BILL ANALYSIS                                                                                                                                                                                                    �




                   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 6, 2012                           
          Consultant: Brendan McCarthy    
          
          This bill meets the criteria for referral to the Suspense File.
          
          
          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.