Senate Study Bill 1187 - IntroducedA Bill ForAn Act 1providing for the termination of dealership agreements
2involving agricultural equipment.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 322F.3, subsection 1, unnumbered
2paragraph 1, Code 2021, is amended to read as follows:
   3If a dealership agreement is terminated by cancellation or
4nonrenewal by either the dealer or supplier, the supplier must
5repurchase equipment and parts in the dealer’s inventory and
6must repurchase special tools and computer hardware or software
7required for the dealership. The repurchase is subject to the
8following conditions:
9EXPLANATION
10The inclusion of this explanation does not constitute agreement with
11the explanation’s substance by the members of the general assembly.
   12This bill amends a provision in Code chapter 322F, which
13regulates business relationships between suppliers and dealers
14of agricultural equipment associated with livestock or crop
15production, horticulture, or floriculture (Code section
16322F.1(1)). The parties’ business relationship is governed by
17a dealership agreement which grants the dealer a right to sell,
18distribute, or service the supplier’s equipment (Code section
19322F.1(5)). The Code chapter specifies a number of rights
20and obligations imposed upon dealers and suppliers, places
21restrictions upon certain supplier practices (Code section
22322F.7), and provides for supplier liability (Code section
23322F.8). A dealer may exercise a number of rights if the
24agreement is terminated. For example, the supplier must pay
25the dealer costs of unused complete equipment, repair parts,
26and computer devices (amended Code section 322F.3(1)). The
27bill specifies that the termination procedures apply regardless
28of which party terminated the agreement.
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da/ns