Sponsor Statement for SB 13

Increase Tobacco Taxes

This bill is a tax bill, an education bill, and a health bill.

Section 1 details the legislative intent and purposes of the bill. Section 1, item (1) and (2) starting on line 6 directs the cigarette tax be deposited to the existing "dedicated school fund" and can only be used for rehabilitation, construction and repair of the state’s school facilities per <AS 43.50.140>.

Item (3), page 1, lines 12-14 and page 2, lines 1-3 states legislative intent, "subject to appropriation," that the new tobacco tax revenue be used for the establishment and maintenance of an aggressive anti-tobacco campaign targeting children and also to establish and maintain a program of pass through grants to municipalities for programs to detect and prosecute those who sell or supply tobacco products to children.

Sections 3 and 4 increase the tax on each cigarette by $1.00 per pack.

Section 5, increases the excise tax on tobacco products <non-cigarettes> from 25% of wholesale value to 100% of wholesale value.

Sections 6, 7 and 8 sets varying conditions and effective dates depending on possible court decisions.

The accompanying fiscal note breaks down the estimated revenue from cigarettes and that from other tobacco products because of the proposed different uses. These amounts would represent a significant portion of the $66 million of new revenue that we have committed to raise in FY 98 of our long range fiscal plan. I urge your careful consideration of the several extremely positive public policy elements of this proposal and the strong public support of this action statewide.