HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SODERBERG)

A BILL FOR

An Act relating to equipment dealership agreements by providing for supplier liability.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 322F.7, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  8.  Terminates a dealership agreement for which the supplier is liable in a civil action as provided in section 322F.8.
   Sec. 2.  Section 322F.8, subsection 1, paragraph a, subparagraph (1), Code 2011, is amended to read as follows:
   (1)  A dealer may bring a legal action against a supplier for damages sustained by the dealer as a consequence of the supplier’s violation of any provision of this chapter, including but not limited to a violation described in section 322F.7. A supplier violating this chapter shall compensate the dealer for damages sustained by the dealer as a consequence of the supplier’s violation, together with the actual costs of the action, including reasonable attorney fees.
   Sec. 3.  Section 322F.8, subsection 2, paragraph b, Code 2011, is amended to read as follows:
   b.
  (1)  If upon Upon termination of a dealership agreement by nonrenewal or cancellation, by a dealer or supplier, if the supplier fails to make payment or credit the account of the dealer as provided in any provision of this chapter, the supplier is liable in a civil action brought by the dealer for the repurchase amount set forth in section 322F.3, plus interest as calculated pursuant to paragraph “a”.
   (2)  Upon cancellation of a dealership agreement by a supplier without good cause or cancellation of a dealership agreement by a supplier in violation of any provision of this chapter, if the supplier fails to make payment or credit the account of the dealer as provided in any provision of this chapter, the supplier is liable in a civil action brought by the dealer for the repurchase amount set forth in section 322F.3, plus interest as calculated pursuant to paragraph “a”.
EXPLANATION
   This bill addresses supplier-dealership agreements under Code chapter 322F, involving franchises for agricultural equipment; all-terrain vehicles; and construction, industrial, or utility equipment. Generally the Code chapter regulates business relationships between dealerships and suppliers by providing for the terms and conditions of dealership agreements. Code section 322F.7 includes a list of supplier violations and Code section 322F.8 provides a list of causes for a supplier’s liability, including for damages sustained by a dealer as a consequence of a supplier’s violation of the Code chapter. The bill expressly provides that a violation of the Code chapter and grounds for civil liability include the cancellation of a dealership agreement without good cause (see Code section 322F.1(7)) if the supplier fails to make payment or credit the account of the dealer.