Text: HSB00212 Text: HSB00214 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 322F.1, Code 2003, is amended by adding 1 2 the following new subsections: 1 3 NEW SUBSECTION. 0A. "Agricultural equipment" means a 1 4 device, part of a device, or an attachment of a device 1 5 designed to be principally used for an agricultural purpose. 1 6 "Agricultural equipment" includes but is not limited to 1 7 equipment associated with livestock or crop production, 1 8 horticulture, or floriculture. "Agricultural equipment" 1 9 includes but is not limited to tractors; trailers; combines; 1 10 tillage, planting, and cultivating implements; bailers, 1 11 irrigation implements; and all-terrain vehicles. 1 12 NEW SUBSECTION. 1A. "Construction equipment", "industrial 1 13 equipment", or "utility equipment" means a device, part of a 1 14 device, or an attachment to a device designed to be 1 15 principally used for a construction or industrial purpose. 1 16 "Construction equipment", "industrial equipment", or "utility 1 17 equipment" includes equipment associated with earthmoving, 1 18 industrial material handling, mining, forestry, highway 1 19 construction or maintenance, and landscaping. "Construction 1 20 equipment", "industrial equipment", or "utility equipment" 1 21 includes but is not limited to tractors, graders, excavators, 1 22 loaders, and backhoes. 1 23 NEW SUBSECTION. 7A. "Outdoor power equipment" means 1 24 equipment using small motors or engines, if the equipment is 1 25 used principally for outside service, including but not 1 26 limited to aerators, augers, blowers, brush clearers, brush 1 27 cutters, chain saws, dethatchers, edgers, hedge trimmers, lawn 1 28 mowers, pole saws, power rakes, snowblowers, and tillers. 1 29 Sec. 2. Section 322F.1, subsection 2, Code 2003, is 1 30 amended to read as follows: 1 31 2. "Dealer" or "dealership" means a person engaged in the 1 32 retail sale of equipment, if the person sells equipment1 33designed to be principally used for agricultural operations,1 34including but not limited to livestock or crop production or1 35horticulture. 2 1 Sec. 3. Section 322F.1, subsection 4, Code 2003, is 2 2 amended by striking the subsection, and inserting in lieu 2 3 thereof following: 2 4 4. "Equipment" means agricultural equipment, construction 2 5 equipment, industrial equipment, utility equipment, or outdoor 2 6 power equipment. However, "equipment" does not include self- 2 7 propelled machines designed primarily for the transportation 2 8 of persons or property on a street or highway. 2 9 Sec. 4. Section 322F.2, subsection 1, Code 2003, is 2 10 amended to read as follows: 2 11 1. a. A supplier shall terminate a dealership agreement 2 12 for equipment other than outdoor power equipment by 2 13 cancellation, nonrenewal, or a substantial change in 2 14 competitive circumstances only upon good cause and upon at 2 15 least ninety days' prior written notice delivered to the 2 16 dealer by certifiedor registeredmail or restricted certified 2 17 mail. A supplier shall terminate a dealership agreement for 2 18 outdoor power equipment by cancellation or nonrenewal only 2 19 upon good cause and upon at least ninety days' prior written 2 20 notice delivered to the dealer by restricted certified mail or 2 21 hand delivered by a representative of the supplier to the 2 22 dealer or a designated representative of the dealer. 2 23 b.TheA written termination notice must specify each 2 24 deficiency constituting good cause for the action. The notice 2 25 must also state that the dealer has sixty days to cure a 2 26 specified deficiency. If the deficiency is cured within sixty 2 27 days from the date that the notice is delivered, the notice is 2 28 void. However, if the deficiency is based on a dealer's 2 29 inadequate representation of a manufacturer's product relating 2 30 to sales, as provided in section 322F.1, the notice must state 2 31 that the dealer has eighteen months to cure the deficiency. 2 32 If the deficiency based on inadequate representation of a 2 33 manufacturer's product relating to sales is cured within 2 34 eighteen months from the date that notice is delivered, the 2 35 notice is void. 3 1 Sec. 5. Section 322F.3, subsection 1, Code 2003, is 3 2 amended by adding the following new paragraph: 3 3 NEW PARAGRAPH. f. The supplier must pay to the dealer or 3 4 credit the dealer's account with one hundred percent of the 3 5 net cost of all equipment used in demonstrations, including 3 6 equipment leased primarily for demonstration or lease, at the 3 7 equipment's agreed-upon depreciated value, provided that such 3 8 equipment is in new condition and has not been abused. 3 9 Sec. 6. Section 322F.5, Code 2003, is amended to read as 3 10 follows: 3 11 322F.5 DEATH OR INCAPACITY OF DEALER. 3 12 If a dealer or a person holding a majorityshareholder of a3 13corporationinterest in a business entity operating a 3 14 dealership dies or is incapacitated, the rights under this 3 15 chapter may be exercised as an option by the heirs at law if 3 16 the dealer orshareholdermajority interest holder died 3 17 intestate, or by the executor under the terms of the dealer's 3 18 orshareholder'smajority interest holder's will. If the 3 19 heirs or the executor do not exercise this option within 3 20 twelve months from the date of death of the dealer or 3 21shareholdermajority interest holder, the supplier must 3 22 repurchase the equipment as if the supplier had terminated the 3 23 dealership agreement pursuant to section 322F.3. However, 3 24 this section does not entitle an heir, executor, 3 25 administrator, legatee, or devisee of a deceased dealer or 3 26 majorityshareholderinterest holder to continue to operate 3 27 the dealership without the consent of the supplier. 3 28 Sec. 7. Section 322F.7, subsection 7, Code 2003, is 3 29 amended to read as follows: 3 30 7. a.TakesFor a dealership agreement governing 3 31 equipment other than outdoor power equipment, takes action 3 32 terminating, canceling, failing to renew the dealership 3 33 agreement, or substantiallychangingchanges the competitive 3 34 circumstances intended by the dealership agreement, due to the 3 35 results of conditions beyond the dealer's control, including 4 1 drought, flood, labor disputes, or economic recession. 4 2 b. For a dealership agreement governing outdoor power 4 3 equipment, takes action terminating, canceling, or failing to 4 4 renew the dealership agreement due to the results of 4 5 conditions beyond the dealer's control, including drought, 4 6 flood, labor disputes, or economic recession. 4 7 This subsection shall not apply if the dealer is in default 4 8 of a security agreement in effect with the supplier. 4 9 Sec. 8. Section 322F.8, subsection 1, Code 2003, is 4 10 amended to read as follows: 4 11 1. A dealer may bring a legal action against a supplier 4 12 for damages sustained by the dealer as a consequence of the 4 13 supplier's violation of this chapter. A supplier violating 4 14 this chapter shall compensate the dealer for damages sustained 4 15 by the dealer as a consequence of the supplier's violation, 4 16 together with the actual costs of the action, including 4 17 reasonableattorneys'attorney fees. 4 18 a.TheFor a dealership agreement governing equipment 4 19 other than outdoor power equipment, a dealer may be granted 4 20 injunctive relief against unlawful termination, cancellation, 4 21 or the nonrenewal of the dealership agreement, or a 4 22 substantial change of competitive circumstances as provided in 4 23 section 322F.2. 4 24 b. For a dealership agreement governing outdoor power 4 25 equipment, a dealer may be granted injunctive relief against 4 26 unlawful termination, cancellation, or the nonrenewal of the 4 27 dealership agreement as provided in section 322F.2. 4 28 PARAGRAPH DIVIDED. The remedies in this section are in 4 29 addition to any other remedies permitted by law. 4 30 Sec. 9. Section 322F.8, subsection 2, paragraph b, Code 4 31 2003, is amended to read as follows: 4 32 b. If upon termination of a dealership agreement by 4 33 nonrenewal or cancellation, by a dealer or supplier, the 4 34 supplier fails to make payment or credit the account of the 4 35 dealer as provided in this chapter, the supplier is liable in 5 1 a civil action brought by the dealer forone hundred percent5 2of the net costs of the equipmentthe repurchase amount set 5 3 forth in section 322F.3, plus interest as calculated pursuant 5 4 to paragraph "a", and ninety percent of the net price of5 5repair parts, plus interest as calculated pursuant to5 6paragraph "a". 5 7 Sec. 10. Section 322F.9, subsection 2, Code 2003, is 5 8 amended to read as follows: 5 9 2. a. For all dealership agreements other than those 5 10 provided forall-terrain vehicles,in this section, this 5 11 chapter applies to those dealership agreements in effect that 5 12 have no expiration date and all other dealership agreements 5 13 entered into or renewed on or after July 1, 1990. Any such 5 14 dealership agreement in effect on June 30, 1990, which by its 5 15 own terms will terminate on a subsequent date, shall be 5 16 governed by the law as it existed prior to July 1, 1990. 5 17 b. For all dealership agreementsforgoverning all-terrain 5 18 vehicles, this chapter applies to those dealership agreements 5 19 in effect that have no expiration date and all other such 5 20 dealership agreements entered into or renewed on or after July 5 21 1, 2002. Any such dealership agreement in effect on July 1, 5 22 2002, which by its own terms will terminate on a subsequent 5 23 date, shall be governed by the law as it existed prior to July 5 24 1, 2002. 5 25 c. For all dealership agreements governing agricultural 5 26 equipment used principally for floriculture and for all 5 27 dealership agreements governing construction equipment, 5 28 industrial equipment, utility equipment, and outdoor power 5 29 equipment, this chapter applies to those dealership agreements 5 30 in effect that have no expiration date and all other such 5 31 dealership agreements entered into or renewed on or after the 5 32 effective date of this Act. Any dealership agreement in 5 33 effect on the effective date of this Act, which by its own 5 34 terms will terminate on a subsequent date, shall be governed 5 35 by the law as it existed prior to the effective date of this 6 1 Act. 6 2 EXPLANATION 6 3 GENERAL. This bill provides for dealership agreements 6 4 under Code chapter 322F. Under Code chapter 322F, dealership 6 5 agreements generally involve agricultural equipment 6 6 franchises. Under the Code chapter, a franchisor is referred 6 7 to as the supplier and a franchisee is referred to as a 6 8 dealership. During the 2002 session, the general assembly 6 9 enacted Senate File 2084, which extended the provisions of the 6 10 Code chapter to cover dealership agreements involving all- 6 11 terrain vehicles. The bill extends the provisions to cover 6 12 certain other agricultural equipment (principally used in 6 13 floriculture). It also extends the Code chapter's provisions 6 14 to cover a new class of equipment referred to as construction 6 15 equipment, industrial equipment, or utility equipment. This 6 16 includes equipment associated with earthmoving, industrial 6 17 material handling, mining, forestry, highway construction or 6 18 maintenance, or landscaping. It also includes outdoor power 6 19 equipment (equipment using small motors or engines used 6 20 principally for outside service). 6 21 DEALERSHIP AGREEMENTS. Generally, Code chapter 322F 6 22 regulates business relationships between dealers and suppliers 6 23 by providing for the terms and conditions of dealership 6 24 agreements. The Code chapter specifies rights and obligations 6 25 for dealers and suppliers. The Code chapter places 6 26 restrictions on supplier practices, provides for supplier 6 27 liability, and provides remedies available to the dealer. The 6 28 terms and conditions of dealership agreements regulated by the 6 29 Code chapter relate to causes for termination of a dealership 6 30 agreement, including requiring that good cause exists for the 6 31 termination. The Code chapter provides requirements relating 6 32 to the repurchase and repossession of equipment following 6 33 termination of a dealership agreement, the death of a dealer 6 34 or the majority shareholder of a corporation operating a 6 35 dealership, or upon a judgment against a supplier in a civil 7 1 action. 7 2 PROVISIONS OF THE BILL. In general, the bill provides that 7 3 the same requirements that apply to dealership agreements for 7 4 agricultural equipment also apply to construction equipment, 7 5 industrial equipment, utility equipment, and outdoor power 7 6 equipment. An exception is carved out for dealership 7 7 agreements involving outdoor power equipment. For example, 7 8 generally grounds for termination of a dealership agreement 7 9 must be by cancellation, nonrenewal, or a substantial change 7 10 in competitive circumstances. However, under the bill a 7 11 substantial change in competitive circumstances is not a 7 12 grounds for termination for an agreement involving outdoor 7 13 power equipment. 7 14 The bill also makes changes in provisions of Code chapter 7 15 322F affecting this type of equipment. A supplier must pay 7 16 the dealer or credit the dealer's account with 100 percent of 7 17 the net cost of all equipment used in demonstrations. It 7 18 expands the right of the heirs of a dealer to require a 7 19 supplier to repurchase the dealership's equipment if a person 7 20 holds a majority interest in a business entity rather than 7 21 only in a corporation. It also provides that upon a wrongful 7 22 termination of a dealership agreement, the supplier is liable 7 23 for a repurchase amount according to a schedule for 7 24 termination of agreements. 7 25 The bill provides special applicability provisions for 7 26 dealership agreements involving floriculture equipment and 7 27 industrial and construction equipment which terminate on a 7 28 specified date after the bill's effective date. 7 29 LSB 1924HC 80 7 30 da/cl/14
Text: HSB00212 Text: HSB00214 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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