The Florida Senate BILL ANALYSIS AND FISCAL IMPACT STATEMENT (This document is based on the provisions contained in the legislation as of the latest date listed below.) Prepared By: The Professional Staff of the Committee on Regulated Industries BILL: CS/SB 1158 INTRODUCER: Regulated Industries Committee and Senator Jones SUBJECT: Home Kitchen Operations DATE: February 9, 2022 ANALYST STAFF DIRECTOR REFERENCE ACTION 1. Oxamendi Imhof RI Fav/CS 2. AP 3. RC Please see Section IX. for Additional Information: COMMITTEE SUBSTITUTE - Substantial Changes I. Summary: CS/SB 1158 allows “home kitchen operations” to sell and offer for sale home kitchen food products. Under the bill, a home kitchen operation means a natural person or an entity that stores, handles, prepares, and packages food products at the residence of the natural person or at the residence of a natural person who has an ownership interest in the entity and sells such products in accordance with the requirements in the bill. The bill defines a “home kitchen product” to mean food that is: Stored, handled, prepared, and packaged by a home kitchen operation; Not raw milk, a product of raw milk, raw oysters, or raw shellfish. A home kitchen operation is not required to have a food establishment permit issued by the Department of Agriculture and Consumer Services (department) if it complies with the home kitchen operation requirements in the bill and has annual gross sales of home kitchen food products that do not exceed $250,000. In addition, a home kitchen operation may: Only sell or provide home kitchen food products directly to consumers and may not sell or provide home kitchen food products to any food reseller; and Sell home kitchen food products to consumers in person or remotely by telephone, e-mail, or website, including through a third-party website or mobile application. REVISED: BILL: CS/SB 1158 Page 2 The bill: Limits food preparation and service to 10 individual meals per day; Requires food to be prepared, cooked, and served on the same calendar day; Authorizes sales via the Internet or in person; Authorizes deliveries to be made directly to the consumer, to a specific event venue, or to the consumer by the home kitchen operation or a third party delivery service; Prohibits sales and deliveries of home kitchen food products at wholesale or retail; Requires home kitchen operation owners and employees to successfully complete a food safety education certificate training program; Specifies labeling requirements; Requires home kitchen operations to give the department access to records within 24 hours of a request; Allows the department to inspect home kitchen operations without a complaint; Requires the department to investigate complaints and makes a refusal to permit entry and inspection grounds for disciplinary action; Authorizes immediate closures by the department if it determines that the continued operation of a food establishment presents an immediate danger to the public health, safety, and welfare; Preempts the regulation of home kitchen operations to the state; and Authorizes the department to impose an administrative fine not to exceed $5,000 for a violation. The bill takes effect July 1, 2022. II. Present Situation: Food Safety Laws The Division of Food Safety within the Department of Agriculture and Consumer Services (department) ensures that safe, wholesome, and properly labeled food is available to the public through the permitting and inspection of “food establishments,” 1 and inspection of food products that are sold or produced in Florida. 2 The department works in cooperation with the United States Department of Agriculture and the Food and Drug Administration to help ensure compliance with both state and federal regulations. 3 1 Section 500.03(1)(p), F.S., defines the term “food establishment” to mean: …a factory, food outlet, or other facility manufacturing, processing, packing, holding, or preparing food or selling food at wholesale or retail. The term does not include a business or activity that is regulated under s. 413.051, [F.S.,] s. 500.80, [F.S.,] chapter 509, [F.S.], or chapter 601, [F.S.] The term includes tomato packinghouses and repackers but does not include any other establishments that pack fruits and vegetables in their raw or natural states, including those fruits or vegetables that are washed, colored, or otherwise treated in their unpeeled, natural form before they are marketed. 2 Florida Department of Agriculture and Consumer Services, Division of Food Safety, available at: http://www.freshfromflorida.com/Divisions-Offices/Food-Safety (last visited Feb. 3, 2022). See also ch. 500, F.S., the Florida Food Safety Act. 3 Florida Department of Agriculture and Consumer Services, Food Establishments, available at: https://www.fdacs.gov/Business-Services/Food/Food-Establishments (last visited Feb. 3, 2022). BILL: CS/SB 1158 Page 3 A food establishment permit from the department is required to open a food establishment. The department issues three different types of food establishment permits, including retail, wholesale/manufactured, and medical marijuana treatment center edibles. 4 A food establishment permit holder must allow access by the department or its duly authorized agent during all reasonable hours to any food establishment, any food records, or any vehicle being used to transport or hold food in commerce for the purpose of inspecting such establishment, records, or vehicle to determine compliance with ch. 500, F.S., and any rule adopted under that chapter 5 . Cottage Food Operations A cottage food operation is a natural person or entity that produces or packages food that is not potentially hazardous in the residence of the natural person or at the residence of a natural person who has an ownership interest in the entity and sells such products in accordance with cottage food operation requirements of s. 500.80, F.S. 6 Cottage food operations are not required to have a food establishment permit under s. 500.12, F.S., dealing with the permit requirements for operators of food establishments and retail food stores. 7 Cottage food operations must comply with the cottage food law in s. 500.80, F.S., and limit annual gross sales of cottage food products to less than $250,000 based on all sales of cottage food products at any location, regardless of the types of products sold or the number of persons involved in the operation. A cottage food operation must provide the department with written documentation to verify its annual gross sales upon the department’s request to do so. 8 Cottage food operations may sell, offer for sale, and accept payments for cottage food products over the Internet or by mail order. Cottage food products may be delivered in person directly to the consumer, to a specific event venue, or by United States Postal Service or commercial mail delivery service. A cottage food operation may not sell, offer for sale, or deliver cottage food products at wholesale. 9 A cottage food operation may only sell cottage food products that are stored on the premises of the operation. 10 Cottage foods operations may only sell cottage food products which are prepackaged with a label affixed that contains: 11 The name and address of the cottage food operation; The name of the cottage food product; The ingredients of the cottage food product, in descending order of predominance by weight; The net weight or net volume of the cottage food product; 4 See Florida Department of Agriculture and Consumer Services, Food Establishments, available at: https://www.fdacs.gov/Business-Services/Food/Food-Establishments (last visited Feb. 3, 2022). 5 Section 500.147, F.S. 6 Sections 500.03(j), F.S. 7 See ss. 500.03(p) and (bb), F.S., defining the terms “food establishment” and “retail food store,” respectively. 8 Section 500.80(1), F.S. 9 Section 500.80(2), F.S. 10 Section 500.80(4), F.S. 11 Section 500.80(3), F.S. BILL: CS/SB 1158 Page 4 Allergen information as specified by federal labeling requirements; and If any nutritional claim is made, appropriate nutritional information as specified by federal labeling requirements. In addition, the label must have the following statement printed in at least 10-point type in a color that provides a clear contrast to the background of the label: “Made in a cottage food operation that is not subject to Florida's food safety regulations.” 12 Section 500.80, F.S., does not exempt cottage food operations from any other state or federal tax law, rule, regulation, or certificate. 13 Cottage Food Products A cottage food product is any food that is not a potentially hazardous food defined by department rule which is sold by a cottage food operation in accordance with s. 500.80, F.S. 14 The department has not adopted a rule defining the term “potentially hazardous food,” but it has adopted the U.S. Food and Drug Administration’s 2017 Food Code (Food Code). 15 The Food Code defines the term “time/temperature controlled for safety food,” formerly referred to as “potentially hazardous food,” as a “food that requires time/temperature control for safety (TCS) to limit pathogenic microorganism growth or toxin formation.” The term includes: Animal food that is raw or heat-treated; Plant food that is heat-treated or consists of raw seed sprouts, cut melons, cut leafy greens, cut tomatoes or mixtures of cut tomatoes that are not modified in a way so that they are unable to support pathogenic microorganism growth or toxin formation; and Garlic-in-oil mixtures that are not modified so that they are unable to support pathogenic micro-organism growth or toxin formation. 16 The department has identified the following foods as not potentially hazardous and therefore permitted to be produced by a cottage food operation: Loaf breads, rolls, biscuits; Cakes, pastries, and cookies; Honey; Jams, jellies, and preserves made from high acid-fruits only; Fruit pies and dried fruits; Dry herbs, seasonings, and mixtures; Homemade pasta; Cereals, trail mixes, and granola; Coated or uncoated nuts; 12 Id. 13 Section 500.80(5), F.S. 14 Section 500.03(k), F.S. 15 Fla. Admin. Code R. 5K-4.002(4)(a). 16 U.S. Food and Drug Administration, 2017 Food Code, subpart 1-201.10, defining “Time/Temperature Control for Safety Food (formerly “potentially hazardous food” (PHF))” Certain foods may be designated as “product assessment required” due to the interaction of their water content and pH values after heat treatment or packaging to control vegetative cells and spores. Such foods are considered TCS food until further study proves otherwise. BILL: CS/SB 1158 Page 5 Vinegar and flavored vinegars; Popcorn and popcorn balls; and Nut butters, including almond, peanut, cashew, etc. 17 Cottage Food Operations Investigations and Complaints The department may only investigate a cottage food operation if it receives a complaint that a cottage food operation has violated an applicable provision of state food products law 18 or rule adopted under such law. 19 Upon a complaint, an officer or employee of the department may enter and inspect the cottage food operation’s premises to determine compliance with applicable state law and departmental rules. A cottage food operation’s refusal to permit an authorized officer or employee to enter and inspect the premises is grounds for administrative disciplinary action under s. 500.121, F.S. 20 The cottage food operation provisions in s. 500.80, F.S., do not apply to any person operating under a food permit issued pursuant to s. 500.12, F.S. 21 Preemption The regulation of cottage food operations is preempted to the state. 22 A local law, ordinance, or regulation may not prohibit a cottage food operation or regulate the preparation, processing, storage, or sale of cottage food products by a cottage food operation; however, a cottage food operation must comply with the conditions for the operation of a home-based business under s. 559.955, F.S. 23 Home-Based Businesses Section 559.955, F.S., preempts the regulation of home-based businesses to the state. Counties and municipalities may not enact or enforce any ordinance, regulation, or policy, or take any action to license or otherwise regulate a home-based business. A home-based business may operate in an area zoned for residential use and may not be prohibited, restricted, regulated, or licensed in a manner different from other businesses in a local government's jurisdiction, except as provided in s. 559.955, F.S. However, home-based businesses are subject to applicable business taxes under ch. 205, F.S., in the county and municipality in which the home-based business is located. 24 17 See Department of Agriculture and Consumer Services, Division of Food Safety, Cottage Food Operations (July 2021), available at: https://www.fdacs.gov/Business-Services/Food/Food-Establishments/Cottage-Foods (last visited Feb. 2, 2022). 18 Chapter 500, F.S. 19 Section 500.80(8), F.S. 20 Section 500.121, F.S., provides disciplinary procedures for violations of ch. 500, F.S., and applicable rules, including the imposition of Class II administrative fines against a cottage food operation that violates ch. 500, F.S. A violation in the Class II category carries a fine not to exceed $5,000 for each violation. See s. 570.971(1)(b), F.S. 21 Section 500.12, F.S., requires a permit issued by the department for any person operating a food establishment or retail food store. 22 Section 500.80(4), F.S. 23 Section 500.80(6), F.S. 24 Section 559.955(2), F.S. BILL: CS/SB 1158 Page 6 A business is considered a home-based business if it operates, in whole or in part, from a residential property and meets the following criteria: 25 The activities of the home-based business are secondary to the property's use as a residential dwelling. The business employees who work at the residential dwelling also reside in the residential dwelling, except that up to two employees or independent contractors who do not reside at the residential dwelling may work at the business. Parking related to the business activities of the home-based business complies with local zoning requirements. The business may not generate a need for parking greater in volume than a similar residence where no business is conducted. Local governments may regulate the parking or storage of heavy equipment at the business which is visible from the street. As viewed from the street, the residential property is consistent with the uses of the residential areas surrounding the property. Any external modifications to a home-based business must conform to the residential character and architectural aesthetics of the neighborhood. The home-based business may not conduct retail transactions at a structure other than the residential dwelling; however, incidental business uses and activities may be conducted at the residential property. All business activities comply with any relevant local or state regulations concerning signage and equipment or processes that create noise, vibration, heat, smoke, dust, glare, fumes, or noxious odors. However, such regulations on a business, absent signage, may not be more stringent than those that apply to a residence where no business is conducted. All business activities comply with any relevant local, state, and federal regulations concerning the use, storage, or disposal of hazardous materials. However, such regulations on a business may not be more stringent than those applicable to a residence where no business is conducted. Any adversely affected current or prospective home-based business owner may recover reasonable attorney fees and costs incurred instituting or defending a legal action concerning the validity of a local government's home-based business regulations. 26 The home-based business requirements of s. 559.955, F.S., do not supersede any current or future declaration of condominium adopted pursuant to ch. 718, F.S., cooperative document adopted pursuant to ch. 719, F.S., or declaration of covenants adopted pursuant to ch. 720, F.S. Any local laws, ordinances, or regulations related to transient public lodging establishments that are not otherwise preempted under ch. 509, F.S., are not affected by s. 559.955, F.S. 27 Public Food Service Establishments The Division of Hotels and Restaurants within the Department of Business and Professional Regulation licenses, inspects, and regulates public food service establishments in Florida under ch. 509, F.S. 28 The term “public food service establishment” means: 25 Section 559.955(3), F.S. 26 Section 559.955(4), F.S. 27 See. 509.032(7), F.S., relating to the state preemption of vacation rental regulation and providing exceptions. 28 The Division of Hotels and Restaurants also licenses and regulates public lodging establishments, elevators, escalators, and other vertical conveyance devices. See Department of Business and Professional Regulation, Division of Hotels and Restaurants, http://www.myfloridalicense.com/DBPR/hotels-restaurants/ (last visited Feb. 3, 2022). BILL: CS/SB 1158 Page 7 any building, vehicle, place, or structure, or any room or division in a building, vehicle, place, or structure where food is prepared, served, or sold for immediate consumption on or in the vicinity of the premises; called for or taken out by customers; or prepared prior to being delivered to another location for consumption. The term includes a culinary education program, as defined in s. 381.0072(2), which offers, prepares, serves, or sells food to the general public, regardless of whether it is inspected by another state agency for compliance with sanitation standards. 29 Several food service places are exempted from the definition of public food service establishment, such as certain schools and universities operated for students and faculty, and places maintained by certain religious, fraternal, and civic organizations. 30 Establishments regulated under ch. 509, F.S., must be licensed and inspected by the Division of Hotels and Restaurants, and are subject to sanitary standards, staff training and test requirements, administrative rules, and immediate closure upon a finding that continued operation presents a severe and immediate threat to the public health. 31 III. Effect of Proposed Changes: The bill amends s. 500.80, F.S., to allow “home kitchen operations” to sell and offer for sale home kitchen food products in a manner similar to cottage food operations. The bill creates s. 500.03(1)(t), F.S., to define the term “home kitchen operation” to mean a natural person or an entity that stores, handles, prepares, and packages food products at the residence of the natural person or at the residence of a natural person who has an ownership interest in the entity and sells such products in accordance with s. 500.80, F.S. Under the bill, a home kitchen operation does not include: A public food service establishment as defined in s. 509.013(5), F.S.; A catering operation licensed under ch. 509, F.S.; 32 and A cottage food operation, as defined in s. 500.03, F.S. The bill creates s. 500.03(1)(s), F.S., to define the term “home kitchen product” to mean food that is: Stored, handled, prepared, and packaged by a home kitchen operation; and Not raw milk, a product of raw milk, raw oysters, or raw shellfish. The bill creates s. 500.82, F.S., to provide for the regulation of home kitchen operations. A home kitchen operation is not required to have a food establishment permit, as required in s. 500.12, F.S., if the home kitchen operation complies with this section and: 29 See s. 509.013(5) ,F.S. 30 Id. 31 See s. 509.035, F.S. 32 Chapter 509, F.S., does not provide for licensure of “catering operations.” However, a public food service establishment licensed under ch. 509, F.S., may offer catering services. For example, s. 509.241, F.S., requires a public food service establishments that offer catering services to display its license number on all advertising for catering services. BILL: CS/SB 1158 Page 8 Has annual gross sales of home kitchen food products that do not exceed $250,000; Limits the preparation and service of home kitchen food products to no more than 10 individual means per calendar day or the approximate equivalent of meal components when sold separately; Prepares, cooks, and serves home kitchen food products on the same calendar day; and Processes home kitchen food products in compliance with state and federal regulations and s. 500.80, F.S., relating to cottage food operations. A cottage food operation's annual gross sales include all sales of home kitchen food products at any location, regardless of the types of products sold or the number of persons involved in the operation. A cottage food operation must provide the department, upon request, with written documentation verifying the operation's annual gross sales. These provisions are identical to the requirements for cottage food operations in s. 500.80, F.S. A home kitchen operation must allow the department to access the operation’s records within 24 hours of the department’s request. In addition, a home kitchen operation may: Sell, offer for sale, and accept payment for home kitchen food products over the Internet or in person; Deliver home kitchen food products in person directly to the consumer, to a specific venue, or by a third party delivery service; and Not sell, offer for sale, or deliver home kitchen food products to any wholesaler or retailer. The bill requires all home kitchen operation owners and employees to successfully complete a food safety certificate training program that complies with United States Food and Drug Administration Food Safety Modernization Act. 33 The course, at a minimum, must include information and training on cross-contamination, temperature control, and personal hygiene. The bill requires home kitchen operations to: Take steps to avoid any potential contamination to food, equipment, utensils, and unwrapped single-service and single-use articles; Prevent an individual from entering the food preparation area while food is being prepared if the individual is known to be suffering from: o Symptoms associated with acute gastrointestinal illness; or o A communicable disease that is transmissible through food; Ensure a hand washing station supplied with warm water, soap, and disposable hand towels is conveniently located in food preparation, food dispensing, and “warewashing” areas; Ensure that the kitchen sink is fully operational and has hot and cold water and a sanitizing agent, and that dishes are sanitized between each use; Ensure that ready-to-eat home kitchen food products are protected from contamination during storage, preparation, handling, transport, and display; Ensure that home kitchen food products are maintained at proper holding temperatures; 33 See United States Food and Drug Administration, Food Safety Modernization Act (FSMA), https://www.fda.gov/food/guidance-regulation-food-and-dietary-supplements/food-safety-modernization-act-fsma (last visited Feb. 8, 2022). BILL: CS/SB 1158 Page 9 Ensure that utensils and equipment used in the home kitchen operation: o Retain their characteristic qualities under normal use conditions; o Are properly sanitized after each use; and o Are maintained in a sanitary manner between uses; Ensure that kitchen equipment is cleaned and sanitized between uses; Ensure that gases, odors, steam, heat, grease, vapors, and smoke are able to escape the kitchen; Ensure that temperature measuring devices or holding equipment for the time or temperature control of food properly used for hot and cold holding of home kitchen food products during storage, serving, and cooling; and Ensure that home kitchen food product preparation and service is discontinued if there is a disruption of potable water service. The bill provides that home kitchen operations may only sell home kitchen food products which are affixed with a label that contains the following information: The name and address of the home kitchen operation; The name of the home kitchen food product; The ingredients of the home kitchen food product, in descending order of predominance by weight; The net weight or net volume of the home kitchen food product; Allergen information as specified by federal labeling requirements; Appropriate nutritional information as specified by federal labeling requirements if any nutritional claim is made; and A statement printed in at least 10-point type in a color that provides a clear contrast to the background of the label and reads: "Made in a home kitchen operation that is not subject to Florida's food safety regulations." The labeling requirements for home kitchen food products are identical to those required for cottage food products in s. 500.80(3), F.S. In addition, the bill provides that s. 500.82, F.S., as created by this act, does not: Exempt a home kitchen operation from any state or federal tax law, rule, regulation, or certificate that applies to all home kitchen operations; Prevent the department or a local health department from enforcing an order to cease and desist operation of a home kitchen if the department or the local health department has a valid reason to suspect that the home kitchen operation is the source of an adulterated food or of an outbreak of illness caused by contaminated food; and Apply to a person operating under a food establishment permit issued pursuant to s. 500.12, F.S. Under the bill, the regulation of home kitchen operations is preempted to the state. A local law, ordinance, or regulation may not prohibit a home kitchen operation or regulate the preparation, processing, storage, or sale of home kitchen food products by a home kitchen operation; however, a home kitchen operation must comply with the conditions for the operation of a home- based business under s. 559.955, F.S. BILL: CS/SB 1158 Page 10 The bill requires the department to investigate any complaint which alleges that a home kitchen operation has violated an applicable provision or rule. Upon receipt of a complaint, the bill requires an authorized officer or employee of the department to enter and inspect the premises of a home kitchen operation to determine compliance with the Florida Food Safety Act 34 and department rules, as applicable. A home kitchen operation's refusal to permit such entry to the premises or to conduct the inspection is grounds for disciplinary action pursuant to s. 500.121, F.S. Under the bill, the department may inspect a home kitchen operation for compliance with the Florida Food Safety Act without an underlying compliant. Section 500.80, F.S., permits the department to inspect a cottage food operation only if there is a complaint. The bill amends s. 500.121, F.S., to apply the disciplinary procedures for violations of ch. 500, F.S., to home kitchen operations. 35 Under the bill, the department may impose a Class II administrative fine pursuant to s. 570.971, F.S., 36 against a home kitchen operation that violates ch. 500, F.S., the Florida Food Safety Act. For each violation in the Class II category, a fine not to exceed $5,000 may be imposed. 37 The bill takes July 1, 2022. IV. Constitutional Issues: A. Municipality/County Mandates Restrictions: None. B. Public Records/Open Meetings Issues: None. C. Trust Funds Restrictions: None. D. State Tax or Fee Increases: None. E. Other Constitutional Issues: None. 34 Chapter 500, F.S. 35 Supra n. 24. 36 Section 570.971, F.S., provides the administrative fines the department may impose for Class I through Class IV violations of a chapter or section of the Florida Statutes within the jurisdiction of the department. 37 Section 570.971(1)(b), F.S. BILL: CS/SB 1158 Page 11 V. Fiscal Impact Statement: A. Tax/Fee Issues: None. B. Private Sector Impact: The bill allows persons to sell or offer for sale home kitchen food products, which may provide additional income for such persons. C. Government Sector Impact: The department has not provided a fiscal analysis for CS/SB 1158, but in its bill analysis for SB 1158 estimated a negative fiscal impact of $1,435,310 for Fiscal Year 2022-2023, Fiscal Year 2023-2024, and Fiscal Year 2024-2025. 38 VI. Technical Deficiencies: None. VII. Related Issues: None. VIII. Statutes Affected: This bill creates section 500.82 of the Florida Statutes. This bill substantially amends the following sections of the Florida Statutes: 500.03 and 500.121. IX. Additional Information: A. Committee Substitute – Statement of Substantial Changes: (Summarizing differences between the Committee Substitute and the prior version of the bill.) CS by Regulated Industries on February 8, 2022: The committee substitute: Does not amend s. 500.80, F.S., relating to the cottage food operations; Removes the provision allowing home kitchen food products to be consumed at the location of a home kitchen operation; Provides how the amount of annual gross sales of a home kitchen operation is calculated; Limits food preparation and service to 10 individual meals per day; Requires food to be prepared, cooked, and served on the same calendar day; 38 Department of Agriculture and Consumer Services, Agency Analysis for SB 1158, p. 4, Dec. 22, 2022 (on file with the Senate Committee on Regulated Industries). BILL: CS/SB 1158 Page 12 Requires home kitchen operation owners and employees to successfully complete a food safety certificate training program. Requires home kitchen operations to give the department access to records within 24 hours of a request; Requires home kitchen operations to ensure that they comply with specified food safety procedures and equipment, including preventing individuals with gastrointestinal illness and communicable diseases from entering the food preparation areas, and providing hand washing stations and kitchen sinks; Requires discontinuation of preparation and service if there is a disruption of potable water service; Revises the labeling requirements for home kitchen food products; Allows the department or a local health department to enforce an order to cease and desist if the home kitchen operation is the source of an adulterated or contaminated food; Requires the department to investigate complaints and makes a refusal to permit entry and inspection grounds for disciplinary action; Authorizes immediate closures by the department if the home kitchen operation presents an immediate danger to the public health, safety, and welfare; and Changes the effective date of the bill from upon becoming law to July 1, 2022. B. Amendments: None. This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.