BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1404|
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                                 THIRD READING


          Bill No:  SB 1404
          Author:   Pavley (D)
          Amended:  5/10/10
          Vote:     21

           
           SENATE ELEC., REAP. & CONST. AMEND. COMMITTEE  :  3-2, 4/6/10
          AYES:  Hancock, DeSaulnier, Liu
          NOES:  Denham, Strickland

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    Elections:  ballot cards and voting systems

           SOURCE  :     Secretary of State


           DIGEST  :    This bill requires a voting system vendor that  
          knows of, or becomes aware of, a defect, fault, or failure  
          with a voting system or a fault of the voting system, to  
          notify the Secretary of State and all local election  
          officials who use the system of that defect, fault or  
          failure only to the extent that the specific issue could  
          impact future voting or tallying of an election.

           Senate Floor Amendments  of 5/10/10 clarify when a known  
          problem to a voting system could potentially affect the  
          voting or tallying of a future election.

           ANALYSIS  :    Existing law requires the Secretary of State  
          (SOS) to adopt regulations governing the manufacture,  
          distribution, and inventory control of punchcards, and  
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          requiring the inspection of facilities that manufacture and  
          store punchcards.  Existing law requires the SOS to approve  
          a punchcard manufacturer prior to the manufacturers  
          providing of punchcards for use in California elections.

          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, 2011.

          2. Requires the SOS to notify the United States Election  
             Assistance Commission 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 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/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.

          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  

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             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.  Each defect, fault,  
                or failure shall be considered a separate  
                violation.  A defect, fault, or failure constitutes  
                a single violation regardless of the number of  
                voting system units in which the defect, fault, or  
                failure is found.

             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."

           Background
           
           The Humboldt County Incident  .  Currently, ballot vendors or  
          voting system vendors are not required to inform the SOS  
          about previously undisclosed flaws in their product before  
          or after an election.  A recent incident in Humboldt County  
          during the November 2008 elections found that Premier  
          Elections Solutions (formerly Diebold), GEMS software  
          erroneously deleted nearly 200 votes cast.

          It was later learned that while Premier was aware of the  
          problem at least four years before the election in which  
          its effects came to light in Humboldt County, and although  
          Premier made limited attempts (pre-election) to notify  
          affected counties of the software flaw, they failed to  

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          provide notice of the defect to the National Association of  
          State Election Directors, the United States Election  
          Assistance Commission, the SOS or to the public.

           Related legislation
           
          SB 541 (Pavley), of 2009, was almost identical to this  
          bill, but was vetoed by the Governor due to concerns over  
          civil penalty provisions placed on voting system vendors.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  5/11/10)

          Secretary of State (source)

           OPPOSITION  :    (Verified  5/11/10)

          Election Technology Council

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          "SB 1404 is designed to ensure the integrity of  
          California's voting system and requires notification steps  
          to prevent future errors, discrepancies and uncertainties  
          surrounding our voting processes."  The author's office  
          indicates they will be amending the bill to make clarifying  
          changes to some of the provisions.

           ARGUMENTS IN OPPOSITION  :    The opposition is concerned  
          with the penalty provision of the bill which could result  
          in a less competition marketplace or could negatively  
          impact the industry's ability to effectively serve its  
          customers and their constituents.  
           

          DLW:do  5/17/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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