Environment - Permit Applications for New Buildings - Notice (Large Buildings for Tomorrow Act)
HB0870 revises Maryland’s tobacco product manufacturer escrow framework by replacing the existing escrow deposit requirement for nonparticipating tobacco manufacturers with a new “equity fee” beginning in 2026. Under the bill, manufacturers that sell cigarettes in Maryland must either remain participating manufacturers under the Master Settlement Agreement or, if they are nonparticipating manufacturers, pay an annual per-unit equity fee to the Attorney General instead of placing money into a qualified escrow fund for sales made in 2026 and later. The bill also preserves the escrow requirement for sales through 2025.
The bill changes the certification and enforcement provisions that tobacco manufacturers must follow each year. Manufacturers must certify compliance to the Attorney General, and the certification must now indicate whether the manufacturer has either maintained escrow for pre-2026 sales or paid the equity fee for later sales. The Attorney General is authorized to collect the equity fees, deposit them into the Cigarette Restitution Fund, bring civil actions for noncompliance, recover attorney’s fees and costs, and seek civil penalties and sales prohibitions for repeated violations. The bill also authorizes regulations to implement the new framework and updates directory provisions so only compliant manufacturers and brand families may be sold in the State.
HB0870 would amend Title 16 of the Business Regulation Article by renaming the existing Escrow Act provisions as the Tobacco Product Manufacturers Equity Act and by creating a new statutory payment mechanism for nonparticipating tobacco manufacturers. It would alter the legal obligations of tobacco product manufacturers selling cigarettes in Maryland, shift certain payments from escrow accounts to direct payments to the Attorney General, and direct those funds to the Cigarette Restitution Fund. It also expands the Attorney General’s enforcement authority and updates related certification, directory, and penalty provisions that govern which cigarette brands may be stamped, sold, or possessed in Maryland.
The bill’s stated purpose and structure suggest a strong public-health and revenue-protection rationale, with the General Assembly framing the measure as a way to ensure tobacco manufacturers bear the costs of smoking-related harms and to prevent non-settling manufacturers from gaining an advantage over settling manufacturers. The text indicates support for maintaining compensation to the State and for reducing smoking, especially among youth, while preserving enforcement tools against noncompliant manufacturers. No committee transcript or recorded vote information was provided, so there is no additional evidence of debate sentiment beyond the bill language itself.
The main point of contention appears to be the shift from escrow deposits to an equity fee and whether that change remains consistent with the Master Settlement Agreement and Maryland’s existing tobacco-control framework. The bill anticipates legal and policy concerns by making the act nonseverable and by providing that if the equity fee causes the Equity Act to lose its status as a qualifying statute under the Master Settlement Agreement, the act has no effect. Another likely issue is the practical and legal treatment of nonparticipating manufacturers: the bill imposes direct payment obligations, allows challenges to the fee amount, and strengthens penalties and sales restrictions for noncompliance, which could be contested by affected manufacturers or distributors.