Amended in Senate June 15, 2014

Amended in Senate June 24, 2013

Amended in Assembly May 2, 2013

Amended in Assembly April 25, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1360

Introduced by Assembly Member Torres

(Coauthor: Assembly Member Gordon)

February 22, 2013

An act to amend Sections begin delete 5110 and end delete begin insert 5110, 5120, end insert 5125 begin insert , and 5260 end insert of, and to add Section begin delete 5117 end delete begin insert 5116 end insert 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. Existing law requires that the sealed ballots remain in the custody of the inspector or inspectors of elections or at a location designated by the inspector or inspectors until after the tabulation of the vote, and until the time allowed for challenging the election has expired, when custody is required to be transferred to the association.

This bill would authorize an association to conduct elections by electronic voting, as specified, and would enact related provisions. The bill would require an association, if electronic voting is to be conducted, to provide each member with an opportunity to indicate that he or she will be voting electronically and to provide ballots, as specified. The bill would require the electronic balloting service provider to retain the begin insert electronically submitted end insert ballot data until the time allowed for challenging the election has expired.

begin insert

This bill set forth minimum requirements of an electronic voting system for an association’s election. The bill would also authorize the Secretary of State to study and adopt regulations governing the use of electronic voting systems to determine whether the systems are capable of complying with these requirements.

end insert

The bill would also declare the Legislature’s intent in this regard.

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . 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.

begin delete

(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.

end delete begin delete

(d)

end delete

begin insert (c) end insert  Election quorums would be more easily achieved using
electronic balloting.

begin delete

(e)

end delete

begin insert (d) end insert  Under existing law, the entire election process must be
repeated until quorum is achieved, which costs the association
significantly more money.

begin delete

(f)

end delete

begin insert (e) end insert  Authority for the use of electronic voting would give
associations and their members an option that could save postage
and paper costs while preserving natural resources.

begin delete

(g)

end delete

begin insert (f) end insert  Electronic transactions are already commonly used in
California to conduct state voter registration, vehicle registration
and driver’s license renewals, payment of local real property and
state income taxes, banking transactions, travel reservations, and
corporation elections, because they are technologically secure and
provide users with confirmation of their transaction.

begin delete

(h)

end delete

begin insert (g) end insert  Senate Bill 820 (Chapter 428 of the Statutes of 1999) created
the Uniform Electronic Transactions Act (Title 2.5 (commencing
with Section 1633.1) of Part 2 of Division 3 of the Civil Code),
which provides that a record or signature may not be denied legal
effect or enforceability solely because it is in electronic form, that
a contract may not be denied legal effect or enforceability solely
because an electronic record was used in its formation, and that if
a law requires a record to be in writing, or if a law requires a
signature, an electronic record satisfies the law.

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)  An independent third party may be a member, but shall 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 shall 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, begin delete or receive the voting results from an
electronic balloting service provider end delete begin insert including those submitted
through an electronic voting system pursuant to Section 5116 end insert .

(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 begin delete the voting results
received pursuant to paragraph (3) end delete begin insert those submitted through an
electronic voting system pursuant to Section 5116 end insert .

(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.

(e) As used in this begin delete section: end delete begin insert 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 insert

begin delete

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

(A) Is not affiliated with the association management or
members.

(B) Is insured for liability.

(C) Protects the secrecy of the votes.

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

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

(F) Produces a list of members who voted electronically.

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

(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 delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 5116 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 5116. end insert   

(a) Notwithstanding subdivision (a) of Section 5115,
the association may conduct elections by electronic voting
conducted pursuant to this section. If electronic voting is to be
conducted, the association shall provide each member with an
opportunity to indicate whether he or she will vote electronically.
For a member who indicates that he or she will vote electronically,
not less than 30 days before the voting deadline, the association
shall provide to the member the ballot and any related material
by electronic transmission. Member ballots shall be returned to
the association by electronic transmission by the voting deadline.
The association, for a member who did not indicate that he or she
would be voting electronically, shall provide the member with a
ballot pursuant to Section 5115. The inspector of elections, or the
designee of the inspector of elections, may verify the authenticity
of a member’s request to vote electronically.

(b) The association may conduct elections by electronic voting
only if all of the following requirements are met:

(1) In accordance with subdivision (a), the association receives
confirmation from at least one member that he or she will be voting
electronically.

(2) The association, or an electronic balloting service provider
acting on behalf of the association, provides each member that
will be voting electronically with all of the following:

(A) A method to securely authenticate the member’s identity to
the electronic voting system.

(B) A method to secure a member’s electronic voting platform
from, among other things, malicious software and the ability of
others to remotely monitor or control the electronic voting
platform.

(C) A method to securely communicate with the electronic voting
system.

(D) A method to securely review an electronic ballot prior to
its transmission to the electronic voting system.

(E) A method to securely transmit an electronic ballot to the
electronic voting system that ensures the secrecy and integrity of
each ballot.

(F) A method to allow members to verify the authenticity of
receipts sent from the electronic voting system.

(G) A method to confirm, at least 14 days before the voting
deadline, that a member’s electronic voting platform can
successfully communicate with the electronic voting system.

(H) In the event of a disruption of the electronic voting system,
the ability to vote by mail pursuant to Section 5115 or to deliver
a ballot in-person, notwithstanding the 30-day requirement in
subdivision (a) of Section 5115.

(3) The association, or an electronic balloting service provider
acting on behalf of the association, ensures that the electronic
voting system meets all of the following requirements:

(A) The electronic voting system is accessible to members with
disabilities.

(B) The electronic voting system is secure from, among other
things, malicious software and the ability of others to remotely
monitor or control the system.

(C) The electronic voting system is able to securely authenticate
a member’s identity.

(D) The electronic voting system is able to securely communicate
with each member’s electronic voting platform.

(E) The electronic voting system is able to securely authenticate
the validity of each electronic ballot to ensure that the ballot has
not been altered in transit.

(F) The electronic voting system is able to securely transmit a
receipt from the electronic voting system to each member who
casts an electronic ballot.

(G) The electronic voting system is able to securely and
permanently separate any authentication or identifying information
from the electronic ballot, rendering it impossible to tie any ballot
to any specific member.

(H) The electronic voting system is able to securely allow
members to confirm that their ballot has been received and
counted.

(I) The electronic voting system is able to store electronic ballots
in a secure manner, keeping them accessible to election officials
for recount, inspection, and review purposes as required by Section
5125.

(4) The Secretary of State has approved the electronic voting
system in accordance with the procedures for certification of voting
systems in Article 1 (commencing with Section 19220) of Chapter
3 of Division 19 of the Elections Code. For purposes of this
subdivision, the prohibitions contained in Section 19205 of the
Elections Code shall not apply.

(c) An electronic balloting service provider shall not provide
electronic voting services to an association pursuant to this section
unless it is both insured for liability and is not affiliated with the
association management or members.

(d) The Secretary of State may study and adopt regulations
governing the use of electronic voting systems to determine whether
they are capable of complying with paragraphs (2) and (3) of
subdivision (b).

end insert

begin delete

SEC. 3.  

Section 5117 is added to the Civil Code, to read:

5117.  

Notwithstanding Section 5115, subdivision (a) of Section
5120, or Section 5125, the association may conduct elections by
electronic voting conducted pursuant to subdivision (a) of Section
7510 of the Corporations Code. If electronic voting is to be
conducted in accordance with this section, the association shall
provide each member with an opportunity to indicate that he or
she will be voting electronically. 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. The association, for a member
who did not indicate that he or she would be voting electronically,
shall provide the member with a ballot pursuant to Section 5115.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 5120 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

5120.  

(a) All votes begin insert , including votes submitted through an
electronic voting system, if any, end insert shall be counted and tabulated by
the inspector or inspectors of elections, or the designee of the
inspector of elections, in public at a properly noticed open meeting
of the board or members. Any candidate or other member of the
association may witness the counting and tabulation of the votes.
No person, including a member of the association or an employee
of the management company, shall open or otherwise review any
ballot prior to the time and place at which the ballots are counted
and tabulated. The inspector of elections, or the designee of the
inspector of elections, may verify the member’s information and
signature on the outer envelope prior to the meeting at which
ballots are tabulated. Once a secret ballot is received by the
inspector of elections, it shall be irrevocable.

(b) The tabulated results of the election shall be promptly
reported to the board and shall be recorded in the minutes of the
next meeting of the board and shall be available for review by
members of the association. Within 15 days of the election, the
board shall give general notice pursuant to Section 4045 of the
tabulated results of the election.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section 5125 of the Civil Code is amended to read:

5125.  

begin insert (a) end insert begin insert   end insert The sealed ballots at all times shall be in the custody
of the inspector or inspectors of elections or at a location designated
by the inspector or inspectors until after the tabulation of the vote,
and until the time allowed by Section 5145 for challenging the
election has expired, at which time custody shall be transferred to
the association. begin delete The end delete

begin insert (b) end insert begin insert   end insert begin insert If an end insert electronic balloting service provider, as defined in
Section 5110, begin insert is used in the course of an election, this provider end insert
shall retain the begin insert electronically submitted end insert ballot data until the time
allowed by Section 5145 for challenging the election has expired.
begin delete If end delete

begin insert (c) end insert begin insert   end insert begin insert If end insert there is a recount or other challenge to the election process,
the inspector or inspectors of elections shall, upon written request,
make the ballots available for inspection and review by an
association member or the member’s authorized representative.
Any recount shall be conducted in a manner that preserves the
confidentiality of the vote.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 5260 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

5260.  

To be effective, any of the following requests shall be
delivered in writing to the association, pursuant to Section 4035:

(a) A request to change the member’s information in the
association membership list.

(b) A request to add or remove a second address for delivery of
individual notices to the member, pursuant to subdivision (b) of
Section 4040.

(c) A request for individual delivery of general notices to the
member, pursuant to subdivision (b) of Section 4045, or a request
to cancel a prior request for individual delivery of general notices.

(d) A request to opt out of the membership list pursuant to
Section 5220, or a request to cancel a prior request to opt out of
the membership list.

(e) A request to receive a full copy of a specified annual budget
report or annual policy statement pursuant to Section 5320.

(f) A request to receive all reports in full, pursuant to subdivision
(b) of Section 5320, or a request to cancel a prior request to receive
all reports in full.

begin insert

(g) A request to vote in an association election using an
electronic voting system pursuant to Section 5116.

end insert