Freshman Sen. Kay Hagan’s (D-N.C.) fight against tobacco legislation this week provides the latest example of the old adage that all politics is local.

As the Senate takes up a bill that would allow the government to regulate tobacco products for the first time, Hagan finds herself joining forces with Republicans to derail a top Democratic priority. Not only is she likely to be the only Democrat to oppose the bill, she will also be fighting side by side with Sen. Richard Burr (R-N.C.), who campaigned hard to prevent her election last fall.

“I will not stand idly by while the [Food and Drug Administration] is put in charge of such a critical industry to North Carolina,— said Hagan, who believes the bill amounts to a de facto ban on tobacco products.

Hagan frequently ticks off the stats: North Carolina is home to 65,000 tobacco jobs and 12,000 tobacco farmers, which together generate $7 billion in annual revenue. Her state is also home to R.J. Reynolds, the second-largest tobacco company in the United States and the creator of the cigarette advertising icon Joe Camel.

The Senate appears on the cusp of passing landmark legislation to allow the FDA to regulate the sale and marketing of tobacco products. For nearly a decade, Senate Democrats have tried but failed to even call up similar legislation in the face of Republican filibuster threats.

But now, with control of 59 seats and support from several moderate Senate Republicans, Democrats likely have the votes to overcome any opposition. The House has passed the bill, and President Barack Obama would sign the measure into law.

“All of us believe the time has come to act, and frankly I do not believe we can afford to wait a minute longer,— said Sen. Chris Dodd (D-Conn.), who’s likely to manage the legislation on the floor in place of ailing Health, Education, Labor and Pensions Chairman Edward Kennedy (D-Mass.). “If we ever had a moral obligation to act, the time is now.—

A spokesman for Majority Leader Harry Reid (D-Nev.) said Hagan is simply trying to best represent her state. Party leaders are unlikely to punish the freshman Senator from a typically Republican state if they can get to 60 votes without her support.

Ironically, Hagan’s closest ally in opposing the bill will be Burr, who campaigned against her in 2008 as she went on to unseat Sen. Elizabeth Dole (R).

Hagan, who drew strong support from moderate and women Republican voters in the Tar Heel State, seems likely to return the favor and campaign against Burr as he faces his first re-election test in 2010.

But this week, a Burr aide said, state economic concerns will trump partisan politics as the two work together to water down, if not defeat, the tobacco measure. The tobacco industry gave tens of thousands of dollars to both Hagan and Dole in 2008.

Burr and Hagan are expected to propose substitute legislation that would call for creating a new Tobacco Regulatory Agency to oversee cigarettes and other tobacco products — with a special focus on ending marketing to children.

“The FDA is overburdened already and lacks the capacity or the expertise to take on a large, complicated new industry,— Hagan said at a recent tobacco bill markup.

Critics say the Hagan-Burr proposal would create an agency that could easily be influenced by the tobacco industry. Moreover, they say, it would take years and cost billions of dollars to start a new agency as opposed to granting regulatory authority to the FDA.

Dodd warns the agency proposed by Hagan and Burr would lack any meaningful authority to require changes to tobacco products and would not strengthen warning labels on cigarette packs.

If their call for a new agency fails, Hagan and GOP allies could propose amendments to lessen the bill’s impact on tobacco companies. They could propose ending FDA regulation if there are not decreases in youth smoking or could seek limits on the fees the FDA charges tobacco manufacturers.

Public health interest groups are lining up in support of the Democrats’ bill, among them the American Cancer Society’s Cancer Action Network, the American Heart Association, the American Lung Association and the American Medical Association. They cite statistics that show 12,000 North Carolina residents die annually from tobacco use.

But Burr counters it’s “pretty easy to sit here and bash manufacturers.— He says the companies already do a lot to prevent marketing to children.