BILL NUMBER: AB 1616 AMENDED BILL TEXT AMENDED IN SENATE JULY 3, 2012 AMENDED IN ASSEMBLY MAY 3, 2012 AMENDED IN ASSEMBLY APRIL 25, 2012 AMENDED IN ASSEMBLY APRIL 10, 2012 INTRODUCED BY Assembly Member Gatto (Coauthors: Assembly Members Fletcher, Huffman, Nestande, V. Manuel Pérez, and Wieckowski) (Coauthor:SenatorDeSaulnierCoauthors: Senators Correa and DeSaulnier ) FEBRUARY 8, 2012 An act to amend Sections 109947, 110460, 111955, 113789, 114021, and 114023 of, to add Section 113758 to, and to add Chapter 11.5 (commencing with Section 114365) to Part 7 of Division 104 of, the Health and Safety Code, relating to food safety. LEGISLATIVE COUNSEL'S DIGEST AB 1616, as amended, Gatto. Food safety: cottage food operations. Existing law, the Sherman Food, Drug, and Cosmetic Law (Sherman Law), requires the State Department of Public Health to regulate the manufacture, sale, labeling, and advertising activities related to food, drugs, devices, and cosmetics in conformity with the Federal Food, Drug, and Cosmetic Act. The Sherman Law makes it unlawful to manufacture, sell, deliver, hold, or offer for sale any food that is misbranded. Food is misbranded if its labeling does not conform to specified federal labeling requirements regarding nutrition, nutrient content or health claims, and food allergens. Violation of this law is a misdemeanor. The existing California Retail Food Code provides for the regulation of health and sanitation standards for retail food facilities, as defined, by the State Department of Public Health. Under existing law, local health agencies are primarily responsible for enforcing the California Retail Food Code. That law exempts private homes from the definition of a food facility, and prohibits food stored or prepared in a private home from being used or offered for sale in a food facility. A violation of these provisions is a misdemeanor. This bill would include a cottage food operation, as defined, that is registered or has a permit within the private home exemption of the California Retail Food Code. The bill would also exclude a cottage food operation from specified food processing establishment and Sherman Law requirements. This bill would require a cottage food operation to meet specified requirements relating to training, sanitation, preparation, labeling, and permissible types of sales. The bill would establish various zoning and permit requirements relating to cottage food operations. By imposing duties on local officials and adding new crimes, this bill would create a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason. With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) Small businesses have played an important role in helping slow economies recover and prosper as an engine of job creation. During the 1990s, small businesses created the majority of new jobs and now account for 65 percent of United States employment. (b) California, and the United States as a whole, are facing growing obesity and obesity-related disease epidemics. (1) Two-thirds of American adults and nearly one-third of children and teens are obese or overweight, placing them at risk for developing chronic diseases such as diabetes, heart disease, and cancer. (2) One in every nine California children, one in three teens, and over half of adults are already overweight or obese. This epidemic affects virtually all Californians. (3) These health conditions are preventable and curable through lifestyle choices that include consumption of healthy fresh foods. (c) For decades, low-income and rural communities have faced limited opportunities to purchase healthy foods. Often, without cars or convenient public transportation options, low-income residents in these areas must rely for much of their shopping on expensive, fatty, processed foods sold at convenience and corner stores. (d) There is a growing movement in California to support community-based food production, sometimes referred to as "cottage food," "artisanal food," "slow food," "locally based food," or "urban agriculture" movements. These movements seek to connect food to local communities, small businesses, and environmental sustainability. (e) Increased opportunities for entrepreneur development through microenterprises can help to supplement household incomes, prevent poverty and hunger, and strengthen local economies. (f) At least 32 other states have passed laws that allow small business entrepreneurs to use their home kitchens to prepare, for sale, foods that are not potentially hazardous. (g) Even some bake sales are currently illegal in California. (h) It is the intent of the Legislature to enact a homemade food act specifically designed to help address these challenges and opportunities. SEC. 2. Section 109947 of the Health and Safety Code is amended to read: 109947. "Food processing facility" means any facility operated for the purposes of manufacturing, packing, or holding processed food. Food processing facility does not include a food facility as defined in Section 113785, a cottage food operation that is registered or has a permit pursuant to Section 114365, or any facility exclusively storing, handling, or processing dried beans. SEC. 3. Section 110460 of the Health and Safety Code is amended to read: 110460. No person shall engage in the manufacture, packing, or holding of any processed food in this state unless the person has a valid registration from the department, except those engaged exclusively in the storing, handling, or processing of dried beans. The registration shall be valid for one calendar year from the date of issue, unless it is revoked. The registration shall not be transferable. This section shall not apply to a cottage food operation that is registered or has a permit pursuant to Section 114365. SEC. 4. Section 111955 of the Health and Safety Code is amended to read: 111955. "Food processing establishment," as used in this chapter, shall mean any room, building, or place or portion thereof, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food except restaurants. "Food processing establishment" shall not include a cottage food operation that is registered or has a permit pursuant to Section 114365. SEC. 5. Section 113758 is added to the Health and Safety Code, to read: 113758. (a) "Cottage food operation" means an enterprise that has not more than fifty thousand dollars ($50,000) in gross annual sales and is operated by a cottage food operator and not more than one cottage food employee, not including a family member or household member of the cottage food operator, within the registered or permitted area of a private home where cottage food products are prepared or packaged for direct, indirect, or direct and indirect sale to consumers pursuant to this part. A cottage food operation includes both of the following: (1) A "Class A" cottage food operation, which is a cottage food operation that may engage only in direct sales of cottage food products. (2) A "Class B" cottage food operation, which is a cottage food operation that may engage in both direct sales and indirect sales of cottage food products. (b) For purposes of this section, the following definitions shall apply: (1) "Cottage food employee" means an individual, paid or volunteer, who is involved in the preparation, packaging, handling, and storage of a cottage food product, or otherwise works for the cottage food operation. An employee does not include an immediate family member or household member of the cottage food operator. (2) "Cottage food operator" means an individual who operates a cottage food operation in his or her private home and is the owner of the cottage food operation. (3) "Cottage food products" means not potentially hazardous foods,as describedincluding foods listed in Section 114365.5, that do not meet the definition of a potentially hazardous food, as defined in Section 113871, and that are prepared for sale in the kitchen of a cottage food operation. (4) "Direct sale" means a transaction between a cottage food operation operator and a consumer, where the consumer purchases the cottage food product directly from the cottage food operation. Direct sales include, but are not limited to, transactions at holiday bazaars or other temporary events, such as bake sales or food swaps, transactions at farm stands, certified farmers' markets, or through community-supported agriculture subscriptions, and transactions occurring in person in the cottage food operation. (5) "Indirect sale" means an interaction between a cottage food operation, a third-party retailer, and a consumer, where the consumer purchases cottage food products made by the cottage food operation from a third-party retailer. Indirect sales include, but are not limited to, sales made to retail shops or to retail food facilities where food may be immediately consumed on the premises. (6) "Private home" means a dwelling, including an apartment or other leased space, where individuals reside. (7) "Registered or permitted area" means the portion of a private home used for the preparation, packaging, storage, or handling of cottage food products and related ingredients or equipment, or both. SEC. 6. Section 113789 of the Health and Safety Code is amended to read: 113789. (a) "Food facility" means an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level, including, but not limited to, the following: (1) An operation where food is consumed on or off the premises, regardless of whether there is a charge for the food. (2) Any place used in conjunction with the operations described in this subdivision, including, but not limited to, storage facilities for food-related utensils, equipment, and materials. (b) "Food facility" includes permanent and nonpermanent food facilities, including, but not limited to, the following: (1) Public and private school cafeterias. (2) Restricted food service facilities. (3) Licensed health care facilities. (4) Commissaries. (5) Mobile food facilities. (6) Mobile support units. (7) Temporary food facilities. (8) Vending machines. (9) Certified farmers' markets, for purposes of permitting and enforcement pursuant to Section 114370. (10) Farm stands, for purposes of permitting and enforcement pursuant to Section 114375. (c) "Food facility" does not include any of the following: (1) A cooperative arrangement wherein no permanent facilities are used for storing or handling food. (2) A private home, including a cottage food operation that is registered or has a permit pursuant to Section 114365. (3) A church, private club, or other nonprofit association that gives or sells food to its members and guests, and not to the general public, at an event that occurs not more than three days in any 90-day period. (4) A for-profit entity that gives or sells food at an event that occurs not more than three days in a 90-day period for the benefit of a nonprofit association, if the for-profit entity receives no monetary benefit, other than that resulting from recognition from participating in an event. (5) Premises set aside for wine tasting, as that term is used in Section 23356.1 of the Business and Professions Code and in the regulations adopted pursuant to that section, that comply with Section 118375, regardless of whether there is a charge for the wine tasting, if no other beverage, except for bottles of wine and prepackaged nonpotentially hazardous beverages, is offered for sale for onsite consumption and no food, except for crackers, is served. (6) Premises operated by a producer, selling or offering for sale only whole produce grown by the producer, or shell eggs, or both, provided the sales are conducted on premises controlled by the producer. (7) A commercial food processing plant as defined in Section 111955. (8) A child day care facility, as defined in Section 1596.750. (9) A community care facility, as defined in Section 1502. (10) A residential care facility for the elderly, as defined in Section 1569.2. (11) A residential care facility for the chronically ill, which has the same meaning as a residential care facility, as defined in Section 1568.01. (12) Premises set aside by a beer manufacturer, as defined in Section 25000.2 of the Business and Professions Code, that comply with Section 118375, for the purposes of beer tasting, regardless of whether there is a charge for the beer tasting, if no other beverage, except for beer and prepackaged nonpotentially hazardous beverages, is offered for sale for onsite consumption, and no food, except for crackers or pretzels, is served. SEC. 7. Section 114021 of the Health and Safety Code is amended to read: 114021. (a) Food shall be obtained from sources that comply with all applicable laws. (b) Food stored or prepared in a private home shall not be used or offered for sale in a food facility, unless that food is prepared by a cottage food operation that is registered or has a permit pursuant to Section 114365. SEC. 8. Section 114023 of the Health and Safety Code is amended to read: 114023. Food in a hermetically sealed container shall be obtained from a food processing plant that is regulated by the food regulatory agency that has jurisdiction over the plant, or from a cottage food operation that is registered or has a permit pursuant to Section 114365. SEC. 9. Chapter 11.5 (commencing with Section 114365) is added to Part 7 of Division 104 of the Health and Safety Code, to read: CHAPTER 11.5. COTTAGE FOOD OPERATIONS 114365. (a) (1) (A) A "Class A" cottage food operation shall not be open for business unless it is registered with the local enforcement agency in a manner that includes a self-certification checklist approved by the local enforcement agency that verifies that the cottage food operation conforms to this chapterand with, including the following requirements: (i) No cottage food preparation, packaging, or handling may occur in the home kitchen concurrent with any other domestic activities such as family meal preparation, dishwashing, clothes washing or ironing, kitchen cleaning, or guest entertainment. (ii) No infants, small children, or pets may be in the home kitchen during the preparation, packaging, or handling of any cottage food products. (iii) Only normal, noncommercial types of kitchen equipment and utensils may be used to produce cottage food products. (iv) All food contact surfaces, equipment, and utensils used for the preparation, packaging, or handling of any cottage food products shall be washed, rinsed, and sanitized before each use. (v) All food preparation and food and equipment storage areas shall be maintained free of rodents and insects. (B) The department shall post the requirements described in subparagraph (A) on its Internet Web site. (C) A local enforcement agency may seek recovery from a "Class A" cottage food operation of an amount that does not exceed the local enforcement agency's reasonable costs of inspecting the "Class A" cottage food operation for compliance of this chapter, if the "Class A" cottage food operation is found to be in violation of this chapter. (2) (A) A "Class B" cottage food operation shall not be open for business unless it obtains a permit from the local enforcement agency in a manner approved by the local enforcement agency to engage in the direct and indirect sale of cottage food products. (B) A "Class B" cottage food operation shall comply with the requirements described in clauses (i) to (v), inclusive, of subparagraph (A) of paragraph (1) of subdivision (a). (C) (i) A "Class B" cottage food operation shall be authorized to sell cottage food products within the county in which the "Class B" cottage food operation is permitted. (ii) Counties may agree to allow cottage food products which are produced by a "Class B" cottage food operation that is permitted in another county to be sold in its own county. (b) (1) A registration or permit shall be issued by the enforcement agency when an investigation has determined that the proposed cottage food operation and its method of operation conform to this chapter. (2) A registration or permit, once issued, is nontransferable. A registration or permit shall be valid only for thepersonsperson , location, type of food sales, and distribution activity specified by that registration or permit, and, unless suspended or revoked for cause, for the time period indicated.(c) A local enforcement agency may seek recovery from acottage food operation of an amount that does not exceed the local enforcement agency's reasonable costs of inspecting a "Class A" or "Class B" cottage food operation for compliance with this chapter.114365.2. A cottage food operation that is registered or has a permit issued pursuant to Section 114365 shall be considered a restricted food service facility for purposes of, and subject to, Sections 113953.5, 114101, 114130, 114149.1, 114256.1, 114259.5, 114268, 114279, 114285, and 114286. A cottage food operation that is registered or has a permit also shall be subject to Sections 113715 and 113980 and to all of the following requirements: (a) A person with a contagious illness shall refrain from work in the registered or permitted area of the cottage food operationwith a contagious illness. (b) A person involved in the preparation or packaging of cottage food products shall keep his or her hands and exposed portions of his or her arms clean and shall wash his or her hands before any food preparation or packaging activity in a cottage food operation. (c) Water used during the preparation of cottage food products shall meet the potable drinking water standards described in Section 113869, except that a cottage food operation shall not be required to have an indirect sewer connection. Water used during the preparation of cottage food products includes both of the following: (1) The washing, sanitizing, and drying of any equipment used in the preparation of a cottage food product. (2) The washing, sanitizing, and drying of hands and arms. (d) A person who prepares or packages cottage food products shall complete a food handler course described in Section 113948. (e) A cottage food operation shall include on its cottage food package a statement of disclosure informing the consumer that the cottage food product was prepared in a private home and the cottage food operation's registration number or permit number as assigned by the local enforcement agency. 114365.5. (a) The department shall adopt and post on its Internet Web site a list of not potentially hazardous foods and their ethnic variations that are approved for sale by a cottage food operation. (b) This list of not potentially hazardous foods shall include, but not be limited to, all of the following: (1) Baked goods without cream, custard, or meat fillings, such as breads, churros, cookies, pastries, and tortillas. (2) Candy, such as brittle and toffee. (3) Chocolate-covered nonperishable foods, such as nuts and dried fruit. (4) Dried fruit. (5) Dried pasta. (6) Dry baking mixes. (7) Fruit pies , fruit empanadas, and fruit tamales .(8) Fruit or vegetable empanadas and tamales.(9)(8) Granola and other dried cereal.(10)(9) Herb blends and dried mole paste.(11)(10) Honey and sweet sorghum syrup.(l2)(11) Jams, jellies, preserves, and fruit butter.(13) Kombucha.(14)(12) Nut mixes and nut butters.(15)(13) Popcorn.(16)(14) Rice cakes and rice noodles that comply with the handling and labeling requirements of Sections 111222 and 111223.(17)(15) Vinegar and mustard.(18)(16) Roasted coffee and dried tea.(19)(17) Waffle cones and pizelles. (c) Additions to the list of foods specified in subdivision (b) are subject to approval by the department. 114365.7. All of the following shall apply to cottage food operations: (a) A city, county, or city and county shall not prohibit cottage food operations in any residential dwellings, but shall do one of the following: (1) Classify these operations as a permitted use of residential property for zoning purposes. (2) Grant a nondiscretionary permit to use a residence as any cottage food operation that complies with local ordinances prescribing reasonable standards, restrictions, and requirements concerning spacing and concentration, traffic control, parking, and noise control relating to those homes. Any noise standards shall be consistent with local noise ordinances implementing the noise element of the general plan. The permit issued pursuant to this paragraph shall be granted by the zoning administrator, or if there is no zoning administrator, by the person or persons designated by the planning agency to grant these permits, upon the certification without a hearing. (3) Require any cottage food operation to apply for a permit to use a residence for its operation. The zoning administrator, or if there is no zoning administrator, the person or persons designated by the planning agency to handle the use permits, shall review and decide the applications. The use permit shall be granted if the cottage food operation complies with local ordinances, if any, prescribing reasonable standards, restrictions, and requirements concerning the following factors: spacing and concentration, traffic control, parking, and noise control relating to those homes. Any noise standards shall be consistent with local noise ordinances implementing the noise element of the general plan. The local government shall process any required permit as economically as possible. Fees charged for review shall not exceed the costs of the review and permit process. An applicant may request a verification of fees, and the city, county, or city and county shall provide the applicant with a written breakdown within 45 days of the request. The application form for cottage food operation permits shall include a statement of the applicant's right to request the written fee verification. (b) In connection with any action taken pursuant to paragraph (2) or (3) of subdivision (a), a city, county, or city and county shall do all of the following: (1) Upon the request of an applicant, provide a list of the permits and fees that are required by the city, county, or city and county, including information about other permits that may be required by other departments in the city, county, or city and county, or by other public agencies. The city, county, or city and county shall, upon request of any applicant, also provide information about the anticipated length of time for reviewing and processing the permit application. (2) Upon the request of an applicant, provide information on the breakdown of any individual fees charged in connection with the issuance of the permit. (3) If a deposit is required to cover the cost of the permit, provide information to the applicant about the estimated final cost to the applicant of the permit, and procedures for receiving a refund from the portion of the deposit not used. (c) Use of a residence for the purposes of a cottage food operation shall not constitute a change of occupancy for purposes of the State Housing Law (Part 1.5 (commencing with Section 17910) of Division 13), or for purposes of local building and fire codes. (d) Cottage food operations shall be considered residences for the purposes of the State Uniform Building Standards Code and local building and fire codes. SEC. 10. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution. However, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.