| Complementary
Legislation
On
May 22, 2003, Governor Ehrlich signed HB 889; this law, Chapter
455 of the Acts of the General Assembly of 2003, codified at
Business Regulation Article § 16-501 et seq. became
effective on June 1, 2003. As a result of this legislation, tobacco
products of manufacturers that are not in compliance with the
Escrow Act will no longer be permitted to be stamped, sold, or
possessed for sale in the State of Maryland.
The
new legislation, which is codified at Md. Code, Bus. Reg., §§ 16-501
et seq., requires all tobacco product manufacturers to certify
to the Attorney General that they are in compliance with the
Escrow Act – i.e., they have either signed the MSA or they
have set up and deposited money into an escrow account otherwise
meeting the requirements of Maryland law. Each manufacturer must
also submit to the Attorney General a list of its brands and
brand families. Because this new legislation complements the
ability of Maryland to enforce the Escrow Act, it is known as "Complementary
Legislation." In mid-July, the Office of the Attorney General
mailed the following notices to tobacco product manufacturers
informing them of their new obligations pursuant to this statute.
• Notice
to Participating Manufacturers
• Notice to Nonparticipating Manufacturers
All tobacco product manufacturers that wish to sell cigarettes and "roll-your-own" tobacco
in Maryland must certify their compliance with Maryland law and list their
brands and brand families on the Certification prepared
by the Attorney General. Tobacco product manufacturers must submit the initial
Certification on or before August 15, 2003, and all subsequent certifications
on or before April 30 following the year of sales. Participating Manufacturers
need only complete Parts 1, 2, and 3 of the Certification; Nonparticipating
Manufacturers must complete the entire form. Further instructions are provided
in the Notices and Certification.
On September 15, 2003, the Office of the Attorney General released a directory
of those tobacco products and manufacturers that are in full compliance with
the Escrow Act and Complementary Legislation. The directory lists the names
of those tobacco product manufacturers that have been certified by the Attorney
General as being fully compliant, together with each manufacturer's brands
and brand families. The directory is published on the Office of the Attorney
General's website.
The
directory informs and directs licensed wholesalers that only
those brands and brand families listed in the directory may be
stamped, offered or possessed for sale in the State of Maryland.
Any cigarettes or "roll-your-own" tobacco that have
been sold, offered or possessed for sale, or imported for personal
consumption in this State while not included in the Attorney
General's directory will be deemed contraband subject to seizure
and forfeiture as provided in §§ 13-836, 13-837, and
13-839 of the Tax - General Article. Furthermore, any person
who sells, distributes, acquires, holds, owns, possesses, transports,
imports, or causes to be imported, cigarettes or "roll-your-own" tobacco
that the person knows or should know are intended for distribution
or sale in the State while not included in the Attorney General's
directory is guilty of a misdemeanor, and on conviction is subject
to a fine not exceeding $5,000 or imprisonment not exceeding
one year or both.
The Attorney General will update the directory as necessary to make additions
and deletions to it. Licensed wholesalers and others that sell, distribute
or import cigarettes and "roll-your-own" tobacco should review the
Attorney General's directory frequently to ensure that the tobacco products
they possess or are considering possessing may be lawfully sold, possessed
or distributed in the State of Maryland.
Complementary
Legislation requires licensed wholesalers to provide and update
as necessary an electronic mail address to the Attorney General
for the purpose of receiving any notifications that may be sent
pursuant to it. The Attorney General has prepared a Licensed
Wholesaler Address Reporting Form for that purpose. Licensed
wholesalers must complete the form and return it to the Office
of the Attorney General. Licensed wholesalers must update the
information whenever a change takes place.
In
addition, licensed wholesalers must now submit to the Comptroller
quarterly reports that set forth the brands and brand families
of cigarettes and "roll-your-own" tobacco that the
licensed wholesaler sold in the previous quarter. The first report
on the new form will be due from wholesalers on or before October
21, 2003, for the quarter ending September 30, 2003.
If
you are a tobacco product manufacturer and have questions regarding
the Escrow Statute or Complementary Legislation, please contact
David Lapp, Assistant Attorney General, Office of the Attorney
General of Maryland, 200 St. Paul Place, 20th Floor, Baltimore,
Maryland 21202-1626, Tel: (410) 576-7056, Fax: (410) 576-6955.
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