House Study Bill 85 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SODERBERG) A BILL FOR An Act relating to equipment dealership agreements by providing 1 for supplier liability. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1923YC (1) 84 da/nh

H.F. _____ Section 1. Section 322F.7, Code 2011, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 8. Terminates a dealership agreement for 3 which the supplier is liable in a civil action as provided in 4 section 322F.8. 5 Sec. 2. Section 322F.8, subsection 1, paragraph a, 6 subparagraph (1), Code 2011, is amended to read as follows: 7 (1) A dealer may bring a legal action against a supplier 8 for damages sustained by the dealer as a consequence of 9 the supplier’s violation of any provision of this chapter , 10 including but not limited to a violation described in section 11 322F.7 . A supplier violating this chapter shall compensate the 12 dealer for damages sustained by the dealer as a consequence of 13 the supplier’s violation, together with the actual costs of the 14 action, including reasonable attorney fees. 15 Sec. 3. Section 322F.8, subsection 2, paragraph b, Code 16 2011, is amended to read as follows: 17 b. (1) If upon Upon termination of a dealership agreement 18 by nonrenewal or cancellation , by a dealer or supplier, if 19 the supplier fails to make payment or credit the account of 20 the dealer as provided in any provision of this chapter , the 21 supplier is liable in a civil action brought by the dealer 22 for the repurchase amount set forth in section 322F.3 , plus 23 interest as calculated pursuant to paragraph “a” . 24 (2) Upon cancellation of a dealership agreement by a 25 supplier without good cause or cancellation of a dealership 26 agreement by a supplier in violation of any provision of this 27 chapter, if the supplier fails to make payment or credit the 28 account of the dealer as provided in any provision of this 29 chapter, the supplier is liable in a civil action brought by 30 the dealer for the repurchase amount set forth in section 31 322F.3, plus interest as calculated pursuant to paragraph “a” . 32 EXPLANATION 33 This bill addresses supplier-dealership agreements under 34 Code chapter 322F, involving franchises for agricultural 35 -1- LSB 1923YC (1) 84 da/nh 1/ 2

H.F. _____ equipment; all-terrain vehicles; and construction, industrial, 1 or utility equipment. Generally the Code chapter regulates 2 business relationships between dealerships and suppliers 3 by providing for the terms and conditions of dealership 4 agreements. Code section 322F.7 includes a list of supplier 5 violations and Code section 322F.8 provides a list of causes 6 for a supplier’s liability, including for damages sustained 7 by a dealer as a consequence of a supplier’s violation of the 8 Code chapter. The bill expressly provides that a violation of 9 the Code chapter and grounds for civil liability include the 10 cancellation of a dealership agreement without good cause (see 11 Code section 322F.1(7)) if the supplier fails to make payment 12 or credit the account of the dealer. 13 -2- LSB 1923YC (1) 84 da/nh 2/ 2