BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1616| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1616 Author: Gatto (D), et al. Amended: 8/24/12 in Senate Vote: 21 SENATE HEALTH COMMITTEE : 8-0, 6/27/12 AYES: Hernandez, Harman, Alquist, Anderson, Blakeslee, DeSaulnier, Rubio, Wolk NO VOTE RECORDED: De León SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/16/12 AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price, Steinberg ASSEMBLY FLOOR : 56-19, 5/29/12 - See last page for vote SUBJECT : Food safety: cottage food operations SOURCE : Author DIGEST : This bill regulates the production in home kitchens of food for sale, referred to as cottage food operations. Senate Floor Amendments of 8/24/12 include provisions deemed necessary by the Administration to ensure proper implementation of the bill. (See analysis section for details of the 8/24/12 amendment) ANALYSIS : The Sherman Law makes it unlawful to CONTINUED AB 1616 Page 2 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 (CRFC) provides for the regulation of health and sanitation standards for retail food facilities, as defined, by the Department of Public Health (DPH). Under existing law, local health agencies are primarily responsible for enforcing the CRFC. 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. That law also requires food that is offered for human consumption to be honestly presented, as specified. A violation of these provisions is a misdemeanor. This bill includes a cottage food operation, as defined, that is registered or has a permit within the private home exemption of the CRFC. This bill also excludes a cottage food operation from specified food processing establishment and Sherman Law requirements. This bill requires a cottage food operation to meet specified requirements relating to training, sanitation, preparation, labeling, and permissible types of sales and would subject a cottage food operation to inspections under specified circumstances. This bill requires a food facility that serves a cottage food product without packaging or labeling to identify it as homemade. This bill establishes various zoning and permit requirements relating to cottage food operations. Double-jointed with AB 2297 (Hayashi). Specifically the August 24, 2012 amendments do the following: 1. Create a Food Safety Fund in the state Treasury for monies collected by the DPH pursuant to the provisions of this bill. 2. Phase in gross annual sales limitations on cottage food operators, beginning with a $35,000 sales maximum in 2013, a $40,000 maximum in 2014, and a $50,000 maximum CONTINUED AB 1616 Page 3 beginning in 2015 and in each subsequent year. 3. Clarify allowable locations for the direct and indirect sales of cottage food products. 4. Clarify that a third party retailer involved in indirect sales must hold a valid permit from the enforcement agency. 5. Clarify the definition of "registered or permitted area" to include the kitchen of the private home and attached rooms within the home that are used exclusively for storage. 6. Amend the definition of "Permit" in the CRFC to include a cottage food operation. Specify that "registration" is synonymous with "permit." 7. Require kitchen equipment to be clean and maintained in a good state of repair. 8. Remove the requirement that a home inspection, conducted by a representative of a local enforcement agency based on a consumer complaint, be conducted during regular business hours. Remove the ability of the local enforcement agency representative to pursue a search warrant through an appropriate court upon denial of access to the registered area of the home to be inspected. 9. Remove the requirement that cottage food operations be subject to specified sections of the CRFC pertaining to: A. posting signage regarding employee handwashing, B. warewashing machine specifications, C. design and construction of utensils and equipment, D. mechanical exhaust ventilation, E. lockers for employees, F flooring material specifications, G. specifications for janitorial sinks, or H. construction, alteration, or remodeling. 10.Require that employees of cottage food operations be subject to handwashing requirements and personal CONTINUED AB 1616 Page 4 cleanliness requirements, as described, and require employees to wear gloves when contacting food and food-contact surfaces, and other requirements, as described. 11.Require a person who prepares or packages cottage food products to complete a food handler course instructed by DPH within three months of becoming registered. Specify that the course not exceed four hours in length. Require CDPH to work with local enforcement agencies to ensure proper notification to cottage food operators. 12.Specify that cottage food products are prohibited from being potentially hazardous food that requires time or temperature control to limit pathogenic micro-organism growth or toxin formation. 13.Make changes to the list of nonpotentially hazardous foods DPH must adopt by adding biscuits, trail mixes, and deleting rice cakes and rice noodles. Authorize the State Public Health Officer to add or delete food products to or from the list, as specified. Require DPH to give notice of changes to this list on its website and excludes the approved food products list from administrative rulemaking requirements. 14.Require the State Public Health Officer to provide technical assistance and develop, maintain, and deliver commodity-specific training related t the safe processing and packaging of cottage food products to local enforcement agencies. Authorize local enforcement agencies to collect a surcharge fee not to exceed reasonable costs DPH incurs through the administration of this training, to be deposited into the Food Safety Fund. 15.Allow an authorized enforcement officer to enter, inspect, issue citations to, and secure any samples, photographs or other evidence from a cottage food operation during hours of operation and other reasonable times. Allow local enforcement officers to suspend or revoke a cottage food operators permit for specified violations, or immediately close an operation if an imminent health hazard. CONTINUED AB 1616 Page 5 16.Recast provisions prohibiting a city or county from prohibiting cottage food operations from the Health and Safety Code to the Government Code. 17.Make various technical and conforming changes. Background Cottage foods . Cottage foods are classified as certain non-potentially hazardous foods, such as bread, granola, popcorn, and nuts, that do not require time and temperature control for safety. Cottage food operations are, in many cases, unlicensed or unregistered, and the limited oversight of these operations may present a gap in our current food safety and security system in this country, according to the Association of Food and Drug Officials (AFDO). According to the National Conference of State Legislatures, 31 states have laws to regulate cottage and home-based food production and it continues to be a subject of legislative interest. Most states do not conduct regular, routine inspections for CFOs in the same manner as they would for commercial kitchens. Some states also require the home kitchen to be inspected only if the LEHD has particular reason to suspect any unsafe food is associated with the kitchen. According to information from the Sustainable Economies Law Center (SELC), a supporter of this bill, most cottage food laws only allow for the direct sale to consumers (such as at farmer's markets) but some also allow for the sale of homemade foods to grocery stores and restaurants. AFDO guidance . AFDO, an international, non-profit, food industry-focused organization aimed at streamlining and simplifying federal, state, and local regulations, issued regulatory guidance in April 2012 to discuss best practices for the oversight of cottage foods. According to AFDO, the regulatory guidance document is a consensus effort to set standards for CFOs that preserve public health while still allowing for economic opportunity. Highlights of this guidance include the following: 1. Definitions . AFDO provides definitions for "cottage food products" and "potentially hazardous food," which CONTINUED AB 1616 Page 6 are fairly consistent with the definitions in this bill. A key distinction is AFDO's definition of "cottage food operation," which is defined in part as a person who produces cottage food products only for sale directly to the consumer. AFDO suggests prohibiting sales by internet, mail or phone order, consignment or wholesale. This bill goes beyond this definition by including indirect sales of cottage food products to third-party retailers. 2. Permitting and inspections . AFDO suggests that all cottage food operators be permitted annually by the regulatory authority on forms developed by that authority. AFDO suggests the regulatory authority be required to examine the premises of the CFO to determine it to be in compliance with requirements. AFDO guidance permits the regulatory authority to inspect at any time, and whenever there is reason to believe the cottage food operation is in violation of these requirements or is operating in an unsanitary manner. This bill does not describe inspection requirements. Class A CFOs are merely required to self-certify that they meet applicable requirements. Class B CFOs are required to be permitted, but the bill is silent on how inspections would occur for this class. 3. Non-potentially hazardous food items . AFDO provides a list of food items they consider to be non-potentially hazardous, and therefore acceptable for CFOs, as well as a list of food items AFDO considers unacceptable for CFOs. This bill issues a list of items that is largely similar to the AFDO list, but with a few notable exceptions: (a) this bill allows chocolate covered non-perishable foods, whereas AFDO prohibits tempered or molded chocolate or chocolate-type products; (b) this bill allows mustards, which AFDO prohibits; (c) this bill adds baked goods such as breads, whereas AFDO allows most breads except for focaccia-style breads with vegetables and/or cheeses; and (d) this bill lists additional items that AFDO does not address, like honey and sweet sorghum syrup, dried mole paste, fruit butters and nut butters. CRFC . CRFC was established to create uniformity between CONTINUED AB 1616 Page 7 California's retail food safety laws and those of other states, as well as to enhance food safety laws based on the best available science. CRFC is modeled after the U.S. Food and Drug Administration's (FDA) Food Code, a model that assists food control jurisdictions at all levels of government by providing them with a scientifically sound, technical and legal basis for regulating the retail and food service segment of the industry (restaurants and grocery stores and institutions such as nursing homes). CRFC, among other things, establishes uniform food safety and sanitation requirements for local jurisdictions to follow and establishes the authority of local environmental health jurisdictions to adopt a food safety inspection program with state oversight. Local jurisdictions are granted the authority to inspect food facilities, immediately suspend a permit, conduct hearings, take samples or other evidence, impound food or equipment, and issue reports as necessary to protect the public's health. The federal model Food Code, published by the FDA along with the U.S. Public Health Service, states that "food prepared in a private home may not be used or offered for human consumption in a food establishment." FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: One-time costs of $150,000 to $300,000 (General Fund) for DPH 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. SUPPORT : (Verified 8/27/12) American Federation of State, County and Municipal Employees, AFL-CIO Bay Localize Berkeley Food Policy Council CONTINUED AB 1616 Page 8 California Food and Justice Coalition California State Grange Central Coast Alliance United for a Sustainable Economy Community Alliance with Family Farmers East Bay Urban Agriculture Alliance forageSF La Cocina Los Angeles Bread Bakers Oakland Food Policy Council Proyecto Jardin San Diego Hunger Coalition San Francisco Urban Agriculture Alliance Sustainable Economies Law Center Valley Ford Young Farmers Association Whole Foods Northern California OPPOSITION : (Verified 8/27/12) Alameda County Board of Supervisors California Association of Environmental Health Administrators California Retail Food Safety Coalition Health Officers Association of California Jackie's Jams ARGUMENTS IN SUPPORT : The Community Alliance with Family Farmers (CAFF) supports this bill because they claim the availability of commercial kitchens across the state is uneven, and particularly in rural areas where CAFF's members live. CAFF states that with the recent rise of the local food movement throughout the state, many people in urban areas also want to be able to process and sell food from their homes. The East Bay Urban Agriculture Alliance (EBUAA) sees this bill as providing groundbreaking opportunities to facilitate a local food economy and access to healthy food in the community and statewide. EBUAA claims the costs associated with accessing commercial kitchens are currently too high for people, which creates unnecessary barriers to micro-enterprises seeking to process and sell the least hazardous types of food on a neighborhood or regional basis. The Los Angeles Bread Bakers supports this bill because it will decriminalize artisanal food production. They believe CONTINUED AB 1616 Page 9 hunger, food insecurity and nutrition-related chronic disease can be eliminated by removing barriers to small-scale food production, which will promote a healthy, sustainable community-based food system that benefits food producers and consumers alike. Whole Foods Market supports this bill and claims they make special efforts to find and sell unique products that are grown and processed locally. Whole Foods supports legislative efforts to stimulate local food production to meet the demand for artisan, specialty and locally produced foods that cottage food operators, empowered by this bill, are sure to provide the state. ARGUMENTS IN OPPOSITION : The California Association of Environmental Health Administrators (CAEHA) is opposed unless two provisions are amended. CAEHA asserts that this bill is a major departure from the CRFC in two ways: it would allow food prepared in private homes to be sold to the public, and it would pre-approve a set of "low-risk" foods to be prepared and sold in this manner. CAEHA states that the limitations they have been considering for these indirect or wholesale sales have not allayed the concerns of local regulators. The inspection of private homes by local or state regulators is fraught with enforcement challenges and the geographic or sales volume limitations considered for these indirect sales are likely to be impractical to establish and impose. CAEHA says that while it may be possible to develop criteria to limit these indirect sales, these have not yet been identified. Local regulators understand that legitimizing the emerging cottage food industry in California may have some economic and limited nutritional benefits. CAEHA asserts that they would remove their opposition if this bill was amended to allow only direct sales to consumers. CAEHA also expresses concern over the list of pre-approved low-risk not potentially hazardous foods in this bill. CAEHA instead suggests using the list proposed by the National Association of Food and Drug Officials, which has been reviewed and approved by food safety experts across the nation. CAEHA also suggests amending the bill to give DPH authority to add or delete foods on the list as needed in order to keep the list current and valid. CONTINUED AB 1616 Page 10 ASSEMBLY FLOOR : 56-19, 5/29/12 AYES: Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Galgiani, Gatto, Gordon, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Lara, Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning, Nestande, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wieckowski, Williams, Yamada, John A. Pérez NOES: Achadjian, Conway, Donnelly, Beth Gaines, Garrick, Grove, Hagman, Halderman, Harkey, Jones, Knight, Logue, Mansoor, Miller, Morrell, Nielsen, Norby, Silva, Wagner NO VOTE RECORDED: Cedillo, Cook, Fletcher, Gorell, Hall CTW:mk 8/27/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED