BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2296|
|Office of Senate Floor Analyses | |
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CONSENT
Bill No: AB 2296
Author: Low (D)
Amended: 6/21/16 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE: 7-0, 6/14/16
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
ASSEMBLY FLOOR: 76-0, 5/2/16 (Consent) - See last page for
vote
SUBJECT: Digital signatures
SOURCE: California Secretary of State, Alex Padilla
DIGEST: This bill adds to the Uniform Electronic Transactions
Act's (UETA) definition of "electronic signature," that a
"digital signature" under the Government Code (which is defined
and authorized for use by public entities, at the entity's
election) is also a type of electronic signature for purposes of
the UETA. This bill makes corresponding changes to the
Government Code to reflect that a "digital signature" is a type
of "electronic signature" under the UETA. This bill clarifies
that the regulations for "digital signatures" apply only to a
"digital signature" and not to any other type of "electronic
signature" authorized under the UETA. Lastly, this bill
specifies nothing in section regarding "digital signatures"
limits the right of a public entity or government agency to use
and accept an "electronic signature" under the UETA. This bill
includes various findings and declarations.
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ANALYSIS:
Existing law:
1)Authorizes, generally, under the UETA, the transaction of
business, commerce, and contracts by electronic means, and
establishes standards for conducting electronic transactions
in this State.
2)Applies the UETA only to a transaction between parties that
have agreed to conduct the transaction by electronic means, as
specified.
3)Sets forth in the UETA certain principles governing the legal
effect of conducting transactions electronically.
Specifically:
a record or signature may not be denied legal effect or
enforceability solely because it is in electronic form;
a contract may not be denied legal effect or
enforceability solely because an electronic record was used
in its formation;
if a law requires a record to be in writing, an
electronic record satisfies the law; and
if a law requires a signature, an electronic signature
satisfies the law.
1)Provides that an electronic record or electronic signature is
attributable to a person if it was the act of the person,
which may be shown in any manner, including a showing of the
efficacy of any security procedure applied to determine the
person to which the electronic record or electronic signature
was attributable. Existing law provides that the effect of an
electronic record or electronic signature attributed to a
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person is determined from the context and surrounding
circumstances at the time of its creation, execution, or
adoption, including the parties' agreement, if any, and
otherwise as provided by law.
2)Defines "electronic signature" for purposes of the UETA, as
well as the Levying Officer Transfer Act, California Franchise
Investment Law, Corporate Securities Law, brokerage
agreements, and various purposes under the Financial Code, to
mean an electronic sound, symbol, or process attached to or
logically associated with an electronic record and executed or
adopted by a person with the intent to sign the electronic
record.
3)Similarly defines, for the purposes of the Code of Civil
Procedure, "electronic signature" as an electronic sound,
symbol, or process attached to or logically associated with an
electronic record and executed or adopted by a person with the
intent to sign the electronic record.
4)Authorizes, under Section 16.5 of the Government Code, that a
specified digital signature to be used in any written
communication with a public entity in which a signature is
required or used. Existing law provides that the use or
acceptance of a digital signature is at the option of the
parties, and that nothing in these provisions requires a
public entity to use or permit the use of a "digital
signature."
5)Defines "digital signature" for the aforementioned purposes as
an electronic identifier, created by computer, intended by the
party using it to have the same force and effect as a manual
signature. Existing law provides that the use of a digital
signature shall have the same force and effect as the use of a
manual signature if and only if it embodies certain
attributes, including that it:
is unique to the person using it;
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is capable of verification; and
conforms to regulations adopted by the Secretary of
State, as specified.
This bill:
1)Includes within the definition of "electronic signature" under
the UETA, that, for purposes of the UETA, a "digital
signature" as defined in subdivision (d) of Section 16.5 of
the Government Code is a type of electronic signature.
2)Includes within the definition of "digital signature" under
Section 16.5 of the Government Code, that for purposes of that
section, a digital signature is a type of "electronic
signature" as defined under the UETA, as specified. This bill
specifies that regulations adopted by the Secretary of State
to implement Section 16.5 apply only to a public entity's use
of a "digital signature" and not to the use of any other type
of "electronic signature" authorized in the UETA.
3)Specifies that nothing in Section 16.5 of the Government Code
shall limit the right of a public entity or government agency
to use and accept an "electronic signature" as defined under
the UETA, as specified.
4)Includes various findings and declarations regarding the
history of the UETA and Section 16.5 of the Government Code,
above. The findings and declarations also state, among other
things:
The Internet and digital technologies enable government
to provide services to the public and to transact business
more efficiently than with paper-based processes.
It is the intent of the Legislature to amend current law
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to clarify that a "digital signature" authorized by Section
16.5 of the Government Code and subject to regulations
adopted by the Secretary of State is one type of
"electronic signature" that a public agency may choose to
adopt under the UETA.
5)Includes other technical, nonsubstantive changes.
Background
California has taken various steps to utilize more electronic
resources within the various branches of government. In 1995,
AB 1577 (Bowen, Chapter 594, Statutes of 1995) was enacted to
provide public entities an option, in any written communication
in which a public entity is a party and a signature is required
or used, to use a "digital signature" that would have the same
force and effect as the use of a manual (or "wet") signature.
For those purposes, "digital signature" was defined to mean an
electronic identifier, created by computer, intended by the
party using it to have the same force and effect as the use of a
manual signature. At the same time, the digital signature was
only to be given such force and effect if it met certain
conditions, including that it conform to regulations adopted by
the Secretary of State, as specified. (See Gov. Code Sec.
16.5.)
Separately, in 1999, the Legislature enacted the UETA,
regulating the electronic transmission of documents and
signatures. (SB 820 (Sher, Chapter 428, Statutes of 1999).)
Also in 1999, the Legislature authorized courts to adopt local
rules of court permitting electronic filing and service of
documents, as specified. (SB 367 (Dunn, Chapter 514, Statutes
of 1999).) Six years later, in 2004, the Legislature,
recognizing a need for an efficient, cost-effective means of
maintaining and transmitting records by public agencies, enacted
the Electronic Recording Delivery Act of 2004, regulating the
electronic delivery, recording, and return of instruments
affecting right, title, or interest in real property. (AB 578
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(Leno, Chapter 621, Statutes of 2004).)
More recently, in 2010, AB 1926 (Evans, Chapter 167, Statutes of
2010) was enacted to provide trial courts with the ability to
create, maintain, and preserve trial court records
electronically under procedures and guidelines to be provided
for by the Judicial Council. That same year, AB 2394 (Brownley,
Chapter 680, Statutes of 2010) was enacted to establish the
Levying Officer Electronic Transactions Act, whereby a levying
officer could use electronic methods to create, generate, send,
receive, store, display, retrieve, or process information,
electronic records, and documents, as specified. Like SB 820
(which, again, enacted the UETA), above, AB 2394 defined
"electronic signature" for these purposes to mean an electronic
sound, symbol, or process attached to, or logically associated
with, an electronic record and executed or adopted by a person
with the intent to sign the electronic record. (See Civ. Code
Sec. 1633.2(h) and Code Civ. Proc. Sec. 263.1(c), respectively.)
Last year, AB 432 (Chang Chapter 32, Statutes of 2015) was
enacted to bring consistency throughout the California statutes
in relation to the term "electronic signature." To do so, that
bill defined the term "electronic signature" for purposes of the
Code of Civil Procedure to mirror the definition to those of
"electronic signature" enacted under SB 820 and AB 2394, above.
That bill also provided that an electronic signature, as defined
under the bill, by a court or judicial officer shall be as
effective as an original signature. The bill did not, however,
in any way affect the Government Code section first enacted in
1995 relating to "digital signatures." According to the
proponents of this bill, there is some confusion as to how
"digital signatures" compare to "electronic signatures" under
the UETA and the ability of public entities to use an electronic
signature, as opposed to digital signature.
This bill, sponsored by the Secretary of State's Office, seeks
to clarify within the UETA's definition of "electronic
signature" that a "digital signature," as defined under the
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Government Code, is also a type of electronic signature for
purposes of the UETA. This bill makes corresponding changes to
the Government Code to reflect that a digital signature is a
type of "electronic signature" under the UETA, and makes other
clarifying changes.
Comments
As stated by the author, "AB 2296 would remove a barrier to
California public agencies' use of fully digital transactions by
clarifying which electronic signature technologies are legally
permissible. The bill would thereby enable government to
provide services to the public and transact business with
increased efficiency, cost savings, convenience, and paper
reduction."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/22/16)
California Secretary of State, Alex Padilla (source)
California Assessors' Association
California Association of Realtors
California Cable and Telecommunications Association
California Chamber of Commerce
California Manufacturers and Technology Association
Computing Technology Industry Association
County Recorders' Association of California
Electronic Signatures and Records Association
Innovate Your State
League of California Cities
OPPOSITION: (Verified6/22/16)
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None received
ARGUMENTS IN SUPPORT: In support, the Electronic Signature &
Records Association writes:
California Government Code Section 16.5 was passed in 1995. It
specifies the requirements that digital signatures must meet
in order for them to be used and accepted by California
government agencies. Four years later, California adopted the
Uniform Electronic Transactions Act (UETA) which grants
government agencies the power to accept all forms of
electronic signatures - both digital and simple electronic.
However, many of our members have noted that some California
agencies, cities and counties have continued operating under
the belief that Section 16.5 prevents them from taking
advantage of UETA because they believe Section 16.5 requires
them, rather than permits them, to use digital signatures.
The impact has been that California government agencies and
local governments are not taking advantage of the speed and
efficiency that can be realized by widespread adoption of
electronic signatures and California citizens are burdened
with using slow, paper-based handwritten signatures. In short,
government agencies are not as agile as the private sector
needs them to be.
Assembly Bill 2296 will positively impact government
transactions and California commerce by clarifying that UETA
allows government agencies to accept both digital and
electronic signatures. The changes set forth in the bill will
resolve the conflict between Section 16.5 and UETA.
With these changes in place, businesses will be able to take
advantage of being able to quickly file all types of forms and
documentation online without the need to print out, sign, and
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fax or mail the form. Consumers will be able to enjoy a much
greater degree of responsiveness and ease in working with
government agencies. Government agencies will have the ability
to create document workflows and acceptance processes using
all of the technological options available. Section 16.5 was
meant to speed government processes, not slow them. Assembly
Bill 2296 ensures that original goal is met.
ASSEMBLY FLOOR: 76-0, 5/2/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Wood,
Rendon
NO VOTE RECORDED: Beth Gaines, Roger Hernández, Ridley-Thomas,
Williams
Prepared by:Ronak Daylami / JUD. / (916) 651-4113
6/22/16 15:14:52
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