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AB-1360 Common interest developments: electronic voting.(2013-2014)

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AB1360:v95#DOCUMENT

Amended  IN  Senate  June 15, 2014
Amended  IN  Senate  June 24, 2013
Amended  IN  Assembly  May 02, 2013
Amended  IN  Assembly  April 25, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill No. 1360


Introduced by Assembly Member Torres
(Coauthor: Assembly Member Gordon)

February 22, 2013


An act to amend Sections 5110 and 5110, 5120, 5125, and 5260 of, and to add Section 5117 5116 to, the Civil Code, relating to common interest developments.


LEGISLATIVE COUNSEL'S DIGEST


AB 1360, as amended, Torres. Common interest developments: electronic voting.
Existing law, the Davis-Stirling Common Interest Development Act, defines and regulates common interest developments, which include community apartment projects, condominium projects, planned developments, and stock cooperatives. These provisions require that a common interest development be managed by an association and that elections related to the governance or administration of the common interest development conform to specified requirements, including, among other things, the requirement that the association adopt rules to allow one or more inspectors to appoint or oversee independent 3rd parties to verify signatures and count and tabulate votes. Existing law authorizes a secret paper ballot to be distributed and voted upon by the membership without a meeting, and imposes other requirements relating to proxies and secret ballots. Existing law authorizes a member of an association to bring a civil action to enforce his or her rights and authorizes a court to impose a civil penalty of up to $500 for a violation of the provisions governing elections. Existing law requires that the sealed ballots remain in the custody of the inspector or inspectors of elections or at a location designated by the inspector or inspectors until after the tabulation of the vote, and until the time allowed for challenging the election has expired, when custody is required to be transferred to the association.
This bill would authorize an association to conduct elections by electronic voting, as specified, and would enact related provisions. The bill would require an association, if electronic voting is to be conducted, to provide each member with an opportunity to indicate that he or she will be voting electronically and to provide ballots, as specified. The bill would require the electronic balloting service provider to retain the electronically submitted ballot data until the time allowed for challenging the election has expired.
This bill set forth minimum requirements of an electronic voting system for an association’s election. The bill would also authorize the Secretary of State to study and adopt regulations governing the use of electronic voting systems to determine whether the systems are capable of complying with these requirements.
The bill would also declare the Legislature’s intent in this regard.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Common interest development association elections are subject to specific procedures which are more restrictive than the procedures for other nonprofit corporations that may conduct balloting by electronic means under Section 7510 of the Corporations Code.
(b) The procedures set forth in the Davis-Stirling Common Interest Development Act do not permit the use of electronic voting. The act requires the use of paper ballots and double envelopes enclosing those ballots.

(c)The statutorily prescribed paper ballot voting procedure failed to increase voter participation. Therefore, common interest development membership meetings often fail for lack of quorum.

(d)

(c) Election quorums would be more easily achieved using electronic balloting.

(e)

(d) Under existing law, the entire election process must be repeated until quorum is achieved, which costs the association significantly more money.

(f)

(e) Authority for the use of electronic voting would give associations and their members an option that could save postage and paper costs while preserving natural resources.

(g)

(f) Electronic transactions are already commonly used in California to conduct state voter registration, vehicle registration and driver’s license renewals, payment of local real property and state income taxes, banking transactions, travel reservations, and corporation elections, because they are technologically secure and provide users with confirmation of their transaction.

(h)

(g) Senate Bill 820 (Chapter 428 of the Statutes of 1999) created the Uniform Electronic Transactions Act (Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code), which provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form, that a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation, and that if a law requires a record to be in writing, or if a law requires a signature, an electronic record satisfies the law.

SEC. 2.

 Section 5110 of the Civil Code is amended to read:

5110.
 (a) The association shall select an independent third party or parties as an inspector of elections. The number of inspectors of elections shall be one or three.
(b)  An independent third party may be a member, but shall not be a director or a candidate for director or be related to a director or to a candidate for director. An independent third party shall not be a person, business entity, or subdivision of a business entity who is currently employed or under contract to the association for any compensable services, unless expressly authorized by rules of the association adopted pursuant to paragraph (5) of subdivision (a) of Section 5105.
(c) The inspector or inspectors of elections shall do all of the following:
(1) Determine the number of memberships entitled to vote and the voting power of each.
(2) Determine the authenticity, validity, and effect of proxies, if any.
(3) Receive ballots, or receive the voting results from an electronic balloting service provider including those submitted through an electronic voting system pursuant to Section 5116.
(4) Hear and determine all challenges and questions in any way arising out of or in connection with the right to vote.
(5) Count and tabulate all votes, including the voting results received pursuant to paragraph (3) those submitted through an electronic voting system pursuant to Section 5116.
(6) Determine when the polls shall close, consistent with the governing documents.
(7) Determine the tabulated results of the election.
(8) Perform any acts as may be proper to conduct the election with fairness to all members in accordance with this article, the Corporations Code, and all applicable rules of the association regarding the conduct of the election that are not in conflict with this article.
(d) An inspector of elections shall perform all duties impartially, in good faith, to the best of the inspector of election’s ability, and as expeditiously as is practical. If there are three inspectors of elections, the decision or act of a majority shall be effective in all respects as the decision or act of all. Any report made by the inspector or inspectors of elections is prima facie evidence of the facts stated in the report.
(e) As used in this section: section, an “independent third party” includes, but is not limited to, a volunteer poll worker with the county registrar of voters, a licensee of the California Board of Accountancy, or a notary public.

(1)“Electronic balloting service provider” means a business that meets all of the following requirements:

(A)Is not affiliated with the association management or members.

(B)Is insured for liability.

(C)Protects the secrecy of the votes.

(D)Protects the anonymity of the voter by ensuring that members’ names are not associated with the votes when the votes are tallied and submitted to the association by the electronic balloting service provider.

(E)Produces a record verifying dates and times that votes were cast.

(F)Produces a list of members who voted electronically.

(G)Provides to a member a secure confirmation of the member’s electronically cast vote.

(2)“Independent third party” includes, but is not limited to, a volunteer poll worker with the county registrar of voters, a licensee of the California Board of Accountancy, or a notary public.

SEC. 3.

 Section 5116 is added to the Civil Code, to read:

5116.
 (a) Notwithstanding subdivision (a) of Section 5115, the association may conduct elections by electronic voting conducted pursuant to this section. If electronic voting is to be conducted, the association shall provide each member with an opportunity to indicate whether he or she will vote electronically. For a member who indicates that he or she will vote electronically, not less than 30 days before the voting deadline, the association shall provide to the member the ballot and any related material by electronic transmission. Member ballots shall be returned to the association by electronic transmission by the voting deadline. The association, for a member who did not indicate that he or she would be voting electronically, shall provide the member with a ballot pursuant to Section 5115. The inspector of elections, or the designee of the inspector of elections, may verify the authenticity of a member’s request to vote electronically.
(b) The association may conduct elections by electronic voting only if all of the following requirements are met:
(1) In accordance with subdivision (a), the association receives confirmation from at least one member that he or she will be voting electronically.
(2) The association, or an electronic balloting service provider acting on behalf of the association, provides each member that will be voting electronically with all of the following:
(A) A method to securely authenticate the member’s identity to the electronic voting system.
(B) A method to secure a member’s electronic voting platform from, among other things, malicious software and the ability of others to remotely monitor or control the electronic voting platform.
(C) A method to securely communicate with the electronic voting system.
(D) A method to securely review an electronic ballot prior to its transmission to the electronic voting system.
(E) A method to securely transmit an electronic ballot to the electronic voting system that ensures the secrecy and integrity of each ballot.
(F) A method to allow members to verify the authenticity of receipts sent from the electronic voting system.
(G) A method to confirm, at least 14 days before the voting deadline, that a member’s electronic voting platform can successfully communicate with the electronic voting system.
(H) In the event of a disruption of the electronic voting system, the ability to vote by mail pursuant to Section 5115 or to deliver a ballot in-person, notwithstanding the 30-day requirement in subdivision (a) of Section 5115.
(3) The association, or an electronic balloting service provider acting on behalf of the association, ensures that the electronic voting system meets all of the following requirements:
(A) The electronic voting system is accessible to members with disabilities.
(B) The electronic voting system is secure from, among other things, malicious software and the ability of others to remotely monitor or control the system.
(C) The electronic voting system is able to securely authenticate a member’s identity.
(D) The electronic voting system is able to securely communicate with each member’s electronic voting platform.
(E) The electronic voting system is able to securely authenticate the validity of each electronic ballot to ensure that the ballot has not been altered in transit.
(F) The electronic voting system is able to securely transmit a receipt from the electronic voting system to each member who casts an electronic ballot.
(G) The electronic voting system is able to securely and permanently separate any authentication or identifying information from the electronic ballot, rendering it impossible to tie any ballot to any specific member.
(H) The electronic voting system is able to securely allow members to confirm that their ballot has been received and counted.
(I) The electronic voting system is able to store electronic ballots in a secure manner, keeping them accessible to election officials for recount, inspection, and review purposes as required by Section 5125.
(4) The Secretary of State has approved the electronic voting system in accordance with the procedures for certification of voting systems in Article 1 (commencing with Section 19220) of Chapter 3 of Division 19 of the Elections Code. For purposes of this subdivision, the prohibitions contained in Section 19205 of the Elections Code shall not apply.
(c) An electronic balloting service provider shall not provide electronic voting services to an association pursuant to this section unless it is both insured for liability and is not affiliated with the association management or members.
(d) The Secretary of State may study and adopt regulations governing the use of electronic voting systems to determine whether they are capable of complying with paragraphs (2) and (3) of subdivision (b).

SEC. 3.Section 5117 is added to the Civil Code, to read:
5117.

Notwithstanding Section 5115, subdivision (a) of Section 5120, or Section 5125, the association may conduct elections by electronic voting conducted pursuant to subdivision (a) of Section 7510 of the Corporations Code. If electronic voting is to be conducted in accordance with this section, the association shall provide each member with an opportunity to indicate that he or she will be voting electronically. For a member who indicated that he or she will be voting electronically, not less than 30 days prior to the voting deadline, the association shall provide to the member the ballot and any related material by electronic transmission. Member responses shall be returned to the association by electronic transmission by the voting deadline. The association, for a member who did not indicate that he or she would be voting electronically, shall provide the member with a ballot pursuant to Section 5115.

SEC. 4.

 Section 5120 of the Civil Code is amended to read:

5120.
 (a) All votes, including votes submitted through an electronic voting system, if any, shall be counted and tabulated by the inspector or inspectors of elections, or the designee of the inspector of elections, in public at a properly noticed open meeting of the board or members. Any candidate or other member of the association may witness the counting and tabulation of the votes. No person, including a member of the association or an employee of the management company, shall open or otherwise review any ballot prior to the time and place at which the ballots are counted and tabulated. The inspector of elections, or the designee of the inspector of elections, may verify the member’s information and signature on the outer envelope prior to the meeting at which ballots are tabulated. Once a secret ballot is received by the inspector of elections, it shall be irrevocable.
(b) The tabulated results of the election shall be promptly reported to the board and shall be recorded in the minutes of the next meeting of the board and shall be available for review by members of the association. Within 15 days of the election, the board shall give general notice pursuant to Section 4045 of the tabulated results of the election.

SEC. 4.SEC. 5.

 Section 5125 of the Civil Code is amended to read:

5125.
 (a) The sealed ballots at all times shall be in the custody of the inspector or inspectors of elections or at a location designated by the inspector or inspectors until after the tabulation of the vote, and until the time allowed by Section 5145 for challenging the election has expired, at which time custody shall be transferred to the association. The
(b) If an electronic balloting service provider, as defined in Section 5110, is used in the course of an election, this provider shall retain the electronically submitted ballot data until the time allowed by Section 5145 for challenging the election has expired. If
(c) If there is a recount or other challenge to the election process, the inspector or inspectors of elections shall, upon written request, make the ballots available for inspection and review by an association member or the member’s authorized representative. Any recount shall be conducted in a manner that preserves the confidentiality of the vote.

SEC. 6.

 Section 5260 of the Civil Code is amended to read:

5260.
 To be effective, any of the following requests shall be delivered in writing to the association, pursuant to Section 4035:
(a) A request to change the member’s information in the association membership list.
(b) A request to add or remove a second address for delivery of individual notices to the member, pursuant to subdivision (b) of Section 4040.
(c) A request for individual delivery of general notices to the member, pursuant to subdivision (b) of Section 4045, or a request to cancel a prior request for individual delivery of general notices.
(d) A request to opt out of the membership list pursuant to Section 5220, or a request to cancel a prior request to opt out of the membership list.
(e) A request to receive a full copy of a specified annual budget report or annual policy statement pursuant to Section 5320.
(f) A request to receive all reports in full, pursuant to subdivision (b) of Section 5320, or a request to cancel a prior request to receive all reports in full.
(g) A request to vote in an association election using an electronic voting system pursuant to Section 5116.