BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2013-2014 Regular Session
AB 1360 (Torres)
As Amended June 15, 2014
Hearing Date: June 24, 2014
Fiscal: Yes
Urgency: No
TH
SUBJECT
Common Interest Developments: Electronic Voting
DESCRIPTION
This bill would amend the Davis-Stirling Common Interest
Development Act to authorize associations to conduct elections
using electronic voting systems, as specified, provided
participating voters opt into using the electronic voting system
and other required conditions are met.
BACKGROUND
In California, common interest developments (CIDs) are governed
by the Davis-Stirling Common Interest Development Act
("Davis-Stirling Act" or "Act"). Owners of separate property in
CIDs have an undivided interest in the common property of the
development and are subject to the CID's covenants, conditions,
and restrictions. CIDs are also governed by a homeowners
association, which is run by volunteer directors that may or may
not have prior experience managing an association. The Court of
Appeal, Fourth Appellate District, previously observed that:
[t]he homeowners associations function almost "as a second
municipal government, regulating many aspects of [the
homeowners'] daily lives." "[U]pon analysis of the
association's functions, one clearly sees the association as
a quasi-government entity paralleling in almost every case
the powers, duties, and responsibilities of a municipal
government. As a 'mini-government,' the association
provides to its members, in almost every case, utility
services, road maintenance, street and common area lighting,
(more)
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and refuse removal. In many cases, it also provides
security services and various forms of communication within
the community. There is, moreover, a clear analogy to the
municipal police and public safety functions. . . ." In
short, homeowners associations, via their enforcement of the
CC&R's, provide many beneficial and desirable services that
permit a common interest development to flourish. (Villa
Milano Homeowners Ass'n v. Il Davorge (2000) 84 Cal.App.4th
819, 836 [citations omitted].)
Just as with municipal governments, homeowners associations use
elections to choose members to serve on an association's board
of directors and to levy assessments for particular purposes.
Under existing law, homeowners associations conduct elections
through a paper and mail based balloting system that resembles
California's vote by mail process. Some associations reportedly
have difficulty under the existing balloting system establishing
the quorum required by their governing documents. Consequently,
associations may have to conduct repeated paper-based elections
until a quorum is established.
This bill would authorize homeowners associations to conduct
elections using electronic voting systems in addition to the
existing paper-based balloting system. It would allow each
voting member of an association to opt into using the electronic
voting system if they so choose. This bill would permit an
association, or an electronic balloting service provider acting
on behalf of an association, to conduct elections by electronic
voting only if, among other requirements, each voting member is
provided with the following:
a method to securely authenticate the member's identity to the
electronic voting system;
a method to secure a member's electronic voting platform from
malicious software and the ability of others to remotely
monitor or control the electronic voting platform;
a method to securely communicate with the electronic voting
system;
a method to securely review an electronic ballot prior to its
transmission to the electronic voting system;
a method to securely transmit an electronic ballot to the
electronic voting system that ensures the secrecy and
integrity of each ballot; and
a method to allow members to verify the authenticity of
receipts sent from the electronic voting system.
Additionally, before electronic voting may take place, the
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association's chosen electronic voting system must, among other
things, be:
accessible to members with disabilities;
secure from malicious software and the ability of others to
remotely monitor or control the system;
able to securely authenticate a member's identity;
able to securely communicate with each member's electronic
voting platform;
able to securely authenticate the validity of each electronic
ballot to ensure that the ballot has not been altered in
transit;
able to securely transmit a receipt from the electronic voting
system to each member who casts an electronic ballot;
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;
able to securely allow members to confirm that their ballot
has been received and counted; and
able to store electronic ballots in a secure manner, keeping
them accessible to election officials for recount, inspection,
and review purposes as required.
Finally, before electronic voting systems could be used in an
association's election, this bill would require the Secretary of
State to first approve the electronic voting system in
accordance with specified procedures for the certification of
voting. This bill would also authorize the Secretary of State
to study and adopt regulations governing the use of electronic
voting systems to determine whether they are capable of
complying with the requirements set by this bill.
CHANGES TO EXISTING LAW
Existing law , the Davis-Stirling Common Interest Development
Act, establishes the rules and regulations governing the
operation of a common interest development (CID) and the
respective rights and duties of a homeowners association and its
members. (Civ. Code Sec. 4000 et seq.)
Existing law requires association elections regarding
assessments legally requiring a vote, election and removal of
directors, amendments to the governing documents, or the grant
of exclusive use of common area to be held by secret ballot in
accordance with specified procedures. (Civ. Code Sec. 5100.)
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Existing law requires associations to select an independent
inspector or inspectors of elections to do the following:
determine the number of memberships entitled to vote and the
voting power of each;
determine the authenticity, validity, and effect of proxies,
if any;
receive ballots;
hear and determine all challenges and questions in any way
arising out of or in connection with the right to vote;
count and tabulate all votes;
determine when the polls shall close, consistent with the
governing documents;
determine the tabulated results of the election; and
perform any acts as may be proper to conduct the election with
fairness to all members in accordance with all applicable laws
and rules of the association regarding the conduct of the
election. (Civ. Code Sec. 5110(c).)
Existing law specifies the voting procedure for an association
election as follows:
Ballots and two preaddressed envelopes with instructions on
how to return ballots shall be mailed by first-class mail or
delivered by the association to every member not less than 30
days prior to the deadline for voting. In order to preserve
confidentiality, a voter may not be identified by name,
address, lot, parcel, or unit number on the ballot. The
association shall use as a model those procedures used by
California counties for ensuring confidentiality of vote by
mail ballots, including all of the following:
o the ballot itself is not signed by the voter, but is
inserted into an envelope that is sealed. This envelope is
inserted into a second envelope that is sealed. In the
upper left hand corner of the second envelope, the voter
shall sign the voter's name, indicate the voter's name, and
indicate the address or separate interest identifier that
entitles the voter to vote; and
o the second envelope is addressed to the inspector or
inspectors of elections, who will be tallying the votes.
The envelope may be mailed or delivered by hand to a
location specified by the inspector or inspectors of
elections. The member may request a receipt for delivery.
(Civ. Code Sec. 5115(a).)
Existing law states that a quorum shall be required only if so
stated in the governing documents or other provisions of law.
If a quorum is required by the governing documents, each ballot
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received by the inspector of elections shall be treated as a
member present at a meeting for purposes of establishing a
quorum. (Civ. Code Sec. 5115(a).)
Existing law specifies that except for a meeting to count the
votes, an election may be conducted entirely by mail unless
otherwise specified in the governing documents. (Civ. Code Sec.
5115(b).)
Existing law provides that all votes shall be counted and
tabulated by the inspector or inspectors 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 may verify the member's information
and signature on the outer envelope prior to the meeting at
which the ballots are tabulated. Once a secret ballot is
received by the inspector of elections, it shall be irrevocable.
(Civ. Code Sec. 5120(a).)
Existing law provides that 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. (Civ. Code
Sec. 5120(b).)
Existing law provides that 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 for
challenging the election has expired, at which time custody
shall be transferred to the association. If 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. (Civ. Code Sec. 5125.)
This bill would provide that an association may conduct
elections by electronic voting, provided certain conditions are
met. If electronic voting is to be conducted, the association
shall provide each member with an opportunity to indicate
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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 paper ballot pursuant to existing law. The
inspector of elections, or the designee of the inspector of
elections, may verify the authenticity of a member's request to
vote electronically.
This bill would state that an association may conduct elections
by electronic voting only if all of the following requirements
are met:
the association receives confirmation from at least one member
that he or she will be voting electronically; and
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:
o a method to securely authenticate the member's identity
to the electronic voting system;
o 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;
o a method to securely communicate with the electronic
voting system;
o a method to securely review an electronic ballot prior
to its transmission to the electronic voting system;
o a method to securely transmit an electronic ballot to
the electronic voting system that ensures the secrecy and
integrity of each ballot;
o a method to allow members to verify the authenticity of
receipts sent from the electronic voting system;
o 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;
and
o in the event of a disruption of the electronic voting
system, the ability to vote by mail pursuant to existing
law or to deliver a ballot in-person, as provided.
This bill would, in addition to the requirements above, state
that an association may conduct elections by electronic voting
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only if 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:
it is accessible to members with disabilities;
it is secure from, among other things, malicious software and
the ability of others to remotely monitor or control the
system;
it is able to securely authenticate a member's identity;
it is able to securely communicate with each member's
electronic voting platform;
it is able to securely authenticate the validity of each
electronic ballot to ensure that the ballot has not been
altered in transit;
it is able to securely transmit a receipt from the electronic
voting system to each member who casts an electronic ballot;
it 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;
it is able to securely allow members to confirm that their
ballot has been received and counted; and
it is able to store electronic ballots in a secure manner,
keeping them accessible to election officials for recount,
inspection, and review purposes.
This bill would also provide that an association may conduct
elections by electronic voting only if the Secretary of State
has approved the electronic voting system in accordance with the
procedures for certification of voting systems specified in this
bill. This bill would also authorize the Secretary of State to
study and adopt regulations governing the use of electronic
voting systems to determine whether they are capable of
complying with the requirements of this bill.
This bill would state that an electronic balloting service
provider shall not provide electronic voting services to an
association unless it is both insured for liability and is not
affiliated with the association's management or members.
This bill would provide that if an electronic balloting service
provider is used in the course of an election, the provider
shall retain the electronically submitted ballot data until the
time allowed for challenging the election has expired.
This bill would make other conforming changes to existing law,
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and would make certain findings and declarations.
COMMENT
1. Stated need for the bill
The author writes:
Assembly Bill 1360 allows members of a homeowners association
(HOA) to opt-in to electronic voting (e-ballot) as an
alternative to voting by paper ballot. AB 1360 seeks to
increase voter participation in HOA elections while
contributing to reductions in the use of paper and providing
cost savings opportunities for HOAs in the administration of
elections.
Nationally, there are around 323,600 HOAs comprising 25.9
million housing units. In California, there are an estimated
47,000 HOAs representing over 4.8 million homes. Each year
HOAs conduct hundreds of paper ballot elections which incur
costs and some result in poor participation. Today advances
in technology have not only simplified many routine tasks from
paying bills online to buying movie tickets via our mobile
phones but have also increased efficiencies and made our lives
easier. In 2012, California for the first time permitted
online voter registration and signed up over 700,000 new
voters in a span of a few months. California drivers today
can now show proof of car insurance using a mobile device such
as a smart phone. Election technology available today
provides opportunities to increase efficiencies in the system
of election administration by moving from paper ballots to
e-ballots.
AB 1360 seeks to provide options for HOAs to utilize the
latest election technology to boost voter participation rates,
reduce paper use and achieve election administration
efficiencies while balancing the ability of homeowners to
continue to vote by paper ballot. AB 1360 provides HOA
members with an environmentally friendly, cost-effective,
time-saving option to participate in the governance of their
community.
2. Findings of Internet Voting Task Force
In January of 2000, the California Internet Voting Task Force,
convened by then Secretary of State Bill Jones, announced its
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findings from a long-term feasibility study of using the
Internet to conduct elections in California. The Task Force,
made up of more than two dozen experts in the fields of data
security, elections and voter participation, made the following
observations:
The implementation of Internet voting would allow increased
access to the voting process for millions of potential voters
who do not regularly participate in our elections. However,
technological threats to the security, integrity and secrecy
of Internet ballots are significant. The possibility of
"Virus" and "Trojan Horse" software attacks on home and office
computers used for voting is very real and, although they are
preventable, could result in a number of problems ranging from
a denial of service to the submission of electronically
altered ballots.
Despite these challenges, it is technologically possible to
utilize the Internet to develop an additional method of voting
that would be at least as secure from vote-tampering as the
current absentee ballot process in California. At this time,
it would not be legally, practically or fiscally feasible to
develop a comprehensive remote Internet voting system that
would completely replace the current paper process used for
voter registration, voting, and the collection of initiative,
referendum and recall petition signatures. (California
Internet Voting Task Force, A Report on the Feasibility of
Internet Voting (Jan. 2000) <
http://www.sos.ca.gov/elections/ivote/> (as of Jun. 22,
2014).)
The Task Force also observed:
We believe that additional technical innovations are necessary
before remote Internet voting can be widely implemented as a
useful tool to improve participation in the elections process
in California. . . . As with most computer systems, increased
security and higher levels of privacy can be provided by
increasing the complexity and the burden on the user of the
system. The success or failure of Internet voting in the
near-term may well depend on the ability of computer
programmers and election officials to design a system where
the burden of the additional duties placed on voters does not
outweigh the benefits derived from the increased flexibility
provided by the Internet voting system.
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The democratic process warrants an extremely high level of
security, but the security measures cannot be so cumbersome to
voters that the new process would prevent participation. An
appropriate balance between security, accessibility and ease
of use must be achieved before Internet voting systems should
be deployed. (Id.)
Staff notes that this bill is modeled on the recommendations and
criteria set by the Task Force for internet-based municipal
voting. This bill, following those criteria, would require
homeowners associations and their electronic voting systems to
meet a multitude of privacy and security-related criteria before
electronic voting would be authorized. Additionally, this bill
would require any electronic voting system intended for
association use to be certified by the Secretary of State under
the existing criteria for certifying electronic voting systems
currently in use before it could be deployed in an association
election.
3. Security of internet-based voting
The entities opposed to this bill all raise concerns about the
security and reliability of internet voting, and whether current
technology could truly maintain the integrity and secrecy of
ballots cast and transmitted across the internet. The Secretary
of State's opposition letter articulates these shared concerns,
stating:
There is widely shared agreement among private and public
computer security experts, including cyber security officials
at the U.S. Department of Homeland Security, that casting
ballots over the Internet is not secure and cannot be made
secure. . . . Internet voting threatens the integrity of the
electoral process, which is why California law prevents any
public election from being conducted over the Internet. There
is no policy rationale or electoral justification to allow
HOAs [homeowners associations] to ignore that law and
jeopardize the elections they conduct.
The problems associated with allowing HOA elections to be
conducted over the Internet include:
Internet transactions always confront a variety of
security risks, but security threats associated with
Internet voting are made worse because the secret ballot
process makes it impossible to verify whether tampering
with Internet votes has occurred.
Unlike other voting systems, an Internet voting system
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can be attacked by anyone who has a computer and an
Internet connection anywhere in the world.
Internet voting does not include a voter verified paper
audit trail that can be recounted, so this bill eliminates
the ability for CID residents to challenge election
results.
To verify the identities of eligible voters, the bill
effectively allows personal information to be collected and
shared over the Internet, making it vulnerable to identify
theft. An HOA election involving several thousand
households offers identity thieves and computer hackers the
opportunity to acquire critical personal information from
voters who would unwittingly be using an Internet voting
system that, by definition, is unsafe and insecure.
Voting over the Internet relies on people using their
personal computers, tablets, and mobile devices. These
devices are commonly infected with viruses, malware and
spyware, all of which can jeopardize the integrity and
accuracy of any election.
Staff notes that this bill would essentially prohibit an
association's use of electronic voting systems if they cannot be
made secure enough to protect the integrity and secrecy of each
ballot cast as determined by the criteria set forth in the bill.
4. Other opposition concerns
Some opponents argue that authorizing the use of electronic
voting systems will not actually solve the author's stated goal
of increasing voter turnout in homeowners association elections.
Verified Voting, writing in opposition, states:
In a municipality in Hawaii that shifted to a combination of
Internet and phone voting from their paper ballots used in the
past, the decrease in turnout was over 80 [percent]. In a
Canada election using an Internet option for the first time,
there was an increase in early voting, but no overall turnout
change. People who were going to vote anyway just shifted
modes; it doesn't mean more people voted.
Additionally, some opponents highlight that allowing the use of
electronic voting systems might not actually decrease the cost
of administering association elections, since associations may
have to continue to offer printed and mailed ballots to those
members who opt not to use the electronic voting system.
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Support : California Association of Community Managers;
California Association of Realtors; Educational Community for
Home Owners; Congress of California Seniors; South Orange County
Economic Coalition; South Orange County Regional Chamber of
Commerce; three individuals
Opposition : California Alliance for Retired Americans;
California Common Cause; Center for California Homeowner
Association Law; Secretary of State; Verified Voting
HISTORY
Source : Community Associations Institute - California
Legislative Action Committee
Related Pending Legislation :
AB 968 (Gordon) would provide that an association subject to the
Davis-Stirling Common Interest Development Act is responsible
for maintaining, repairing, and replacing the designated common
area, the owner of each separate interest is responsible for
maintaining, repairing, and replacing their separate interest,
and the owner of the separate interest is responsible for
maintaining an exclusive use common area appurtenant to the
separate interest while the association is responsible for
repairing and replacing the exclusive use common area, unless
otherwise provided in the common interest development
declaration. This bill is on the Senate Floor.
AB 1738 (Chau) would codify minimum requirements for association
dispute resolution procedures by specifying, among other things,
that a member and the association may enlist the assistance of
an attorney or another person to explain their position. This
bill is on the Senate Floor.
AB 2100 (Campos) would prohibit an association subject to the
Davis-Stirling Common Interest Development Act from imposing a
fine or assessment against a member of a separate interest for
reducing or eliminating watering of vegetation or lawns during
any period for which the Governor has declared a state of
emergency, or a local government has declared a local emergency,
due to drought. This bill is on the Senate Floor.
AB 2104 (Gonzalez) would provide that any provision of the
governing documents or of the architectural or landscaping
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guidelines or policies of an association subject to the
Davis-Stirling Common Interest Development Act shall be void and
unenforceable if it prohibits, or includes conditions that have
the effect of prohibiting, low water-using plants as a group or
as a replacement of existing turf, or if the provision has the
effect of prohibiting or restricting compliance with a local
water-efficient landscape ordinance or water conservation
measure. This bill is on the Senate Floor.
SB 992 (Nielsen) would prohibit an association subject to the
Davis-Stirling Common Interest Development Act from imposing a
fine or assessment on separate interest owners for reducing or
eliminating watering of vegetation or lawns during any period
for which the Governor has declared a state of emergency due to
drought. This bill is on the Assembly Floor.
SB 1026 (Vidak) would permit associations subject to the
Commercial and Industrial Common Interest Development Act and
the Davis-Stirling Common Interest Development Act to serve an
owner with a Notice of Default, the first step in the
non-judicial foreclosure process, for failure to pay required
assessments through posting, mailing, and publishing the
notices, as specified, when those notices cannot be personally
served after reasonable diligence, as specified. This bill is
currently in the Senate Committee on Judiciary.
Prior Legislation :
SB 752 (Roth, Ch. 605, Stats. 2013) established the Commercial
and Industrial Common Interest Development Act and provided for
the creation and regulation of industrial or commercial common
interest developments.
AB 1836 (Harman, Ch. 754, Stats. 2004) reorganized and expanded
the alternative dispute resolution processes and procedures
contained in the Davis-Stirling Act, and expanded the scope of
the disputes to which alternative dispute resolution processes
and procedures may be applied within common interest
developments. This bill also required associations to develop
fair, reasonable, and expeditious internal dispute resolution
processes.
AB 2376 (Bates, Ch. 346, Stats. 2004) requires a homeowner
association to provide a fair and reasonable process for
reviewing a request by a homeowner for a physical alteration to
their unit or the common area.
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AB 2598 (Steinberg, 2004) would have prohibited the use of the
non-judicial foreclosure process by homeowner associations in
collecting overdue assessments when the underlying debt is for
the failure to pay association assessments or dues. This bill
was vetoed by Governor Schwarzenegger.
SB 1682 (Ducheny, 2004) would have required homeowner
associations to offer binding arbitration before placing a lien
on the property or before initiating foreclosure proceedings.
This bill died on the Assembly Floor.
Prior Vote :
Assembly Floor (Ayes 69, Noes 3)
Assembly Committee on Housing and Community Development (Ayes 7,
Noes 0)
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