BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 1616 (Gatto) - Food safety: cottage food operations. Amended: July 3, 2012 Policy Vote: Health 8-0 Urgency: No Mandate: Yes Hearing Date: August 16, 2012 Consultant: Brendan McCarthy SUSPENSE FILE. AS PROPOSED TO BE AMENDED. Bill Summary: AB 1616 would regulate the production in home kitchens of food for sale, referred to as cottage food operations. Fiscal Impact: One-time costs of $150,000 to $300,000 (General Fund) for the Department of Public Health to adopt regulations regarding foods that may be produced by cottage food operations. Unknown costs to local environmental health departments to regulate cottage food operations (local funds). Because local environmental health departments have the authority to levy fees, these costs are not reimbursable by the state. Background: Under current law, retail food facilities are regulated under the California Retail Food Code. Foods prepared in a home kitchen are prohibited from sale in a food facility. Proposed Law: AB 1616 would regulate the production in home kitchens of food for sale, referred to as cottage food operations. The bill creates regulatory standards and a process for regulation of cottage food facilities. In general, enforcement of regulatory standards would be performed by local environmental health departments. Specific provisions of the bill include: A definition of cottage food operation to be an enterprise with less than $50,000 in gross annual revenues that is operated within a private home. Defines "Class A" cottage food operations as those that only sell directly to consumers. AB 1616 (Gatto) Page 1 Defines "Class B" cottage food operations as those that sell directly to consumers or indirectly, through other retailers. Requires Class A cottage food operations to be registered with the local environmental health department, based on a self-certification process and specified health and safety standards. Requires Class B cottage food operations to be licensed by local environmental health departments. Requires the Department of Public Health to adopt a list of "not potentially hazardous foods", which would include a specific list of foods. Excludes registered or licensed cottage food operations from existing prohibitions on selling food prepared in home kitchens and from existing regulatory requirements on commercial kitchens. Prohibits a city and/or county from prohibiting cottage food operations in residential dwellings. Proposed Author Amendments: The proposed author's amendments prohibit routine inspections of Class A cottage food operations, but allow for inspections in response to a consumer complaint. The amendments also specify that Class B cottage food operations shall only be inspected once per year, unless in response to a consumer complaint. The amendments specify labeling requirements and make other technical changes.