Maryland 2025 Regular Session

Maryland House Bill HB1046 Compare Versions

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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LA W.
44 [Brackets] indicate matter deleted from existing law.
55 Underlining indicates amendments to bill.
66 Strike out indicates matter stricken from the bill by amendment or deleted from the law by
77 amendment.
8- Italics indicate opposite chamber/conference committee amendments.
98 *hb1046*
109
1110 HOUSE BILL 1046
12-I3, R4 (5lr3167)
13-ENROLLED BILL
14-— Economic Matters/Finance —
15-Introduced by Delegate Bagnall
11+I3, R4 5lr3167
1612
17-Read and Examined by Proofreaders:
18-
19-_______________________________________________
20-Proofreader.
21-_______________________________________________
22-Proofreader.
23-
24-Sealed with the Great Seal and presented to the Governor, for his approval this
25-
26-_______ day of _______________ at _________________ _______ o’clock, ________M.
27-
28-______________________________________________
29-Speaker.
13+By: Delegate Bagnall
14+Introduced and read first time: February 5, 2025
15+Assigned to: Economic Matters
16+Committee Report: Favorable with amendments
17+House action: Adopted
18+Read second time: March 6, 2025
3019
3120 CHAPTER ______
3221
3322 AN ACT concerning 1
3423
3524 Insurance Protections for Vehicle Service Contracts 2
3625 Mechanical Repair Contracts – Technical Service Bulletins 3
3726
3827 FOR the purpose of establishing that a licensed vehicle dealer, an obligor, or an agent that 4
3928 sells mechanical repair contracts for motor vehicles may not make deceptive or 5
4029 misleading statements regarding the mechanical repair contract and shall ensure 6
4130 that testimonials of any of their endorsers are truthful, accurate, and not deceptive 7
4231 prohibiting a mechanical repair contract from containing a provision precluding 8
4332 coverage for service to a motor vehicle for issues identified in a technical service 9
4433 bulletin and prohibiting the denial of a service claim for such an issue by certain 10
4534 persons; and generally relating to technical service bulletins and mechanical repair 11
4635 contracts for motor vehicles. 12
4736
4837 BY repealing and reenacting, without amendments, 13
49- Article – Commercial Law 14 2 HOUSE BILL 1046
38+ Article – Commercial Law 14
39+Section 14–404 15
40+ Annotated Code of Maryland 16
41+ (2013 Replacement Volume and 2024 Supplement) 17
42+
43+BY repealing and reenacting, without amendments, 18
44+ Article – Transportation 19
45+Section 15–311.2(a) and (e) through (h) 20
46+ Annotated Code of Maryland 21
47+ (2020 Replacement Volume and 2024 Supplement) 22
48+ 2 HOUSE BILL 1046
5049
5150
52-Section 14–404 1
53- Annotated Code of Maryland 2
54- (2013 Replacement Volume and 2024 Supplement) 3
51+BY repealing and reenacting, with amendments, 1
52+ Article – Transportation 2
53+Section 15–311.2(i) 3
54+ Annotated Code of Maryland 4
55+ (2020 Replacement Volume and 2024 Supplement) 5
5556
56-BY repealing and reenacting, without amendments, 4
57- Article – Transportation 5
58-Section 15311.2(a) and (e) through (h) 6
59- Annotated Code of Maryland 7
60- (2020 Replacement Volume and 2024 Supplement) 8
57+BY adding to 6
58+ Article – Commercial Law 7
59+ Section 14404.1 8
60+ Annotated Code of Maryland 9
61+ (2013 Replacement Volume and 2024 Supplement) 10
6162
62-BY repealing and reenacting, with amendments, 9
63- Article – Transportation 10
64-Section 15–311.2(i) 11
65- Annotated Code of Maryland 12
66- (2020 Replacement Volume and 2024 Supplement) 13
63+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
64+That the Laws of Maryland read as follows: 12
6765
68-BY adding to 14
69- Article – Commercial Law 15
70- Section 14–404.1 16
71- Annotated Code of Maryland 17
72- (2013 Replacement Volume and 2024 Supplement) 18
66+Article – Commercial Law 13
7367
74- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
75-That the Laws of Maryland read as follows: 20
68+14–404. 14
7669
77-Article – Commercial Law 21
70+ (a) (1) A guarantor shall fulfill the guarantor’s guaranty according to its 15
71+terms: 16
7872
79-14–404. 22
73+ (i) Within a reasonable time; and 17
8074
81- (a) (1) A guarantor shall fulfill the guarantor’s guaranty according to its 23
82-terms: 24
75+ (ii) For the stated period of the guaranty or, if no period is stated, for 18
76+a reasonable period of time. 19
8377
84- (i) Within a reasonable time; and 25
78+ (2) A provider shall fulfill the obligations under the service contract 20
79+according to its terms: 21
8580
86- (ii) For the stated period of the guaranty or, if no period is stated, for 26
87-a reasonable period of time. 27
81+ (i) At or within the period stated in the service contract, or if no 22
82+period is stated, within a reasonable time; and 23
8883
89- (2) A provider shall fulfill the obligations under the service contract 28
90-according to its terms: 29
84+ (ii) For the stated duration of the service contract. 24
9185
92- (i) At or within the period stated in the service contract, or if no 30
93-period is stated, within a reasonable time; and 31
86+ (b) (1) (i) A guaranty is extended automatically when a guarantor fails to 25
87+repair successfully a malfunctioning or defective product within the guaranty period. 26
9488
95- (ii) For the stated duration of the service contract. 32
89+ (ii) The guaranty does not terminate until the consumer product 27
90+successfully performs its intended function for the remaining period of the guaranty plus a 28
91+period equal to the time of repair. 29
9692
97- (b) (1) (i) A guaranty is extended automatically when a guarantor fails to 33
98-repair successfully a malfunctioning or defective product within the guaranty period. 34 HOUSE BILL 1046 3
93+ (2) (i) A service contract is extended automatically when the provider 30
94+fails to perform the services under the service contract. 31
95+
96+ (ii) The service contract does not terminate until the services are 32
97+provided in accordance with the terms of the service contract. 33 HOUSE BILL 1046 3
9998
10099
101100
102- (ii) The guaranty does not terminate until the consumer product 1
103-successfully performs its intended function for the remaining period of the guaranty plus a 2
104-period equal to the time of repair. 3
101+ (c) If a guaranty fails to disclose the information required by § 14–403 of this 1
102+subtitle, the guarantor shall, without charge and within a reasonable period of time: 2
105103
106- (2) (i) A service contract is extended automatically when the provider 4
107-fails to perform the services under the service contract. 5
104+ (1) Repair a malfunctioning or defective consumer product; or 3
108105
109- (ii) The service contract does not terminate until the services are 6
110-provided in accordance with the terms of the service contract. 7
106+ (2) If repair is not commercially practicable or cannot be timely made, 4
107+replace the malfunctioning or defective consumer product. 5
111108
112- (c) If a guaranty fails to disclose the information required by § 14–403 of this 8
113-subtitle, the guarantor shall, without charge and within a reasonable period of time: 9
109+ (d) (1) If a guarantor is unable to fulfill the terms of the guaranty within 10 6
110+days of the tender or delivery of a consumer product to the guarantor, the guarantor shall 7
111+provide on request of the person guaranteed a brief written explanation of the reasons for 8
112+the delay. 9
114113
115- (1) Repair a malfunctioning or defective consumer product; or 10
114+ (2) If a provider is unable to fulfill the terms of the service contract within 10
115+10 days after the date on which the provider is required to perform obligations under the 11
116+service contract, the provider shall provide on request of the person guaranteed a brief 12
117+written explanation of the reasons for the delay. 13
116118
117- (2) If repair is not commercially practicable or cannot be timely made, 11
118-replace the malfunctioning or defective consumer product. 12
119+Article – Transportation 14
119120
120- (d) (1) If a guarantor is unable to fulfill the terms of the guaranty within 10 13
121-days of the tender or delivery of a consumer product to the guarantor, the guarantor shall 14
122-provide on request of the person guaranteed a brief written explanation of the reasons for 15
123-the delay. 16
121+15–311.2. 15
124122
125- (2) If a provider is unable to fulfill the terms of the service contract within 17
126-10 days after the date on which the provider is required to perform obligations under the 18
127-service contract, the provider shall provide on request of the person guaranteed a brief 19
128-written explanation of the reasons for the delay. 20
123+ (a) (1) In this section the following words have the meanings indicated. 16
129124
130-Article – Transportation 21
125+ (2) “Agent” means a business entity that is authorized by an obligor or a 17
126+licensed vehicle dealer to sell a mechanical repair contract. 18
131127
132-15–311.2. 22
128+ (3) (i) “Mechanical repair contract” means any agreement or contract 19
129+sold by a licensed vehicle dealer, an obligor, or an agent under which the obligor agrees to 20
130+perform over a fixed period of time, for a specific duration, and for a specific identifiable 21
131+price, provided that the purchase of the contract is optional to the purchaser, any of the 22
132+following services: 23
133133
134- (a) (1) In this section the following words have the meanings indicated. 23
134+ 1. The repair, replacement, or maintenance of a motor 24
135+vehicle, or the indemnification for the repair, replacement, or maintenance of a motor 25
136+vehicle, for the operational or structural failure of the motor vehicle due to a defect in 26
137+materials, workmanship, or normal wear and tear, with or without additional provisions 27
138+for incidental payment of indemnity for services including towing, rental and emergency 28
139+road service, and road hazard protection; 29
135140
136- (2) “Agent” means a business entity that is authorized by an obligor or a 24
137-licensed vehicle dealer to sell a mechanical repair contract. 25
138-
139- (3) (i) “Mechanical repair contract” means any agreement or contract 26
140-sold by a licensed vehicle dealer, an obligor, or an agent under which the obligor agrees to 27
141-perform over a fixed period of time, for a specific duration, and for a specific identifiable 28
142-price, provided that the purchase of the contract is optional to the purchaser, any of the 29
143-following services: 30
144-
145- 1. The repair, replacement, or maintenance of a motor 31
146-vehicle, or the indemnification for the repair, replacement, or maintenance of a motor 32
147-vehicle, for the operational or structural failure of the motor vehicle due to a defect in 33 4 HOUSE BILL 1046
141+ 2. The repair, replacement, or maintenance of a motor 30
142+vehicle for the operational or structural failure of one or more parts or systems of the motor 31
143+vehicle brought about by the failure of an additive product to perform as represented; 32
144+ 4 HOUSE BILL 1046
148145
149146
150-materials, workmanship, or normal wear and tear, with or without additional provisions 1
151-for incidental payment of indemnity for services including towing, rental and emergency 2
152-road service, and road hazard protection; 3
147+ 3. The repair or replacement of tires or wheels on a motor 1
148+vehicle damaged as a result of coming into contact with road hazards, including potholes, 2
149+rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps; 3
153150
154- 2. The repair, replacement, or maintenance of a motor 4
155-vehicle for the operational or structural failure of one or more parts or systems of the motor 5
156-vehicle brought about by the failure of an additive product to perform as represented; 6
151+ 4. The removal and repair of dents, dings, or creases on a 4
152+motor vehicle using the process of paintless dent removal; 5
157153
158- 3. The repair or replacement of tires or wheels on a motor 7
159-vehicle damaged as a result of coming into contact with road hazards, including potholes, 8
160-rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps; 9
154+ 5. The repair of chips or cracks in, or the replacement of, 6
155+motor vehicle windshields as a result of damage caused by road hazards; 7
161156
162- 4. The removal and repair of dents, dings, or creases on a 10
163-motor vehicle using the process of paintless dent removal; 11
157+ 6. The replacement of a motor vehicle key or key fob if the 8
158+key or key fob becomes inoperable or is lost or stolen; or 9
164159
165- 5. The repair of chips or cracks in, or the replacement of, 12
166-motor vehicle windshields as a result of damage caused by road hazards; 13
160+ 7. Other services or products that may be approved by the 10
161+Insurance Commissioner if consistent with the provisions of this section. 11
167162
168- 6. The replacement of a motor vehicle key or key fob if the 14
169-key or key fob becomes inoperable or is lost or stolen; or 15
163+ (ii) “Mechanical repair contract” includes extended warranties and 12
164+extended service contracts. 13
170165
171- 7. Other services or products that may be approved by the 16
172-Insurance Commissioner if consistent with the provisions of this section. 17
166+ (iii) “Mechanical repair contract” does not include: 14
173167
174- (ii) “Mechanical repair contract” includes extended warranties and 18
175-extended service contracts. 19
168+ 1. Warranties under the Magnuson–Moss Warranty Act, 15 15
169+U.S.C. § 2301, et seq.; 16
176170
177- (iii) “Mechanical repair contract” does not include: 20
171+ 2. Contracts or agreements for regular maintenance only; or 17
178172
179- 1. Warranties under the Magnuson–Moss Warranty Act, 15 21
180-U.S.C. § 2301, et seq.; 22
173+ 3. An agreement between a motor club, as defined in § 18
174+26–101 of the Insurance Article, and a member or subscriber of the motor club. 19
181175
182- 2. Contracts or agreements for regular maintenance only; or 23
176+ (4) (i) “Obligor” means the person specified in a mechanical repair 20
177+contract that is contractually obligated to perform the services set forth in the mechanical 21
178+repair contract. 22
183179
184- 3. An agreement between a motor club, as defined in § 24
185-26–101 of the Insurance Article, and a member or subscriber of the motor club. 25
180+ (ii) “Obligor” does not include an insurer that provides insurance 23
181+coverage in accordance with subsection (b) of this section. 24
186182
187- (4) (i) “Obligor” means the person specified in a mechanical repair 26
188-contract that is contractually obligated to perform the services set forth in the mechanical 27
189-repair contract. 28
183+ (e) A mechanical repair contract shall be offered in addition to any express 25
184+warranty originally included as part of the contract for sale of a new motor vehicle. 26
190185
191- (ii) “Obligor” does not include an insurer that provides insurance 29
192-coverage in accordance with subsection (b) of this section. 30
186+ (f) A mechanical repair contract shall clearly and conspicuously set forth the date 27
187+when the warranty begins. 28
193188
194- (e) A mechanical repair contract shall be offered in addition to any express 31
195-warranty originally included as part of the contract for sale of a new motor vehicle. 32
189+ (g) A mechanical repair contract shall clearly and conspicuously set forth the date 29
190+or the odometer reading at which the warranty expires and the name and address of the 30
191+insurer issuing the policy of insurance as described in subsection (b) of this section. 31
196192 HOUSE BILL 1046 5
197193
198194
199- (f) A mechanical repair contract shall clearly and conspicuously set forth the date 1
200-when the warranty begins. 2
195+ (h) The repair of a malfunction or defect covered under a mechanical repair 1
196+contract shall include the cost of the teardown and diagnosing the malfunction or defect. 2
201197
202- (g) A mechanical repair contract shall clearly and conspicuously set forth the date 3
203-or the odometer reading at which the warranty expires and the name and address of the 4
204-insurer issuing the policy of insurance as described in subsection (b) of this section. 5
198+ (i) (1) The provisions of the Maryland Consumer Products Guaranty Act, Title 3
199+14, Subtitle 4 of the Commercial Law Article, apply to a mechanical repair contract sold in 4
200+the State. 5
205201
206- (h) The repair of a malfunction or defect covered under a mechanical repair 6
207-contract shall include the cost of the teardown and diagnosing the malfunction or defect. 7
202+ (2) IN ADDITION TO THE RE QUIREMENTS FOR LICEN SED VEHICLE 6
203+DEALERS, OBLIGORS, AND AGENTS ESTABLISH ED UNDER § 14–404 OF THE 7
204+COMMERCIAL LAW ARTICLE, A LICENSED VEHICLE D EALER, AN OBLIGOR, OR AN 8
205+AGENT: 9
208206
209- (i) (1) The provisions of the Maryland Consumer Products Guaranty Act, Title 8
210-14, Subtitle 4 of the Commercial Law Article, apply to a mechanical repair contract sold in 9
211-the State. 10
207+ (I) MAY NOT MAKE DECEPTIV E OR MISLEADING STAT EMENTS 10
208+REGARDING A MECHANIC AL REPAIR CONTRACT ; AND 11
212209
213- (2) IN ADDITION TO THE RE QUIREMENTS FOR LICEN SED VEHICLE 11
214-DEALERS, OBLIGORS, AND AGENTS ESTABLISH ED UNDER § 14–404 OF THE 12
215-COMMERCIAL LAW ARTICLE, A LICENSED VEHICLE D EALER, AN OBLIGOR, OR AN 13
216-AGENT: 14
210+ (II) SHALL ENSURE THAT TES TIMONIALS OF ANY OF THEIR 12
211+ENDORSERS ARE TRUTHF UL, ACCURATE, AND NOT DECEPTIVE . 13
217212
218- (I) MAY NOT MAKE DECEPTIV E OR MISLEADING STAT EMENTS 15
219-REGARDING A MECHANIC AL REPAIR CONTRACT ; AND 16
213+14–404.1. 14
220214
221- (II) SHALL ENSURE THAT TES TIMONIALS OF ANY OF THEIR 17
222-ENDORSERS ARE TRUTHF UL, ACCURATE, AND NOT DECEPTIVE . 18
215+ (A) A MECHANICAL REPAIR CO NTRACT UNDER § 15–311.2 OF THE 15
216+TRANSPORTATION ARTICLE MAY NOT CONTA IN A PROVISION PRECL UDING 16
217+COVERAGE FOR AN ISSU E WITH A MOTOR VEHIC LE IDENTIFIED IN A T ECHNICAL 17
218+SERVICE BULLETIN . 18
223219
224-14–404.1. 19
220+ (B) A GUARANTOR OR PROVIDER MAY NOT DENY A MECHANICAL RE PAIR 19
221+CONTRACT CLAIM BECAU SE THE DIAGNOSED ISS UE WITH THE MOTOR VE HICLE FOR 20
222+WHICH THE CLAIM WAS MADE WAS IDENTIFIED IN A TECHNICAL SERVI CE BULLETIN. 21
225223
226- (A) A MECHANICAL REPAIR CO NTRACT UNDER § 15–311.2 OF THE 20
227-TRANSPORTATION ARTICLE MAY NOT CONTA IN A PROVISION PRECL UDING 21
228-COVERAGE SOLELY FOR AN ISSUE WITH A MOTOR VEHICLE IDENTI FIED IN A 22
229-TECHNICAL SERVICE BU LLETIN. 23
224+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take ef fect 22
225+October 1, 2025. 23
230226
231- (B) A GUARANTOR OR PROVIDE R MAY NOT DENY A MEC HANICAL REPAIR 24
232-CONTRACT CLAIM SOLELY BECAUSE THE DIAGNOSE D ISSUE WITH THE MOT OR 25
233-VEHICLE FOR WHICH TH E CLAIM WAS MADE WAS IDENTIFIED IN A TECH NICAL 26
234-SERVICE BULLETIN . 27
235227
236- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 28
237-October 1, 2025. 29
228+
229+
230+Approved:
231+________________________________________________________________________________
232+ Governor.
233+________________________________________________________________________________
234+ Speaker of the House of Delegates.
235+________________________________________________________________________________
236+ President of the Senate.