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 for supplier liability.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 322F.7, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   A supplier violates A violation of this chapter if the includes but is not limited to a supplier does doing any of the following:
   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, Code 2011, is amended to read as follows:
   2.
  a.  If the payment or allowance of equipment repurchased pursuant to section 322F.3 is not made as required, or the supplier is found liable for damages pursuant to subsection 1, paragraph “a”, subparagraph (1), the amount due bears to the dealer shall bear interest at the rate of one and one-half percent per month calculated from the date that the dealership agreement was terminated.
   b.  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”.  The supplier’s civil liability as provided in this paragraph shall be in addition to and not in lieu of any remedy provided by subsection 1, paragraph “a”, subparagraph (1).
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. Code section 322F.3 provides that if a supplier terminates a dealership agreement, the supplier must repurchase the dealer’s equipment and parts inventory. The bill expressly provides that if a supplier is found liable for damages resulting from a violation of the Code chapter, the amount due the supplier bears interest at the same rate as for the failure to repurchase equipment. It also provides that a supplier’s civil liability is in addition to the repurchase amount required to be paid to the dealer.