The bill amends Section 8-32-3 of the Code of Alabama 1975, mandating that all service contract provider registration fees be directed to the State Treasury and credited to the Special Examination Revolving Fund, replacing the previous allocation to the Service Contract Revolving Fund. It establishes that any adjustments to these fees will correspond with changes in the Consumer Price Index and requires the transfer of any unencumbered and unexpended balance from the Service Contract Revolving Fund to the Special Examination Revolving Fund. Additionally, the bill makes conforming changes to Sections 8-32-1 and 8-32-5 of the Code.

The legislation also outlines the responsibilities of service contract providers, including the necessity for written evidence of service contract purchases and the option to appoint an administrator for compliance. It sets financial stability requirements, such as maintaining a net worth of at least $100 million or obtaining a reimbursement insurance policy. The bill details conditions for refunds on service contracts, including a 10 percent penalty for refunds not processed within 45 days. Furthermore, it establishes a regulatory framework for service contracts, specifies exemptions for certain agreements, and introduces changes to contract requirements, including cancellation terms and obligations of service contract holders. The act is scheduled to take effect on October 1, 2026.

Statutes affected:
Introduced: 8-32-3, 8-32-1, 8-32-5
Enrolled: 8-32-3, 8-32-1, 8-32-5