Senate panel advances bill to fund NCI center, raise tobacco age

A bill funding a National Cancer Institute designation passed a Senate committee Wednesday (March 13) though by itself it would raise less than the $10.5 million sponsors have been seeking.

House Bill 1565 by Rep. Andy Davis, R-Little Rock, passed the Senate Revenue and Taxation Committee on a voice vote.

Funds created by the bill would be dedicated to a UAMS National Cancer Institute (NCI) Research Center Designation Trust Fund. The fund is meant to enable UAMS’ Winthrop P. Rockefeller Cancer Institute to become an NCI research center.

There are 70 NCI-designated centers in 36 states, but none in Arkansas. Having one would allow cancer patients to receive drugs and participate in clinical trials that currently are not available in the state.

The bill’s sponsors had hoped to raise $10.5 million a year for that effort, but the bill in its current form would raise $5.4 million this year and about $8.5 million next year. Sen. Jonathan Dismang, R-Searcy, the lead Senate sponsor, said the bill could create more money than anticipated.

For now, the difference could be bridged using general revenue funds during the upcoming Revenue Stabilization Act budgeting process.

“I think everyone is committed to funding NCI at this point,” he told reporters.

Gov. Asa Hutchinson has said he supports the bill.

The bill would fund the NCI designation with revenues from medical marijuana sales taxes and a 4% excise tax. Medical marijuana has not yet been sold in Arkansas after voters legalized it in 2016.

The bill also would increase the state minimum cigarette price from 7.5% to 9.5% of the basic cost to the retailer, and it would remove an exemption that sets tobacco taxes in border cities at the same rates as those in the neighboring states. It also would impose a tax of 50 cents per package of 32 sheets of paper used for hand-rolling cigarettes.

The bill also would raise the legal age for purchasing tobacco and e-cigarette products to 21, though it would exempt members of the military and individuals who reach age 19 by Dec. 31, 2019.

The bill’s sponsors removed one of its more controversial provisions, which automatically would have reduced taxes by 50% and 25% for so-called “modified risk products” deemed less dangerous by the Food and Drug Administration. None of those products currently exist.

Davis told reporters he was uneasy about that section because only a small risk reduction could lead to the 50% tax cut. Dismang said the risk has not yet been defined, so there’s no rush to have that contentious provision.

Another provision would prevent local governments from enacting stricter ordinances than state laws and regulations.

The committee earlier voted against Senate Bill 347 by Sen. Will Bond, D-Little Rock, which would have provided funds for the NCI designation by increasing e-cigarette taxes.

Senate President Pro Tempore Jim Hendren, R-Sulphur Springs, is expected to introduce an e-cigarette tax bill soon. Rep. Charles Blake, D-Little Rock, the leader of the House Democratic Caucus, said he has seen a draft of the bill, which includes an earned income tax credit. He said he supports the bill.

Hendren said Wednesday he will hold a press conference at noon Thursday (March 14) to announce a bill that would increase taxes on tobacco and e-cigarettes, with the revenues used to provide tax relief for lower income individuals. The revenues would offset an earned income tax credit, an increase in the standard deduction and rate reductions. He said the package would be revenue neutral.

“We’re trying to put together enough folks to get it done. It’s an uphill battle, but we’re going to try,” he said.