Legal Bulletins

On April 7, 2025, the Maryland General Assembly passed House Bill 49 (HB49), making substantial changes to Maryland Building Energy Performance Standards (BEPS). Those Standards, as regular readers of our bulletins know, call for owners of large buildings and certain condominium complexes to make substantial investments to reduce or eliminate the use of on-site fossil fuel as well as substantially increase the energy efficiency of the buildings. Details on the implementing regulations can be found here and here. 

Among the most significant changes in HB49 was the deferral to a similar building standard enacted in Montgomery County. Under HB49, compliance with the Montgomery County requirements (for buildings within Montgomery County) means that a building owner will not be required to meet the state requirements.

Although there are differences in the two programs, the state’s requirements are generally considered more stringent. For example, the state requires a reduction in on-site greenhouse gas combustion as well as improvements in building efficiency (site energy use intensity or EUI). Montgomery County only requires EUI compliance.

Other significant changes include exemptions for hospitals and other life science buildings, as well as buildings that have secured compartmented information facilities (confidential areas used by national defense agencies or contractors). Many emergency generators using fossil fuels are exempted from BEPS and the Maryland Department of the Environment (MDE or the Department) is required to give building owners credits for renewable energy produced on site. The definition of manufacturing buildings – which may be exempted under many circumstances – was revised to include more buildings.  

Additionally, the Department is now authorized to collect a $100 fee to review “benchmarking” reports submitted by building owners. As described in our earlier bulletins, covered building owners are required to complete these reports and submit the information for the calendar 2024 year to the Department by September 1, 2025.

Perhaps most significantly, the General Assembly also required the Department to conduct a new study and analysis to determine if the overall BEPS program should be redesigned to reduce costs for building owners and the Department. That is significant since the current program is estimated to require more than $15 billion in capital improvements.

Specifically, the study requires the Department to report back to the General Assembly, by December 1, 2026, on the costs of benefits of the program, the emissions reductions and energy savings potential as well as the implementation costs to building owners. A particular focus of the General Assembly was whether the costs could be reduced by eliminating the dual nature of the state program and, like the Montgomery County program, concentrate solely on energy efficiency (EUI) standards.

The Department was also directed to make a recommendation for an “alternative compliance fee” based on a “simple payback period” taking into account a series of issues. The alternative compliance fee would be a fee that a covered building owner could pay in lieu of making the capital improvements called for by the standards.

Finally, the Department is required to make specific recommendations for certain buildings including “county-owned buildings, community colleges, emergency facilities, manufacturing buildings, and residential buildings, including considerations of tenants and condominium unit owners”

The state BEPS program has been controversial since it was first developed as part of Maryland greenhouse gas reduction plan and that controversy continues.  As a result, there have been frequent changes in the details. 

If you have any questions about the program, please feel free to contact Michael Powell or Max Cooke at the email and phone numbers listed below.

Michael Powell
410-576-4175 • mpowell@gfrlaw.com

Max Cooke
410-576-4141 • mcooke@gfrlaw.com