BILL ANALYSIS Ó
AB 2296
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
2296 (Low)
As Amended June 21, 2016
Majority vote
--------------------------------------------------------------------
|ASSEMBLY: | 76-0 | (May 2, 2016) |SENATE: | 37-0 |(June 30, 2016) |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
Original Committee Reference: JUD.
SUMMARY: Clarifies the types of electronic signatures that are
permissible for public agencies. Specifically, this bill:
1)Provides that a "digital signature," as defined, is considered
a type of "electronic signature" under the Uniform Electronic
Transactions Act (UETA).
2)Clarifies that use of a digital signature is discretionary.
3)Clarifies that regulations adopted by the Secretary of State
to implement Government Code Section 16.5 apply only to the
use of a "digital signature" under that statute and not to an
"electronic signature" under the UETA.
4)States various legislative findings.
AB 2296
Page 2
The Senate amendments are technical, correcting a
cross-reference.
EXISTING LAW:
1)Establishes, under the UETA, standards for conducting
electronic transactions in this State, permitting but not
requiring a record or signature to be created, generated,
sent, communicated, received, stored, or otherwise processed
or used by electronic means or in electronic form. As part of
that, defines an "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.
2)Allows a digital signature to be used in a written
communication with a public entity, but provides that use or
acceptance of a digital signature is at the option of the
parties. Defines "digital signature" as an electronic
identifier, created by computer, intended by the party using
it to have the same force and effect as a manual signature.
3)Defines "electronic signature" for the purposes of the Code of
Civil Procedure 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.
FISCAL EFFECT: None
COMMENTS: California has taken several steps to enable use of
more electronic transactions in the various branches of
government. Beginning in 1995, the Legislature adopted its
first digital signature statute to allow public entitles to
engage in electronic commerce. (AB 1577 (Bowen), Chapter 594,
Statutes of 1995.) Beginning in 1999, the Legislature
AB 2296
Page 3
authorized courts to adopt local rules of court permitting
electronic filing and service of documents. (SB 367 (Dunn),
Chapter 514, Statutes of 1999.) Also in 1999, the Legislature
enacted the Uniform Electronic Transactions Act, regulating the
electronic transmission of documents and signatures. (SB 820,
(Sher), Chapter 428, Statutes of 1999.) As a result, there are
multiple rules governing what electronic or digital signatures
are acceptable; and, according to the author, there is confusion
about what rules apply and when. This bill seeks to reduce that
confusion by clarifying that a digital signature under the
Government Code also qualifies as an electronic signature under
the UETA.
Government Code Section 16.5: California enacted Government
Code Section 16.5 in 1995, which authorizes use of a digital
signature in communication with public agencies. (AB 1577
(Bowen), 1995.) For purposes of this bill, the relevant
provision of that statute provides that a digital signature
meeting specified requirements will have the same force and
effect as a manual signature for written communications with a
public entity. The Secretary of State was required to adopt
implementing regulations. Those regulations require that the
digital signature must be created under a technology that the
Secretary of State finds acceptable and has approved. There are
two such technologies today -- Signature Dynamic, which uses a
specialized touchpad to record signatures and, according to the
Secretary of State, is not widely used; and public key
cryptography, which must be issued with a certificate by a
third-party on the Secretary of State's "Approved List of
Certificate Authorities." Those are the only two approved
methods to create a digital signature under Section 16.5. The
rules under Section 16.5 are purely voluntary -- no public
entity is required to use them -- but if the government entity
relies on those rules, the digital signature must be created
through a method approved by the Secretary of State.
Uniform Electronic Transactions Act: Four years later, the
Legislature passed the more comprehensive UETA, which
established uniform standards for conducting electronic
transactions in California. (SB 820 (Sher), 1999.) UETA set
AB 2296
Page 4
out a voluntary system of rules and procedures for the sending
and receiving of electronic records and signatures, the
formation of contracts using electronic records, the making and
retention of electronic records and signatures, and the
procedures governing changes and errors in electronically
transmitted records. It also established the validity of
transactions formed, transmitted and recorded electronically,
and it established the admissibility of electronic records in a
legal proceeding. Of particular relevance for this bill, UETA
defines "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." Unlike Government Code
Section 16.5, UETA does not dictate any particular method of
creation for that electronic signature.
Confusion in the Marketplace: According to the author this bill
is necessary because there is confusion among the stakeholders
about what types of signatures are required for electronic
transactions. This bill seeks to eliminate any confusion
between the Government Code and UETA in several ways. First,
this bill provides relevant cross-references in the Government
Code and the UETA. Second, it clarifies that a digital
signature under Government Code Section 16.5 qualifies as an
electronic signature under the UETA. Third, it clarifies that a
public entity can elect to transaction business using a digital
signature, but is not compelled to do so. Finally the bill
provides that the Secretary of State's regulations under
Government Code Section 16.5, which limit the types of
electronic signature allowed under that code section, do not
apply to an electronic signature under the UETA. These multiple
clarifications are designed to eliminate all confusion and make
clear that an electronic signature under the UETA can be a
digital signature under the Government Code, but does not need
to comply with those requirements.
Supporters write that the bill will "remove a barrier to
California public agencies' use of fully digital transactions by
clarifying which electronic signature technologies are legally
permissible. As a result, the bill would enable government to
AB 2296
Page 5
provide services to the public and transact business with
increased efficiency, cost savings, convenience, and paper
reduction."
Analysis Prepared by:
Leora Gershenzon / JUD. / (916) 319-2334 FN:
0003508