The Child Care and Development Services Act, administered by the State Department of Education, provides that children from infancy to 13 years of age are eligible, with certain requirements, for child care and development services.

The act authorizes the Superintendent of Public Instruction to enter into and execute local contractual agreements with any public or private entity or agency for the delivery of child care and development services. The act authorizes these contractors to maintain records electronically.

This bill would authorize the contractors to use a digital signature, as provided, and would require that the use of a digital signature have the same force and effect as a manual signature if specified requirements are met. The bill would require the use of a digital signature to be in compliance with state and federal standards, as determined by the department.

The Child Care and Development Services Act, administered by the State Department of Education, provides that children from infancy to 13 years of age are eligible, with certain requirements, for child care and development services.

The act authorizes the Superintendent of Public Instruction to enter into and execute local contractual agreements with any public or private entity or agency for the delivery of child care and development services. The act authorizes these contractors to maintain records electronically.

This bill would authorize the contractors to use a digital signature, as provided, and would require that the use of a digital signature have the same force and effect as a manual signature if specified requirements are met. The bill would require the use of a digital signature to be in compliance with state and federal standards, as determined by the department.

The Child Care and Development Services Act, administered by the State Department of Education, provides that children from infancy to 13 years of age are eligible, with certain requirements, for child care and development services. The act requires the department to contract with local contracting agencies to provide for alternative payment programs, and authorizes alternative payment programs for services provided in licensed centers and family day care homes and for other types of programs that conform to applicable law. Existing law authorizes contractors and alternative payment programs and providers to maintain any records electronically and authorizes alternative payment programs and providers to use a digital signature, as provided. Existing law requires the use of a digital signature to have the same force and effect as the use of a manual signature if specified requirements are met. Existing law requires the above provisions relating to the electronic maintenance of records or digital signatures to be in compliance with state and federal standards, as determined by the department.

The act authorizes the Superintendent of Public Instruction to enter into and execute local contractual agreements with any public or private entity or agency for the delivery of child care and development services. The act authorizes these contractors to maintain records electronically.

This bill would authorize the contractors to use a digital signature, as provided, and would require that the use of a digital signature have the same force and effect as a manual signature if specified requirements are met. The bill would require, if rules and regulations relating to digital signatures are adopted by the Superintendent, that they apply to digital signatures used by contractors in lieu of other specified requirements. The bill would require the use of a digital signature to be in compliance with state and federal standards, as determined by the department.

The Child Care and Development Services Act, administered by the State Department of Education, provides that children from infancy to 13 years of age are eligible, with certain requirements, for child care and development services. The The act requires the department to contract with local contracting agencies to provide for alternative payment programs, and authorizes alternative payment programs for services provided in licensed centers and family day care homes and for other types of programs that conform to applicable law. Existing law authorizes contractors and alternative payment programs and providers to maintain any records electronically and authorizes alternative payment programs and providers to use a digital signature, as provided. Existing law requires the use of a digital signature to have the same force and effect as the use of a manual signature if specified requirements are met. Existing law requires the above provisions relating to the electronic maintenance of records or digital signatures to be in compliance with state and federal standards, as determined by the department.

The act authorizes the Superintendent of Public Instruction to enter into and execute local contractual agreements with any public or private entity or agency for the delivery of child care and development services. The act authorizes these contractors to maintain records electronically.

This bill would authorize the contractors to use a digital signature, a as provided, and would require that the use of a digital signature have the same force and effect as a manual signature if specified requirements are met. The bill would require, if rules and regulations relating to digital signatures are adopted by the Superintendent, that they apply to digital signatures used by contractors in lieu of other specified requirements. The bill would require the use of a digital signature to be in compliance with state and federal standards, as determined by the department.

The Child Care and Development Services Act, administered by the State Department of Education, provides that children from infancy to 13 years of age are eligible, with certain requirements, for child care and development services. The act authorizes the Superintendent of Public Instruction to enter into and execute local contractual agreements with any public or private entity or agency for the delivery of child care and development services. The act authorizes these contractors to maintain records electronically.

This bill would authorize the contractors to use a digital signature, a provided, and would require that the use of a digital signature have the same force and effect as a manual signature if specified requirements are met. The bill would require the use of a digital signature to be in compliance with state and federal standards, as determined by the department.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1712

Author:(Obernolte)

As Amended Ver:August 15, 2016

Majority vote

Original Committee Reference: HUM. S.

SUMMARY: Authorizes child care contractors to use digital signatures and requires that those signatures have the same force and effect as manual signatures, as specified.

The Senate amendments:

1. Delete provisions of the bill authorizing the Superintendent of Public Instruction to adopt rules and regulations related to digital signatures, as specified.
2. Make technical changes.

EXISTING LAW:

1. Establishes the California Child Care and Development Services Act to provide a comprehensive, community-based, coordinated, and cost-effective system of child care and development services for children from birth to age 13 with the purpose of enhancing the social, emotional, physical, and intellectual development of children. (Education Code Section (EDC) 8200 et seq.)
2. Defines child care and development services as services designed to meet a wide variety of needs of children and their families, while their parents or guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208(j))
3. Authorizes local government agencies or non-profit organizations to contract with the California Department of Education (CDE) to operate Alternative Payment Programs (APPs) and provide alternative payments and support services to parents and child development providers. (EDC 8220 et seq.)
4. Establishes requirements and procedures APPs and child development providers must follow as contracted agencies with CDE, including, but not limited to, tracking and reporting of attendance, accounting and auditing requirements, and reimbursement and payment procedures. (EDC 8221.5)
5. Permits APPs and child care providers and child care contractors to maintain records in electronic format, as specified. (EDC 8227.3, 8262.1)
6. Permits APPs and child care providers to use electronic signatures, as specified. (EDC 8227.5)
7. Establishes the Uniform Electronic Transactions Act (UETA), which permits, but does not require, a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (Civil Code Section (CIV) 1633.1 et seq.)
8. Establishes that a digital signature, when used in written communication with a public entity, shall have the same force and effect of a manual signature if it meets certain requirements, as specified. (Government Code Section (GOV) 16.5)

FISCAL EFFECT: According to the Senate Appropriations Committee on May 27, 2016, this bill may result in the following:

1. Costs to the California Department of Education (CDE) of $73,000 General Fund. These costs would support one-time activities such as updating the audit guide and training staff on the new requirements.
2. Unknown ongoing costs to the CDE related to audit fieldwork to verify and test that electronic systems and digital signatures meet all required standards. These costs could be in the tens of thousands but will likely decrease over time as digital signatures become more standard. Costs will largely depend on the duration and complexity of each audit. (General Fund)
3. Potential future administrative savings to agencies and providers from increased operational efficiency due to the use of digital signatures.

COMMENTS:

Subsidized child care programs: In California, subsidized child care may be available to families that meet certain eligibility requirements. The three main types of subsidized child care programs include: California Work Opportunity and Responsibility to Kids (CalWORKS) child care, Alternative Payment Programs (APPs) and General Child Care. General Child Care offers child care and education/development services through contracted child care centers and family child care home networks that are administered through public or private agencies, while child care administered by CalWORKs and APPs is offered through a voucher system. For 2015-16, the Legislative Analyst's Office estimates that there are close to 131,000 CalWORKs child care slots; 33,000 APP slots; and 29,000 General Child Care slots.

Digital signatures: California Government Code Section 16.5 defines "digital signature" as 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 if and only if it: is unique to the person using it; is capable of verification; is under the sole control of the person using it; is linked to data in such a manner that if the data are changed, the digital signature is invalidated; and conforms to regulations adopted by the Secretary of State. This section also states that the use or acceptance of a digital signature shall be at the option of the parties. According to the California Secretary of State, digital signatures can be used for many transactions that currently require a handwritten signature, such as on-line college applications and submitting applications for business permits at the local level.

Need for this bill: According to the author, "California leads the nation when it comes to innovation and technology. However, many of our state government operations have been left in the past. As a result, a number of state agencies are forced to operate in a manner that is both outdated and inefficient. [This bill] would help modernize one of these out-of-date conventions and correct an oversight in existing law by allowing childcare center contractors to use electronic signatures. Providing child care centers with this option will greatly increase their efficiency and maximize the use of their resources."

PRIOR LEGISLATION:

AB 271 (Obernolte), Chapter 476, Statutes of 2015, expanded the authority of APPs and child care providers and child care contractors to use electronic methods for storage of documents or records, and permitted APPs to use digital signatures pursuant to current state standards.

Analysis Prepared by: Kelsy Castillo / HUM. S. / (916) 319-2089 FN: 0004274

 THIRD READING  

Bill No: AB 1712

Author:

: Senate

Vote:

SENATE EDUCATION COMMITTEE: 9-0, 6/22/16

AYES: Liu, Block, Hancock, Huff, Leyva, Mendoza, Monning, Pan, Vidak

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 80-0, 6/1/16 - See last page for vote

SUBJECT: Child care: contractors: digital signatures

SOURCE: Author

DIGEST: This bill authorizes child care contractors to use digital signatures and requires that those signatures have the same force and effect as manual signatures.

ANALYSIS:

Existing law:

1. Authorizes local government agencies or non-profit organizations to contract with the California Department of Education (CDE) to operate Alternative Payment Programs (APPs) and provide alternative payments and support services to parents and child development providers. APPs help parents arrange child care services and make payments directly to the provider, which may be in-home care, family child care or center-based care, and either licensed or license-exempt. (Education Code § 8220)
2. Establishes requirements and procedures that APPs and child development providers must follow as contracted agencies with the CDE, including but not limited to tracking and reporting of attendance, accounting and auditing requirements, and reimbursement and payment procedures. (EC § 8221.5)
3. Requires, under state regulations, child care and development providers that contract with APPs to submit periodic reports that must include:
   1. Days and hours of enrollment and attendance.
   2. Total days of operation.
   3. Services, revenues and expenditures relating to care provided for subsidized and unsubsidized children.

Parents are required to physically sign-in and sign-out their child when they drop off and pick up their child each day. (California Code of Regulations, Title 5 § 18065)

1. Requires agencies that receive state funds to, at the request of the Superintendent of Public Instruction (SPI), make all records pertaining to its state-funded programs available to the CDE, as specified, and requires that all records be retained by each agency for at least five years, as specified. (EC § 33421)
2. Authorizes APPs and providers and other contractors providing child care development services to maintain records in electronic format if the original documents were created in electronic format. (EC § 8262.1)
3. Authorizes APPs and providers to use digital signatures and specifies that the digital signature have the same force and effect as the use of the manual signature if specified requirements are met. (EC § 8227.5)
4. Establishes the Uniform Electronic Transactions Act (UETA), which permits, but does not require, a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (CIV § 1633.1, et seq.)
5. Establishes that a digital signature, when used in written communication with a public entity, shall have the same force and effect of a manual signature if it meets certain requirements, as specified. (GOV § 16.5)

This bill:

1. Authorizes child care contractors to use digital signatures that comply with state and federal standards, as determined by CDE that may be a marking that is either computer generated or produced by electronic means and is intended by the signatory to have the same effect as a handwritten signature.
2. Requires that the use of a digital signature to have the same force and effect as manual signatures provided that specified requirements are satisfied.

Comments

1. Need for the bill. Recent legislation, AB 271 (Obernotle, Chapter 476, Statutes of 2015) provided APPs, contractors and providers the option to maintain records electronically regardless of whether the original documents were created in electronic format. It also allowed APPs and providers to use electronic signatures but failed to explicitly give the option to child care center contractors. This bill seeks give child care contractors the ability to use digital signatures on records thereby extending an authorization that is currently provided to APPs and child care providers.
2. Subsidized child care programs. State subsidized child care may be available to families that meet certain eligibility requirements. The three main types of subsidized child care programs include: CalWORKS child care, APPs and General Child Care. General Child Care offers child care and education/development services through contracted child care centers and family child care home networks that are administered through public or private agencies, while child care administered by CalWORKs and APPs is offered through a voucher system. This bill provides those entities that contract directly with the CDE for the provision of child care and development services the ability to use electronic signatures on documents and have them carry the same weight as a manual signature.
3. Digital Signature. Current regulations establish criteria for public entities using digital signature technology. Acceptable technology must be capable of creating signatures that are unique to the person using it, capable of verification, under sole control of the person using it and cannot be altered. The regulations also provide recommendations of acceptable digital signature technology.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• Costs to the CDE of $73,000 General Fund. These costs would support one-time activities such as updating the audit guide and training staff on the new requirements.
• Unknown ongoing costs to the CDE related to audit fieldwork to verify and test that electronic systems and digital signatures meet all required standards. These costs could be in the tens of thousands but will likely decrease over time as digital signatures become more standard. Costs will largely depend on the duration and complexity of each audit. (General Fund)
• Potential future administrative savings to agencies and providers from increased operational efficiency due to the use of digital signatures.

SUPPORT: (Verified 8/15/16)

California Alternative Payment Program Association

Kidango

OPPOSITION: (Verified 8/12/16)

None received

ASSEMBLY FLOOR: 80-0, 6/1/16

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, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, 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, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

Prepared by:

8/15/16 20:10:07

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1712 (Obernolte) - Child care: digital signatures

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 11, 2016

Bill Summary:

This bill authorizes child care contractors to use electronic signatures, as specified.

Fiscal Impact:

• Costs to the California Department of Education (CDE) of $73,000 General Fund. These costs would support one-time activities such as updating the audit guide and training staff on the new requirements.
• Unknown ongoing costs to the CDE related to audit fieldwork to verify and test that electronic systems and digital signatures meet all required standards. These costs could be in the tens of thousands but will likely decrease over time as digital signatures become more standard. Costs will largely depend on the duration and complexity of each audit. (General Fund)
• Potential future administrative savings to agencies and providers from increased operational efficiency due to the use of digital signatures.

Author Amendments:

Remove the authority of the CDE to adopt different requirements related to digital signatures or their acceptable technology than the requirements outlined in existing law for other state agencies.

-- END --

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1712 (Obernolte) - Child care: digital signatures

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

This bill authorizes child care contractors to use electronic signatures and permits the Superintendent of Public Instruction (Superintendent) to adopt, as specified, rules and regulations regarding electronic signatures used by child care contractors and alternative payment programs.

Fiscal Impact:

• The California Department of Education (CDE) cites costs of $106,000 General Fund. These costs would support one-time activities such as training audit staff on new requirements related to the use of digital signatures, updating the audit guide and procedures, and potentially engaging in the development of any necessary regulations.
• Unknown ongoing costs to the CDE related to audit fieldwork to verify and test that electronic systems and digital signatures meet all required standards. These costs could be in the tens of thousands but will likely decrease over time as digital signatures become more standard. Costs will largely depend on the duration and complexity of each audit. (General Fund)
• Potential future administrative savings to agencies and providers from increased operational efficiency due to the use of digital signatures.

Background:

The state provides subsidized child care in two ways. It provides vouchers for families that participate in certain programs, such as alternative payment programs, to use to access care with different types of child care providers. The state also provides subsidized child care through direct contracts with certain licensed child care providers.

Existing law establishes requirements that alternative payment programs and child development providers must follow as contracted agencies with the CDE, including tracking and reporting of attendance, accounting and auditing requirements, and reimbursement and payment procedures. (EC § 8221.5)

Current regulations require child care and development providers that contract with alternative payment programs to submit periodic reports that must include: (1) days and hours of enrollment and attendance; (2) total days of operation; and (3) services, revenues and expenditures relating to care provided for subsidized and unsubsidized children. Parents are required to physically sign-in and sign-out each child when they drop off and pick up their child each day.

Through AB 271 (Obernolte, Chapter 476, Statutes of 2015) alternative payment providers and state-subsidized child care providers are authorized to maintain records in electronic format. It also authorized alternative payment programs to use electronic signatures. This bill seeks to give child care center contractors the ability to use digital signatures on records as well.

Proposed Law:

This bill authorizes child care center contractors to use a digital signature that complies with state and federal standards, as determined by the CDE, and is intended by the signatory to have the same effect as a handwritten signature.

This bill also allows the Superintendent to adopt rules and regulations related to digital signatures or their acceptable technology. It provides that these regulations would supersede existing regulations, should they differ.

Staff Comments:

Currently, the CDE conducts four to six annual program audits of child care providers, and verifies that the provider has kept the required sign-in and sign-out attendance sheets and they contain the required parent or guardian signatures. The CDE anticipates audit costs will increase by $3,980 per week, and for a small agency a minimum of one additional week would be required. For a larger agency, more time could be required. However, costs are expected to decline over time.

-- END --

SENATE COMMITTEE ON EDUCATION

Senator Carol Liu, Chair

2015 - 2016 Regular

Bill No: AB 1712

Subject: Child care: digital signatures

SUMMARY

This bill authorizes child care contractors to use electronic signatures and permits the Superintendent of Public Instruction (SPI) to adopt, as specified, rules and regulations regarding electronic signatures used by child care contractors, alternative payment programs (APPs) and providers.

BACKGROUND

1. Existing law authorizes local government agencies or non-profit organizations to contract with the California Department of Education (CDE) to operate APPs and provide alternative payments and support services to parents and child development providers. APPs help parents arrange child care services and make payments directly to the provider, which may be in-home care, family child care or center-based care, and either licensed or license-exempt.

(Education Code § 8220)

1. Existing law establishes requirements and procedures that APPs and child development providers must follow as contracted agencies with the CDE, including but not limited to tracking and reporting of attendance, accounting and auditing requirements, and reimbursement and payment procedures.

(EC § 8221.5)

1. Current regulations require child care and development providers that contract with APPs to submit periodic reports that must include:
   1. Days and hours of enrollment and attendance.
   2. Total days of operation.
   3. Services, revenues and expenditures relating to care provided for subsidized and unsubsidized children.

Parents are required to physically sign-in and sign-out their child when they drop off and pick up their child each day. (California Code of Regulations, Title 5 § 18065)

1. Existing law requires agencies that receive state funds to, at the request of the Superintendent of Public Instruction (SPI), make all records pertaining to its state-funded programs available to the California Department Education (CDE), as specified, and requires that all records be retained by each agency for at least five years, as specified. (EC § 33421)
2. Existing law authorizes alternative payment programs and providers and other contractors providing child care development services to maintain records in electronic format if the original documents were created in electronic format.

(EC § 8262.1)

1. Existing law authorizes alternative payment programs and providers to use digital signatures and specifies that the digital signature have the same force and effect as the use of the manual signature if specified requirements are met.

(EC § 8227.5)

1. Establishes the Uniform Electronic Transactions Act (UETA), which permits, but does not require, a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (CIV 1633.1, et seq.)
2. Establishes that a digital signature, when used in written communication with a public entity, shall have the same force and effect of a manual signature if it meets certain requirements, as specified. (GOV § 16.5)

ANALYSIS

This bill authorizes child care contractors to use electronic signatures and permits the SPI to adopt, as specified, rules and regulations regarding electronic signatures used by child care contractors, alternative payment programs (APPs) and providers. Specifically it;

1. Authorizes child care contractors to use digital signatures and requires that those signatures have the same force and effect as manual signatures.
2. Authorizes the SPI to adopt rules and regulations related to digital signatures and provides that these rules and regulations supersede existing law should they differ, as specified.

STAFF COMMENTS

1. Need for the bill. Recent legislation, AB 271 (Obernotle, Chapter 476, Statutes of 2015) provided APPs, contractors and providers the option to maintain records electronically regardless of whether the original documents were created in electronic format. It also allowed APPs and providers to use electronic signatures but failed to explicitly give the option to child care center contractors. This bill seeks give child care contractors the ability to use digital signatures on records thereby extending an authorization that is currently provided to APPs and child care providers.
2. Subsidized child care programs. State subsidized child care may be available to families that meet certain eligibility requirements. The three main types of subsidized child care programs include: California Work Opportunity and Responsibility to Kids (CalWORKS) child care, Alternative Payment Programs (APPs) and General Child Care. General Child Care offers child care and education/development services through contracted child care centers and family child care home networks that are administered through public or private agencies, while child care administered by CalWORKs and APPs is offered through a voucher system. This bill provides those entities that contract directly with the California Department of Education for the provision of child care and development services the ability to use electronic signatures on documents and have them carry the same weight as a manual signature.
3. Digital Signature. Current regulations establish criteria for public entities using digital signature technology. Acceptable technology must be capable of creating signatures that are unique to the person using it, capable of verification, under sole control of the person using it and cannot be altered. The regulations also provide recommendations of acceptable digital signature technology. This bill authorizes the SPI to adopt rules and regulations related to digital signatures including defining or redefining what is acceptable technology for the creation and use of a digital signature and allows these rules to supersede current law. This authorization may provide greater flexibility for modifying requirements as technology evolves.

SUPPORT

KinderCare Education

San Francisco Child Care Planning and Advisory Council

OPPOSITION

None received.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:

Author:(Obernolte)

As Amended Ver:May 27, 2016

Majority vote

SUMMARY: Authorizes child care contractors to use electronic signatures and permits the Superintendent of Public Instruction to adopt superseding rules and regulations regarding electronic signatures used by child care contractors and alternative payment programs (APPs) and providers.

Specifically, this bill:

1. Authorizes child care contractors to use electronic signatures and requires that those signatures have the same force and effect as manual signatures.
2. Authorizes the State Superintendent of Public Instruction to adopt rules and regulations related to digital signatures and further grants precedence to these rules and regulations should they differ from existing law, as specified.

EXISTING LAW:

1. Establishes the California Child Care and Development Services Act to provide a comprehensive, community-based, coordinated, and cost-effective system of child care and development services for children from birth to age 13 with the purpose of enhancing the social, emotional, physical, and intellectual development of children. (Education Code Section (EDC) 8200 et seq.)
2. Defines child care and development services as services designed to meet a wide variety of needs of children and their families, while their parents or guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208(j))
3. Authorizes local government agencies or non-profit organizations to contract with the California Department of Education (CDE) to operate Alternative Payment Programs (APPs) and provide alternative payments and support services to parents and child development providers. (EDC 8220 et seq.)
4. Establishes requirements and procedures APPs and child development providers must follow as contracted agencies with CDE, including, but not limited to, tracking and reporting of attendance, accounting and auditing requirements, and reimbursement and payment procedures. (EDC 8221.5)
5. Permits APPs and child care providers and child care contractors to maintain records in electronic format, as specified. (EDC 8227.3, 8262.1)
6. Permits APPs and child care providers to use electronic signatures, as specified. (EDC 8227.5)
7. Establishes the Uniform Electronic Transactions Act (UETA), which permits, but does not require, a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (CIV 1633.1 et seq.)
8. Establishes that a digital signature, when used in written communication with a public entity, shall have the same force and effect of a manual signature if it meets certain requirements, as specified. (GOV 16.5)

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill may result in the following costs, as anticipated by CDE:

1. One-time costs of $73,000 to train audit staff, update related guides and procedures. (Federal funds and General Fund).
2. Unknown additional costs for audit fieldwork to verify systems meet required standards, with costs expected to decrease over time. Potential costs could be between the low tens of thousands to the low hundreds of thousands. Costs will largely depend on the duration and complexity of each audit. (Federal funds and General Fund)

COMMENTS:

Subsidized child care programs: In California, subsidized child care may be available to families that meet certain eligibility requirements. The three main types of subsidized child care programs include: California Work Opportunity and Responsibility to Kids (CalWORKS) child care, Alternative Payment Programs (APPs) and General Child Care. General Child Care offers child care and education/development services through contracted child care centers and family child care home networks that are administered through public or private agencies, while child care administered by CalWORKs and APPs is offered through a voucher system. For 2015-16, the Legislative Analyst's Office estimates that there are close to 131,000 CalWORKs child care slots; 33,000 APP slots; and 29,000 General Child Care slots.

Digital signatures: California Government Code Section 16.5 defines "digital signature" as 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 if and only if it: is unique to the person using it; is capable of verification; is under the sole control of the person using it; is linked to data in such a manner that if the data are changed, the digital signature is invalidated; and conforms to regulations adopted by the Secretary of State. This section also states that the use or acceptance of a digital signature shall be at the option of the parties. According to the California Secretary of State, digital signatures can be used for many transactions that currently require a handwritten signature, such as on-line college applications and submitting applications for business permits at the local level.

Need for this bill: According to the author, "California leads the nation when it comes to innovation and technology. However, many of our state government operations have been left in the past. As a result, a number of state agencies are forced to operate in a manner that is both outdated and inefficient. [This bill] would help modernize one of these out-of-date conventions and correct an oversight in existing law by allowing childcare center contractors to use electronic signatures. Providing child care centers with this option will greatly increase their efficiency and maximize the use of their resources."

PRIOR LEGISLATION:

AB 271 (Obernolte), Chapter 476, Statutes of 2015, expanded the authority of APPs and child care providers and child care contractors to use electronic methods for storage of documents or records, and permitted APPs to use digital signatures pursuant to current state standards.

Analysis Prepared by: Kelsy Castillo / HUM. S. / (916) 319-2089 FN: 0003314

ASSEMBLY THIRD READING

ATR Bill Id:

Author:(Obernolte)

As Amended Ver:May 27, 2016

Majority vote

SUMMARY: Authorizes child care contractors to use electronic signatures and permits the Superintendent of Public Instruction to adopt superseding rules and regulations regarding electronic signatures used by child care contractors and alternative payment programs (APPs) and providers.

Specifically, this bill:

1. Authorizes child care contractors to use electronic signatures and requires that those signatures have the same force and effect as manual signatures.
2. Authorizes the State Superintendent of Public Instruction to adopt rules and regulations related to digital signatures and further grants precedence to these rules and regulations should they differ from existing law, as specified.

EXISTING LAW:

1. Establishes the California Child Care and Development Services Act to provide a comprehensive, community-based, coordinated, and cost-effective system of child care and development services for children from birth to age 13 with the purpose of enhancing the social, emotional, physical, and intellectual development of children. (Education Code Section (EDC) 8200 et seq.)
2. Defines child care and development services as services designed to meet a wide variety of needs of children and their families, while their parents or guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208(j))
3. Authorizes local government agencies or non-profit organizations to contract with the California Department of Education (CDE) to operate Alternative Payment Programs (APPs) and provide alternative payments and support services to parents and child development providers. (EDC 8220 et seq.)
4. Establishes requirements and procedures APPs and child development providers must follow as contracted agencies with CDE, including, but not limited to, tracking and reporting of attendance, accounting and auditing requirements, and reimbursement and payment procedures. (EDC 8221.5)
5. Permits APPs and child care providers and child care contractors to maintain records in electronic format, as specified. (EDC 8227.3, 8262.1)
6. Permits APPs and child care providers to use electronic signatures, as specified. (EDC 8227.5)
7. Establishes the Uniform Electronic Transactions Act (UETA), which permits, but does not require, a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (CIV 1633.1 et seq.)
8. Establishes that a digital signature, when used in written communication with a public entity, shall have the same force and effect of a manual signature if it meets certain requirements, as specified. (GOV 16.5)

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill may result in the following costs, as anticipated by CDE:

1. One-time costs of $73,000 to train audit staff, update related guides and procedures. (Federal funds and General Fund).
2. Unknown additional costs for audit fieldwork to verify systems meet required standards, with costs expected to decrease over time. Potential costs could be between the low tens of thousands to the low hundreds of thousands. Costs will largely depend on the duration and complexity of each audit. (Federal funds and General Fund)

COMMENTS:

Subsidized child care programs: In California, subsidized child care may be available to families that meet certain eligibility requirements. The three main types of subsidized child care programs include: California Work Opportunity and Responsibility to Kids (CalWORKS) child care, Alternative Payment Programs (APPs) and General Child Care. General Child Care offers child care and education/development services through contracted child care centers and family child care home networks that are administered through public or private agencies, while child care administered by CalWORKs and APPs is offered through a voucher system. For 2015-16, the Legislative Analyst's Office estimates that there are close to 131,000 CalWORKs child care slots; 33,000 APP slots; and 29,000 General Child Care slots.

Digital signatures: California Government Code Section 16.5 defines "digital signature" as 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 if and only if it: is unique to the person using it; is capable of verification; is under the sole control of the person using it; is linked to data in such a manner that if the data are changed, the digital signature is invalidated; and conforms to regulations adopted by the Secretary of State. This section also states that the use or acceptance of a digital signature shall be at the option of the parties. According to the California Secretary of State, digital signatures can be used for many transactions that currently require a handwritten signature, such as on-line college applications and submitting applications for business permits at the local level.

Need for this bill: According to the author, "California leads the nation when it comes to innovation and technology. However, many of our state government operations have been left in the past. As a result, a number of state agencies are forced to operate in a manner that is both outdated and inefficient. [This bill] would help modernize one of these out-of-date conventions and correct an oversight in existing law by allowing childcare center contractors to use electronic signatures. Providing child care centers with this option will greatly increase their efficiency and maximize the use of their resources."

PRIOR LEGISLATION:

AB 271 (Obernolte), Chapter 476, Statutes of 2015, expanded the authority of APPs and child care providers and child care contractors to use electronic methods for storage of documents or records, and permitted APPs to use digital signatures pursuant to current state standards.

Analysis Prepared by: Kelsy Castillo / HUM. S. / (916) 319-2089 FN: 0003314

Date of Hearing: April 13, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1712

Author:(Obernolte) – As Introduced Ver:January 26, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY: This bill authorizes child care contractors to use electronic signatures and requires that those signatures have the same force and effect as manual signatures, as specified.

FISCAL EFFECT: The California Department of Education (CDE) anticipates the following costs:

1. One-time costs of $73,000 to train audit staff, update related guides and procedures. (Federal funds and GF).
2. Unknown additional costs for audit fieldwork to verify systems meet required standards, with costs expected to decrease over time. Potential costs could be between the low tens of thousands to the low hundreds of thousands. Costs will largely depend on the duration and complexity of each audit. (Federal funds and GF)

COMMENTS:

1. Purpose. According to the author, “California leads the nation when it comes to innovation and technology. However, many of our state government operations have been left in the past. As a result, a number of state agencies are forced to operate in a manner that is both outdated and inefficient. This bill would help modernize one of these out-of-date conventions and correct an oversight in existing law by allowing childcare center contractors to use electronic signatures. Providing child care centers with this option will greatly increase their efficiency and maximize the use of their resources.”
2. Background. In California, subsidized child care may be available to families that meet certain eligibility requirements. The three main types of subsidized child care programs include: California Work Opportunity and Responsibility to Kids (CalWORKS) child care, Alternative Payment Programs (APPs) and General Child Care. General Child Care offers child care and education/development services through contracted child care centers and family child care home networks that are administered through public or private agencies. Child care administered by CalWORKs and APPs is offered through a voucher system.

The Child Development Division of the CDE conducts child care audits. Currently, CDE conducts four to six annual program audits of child care providers, and verifies that the provider has kept the required sign-in and sign-out attendance sheets and they contain the required parent or guardian signatures. AB 271 (Obernolte), Chapter 476, Statutes of 2015, authorizes APPs and child care providers as well as child care contractors to maintain records electronically, in compliance with state and federal standards, as determined by the CDE. AB 271 also authorizes APPs and child care providers to use digital signatures, pursuant to state and federal standards, and requires a digital signature to have the same force and effect as a manual signature. AB 1712 additionally allows child care contractors to use digital signatures.

The CDE anticipates that shifting to the electronic recordkeeping system authorized in last year's AB 271 will increase costs to conduct audits by $3,980 per week for a small agency, and a minimum of one additional week would be required. For a larger agency, multiple additional weeks could be required. However, costs are expected to decline over time. Actual costs will ultimately depend on the duration of the annual audits which is largely determined by the level of funding an agency receives, the number of contracts the agency has with the CDE, and the workload necessary to accomplish the objectives of the audit. AB 1712 increases the number of entities subject to audits under the new system.

1. Prior Legislation.
2. AB 271 (Obernolte), Chapter 476, Statutes of 2015, expanded the authority of APPs and child care providers and child care contractors to use electronic methods for storage of documents or records, and permitted APPs and providers to use digital signatures pursuant to current state standards.
3. AB 2101 (Levine), 2014, was substantially similar to AB 271 (Obernolte). It was held on this Committee’s Suspense File.
4. AB 274 (Bonilla, Chapter 733, Statutes of 2013) allows APPs to maintain records, including child attendance records, electronically in accordance with state and federal auditing standards, but limited the electronic maintenance of records to only those that were generated electronically.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: March 29, 2016

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Susan Bonilla, Chair

ABPCA Bill Id:AB 1712 (

Author:Obernolte) – As Introduced Ver:January 26, 2016

SUBJECT: Child care: contractors: digital signatures

SUMMARY: Authorizes child care contractors to use electronic signatures and requires that those signatures have the same force and effect as manual signatures, as specified.

EXISTING LAW:

1. Establishes the California Child Care and Development Services Act to provide a comprehensive, community-based, coordinated, and cost-effective system of child care and development services for children from birth to age 13 with the purpose of enhancing the social, emotional, physical, and intellectual development of children. (EDC 8200 et seq.)
2. Defines child care and development services as services designed to meet a wide variety of needs of children and their families, while their parents or guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208(j))
3. Authorizes local government agencies or non-profit organizations to contract with the California Department of Education (CDE) to operate Alternative Payment Programs (APPs) and provide alternative payments and support services to parents and child development providers. (EDC 8220 et seq.)
4. Establishes requirements and procedures APPs and child development providers must follow as contracted agencies with CDE, including, but not limited to, tracking and reporting of attendance, accounting and auditing requirements, and reimbursement and payment procedures. (EDC 8221.5)
5. Requires any agency that contracts with CDE for the provision of educational services to undergo a periodic audit regarding the use of state and federal funds, as specified. (EDC 33420)
6. Requires agencies that receive state funds to, at the request of the Superintendent of Public Instruction, make all records pertaining to its state-funded programs available to the CDE, as specified, and that all records be retained by each agency for at least five years, as specified. (EDC 33421)
7. Permits APPs and child care providers and child care contractors to maintain records in electronic format, as specified. (EDC 8227.3, 8262.1)
8. Permits APPs and child care providers to use electronic signatures, as specified. (EDC 8227.5)
9. Establishes the Uniform Electronic Transactions Act (UETA), which permits, but does not require, a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (CIV 1633.1 et seq.)
10. Establishes that a digital signature, when used in written communication with a public entity, shall have the same force and effect of a manual signature if it meets certain requirements, as specified. (GOV 16.5)

FISCAL EFFECT: Unknown.

COMMENTS:

Subsidized child care programs: In California, subsidized child care may be available to families that meet certain eligibility requirements. The three main types of subsidized child care programs include: California Work Opportunity and Responsibility to Kids (CalWORKS) child care, Alternative Payment Programs (APPs) and General Child Care. General Child Care offers child care and education/development services through contracted child care centers and family child care home networks that are administered through public or private agencies, while child care administered by CalWORKs and APPs is offered through a voucher system. For 2015-16, the Legislative Analyst’s Office estimates that there are close to 131,000 CalWORKs child care slots; 33,000 APP slots; and 29,000 General Child Care slots.

Digital signatures: California Government Code Section 16.5 defines “digital signature” as 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 if and only if it: is unique to the person using it; is capable of verification; is under the sole control of the person using it; is linked to data in such a manner that if the data are changed, the digital signature is invalidated; and conforms to regulations adopted by the Secretary of State. This section also states that the use or acceptance of a digital signature shall be at the option of the parties. According to the California Secretary of State, digital signatures can be used for many transactions that currently require a hand written signature, such as on-line college applications and submitting applications for business permits at the local level.

Need for this bill: According to the author, “California leads the nation when it comes to innovation and technology. However, many of our state government operations have been left in the past. As a result, a number of state agencies are forced to operate in a manner that is both outdated and inefficient. [This bill] would help modernize one of these out-of-date conventions and correct an oversight in existing law by allowing childcare center contractors to use electronic signatures. Providing child care centers with this option will greatly increase their efficiency and maximize the use of their resources.”

In similar legislation that was passed last year, APPs and child care contractors were authorized to maintain their records electronically and APPs were allowed to use electronic signatures. Last year’s measure, however, did not give explicit permission to child care contractors to use electronic signatures that carry the same weight as manual signatures. This bill affords child care contractors the same ability as APPS to use electronic signatures.

PRIOR LEGISLATION:

AB 271 (Obernolte), Chapter 476, Statutes of 2015, expanded the authority of APPs and child care providers and child care contractors to use electronic methods for storage of documents or records, and permitted APPs to use digital signatures pursuant to current state standards.

REGISTERED SUPPORT / OPPOSITION:

Support

California Alternative Payment Program Association (CAPPA) – co-sponsor

Child Development Associates

Opposition

None on file.

Analysis Prepared by: Kelsy C. Castillo / HUM. S. / (916) 319-2089