Committee hears push to raise cottage-food income cap to $30,000, debates Department of Health’s training and canned-food proposal

Caroline Schremen Gordon, legislative director of Louisville Mont, told the Senate Committee on Health and Welfare that House-passed language to raise cottage-food gross annual sales exemptions would help small farm and home-based food producers diversify income and increase food access.

The bill under review (referred to in committee as 401) would raise current statutory gross-sales thresholds for food manufacturers operating from a home kitchen — currently $10,000 for general cottage manufacturing and about $6,500 for some baked goods, according to testimony — to $30,000. Gordon said the change was a long-standing policy priority for her farmer-led nonprofit and that the House had passed the language unanimously.

Committee counsel and staff reviewed draft 2.1 of the bill, which includes new definitions for “cottage food product” and “cottage food operator,” a requirement that exempt operations submit an annual licensing-exemption filing to the Department of Health and attest to completion of any training required by rule, and a provision directing the commissioner to adopt emergency rules effective July 1, 2025, pending permanent rulemaking.

Gordon urged the committee to reject a Department of Health recommendation submitted in written testimony April 16 that would create a separate category for certain potentially hazardous canned or acidified foods (pickles, fermented foods, soups, hot sauces) and that would keep the income exemption for those products at $10,000 while requiring free virtual training for producers of those items. “The Department of Health’s recommendation would create a different category of cottage foods for potentially more hazardous foods,” Gordon said, adding that the department already has rule authority to request documentation of production processes and has not shown that recent foodborne illness outbreaks stem from cottage producers. “All recent cases of foodborne illnesses they are aware of actually stem from catering businesses … licensed by the Department of Health,” she said, urging the committee to ask the department to clarify the outbreak data in its testimony.

Legislative counsel explained the draft’s structure: the cottage-food product definition in 2.1 covers foods that do not require refrigeration or time/temperature control for safety and includes an illustrative list plus a catchall for items the commissioner may define by rule. The draft preserves an exemption for cottage food operations with average gross retail sales of $30,000 or less and adds a filing and attestation requirement. Counsel also flagged concern about timing for permanent rule adoption and recommended emergency rule authority to let the new statutory exemptions take effect on July 1, 2025, while permanent rules are developed.

Committee members raised operational questions the department will need to resolve if the bill moves forward: which specific products will be enumerated in rules, how to treat products derived from dairy or other regulated ingredients, whether cottage operators can use an outbuilding or other nonresidential structure on their property (staff suggested “on the property of the person’s primary residence” as possible language), and what the proposed training would cover and how it would be delivered.

The committee did not take action. Members said they will request clarification from the Department of Health, including data referenced in prior testimony, and will invite the department back for further discussion before concluding work on the bill.

Ending: The committee scheduled follow-up questions for the Department of Health and flagged the bill for future committee consideration; staff said the committee will aim to reconcile House-passed language with health-department recommendations before advancing statutory text.