The Executive Commissioner of the Health and Human Services Commission (commission), on behalf of the Department of State Health Services (department), adopts new §229.661, concerning the regulation of cottage food production operations, with changes to the proposed text as published in the January 27, 2012, issue of the Texas Register (37 TexReg 294).

BACKGROUND AND PURPOSE

The purpose of the new rule is to implement Senate Bill (SB) 81 of the 82nd Legislature, Regular Session, 2011, which amends Health and Safety Code, Chapter 437, relating to requirements for a cottage food production operation. The Executive Commissioner of the Health and Human Services Commission is directed in SB 81 to adopt a rule requiring a cottage food production operation to label all of the foods described in Health and Safety Code, §437.001(2-b)(A), that the operation sells to consumers.

A cottage food production operation is an individual who operates out of the individual's home; produces a baked good, a canned jam or jelly, or a dried herb or herb mix for sale at the person's home; has an annual gross income of $50,000 or less from the sale of foods; and sells the foods produced only directly to consumers.

SECTION-BY-SECTION SUMMARY

SB 81 states that a cottage food production operation is not a food service establishment for purposes of the Health and Safety Code, Chapter 437. This rule was developed under the authority of the Health Safety Code, §437.0193, which gives the Executive Commissioner rulemaking authority. The new rule provides definitions for cottage food production operations, labeling requirements, complaint database requirements, and sales location requirements.

New definitions in Health and Safety Code, §437.001, are added to incorporate terminology due to the enactment of SB 81 in §229.661(b).

The new definition of "baked good" in §229.661(b)(1) is added to specify the types of foods and products that are allowed to be produced by a cottage food production operation.

The new definition of "cottage food production operation" in §229.661(b)(2) is added to specify where a cottage food production operation may operate, what a cottage food production operation may produce, how much in annual gross income a cottage food production operation may earn, and to whom a cottage food production operation may sell its products.

The new definition of "department" in §229.661(b)(3), is added to specify the Department of State Health Services.

The new definition of "Executive Commissioner" in §229.661(b)(4) is added to specify the Executive Commissioner of the Health and Human Services Commission.

The new definition of "food establishment" in §229.661(b)(5) is added to specify types of food service operations that are considered to be food establishments, and to specify that a "cottage food production operation" is not a food establishment.

The new definition of "herbs" in §229.661(b)(6) is added to specify that the use of herbs is only for culinary purposes.

The new definition of "home" in §229.661(b)(7) is added to specify the meaning of the term home as a primary residence.

The new definition of "potentially hazardous food" in §229.661(b)(8) is added to clarify the types of foods that are not allowed to be produced by a cottage food production operation under Health and Safety Code, §437.0191, which exempts a cottage food production operation from being a food service establishment.

The new §229.661(c) is added to specify the department's responsibilities in reference to complaints as stated in Health and Safety Code, §437.0192.

The new §229.661(d) is added to specify labeling requirements for food items produced by a cottage food production operation, including the statement that the department does not inspect a cottage food production operation, in compliance with Health and Safety Code, §437.0193.

The new §229.661(e) is added to specify that a cottage food production operation is prohibited from selling its products through the Internet, in compliance with Health and Safety Code, §437.0194.

COMMENTS

A public hearing was held on February 2, 2012. The department received oral comments during the public hearing. The department also received written comments during the comment period. The department, on behalf of the commission, has fully considered all written and oral comments and has prepared responses to the comments received during the comment period. The commenters were individuals, associations, and/or groups, including the following: The Texas House of Representatives, The Senate of the State of Texas, Texas Medical Association, Texas Environmental Health Association, Texas State Food Safety and Defense Task Force, City of Plano Health Department, Dallas/Denton/Arlington Cake Clubs, and Texas Bakers Bill Group. The majority of the commenters were not against the rule in its entirety but recommended changes. Many commenters were in favor of the rule and recommended changes.

Comment: Concerning §229.661, commenters stated that the law is confusing and applies severe restrictions to other occasional and infrequent procedures, like non-profit groups.

Response: The commission disagrees with these comments. Section 229.661 does not address non-profit organizations. No change was made to the rule as a result of these comments.

Comment: Concerning §229.661(b)(2)(A), commenters were concerned about safety problems and other hazards by selling from a person's home. One commenter stated that it is an invitation to violent crime.

Response: Health and Safety Code, §437.001(2-b), defines a cottage food production operation as an individual operating out of the individual's home. The rule follows the definition in the statute. No change was made to the rule as a result of these comments.

Comment: Commenters requested that the definition for "food establishment" be deleted, especially the reference to "farmers' market" in §229.661(b)(5)(A)(i), except as it relates to a cottage food production operation.

Response: The commission disagrees with deleting the term "food establishment" because this term defines the reference to "food service establishment" in the Health and Safety Code, §437.0191. No change was made to the definition of "food establishment" in the rule as a result of these comments. The commission agrees with deleting the term "farmers' market" as a type of food establishment. The term "farmers' market" was deleted in §229.661(b)(5)(A)(i) as a result of these comments.

Comment: Concerning §229.661(b)(8), commenters recommended that the department delete the definition for "potentially hazardous food," except as it applies to cottage food production operations.

Response: The commission disagrees with deleting the definition for "potentially hazardous food." Health and Safety Code, §437.001(2-a)-(2-b) describes a cottage food production operation as producing baked goods and defines a baked good as not including a potentially hazardous food item, as defined by the department rule. The definition for potentially hazardous food explains the criteria for determining which foods are potentially hazardous. No change was made to the rule as a result of these comments.

Comment: Concerning §229.661(d)(1)(A), commenters were concerned about safety problems and other hazards with informing people about the physical address of a cottage food production operation. One commenter stated that including the physical address of the bakers is un-American, is unethical, and would place bakers at risk of violence. Another commenter stated that the physical address on the label could cause safety problems and violate the rights of the citizen.

Response: Health and Safety Code, §437.0193, requires the Executive Commissioner to adopt rules requiring labels and requires labels to include the address of the cottage food production operation. The rule follows the requirement in the statute. No change was made to the rule as a result of these comments.

Comment: Concerning §229.661(d)(1)(B), commenters objected to the requirement to include "the common or usual name of the product and an adequately descriptive statement of identity."

Response: The commission amended §229.661(d)(1)(B) to require only "the common or usual name of the product" on the label. The commission has deleted the words "and an adequately descriptive statement of identity" as a result of these comments.

Comment: Concerning §229.661(d)(1)(C), commenters objected to the words, "if made from two or more ingredients, a list of ingredients in descending order of predominance by net weight, including a declaration of artificial color or flavor and chemical preservatives, if contained in the food" of the labeling requirements.

Response: The commission agrees and has deleted the words "made from two or more ingredients, a list of ingredients in descending order of predominance by net weight, including a declaration of artificial color or flavor and chemical preservatives, if contained in the food" from the rule.

Comment: Concerning §229.661(d)(1)(D), commenters objected to including "an accurate declaration of the net quantity of contents including metric measurements."

Response: The commission agrees and has deleted subparagraph (D), which stated "an accurate declaration of the net quantity of contents including metric measurements" from the rule text.

Comment: Concerning §229.661(d)(1)(E), commenters objected to the requirements for allergen labeling in compliance with the Food Allergen Labeling and Consumer Protection Act of 2004. Many comments stated that the U.S. Food and Drug Administration (FDA) exempts small businesses from complying with this requirement.

Response: The commission disagrees with these comments for public health reasons. Consumers should be informed of food containing ingredients that are known to be major food allergens, such as eggs, nuts, soy, peanuts, milk, or wheat. FDA exempts small business with a particular gross annual income from requirements regarding nutritional labeling. FDA does not exempt these businesses from requirements regarding listing ingredients. The commission has amended the proposed language in §229.661(d)(1)(E) as follows: "allergen labeling in compliance with the Food Allergen Labeling and Consumer Protection Act of 2004, Pub. L. No.108-282, Title II, 118. Stat. 905" has been deleted, and the following new language has been moved to §229.661(d)(1)(C) in the adopted rule, "if a food is made with a major food allergen, such as eggs, nuts, soy, peanuts, milk or wheat that ingredient must be listed on the label." Subsequent subparagraph (F) was renumbered to subparagraph (D).

Comment: Concerning §229.661(d)(1(F), some commenters stated the requirement for font size for labeling was unnecessary, complicated, and confusing.

Response: The commission believes that the disclaimer, "Made in home kitchen, food is not inspected by the Department of State Health Services or a local health department" must be clearly visible to consumers. The commission has deleted the words "in at least the equivalent of 11-point font and in a color that provides a clear contrast to the background" from the rule. However, the label must be legible.

Comment: Concerning §229.661(d)(1)(F), a commenter requested that the disclaimer be worded as "This food was made in a home kitchen, and has not been inspected by the Department of State Health Services or a local health department."

Response: The commission agrees and has amended the disclaimer.

Comment: Concerning §229.661(d)(2), commenters objected to the words "clearly" and "and printed with durable, permanent ink" because the requirement was unnecessary, complicated and confusing.

Response: The commission agrees and has deleted the words "clearly" and "and printed with durable, permanent ink" and now states "Labels must be legible."

Comment: Concerning §229.661(d)(2)(A) - (C), commenters objected to the labeling requirements.

Response: The commission agrees and has deleted subparagraph (A), "Ingredient statements shall be at 1/16 of an inch or larger;" subparagraph (B), "Ingredients shall include components of the ingredients;" and subparagraph (C), "Net quantity of contents shall be separated from other text on the label and must be located in the bottom third of the label."

Comment: Commenters objected to the proposed rule and recommended that the department withdraw the rule and publish a new rule that reflects the intent of the legislation.

Response: The commission disagrees with the recommendation to withdraw the proposed rule but agrees to amend the rule to reflect the intent of the legislation. The rule has been amended as described in this preamble to reflect the legislative intent.

LEGAL CERTIFICATION

The Department of State Health Services General Counsel, Lisa Hernandez, certifies that the rule, as adopted, has been reviewed by legal counsel and found to be a valid exercise of the agencies' legal authority.

STATUTORY AUTHORITY

The new rule is authorized under the Health and Safety Code, Chapter 437, which provides the Executive Commissioner of the Health and Human Services Commission with authority to adopt rules and guidelines relating to §437.0193, labeling requirements for cottage food production operations; and Government Code, §531.0055(e), and Health and Safety Code, §1001.075, which authorize the Executive Commissioner of the Health and Human Services Commission to adopt rules and policies necessary for the operation and provision of health and human services by the department and for the administration of Health and Safety Code, Chapter 1001.