Preheat oven to 450 degrees. Lightly grease a baking sheet.
Mix flour, baking powder, ¾ tsp garlic powder, salt and Italian seasoning in a bowl. Grate butter using the large holes of a box grater, stir into the flour mixture. Stir in milk, cheese, pepperoni, onion and green pepper until well blended.
Using a cookie or ice cream scoop, drop 2-inch mounds onto the prepared baking sheet. Bake until golden, 12-15 minutes.
Stir melted butter and remaining ½ tsp garlic powder together in a small bowl and brush onto warm biscuits.