Maryland 2023 Regular Session

Maryland House Bill HB1208 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1208
6	6
7	7	HOUSE BILL 1208
8	8	R4 3lr2400
9	9	CF 3lr3079
10	10	By: Delegates Stein and Amprey
11	11	Introduced and read first time: February 10, 2023
12	12	Assigned to: Economic Matters
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Vehicle Laws – Manufacturers – Dealer Compensation 2
19	19
20	20	FOR the purpose of altering the basis for determining compensation from a vehicle 3
21	21	manufacturer to a vehicle dealer for repairs made under a recall or warranty; 4
22	22	prohibiting a vehicle manufacturer from recovering or attempting to recover by 5
23	23	certain methods any portion of its costs for compensating vehicle dealers for repairs 6
24	24	made under a recall or warranty; and generally relating to vehicle dealer 7
25	25	compensation for repairs made under a recall or warranty. 8
26	26
27	27	BY repealing and reenacting, with amendments, 9
28	28	Article – Transportation 10
29	29	Section 15–212(c)(1), (2), (3), and (7) 11
30	30	Annotated Code of Maryland 12
31	31	(2020 Replacement Volume and 2022 Supplement) 13
32	32
33	33	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
34	34	That the Laws of Maryland read as follows: 15
35	35
36	36	Article – Transportation 16
37	37
38	38	15–212. 17
39	39
40	40	(c) (1) A licensee shall specify in writing to each of its motor vehicle dealers 18
41	41	licensed in the State: 19
42	42
43	43	(i) The dealer’s obligation for vehicle preparation, delivery, 20
44	44	warranties, and recalls on its products; AND 21
45	45
46	46	(ii) The schedule of compensation to be paid to the dealers for parts, 22
47	47	including parts assemblies, and labor, including diagnostic labor and associated 23 2 HOUSE BILL 1208
48	48
49	49
50	50	administrative requirements, in connection with the service obligations established under 1
51	51	item (i) of this paragraph[; and 2
52	52
53	53	(iii) A time allowance for the performance of labor described in this 3
54	54	paragraph that is reasonable and adequate]. 4
55	55
56	56	(2) Reasonable compensation under this section may not be less than: 5
57	57
58	58	(i) With respect to labor for warranty or recall repairs, the dealer’s 6
59	59	CURRENT TIME ALLOWAN CES AND current labor rate for nonwarranty repairs of a like 7
60	60	kind for retail customers; and 8
61	61
62	62	(ii) With respect to any part, the dealer’s cost plus its current retail 9
63	63	mark–up percentage charged to retail customers for nonwarranty repairs of a like kind. 10
64	64
65	65	(3) (i) For purposes of paragraph (2) of this subsection, the dealer’s 11
66	66	labor rate or parts mark–up percentage shall be established by a submission to the licensee 12
67	67	of whichever of the following produces fewer repair orders closed, as of the date of 13
68	68	submission, within the preceding 180 days: 14
69	69
70	70	1. 100 qualifying sequential customer–paid repair orders; or 15
71	71
72	72	2. 90 days of qualifying customer–paid repair orders. 16
73	73
74	74	(ii) WITH RESPECT TO LABOR , COMPENSATION ESTABLI SHED 17
75	75	UNDER THIS SUBSECTIO N SHALL BE EQUAL TO THE PRODUCT OF: 18
76	76
77	77	1. THE HOURLY LABOR RATE AS REFLECTED IN 19
78	78	QUALIFYING REPAIR OR DERS, CALCULATED BY DIVIDING THE TOTAL CHARGES 20
79	79	ALLOCATED TO LABOR IN THE REPAIR ORDERS BY THE TOTAL NUMBER OF HOURS 21
80	80	CHARGED FOR THE REPAIRS; AND 22
81	81
82	82	2. THE TIME ALLOWANCE APPLI CABLE TO EACH REPAIR 23
83	83	AS PRESCRIBED IN A N ATIONALLY RECOGNIZED LABOR GUIDE SELECTED BY THE 24
84	84	DEALER. 25
85	85
86	86	(III) With respect to parts, a schedule of compensation established 26
87	87	under this subsection shall be equal to the parts mark–up percentage as reflected in 27
88	88	qualifying repair orders, calculated by dividing the total charges for parts in the repair 28
89	89	orders by the total dealer cost for the parts minus one. 29
90	90
91	91	[(iii)] (IV) 1. A dealer may not make a submission under this 30
92	92	subsection more than once in 1 year. 31
93	93	HOUSE BILL 1208 3
94	94
95	95
96	96	2. For purposes of subsubparagraph 1 of this subparagraph, 1
97	97	a revision or supplement to a submission to correct or clarify the submission does not 2
98	98	constitute a new submission. 3
99	99
100	100	(7) A licensee may not directly or indirectly: 4
101	101
102	102	(i) Calculate its own labor rate or parts mark–up percentage on a 5
103	103	warranty reimbursement rate submission by the licensee’s dealer under this section, or 6
104	104	require a dealer to calculate a labor rate or parts mark–up percentage, by any method not 7
105	105	required under this section, including a method that is unduly burdensome or 8
106	106	time–consuming or that requires information that is unduly burdensome or 9
107	107	time–consuming to provide such as: 10
108	108
109	109	1. A part–by–part or transaction –by–transaction 11
110	110	calculation; or 12
111	111
112	112	2. Presentation of information as to, or calculations based on, 13
113	113	the dealer’s or other dealers’ warranty compensation; 14
114	114
115	115	(ii) Establish or implement a special part or component number for 15
116	116	parts used in warranty fulfillment, if the special part or component number results in 16
117	117	reduced compensation for the dealer unless the part is used for specific, limited repair 17
118	118	situations; 18
119	119
120	120	(iii) Require or coerce a dealer to change the prices for which it sells 19
121	121	parts or labor for retail customer repairs; 20
122	122
123	123	(iv) Take adverse action against a dealer because the dealer seeks 21
124	124	compensation under this section, by: 22
125	125
126	126	1. Implementing a process that is inconsistent with the 23
127	127	licensee’s obligations to the dealer under this subtitle; or 24
128	128
129	129	2. Failing to act in good faith; 25
130	130
131	131	(v) Conduct any warranty or retail customer repair audit, or other 26
132	132	service–related audit, solely because the dealer makes a request for warranty 27
133	133	reimbursement at retail rates in the ordinary course of business; [or] 28
134	134
135	135	(vi) Establish, implement, enforce, or apply any policy, standard, 29
136	136	rule, program, or incentive regarding the compensation due under this section other than 30
137	137	in a uniform manner among the licensee’s dealers in the State; OR 31
138	138
139	139	(VII) RECOVER OR ATTEMPT TO RECOVER ANY PORTION OF THE 32
140	140	LICENSEE’S COSTS FOR COMPENSATI NG DEALERS UNDER THI S SECTION BY 33 4 HOUSE BILL 1208
141	141
142	142
143	143	REDUCING THE AMOUNT DUE TO A DEALER OR B Y IMPOSING A FEE, ASSESSMENT, OR 1
144	144	SURCHARGE ON THE AMO UNT DUE TO THE DEALER. 2
145	145
146	146	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 3
147	147	October 1, 2023. 4