BILL ANALYSIS
SB 541
Page 1
Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
SB 541 (Pavley) - As Amended: June 30, 2009
SENATE VOTE : 22-15
SUBJECT : Elections: ballot cards and voting systems.
SUMMARY : Requires voting system vendors and ballot paper
manufacturers to notify the Secretary of State (SOS) of any
flaws or defects that they discover in their products. Requires
ballot paper manufacturers and finishers to pay the costs
associated with facility inspections by the SOS. Specifically,
this bill :
1)Defines the following terms, for the purposes of this bill:
a) "Defect" means any flaw in the hardware or documentation
of an approved or conditionally approved voting system that
could result in a state of unfitness for use or
nonconformance to the manufacturer's specifications.
b) "Failure" means a discrepancy between the external
results of the operation of any software or firmware in an
approved or conditionally approved voting system and the
manufacturer's product requirements for that software or
firmware.
c) "Fault" means a step, process, or data definition in any
software or firmware in an approved or conditionally
approved voting system that is incorrect under the
manufacturer's program specification.
2)Requires a voting system vendor that knows of, or becomes
aware of, a defect, fault, or failure in the voting system or
a part of the voting system, to make the following written
notifications of that defect, fault, or failure:
a) In the case of a voting system that is being submitted
to the SOS to be reviewed, notification to the SOS of any
defect, fault, or failure known to the vendor as part of
the application for review;
SB 541
Page 2
b) In the case of a voting system that has been submitted
to the SOS to be reviewed, but for which the SOS has not
completed his or her report on the examination of the
system, notification to the SOS of any defect, fault, or
failure that becomes known to the vendor;
c) In the case of a voting system that has been approved by
the SOS, notification to the SOS and to all local elections
officials who use the system within 30 calendar days after
the vendor learns of the defect, fault, or failure; and,
d) In the case of a voting system that is approved by the
SOS prior to the effective date of this bill, notification
to the SOS and to all local elections officials who use the
system not later than January 8, 2010 of any defect, fault,
or failure known to the vendor prior to January 1, 2010.
3)Requires the SOS to notify the United States Election
Assistance Commission (EAC) or its successor entity of any
defect, fault, or failure disclosed to the SOS by a voting
system vendor pursuant to this bill.
4)Requires a ballot card manufacturer or finisher to disclose
any known flaw or defect in its current or past manufacturing
or finishing process or manufactured or finished ballot cards
in writing to the SOS not later than five working days before
the SOS begins his or her initial inspection of that
manufacturer's or finisher's facilities. Requires a ballot
card manufacturer or finisher that has been approved by the
SOS to notify the SOS and affected local elections officials
in writing within two business days after it discovers any
flaw or defect in its manufacturing or finishing process or
manufactured or finished cards.
5)Requires the SOS to inspect manufacturing and storage
facilities for ballot cards biennially, instead of
periodically, and requires the SOS to inspect finishing
facilities for ballot cards biennially. Requires the costs
associated with the biennial inspection to be paid by the
ballot card manufacturer or finisher, and permits the SOS to
require the manufacturer or finisher to deposit sufficient
funds to cover the costs of the inspection prior to the
inspection.
6)Permits the SOS to seek injunctive and administrative relief
SB 541
Page 3
when a voting system or part of a voting system is defective
due to a known hardware, software, or firmware defect, fault,
or failure that has not been disclosed as required by this
bill. Permits the SOS to seek all of the following relief for
a known but undisclosed defect, fault, or failure in a voting
system or part of a voting system approved or conditionally
approved for use in California:
a) Refund of all moneys paid by a local agency for a voting
system or part of a voting system that is defective due to
a known but undisclosed defect, fault, or failure, whether
or not the voting system has been used in an election;
b) A civil penalty from the offending party or parties, not
to exceed $50,000 per violation; and,
c) A penalty of $1,000 for each day between the deadline
for the vendor to disclose the defect, fault, or failure
and the day when the required disclosure is filed with the
SOS.
7)Provides that all monetary penalties levied pursuant to the
provisions of this bill, other than the refund of moneys paid
by a local agency for a voting system, shall be allocated to
the office of the SOS.
8)Requires regulations adopted by the SOS governing ballot cards
to govern the finishing and quality standards of such cards.
9)Repeals an obsolete provision of law that establishes a
revolving fund for the purchase of ballot paper.
10)Changes terminology in the Elections Code from "punchcards"
to "ballot cards."
11)Makes corresponding changes.
EXISTING LAW :
1)Requires ballot paper and punchcards used by any jurisdiction
in California to be tinted and watermarked or overprinted with
a design furnished by the SOS in a manner that the watermark
or overprint is plainly discernible.
2)Requires the SOS to adopt regulations governing the
SB 541
Page 4
manufacture, distribution, and inventory control of
punchcards. Requires the SOS to inspect the manufacturing and
storage facilities for punchcards periodically. Requires the
SOS to approve each punchcard manufacturer prior to that
manufacturer providing punchcards for use in California
elections.
3)Prohibits a user, vendor, or manufacturer from warehousing
ballot paper or punchcards furnished or released by the SOS
for a specific election for any subsequent election without
the advance written authorization of the SOS.
4)Establishes a revolving fund for the purchase of ballot paper
and punchcards.
5)Permits a person or corporation owning or being interested in
a voting system or a part of a voting system to apply to the
SOS to examine it and report on its accuracy and efficiency to
fulfill its purpose. Requires the SOS to complete his or her
examination without undue delay.
6)Permits the SOS to seek injunctive and administrative relief
when a voting system has been compromised by the addition or
deletion of hardware, software, or firmware without prior
approval.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the Bill : According to the author:
Under current law, ballot vendors and voting system vendors
are not required to inform the Secretary of State about
previously undisclosed flaws in their product before or
after an election. This lack of disclosure can result in
serious delays or jeopardize or nullify votes in counties.
A recent incident in Humboldt County in which a vendor's
software deleted votes cast during a November 2008 election
illustrates the consequences of not requiring vendors to
notify the Secretary of State or anyone else when they
learn of a problem. This bill would help prevent future
errors and discrepancies surrounding our voting processes,
by requiring voting system vendors and ballot manufacturers
to notify the Secretary of State about problems and flaws
SB 541
Page 5
with their respective systems and ballots, before and after
an election.
Also, current law requires only voting system vendors to
pay the costs associated with the Secretary of State's
inspection of their product. This bill would also require
ballot vendors to pay the costs associated with the
Secretary of State's inspection of their facilities,
mirroring the requirement imposed on voting system vendors.
2)Humboldt County Incident : As noted by the author, this bill
is prompted in part by an incident in Humboldt County during
the November 2008 election that resulted in the deletion of
nearly 200 votes cast in that election. The deletion was
caused by a programming error in a version of the GEMS
election management software produced by Premier Elections
Solutions (formerly Diebold). That programming error caused
the first batch of ballots counted by a central count server
at an election to be deleted under certain circumstances.
Premier knew of this problem at least four years prior to the
November 2008 election, and developed a "work-around" to avoid
the deletion of ballots. While Premier did notify elections
officials in the 11 affected California counties of the
"work-around," they did not explain why it was necessary.
Furthermore, Premier did not provide notice of the defect to
the National Association of State Election Directors (NASED),
the EAC, SOS or to the public. When the Humboldt County
employee who had been notified of the "work-around" left
Humboldt County for another job in 2007, that employee did not
pass the information about the "work-around" along to anyone
else in the county elections official's office.
3)Should the SOS Receive Penalty Revenues ? This bill provides
that any monetary penalties assessed against a voting system
vendor for failure to disclose a known defect, fault, or
failure in the voting system or a part of the voting system
shall be paid to the office of the SOS. It is relatively
uncommon for a state agency to receive penalty revenues
resulting from an enforcement action undertaken by that agency
pursuant to law. The desirability of such a policy is
unclear, as it could create an incentive for a state agency to
pursue enforcement actions for financial gain rather than to
ensure the fair and effective implementation of state law.
SB 541
Page 6
In at least one circumstance, however, state law already allows
the SOS to collect a portion of civil penalties assessed under
an enforcement action brought by the SOS. Existing law
provides for a civil penalty of up to $10,000 per violation
for an unauthorized change to a voting system, with penalty
revenues split evenly between the county in which the
violation occurred and the SOS. However, this provision of
state law explicitly requires such penalty revenues to be used
by the SOS "for purposes of bolstering voting systems security
efforts." No such restriction exists on penalty revenues
received by the SOS under this bill.
The committee may wish to consider amending this bill to provide
that penalty revenues resulting from a violation of the bill
shall be deposited in the state's general fund.
4)Ballot Paper Manufacturing Facilities : Under existing law,
any manufacturer who wishes to sell ballot paper or ballot
cards to jurisdictions in California must first be approved by
the SOS. Existing law also requires the SOS to adopt
regulations governing the manufacture, distribution, and
inventory control of ballot paper.
This bill codifies a number of the regulations adopted by the
SOS pursuant to existing law. Among the regulations codified
by this bill are a requirement that ballot manufacturing and
storage facilities be inspected biennially (the Elections Code
requires such facilities to be inspected "periodically") and a
requirement that the SOS approve and inspect ballot finishing
facilities (which is not explicitly required by the Elections
Code).
Additionally, this bill requires ballot paper manufacturers and
finishers to pay the costs associated with the SOS inspections
of their facilities. While existing law already requires
voting system vendors to pay the costs of the examination by
the SOS of those systems, no similar requirement currently
exists for ballot paper manufacturers and finishers.
5)Arguments in Opposition : The Election Technology Council
(ETC), which is a national trade association of voting system
manufacturers, sent a letter of opposition to a prior version
of this bill on March 31 of this year. Since that time, this
bill has been amended three times, and some of the amendments
taken appear to respond to concerns raised by the ETC in their
SB 541
Page 7
letter of opposition. As of this writing, committee staff has
been unable to confirm whether ETC continues to oppose this
bill.
In its opposition to a prior version to this bill, however, ETC
expressed concern with a number of provisions that remain in
this bill. For instance, ETC argued that requiring ballot
paper manufacturers and finishers to pay the costs of the
facility inspections by the SOS "may harm the viability for
smaller providers to remain within the market and lead to a
consolidation in the number of providers." ETC also argued
that the inspection costs "would simply be passed along to the
customers in the state of California (i.e., local election
officials and taxpayers)." Finally, ETC maintained that the
imposition of substantial civil penalties for violations of
the bill was unwarranted, and that it would be more
appropriate to provide for the assessment of damages against a
vendor if those damages result from a violation of the bill.
6)Technical Amendment : Committee staff recommends the following
technical amendment to this bill:
On page 6, line 5, strike out "flaw, or error" and insert
"fault, or failure".
REGISTERED SUPPORT / OPPOSITION :
Support
Secretary of State Debra Bowen (sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
Disability Rights California
Opposition
Election Technology Council (as introduced)
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094