Bill Text: IA SF2084 | 2015-2016 | 86th General Assembly | Introduced

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Bill Title: A bill for an act relating to the sources of goods or services under a franchise agreement. (See SF 2277.)

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2016-02-09 - Subcommittee, Sodders, Anderson, and Dotzler. S.J. 190. [SF2084 Detail]

Download: Iowa-2015-SF2084-Introduced.html

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Senate File 2084 - Introduced




                                 SENATE FILE       
                                 BY  DOTZLER

                                      A BILL FOR

  1 An Act relating to the sources of goods or services under a
  2    franchise agreement.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 5724XS (2) 86
    gh/nh

PAG LIN



  1  1    Section 1.  Section 537A.10, subsection 9, paragraph b, Code
  1  2 2016, is amended to read as follows:
  1  3    b.  However, the publication by the franchisor of a list
  1  4 of approved suppliers of goods, supplies, inventories, or
  1  5 services, or the requirement that such goods, supplies,
  1  6 inventories, or services comply with customary and reasonable
  1  7  specifications and standards prescribed by the franchisor,
  1  8 does not constitute designation of a source. Additionally,
  1  9 the reasonable right of a franchisor to disapprove a supplier
  1 10 does not constitute a designation of source. This subsection
  1 11 does not apply to the principal goods, supplies, inventories,
  1 12 or services manufactured by the franchisor, except for motor
  1 13 oil that is labeled in accordance with the requirements of
  1 14 the American petroleum institute, or such goods, supplies,
  1 15 inventories, or services entitled to protection as a trade
  1 16 secret.
  1 17                           EXPLANATION
  1 18 The inclusion of this explanation does not constitute agreement with
  1 19 the explanation's substance by the members of the general assembly.
  1 20    This bill relates to the sources of goods or services under
  1 21 a franchise agreement.
  1 22    Under current Code section 537A.10(9), a franchisor cannot
  1 23 require a franchisee to purchase goods or services exclusively
  1 24 from the franchisor or from a specific source designated by
  1 25 the franchisor if goods or services of comparable quality are
  1 26 available from other sources. A franchisor may publish a list
  1 27 of approved suppliers of goods or services or require that such
  1 28 goods or services comply with standards and specifications.
  1 29 A franchisor also has the reasonable right to disapprove a
  1 30 supplier. This provision does not apply to the principal goods
  1 31 or services manufactured by a franchisor or such goods or
  1 32 services entitled to trade secret protection.
  1 33    The bill amends current law to limit the ability of a
  1 34 franchisor to prescribe specifications and standards regarding
  1 35 the purchase of goods or services to specifications and
  2  1 standards that are customary and reasonable. The bill
  2  2 also amends current law to provide that a franchisor cannot
  2  3 designate a source for a franchisee's purchase of motor oil
  2  4 labeled in accordance with the requirements of the American
  2  5 petroleum institute.
       LSB 5724XS (2) 86
       gh/nh