SB 323 does not expressly address this conflict between Section 4205's mandatory hierarchy and SB 323's mandatory new election rule provisions. Nevertheless, I believe it is advisable to interpret Section 5105 as trumping Section 4205 - in other words, that SB 323's mandatory new election rule provisions "prevail" over any conflicting provisions in CC&Rs, articles, and bylaws.
This interpretation is important for communities for whom SB 323 will require a governing document update, as by law, all votes on "amendments to governing documents" must be conducted using the secret ballot process, which itself requires the adoption of and adherence to SB 323 compliant stand-alone election rules. Given the penalties for non-compliance with SB 323, the risk of running afoul of of Section 4205 seems a lesser evil.
That being said, it would appear that Section 5105 only upends Section 4205's hierarchy in relation to to its list of mandatory new provisions. Section 4205 will continue to control in relation to other provisions set forth in election rules, as well as in relation to other operating rules. This complex hierarchical relationship highlights the importance of a thorough review of existing governing documents while drafting new SB 323 compliant election rules in order to properly integrate those provisions which remain valid.
In a related vein, SB 323 adds new Civil Code section 5105(c), which provides that “[t]hrough its bylaws or election operating rules ... only, an association may disqualify a person from nomination as a candidate pursuant to" the Section's list of optional qualifications. This use of "only" suggests that all director qualifications other than membership - even those which are SB 323 compliant - which are contained in CC&RS or articles are now void. This is problematic, as many older CC&Rs and articles contain director qualification provisions. Such communities may be forced to amend or update their governing documents as a result.