BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 541
                                                                  Page  1


          SENATE THIRD READING
          SB 541 (Pavley)
          As Amended  August 24, 2009
          Majority vote 

           SENATE VOTE  :22-15  
           
           ELECTIONS           4-2         APPROPRIATIONS      12-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Fong, Coto, Mendoza,      |Ayes:|De Leon, Ammiano,         |
          |     |Swanson                   |     |Charles Calderon, Coto,   |
          |     |                          |     |Davis, Fuentes, Hall,     |
          |     |                          |     |John A. Perez,            |
          |     |                          |     |Skinner, Solorio,         |
          |     |                          |     |Torlakson, Hill           |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Adams, Bill Berryhill     |Nays:|Conway, Duvall, Harkey,   |
          |     |                          |     |Miller, Audra Strickland  |
          |     |                          |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           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)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 notify the SOS and all local elections  
            officials who use the system of that defect, fault, or failure.   
            Requires this notification to be made within 30 calendar days  
            from the date after the vendor learns of the defect, fault, or  
            failure, or at the time the system is submitted for review by  
            the SOS.  Requires all known defects, faults, or failures on  
            systems that are currently approved for use in California to be  
            disclosed no later than January 8, 2010.

          2)Requires the SOS to notify the United States Election Assistance  
            Commission (EAC) of any defect, fault, or failure disclosed to  
            the SOS by a voting system vendor pursuant to this bill.

          3)Requires a ballot card manufacturer or finisher to disclose any  







                                                                  SB 541
                                                                  Page  2


            known flaw or defect in its manufacturing or finishing process  
            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.

          4)Requires the SOS to inspect manufacturing, finishing, and  
            storage facilities for ballot cards biennially.  Requires the  
            costs associated with the biennial inspection to be paid by the  
            ballot card manufacturer or finisher.

          5)Permits the SOS to seek injunctive and administrative relief  
            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;

             b)   A civil penalty from the offending party 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.

          6)Repeals an obsolete provision of law that establishes a  
            revolving fund for the purchase of ballot paper.

          7)Changes terminology in the Elections Code from "punchcards" to  
            "ballot cards."

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee:

          1)Minor annual revenue to the SOS from vendor reimbursements for  
            SOS inspections of ballot card manufacturing and finishing  







                                                                  SB 541
                                                                  Page  3


            facilities.  The SOS indicates that there are currently 27 such  
            entities.

          2)Minor absorbable costs to the SOS for enforcement of the bill's  
            provisions, and potential revenue to the SOS from civil  
            penalties.

           COMMENTS  :  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 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 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."

          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 election management  
          software produced by Premier Elections Solutions.  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, 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.

          Please see the policy committee analysis for a full discussion of  
          this bill.

           Analysis Prepared by  :    Ethan Jones / E. & R. / (916) 319-2094 
                                                                  FN: 0002273