BILL ANALYSIS SB 1404 Page 1 SENATE THIRD READING SB 1404 (Pavley) As Amended May 10, 2010 Majority vote SENATE VOTE :21-12 ELECTIONS 5-2 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Fong, Gatto, Mendoza, |Ayes:|Fuentes, Bradford, | | |Saldana, Swanson | |Charles Calderon, Coto, | | | | |Davis, De Leon, Gatto, | | | | |Hall, Skinner, Solorio, | | | | |Torlakson, Torrico | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Adams, Bill Berryhill |Nays:|Conway, Harkey, Miller, | | | | |Nielsen, Norby | | | | | | ----------------------------------------------------------------- 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. 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, 2011. 2)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 pursuant to this bill. 3)Requires a ballot card manufacturer or finisher to disclose SB 1404 Page 2 any known flaw or defect in its manufacturing or finishing process or ballot cards in writing to the SOS not later than five working days before the SOS begins its inspection of that manufacturer's or finisher's facilities. Requires a ballot card manufacturer or finisher to notify the SOS and affected local elections officials in writing within two business days after it discovers any flaw or defect. Requires the SOS to inspect manufacturing and storage facilities for ballot cards biennially. 4)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 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 the voting system; 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. 5)Provides that, for the purposes of penalties provided for in this bill, 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. 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: SB 1404 Page 3 1)Absorbable costs to the SOS for biennial inspections of ballot card manufacturing and finishing facilities, as the bill is generally consistent with the office's current practice. 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 General Fund revenue from civil penalties. COMMENTS : According to the author, "Under current law, ballot vendors or 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. . . .SB 541 (2009), a similar version of this bill, was vetoed by the Governor last year because of concerns about the civil penalties placed on voting system vendors. This bill clarifies that the penalty in the measure would apply to each defect, flaw or failure, not to each machine that may contain a defect, fault or failure." 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. SB 541 (Pavley) of 2009 was substantially similar to this bill, except that it did not specify that a single defect, fault or failure on multiple units of a voting system constitutes a single violation. SB 541 was vetoed by Governor Schwarzenegger, who expressed concern that the bill could have subjected voting SB 1404 Page 4 system vendors to substantial civil penalties. Please see the policy committee analysis for a full discussion of this bill. Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094 FN: 0005544