Bill > HB870

This bill modifies Maryland's existing tobacco product manufacturer regulation by replacing the current escrow account requirement with an equity fee system starting in 2026. Under the new system, tobacco product manufacturers that are not part of the 1998 Master Settlement Agreement will be required to pay an equity fee of $0.0188482 per cigarette unit sold, instead of depositing funds into a qualified escrow account. The bill aims to ensure that all tobacco manufacturers contribute financially to the state's public health costs, regardless of their settlement status. Manufacturers who pay the equity fee will have the right to contest the amount within one year of payment, and the collected fees will be distributed to the Cigarette Restitution Fund. The bill maintains the state's policy of requiring tobacco manufacturers to internalize health care costs, increase cigarette prices to reduce smoking (especially among youth), and provide partial compensation for the financial burdens associated with cigarette smoking. The legislation also updates various reporting and compliance requirements, including annual certifications to the Attorney General and potential penalties for non-compliance. The bill is not severable, meaning if any part is found invalid, the entire act will be invalidated, and it is set to take effect on October 1, 2025.

Health and Social Services

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0870?ys=2025RS