Bill introduced to tax e-cigarettes to pay for rural health care


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SALT LAKE CITY — A bill adding a tax to e-cigarettes that would be used to pay for rural health care needs was introduced Friday, but the sponsor acknowledges it will be a hard sell to the Legislature.

"It's an election year. It's going to be tough," the sponsor of HB333, Rep. Paul Ray, R-Clearfield, said.

Ray said his bill, which has not yet been assigned to a committee, would raise an estimated $10 million to $12 million annually from the sale of e-cigarettes by imposing an 86.5 percent tax on the manufacturer's price.

But he said he believes concerns lawmakers may have about supporting a tax increase will be offset by the impact higher prices can have on the growing number of young people in Utah vaping with the hand-held, battery-operated devices.

"I also know a lot of people up here are concerned about children having access to e-cigarettes," Ray said. "And the whole point of my bill is to raise the price point high enough that the youth don't have access."

The bill creates a new Rural Health Care Access account to pay for a three-year pilot project placing nurses and other health care providers at high schools in rural areas with limited health care resources.

Ray said he came up with the idea during the Legislature's interim visit to Moab and other remote communities last September.

"When we did the tour to rural Utah, I found a dire need for medical assistance out there. This was specifically crafted to put the money for a school nurse or an athletic trainer in rural high schools to provide health care for the community," he said.

Although there has been discussion about using a tax on e-cigarettes to help cover the cost of extending traditional Medicaid to the poorest Utahns, Ray said that wasn't his goal.

"It's not a placeholder for anything," he said of his bill.

Another bill, HB302, from Rep. Ray Ward, R-Bountiful, would use a similar tax on e-cigarettes for a plan to use the Medicaid expansion money available under the Affordable Care Act.

House Majority Leader Jim Dunnigan, R-Taylorsville, is drafting what is expected to be the Republican leadership's plan for covering at least some of the Utahns in the so-called coverage gap because the state has not accepted Medicaid expansion.

Dunnigan said his proposal will not call for an e-cigarette tax and instead be funded through a tax on hospitals and general fund revenues.

Senate President Wayne Niederhauser, R-Sandy, said there is some interest in taxing e-cigarettes. But Niederhauser said perhaps the tax should be based on the harm the product causes.

"Maybe it should be less because there are folks trying to quit the habit of smoking cigarettes and at least e-cigarettes have been a solution to that," he said. "We'll vigorously debate that bill when it comes here."

House Speaker Greg Hughes, R-Draper, said it will be difficult to pass a tax increase, especially after lawmakers approved raising both the gas and the property tax last session.

"I don't see a lot of groundswell for it," the speaker said. He said he does not like what he called "sin" taxes, on alcohol, tobacco and other products lawmakers want to discourage Utahns from using.

"I'm afraid those that are receiving the revenue from that tax may change their opinion on what it is they're taxing," he said. "As that revenue starts to arrive, maybe you don't want to see that product necessarily go away." Email: lroche@ksl.com Twitter: DNewsPolitics

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Lisa Riley Roche

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