Indiana hasn't raised its cigarette tax in eight years.
The AAP calls for a couple of steps Indiana has already taken, such as making e-cigarettes off limits to minors and requiring cartridges to be tamper-proof.
The attorney general's proposal would include e-cigarettes in the statewide smoking ban.
Researchers say e-cigarettes may be worse for your health than their makers let on, and the FDA hasn't taken action due to a lack of conclusive evidence.
Indiana reached a settlement with tobacco companies Thursday that will pay the state $93 million this year and $124 million next year.
State Department of Health officials say they do not plan to regulate e-cigarettes any further until they receive more direction from the FDA.
Indiana offers health coverage to Medicaid patients for tobacco cessation programs, but anti-smoking advocates say that's not enough.
Hemp advocates say legalizing the plant could be a boon to Indiana's economy.
Attorney General Greg Zoeller appealed a lawsuit that takes away $60 million the State earned from a tobacco settlement and was being used for health care.
The money was supposed to be used for smoking cessation and other health programs.