BILL NUMBER: AB 1255	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 18, 2013

INTRODUCED BY   Assembly Member Pan

                        FEBRUARY 22, 2013

   An act to amend Section  25502.5   12313
 of the Corporations Code, relating to corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1255, as amended, Pan.  Corporations.  
Corporations: consumer cooperatives.  
   Existing law, the Consumer Cooperative Corporation Law, governs
the organization and operation of consumer cooperative corporations.
The law specifies the provisions that may be set forth in the
articles of incorporation of a consumer cooperative.  
   This bill would include among these provisions the classes of
preferred, nonvoting shares, if any, and whether the directors of the
consumer cooperative corporation may set the number, series, and
rights, preferences, privileges, restrictions, and conditions
attaching to each class.  
   The Corporate Securities Law of 1968 provides for the regulation
of the issuance of corporate securities and includes a civil remedy
for specified issuers of securities for a specified violation of its
provisions.  
   This bill would make technical, nonsubstantive changes to this
provision. 
   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.    Section 12313 of the   
 Corporations Code   is amended to read: 
   12313.  (a) The articles of incorporation may set forth any or all
of the following provisions, which shall not be effective unless
expressly provided in the articles:
   (1) A provision limiting the duration of the corporation's
existence to a specified date.
   (2) A provision providing for the distribution of the remaining
assets of the corporation, after payment or adequate provision for
all of its debts and liabilities, to a charitable trust.
   (b) Nothing contained in subdivision (a) shall affect the
enforceability, as between the parties thereto, of any lawful
agreement not otherwise contrary to public policy.
   (c) The articles of incorporation may set forth any or all of the
following provisions:
   (1) The names and addresses of the persons appointed to act as
initial directors.
   (2) Provisions concerning the transfer of memberships, in
accordance with Section 12410.
   (3) The classes of members, if any, and if there are two or more
classes, the rights, privileges, preferences, restrictions and
conditions attaching to each class.
   (4) Any other provision, not in conflict with law, for the
management of the activities and for the conduct of the affairs of
the corporation, including any provision which is required or
permitted by this part to be stated in the bylaws.
   (5) A provision conferring upon members the right to determine the
consideration for which memberships shall be issued. 
   (6) The classes of preferred, nonvoting shares, if any, and
whether the directors may set the number, the series, and the rights,
preferences, privileges, restrictions, and conditions attaching to
each class.  
  SECTION 1.    Section 25502.5 of the Corporations
Code is amended to read:
   25502.5.  (a)  A person, other than the issuer, who violates
Section 25402 shall be liable to the issuer of the security purchased
or sold in violation of Section 25402 for damages in an amount up to
three times the difference between the price at which the security
was purchased or sold and the market value which the security would
have had at the time of the purchase or sale if the information known
to the defendant had been publicly disseminated prior to that time
and a reasonable time had elapsed for the market to absorb the
information and shall be liable to the issuer of the security or to a
person who institutes an action under this section in the right of
the issuer of the security for reasonable costs and attorney's fees.
   (b) The amounts recoverable under this section by the issuer shall
be reduced by any amount paid by the defendant in a proceeding
brought by the Securities and Exchange Commission with respect to the
same transaction or transactions under the federal Insider Trading
Sanctions Act of 1984 (15 U.S.C. Secs. 78a, 78c, 78o, 78t, 78u, and
78ff) or any other act, regardless of whether the amount was paid
pursuant to a judgment or settlement or paid before or after the
filing of an action by the plaintiff against the defendant. If a
proceeding has been commenced by the Securities and Exchange
Commission, but has not been finally resolved, the court shall delay
entering a judgment for the plaintiff under this section until that
proceeding is resolved.
   (c) If any shareholder of an issuer alleges to the board that
there has been a violation of this section, the board shall consider
the allegation in good faith, and if the allegation involves
misconduct by any director, that director shall not be entitled to
vote on any matter involving the allegation. However, that director
may be counted in determining the presence of a quorum at a meeting
of the board or a committee of the board.
   (d) This section shall only apply to issuers who have total assets
in excess of one million dollars ($1,000,000) and have a class of
equity security held of record by 500 or more persons.