BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2746


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          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  








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               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)










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          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. 








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          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  








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            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














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