BILL ANALYSIS Ó
AB 1554
Page 1
Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
AB 1554
(Irwin) - As Introduced January 4, 2016
SUBJECT: Powdered alcohol
SUMMARY: Prohibits the Department of Alcoholic Beverage Control
(ABC) from issuing a license to manufacture, distribute, or sell
powdered alcohol, as defined, and would require the department
to revoke the license of any licensee who manufactures,
distributes, or sells powdered alcohol, as specified. Would
also prohibit the purchase, sale, offer for sale, distribution,
manufacture, possession, or use of powdered alcohol.
Specifically, this bill:
1) Defines "Powdered alcohol" as an alcohol prepared or sold in
a powder or crystalline form that is used for human consumption
in that form or reconstituted as an alcoholic beverage when
mixed with water or any other liquid. "Powdered alcohol" does
not include "vaporized alcohol," as defined.
2) Provides that a license shall not be issued to any applicant
to authorize the manufacture, distribution, or retail sale of
powdered alcohol.
3) Provides ABC shall revoke or suspend any license if the
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licensee or the agent or employee of the licensee manufactures,
distributes, or offers for retail sale powdered alcohol.
4) Specifies that a person shall not purchase, sell, offer for
sale, manufacture, distribute, possess, or use powdered alcohol.
5) Provides that any person who sells, offers for sale,
manufactures, or distributes powdered alcohol is guilty of an
infraction that shall be punishable by a fine of not more than
five hundred dollars ($500).
6) Provides that any person who purchases, possesses, or uses
powdered alcohol is guilty of an infraction and subject to a
fine of one hundred twenty-five dollars ($125).
EXISTING LAW:
1)Federal Law grants states the authority to establish alcoholic
beverage laws and administrative structures to regulate the
sale and distribution of alcoholic beverages.
2)Establishes the Alcoholic Beverage Control Act (Act) which
contains various provisions regulating the application for,
the issuance of, the suspension of, and the conditions imposed
upon, alcoholic beverage licenses by ABC.
3)Imposes regulations on the sale of alcoholic beverages and
creates penalties for violations of those regulations.
4)Grants ABC exclusive authority to administer the provisions of
the Act.
5)Establishes three types of alcoholic beverages for tax
purposes, namely, distilled spirits, beer and wine.
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6)Stipulates that any person who sells or offers for sale any
vaporized form of alcohol produced by an alcohol vaporizing
device shall be guilty of a misdemeanor punishable by a $1,000
fine or imprisonment in a county jail for up to six months.
Provides that any person who purchases or uses any vaporized
form of alcohol produced by an alcohol vaporizing device is
subject to a fine of $250.
7)Prohibits the use in any advertisement of alcoholic beverages,
of any subject matter, language or slogans addressed to and
intended to encourage minors to drink alcoholic beverages.
FISCAL EFFECT: Unknown
COMMENTS:
Powdered alcohol : As the name suggests, powdered alcohol is
powder that when mixed with water or any other liquid becomes an
alcoholic beverage. Small amounts of liquid alcohol are
enclosed in cyclodextrins, which are literally small rings of
sugar. Once water or any other liquid is added the sugar
dissolves and the alcohol is freed into the drink. Powdered
alcohol gained media attention in the United States when in
April 2014 the U.S. Alcohol and Tobacco Tax and Trade Bureau
(TBB) approved labels for a product called Palcohol.
Proponents of powdered alcohol have touted its lightweight and
its ease to transport as some of the benefits of powdered
alcohol compared to liquid alcohol. Palcohol creator, Mark
Phillips, has stated that powdered alcohol is ideal for such
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outdoor activities as hiking. The Palcohol website had
previously touted additional benefits including that it would be
easier to sneak powdered alcohol into sporting events and
concerts and the ability to sprinkle powdered alcohol on food
for "an extra kick."
Critics of powdered alcohol argue that this type of product will
be much easier to over consume, conceal and be acquired by
minors. Critics point to the ability to add powdered alcohol to
liquid alcohol to produce a greater concentration than intended.
In addition, critics point to the ease in which people,
including youths, could bring alcohol to places where it is
banned; such as sporting events, movie theaters, parks, and
schools.
Powdered Alcohol Authorization : Though the TBB approved the
Palcohol labels in April of 2014, within two weeks the TBB
issued a statement stating that the approval had been issued in
error. However, in March 2015, the TBB again approved four
powdered alcohol products with the brand name "Palcohol" for
sale in the U.S.
Shortly after TBB approval, the U. S. Food and Drug
Administration (FDA) responded to inaccurate reports that
implied that the FDA had approved powdered alcohol as being
safe. Rather, the FDA clarified that its role was to evaluate
the nonalcoholic ingredients. Based on that evaluation, the FDA
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stated, "the use of ingredients in the proposed products was in
compliance with FDA's regulations. The agency notes that the
ingredients used in the products are typical of ingredients
found in many processed foods." The FDA concluded that they had
no legal basis to block their entry into the U.S. market.
However, individual states, not the TBB, are responsible for
regulating the sale of alcohol and tobacco products at the
retail level, including sales to minors. As of January 2016,
twenty-seven states have banned powdered alcohol outright. Two
states, Maryland and Minnesota have a one-year temporary
statutory ban. Three states, Colorado, Delaware, and New
Mexico, have added powdered alcohol in their statutory
definitions of alcohol so that the product can be regulated
under existing alcohol regulations.
As of today, powdered alcohol is not being sold anywhere in the
United States, though the Palcohol website does state that, "we
will be working on getting the production facility up and
running. It will take a while but hopefully it will be
available soon."
Powdered distilled spirits are already taxed in California in
the same manner and to the same extent as other distilled
spirits in Title 18 of the California Code of Regulations,
Article 6, Classification of Particular Beverages, Regulation
2557.
Purpose of the bill : According to the author, more than 10,000
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people die in California annually from excessive alcohol use and
in 2006 excessive alcohol use cost California nearly $32
billion. Concerns have been raised that powdered alcohol would
add to these numbers. Health and safety concerns that have been
associated with powdered alcohol include: low cost; easy youth
access to the packets; similar size and shape of packets to
nonalcoholic children's drink packets; potential mixing with a
small amount of water to make a single very potent drink; mixing
powdered alcohol with beer or alcopops; mixing powdered alcohol
with energy drinks or other youth-oriented products; concealment
by underage drinkers attending events/locations where alcohol is
prohibited; ingestion of the product by snorting or eating; and
easy theft.
The author states that powdered alcohol products manufactured in
other countries, such as Subyou and Booz2Go, have been marketed
squarely at teenagers with slogans emphasizing how cheap and
inconspicuous the powdered products are. The original website
of Palcohol boasted that powdered alcohol can be smuggled into
concerts and sporting events, added to food, and even snorted to
"get drunk almost instantly." The site has since been updated
and Palcohol reports that they have added enough volume to the
powder that snorting would no longer be effective.
Proponents state that powdered alcohol is a dangerous alcohol
product, and has great appeal to underage drinkers. California
already suffers more alcohol-related harm than any other state.
Currently, powdered alcohol is not available for sale in
California. Supporters state that powdered alcohol usage will
be dangerous, prone to abuse, and could cause overdoses.
Therefore, the reason why more than two dozen states have
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permanently banned the consumption and selling of powdered
alcohol products.
Proponents further state that California has protected children
and adults from consuming dangerous forms of alcohol in the
past. AB 273 (Baca), Chapter 29, Statutes of 2006, prohibited
the sale, purchase, and use of any vaporized form of alcohol
produced by an alcohol vaporizing device. In 2011, SB 39
(Padilla, Chapter 140) prohibited the importation, production,
manufacture, distribution, or sale of beer to which caffeine has
been directly added as a separate ingredient at retail locations
in California.
Proponents conclude that it is imperative for the safety of all
of our children to define powered alcohol in statute and
prohibit the sale, distribution, manufacture, purchase,
possession or use of powered alcohol in California.
Related legislation : SB 819 (Huff) of 2016. Would prohibit ABC
from issuing a license to manufacture, distribute, or sell
powdered alcohol, as defined. (Pending in Senate
Appropriations)
SB 39 (Padilla, Chapter 140, Statutes of 2011). Prohibited the
importation, production, manufacture, distribution, or sale of
beer to which caffeine has been directly added as a separate
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ingredient at retail locations in California, as defined.
AB 1598 (Beall, 2010). Would have prohibited the sale,
production, importation, manufacture or distribution of a
caffeinated malted beverage, as defined. (Failed passage in
Assembly Governmental Organization Committee)
AB 346 (Beall, Chapter 624, Statutes of 2008). Required that
any container of beer or alcoholic beverage that derives 0.5% or
more of its alcoholic content by volume from flavors or other
ingredients containing distilled alcohol and that is sold by a
manufacturer or importer to a wholesaler or retailer within this
state to bear a label or a firmly affixed sticker that includes
specified information regarding its alcohol content and its
status as an alcoholic beverage.
AB 273 (Baca), Chapter 29, Statutes of 2006. Prohibits the
sale, purchase, and use of any vaporized form of alcohol
produced by an alcohol vaporizing device, as defined.
AB 1657 (Chan, 2004). Would have limited the sale of any
prepackaged alcoholic beverage product made with a "gelatin"
base to businesses that prohibit the presence of persons under
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the age of 21. (Failed passage in Senate Governmental
Organization Committee)
REGISTERED SUPPORT / OPPOSITION:
Support
University of the Pacific, McGeorge School of Law, Legislative
and Public Policy Clinic (Sponsor)
Alcohol Justice
Alcohol Policy Panel of San Diego County
Association for Los Angeles Deputy Sheriffs
Association of California Healthcare Districts
California Association of Code Enforcement Officers
California Beer and Beverage Distributors
California College and University Police Chiefs Association
California District Attorneys Association
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California Friday Night Live Partnership
California Narcotic Officers Association
California State Sheriffs' Association
Children's Hospital Los Angeles, Division of Adolescent and
Young Adult Medicine
Children's Hospital Los Angeles, Substance Abuse Treatment and
Prevention Program
City of El Cajon City Council
Consumer Federation of California
Contra Costa County Board of Supervisors
County Health Executives Association of California
El Dorado County Board of Supervisors
Health Officers Association of California
Institute for Public Strategies
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Los Angeles County Professional Peace Officers Association
Los Angeles Police Protective League
Lutheran Office of public Policy - California
Marin County Board of Supervisors
Pacific Clinics
Partnership for a Positive Pomona
Placer County Board of Supervisors
Pueblo Y Salud, Inc.
Riverside Sheriffs Association
Saving Lives Coalition
Social Model Recovery Systems
Sonoma County Board of Supervisors
Techniques for Effective Alcohol Management
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The Wall Las Memorias Project
Ventura County Board of Supervisors
Women Against Gun Violence
Youth Leadership Institute
Opposition
None on file
Analysis Prepared by:Eric Johnson / G.O. / (916) 319-2531