Amended in Assembly April 25, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1360

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 amended, 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 begin delete or other membership balloting end delete by electronic voting, as specified, and would enact related provisions. The bill would require an association begin insert , if electronic voting is to be conducted, end insert to provide each member with an opportunity to indicate that he or she will be voting electronically and to provide begin delete a member who did not indicate so with a paper ballot for submission end delete begin insert ballots end insert , 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 begin delete which end delete begin insert that end insert 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)  begin delete 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. end delete An independent third party may
be a member, but begin delete may end delete begin insert shall end insert 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 begin delete may end delete begin insert shall end insert 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 begin insert , end insert 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 begin delete tally report end delete begin insert voting results end insert
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 begin delete votes indicated
on the tally report end delete begin insert voting results end insert 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.

begin insert

(e) As used in this section:

end insert begin insert

(1) “Electronic balloting service provider” means a business
that meets all of the following requirements:

end insert begin insert

(A) Is an independent third party that is not affiliated with the
association management or members.

end insert begin insert

(B) Is insured for liability.

end insert begin insert

(C) Protects the secrecy of ballots.

end insert begin insert

(D) Protects the anonymity of the voter by ensuring that
members’ names are not listed when the votes are tallied and
submitted to the association by the electronic balloting service
provider.

end insert begin insert

(E) Produces a record verifying dates and times that votes were
cast.

end insert begin insert

(F) Provides to a member a secure confirmation of the member’s
electronically cast vote.

end insert begin insert

(2) “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.

end insert

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 begin delete or other membership balloting end delete by electronic
voting conducted pursuant to begin insert subdivision (a) of end insert Section 7510 of
the Corporations Code. begin delete The end delete begin insert If electronic voting is to be conducted
in accordance with this section, the end insert association shall provide each
member with an opportunity to indicate that he or she will be voting
electronically. begin insert For a member who indicated that he or she will be
voting electronically, not less than 30 days prior to the voting
deadline, the association shall provide to the member the ballot
and any related material by electronic transmission. Member
responses shall be returned to the association by electronic
transmission by the voting deadline. end insert The association begin delete shall provide end delete begin insert ,
for end insert a member who did not indicate that he or she would be voting
electronically begin insert , shall provide the member end insert with a begin delete paper end delete ballot begin delete , 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 end delete begin insert pursuant to Section 5115 end insert .