The Executive Commissioner of the Texas Health and Human Services Commission (HHSC), on behalf of the Department of State Health Services (DSHS), proposes an amendment to §229.661, concerning Cottage Food Production Operations.

BACKGROUND AND PURPOSE

The proposed amendment to §229.661 complies with Senate Bill (S.B.) 572, 86th Legislature, Regular Session, 2019, which amended Texas Health and Safety Code, Chapter 437, relating to Cottage Food Production Operations. The legislation expands and clarifies the list of foods allowable as cottage food products to include frozen raw and uncut fruit or vegetables, pickled fruit or vegetables, fermented vegetable products, plant-based acidified canned foods, and any other food that is not a time and temperature control for safety food. The legislation sets forth specific requirements for cottage foods production of fermented and acidified canned foods and requirements for DSHS to implement procedures for recipe source approval and to maintain lists of laboratories and process authorities on DSHS' website. The legislation expands the methods by which cottage food products may be marketed and sold through the internet and by mail-order.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §229.661(b) updates and adds definitions as a result of S.B. 572. New definitions include "acidified canned goods," "fermented vegetable product," and "process authority." The definition for "cottage food production operation" expands the list of foods that can be produced by adding pickled fruit or vegetables, plant-based acidified canned goods, fermented vegetable products, frozen raw and uncut fruit or vegetables, and any other food that is not a time and temperature control for safety food. The amendment replaces "potentially hazardous food" with "time and temperature control for safety food (TCS food)" throughout the section, updates the definition for "farmers' market" and removes language limiting the places where the exchange between the cottage food production operation (operator) and consumer occurs. The subsection is renumbered to account for the addition of definitions.

The proposed amendment to §229.661(d), concerning packaging and labeling requirements for cottage food production operations, adds fish or shellfish to be included on the label as a disclosure of major food allergens, adds language regarding the sale of frozen raw and uncut fruit or vegetables and advertising media for cottage food products.

The proposed amendment to §229.661(e), concerning certain prohibited or restricted sales by cottage food production operations, removes the previous restriction on the sale of cottage food products through the internet or by mail-order and adds the requirements for selling cottage food products by these methods.

The proposed amendment §229.661(f), concerning requirements for the sale of certain cottage food products, outlines the requirements for the production, labeling, recordkeeping, and sale of pickled fruit or vegetables, fermented vegetable products, and plant-based acidified canned foods in a cottage food production operation. The proposed amendment adds procedures for recipe source approval and requires DSHS to maintain a list of web-based resources for operators who want to produce fermented and acidified canned foods on DSHS' website.

The proposed amendment to §229.661(g), concerning requirements for the sale of frozen fruit or vegetables, describes the storage, delivery, and labeling of the frozen fruit or vegetables.

The proposed amendments to §299.661(f) through (h) are renumbered as subsections (h) though (j) due to the new subsections.

FISCAL NOTE

Donna Sheppard, Chief Financial Officer, has determined that for each year of the first five years that the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

DSHS has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of DSHS employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to DSHS;

(5) the proposed rule will not create a new rule;

(6) the proposed rule will expand the existing rule;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will positively affect the local economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Donna Sheppard has also determined that it cannot be determined if there is an adverse economic effect on small businesses, micro-businesses, or rural communities, because there is no license or permit required for cottage food production operations. DSHS does not have a mechanism to count how many cottage food production operations are active in the state. The amended rule represents a significant expansion of foods that may be produced by cottage food production operations to include both fermented and acidified canned foods; and the means by which those foods may be marketed to include internet and mail-order sales. The rule expands economic opportunity for businesses in the state of Texas.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code, §2001.0045 does not apply to this rule because the rule is necessary to protect the health, safety, and welfare of the residents of Texas; and the rule is necessary to implement legislation that does not specially state that §2001.0045 applies to the rule.

PUBLIC BENEFIT AND COSTS

Stephen Pahl, Associate Commissioner, Consumer Protection Division, has determined that for each year of the first five years the rule is in effect, the public benefit will be the increased opportunity for business owners who are cottage food production operations. Businesses will benefit due to the expanded list of foods that can be produced to include frozen raw and uncut fruit or vegetables, pickled fruit or vegetables, and fermented and acidified canned foods, and the permission for mail-order and internet sales. DSHS will maintain a list of web-based resources on DSHS' website for operators who want to produce fermented and acidified canned foods.

Donna Shepperd has also determined that for the first five years the rule is in effect, persons who are required to comply with the proposed rule may incur economic costs because of requirements in the rule for operators of fermented and acidified foods. The amended rule will require operators to follow one of the following three options: to utilize approved recipe sources for processing their food products; to have the products evaluated by an approved process authority; or to have the products tested at a certified commercial laboratory. If an operator produces fermented or acidified foods chooses not to use pre-approved recipes, there will be "up-front" costs in evaluation of recipes by process authorities or determination of end-product equilibrium pH by certified laboratories. Costs will depend on the number of recipes tested or the amount of experimentation required to achieve a recipe that produces a safe product. Evaluation of an acidified product by a process authority can cost $75.00 per product. Testing for equilibrium pH can cost $100.00 per product. These alternate steps (product evaluation or product testing) are considered necessary to ensure the safety of consumers due to the risk of botulism toxin forming in the anaerobic environment of shelf-stable canned foods. It is assumed that these production costs will be recouped in the retail cost paid by consumers. The amended rule will require DSHS to maintain current lists of approved sources of recipes, qualified process authorities, and certified laboratories on DSHS' website.

TAKINGS IMPACT ASSESSMENT

DSHS has determined that the proposal 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 Texas Government Code, §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Joe Williams, R.S. at (512) 231-5653 in DSHS Public Sanitation and Retail Food Safety Unit.

Written comments on the proposal may be submitted to Joe Williams, R.S., Manager, DSHS Public Sanitation and Retail Food Safety Unit, at Public Sanitation and Retail Food Safety Unit MC 1987, Texas Department of State Health Services, P.O. Box 149347, Austin, Texas 78714-9347, or by email to foodestablishments@dshs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered at 8407 Wall Street, Austin, Texas 78754 before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 19R077" in the subject line.

STATUTORY AUTHORITY

The amendment is authorized by Texas Health and Safety Code, §437.0056, which provides that the Executive Commissioner of HHSC may adopt rules for the efficient enforcement of Texas Health and Safety Code, Chapter 437; and Texas Health and Safety Code, §1001.075, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of health and human services by DSHS and for the administration of Texas Health and Safety Code, Chapter 1001.

The amendment implements Texas Government Code, §531.0055 and Texas Health and Safety Code, Chapters 437 and 1001.