House Study Bill 181 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON LUNDGREN) A BILL FOR An Act providing for the termination of dealership agreements 1 involving agricultural equipment. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1834YC (3) 89 da/ns

H.F. _____ Section 1. Section 322F.3, subsection 1, unnumbered 1 paragraph 1, Code 2021, is amended to read as follows: 2 If a dealership agreement is terminated by cancellation or 3 nonrenewal by either the dealer or supplier , the supplier must 4 repurchase equipment and parts in the dealer’s inventory and 5 must repurchase special tools and computer hardware or software 6 required for the dealership. The repurchase is subject to the 7 following conditions: 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill amends a provision in Code chapter 322F, which 12 regulates business relationships between suppliers and dealers 13 of agricultural equipment associated with livestock or crop 14 production, horticulture, or floriculture (Code section 15 322F.1(1)). The parties’ business relationship is governed by 16 a dealership agreement which grants the dealer a right to sell, 17 distribute, or service the supplier’s equipment (Code section 18 322F.1(5)). The Code chapter specifies a number of rights 19 and obligations imposed upon dealers and suppliers, places 20 restrictions upon certain supplier practices (Code section 21 322F.7), and provides for supplier liability (Code section 22 322F.8). A dealer may exercise a number of rights if the 23 agreement is terminated. For example, the supplier must pay 24 the dealer costs of unused complete equipment, repair parts, 25 and computer devices (amended Code section 322F.3(1)). The 26 bill specifies that the termination procedures apply regardless 27 of which party terminated the agreement. 28 -1- LSB 1834YC (3) 89 da/ns 1/ 1