The Executive Commissioner of the Health and Human Services Commission, on behalf of the Department of State Health Services (department), proposes an amendment to §229.661, concerning cottage food production operations.

BACKGROUND AND PURPOSE

The proposed amendment to §229.661 implements House Bill (HB) 970, 83rd Legislature, Regular Session, 2013. HB 970 amends Health and Safety Code, Chapter 437, relating to cottage food production operations. HB 970 added and revised definitions, expanded the types of foods that a cottage food production operation may produce, identified locations where cottage foods may be sold, clarified packaging and labeling requirements, prohibited sales by mail or at wholesale, and required a cottage food production operator to complete basic food safety training.

A cottage food production operation is an individual who operates out of the individual's home; produces at the individual's home certain non-potentially hazardous foods; has an annual gross income of $50,000 or less from the sale of foods; sells the foods produced only directly to consumers at the individual's home, a farmers' market, a farm stand, or a municipal, county, or nonprofit fair, festival, or event; and delivers products to the consumer at the point of sale or another location designated by the consumer.

SECTION-BY-SECTION SUMMARY

Section 229.661(b)(1) revises the definition for baked good by deleting the statement, "A baked good does not include a potentially hazardous food."

Section 229.661(b)(2)(A) revises the definition for cottage food production operation by expanding the foods that may be produced to include candy; coated and uncoated nuts; unroasted nut butters; fruit butters, fruit pie, dehydrated fruit or vegetables, including dried beans; popcorn and popcorn snacks; cereal, including granola; dry mix; vinegar; pickles; mustard; roasted coffee or dry tea; and dried herbs or dried herb mix; and deletes the phrase "for sale at the person's home."

Section 229.661(b)(2)(C) allows cottage food to be sold from an individual's home; a farmers' market; a farm stand; a municipal fair, festival or event; a county fair, festival or event; or a nonprofit fair, festival or event.

Section 229.661(b)(2)(D) allows cottage foods to be delivered to the consumer at the point of sale or another location designated by the consumer.

Section 229.661(b)(5) adds a new definition for "farm stand."

Section 229.661(b)(6) adds a new definition for "farmers' market."

Section 229.661(b)(10) adds a new definition for "pickles."

Section 229.661(b)(11) revises the definition for potentially hazardous food with the definition in HB 970.

Section 229.661(d) adds packaging to the labeling requirements to require all cottage foods to be packaged and labeled in a manner that prevents product contamination, except when food is too large or bulky for conventional packaging.

Section 229.661(e) is amended to prohibit the sale of cottage foods by mail and wholesale.

The new §229.661(f) clarifies that a cottage food production operation is not exempt from meeting the application of Health and Safety Code, §431.045 - Emergency Order, §431.0495 - Recall Orders, and §431.247 - Delegation of Powers or Duties. The department or local health authority may act to prevent an immediate and serious threat to human life or health.

The new §229.661(g) prohibits a cottage food production operation from selling potentially hazardous foods.

The new §229.661(h) requires an individual who operates a cottage food production operation to complete a basic food safety education or training program for food handlers accredited under Health and Safety Code, Chapter 438, Subchapter D.

FISCAL NOTE

John Huss, Section Director, Environmental and Consumer Safety Section, has determined that for each year of the first five years that the section will be in effect, there will be no fiscal implications to state or local governments as a result of enforcing and administering the section as proposed.

SMALL AND MICRO-BUSINESS IMPACT ANALYSIS

Mr. Huss has also determined that there will be no adverse economic impact on small businesses or micro-businesses required to comply with the section as proposed. This is determined by interpretation of the rule that small businesses and micro-businesses will not be required to alter their business practices in order to comply with the section.

ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT

There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no anticipated negative impact on local employment.

PUBLIC BENEFIT

In addition, Mr. Huss has also determined that for each year of the first five years the section is in effect, the public will benefit from adoption of the section. The public benefit anticipated as the result of administering the section is to ensure the public is aware that food produced by a cottage food production operation is not inspected by the department or a local health department. The public will also be aware that an individual who operates a cottage food production operation must have successfully completed a basic food safety education or training program.

REGULATORY ANALYSIS

The department has determined that this proposal is not a "major environmental rule" as defined by Government Code, §2001.0225. "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risk to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment or the public health and safety of a state or a sector of the state.

TAKINGS IMPACT ASSESSMENT

The department has determined that the proposed amendment does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Government Code, §2007.043.

PUBLIC COMMENT

Comments on the proposed amendment may be submitted to Cheryl Wilson, Public Sanitation and Retail Food Safety Group, Policy, Standards and Quality Assurance Unit, Division of Regulatory Services, Environmental and Consumer Safety Section, Department of State Health Services, Mail Code 1987, P.O. Box 149347, Austin, Texas 78714-9347, (512) 834-6770, extension 2053, or by email to cheryl.wilson@dshs.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

PUBLIC HEARING

A public hearing to receive comments on the proposal will be scheduled after publication in the Texas Register and will be held at the Department of State Health Services, Exchange Building, 8407 Wall Street, Austin, Texas 78754. The meeting date will be posted on the Food Establishments Group website at www.dshs.state.tx.us/foodestablishments. Please contact Cheryl Wilson at (512) 834-6770, extension 2053, or cheryl.wilson@dshs.state.tx.us if you have questions.

LEGAL CERTIFICATION

The Department of State Health Services General Counsel, Lisa Hernandez, certifies that the proposed rule has been reviewed by legal counsel and found to be within the state agencies' authority to adopt.

STATUTORY AUTHORITY

The amendment is authorized under the Health and Safety Code, §437.0193, which provides the Executive Commissioner of the Health and Human Services Commission with authority to adopt rules and guidelines relating to labeling requirements for cottage food production operations; Health and Safety Code, §438.042, which requires the department to adopt standards for accreditation of education and training programs for persons employed in the food service industry; 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.

The amendment affects Government Code, Chapter 531; and Health and Safety Code, Chapters 437, 438, and 1001.