A BILL for an Act to create and enact a new section to chapter 50-06 and two new sections to chapter 57-36 of the North Dakota Century Code, relating to the creation of a tobacco tax distribution behavioral health fund and the collection, transfer, and report of a tax on electronic smoking devices and alternative tobacco products; to amend and reenact sections 57-36-01, 57-36-25, 57-36-26, 57-36-31, and 57-36-32 of the North Dakota Century Code, relating to the tax imposed on cigarettes and other tobacco products; to provide a penalty; and to provide an effective date.
HB1570 would substantially revise North Dakota’s tobacco tax structure and dedicate a portion of tobacco-related revenue to behavioral health services. The bill creates a new special fund in the state treasury, the tobacco tax distribution behavioral health fund, and directs money from certain tobacco taxes into that fund to support depression and anxiety services delivered through regional human service centers, with the option to contract with community providers and prioritize people in financial need.
The measure also expands and updates the state’s tobacco tax code to explicitly cover electronic smoking devices and alternative tobacco products, including vaping devices, nicotine pouches, and similar noncombustible nicotine products. It defines those products in statute, imposes a 56 percent excise tax on the wholesale purchase price of electronic smoking devices and alternative tobacco products, and adjusts existing cigarette and other tobacco product tax provisions, including allocation rules for revenue and penalties for late filing or payment. The bill would take effect for taxable events after June 30, 2025.
If enacted, HB1570 would amend multiple sections of North Dakota Century Code chapter 57-36 governing tobacco taxation and would create a new chapter 50-06 special fund for behavioral health services. It would redirect some cigarette-tax revenue and specified tobacco-product tax revenue away from the general fund and into the new behavioral health fund, while preserving some cigarette tax revenue for the general fund. It would also impose new tax and reporting obligations on distributors and dealers of electronic smoking devices and alternative tobacco products, and it would broaden the state’s statutory definitions to cover modern nicotine products such as vape pens and nicotine pouches.
The bill appears to have been framed as a public-health and behavioral-health funding measure, pairing higher or newly targeted tobacco taxes with support for depression and anxiety services. The available record shows no committee transcript or vote details, but the bill ultimately failed, indicating it did not secure sufficient legislative support to advance. Based on the text alone, the proposal likely appealed to supporters of tobacco-tax-based health funding and regulation of vaping products, while facing resistance from those opposed to new excise taxes or revenue diversion.
The main points of contention would likely have been the new 56 percent excise tax on electronic smoking devices and alternative tobacco products, the reallocation of tobacco tax revenue from the general fund to a dedicated behavioral health fund, and the broader taxation of vaping and nicotine-pouch products. Retailers, distributors, and consumers of these products would be directly affected, and opponents may have objected to the tax burden, the administrative complexity of new reporting requirements, or the use of tobacco taxes to fund a specific program rather than the general fund. Supporters would likely have emphasized the public-health rationale, the inclusion of modern nicotine products in the tax base, and the dedicated funding stream for mental health services.