BILL ANALYSIS                                                                                                                                                                                                    �







                      SENATE COMMITTEE ON PUBLIC SAFETY
                            Senator Loni Hancock, Chair              S
                             2013-2014 Regular Session               B

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          SB 506 (Hill)                                               
          As Introduced February 21, 2013 
          Hearing date:  April 9, 2013
          Health and Safety Code
          JM:mc

                         PSEUDOEPHEDRINE AND RELATED PRODUCTS:

                    SALES LIMITS AND ELECTRONIC TRACKING OF SALES  



                                       HISTORY

          Source:  Consumer Healthcare Products Association

          Prior Legislation: AB 1455 (Hill) - 2010, held in Senate  
          Judiciary
                       SB 484 (Wright) - 2009, failed passage in Assembly  
                       Public Safety                          SB 276  
                       (Vasconcellos) - Ch. 276, Stats. 2003 
                       AB 154 (La Suer) - Ch. 13, Stats. 2001
                       AB 162 (Runner) - Ch. 978, Stats. 1999

          Support: California State Sheriffs' Association; California  
                   Manufacturers and Technology Association; Rickitt  
                   Benckiser; BIOCOM;  Valley Industry & Commerce  
                   Association; Rite Aid; California Retailers  
                   Associations; National Association of Chain Drug  
                   Stores; California Pharmacists Association; Johnson &  
                   Johnson; California District Attorneys Association;  
                   Peace Officers Research Association of California;  
                   California Chamber of Commerce; California Healthcare  




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                   Institute; Shasta County Sheriff

          Opposition:California Narcotics Officers Association; Electronic  
                   Frontier Foundation; American Civil Liberties Union  
                   (unless amended); Privacy Rights Clearinghouse (unless  
                   amended)




                                         KEY ISSUE
           
          SHOULD SEVERAL CHANGES BE MADE TO HOW SALES OF PSEUDOEPHEDRINE ARE  
          MADE IN CALIFORNIA, INCLUDING REQUIRING THAT THESE SALES BE  
          MONITORED ELECTRONICALLY, AS SPECIFIED?



                                       PURPOSE

          The purposes of this bill are to 1) specifically provide in  
          California law, as is the case under federal law, that retail  
          sales of pseudoephedrine and related products to a single  
          customer are limited to 3.6 grams per transaction and 9 grams in  
          any 30-day period; 2) require the purchaser to provide a valid  
          photo identification and sign a "written" or electronic log  
          reflecting the person's identity and the amount and date of the  
          purchase; 3) require retailers to record this information in the  
          National Precursor Log Exchange (NPLEx) electronic tracking  
          system and to inform purchasers that the information will be  
          provided to law enforcement to prevent illegal sales; 4) require  
          retailers in selling the product  to determine through the  
          electronic system if a sale would violate the law; 5) forbid  
          sales that violate the gram weight limits and identification  
          requirement; 6) provide that when the Department of Justice  
          (DOJ) enters into memorandum of understanding with the National  
          Association of Drug Diversion Investigators (NADDI), NADDI will  
          forward system data to DOJ weekly and provide law enforcement  
          with real-time access to NPLEx; 7) provide that neither the  
          state nor any state agency shall bear any costs for the  




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          development, installation or maintenance of the system; 8)  
          provide that the state shall impose no fee on a retail  
          distributor or manufacturer to defray costs for oversight or use  
          of the system; 9) provide that pseudoephedrine sales data shall  
          be subject to specified confidentiality rules for medical  
          records; 10) provide that retail distributors and the NPLEx  
          vendor shall maintain the data no longer than two years and  
          destroy the records at that time; and 11) state legislative  
          findings that a law enforcement investigation from a single  
          transaction in violation of purchase limits shall be supported  
          by probable cause.
           
          Existing law  , with specified and detailed exceptions, prohibits  
          disclosure of medical information without the authorization of  
          the patient.  Medical information shall be disclosed pursuant to  
          a court order or a warrant issued to a law enforcement agency.   
          Other specific exceptions are enumerated.  (Civ.  Code � 56.10.)

           Existing law  provides that medical information can be disclosed  
          "when otherwise specifically required by law."  (Civ. Code �  
          56.10, subd. (b)(9).)

           Existing provisions of the California Constitution  state that  
          all people have inalienable rights, including the right to  
          pursue and obtain privacy.  (Cal. Const. Art. I, � 1.)
           
          Existing law  classifies controlled substances in five schedules  
          according to their dangerousness and potential for abuse.   
          (Health & Saf. Code �� 11054-11058.)

           Existing law  includes the CURES (Controlled Substance  
          Utilization Review and Evaluation System) system to provide for  
          the electronic monitoring of the prescribing and dispensing of  
          Schedule II, III and IV controlled substances.  CURES provides  
          for the electronic transmission of Schedule II, III and IV  
          prescription data to the Department of Justice (DOJ) at the time  
          prescriptions are dispensed.  (Health & Saf. Code � 11165.)

           Existing law  provides that pharmacists, in filling a controlled  
          substance prescription, shall provide to DOJ the patient's name,  




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          date of birth, the name, form, strength and quantity of the  
          drug, and the pharmacy name, pharmacy number and the prescribing  
          physician information.  (Health & Saf. Code � 11165, subd. (d).)

           Existing law  provides that a licensed health care practitioner  
          eligible to prescribe Schedule II, III or IV controlled  
          substances, or a pharmacist, may make a written request to the  
          DOJ for the history of controlled substances dispensed to an  
          individual based on the data in CURES.  (Health & Saf. Code �  
          11165.1, subd. (a).)

           Existing law  provides that the DOJ may initiate the referral of  
          the history controlled substances dispensed to an individual,  
          based on the CURES data, to licensed health care practitioners  
          and pharmacists, as specified.  (Health & Saf. Code � 11165.1,  
          subd. (b).)

           Existing law  provides that the history of controlled substances  
          dispensed to a patient based on CURES data that is received by a  
          practitioner or pharmacist shall be considered medical  
          information, as specified.  (Health & Saf. Code � 11165.1, subd.  
          (c).)

           Existing law  provides that prescriptions for controlled  
          substances must be made on special security forms to prevent  
          copying or forgery of prescriptions.  (Health & Saf. Code �  
          11162.1.)

           Existing law  requires practitioners other than pharmacists who  
          prescribe or administer a controlled substance classified in  
          Schedule II to make a record containing the name and address of  
          the patient, date, and the character, name, strength, and  
          quantity of the controlled substance prescribed, as well as the  
          pathology and purpose for which the controlled substance was  
          administered or prescribed.  (Health & Saf. Code � 11190, subd.  
          (a)-(b).)

           Existing law  requires prescribers who are authorized to dispense  
          Schedule II, III  or IV controlled substance in their office or  
          place of practice to record and maintain information for each  




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          such prescription that includes the patient's name, address,  
          gender, and date of birth,  prescriber's license and license  
          number, federal controlled substance registration number, state  
          medical license number, NDC number of the controlled substance  
          dispensed, quantity dispensed, diagnosis code, if available, and  
          original date of dispensing.  This information shall be provided  
          to DOJ on a monthly basis.  (Health & Saf. Code � 11190 subd.  
          (c).)

           Existing law  includes a detailed regulatory scheme for the  
          production and distribution of specified chemicals that may be  
          precursors to controlled substances.  (Health & Saf. Code
          � 11100.)

           Existing law  provides that producers and users of precursor  
          chemicals (Health & Saf. Code � 11100) must obtain a permit from  
          DOJ.  Applications for permits must include documentation of  
          legitimate uses for regulated chemicals.  (Health & Saf. Code �  
          11106.)

           Existing law  provides that "[s]elling, transferring, or  
          otherwise furnishing or obtaining any [restricted] substance  
          specified in subdivision (a) of [Health & Saf. Code] Section  
          11100 without a permit is a misdemeanor or a felony."  (Health &  
          Saf. Code � 11106, subd. (j).)

           Existing law  provides that any person or entity that sells or  
          transfers one of a list of specified chemical precursors,  
          including pseudoephedrine, must obtain the purchaser's proper  
          identification, as specified, and a letter of authorization from  
          the purchaser which includes the purchaser's business license  
          number or DEA registration, the address of the business and a  
          description of how the chemical is to be used.  The information  
          must be retained "in a readily available manner" for three  
          years.  (Health & Saf. Code � 11100, subd. (c).)

           Existing law  requires any person or entity that sells,  
          transfers, or otherwise furnishes a specified chemical  
          precursor to another person or entity must submit a report to  
          the DOJ, generally within 21 days, of all of each  




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          transaction.  The report must include the identification  
          information about the purchaser.  (Health & Saf. Code �  
          11100, subd. (d).)

           Existing law  provides that violation of restricted chemical  
          reporting requirements (for transferring or obtaining restricted  
          chemicals) is misdemeanor.  A first-time violation is punishable  
          by a county jail term of up to 6 months, a fine of up to 5,000,  
          or both.  A subsequent violation is an alternate  
          felony-misdemeanor, punishable by a prison term of 16 months,  
          two years or three years for a felony, a county jail term of up  
          to 1 year, a fine of up to $100,000, or both such fine and  
          imprisonment.  (Health & Saf. Code � 11100, subd. (f).)

           Existing law  requires specified recording and tracking of  
          transactions involving laboratory glassware, apparatus and  
          chemical reagents where the value of the material exceeds $100.   
          The purchaser must present valid identification.  The bill of  
          sale must be retained for 3 years, as specified.  The document  
          must be presented to law enforcement upon request.  A violation  
          of these provisions is a misdemeanor punishable by imprisonment  
          in a county jail not exceeding 6 months, by a fine not exceeding  
          $1,000, or both.  (Health & Saf. Code � 11107.)

           Existing law  provides that it is unlawful for a retailer to (i)  
          sell in a single transaction more than three packages, or 9  
          grams, of a product that he or she knows to contain ephedrine,  
          pseudoephedrine, norpseudoephedrine, or phenylpropanolamine.   
          With specified exceptions, the three package-9 grams per  
          transaction limitation applies to any product lawfully furnished  
          over the counter pursuant to applicable federal law.  This  
          offense is a misdemeanor, punishable by a county jail term of up  
          to 6 months, a fine of up to $1,000, or both.  The penalty for a  
          subsequent conviction is a misdemeanor term of up to one year in  
          jail, a fine of up to $10,000, or both.  (Health & Saf. Code �  
          11100, subd. (g)(4).)

           Existing federal law  includes the Health Insurance Portability  
          and Accountability Act of 1996 (HIPAA) which, subject to  
          specified exceptions and procedures, provides that medical  




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          information shall be confidential.  (Pub. Law 104-191; 45 CFR  
          160, 164.)

           Existing federal law  (21 USC � 830 (e) and 844 (a)) - the Combat  
          Methamphetamine Epidemic Act (CMEA) - includes very detailed  
          restrictions and requirements the for retail sale of ephedrine,  
          pseudoephedrine, norpseudoephedrine or phenylpropanolamine.   
          These restrictions include, in part:

                 No more than 3.6 grams in a single transaction.
                 No more than 9 grams per customer in a one-month period.
                 If the drug is obtained through postal or similar  
               delivery, no more than 7.5 grams can be so obtained.
                 Seller must maintain a written or electronic logbook of  
               each sale, including the date of the transaction, the name  
               and address of the purchaser and the quantity sold.
                 The purchaser must present valid identification, as  
               specified, and the seller must verify the identification.
                 The purchaser must sign a paper or electronic logbook,  
               as specified.
                 The seller must maintain these documents, as specified.
                 Law enforcement shall have access to the information  
               pursuant to regulations adopted by the Department of  
               Justice.

           Existing federal law  provides the following penalties:

                 Violation of the 9 gram purchase limit is a misdemeanor.
                 Violation of record-keeping laws is a misdemeanor, with  
               specified exceptions.
                 Violation of the distribution limits is punishable by  
               imprisonment for up to five years (pursuant to the federal  
               sentencing guidelines).
                 Distribution of pseudoephedrine with knowledge that it  
               will be used to manufacture a controlled substance, or  
               intentional evasion of record keeping or reporting  
               requirements, is subject to imprisonment for up to 10  
               years, or up to 20 years, as specified.  (21 USC � 841 (c)  
               and 844 (a).)





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           Existing federal law  includes an exception to the log book  
          recording of transactions in the case of a transaction that  
          involves a single package that contains not more than 60  
          milligrams<1> of pseudoephedrine.  (21 USC � 841  
          (e)(1)(A)(iii).)

           Existing federal law  requires retailers to retain purchase  
          information for at least two years.  (21 USC � 841 (v)(6).)

           Existing federal regulations  provide that to protect the privacy  
          of individuals who purchase scheduled listed chemical products,  
          the disclosure of information in logbooks under section 1314.15  
          is restricted as follows:

                 The information shall be disclosed as appropriate to the  
               Administration and to State and local law enforcement  
               agencies.
                 The logbook information shall not be accessed, used, or  
               shared for any purpose other than compliance with this  
               title or to facilitate a product recall. 
                 A regulated seller who in good faith releases  
               information in a logbook to Federal, State, or local law  
               enforcement authorities is immune from civil liability for  
               the release unless the release constitutes gross negligence  
               or intentional, wanton, or willful misconduct.  (21 CFR �  
               1314.45.)

           This bill  repeals the existing statutory provisions for  
          over-the-counter sales of pseudoephedrine<2> and related  
          products and replaces them with new sales limits and a  
          state-wide database for monitoring and tracking sales of these  
          products.
          ---------------------------
          <1> By way of illustration, a single 12-hour extended release  
          allergy-decongestant tablet typically contains 120 milligrams of  
          pseudoephedrine.
          <2> Pseudoephedrine is the most commonly sold of the chemicals  
          or drugs covered by this bill.  References to pseudoephedrine  
          alone in this analysis include the other chemicals covered by  
          the terms of this bill - ephedrine, norpseudoephedrine or  
          phenylpropanolamine.



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           This bill  includes or retains an exception for pseudoephedrine  
          sold or provided pursuant to a prescription.

           This bill  provides that a violation of the sales limits or  
          required procedures is a misdemeanor, punishable on a first  
          conviction by a fine of up to $1,000, a jail term of up to six  
          months, or both.  Upon a subsequent conviction, the maximum jail  
          term is one year and the maximum fine is $10,000.  

           This bill  includes the following required procedures and sales  
          limits:

                 A retailer must store pseudoephedrine products in a  
               locked cabinet or behind the counter. 
                 A retailer may sell no more than 3.6 grams of  
               pseudoephedrine within 24 hours and no more than 9 grams in  
               a 30-day period.   
                 As in federal law (CMEA), the data recording  
               requirements shall not apply to sale of a single package  
               containing no more than 60 milligrams of a product  
               containing pseudoephedrine. 
                 The retailer must record the following at the time of  
               making a pseudoephedrine transaction:
                  o         The date and time of the transaction.
                  o         The type of identification used by the  
                    purchaser, the agency issuing the identification and  
                    the identification number.
                  o         The name, date of birth and address of the  
                    purchaser, as verified by a photo identification.
                  o         The name of the product sold, the quantity of  
                    packages and the total gram amount of pseudoephedrine  
                    involved in the sale.
                 The name or initials of the person making the sale.  The  
               retailer shall immediately transmit the information about  
               the sale and the purchaser to the electronic monitoring  
               system for the purpose of determining whether or not the  
               sale would exceed statutory limits. 
                 The purchaser must provide valid identification, as  
               specified.




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                 The purchaser must sign a written or electronic log.   
               The log must reflect the following:
                  o         Transaction date.
                  o         The agency issuing the identification used by  
                    the purchaser and the number of the identification.
                  o         The name and address of the purchaser.
                  o         The amount and kind of product sold.
           
          This bill  provides that a retailer shall not maintain a separate  
          copy of the transaction information, except as required by  
          federal data collection law.

           This bill  provides that in the event of a failure of the data  
          system that makes compliance with the data collection rules in  
          this bill, sales records shall be maintained in a written log or  
          in alternative electronic form.  
          
           This bill  provides that on and after July 1, 2014, a retail  
          distributor shall immediately transmit information about each  
          sale to the National Precursor Log Exchange (NPLEx) to determine  
          whether or not the transaction is prohibited. 

           This bill  requires the retailer to give notice to customers  
          explaining the identification and purchase data will be provided  
          to law enforcement pursuant to this bill and federal law.   
          Notice may be given electronically, in writing or through signs.

           This bill  provides that the retailer need not keep records of  
          pseudoephedrine transactions in a separate log or location from  
          those required by federal law.

           This bill  states that the Legislature finds that probable cause  
          is necessary before law enforcement can begin an investigation  
          based on a single transaction made in violation of  
          pseudoephedrine purchase limits. 

           This bill  provides that data collected on over-the-counter sales  
          of pseudoephedrine shall be maintained by a retailer and the  
          vendor of the NPLEx system for no longer than two years, except  
          as required by federal law, and shall be destroyed after two  




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          years. 

           This bill  provides retail distributors shall, pursuant to Civil  
          Code Section 56.101, preserve the confidentiality of the  
          information in the system and shall be subject to suit for  
          damages and an administrative penalty as authorized in Civil  
          Code Section 56.36.

          This bill  provides that law enforcement access to the database  
          from a location other than the retailer shall be limited to  
          records of a person whose attempted purchase was denied by the  
          system.   

          This bill  provides that law enforcement access to the database  
          system shall be recorded by means of a unique access code for  
          each person using the system.  Access records shall be  
          maintained by DOJ.

           This bill  provides that the system shall be capable of providing  
          retail distributors with an immediate real-time alert if a  
          person attempts to purchase pseudoephedrine in violation of the  
          limits and procedures in this bill.

           This bill  provides that the data system shall conform to the  
          Federal Bureau of Investigation's Criminal Justice Information  
          Systems security standards and may be audited annually.

           This bill  provides that neither the DOJ nor any state agency  
          shall bear any cost for developing, installing or maintaining  
          the system.

           This bill  provides that the state shall impose no fee on a  
          retailer distributor or manufacturer to defray administrative or  
                                                                            other costs for oversight or use of the system.

           This bill  directs the Board of Equalization to notify all  
          retailers by April 1, 2014, of the requirement to submit each  
          pseudoephedrine transaction to NPLEx.   

          This bill  provides that upon adoption of a memorandum of  




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          understanding (MOU) between DOJ and NADDI, NADDI shall forward  
          California transaction records to DOJ weekly and provide  
          real-time access to the system for law enforcement.  

           This bill  provides that the MOU shall constitute an enforceable  
          contract.  
           
          This bill  states that the MOU must provide or conform to the  
          following:

                 No party to the MOU or any entity under contract to  
               provide the monitoring system shall be authorized to use  
               the data for any purpose other than authorized under this  
               bill, the federal CMEA and corresponding regulations.  
                  The system operator shall be authorized to analyze the  
               data for the sole purpose of assessing and improving the  
               performance and efficacy of the system.  
                  A retail distributor's access to the database shall be  
               limited to that retailer's records for complying with the  
               CMEA and the California monitoring system created by this  
               bill, except pursuant to law enforcement request or court  
               order.
           
          This bill  provides that DOJ may submit recommendations to NADDI  
          for improving identification of false identification cards.  

          This bill  s states legislative intent to preempt all local  
          ordinances or regulations concerning the over-the-counter sale  
          of pseudoephedrine products.  

           This bill  includes the following definitions concerning sellers  
          of pseudoephedrine:

          "Retail distributor" means a grocery store, general merchandise  
          store, drug store, or related entity that sells pseudoephedrine  
          products only for personal use to walk-in customers or in  
          face-to-face transaction.  The parent company of a retailer is  
          not a retail distributor for purposes of this bill.
                 "Drug store" "general merchandise store" or "grocery  
               store" means such an entity as described in a certain  




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               sections of specified classification manual published by  
               the U.S. Office of Management and Budget in 1987<3>.

                 "Sale for personal use" means a sale of pseudoephedrine  
               in a single transaction to an individual customer for  
               legitimate medical use.  Sale for personal use also  
               includes sales to employers to be dispensed to employees  
               from first-aid kits or medicine chests.

           This bill  includes a January 1, 2019, sunset.
          

                    RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION

          For the last several years, severe overcrowding in California's  
          prisons has been the focus of evolving and expensive litigation  
          relating to conditions of confinement.  On May 23, 2011, the  
          United States Supreme Court ordered California to reduce its  
          prison population to 137.5 percent of design capacity within two  
          years from the date of its ruling, subject to the right of the  
          state to seek modifications in appropriate circumstances.  

          Beginning in early 2007, Senate leadership initiated a policy to  
          hold legislative proposals which could further aggravate the  
          prison overcrowding crisis through new or expanded felony  
          prosecutions.  Under the resulting policy known as "ROCA" (which  
          stands for "Receivership/ Overcrowding Crisis Aggravation"), the  
          Committee held measures which created a new felony, expanded the  
          scope or penalty of an existing felony, or otherwise increased  
          the application of a felony in a manner which could exacerbate  
          the prison overcrowding crisis.  Under these principles, ROCA  
          was applied as a content-neutral, provisional measure necessary  
          to ensure that the Legislature did not erode progress towards  
          reducing prison overcrowding by passing legislation which would  
          increase the prison population.  ROCA necessitated many hard and  
          difficult decisions for the Committee.
          ---------------------------
          <3> Codes 5912, 5311 to 5319 and 5411 (drug store, general  
          merchandise store and grocery store respectively) of  the  
          Standard Industrial Classification Manual of the Office of  
          Management and Budget, 1987 edition.



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          In January of 2013, just over a year after the enactment of the  
          historic Public Safety Realignment Act of 2011, the State of  
          California filed court documents seeking to vacate or modify the  
          federal court order to reduce the state's prison population to  
          137.5 percent of design capacity.  The State submitted in part  
          that the, ". . .  population in the State's 33 prisons has been  
          reduced by over 24,000 inmates since October 2011 when public  
          safety realignment went into effect, by more than 36,000 inmates  
          compared to the 2008 population . . . , and by nearly 42,000  
          inmates since 2006 . . . ."  Plaintiffs, who oppose the state's  
          motion, argue in part that, "California prisons, which currently  
          average 150% of capacity, and reach as high as 185% of capacity  
          at one prison, continue to deliver health care that is  
          constitutionally deficient."  

          In an order dated January 29, 2013, the federal court granted  
          the state a six-month extension to achieve the 137.5 % prisoner  
          population cap by December 31st of this year.  

          The ongoing litigation indicates that prison capacity and  
          related issues concerning conditions of confinement remain  
          unsettled.  However, in light of the real gains in reducing the  
          prison population that have been made, although even greater  
          reductions are required by the court, the Committee will review  
          each ROCA bill with more flexible consideration.  The following  
          questions will inform this consideration:

                 whether a measure erodes realignment;
                 whether a measure addresses a crime which is directly  
               dangerous to the physical safety of others for which there  
               is no other reasonably appropriate sanction; 
                 whether a bill corrects a constitutional infirmity or  
               legislative drafting error; whether a measure proposes  
               penalties which are proportionate, and cannot be achieved  
               through any other reasonably appropriate remedy; and
                 whether a bill addresses a major area of public safety  
               or criminal activity for which there is no other  
               reasonable, appropriate remedy.
          




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                                      COMMENTS

          1.    Need for This Bill  

          According to the author:

            Since 2006, federal law has required that all OTC  
            (over-the-counter) pseudoephedrine (PSE) products be stored  
            behind the counter, requires purchasers to provide  
            identification and sign a paper logbook, and limits the  
            quantities which may be purchased to 3.6 grams per day and 9  
            grams per month.  This is to prevent criminals from  
            accumulating large quantities of PSE and using it in the  
            illegal production of methamphetamine.  California currently  
            has no mechanism to prevent criminals who are involved in  
            illegal trafficking of PSE from visiting multiple stores and  
            buying as many packages of PSE-containing products as they  
            want, because retailers' logbooks are not connected.

            SB 506 requires California retailers selling OTC products  
            containing pseudoephedrine (PSE) to submit data required to be  
            collected under federal law to a unified electronic logbook  
            prior to completing the sale.  Current law limits sales of  
            PSE, but does not provide retailers with a mechanism to ensure  
            that a sale is legal prior to completing it.  The electronic  
            logbook required by this bill fills that gap.  Retailers would  
            be alerted immediately when a consumer is about to exceed the  
            purchase limits, and required to stop the sale.
            
            Twenty-six states already mandate the use of real-time  
            electronic logbooks for PSE sales: Alabama, Arizona, Arkansas,  
            Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,  
            Kentucky, Louisiana, Maine, Michigan, Missouri, Nebraska,  
            North Carolina, North Dakota, Ohio, Oklahoma, South Carolina,  
            Tennessee, Texas, Virginia, Washington, and West Virginia.

          2.  Restrictions on Pseudoephedrine in Other States  

          According to the 2010 Drug Threat Assessment by the U.S.  




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          Department of Justice, 45 states have enacted limits on  
          purchases of pseudoephedrine.  Laws vary in other states.  (2010  
          Threat Assessment, USDOJ, pp. 66-67.)  Twenty states have made  
          pseudoephedrine a scheduled drug (controlled substance),  
          although most of those states create an exception for over the  
          counter sales consistent with federal law.  Forty-three states  
          have imposed point-of-sale restrictions, and 26 have enacted  
          pseudoephedrine tracking laws.  (Ibid.)  

          Oregon has required a prescription for pseudoephedrine purchases  
          since 2006.  Mississippi has required a prescription since July,  
          2010.  (See Comment # 12 for a discussion of the Oregon  
          experience.) 

          3.  Standard Packages of Pseudoephedrine - How Much are 3.6 Grams  
            and 9 Grams?  

          A standard pseudoephedrine tablet contains 30 milligrams.  The  
          tablets are sold in blister packages of 24 or 28 tablets.  The  
          recommended dose is up to two tablets every four to six hours,  
          but no more than eight tablets a day.  This bill, as amended on  
          June 14, 2010, exempts from data collection requirements single  
          dosage packs of up to 60 milligrams.

          A box of 48 tablets contains 1440 milligrams (1.44 grams) of  
          pseudoephedrine.  A box of 24 tablets contains 720 milligrams  
          (.720) grams of pseudoephedrine.  Under federal law, a person  
          may in a single day buy no more than two boxes of 48 tablets and  
          a box of 24 tablets, or 120 tablets.  At the recommended maximum  
          dose of 8 tablets per day, 3.6 grams is a 15-day supply.  The  
          maximum monthly purchase amount - 9 grams - is approximately 306  
          tablets, a 38-day supply.  The Mayo Clinic website warns not to  
          continue taking the medicine for more than 7 days if symptoms do  
          not improve.  

          Tables of Packaging, Sales Limits and Dosages<4>
           
          -------------------------
          <4> These charts assume that the pseudoephedrine tablet contains  
          nothing but pseudoephedrine.  The actual amount of the drug in a  
          tablet may be somewhat less than the weight of the tablet.



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           ------------------------------------------------------------------- 
          |Package         |Tablet          |Milligrams      |Grams per       |
          |                |weight          |per             |Package         |
          |                |                |Package         |                |
          |----------------+----------------+----------------+----------------|
          |48 tablets      |30              |1440            |1.44            |
          |                |milligrams      |                |                |
          |                |- .03           |                |                |
          |                |grams           |                |                |
          |----------------+----------------+----------------+----------------|
          |24 tablets      |30              |720             |.720            |
          |                |milligrams      |                |                |
          |                |- .03           |                |                |
          |                |grams           |                |                |
           ------------------------------------------------------------------- 

           ----------------------------------------------------------------- 
          |Daily          |Packages        |Tablet          |Maximum        |
          |Limit          |                |limit           |Dosage         |
          |---------------+----------------+----------------+---------------|
          |3.6 grams      |2 packs of      |120             |15 days        |
          |               |48 tabs,        |                |at             |
          |               |and             |                |maximum        |
          |               |1 pack of       |                |of 8           |
          |               |24 tabs         |                |tablets        |
          |               |                |                |per day        |
          |               |                |                |               |
           ----------------------------------------------------------------- 

           ------------------------------------------------------------------- 
          |Monthly         |Packages        |Tablet          |Dosage          |
          |limit           |                |limit           |                |
          |----------------+----------------+----------------+----------------|
          |9 grams         |6.25 packs      |300             |38 days at      |
          |                |of 48           |                |maximum of      |
          |                |                |                |8 tabs per      |
          |                |                |                |day             |
          |                |                |                |                |
           ------------------------------------------------------------------- 





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          4.  Privacy Concerns from Recording Pseudoephedrine Sales in a  
            Database that can be Accessed by Law Enforcement and  
            Pseudoephedrine Retailers  

          California and Federal Medical Privacy Law
          
          California law includes relatively stringent medical privacy  
          rules.  Unless a specified exception applies, such as a court  
          order or warrant, medical information can only be disclosed with  
          the authorization of the patient.

          The federal Health Insurance Portability and Accountability Act  
          of 1996 (HIPAA) rules also require confidentiality of medical  
          information, with specified exceptions.  It appears that HIPAA  
          controls over any conflicting state laws.  Covered entities may  
          disclose protected health information (not pseudoephedrine  
          sales) to law enforcement officials for specified law  
          enforcement purposes, such as court orders, to identify suspects  
          or witnesses, to find missing persons, information about a crime  
          victim, notice of death and related matters.  

          The bill provides that a retail distributor can retain  
          information for no more than two years, except as required under  
          the federal CMEA.  The retailer may not keep a copy of the  
          information, except as required by federal law.

          The bill also makes a retail distributor's use of the system  
          subject to Section 56.101 of the Civil Code, which provides that  
          a health care provider, health plan, pharmaceutical company, or  
          contractor that creates, uses, stores or maintains, or destroys  
          medical records shall preserves the confidentiality of the  
          information in the records.  Negligence as to medical records by  
          an entity subject to Section 56.101 is liable, pursuant to  
          Section 56.36, for an administrative penalty and a suit for  
          money damages. 

          Arguably, confidentiality is relatively high for purposes other  
          than law enforcement.  That is, the information shall not be  
          accessed, used, or shared for any purpose other than to ensure  




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          compliance with the CMEA or to protect public health and safety  
          in a product recall.  The CMEA regulations provide civil  
          immunity for information released to law enforcement.  Immunity  
          does not apply if the release constitutes intentional misconduct  
          or gross negligence.  (21 CFR � 1314.45.)

          DOES THIS BILL PROTECT THE CONFIDENTIALITY OF PURCHASER  
          INFORMATION BY PROHIBITING A RETAIL DISTRIBUTOR FROM RETAINING  
          THE INFORMATION FOR MORE THAN TWO YEARS, BY SUBJECTING A  
          NEGLIGENT RETAILER TO SUIT AND AN ADMINISTRATIVE FINE, AND BY A  
          PROHIBITION ON COPYING THE INFORMATION?

          Law Enforcement Access to the Database
          
          This bill requires retailers to electronically record personal  
          information from each person who buys pseudoephedrine or related  
          products.  This information is then entered into a database that  
          can be accessed in real time by law enforcement.

          Federal law requires retailers to record the same information as  
          is required by this bill, and federal law provides that the  
          information can be electronically recorded.  However, federal  
          law does not include a unified database into which all  
          transactions are recorded.  According to a July, 2007 story  
          published by MSNBC about the Kentucky tracking law, privacy  
          advocates raised concerns about a system through which law  
          enforcement<5> can access data about drug store customers.  The  
          advocates stated that the vast majority of pseudoephedrine  
          purchases are legitimate and that there was no reason for law  
          enforcement to information about people making such purchases.   
          Law enforcement representatives responded that the system is  
          simply an investigative tool, and does not provide probable  
          ---------------------------
          <5>  Representatives of the sponsor submit that the data already  
          in the system would not be accessible to a retail clerk.  The  
          only information provided by the system to the clerk at the time  
          of a sale is whether or not a sale is prohibited.  The system  
          does not reveal the reason for the prohibition.  The clerk would  
          give the customer a number to call for an explanation of the  
          denial of sale.




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          cause for search or arrest.

          Arguably, law enforcement has no use for any information in the  
          system except where a sale has been denied or the prospective  
          purchaser presented a questionable identification.  The bill  
          does provide the following as to law enforcement access to the  
          database:  "Access by law enforcement to the data contained in  
          the system from a location other than the retailer shall be  
          limited to the records of an individual whose attempted purchase  
          has been denied by the system."  It may not be clear how law  
          enforcement learns that an individual's purchase attempt has  
          been denied.  Perhaps this point should be clarified.

          The bill apparently does not limit the time law enforcement can  
          retain the information.  This raises the issue whether or not  
          some other law limits the time law enforcement, or the entity  
          operating the database, may retain the information. 

          ARE PRIVACY CONCERNS LIMITED BY THE REQUIREMENT THAT EACH LAW  
          ENFORCEMENT OFFICER MUST ACCESS THE DATABASE WITH A UNIQUE  
          IDENTIFIER THAT SHALL BE RETAINED AND MAY BE AUDITED BY DOJ AND  
          THAT REMOTE ACCESS TO THE DATABASE (AWAY FROM A RETAIL SITE) BY  
          LAW ENFORCEMENT SHALL BE LIMITED TO CIRCUMSTANCES WHERE A SALE  
          WAS DENIED BY THE SYSTEM?

          SHOULD THE CIRCUMSTANCES UNDER WHICH A LAW ENFORCEMENT OFFICER  
          HAS ACCESS TO THE INFORMATION ABOUT A DENIED SALE BE CLARIFIED?

          DOES THE AVAILABILITY OF PRESCRIPTIONS FOR PSEUDOEPHEDRINE LIMIT  
          PRIVACY CONCERNS ABOUT THE DATABASE?

          DOES THE BILL ADEQUATELY LIMIT THE LENGTH OF TIME THAT THE  
          PRIVATE VENDOR OR LAW ENFORCEMENT CAN RETAIN THE DATA?

          5.  The CURES Program - Electronic Monitoring of Controlled  
            Substance Prescriptions, Private Contractor  

          The CURES program was established in 1997 by AB 3042 (Takasugi)  
          in response to recommendations of the Controlled Substance  
          Prescription Advisory Council.  (SCR 74, 1992.)  CURES was  




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          initially intended to electronically monitor the prescribing and  
          dispensing of Schedule II controlled substances such as  
          oxycodone.  CURES provides for real-time electronic transmission  
          of specified prescription data to DOJ.  Essentially the data is  
          analyzed for indications that controlled substances are being  
          improperly prescribed, or that drug abusers are obtaining  
          prescriptions from many doctor.  Physicians and pharmacists, in  
          addition to law enforcement, have access to CURES data through  
          PAR - patient activity reports.  A private contractor - Infinite  
          Solutions Inc. (ISI) - collects CURES data for DOJ.  

          DOES THE EXISTING CURES SYSTEM USE EXTENSIVE REAL-TIME DATA  
          TRACKING AND MONITORING OF CONTROLLED SUBSTANCE PRESCRIPTIONS  
          AND PATIENTS?

            6.  Decongestant Medications - Efficacy Comparisons
           
          Many consumers rely on pseudoephedrine products to ease nasal  
          congestion because these products are effective.  Because a  
          prescription is not requited, these medications are readily  
          available to those without medical insurance or access to  
          physicians for non-emergency treatment.

          In recent years, because of restrictions on the sale and  
          distribution of pseudoephedrine, the pharmaceutical industry has  
          developed and marketed alternative or substitute products, often  
          phenylephrine   These substitute decongestants are kept on open  
          shelves in drug stores and other retail shops, while  
          pseudoephedrine products must be kept behind the counter or in a  
          locked cabinet.  It appears that the most commonly used  
          substitute is phenylephrine.  Many consumers purchase these  
          products.

          The website of the National Institutes of Health (NIH)  
          includes an article published in the British Journal of  
          Phamacology that surveyed studies of the relative efficacy  
          of orally administered pseudoephedrine and phenylephrine.   
          The author of the article, Professor Ronal Eccles of the  
          Common Cold Centre and Healthcare Clinical Trials at the  
          Cardiff University School of Biosciences noted that many  




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          companies were replacing pseudoephedrine with phenylephrine  
          in over-the-counter decongestant tablets.  Eccles stated:   
          "[Phenylephrine and [pseudoephedrine] have been used as  
          oral decongestants for over 50 years in a large range of  
          medicines for the treatment of nasal congestion associated  
          with common cold and flu.  There is support in the  
          literature for the efficacy of PDE as an orally  
          administered nasal decongestant [citation], but no support  
          for the efficacy of oral PE."<6>

          Another article on the website of the NIH was published in  
          the International Journal of General Medicine<7> in 2010.   
          The article was authored by physicians from the University  
          of California, Wayne State University and a medical center  
          in each of Caracas Venezuela and London and considered a  
          wide range of treatments for upper respiratory congestion.   
          The article concluded:  "Oral decongestants include  
          phenylephrine and pseudoephedrine, with the latter being  
          more effective.  In some patients, their use can be  
          associated with adverse systemic effects, including  
          increased blood pressure, palpitations, appetite loss, and  
          insomnia."

          ARE OVER-THE-COUNTER ALTERNATIVES TO PSEUDOEPHEDRINE EFFECTIVE?

          WOULD THIS BILL ALLOW THOSE WITHOUT LIMITED ACCESS TO  
          PHYSICIANS, OR LIMITED FUNDS FOR TREATMENT, TO OBTAIN AN  
          EFFECTIVE MEDICATION WITHOUT A PRESCRIPTION?

          7.  New "Shake and Bake" or "One-Pot" Method for Making Small  
            Batches of Methamphetamine  

          Media and law enforcement reports have noted that a new process  
          for making methamphetamine on a small scale is rapidly growing  
          in popularity.  This process is typically called "shake and  
          bake" or "one pot" because the drug is usually made in a 2-liter  
          ---------------------------
          <6>  http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2000711  .  The  
          journal noted that Eccles had previously acted as a consultant  
          to pharmaceutical companies that marketed nasal decongestants.
          <7> http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866555/



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          bottle or a similar closable container and produces an amount  
          for personal use.  This method requires much less  
          pseudoephedrine than required to make methamphetamine in a full  
          clandestine lab.  Nevertheless, as with the full laboratory  
          method, the one pot method can be very dangerous.  The chemicals  
          can explode and even create fireballs.  

          The shake and bake method essentially involves mixing crushed  
          pseudoephedrine tablets, a substance such as ammonia nitrate  
          (which can be found in instant cold packs for icing injuries),  
          lithium battery strips, drain cleaner (or similar product) and  
          water.  The materials create a chemical reaction in a single  
          bottle.  Recipes typically call for about 200 tablets of  
          pseudoephedrine.  This amount falls within the monthly legal  
          limit.

          CAN A PERSON MAKE METHAMPHETAMINE FOR PERSONAL USE WITH A  
          LEGALLY PURCHASED AMOUNT OF PSEUDOEPHEDRINE?

          WILL THE "SHAKE AND BAKE" OR "ONE POT" METHAMPHETAMINE METHOD,  
          WHICH USES RELATIVELY SMALL AMOUNTS OF PSEUDOEPHEDRINE, MAKE IT  
          MORE DIFFICULT TO PREVENT DIVERSION OF PSEUDOEPHEDRINE FOR  
          METHAMPHETAMINE MANUFACTURING?

          8.  U.S. DOJ Attributes Rise in Laboratory Discoveries to  
            Development and Increase in the One-Pot, Small-Scale  
            Cooking Method  

          The 2010 Methamphetamine Threat Assessment published by the U.S.  
          DOJ National Drug Intelligence Center noted that an increasing  
          proportion of "laboratory" seizures or incidents result from  
          one-pot or shake and bake manufacturing:

               Domestic methamphetamine laboratory seizures increased  
               from 3,096 laboratories in 2007 to 3,950 in 2008 to  
               5,308 in 2009 (see Figure 3 on page 5).  Analysis of  
               laboratory seizure data indicate that the increase -71  
               percent since 2007 - primarily is due to an increase  
               in the prevalence of small-scale "one pot," or "shake  
               and bake," lithium ammonia method laboratories.  In  




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               fact, of the small-scale laboratories seized between  
               2007 and 2009, the number of small-scale lithium  
               ammonia method laboratories increased 158 percent  
               overall - from 1,583 in 2007 to 2,584 in 2008 to 4,089  
               in 2009.

               Domestic superlab seizures did not change  
               significantly [from 2007-2009].  The number of  
               superlabs [capable of producing 10 lbs. or more of the  
               drug in a cycle] seized increased only slightly from  
               2007 (11) to 2008 (17) before decreasing in 2009 (14).  
                ? 13 [superlabs] were seized in California and one in  
               Georgia. Rising methamphetamine production in 2009 was  
               realized in six of the nine Organized Crime Drug  
               Enforcement Task Force regions, with the most notable  
               increase occurring in the Great Lakes Region.

          The trend of increasing numbers of small-scale labs has  
          continued.  The 2011 National Drug Threat Assessment<8>  
          found that 81% of laboratories found or seized since 2006  
          were "small scale" one-pot operations capable of producing  
          less than 2 ounces of methamphetamine.  "Most of the  
          remaining laboratories were? small with capacities between  
          2 and 8 ounces?"  (Nat. Drug Threat Assess. 2011, p. 35.)

          In testimony to a congressional committee<9> on July 24,  
          2012, National Drug Control Policy Director R. Gil  
          Kerlikowske stated that domestic production has shifted  
          significantly away from superlabs toward much smaller-scale  
          operations.  This shift occurred because sales of precursor  
          chemicals were limited by law.  Kerlikowske noted that labs  
          have decreased in the West and increased in the Midwest and  
          South.  While one-pot labs often produce methamphetamine  
          for personal use, the proliferation of very small labs can  
          -------------------------
          <8> The National Drug Intelligence Center closed on June 15,  
          2012.  It appears that the 2011 threat assessment will be the  
          last one published by the U.S. Department of Justice.  No  
          explanation was given on the Website.   
          http://www.justice.gov/archive/ndic/topics/ndtas.htm#Top
          <9> http://www.whitehouse.gov/ondcp/congressional-hearings



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          stimulate new markets for the drug.
          
          It appears that one-pot cooking may create less danger to the  
          public than traditionally cooking methods that create relatively  
          large quantities of toxic chemicals.  An August 2009, AP story  
          stated that the one-pot methods produces enough for only a "few  
          hits."  While there is substantial danger that a one-pot or soda  
          bottle used to make a small batch of methamphetamine could  
          explode, the danger appears to mainly be to the cooker and  
          persons in the immediate vicinity.  However, the AP report noted  
          that the explosive power of one-pot cooking can cause  
          particularly intense fires, including a fire in an apartment.

          Traditional cooking methods created a risk of explosion of the  
          building where the cooking took place.  There have been reports  
          of entire apartments exploding.  (WKRG.com, Mobile-Pensacola,  
          July 7, 2009.)  In addition, traditional methods produce  
          relatively large amounts of waste chemicals that are abandoned  
          at the manufacturing site or dumped into the environment.   
          Children are particularly subject to contamination by  
          methamphetamine manufacturing.  The toxic residue from a one-pot  
          recipe is typically left in a 2-liter soda bottle.  

          DO MANY OF THE METHAMPHETAMINE LABORATORIES FOUND IN RECENT  
          YEARS REFLECT GROWING USE OF THE SMALL-SCALE ONE-POT OR SHAKE  
          AND BAKE METHOD?

          9.  California and Federal Statutes on Pseudoephedrine Sales  
          Limits - Smurfing to      Obtain Chemicals to Make  
          Methamphetamine  

          Despite limits on purchases of pseudoephedrine, laboratory  
          incidents in California rose in 2008 to 346.  (As noted above,  
          the increase in laboratory incidents could be attributable in  
          significant part to the use of one-pot or one container cooking  
          methods.)  Many law enforcement agencies, including the DEA,  
          have concluded that the rise in laboratories in 2008 resulted  
          from an increase in "smurfing" of pseudoephedrine.  Smurfing  
          involves purchases of small amounts of pseudoephedrine from  
          numerous drug stores.  While smurfers may violate federal law in  




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          purchasing more than 9 grams in a month - although each purchase  
          would not be over the 3.6 gram limit - the lack of adequate law  
          enforcement personnel and resources to manually review purchase  
          logs and absence of a database for tracking purchase or the  
          personnel allows smurfing to continue.  

          As noted above, the 2010 DOJ methamphetamine threat assessment  
          attributes much of the increase in laboratory incidents  
          nationally to the increasing use of small-batch one-pot method  
          of making methamphetamine.  The 2011 threat assessment, the  
          testimony of the Director Kerlikowske and the California HIDTA  
          reports state that smurfing continues to be a significant  
          problem.<10>  

          10.   Concerns over Continuing Demand for Methamphetamine;  
            Involvement of Drug Trafficking Organizations, or Cartels, in  
            Methamphetamine Trafficking  

          As long as demand for the drug is high, eliminating California  
          manufacturing of methamphetamine will not diminish use of the  
          drug if the drug remains available from others sources,  
          especially Mexico.  Any policy change that results in an  
          increase in importation of methamphetamine from Mexico, even a  
          law that has the substantial benefit or reducing illicit  
          laboratories in California, could adversely affect public  
          safety.  Law enforcement and media sources have recently noted  
          an increase in violence used by Mexican drug trafficking  
          organizations (DTOs) in the United States, including significant  
          increases in violence related to Mexican DTOs in border states.   
          (Mexican Drug Cartel Violence Spills Over, Alarming U.S., New  
          York Times, March 22, 2009.)

          WILL MEXICAN DRUG TRAFFICKING ORGANIZATIONS MEET THE CONTINUING  
          ---------------------------
           <10>http://www.justice.gov/archive/ndic/pubs44/44849/44849p.pdf   
          http://www.whitehouse.gov/sites/default/files/page/files/rgk_hous 
          e_govt_reform_subcommittee_meth_testimony_-072412_-.pdf    
           http://www.justice.gov/archive/ndic/dmas/Northern_CA_DMA-2011(U). 
          pdf   
          http://www.justice.gov/archive/ndic/dmas/Los_Angeles_DMA-2011(U). 
          pdf



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          DEMAND FOR METHAMPHETAMINE?

          11.   2010 and 2011 U.S. DOJ Methamphetamine Analyses: Mexican  
            Drug Trafficking Organizations (DTOs) Dominate, Wide  
            Availability, Lowest Prices and Highest Purity Since 2005;  
            Reduced Volume of Domestic Production Volume, but More Very  
            Small Labs  
           
          The U.S. DOJ 2010 Threat assessment for methamphetamine was  
          published in the New York Times prior to release by the National  
          Drug Intelligence Center.  The Times stated that the report was  
          likely not publicly released by the government because of  
          concerns over relations between the U.S. and the government of  
          Mexico.  The Times story states that the assessment "portrays  
          drug cartels as easily able to circumvent the Mexican  
          government's restrictions on the importing of chemicals used to  
          manufacture meth, which has reached its highest purity and  
          lowest price in the United States since 2005."  (U.S. Delays  
          Report tying Meth to Mexico, New York Times, June 8, 2010,  
          italics added.)

          The Executive Summary of the 2010 methamphetamine threat  
          assessment presents a relatively pessimistic portrait of the  
          situation in the United States.  Arguably, the only positive  
          conclusion in the assessment is that "[a]s Mexican ? production  
          increases, the need for domestic production will decrease.   
          Preliminary first-quarter 2010 data on methamphetamine  
          laboratory seizures reflect a downward trend in domestic  
          production - the result of restored availability of  
          Mexico-produce product." 

          The report states:

               After gradually declining since 2006, domestic  
               methamphetamine availability  is at a 5-year high as  
               a result of increasing large-scale production of the  
               drug in Mexico and, to a lesser extent, the increasing  
               prevalence of small-scale production in the United  
               States.  Mid-2009 indicators, particularly increased  
               methamphetamine seizures along the Southwest Border  




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               and seizures of bulk pseudoephedrine and  
               pseudoephedrine analogs entering Mexico, point to a  
               renewed ability of Mexican  DTOs to acquire precursor  
               chemicals.  This has led to resurgence in  
               methamphetamine production in Mexico.  Moreover, the  
               increased use of nonephedrine-based methods of  
               methamphetamine production by Mexican DTOs, along with  
               seizures in Mexico of large-scale methamphetamine  
               laboratories that used nonephedrine-based production  
               methods, confirms increased production in Mexico.

               At the same time, seizures of methamphetamine  
               laboratories in the United States rose for the second  
               year in a row, primarily because of the growing  
               prevalence of small-scale "onepot," or "shake and  
               bake," laboratories.  As a result, overall  
               methamphetamine availability is high and increasing,  
               as evidenced by supplies of the purest methamphetamine  
               available in U.S. markets since 2005, at prices that  
               currently reflect a 5-year low.  As Mexican  
               methamphetamine production increases, the need for  
               domestic production will decrease.  Preliminary  
               first-quarter 2010 data on methamphetamine laboratory  
               seizures reflect a downward trend in domestic  
               production-the result of the restored availability of  
               Mexico-produced methamphetamine in U.S. drug markets.   
               (DOJ 2010 Meth.  Threat Assess., p.1, italics added.)

          The 2011 Los Angeles High Intensity Drug Trafficking Area  
          (HIDTA) report found that local production of methamphetamine  
          had declined in the prior three years.  Seizure of large-scale  
          labs fell 63% and seizures of all labs fell 22% from 2008 to  
          2010.  Nevertheless, "overall methamphetamine availability has  
          remained high because Mexican DTOs are smuggling large  
          quantities of the drug from Mexico into and through the  
          region."<11>  The Northern California HIDTA report noted that  
          Mexican dominance of the methamphetamine trade is "unrivaled"  
          and that these DTOs are well-entrenched.  The Northern  

          ---------------------------
           <11>http://www.justice.gov/archive/ndic/dmas/Los_Angeles_DMA-2011 
          (U).pdf  .  



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          California report did note that Mexican DTOs had used profits  
          from the marijuana trade to fund methamphetamine manufacturing  
          in Central and Northern California.<12>  It thus appears that  
          methamphetamine manufacturing in California does not follow a  
          single pattern.  The Northern California report noted control of  
          cross-border DTO operations by family networks in San Jose,  
          Redwood City and East Palo Alto.  From 2006 to 2010, the number  
          of small labs (capable of producing 2 pounds or less) seized in  
          the Northern California HIDTA<13> decreased steadily from 27 to  
          18, large scale labs (10 pounds or more capacity) varied from1  
          to 3, but medium-sized labs (2-9 pounds) fell markedly from 10  
          to 1.

          The amount of methamphetamine shipped into the U.S. by Mexican  
          DTOs in 2009 exceeded the amount shipped in 2005, the year that  
          pseudoephedrine restrictions began in Mexico.  The amount of  
          methamphetamine seized along the border in 2009 was 1,000  
          kilograms (43%) higher than the last year in which  
          pseudoephedrine importation was not limited in Mexico.

          The 2010 DOJ methamphetamine threat assessment attributed much  
          of the increase in Mexican production to the use of the P2P  
          (using phenyl-2-propanone) method.  In contrast, the United  
          Nations - through the International Narcotics Control Board  
          (INCB) - has noted that Mexican DTOs have contracted with  
          pseudoephedrine manufacturers in Asia.  (Precursors, INCB 2008  
          report, pp. 7-8.)  Further, the 2009 DOJ threat assessment noted  
          that Mexican DTOs would have little difficulty obtaining  
          pseudoephedrine in Central and South America.  (2009 National  
          Drug Threat Assessment, DEA, pp. 13-16.)  

          The United Nations has reported that Mexican DTOs have set up  
          operations in Africa and the Middle East to obtain  
          methamphetamine precursors.  The report stated: "Africa remains  
          ---------------------------
          <12>  
          http://www.justice.gov/archive/ndic/dmas/Northern_CA_DMA-2011(U). 
          pdf 
          <13>  
          http://www.justice.gov/archive/ndic/dmas/Northern_CA_DMA-2011(U). 
          pdf



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                                                              SB 506 (Hill)
                                                                      PageD

          a major area of diversion of precursors of amphetamine-type  
          stimulants."  The final destination for these chemicals was  
          Mexico.  "Organized criminal groups have made use of fictitious  
          companies and falsified import authorizations ? [in Africa]."   
          (Precursors, INCB 2008 report, pp. 7-8.)

          The 2011 National Drug Threat Assessment noted that Mexican DTOs  
          continue to dominate the methamphetamine trade.  Prices have  
          fallen, availability has grown and purity levels have increased,  
          even with significant production from chemicals other than  
          pseudoephedrine.  "Methamphetamine seizure rates inside the  
          United States and along the U.S. - Mexico border have increased  
          markedly since 2007."  (2011 Nat. Drug Threat Assess., p. 32.)

          Chart - Southwest Border Seizures of Methamphetamine  
          (Kilograms)<14>
          
          
           ------------------------------------------- 
          |2006                 |2,706                |
          |---------------------+---------------------|
          |2007                 |2,128                |
          |---------------------+---------------------|
          |2008                 |2,221                |
          |---------------------+---------------------|
          |2009                 |3,278                |
          |---------------------+---------------------|
          |2010                 |4,486                |
           ------------------------------------------- 

          12.  Oregon Law Requires a Prescription for Pseudoephedrine;  
          Prescription Proponents   Attribute the Drop in Oregon Meth  
          Laboratories to that Law  
          
          Proponents of the Oregon law that requires a prescription for  
          pseudoephedrine attribute the dramatic reduction of  
          methamphetamine laboratory incidents in Oregon to the  
          prescription law.  They argued that the law prevents "smurfing"  
          of pseudoephedrine through multiple over-the-counter purchases  


          ---------------------------
          <14> 2011 National Drug Threat Assessment, Table B3, p. 50. 



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                                                              SB 506 (Hill)
                                                                      PageE

          of the drug in an amount allowed by law.  It has been noted that  
          the number Oregon meth lab incidents fell sharply in the year  
          before the law took effect.  However, incidents have continued  
          to drop in the past few years.  

          Meth Lab Incidents in Oregon 2003-2008<15>
          
                ----------------------------------------------------- 
               |2004                      |448                       |
               |--------------------------+--------------------------|
               |2005                      |192                       |
               |--------------------------+--------------------------|
               |2006                      |63                        |
               |--------------------------+--------------------------|
               |2007                      |20                        |
               |--------------------------+--------------------------|
               |2008                      |21                        |
               |                          |                          |
               |--------------------------+--------------------------|
               |2009                      |13                        |
               |--------------------------+--------------------------|
               |2010                      |13                        |
               |--------------------------+--------------------------|
               |2011                      |10                        |
                ----------------------------------------------------- 


          The 2013 Oregon HIDTA Threat Assessment<16> reports that  
          methamphetamine abuse in Oregon is a very serious problem,  
          despite the reduction in lab seizures.  The HIDTA report,  
          although it acknowledges that data is somewhat inconsistent, is  
          a comprehensive compilation of relevant statistics, factors and  
          issues concerning methamphetamine use in Oregon: 

               Methamphetamine use remains high in Oregon.  ?[T]he  
               number of fatalities related to methamphetamine use in  
               ----------------------
          <15> Source:  Oregon Dept. of Justice
          <16>  
          http://www.lanecounty.org/departments/sheriff/documents/2013%20or 
          egon_hidta_threat_assessment_final_062112.pdf



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                                                              SB 506 (Hill)
                                                                      PageF

               2011 (107) is an historic high, reflecting more than  
               twice the number reported in 2001 (50)  While ?  
               fatalities changed little from 2010 (106) to 2011  
               (107), varying availability of the drug and  
                                                           accessibility to treatment services may underlie?  
               fluctuations in related deaths?.  

               Methamphetamine related arrests rose? 36 percent from  
               2009 to 2012, and 16 percent in the last year (January  
               2011 - 2012).  ? [T]he percentage of males arrested in  
               Portland who admitted they used methamphetamine during  
               the prior month rose nearly twofold between 2009 and  
               2011.  [There was also an] increase of nearly 72  
               percent ? in the proportion of male arrestees in  
               Portland who tested positive for the drug.  

               ? Nearly one-quarter of people entering  
               publicly-funded treatment in the HIDTA region during  
               2011 reported using methamphetamine, higher than for  
               all other major illicit drugs with the exception of  
               marijuana (32%) and heroin (26%)   

               ? Methamphetamine continues to be highly available in  
               Oregon, despite precursor chemical controls put in  
               place in the state and internationally.  ?Oregon [was]  
               the first U.S. state to require a physician's  
               prescription to purchase cold and allergy medications  
               containing pseudoephedrine?.  Since 2004?  
               methamphetamine labs seized in Oregon decreased by 98  
               percent.  Furthermore, the Government of Mexico  
               implemented progressively tighter restrictions on  
               ephedrine and pseudoephedrine since 2005.  ? Despite  
               additional controls, methamphetamine continues to flow  
               into the United States and Oregon. Approximately 93  
               percent of law enforcement officers surveyed reported  
               that crystal methamphetamine was highly available in  
               their area during 2011, a rise from 80 percent in  
               2009.






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               ?While treatment admissions for amphetamine use  
               (includes methamphetamine) increased 25 percent in the  
               HIDTA region from 2003 through 2005, the number of  
               adults [entering treatment] reporting amphetamine as  
               their primary drug of abuse declined 35 percent  
               between 2005 and 2011, falling below heroin admissions  
               for the first time in 2011.  While the drop in  
               admissions may reflect a decline in use, other  
               contributing factors, such as the effect of resource  
               constraints on treatment admission levels, should also  
               be considered.  According to the AMHD, treatment  
               admissions dropped in 2003 as a result of significant  
               cuts in Medicaid funding during 2001 and 2002.   
               Medicaid coverage affects people below the 100 percent  
               federal poverty level and represents a sizeable  
               proportion of AMHD clients.
           
          The Oregon Criminal Justice Commission reported methamphetamine  
          arrests in Oregon from November, 2006 through November, 2012.   
          There were 24 arrests per 100,000 persons in November 2006.   
          Arrests fell steadily to 14 per 100,000 in November, 2009.   
          Arrests then rose relatively steadily, reaching 24 per 100,000  
          again in January 2013.<17>  The 2009 closing report of the  
          Oregon Methamphetamine Task Force stated that Oregon had  
          "eliminated" meth labs and reduced methamphetamine abuse.

          Despite the conclusions of many in law enforcement that the  
          Oregon prescription law virtually eliminated methamphetamine  
          labs, the abstract of a study published in the journal Drug and  
          Alcohol Dependence<18> found that the Oregon law had little  
          effect on the number of meth.  This was because labs in Oregon  
          had "bottomed out" before enactment of the law.  Similar results  
          would be expected in other western states.  In contrast, the  
          Mississippi prescription law produced a 50% drop in labs, which  
          was explained by the high prevalence of labs prior to enactment.  
          ---------------------------
          <17>http://www.oregon.gov/CJC/Pages/SAC.aspx
          <18>  
          http://www.sciencedirect.com/science/article/pii/S037687161200137 
          8



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                                                              SB 506 (Hill)
                                                                      PageH

           Similar results to those in Mississippi would be expected in  
          eastern states. 

          WOULD THE OREGON APPROACH BE MORE EFFECTIVE IN REDUCING THE METH  
          LAB PROBLEM THAN THE APPROACH PROPOSED BY THIS BILL?

          WOULD THE OREGON APPROACH ADVERSELY AFFECT CONSUMERS WHO CANNOT  
          AFFORD A PRESCRIPTION?  IF SO, WOULD ITS INTENDED BENEFITS  
          OUTWEIGH ITS POTENTIAL ADVERSE CONSEQUENCES?

          13.   Provisions in the Bill Stating Legislative Intent to  
            Preempt Local Ordinances and to Require Probable Cause for  
            Specified Investigations  

          The bill sets out legislative intent to preempt local ordinances  
          on monitoring of pseudoephedrine and related matters.  The bill  
          also states legislative intent that a probable cause is  
          necessary to initiate an investigation based on a single denied  
          purchase of pseudoephedrine.  These provisions raise the issue  
          of why the bill does not directly preempt local ordinances and  
          directly require probable cause for a law enforcement  
          investigation based on a single denied purchase.

          SHOULD THE BILL DIRECTLY STATE THAT LOCAL ORDINANCES CONCERNING  
          PSEUDOEPHEDRINE MONITORING ARE PREEMPTED, RATHER THAN STATING  
          LEGISLATIVE INTENT THAT THIS OCCUR?

          SHOULD THE BILL DIRECTLY STATE THAT PROBABLE CAUSE IS REQUIRED  
          FOR A LAW ENFORCEMENT INVESTIGATION BASED ON A SINGLE DENIED  
          PURCHASE, RATHER THAN STATING LEGISLATIVE INTENT IN THIS REGARD?


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