Business Regulation (GBR) — Title 16. Cigarettes

act as a manufacturer;

act as a subwholesaler;

act as a vending machine operator;

act as a wholesaler; or

act as a storage warehouse; or

operates one or more cigarette manufacturing plants; or

is a participating manufacturer; and

sells unstamped cigarettes to a licensed cigarette wholesaler located in Maryland;

sells unstamped cigarettes that may lawfully be sold in Maryland to a licensed cigarette wholesaler located outside of Maryland;

unless otherwise prohibited or restricted under local law, this article, or the Criminal Law Article, distributes sample cigarettes to consumers located in Maryland; or

stores unstamped cigarettes in a cigarette storage warehouse in Maryland for subsequent shipment to licensed wholesalers, federal reservations, or persons out of state.

holds stamped cigarettes for sale to another person for resale; or

sells stamped cigarettes to another person for resale.

obtain the county license required under § 16–301 of this title;

submit to the clerk an application for each permanent or temporary place of business located in the same enclosure and operated by the same applicant; and

pay to the clerk a fee of $30.

be made on the form that the clerk requires; and

contain the information that the Executive Director requires.

$500 for a 1–year term; or

the amount that results when $500 is prorated to the nearest month, if the application is for less than a 1–year term.

an applicant for the initial issuance of a license issued by the Executive Director under this title shall pay to the Executive Director a nonrefundable application fee of $200; and

an applicant for renewal of a license issued by the Executive Director under this title shall pay to the Executive Director a renewal fee of $30.

a licensed cigarette wholesaler located in Maryland; and

a licensed cigarette wholesaler located outside of Maryland if the unstamped cigarettes may lawfully be sold in Maryland;

the license fee required under § 16–204 of this subtitle; and

if the license is issued by the Executive Director, the renewal fee required under § 16–204(h) of this subtitle.

identify each vending machine with a conspicuous label that states the licensee’s name, address, and telephone number; and

display on a conspicuous label applicable prohibitions and penalties under § 10–107 of the Criminal Law Article.

by means of a government–issued photo identification containing the individual’s date of birth; and

in a direct face–to–face exchange without the assistance of any electronic or mechanical device.

in violation of a license; or

from a person who is not a licensed cigarette manufacturer, licensed subwholesaler, licensed vending machine operator, or licensed wholesaler;

a felony; or

a misdemeanor that is a crime of moral turpitude and is directly related to the fitness and qualification of the applicant or licensee; or

the public welfare and morals would not be impaired by allowing the licensee to operate during the period set for the suspension or revocation; and

the payment of the sum of money will achieve the desired disciplinary purposes.

returning them to the seller or consignor; or

delivering them to a common carrier for return to the seller or consignor.

administer this title; and

enforce the Maryland Cigarette Sales Below Cost Act.

consistent with the process established by the Mayor and City Council of Baltimore City under § 16–302.1 of this title; and

proportional to the number of licensees operating in each legislative district.

the invoice number;

the date of receipt;

the quantity received;

the brand; and

the name of the person from whom the cigarettes are received;

shall keep a record of the name and address of each retailer to whom a sale is made; and

except for a transfer of cigarettes to retail stock by a written memorandum, shall prepare for each sale an invoice that shows the political subdivision where the retailer is located; and

at the beginning or end of the month; or

on another specific day of the month, if the subwholesaler or wholesaler finds it more practical to take inventory on that day and notifies the Executive Director that inventory will be taken on that day.

a person in the State authorized by Title 12 of the Tax – General Article to hold unstamped cigarettes on which the tobacco tax has not been paid; or

a person in another jurisdiction authorized to hold cigarettes on which the tax imposed by that jurisdiction has not been paid; and

is the owner of the brand;

is the United States importer for the brand; or

is a designated agent in Maryland of:

federal trademark or tax laws;

the trademark law of this State under Title 1, Subtitle 4 of this article; or

the tax laws of this State under Title 12 of the Tax – General Article.

sell or ship cigarettes, ordered or purchased by mail or through a computer network, telephonic network, or other electronic network by a consumer or other unlicensed recipient, directly to a consumer or other unlicensed recipient in this State; or

cause cigarettes, ordered or purchased by mail or through a computer network, telephonic network, or other electronic network by a consumer or other unlicensed recipient, to be shipped directly to a consumer or other unlicensed recipient in this State.

subject to discipline by the Executive Director under § 16–210 of this subtitle; and

guilty of a felony and, on conviction, is subject to a fine not exceeding $50 for each carton of cigarettes transported or imprisonment not exceeding 2 years or both.

$25 to the Executive Director;

in Montgomery County, $275 to the county to be used to enforce existing laws banning the sale or distribution of tobacco, tobacco products, or electronic smoking devices, as defined in § 16.7–101 of this article, to individuals under the age of 21 years; and

in all other counties, $275 to the Maryland Department of Health to be used by the Department or its designee to enforce existing laws prohibiting the sale or distribution of tobacco, tobacco products, or electronic smoking devices, as defined in § 16.7–101 of this article, to individuals under the age of 21 years.

in compliance with all relevant State and local laws; and

otherwise entitled to be licensed; and

intended for human inhalation, absorption, ingestion, smoking, heating, chewing, dissolving, or any other manner of consumption that is made of, derived from, or contains:

an accessory or a component used in any manner of consumption of a product described in item (i) of this paragraph.

cigarettes, cigars, pipe tobacco, chewing tobacco, snuff, and snus;

electronic smoking devices; and

filters, rolling papers, pipes, and liquids used in electronic smoking devices regardless of nicotine content.

“owns”, “is owned”, and “ownership” mean ownership of an equity interest, or the equivalent thereof, of 10 percent or more; and

“person” means an individual, partnership, committee, association, corporation, or any other organization or group of persons.

any roll of tobacco wrapped in paper or in any substance not containing tobacco;

tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or

any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in item (i) of this paragraph.

manufactures cigarettes anywhere that such manufacturer intends them to be sold in the United States, including cigarettes intended to be sold in the United States through an importer (except where such importer is an original participating manufacturer (as that term is defined in the Master Settlement Agreement) that will be responsible for the payments under the Master Settlement Agreement with respect to such cigarettes as a result of the provisions of subsection II(mm) of the Master Settlement Agreement and that pays the taxes specified in subsection II(z) of the Master Settlement Agreement, and provided that the manufacturer of such cigarettes does not market or advertise the cigarettes in the United States);

is the first purchaser anywhere for resale in the United States of cigarettes manufactured anywhere that the manufacturer does not intend to be sold in the United States; or

becomes a successor of an entity described in item (i) or (ii) of this paragraph or paragraph (2) of this subsection.

for 1999, $.0094241 per unit sold after June 1, 1999;

for 2000, $.0104712 per unit sold;

for each of 2001 and 2002, $.0136125 per unit sold;

for each of 2003, 2004, 2005, and 2006, $.0167539 per unit sold; and

for 2007 and each year thereafter, $.0188482 per unit sold.

to pay a judgment or settlement on any released claim brought against such tobacco product manufacturer by the State or any releasing party located or residing in the State. Funds shall be released from escrow under this subparagraph:

to the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow on account of units sold in the State in a particular year was greater than the Master Settlement Agreement payments, as determined pursuant to section IX(i) of that Agreement, including after final determination of all adjustments, that such manufacturer would have been required to make on account of such units sold had it been a participating manufacturer, the excess shall be released from escrow and revert back to such tobacco manufacturer; or

to the extent funds are not released from escrow under item (i) or (ii) of this paragraph, funds shall be released from escrow and revert to such tobacco product manufacturer 25 years after the date on which they were placed into escrow.

Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall be required within 15 days to place such funds into escrow as will bring the manufacturer into compliance with this section.

The court, upon a finding of a violation of subsection (a)(2) or (b) of this section, may impose a civil penalty, to be paid to the General Fund of the State:

If a tobacco product manufacturer has knowingly violated subsection (a)(2) or (b) of this section, the manufacturer shall be required within 15 days to place such funds into escrow as will bring it into compliance with this section.

Upon a finding of a knowing violation of subsection (a)(2) or (b) of this section, the court may impose a civil penalty, to be paid to the General Fund of the State:

separately list each brand family of cigarettes and the number of units sold for each brand family that was sold in the State during the preceding calendar year;

list each of its brand families that have been sold in the State at any time during the current calendar year;

indicate by an asterisk any brand family sold in the State during the preceding calendar year that is no longer being sold in the State as of the date of such certification; and

identify by name and address any other manufacturer of such brand families in the preceding or current calendar year.

is registered to do business in the State or has appointed a resident agent for service of process and provided notice of the appointment as required by § 16–505 of this subtitle;

has established and continues to maintain a qualified escrow fund, and has executed a qualified escrow agreement that has been reviewed and approved by the Attorney General and that governs the qualified escrow fund; and

is in full compliance with the Escrow Act and this subtitle and any regulations adopted in accordance with the Escrow Act and this subtitle.

the name, address and telephone number of the financial institution in which the nonparticipating manufacturer has established a qualified escrow fund required under § 16–403(a)(2) of this title (the Escrow Act) and all regulations adopted under it;

the account number of the qualified escrow fund and subaccount number for the State of Maryland;

the amount the nonparticipating manufacturer placed in the fund for cigarettes sold in the State during the preceding calendar year, the date and amount of each deposit, and any additional information the Attorney General considers necessary to confirm the information required by this subparagraph; and

the amount of and date of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from the fund or from any other qualified escrow fund into which the nonparticipating manufacturer made escrow payments under § 16–403(a)(2) of this title (the Escrow Act) and all regulations adopted under that section.

in the case of a participating manufacturer, the participating manufacturer affirms that the brand family is deemed to be its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year, in the volume and shares determined in accordance with the Master Settlement Agreement; and

in the case of a nonparticipating manufacturer, the nonparticipating manufacturer affirms that the brand family is deemed to be its cigarettes for purposes of the Escrow Act.

any escrow payment required under § 16–403(a)(2) of this title (the Escrow Act) for any period for any brand family, whether or not listed by such nonparticipating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the Attorney General; or

any outstanding final judgment, including interest on the judgment, for a violation of the Escrow Act has not been fully satisfied for the brand family or the manufacturer.

notice to the Attorney General at least 30 calendar days prior to termination of the authority of an agent; and

proof to the satisfaction of the Attorney General of the appointment of a new agent not less than 5 calendar days prior to the termination of an existing agent appointment.

notify the Attorney General of the termination within 5 calendar days; and

include proof to the satisfaction of the Attorney General of the appointment of a new agent.

the giving or distribution of cigarettes as samples, prizes, gifts, or in connection with consumer testing; and

the exchange of cigarettes for any consideration other than money.

have current accreditation pursuant to Standard ISO/IEC 17025 of the International Organization for Standardization, subsequent laboratory standardization, or another comparable accreditation as determined by the Executive Director; and

implement a quality control and quality assurance program that includes a procedure to determine the repeatability of the testing results.

The Executive Director, in consultation with the State Fire Prevention Commission, shall approve a test method and performance standard used in another state if the Executive Director determines that:

A manufacturer may use a test method and performance standard approved under subparagraph (i) of this paragraph for certification in accordance with § 16–603 of this subtitle of the cigarette used in the approved test method.

On request, the manufacturer shall provide the data retained under paragraph (1) of this subsection to the Executive Director, the State Fire Prevention Commission, or the Attorney General within 60 days after receiving the request, for the purpose of ensuring compliance with this section.

A manufacturer who does not provide the data within 60 days of a request is subject to a civil penalty not to exceed $10,000 for each day after the 60th day that the violation continues.

The manufacturer may submit to the Executive Director, as “confidential under seal”, descriptors for each cigarette sold or distributed for the purpose of consumer testing under subsection (b)(1) of this section.

Descriptors shall include brand, style, length, circumference, flavor, and package.

is not subject to disclosure under State law or discovery in civil litigation; and

may be used by the Executive Director or the Attorney General for the purpose of enforcing the provisions of this title.

any marking in use and approved for sale in New York under the New York fire safety standards for cigarettes; or

the letters “FSC” to signify Fire Standards Compliant;

in conjunction with the UPC code; or

on the cigarette pack or cellophane wrap.

The Executive Director shall approve a marking specified in subsection (b)(1) of this section.

A marking is deemed approved if the Executive Director fails to act within 10 business days after receiving a request for approval.