Public School System Contracts - Prohibited Provisions, the official text

WES MOORE, Governor                               Ch. 701

Chapter 701

                   (Senate Bill 646)

AN ACT concerning

             Public School System Contracts – Prohibited Provisions

FOR the purpose of prohibiting certain provisions from being included in certain public
         school system contracts; specifying that certain provisions are void if included in a
         public school system contract; specifying the applicable law and interpretation of
         public school system contracts; and generally relating to prohibited provisions in
         public school system contracts.

BY adding to
         Article – Education
         Section 4–148
         Annotated Code of Maryland
         (2025 Replacement Volume and 2025 Supplement)

         SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:

                   Article – Education

4–148.

        (A) IN THIS SECTION, “PUBLIC SCHOOL SYSTEM CONTRACT” MEANS ANY
AGREEMENT ENTERED INTO BY A PUBLIC SCHOOL SYSTEM.

        (B) THIS SECTION DOES NOT APPLY TO COLLECTIVE BARGAINING
AGREEMENTS ENTERED INTO UNDER:

             (1) TITLE 6, SUBTITLES 4 AND 5 OF THIS ARTICLE;

             (2) TITLE 9.5, SUBTITLE 7 OF THIS ARTICLE; OR

             (3) TITLE 22 OF THE STATE GOVERNMENT ARTICLE.

(B) (C)      EXCEPT AS REQUIRED BY STATE OR FEDERAL LAW, A PUBLIC

SCHOOL SYSTEM CONTRACT MAY NOT INCLUDE A PROVISION THAT:

                (1) REQUIRES THE PUBLIC SCHOOL SYSTEM TO INDEMNIFY, DEFEND,

OR HOLD HARMLESS ANOTHER PERSON WITHOUT AN APPROPRIATION OF FUNDS

FOR THAT PURPOSE;

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Ch. 701  2026 LAWS OF MARYLAND

                (2) REQUIRES THE PUBLIC SCHOOL SYSTEM TO AGREE TO BINDING

ARBITRATION OR ANY OTHER BINDING EXTRAJUDICIAL DISPUTE RESOLUTION

PROCESS;

                (3) NAMES A JURISDICTION OR VENUE FOR ANY ACTION OR DISPUTE

AGAINST THE PUBLIC SCHOOL SYSTEM OTHER THAN A COURT OF PROPER

JURISDICTION IN THE STATE;

                (4) REQUIRES THE PUBLIC SCHOOL SYSTEM TO AGREE TO LIMIT THE

LIABILITY FOR ANY DIRECT LOSS TO THE PUBLIC SCHOOL SYSTEM FOR BODILY

INJURY, DEATH, OR DAMAGE TO PROPERTY OF THE PUBLIC SCHOOL SYSTEM
CAUSED BY THE NEGLIGENCE, INTENTIONAL OR WILLFUL MISCONDUCT,
FRAUDULENT ACT, RECKLESSNESS, OR OTHER TORTIOUS CONDUCT OF A PERSON OR
A PERSON’S EMPLOYEES OR AGENTS OR A PROVISION THAT WOULD OTHERWISE
IMPOSE AN INDEMNIFICATION OBLIGATION ON THE PUBLIC SCHOOL SYSTEM;

                (5) REQUIRES THE PUBLIC SCHOOL SYSTEM TO BE BOUND BY A TERM
OR CONDITION THAT:

                         (I) IS UNKNOWN TO THE PUBLIC SCHOOL SYSTEM AT THE TIME
OF SIGNING A CONTRACT;

                         (II) MAY BE UNILATERALLY CHANGED BY THE OTHER PARTY;

OR

                         (III) IS ELECTRONICALLY ACCEPTED BY A PUBLIC SCHOOL
SYSTEM EMPLOYEE WITHOUT AUTHORITY;

                (6) RESTRICTS A PUBLIC SCHOOL SYSTEM’S DISCRETION TO SELECT
THE APPROPRIATE LEGAL COUNSEL TO REPRESENT ITS INTERESTS;

                (7) IS INCONSISTENT WITH THE PUBLIC SCHOOL SYSTEM’S
OBLIGATIONS UNDER TITLE 3 OR TITLE 4 OF THE GENERAL PROVISIONS ARTICLE;

                (8) CREATES A DEFICIENCY, INCURS A LIABILITY, OR SPENDS MONEY
IN EXCESS OF THE APPROPRIATION, OR BINDS A PUBLIC SCHOOL SYSTEM TO PAY AN
AMOUNT UNLESS FUNDS HAVE BEEN APPROPRIATED FOR THAT PURPOSE;

                (9) REQUIRES AUTOMATIC RENEWAL OF THE CONTRACT AND

OBLIGATES THE PUBLIC SCHOOL SYSTEM TO ALLOCATE FUNDING IN SUBSEQUENT

FISCAL YEARS; OR

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           WES MOORE, Governor           Ch. 701

                (10) LIMITS THE PUBLIC SCHOOL SYSTEM’S ABILITY TO RECOVER A

DIFFERENCE IN THE COST OF A REPLACEMENT CONTRACTOR TO PERFORM THE

SERVICES NOT PERFORMED BY THE ORIGINAL CONTRACTOR.

(C) (D)    IF A PUBLIC SCHOOL SYSTEM CONTRACT CONTAINS A PROVISION

LISTED UNDER SUBSECTION (B) (C) OF THIS SECTION, THE PROVISION IS VOID AB

INITIO AND THE CONTRACT CONTAINING THAT PROVISION SHALL BE ENFORCEABLE

AS IF IT DID NOT CONTAIN THE PROVISION.

(D) (E)    A PUBLIC SCHOOL SYSTEM CONTRACT THAT CONTAINS A

PROVISION LISTED UNDER SUBSECTION (B) (C) OF THIS SECTION SHALL BE

GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH STATE LAW,

NOTWITHSTANDING ANY TERM OR CONDITION TO THE CONTRARY IN THE

CONTRACT.

         SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to
apply only prospectively and may not be applied or interpreted to have any effect on or
application to any public school system contract executed before the effective date of this
Act or to the renewal or extension of a public school system contract executed before the
effective date of this Act.

         SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2026.

Approved by the Governor, May 26, 2026.

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