EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1208*
HOUSE BILL 1208
R4 3lr2400
CF 3lr3079
By: Delegates Stein and Amprey
Introduced and read first time: February 10, 2023
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Vehicle Laws – Manufacturers – Dealer Compensation 2
FOR the purpose of altering the basis for determining compensation from a vehicle 3
manufacturer to a vehicle dealer for repairs made under a recall or warranty; 4
prohibiting a vehicle manufacturer from recovering or attempting to recover by 5
certain methods any portion of its costs for compensating vehicle dealers for repairs 6
made under a recall or warranty; and generally relating to vehicle dealer 7
compensation for repairs made under a recall or warranty. 8
BY repealing and reenacting, with amendments, 9
Article – Transportation 10
Section 15–212(c)(1), (2), (3), and (7) 11
Annotated Code of Maryland 12
(2020 Replacement Volume and 2022 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Transportation 16
15–212. 17
(c) (1) A licensee shall specify in writing to each of its motor vehicle dealers 18
licensed in the State: 19
(i) The dealer’s obligation for vehicle preparation, delivery, 20
warranties, and recalls on its products; AND 21
(ii) The schedule of compensation to be paid to the dealers for parts, 22
including parts assemblies, and labor, including diagnostic labor and associated 23 2 HOUSE BILL 1208
administrative requirements, in connection with the service obligations established under 1
item (i) of this paragraph[; and 2
(iii) A time allowance for the performance of labor described in this 3
paragraph that is reasonable and adequate]. 4
(2) Reasonable compensation under this section may not be less than: 5
(i) With respect to labor for warranty or recall repairs, the dealer’s 6
CURRENT TIME ALLOWAN CES AND current labor rate for nonwarranty repairs of a like 7
kind for retail customers; and 8
(ii) With respect to any part, the dealer’s cost plus its current retail 9
mark–up percentage charged to retail customers for nonwarranty repairs of a like kind. 10
(3) (i) For purposes of paragraph (2) of this subsection, the dealer’s 11
labor rate or parts mark–up percentage shall be established by a submission to the licensee 12
of whichever of the following produces fewer repair orders closed, as of the date of 13
submission, within the preceding 180 days: 14
1. 100 qualifying sequential customer–paid repair orders; or 15
2. 90 days of qualifying customer–paid repair orders. 16
(ii) WITH RESPECT TO LABOR , COMPENSATION ESTABLI SHED 17
UNDER THIS SUBSECTIO N SHALL BE EQUAL TO THE PRODUCT OF: 18
1. THE HOURLY LABOR RATE AS REFLECTED IN 19
QUALIFYING REPAIR OR DERS, CALCULATED BY DIVIDING THE TOTAL CHARGES 20
ALLOCATED TO LABOR IN THE REPAIR ORDERS BY THE TOTAL NUMBER OF HOURS 21
CHARGED FOR THE REPAIRS; AND 22
2. THE TIME ALLOWANCE APPLI CABLE TO EACH REPAIR 23
AS PRESCRIBED IN A N ATIONALLY RECOGNIZED LABOR GUIDE SELECTED BY THE 24
DEALER. 25
(III) With respect to parts, a schedule of compensation established 26
under this subsection shall be equal to the parts mark–up percentage as reflected in 27
qualifying repair orders, calculated by dividing the total charges for parts in the repair 28
orders by the total dealer cost for the parts minus one. 29
[(iii)] (IV) 1. A dealer may not make a submission under this 30
subsection more than once in 1 year. 31
HOUSE BILL 1208 3
2. For purposes of subsubparagraph 1 of this subparagraph, 1
a revision or supplement to a submission to correct or clarify the submission does not 2
constitute a new submission. 3
(7) A licensee may not directly or indirectly: 4
(i) Calculate its own labor rate or parts mark–up percentage on a 5
warranty reimbursement rate submission by the licensee’s dealer under this section, or 6
require a dealer to calculate a labor rate or parts mark–up percentage, by any method not 7
required under this section, including a method that is unduly burdensome or 8
time–consuming or that requires information that is unduly burdensome or 9
time–consuming to provide such as: 10
1. A part–by–part or transaction –by–transaction 11
calculation; or 12
2. Presentation of information as to, or calculations based on, 13
the dealer’s or other dealers’ warranty compensation; 14
(ii) Establish or implement a special part or component number for 15
parts used in warranty fulfillment, if the special part or component number results in 16
reduced compensation for the dealer unless the part is used for specific, limited repair 17
situations; 18
(iii) Require or coerce a dealer to change the prices for which it sells 19
parts or labor for retail customer repairs; 20
(iv) Take adverse action against a dealer because the dealer seeks 21
compensation under this section, by: 22
1. Implementing a process that is inconsistent with the 23
licensee’s obligations to the dealer under this subtitle; or 24
2. Failing to act in good faith; 25
(v) Conduct any warranty or retail customer repair audit, or other 26
service–related audit, solely because the dealer makes a request for warranty 27
reimbursement at retail rates in the ordinary course of business; [or] 28
(vi) Establish, implement, enforce, or apply any policy, standard, 29
rule, program, or incentive regarding the compensation due under this section other than 30
in a uniform manner among the licensee’s dealers in the State; OR 31
(VII) RECOVER OR ATTEMPT TO RECOVER ANY PORTION OF THE 32
LICENSEE’S COSTS FOR COMPENSATI NG DEALERS UNDER THI S SECTION BY 33 4 HOUSE BILL 1208
REDUCING THE AMOUNT DUE TO A DEALER OR B Y IMPOSING A FEE, ASSESSMENT, OR 1
SURCHARGE ON THE AMO UNT DUE TO THE DEALER. 2
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 3
October 1, 2023. 4