BILL NUMBER: AB 1360 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Torres FEBRUARY 22, 2013 An act to amend Section 5110 of, and to add Section 5117 to, the Civil Code, relating to common interest developments. LEGISLATIVE COUNSEL'S DIGEST AB 1360, as introduced, Torres. Common interest developments: electronic voting. Existing law, the Davis-Stirling Common Interest Development Act, defines and regulates common interest developments, which include community apartment projects, condominium projects, planned developments, and stock cooperatives. These provisions require that a common interest development be managed by an association and that elections related to the governance or administration of the common interest development conform to specified requirements, including, among other things, the requirement that the association adopt rules to allow one or more inspectors to appoint or oversee independent 3rd parties to verify signatures and count and tabulate votes. Existing law authorizes a secret paper ballot to be distributed and voted upon by the membership without a meeting, and imposes other requirements relating to proxies and secret ballots. Existing law authorizes a member of an association to bring a civil action to enforce his or her rights and authorizes a court to impose a civil penalty of up to $500 for a violation of the provisions governing elections. This bill would authorize an association to conduct elections or other membership balloting by electronic voting, as specified, and would enact related provisions. The bill would require an association to provide each member with an opportunity to indicate that he or she will be voting electronically and to provide a member who did not indicate so with a paper ballot for submission, as specified. The bill would also declare the Legislature's intent in this regard. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) Common interest development association elections are subject to specific procedures which are more restrictive than the procedures for other nonprofit corporations that may conduct balloting by electronic means under Section 7510 of the Corporations Code. (b) The procedures set forth in the Davis-Stirling Common Interest Development Act do not permit the use of electronic voting. The act requires the use of paper ballots and double envelopes enclosing those ballots. (c) The statutorily prescribed paper ballot voting procedure failed to increase voter participation. Therefore, common interest development membership meetings often fail for lack of quorum. (d) Election quorums would be more easily achieved using electronic balloting. (e) Under existing law, the entire election process must be repeated until quorum is achieved, which costs the association significantly more money. (f) Authority for the use of electronic voting would give associations and their members an option which could save postage and paper costs while preserving natural resources. SEC. 2. Section 5110 of the Civil Code is amended to read: 5110. (a) The association shall select an independent third party or parties as an inspector of elections. The number of inspectors of elections shall be one or three. (b) For the purposes of this section, an independent third party includes, but is not limited to, a volunteer poll worker with the county registrar of voters, a licensee of the California Board of Accountancy, or a notary public. An independent third party may be a member, but may not be a director or a candidate for director or be related to a director or to a candidate for director. An independent third party may not be a person, business entity, or subdivision of a business entity who is currently employed or under contract to the association for any compensable services unless expressly authorized by rules of the association adopted pursuant to paragraph (5) of subdivision (a) of Section 5105. (c) The inspector or inspectors of elections shall do all of the following: (1) Determine the number of memberships entitled to vote and the voting power of each. (2) Determine the authenticity, validity, and effect of proxies, if any. (3) Receive ballots , or receive the tally report from an electronic balloting service provider . (4) Hear and determine all challenges and questions in any way arising out of or in connection with the right to vote. (5) Count and tabulate all votes , including the votes indicated on the tally report received pursuant to paragraph (3) . (6) Determine when the polls shall close, consistent with the governing documents. (7) Determine the tabulated results of the election. (8) Perform any acts as may be proper to conduct the election with fairness to all members in accordance with this article, the Corporations Code, and all applicable rules of the association regarding the conduct of the election that are not in conflict with this article. (d) An inspector of elections shall perform all duties impartially, in good faith, to the best of the inspector of election' s ability, and as expeditiously as is practical. If there are three inspectors of elections, the decision or act of a majority shall be effective in all respects as the decision or act of all. Any report made by the inspector or inspectors of elections is prima facie evidence of the facts stated in the report. SEC. 3. Section 5117 is added to the Civil Code, to read: 5117. Notwithstanding subdivision (a) of Section 5115, subdivision (a) of Section 5120, or Section 5125, the association may conduct elections or other membership balloting by electronic voting conducted pursuant to Section 7510 of the Corporations Code. The association shall provide each member with an opportunity to indicate that he or she will be voting electronically. The association shall provide a member who did not indicate that he or she would be voting electronically with a paper ballot, which shall be submitted by the member directly to the inspector or inspectors of elections at the meeting at which the votes will be counted.