Senate Appropriations amends tobacco bill to remove new appropriations and investigator, reports measure without recommendation

The Senate Committee on Appropriations amended and reported S198 — described repeatedly in the hearing as “the tobacco bill” — after stripping language that would have redirected licensing, penalty and settlement revenues into a tobacco trust fund and deleting a proposed investigator position funded in the short term from the tobacco litigation settlement fund.

Legislative counsel summarized the bill for the committee, saying it reorganizes tobacco statutes, broadens the statutory definition of “tobacco substitute” to include nicotine pouches and similar products, and shifts wholesale licensing authority from the Department of Taxes to the Department of Liquor and Lottery. The bill originally included higher retail licensing fees and a sequence of escalated civil penalties and license suspensions for repeat violations; Finance’s amendment reduced the proposed fee increases substantially.

Joint Fiscal Office staff told the committee the tobacco trust fund had only a modest balance ("about $28,000" in late 2025), while the tobacco litigation settlement fund showed multi‑million dollar balances; counsel said the bill's text would appropriate $160,000 in FY2027 to create a permanent investigator position in DLL and expressed intent that penalty revenue would be used to offset the position beginning in FY2029. Committee members and the JFO questioned whether those revenue assumptions would hold once the bill took effect and whether redirecting fee and penalty revenue would reduce available enforcement funding elsewhere.

Retail representatives said they opposed large license-fee increases but welcomed the Finance Committee’s reduced proposal. "We very much appreciate the reduction," said Maggie Lens on behalf of retail grocers, noting retailers were not in favor of the originally proposed $1,000 fees and could live with the smaller increase recommended by Finance.

After prolonged discussion about enforcement and revenue flows, counsel presented a committee amendment that struck section 1014 (the provision directing fees, penalties and settlements into the tobacco trust fund), removed section 10 (the investigator position and its FY2027 appropriation), and made conforming effective‑date edits. Committee members said some would support the amendment but not the bill on final passage; others preferred to send the bill to the floor without a committee recommendation so the Senate could take it up before crossover deadlines.

The committee adopted the amendment and reported S198 as amended to the Senate floor "without recommendation," with the chair and clerk to record the committee's report and move the bill to the calendar for floor action. The action clears the measure for further consideration on the Senate floor, where members will confront the question of whether to restore funding directions or the investigator position and how to reconcile enforcement goals with revenue and retail impacts.

The committee record shows the immediate practical result: the investigator position and the funding‑redirection language were removed from the committee bill, leaving the statutory reorganizations, revised definitions, penalty escalations and the smaller fee changes from the Finance amendment available for floor debate.