BILL ANALYSIS                                                                                                                                                                                                    



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          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  








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            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:









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          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  








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          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