Senate File 320 - Introduced SENATE FILE 320 BY COMMITTEE ON AGRICULTURE (SUCCESSOR TO SF 193) (COMPANION TO HF 329 BY COMMITTEE ON COMMERCE) 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 1923SV (2) 84 da/nh

S.F. 320 Section 1. Section 322F.7, unnumbered paragraph 1, Code 1 2011, is amended to read as follows: 2 A supplier violates A violation of this chapter if the 3 includes but is not limited to a supplier does doing any of the 4 following: 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, Code 2011, is amended 16 to read as follows: 17 2. a. If the payment or allowance of equipment repurchased 18 pursuant to section 322F.3 is not made as required, or the 19 supplier is found liable for damages pursuant to subsection 20 1, paragraph “a” , subparagraph (1), the amount due bears to 21 the dealer shall bear interest at the rate of one and one-half 22 percent per month calculated from the date that the dealership 23 agreement was terminated. 24 b. If upon Upon termination of a dealership agreement 25 by nonrenewal or cancellation, by a dealer or supplier, if 26 the supplier fails to make payment or credit the account of 27 the dealer as provided in any provision of this chapter , 28 the supplier is liable in a civil action brought by the 29 dealer for the repurchase amount set forth in section 322F.3 , 30 plus interest as calculated pursuant to paragraph “a” . The 31 supplier’s civil liability as provided in this paragraph shall 32 be in addition to and not in lieu of any remedy provided by 33 subsection 1, paragraph “a” , subparagraph (1). 34 EXPLANATION 35 -1- LSB 1923SV (2) 84 da/nh 1/ 2

S.F. 320 This bill addresses supplier-dealership agreements under 1 Code chapter 322F, involving franchises for agricultural 2 equipment; all-terrain vehicles; and construction, industrial, 3 or utility equipment. Generally the Code chapter regulates 4 business relationships between dealerships and suppliers 5 by providing for the terms and conditions of dealership 6 agreements. Code section 322F.7 includes a list of supplier 7 violations and Code section 322F.8 provides a list of causes 8 for a supplier’s liability, including for damages sustained 9 by a dealer as a consequence of a supplier’s violation of 10 the Code chapter. Code section 322F.3 provides that if a 11 supplier terminates a dealership agreement, the supplier must 12 repurchase the dealer’s equipment and parts inventory. The 13 bill expressly provides that if a supplier is found liable for 14 damages resulting from a violation of the Code chapter, the 15 amount due the supplier bears interest at the same rate as for 16 the failure to repurchase equipment. It also provides that a 17 supplier’s civil liability is in addition to the repurchase 18 amount required to be paid to the dealer. 19 -2- LSB 1923SV (2) 84 da/nh 2/ 2