An Act To Prevent and Reduce Tobacco Use with Adequate Funding and by Raising the Tax on Tobacco Products
Maine Legislature, Session 129, LD 1028
Committee Amendment CA_A-HA_A_H656 (House)
Amends: 36 MRSA §4401, 36 MRSA §4403, 22 MRSA §3174-J, 36 MRSA §5122

FffiST REGULAR SESSION 
HOUSE AMENDMENT 'it " 
to COMMITTEE AMENDMENT "A" to H.P. 758, 
L.D. 1028, Bill, "An Act To Prevent and Reduce Tobacco Use with Adequate Funding 
and by Raising the Tax on Tobacco Products" 
Amend the amendment by striking out the substitute title and replacing it with the 
following: 
'An Act To Prevent and Reduce Tobacco Use with Adequate Funding and by 
Equalizing the Taxes on Tobacco Products and To Improve Public Health' 
Amend the amendment by striking out all of sections 1 to 7 and inserting the 
following: 
'PART A 
Sec. A-1. 36 MRSA §4401, sub-§§2-A, 2-B and 7-A are enacted to read: 
2-A. Electronic smoking device. "Electronic smoking device
means a device used 
to deliver nicotine or any other substance intended for human consumption that may be 
used by a person to simulate smoking through inhalation of vapor or aerosol from the 
device, including, without limitation. a device manufactured, distributed, marketed or 
sold as an electronic cigarette. electronic cigar, electronic pipe. electronic hookah or 
so~called vape pen. 
2-B. Hookah. 
11Hookah
means a device used for smoking tobacco that consists of a 
tube connected to a container where the smoke is cooled by passing through water. 
7-A. Smoking. 
11Smoking
includes carrying or having in one's possession a lighted 
or heated cigarette, cigar or pipe or a lighted or heated tobacco or plant product intended 
for human consumption through inhalation whether natural or synthetic in any manner or 
in any form. "Smoking" includes the use of an electronic smoking device. 
Sec. A-2. 36 MRSA §4401, sub-§9, as amended by PL 2005, c. 627, §4, is 
further amended to read: 
9. 
Tobacco products. 
11Tobacco products
means cigars; cheroots; stogies; 
electronic smoking devices and liquids used in electronic smoking devices whether or not 
they contain nicotine; periques, granulated, plug cut, crimp cut, ready rubbed, and other 
HOUSE AMENDMENT 
~~, 
,,~ 
HOUSE AMENDMENT ''A "to COMMITTEE AMENDMENT "A" to H.P. 758, L.D. 1028 
smoking tobacco; snuff; snuff flour; snus; cavendish; plug and twist tobacco; finecut and 
other chewing tobaccos; shorts; refuse scraps, clippings, cuttings and sweepings of 
tobacco; and other kinds and forms of tobacco, prepared in such manner as to be su#aale 
for shewing or smoking in a pipe or otherwise, or both for chewing and smoking; but 
does not include tobacoo prnducts that are subject to the tax pro¥iaed by chapter 703 
intended for human consumption or is likely to be consumed, whether smoked, heated, 
chewed1 absorbed. dissolved1 inhaled or ingested by any other means. 
"Tobacco 
products" does not include: 
A. Products that are subject to the tax provided by chapter 703; 
B. Drugs. devices or combination products authorized for sale by the United States 
Department of Health and Human Services, Food and Drug Administration. as those 
terms are defined in the Federal Food, Drug. and Cosmetic Act; 
C. Any product that contains adult use marijuana subject to tax under Title 28-B 1 
section 1001: or 
D. Any product that contains marijuana or marijuana products subject to control 
under Title 22, chapter 558-C. 
Sec. A-3. 36 MRSA §4403, sub-§1, as repealed and replaced by PL 2009, c. 213, 
Pt. H, § 1 and affected by §3, is amended to read: 
1. Smokeless tobacco. A tax is imposed on smokeless tobacco, including chewing 
tobacco and snuff, at the rate of: 
A. On amounts of smokeless tobacco packaged for sale to the consumer in a package 
that contains one ounce or more of smokeless tobacco, $2.02 per ounce and prorated; 
and 
B. 
On smokeless tobacco packaged for sale to the consumer in a package that 
contains less than one ounce of smokeless tobacco, $2.02 per package. 
Beginning January 2, 2020, the tax rates in this subsection are subject to adjustment 
pursuant to subsection 5. 
Sec. A-4. 36 MRSA §4403, sub-§2, as amended by PL 2005, c. 627, §8, is 
further amended to read: 
2. Other tobacco. A tax is imposed on cigars, pipe tobacco and other tobacco 
intended for smoking at the rate of 20% of the wholesale sales price beginning October 1, 
2005. Beginning January 2, 2020, a tax is imposed on all tobacco products, other than 
those subject to tax under subsection 1, at the rate of 43% of the wholesale sales price. 
Beginning January 2. 2020. the tax rate imposed pursuant to this subsection is subject to 
adjustment pursuant to subsection 5. 
Sec. A-5. 36 MRSA §4403, sub-§5 is enacted to read: 
5. Equivalence. If the tax on cigarettes under chapter 703 is increased after January 
2, 2020, the assessor shall calculate a rate of tax on other tobacco products under 
subsections 1 and 2 that is equivalent to the same percentage change in the tax rate for 
one cigarette. The adjusted rates calculated by the assessor take effect at the same time as 
the increase in the tax on cigarettes. 
HOUSE AMENDMENT 
~~ 
~-
,, 
HOUSE AMENDMENT ·A "to COMMITTEE AMENDMENT "A" to H.P. 758, L.D. 1028 
Sec. A-6. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services, Bureau of 0002 
Initiative: Provides funding for one Tax Examiner position and related costs to review 
and process additional tobacco products tax returns. 
GENERAL FUND 
POSITIONS - LEGISLATIVE COUNT 
Personal Services 
All Other 
GENERAL FUND TOTAL 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
DEPARTMENT TOTALS 
GENERAL FUND 
DEPARTMENT TOTAL-ALL FUNDS 
2019-20 
2020-21 
1.000 
1.000 
$65,492 
$85,661 
$12,089 
$2,700 
$77,581 
$88,361 
2019-20 
2020-21 
$77,581 
$88,361 
$77,581 
$88,361 
HEALTH AND HUMAN SERVICES, DEPARTMENT OF 
Maine Center for Disease Control and Prevention 0143 
Initiative: Appropriates funds for evidence-based tobacco use prevention and cessation, in 
accordance with the United States Department of Health and Human Services, Centers 
for Disease Control and Prevention best practices. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
Medical Care-Payments to Providers 0147 
2019-20 
$2,050,000 
$2,050,000 
2020-21 
$4,100,000 
$4,100,000 
Initiative: Appropriates and allocates funds for tobacco use cessation medications and 
counseling provided to MaineCare members. 
HOUSE AMENDMENT 
~ 
.r:"" 
........ 
~i~ 
HOUSE AMENDMENT ·A "to COMMITTEE AMENDMENT "A" to H.P. 758, L.D. 1028 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
FEDERAL EXPENDITURES FUND 
All Other 
FEDERAL EXPENDITURES FUND TOTAL 
HEALTH AND HUMAN SERVICES, 
DEPARTMENT OF 
DEPARTMENT TOTALS 
GENERAL FUND 
FEDERAL EXPENDITURES FUND 
DEPARTMENT TOTAL-ALL FUNDS 
SECTION TOTALS 
GENERAL FUND 
FEDERAL EXPENDITURES FUND 
SECTION TOTAL - ALL FUNDS 
2019-20 
$500,000 
$500,000 
2019-20 
$1,776,235 
$1,776,235 
2019-20 
$2,550,000 
$1,776,235 
$4,326,235 
2019-20 
$2,627,581 
$1,776,235 
$4,403,816 
2020-21 
$750,000 
$750,000 
2020-21 
$1,332,177 
$1,332,177 
2020-21 
$4,850,000 
$1,332,177 
-
$6,182,177 
2020-21 
$4,938,361 
$1,332,177 
$6,270,538 
Sec. A-7. Effective date. Those sections of this Part that amend the Maine 
Revised Statutes, Title 36, section 4401, subsection 9 and that enact Title 36, section 
4401, subsections 2-A, 2-B and 7-A take effect January 2, 2020. 
PARTB 
Sec. B-1. 22 MRSA §3174-JJ, as amended by PL 2013, c. 441, §1, is further 
amended to read: 
§3174-JJ. MaineCare reimbursement for ambulance se1·vices 
The department shall reimburse for ambulance services under MaineCare at a level 
that is not less than the average allowable reimbursement rate under Medicare for such 
services or at the highest percent of that level that is possible within resources 
appropriated for those purposes. 
Beginning March 1, 2015, the department shall 
reimburse for ambulance services under MaineCare at a level that is not less than 65% of 
the average allowable reimbursement rate under Medicare for such services. Beginning 
HOUSE AMENDMENT 
¢',. 
~ 
~<ti 
v 
HOUSE AMENDMENT •A "to COMMITTEE AMENDMENT "A" to H.P. 758, L.D. 1028 
Janua:ry 1, 2020, the department shall reimburse for ambulance services under MaineCare 
at a level that is not less than the average allowable reimbursement rate under Medicare 
for such services and shall reimburse for neonatal transport services under MaineCare at 
the average rate for critical care transport services under Medicare. 
Sec. B-2. Appropriations and allocations. The following appropriations and 
allocations are made. 
HEALTH AND HUMAN SERVICES, DEPARTMENT OF 
Medical Care-Payments to Providers 0147 
Initiative: Pl'ovides funding to increase the reimbursement rate for· ambulance services 
under the MaineCare program so the rates are not less than the average allowable 
reimbursement rate under Medicare and increase the reimbursement rate for neonatal 
transport services under MaineCare so the rates are equal to the average rate for critical 
care transport services under Medicare. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
FEDERAL EXPENDITURES FUND 
All Other 
FEDERAL EXPENDITURES FUND TOTAL 
2019-20 
$1,662,060 
$1,662,060 
2019-20 
$4,894,815 
$4,894,815 
2020-21 
$3,329,640 
$3,329,640 
2020-21 
$5,868,260 
$5,868,260 
PARTC 
Sec. C-1. 36 MRSA §5122, sub-§2, 1QQ is enacted to read: 
QO. For taxable years beginning on or after Januru.y 1. 2020, to the extent included 
in federal adjusted gross income and not subtracted under paragraph FF. student loan 
payments made by the taxpayer
1s employer directly to a lender on behalf of a 
qualified health care employee. As used in this paragraph. "qualified health care 
employee" means an individual who is employed by a hospital located in this State 
and who is licensed under Title 32. chapter 31. subcbapter 3 or 4; chapter 36, 
subchapter 4; or chapter 48, subchapter 2. 
Sec. C-2. Reimbursement for rural hospitals and nonrural hospitals. The 
Department of Health and Human Services shall amend its rule Chapter 101: MaineCare 
Benefits Manual, Chapter III, Section 45 in order to provide MaineCare reimbursement 
for rural hospitals at 100% of inpatient hospital-based physician costs, outpatient 
emergency room hospital-based physician costs, outpatient nonemergency room hospital-
based physician costs and graduate medical education costs. The department shall also 
amend its rule Chapter 101: MaineCare Benefits Manual, Chapter III, Section 45 in order 
HOUSE AMENDMENT 
..,, 
~""") 
-~·,· 
~-
'~ 
HOUSE AMENDMENT "A "to COMMITTEE AMENDMENT "A" to H.P. 758, L.D. 1028 
to provide MaineCare reimbursement for nonrural hospitals at 93.3% of inpatient 
hospital-based physician costs, 93.4% of outpatient emergency room hospital-based 
physician costs and 83.8% of outpatient nonemergency room hospital-based physician 
costs. 
The department shall adopt routine technical rules under the Maine Revised Statutes, 
Title 5, chapter 375, subchapter 2-A to establish a definition of "rural hospital" that 
reflects the regional access to hospital care and the population density of the public health 
district in which the hospital is located, as long as the following hospitals are considered 
rural hospitals: 
1. Northern Light A.R. Gould Hospital in Presque Isle; 
2. Cary Medical Center in Caribou; 
3. Franklin Memorial Hospital in Farmington; 
4. Northern Light Inland Hospital in Waterville; 
5. Northern Light Maine Coast Hospital in Ellsworth; and 
6. Northern Maine Medical Center in Fort Kent. 
Sec. C-3. Reimbursement for acute care critical access hospitals. The 
Department of Health and Human Services shall amend its rule Chapter 101: MaineCare 
Benefits Manual, Chapter III, Section 45 regarding acute care critical access hospital 
physician services to require MaineCare reimbmsement of 100% for all hospital-based 
physician costs. 
Sec. C-4. Reimbursement for rural health clinics. The Department of Health 
and Human Services shall amend its rule Chapter 101: MaineCare Benefits Manual, 
Chapter II, Section 103 regarding the department's reimbmsement methodology to 
provide an alternative payment methodology option that, effective January 1, 2020, is the 
same as the existing methodology except that rural health clinics may be reimbursed on 
the basis of 100% of the average of the reasonable costs of providing MaineCare-covered 
services during calendar years 2016 and 2017 as long as reimbursement is no less than 
reimbursement received under the prospective payment system described in Section 
1902(bb) of the United States Social Security Act. Each rural health clinic must be given 
the option to be reimbursed under the methodology required by this section or under the 
existing prospective payment system methodology. 
Sec. C-5. State plan amendments; rulemaking. The Department of Health 
and Human Services shall submit any necessaty state plan amendments to implement the 
requirements of this Part to the United States Department of Health and Human Services, 
Centers for Medicare and Medicaid Services no later than January 1, 2020. Upon 
approval, the department shall amend its rules within 180 days of approval. Rules 
adopted pmsuant to this section are routine technical rules as defmed in the Maine 
Revised Statutes, Title 5, chapter 375, subchapter 2-A. 
Sec. C-6. Appropriations and allocations. The following appropriations and 
allocations are made. 
HEALTH AND HUMAN SERVICES, DEPARTMENT OF 
HOUSE AMENDMENT 
Qt 
,()' ., 
(''<;~ 
"\) 
~"" 
v 
HOUSE AMENDMENT ·A" to COMMITTEE AMENDMENT "A" to H.P. 758, L.D. 1028 
Medical Care - Payments to Providers 0147 
Initiative: Provides appropriations and allocations to allow for MaineCare reimbursement 
of 100% for all hospital-based physician costs. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
FEDERAL EXPENDITURES FUND 
All Other 
FEDERAL EXPENDITURES FUND TOTAL 
Medical Care-Payments to Providers 0147 
2019-20 
$371,768 
$371,768 
2019-20 
$793,942 
$793,942 
2020-21 
$753,736 
$753,736 
2020-21 
$1,577,684 
$1,577,684 
Initiative: Provides appropriations and allocations to allow for MaineCare reimbursement 
for rural hospitals at 100% of inpatient hospital-based physician costs, outpatient 
emergency room hospital-based physician costs, outpatient nonemergency room hospital-
based physician costs and graduate medical education costs and to allow for MaineCare 
reimbursement for nonrural hospitals at 93.3% of inpatient hospital-based physician 
costs, 93.4% of outpatient emergency room hospital-based physician costs and 83.8% of 
outpatient nonemergency room hospital-based physician costs. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
FEDERAL EXPENDITURES FUND 
All Other 
FEDERAL EXPENDITURES FUND TOTAL 
Medical Care - Payments to Providers 0147 
2019-20 
$263,428 
$263,428 
2019-20 
$562,573 
$562,573 
2020-21 
$534,084 
$534,084 
2020-21 
$1,117,918 
$1,117,918 
Initiative: Provides appropriations and allocations to allow for an alternative payment 
methodology option that is the same as the existing methodology except that rural health 
clinics may be reimbursed on the basis of 100% of the average of the reasonable costs of 
providing MaineCare-covered services during calendar years 2016 and 2017 as long as 
reimbursement is no less than reimbursement received under the prospective payment 
system. 
HOUSE AMENDMENT 
~) 
A 
'':~ 
HOUSE AMENDMENT «A "to COMMI'ITEE AMENDMENT "A" to H.P. 758, L.D. 1028 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
FEDERAL EXPENDITURES FUND 
All Other 
FEDERAL EXPENDITURES FUND TOTAL 
HEALTH AND HUMAN SERVICES, 
DEPARTMENT OF 
DEPARTMENT TOTALS 
GENERAL FUND 
FEDERAL EXPENDITURES FUND 
DEPARTMENT TOTAL-ALL FUNDS 
PARTD 
2019-20 
$739,449 
$739,449 
2019-20 
$1,579,154 
$1,579,154 
2019-20 
$1,374,645 
$2,935,669 
$4,310,314 
2020-21 
$1,499,185 
$1,499,185 
2020-21 
$3,138,020 
$3,138,020 
2020-21 
$2,787,005 
$5,833,622 
$8,620,627 
Sec. D-1. Transfer. Notwithstanding any provision of law to the contrary, the 
State Controller shall transfer from the Hospital Tax, Other Special Revenue Funds 
account in the Department of Health and Human Services $946,925 on or before June 30, 
2020 and $946,925 on or before June 30, 2021 to the unappropriated surplus of the 
General Fund.' 
SUMMARY 
This amendment reduces appropriations for tobacco use prevention and cessation and 
adds provisions increasing reimbursement for certain services under the MaineCare 
program, providing an income tax deduction for student loan payments made by a 
taxpayer's employer directly to a lender on behalf of a qualified health care employee and 
transferring Other Special Revenue Funds in the Department of Health and Human 
Services to the unappropriated surplus of the General Fund. 
FISCAL NOTE REQUIRED 
~ 
~ttached) 
. 
SPONSORED BY: 
(J . 
-=2:J 
(Representative TIPP~ m 
TOWN: Orono 
HOUSE AMENDMENT 
Revised: 06/19/19 ;b/ac. 
LD 1028 
LR 493(06) 
An Act To Prevent and Reduce Tobacco Use with Adequate Funding and by Raising the Tax on 
Tobacco Products 
Fiscal Note for House Amendment ;4" to Committee Amendment II A II 
Sponsor: Rep. Tipping of Orono 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Federal Expenditures Fund 
Revenue 
General Fund 
Federal Expenditures Fund 
Other Special Revenue Funds 
Transfers 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2019-20 
($934,095) 
($513,295) 
$7,830,484 
($526, 125) 
$7,831,484 
($1,375) 
$946,925 
($946,925) 
FY2020-21 
$5,135,686 
$5,116,645 
$11,701,882 
($965,966) 
$11,701,882 
($9,524) 
$946,925 
($946,925) 
Projections 
FY 2021-22 
$6,209,139 
$5,129,112 
$11,700,415 
($1,080,027) 
$11,700,415 
($9,475) 
$0 
$0 
Projections 
FY 2022-23 
$6,217,079 
$5,118,112 
$11,700,315 
($1,098,967) 
$11,700,415 
($9,524) 
$0 
$0 
Part A of the amendment provides an exemption to the tobacco products tax for electronic smoking devices and 
liquids used with medical marijuana. General Fund revenue relative to the committee amendment would be reduced 
by $526,125 in fiscal year 2019-20 and $965,966 in fiscal year 2020-21. Local Government Fund revenue would be 
reduced by $1,375 in fiscal year 2019-20 and $15,826 in fiscal year 2020-21. 
Pait A of this amendment also reduces the General Fund appropriations to the Department of Health and Human 
Services by $3,550,000 in fiscal year 2019-20 and $1,000,000 in fiscal year 2020-21 for evidence-based tobacco use 
prevention and cessation services and for tobacco use cessation medications and counseling provided to MaineCare 
members. 
LR0493(06) - Fiscal Note - Page 1 of2 
Part B of this amendment includes General Fund appropriations to the Department of Health and Human Services of 
$1,662,060 in fiscal year 2019-20 and $3,329,640 in fiscal year 2020-21 to increase the reimbursement rate for 
ambulance services under the MaineCare program so the rates are not less than the average allowable reimbursement 
rate under Medicare and reimbursement for neonatal transport services under MaineCare must be at the average rate 
for critical care transport services under Medicare. Federal Expenditures Fund allocations are also included for the 
FMAP match. 
Pait C of the amendment provides a subtraction modification from income tax for student loan payments made by a 
taxpayer's employer directly to a lender on behalf of a qualified health care employee. It would result in a reduction 
of General Fund revenue of $133,000 in fiscal year 2021-22 and a reduction in Local Government Fund revenue of 
$7,000 in fiscal year 2021-22. The Department of Administrative and Financial Services would require a one-time 
General Fund appropriation of$1 l,OOO in fiscal year 2021-22 for computer programming to update the individual 
income tax return. 
Part C of this amendment also includes General Fund appropriations to the Depa1tment of Health and Human 
Services of $1,374,645 in fiscal year 2019-20 and $2,787,005 in fiscal year 2020-21 for the Department of Health 
and Human Services to amend its rule Chapter 101: MaineCare Benefits Manual, Chapter III, Section 45 regarding 
the department's total annual obligation to rural and nonrural hospitals and acute care critical access hospitals and to 
amend its rule Chapter 10 l: MaineCare Benefits Manual, Chapter II, Section 103 regarding the depmtment's 
reimbursement methodology to provide an alternative payment methodology option for rural health clinics. Federal 
Expenditures Fund allocations are also included for the FMAP match. 
Pait D of this amendment transfers $946,925 from the Hospital Tax, Other Special Revenue Funds account in the 
Department of Health and Human Services to the unappropriated surplus of the General Fund in each year of the 
biennium. 
LR0493(06) - Fiscal Note - Page 2 of2