BILL ANALYSIS Ó AB 2746 Page 1 Date of Hearing: April 20, 2016 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Mike Gatto, Chair AB 2746 (Obernolte) - As Amended March 28, 2016 SUBJECT: Public Utilities Commission: contracts: electronic submissions SUMMARY: Requires the California Public Utilities Commission (CPUC) to adopt procedures authorizing the submission of electronic signatures and documents by all parties on contracts involving the CPUC. EXISTING LAW: 1)Defines "electronic signature" 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. (Code of Civil Procedures Section 17) 2)Authorizes the Uniform Electronic Transactions Act, which does the following: a) Generally applies to electronic transactions, but does not apply to the creation and execution of wills and AB 2746 Page 2 testamentary trusts, and does not apply to certain other transactions. b) Provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form. c) Provides that a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation. d) Provides that if a law requires a record to be in writing, or if a law requires a signature, an electronic record satisfies the law. e) Authorizes the provision of written information by electronic record. f) Sets forth provisions governing changes and errors, the effect of electronic signatures, and admissibility in evidence. (Civil Code Section 1633.1 et seq.) 3)The Corporate Securities Law of 1968 authorizes the Commissioner of Business Oversight to prescribe circumstances under which to accept electronic records or electronic signatures. (Corporations Code Section 25620) 4)Allows a declaration in support of the warrant of probable cause for arrest to be signed with an electronic signature. (Penal Code Section 817) AB 2746 Page 3 5)Provides that an electronic signature by a court or judicial officer would be as effective as an original signature. (Code of Civil Procedure Section 17) 6)Authorizes the clerk of a county board of equalization to accept electronically filed applications for a changed assessment containing an authenticated electronic signature, as provided, if that application meets certain criteria. (Revenue and Taxation Code Section 1603) 7)Authorizes the Department of Motor Vehicles to allow a person to submit any document required to be submitted to the department electronically if the signature is also submitted electronically and the department retains information verifying the identity of the person submitting the electronic signature. (Vehicle Code Section 1801.1) 8)Authorizes the Commissioner of Corporations to prescribe circumstances under which to accept electronic records or electronic signatures. (Corporations Code Section 17.1) 9)Allows an oath to be made using, in addition, a telephone and computer server, and allows the affiant's signature to be in the form of an electronic signature and allow the magistrate to sign a warrant using a digital signature or electronic signature if electronic mail or computer server is used. (Penal Code Section 1526) 10)Permits a county retirement board to include a provision for the use and acceptance of electronic signatures, as specified, within the regulations. (Government Code Section 31527) FISCAL EFFECT: Unknown. AB 2746 Page 4 COMMENTS: 1)Background: The CPUC contracts with consultants when it does not have the resources to provide required services. State agencies generally rely on the Department of General Services (DGS) State Contracting Manual when soliciting or entering into a contract to provide services. Statutory authority for the competitive and non-competitive procurement of information and non-information technology goods and services for state government resides within DGS. The CPUC has stated in internal procedure documents that it uses the state's contracting process for all contracts it develops or manages. The DGS State Contracting Manual requires contracts to have original handwritten signatures. At the CPUC, contracts often involve numerous signatories in a various locations. Getting handwritten signatures from all of these individuals requires contract documents to be mailed to each party. According to the author's office, this process is inefficient and difficult to track, costly, and creates opportunities for the documents to become misplace in the process in which case the process would start over. 2) The Beautiful History of Electronic Signatures: Existing law clearly validates the use of electronic signatures in most if not all public and private organization transactions. The Uniform Electronic Transactions Act (SB 820 (Sher), Chapter 428, Statutes of 1999) provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form. Nevertheless, many laws have passed since 1999 clarifying the validity of electronic signatures in various code sections. Many of these laws are cited under the Existing Law above. There appears to be no reason the CPUC should need to use handwritten signatures to validate AB 2746 Page 5 contracts. This bill clarifies the CPUC's ability to use electronic signatures in contracting and requires the CPUC to adopt procedures authorizing the submission of electronic signatures and documents by all parties on contracts involving the CPUC. REGISTERED SUPPORT / OPPOSITION: Support None on file. Opposition None on file. Analysis Prepared by:Darion Johnston/ U. & C. / (916) 319-2083 AB 2746 Page 6