Ways & Means concurs with Senate amendment creating $30,000 cottage‑food exemption

The Ways & Means panel on Oct. 11 concurred with a Senate amendment that creates a new category of "cottage food" producers and exempts operators with annual gross receipts under $30,000 from licensure and licensure fees.

The change, described by Katie McLean, Legislative Council, will exempt a home food producer "who has gross receipts under $30,000" from a license and related fee; the Senate version establishes the new "cottage food" category rather than altering multiple existing categories. McLean said the category covers foods that "do not require refrigeration or time or temperature control for safety," and listed examples discussed in the bill text.

Why it matters: the bill shifts which small, home‑based food operations pay licensing fees and face inspections. The fiscal office told the panel the revenue effect is small: "the original fiscal note found that de minimis fiscal impact to the Department of Health's Food and Lodging Fund," and staff reiterated that the larger fund picture would not be meaningfully altered by this change.

Key provisions: the Senate amendment defines a cottage food operator as a person who packages or produces covered products in a private home kitchen or on personal property and exempts cottage food products with gross receipts of $30,000 or less from the requirement to obtain a license or pay licensure fees. The bill keeps an existing, separate exemption for non‑bakery producers with gross receipts of $10,000 or less and retains existing treatment of bakeries; many typical home bakery items will fall under the new cottage food product category.

Training and rulemaking: the bill directs the health department to adopt rules specifying required training for food manufacturers and includes language allowing emergency rules so that the exemption and required (mostly online) training can be in place for the farmers market season while permanent rulemaking proceeds. McLean said new rulemaking "can take 9 months to a year," and the emergency rule language is intended to let producers take advantage of the exemption this summer.

Inspections and scope: when committee members asked whether exempt cottage food producers would still be inspected, Christianana, policy director to the Department of Code, said any new entity exempted from licensure and licensure fees "would not be subject to inspections." Committee members clarified the exemption applies only to licensure and fee obligations and does not affect tax obligations.

Fiscal context and previous thresholds: staff explained current law exempts some home bakers at a lower threshold (identified in the discussion as $6,500 for baked goods and $10,000 for some nonbakery producers) and that most newly exempt producers are expected to come from two fee categories identified in the fiscal note. The presenters said those two categories together contributed roughly $25,260 to the Food and Lodging Fund out of about $1,480,000 in total annual fee revenue, a small share of the fund.

Action: the panel voted to concur with the Senate amendment; the chair announced the vote as "10 0 1," indicating 10 in favor, none opposed and one recorded as abstain.

What remains: the bill directs rulemaking to define training details and related processes; permanent rules will follow the emergency rules, and staff indicated the exact training requirements and rule content will be clarified during that process. The committee's concurrence advances the bill with the Senate language intact for the next steps in the legislative process.