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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
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*hb1604*
HOUSE BILL 1604
F1 6lr3678
CF SB 646
By: Delegate Kerr
Introduced and read first time: February 17, 2026
Assigned to: Rules and Executive Nominations
Re–referred to: Ways and Means, March 2, 2026
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 23, 2026
CHAPTER ______
AN ACT concerning 1
Public School System Contracts – Prohibited Provisions 2
FOR the purpose of prohibiting certain provisions from being included in certain public 3
school system contracts; specifying that certain provisions are void if included in a 4
public school system contract; specifying the applicable law and interpretation of 5
public school system contracts; and generally relating to prohibited provisions in 6
public school system contracts. 7
BY adding to 8
Article – Education 9
Section 4–148 10
Annotated Code of Maryland 11
(2025 Replacement Volume and 2025 Supplement) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – Education 15
4–148. 16
(A) IN THIS SECTION , “PUBLIC SCHOOL SYSTEM CONTRACT” MEANS ANY 17
AGREEMENT ENTERED INTO BY A PUBLIC SCHOOL SYSTEM. 18
2 HOUSE BILL 1604
(B) THIS SECTION DOES NOT APPLY TO CO LLECTIVE BARGAINING 1
AGREEMENTS ENTERED INTO UNDER: 2
(1) TITLE 6, SUBTITLES 4 AND 5 OF THIS ARTICLE; 3
(2) TITLE 9.5, SUBTITLE 7 OF THIS ARTICLE; OR 4
(3) TITLE 22 OF THE STATE GOVERNMENT ARTICLE. 5
(B) (C) EXCEPT AS REQUIRED BY STATE OR FEDERAL LAW , A PUBLIC 6
SCHOOL SYSTEM CONTRACT MAY NOT INCLUDE A PROVISION THAT: 7
(1) REQUIRES THE PUBLIC SCHOOL SYSTEM TO INDEMNIFY, DEFEND, 8
OR HOLD HARMLESS ANO THER PERSON WITHOUT AN APPROPRIATION OF FUNDS 9
FOR THAT PURPOSE; 10
(2) REQUIRES THE PUBLIC S CHOOL SYSTEM TO AGRE E TO BINDING 11
ARBITRATION OR ANY O THER BINDING EXTRAJU DICIAL DISPUTE RESOL UTION 12
PROCESS; 13
(3) NAMES A JURISDICTION OR VENUE FOR ANY ACTION OR DISPUTE 14
AGAINST THE PUBLIC S CHOOL SYSTEM OTHER T HAN A COURT OF PROPE R 15
JURISDICTION IN THE STATE; 16
(4) REQUIRES THE PUBLIC SCHOOL SYSTEM TO AGREE TO LIMIT THE 17
LIABILITY FOR ANY DI RECT LOSS TO THE PUB LIC SCHOOL SYSTEM FO R BODILY 18
INJURY, DEATH, OR DAMAGE TO PROPERT Y OF THE PUBLIC SCHO OL SYSTEM 19
CAUSED BY THE NEGLIG ENCE, INTENTIONAL OR WILLFUL MISC ONDUCT, 20
FRAUDULENT ACT, RECKLESSNESS, OR OTHER TORTIOUS CONDUCT OF A PERSON OR 21
A PERSON ’S EMPLOYEES OR AGENT S OR A PROVISION THA T WOULD OTHERWISE 22
IMPOSE AN INDEMNIFICATION OBLIGATION ON THE PUBLIC SCHOOL SYSTEM; 23
(5) REQUIRES THE PUBLIC SCHOOL SYSTEM TO BE BOUND BY A TERM 24
OR CONDITION THAT: 25
(I) IS UNKNOWN TO THE PUBLIC SCHOOL SYSTEM AT THE TIME 26
OF SIGNING A CONTRACT; 27
(II) MAY BE UNILATERALLY C HANGED BY THE OTHER PARTY; 28
OR 29
(III) IS ELECTRONICALLY ACC EPTED BY A PUBLIC SC HOOL 30
SYSTEM EMPLOYEE WITHOUT AUTHORITY; 31
HOUSE BILL 1604 3
(6) RESTRICTS A PUBLIC SCHOOL SYSTEM’S DISCRETION TO SELECT 1
THE APPROPRIATE LEGAL COUNSEL TO REPRESENT ITS INTERESTS; 2
(7) IS INCONSISTENT WITH THE PUBLIC SCHOOL SY STEM’S 3
OBLIGATIONS UNDER TITLE 3 OR TITLE 4 OF THE GENERAL PROVISIONS ARTICLE; 4
(8) CREATES A DEFICIENCY, INCURS A LIABILITY, OR SPENDS MONEY 5
IN EXCESS OF THE APPROPRIATION, OR BINDS A PUBLIC SCHOOL SYSTEM TO PAY AN 6
AMOUNT UNLESS FUNDS HAVE BEEN APPROPRIATED FOR THAT PURPOSE; 7
(9) REQUIRES AUTOMATIC RE NEWAL OF THE CONTRACT AND 8
OBLIGATES THE PUBLIC SCHOOL SYSTEM TO ALL OCATE FUNDING IN SUB SEQUENT 9
FISCAL YEARS; OR 10
(10) LIMITS THE PUBLIC SCH OOL SYSTEM ’S ABILITY TO RECOVER A 11
DIFFERENCE IN THE CO ST OF A REPLACEMENT CONTRACTOR TO PERFOR M THE 12
SERVICES NOT PERFORMED BY THE ORIGINAL CONTRACTOR. 13
(C) (D) IF A PUBLIC SCHOOL SYSTEM CONTRACT CONTAINS A PROVISION 14
LISTED UNDER SUBSECT ION (B) (C) OF THIS SECTION , THE PROVISION IS VOI D AB 15
INITIO AND THE CONTRACT CONTAINING THAT PROVISION SHALL BE ENFORCEABLE 16
AS IF IT DID NOT CONTAIN THE PROVISION. 17
(D) (E) A PUBLIC SCHOOL SYSTEM CONTRACT THAT CONTAI NS A 18
PROVISION LISTED UND ER SUBSECTION (B) (C) OF THIS SECTION SHALL B E 19
GOVERNED BY AND CONS TRUED IN ACCORDANCE WITH STATE LAW , 20
NOTWITHSTANDING ANY TERM OR CONDITION TO THE CONTRARY IN THE 21
CONTRACT. 22
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to 23
apply only prospectively and m ay not be applied or interpreted to have any effect on or 24
application to any public school system contract executed before the effective date of this 25
Act or to the renewal or extension of a public school system contract executed before the 26
effective date of this Act. 27
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 28
1, 2026. 29