BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 39| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 39 Author: Padilla (D), et al Amended: 3/23/11 Vote: 21 SENATE GOVERNMENTAL ORGANIZATION COMM : 8-3, 03/22/11 AYES: Wright, Calderon, Corbett, De León, Evans, Padilla, Wyland, Yee NOES: Anderson, Cannella, Strickland NO VOTE RECORDED: Berryhill, Hernandez SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Alcoholic beverages: caffeinated beer beverages SOURCE : Author DIGEST : This bill prohibits the import, production, manufacture, distribution, or sale of caffeinated beer beverages at retail locations within California. ANALYSIS : Existing law: The enactment of the 21st Amendment to the U.S. Constitution in 1933 repealed the 18th Amendment and ended the era of Prohibition. Accordingly, states were granted the authority to establish alcoholic beverage laws and administrative structures to regulate the sale and distribution of alcoholic beverages. In California, this responsibility was originally entrusted to the State Board CONTINUED SB 39 Page 2 of Equalization. In 1955, however, the State Constitution was amended to shift this responsibility to the newly established Department of Alcoholic Beverage Control (ABC). Existing law grants ABC exclusive authority to administer the provisions of the Act in accordance with laws enacted by the Legislature. Existing law recognizes three types of alcoholic beverages for tax purposes, namely, distilled spirits, beer, and wine and the definitions of beer, wine, and distilled spirits are found in the ABC Act. Existing law defines "Beer" as any alcoholic beverage obtained by the fermentation of any infusion or decoction of barley, malt, hops, or any other similar product, or any combination thereof in water, and includes ale, porter, brown, stout, lager beer, small beer, and strong beer but does not include sake, known as Japanese rice wine. Existing law provides that any container of beer or alcoholic beverage, other than sake, that is approved for labeling as a malt beverage under the Federal Alcohol Administration (FAA) Act, that derives 0.5% or more of its alcoholic content by volume from flavors or other ingredients containing distilled alcohol and that is sold within this state on or after July 1, 2009, shall bear a distinctive, conspicuous, and prominently displayed label, or firmly affixed sticker, as defined. Existing law 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. Existing law provides that consumer advertising specialties furnished by a beer manufacturer are intended only for adults of legal drinking age and prohibits the use of coin banks, toys, balloons, magic tricks, miniature bottles or cans, confections, dolls or other items that appeal to minors or underage drinkers in connection with the merchandising of beer. Existing federal law: The Treasury Department's Alcohol and Tobacco Tax and Trade CONTINUED SB 39 Page 3 Bureau (TTB) is responsible for implementing and enforcing a broad range of statutory and compliance provisions and ensuring that alcohol products are created, labeled, and marketed in accordance with the FAA Act. While TTB regulates the labeling of alcoholic beverages, it is the Food and Drug Administration's (FDA) responsibility to evaluate the safety of ingredients added to alcoholic beverages, pursuant to FDA's authority under the Federal Food, Drug, and Cosmetic Act. Labeling and formulation approval requirements can be found in Title 27 of the Code of Federal Regulations. This bill prohibits the import, production, manufacture, distribution, or sale of "caffeinated beer beverages" at retail locations within California. This bill: 1.Stipulates that caffeinated beer beverages shall not be imported into this state, produced, manufactured, or distributed within this state, or sold by a licensed retailer within this state. 2.Defines "caffeinated beer beverage" to mean a beer for which the manufacturer has filed with the United States Alcohol and Tobacco Trade and Tax Bureau as an ingredient, directly added caffeine, and clarifies it not intended to apply to any beer that has an incidental amount of caffeine as a constituent of a natural ingredient, such as coffee, chocolate, or tea. Comments Caffeinated alcoholic drinks have made headlines over the past year including a highly publicized incident at Central Washington University involving approximately 10 students who were hospitalized after drinking a product called "Four Loko" at a party. Some states (e.g., Massachusetts, Michigan and Washington) have even taken steps to ban the products. Advocates of limited government are quoted as saying, "The government has gone too far and it's time the FDA started treating consumers old enough to buy alcoholic beverages as adults." Critics have also noted that a number of popular CONTINUED SB 39 Page 4 sodas (e.g., Mountain Dew, Dr. Pepper and Coke Zero) and an array of other well-known caffeinated drinks remain on store shelves. Health officials on the other hand, speak out against the dangers of mixing alcohol and caffeine and cite various studies that point to the dangers of such drinks. According to the author's office, combining alcohol with caffeine and other stimulants does not ameliorate alcohol's negative effects on one's motor coordination and visual reaction times. Recent science has revealed that adding caffeine and other stimulants to alcohol is harmful because these additives impair one's ability to judge their own level of intoxication as well as the ability to judge the level of intoxication in someone else. This results in increased alcohol consumption and can lead drinkers to wrongly conclude that they are capable of engaging in risky and potentially dangerous activities, like operating a motor vehicle or engaging in risky sexual behavior. The author's office emphasizes that there is no general consensus among health professionals and the scientific research community that the use of caffeine in alcoholic beverages has been demonstrated to be safe. On the contrary, these alcoholic beverages have been associated with dangerous behaviors. Prior/Related Legislation AB 1598 (Beall), 2009-10 Session, prohibited the sale, production, importation, manufacture or distribution of a caffeinated malted beverage, as defined. (Failed passage in Assembly G.O. Committee) AB 346 (Beall), Chapter 624, Statutes of 2008, requires 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. CONTINUED SB 39 Page 5 AB 345 (Saldana), 2007-08 Session, required the State Board of Equalization (BOE), for calendar years beginning on or after January 1, 2008, to calculate the total amount of all surtaxes, interest, and penalties that would be collected as a result of a reclassification of any alcoholic beverage from beer to a distilled spirit, as specified. (Died in Assembly G.O. Committee) AB 417 (Aghazarian), of the 2005-06 Session, modified the definition of beer to include any alcoholic beverage that qualifies as a malt beverage under federal law. (Vetoed, in his veto message, the Governor encouraged "All interested parties, particularly health professionals, law enforcement and the producers of flavored malt beverages, to use this opportunity for public debate and serious consideration of the policy issues surrounding this beverage.") AB 1657 (Chan), 2003-04 Session, limited the sale of any prepackaged alcoholic beverage product made with a "gelatin" base to businesses that prohibit the presence of persons under the age of 21 on the premises. (Failed passage in Senate G.O. Committee) FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT : (Verified 4/11/11) Alameda County California Association of Alcoholism and Drug Abuse Counselors California Medical Association California Narcotic Officers Association California Police Chiefs Association California Society of Addiction Medicine City of Fresno Police Chief Jerry Dyer Consumer Federation of California County Alcohol and Drug Program Administrators Association of California Mothers Against Drunk Driving Village Nation CONTINUED SB 39 Page 6 ARGUMENTS IN SUPPORT : The Alameda County Board of Supervisors states, "There are currently a number of caffeinated malt beverage products on the market that are targeted in packaging and advertising to young people and these products impair the ability of a person to judge their own level of intoxication or to judge the intoxication of someone else. SB 39 will help reduce the rates of alcohol-related traffic accidents, violence, sexual assaults, and suicides, particularly among young people." PQ:nl 4/13/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED