HB712 Alabama 2012 Session

Summary

Primary Sponsor

Joe Hubbard

Democrat

Session

Regular Session 2012

Title

The Medicaid Paygo Act, Cigarettes, user fee added, distrib., Sec. 40-25-2 am'd.

Summary

The Medicaid Paygo Act of 2012 would create a new per-cigarette user fee and update tobacco taxes to fund Alabama's Medicaid program.

What This Bill Does

It establishes the Medicaid Paygo Act of 2012 and updates the state tax on tobacco products. It adds a 21.25-mill tax per cigarette plus a 50-mill per-cigarette user fee, which together amount to about $0.07125 per cigarette (roughly $1.43 per pack of 20). The revenue from the 50-mill user fee goes into the State General Fund and is allocated to Medicaid. It also clarifies how tobacco taxes are collected (largely via stamps) and sets rules affecting local tobacco taxes.

Who It Affects

• Cigarette purchasers in Alabama, who would pay higher prices due to the new tax and user fee.
• Retailers, wholesalers, and distributors who must collect the tax, affix stamps, and pass costs to customers.
• The Alabama Medicaid Program, which would receive funding from the new revenue.
• Local governments, which are limited in creating new local tobacco taxes and may contract for collection under the updated system.

Key Provisions

• Creates the Medicaid Paygo Act of 2012 and designates it as the state's new framework for tobacco tax funding.
• Imposes a 21.25-mill tax per cigarette and a 50-mill per-cigarette user fee on cigarettes; the combined amount funds Medicaid.
• Requires the 50-mill user fee revenue to be deposited into the State General Fund and allocated to the Medicaid Program.
• Updates the tobacco tax collection system to use stamps and clarifies calculations for various tobacco products.
• Places limits on local tobacco taxes, making increases exclusive of local taxes after May 18, 2004, with local collection potentially contracted to other entities.
• Effective date: the act takes effect on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Cigarettes