House Bill 5196 as enrolled
Public Act 92 of 2000
Sponsor: Rep. Ruth Johnson
House Committee: Health Policy
Senate Committee: Agriculture
Second Analysis (8-4-00)
THE APPARENT PROBLEM:
Food safety is of paramount importance. Each year, people are sickened, and many die, from food contaminated with food-borne pathogens such as E. coli, salmonella, and listeria. With a global economy, foods often cross borders between countries, not just states. To better protect people from food-borne illnesses, there has been a national move to adopt unified food laws that would establish uniformity in the way food is handled across the country. In Michigan, a workgroup of 93 representatives of the Michigan Department of Agriculture, state and local public health agencies, the U.S. Food and Drug Administration, university researchers, and the food industry have met for the last two years to discuss ways to overhaul the state's regulation of food programs.
The food laws have not been significantly rewritten in over 30 years, yet major changes have taken place in food establishments. People are eating more meals away from home than ever before, many grocery stores sell hot, ready-to-eat food like whole chickens, convenience stores sell nachos and hot dogs, and so forth. Increasingly, grocery stores have restaurants located inside the building. And, the types of food people eat today has changed. Raw fish (sushi) is now highly desired, salad bars are found in restaurants and in grocery stores, sales of pre-cut fruits and vegetables are increasing. Scientific knowledge has advanced, and equipment design has improved. For example, it is now known that cold food needs to be kept colder and hot foods hotter than previously thought. Proper hand washing and the use of gloves when handling ready-to-eat foods can significantly decrease incidents of food contamination. Establishments that carry the greater risk of food contamination should be inspected more rigorously and frequently than ones dealing only in packaged foods.
In light of the many changes in food establishments, it has become increasingly clear that Michigan's food laws have not kept up. Many provisions need to be updated, and new provisions need to be written to address the changing climate in the food system. The food laws, spread out over five different state statutes and seven sets of departmental regulations, need to be consolidated. Conflicting language needs to be deleted, and many confusing passages need clarification. Most importantly, the system needs to be adjusted to eliminate duplication of licensing and inspection requirements for newer establishments that fall under the oversight of both a local health department and the Department of Agriculture, such as a grocery store with a food court. In order to update current laws to meet the present and future challenges of ensuring food safety, the workgroup has recommended the adoption of the Food and Drug Administration 1999 Food Code and a rewrite of the state's laws and regulations regulating the food system. Legislation has been proposed to incorporate the workgroup's recommendations into law.
THE CONTENT OF THE BILL:
Currently, food safety in the state is regulated by twelve different statutes and regulations. The bill would create the Food Law of 2000 to consolidate, update, and streamline the laws regulating food establishments. "Food establishment" is defined in the bill as an operation where food is processed, packed, canned, preserved, frozen, stored, prepared, served, sold, or offered for sale. Food establishment would include a food processing plant, a food service establishment, and a retail grocery store. The bill defines a "food processing plant" as an operation that processes, manufactures, packages, labels, or stores food but does not provide food directly to a consumer. "Food service establishment" and "retail grocery store" would retain their current definitions. Among a great number of changes, the bill would make the following substantive changes:
Federal Food Code. The bill would adopt the federal Food and Drug Administration 1999 Food Code. The FDA 1999 Food Code would preempt or supercede numerous provisions currently contained in the various state statutes and departmental regulations regulating food safety. Under the bill, the Food Code would be modified to require that the oven temperature for high humidity oven temperature would have to be 130 degrees Fahrenheit or higher. The bill would also specify that the director of the MDA could adopt any changes or updates to the Food Code by departmental rule, and that the annexes of the Food Code would be considered a persuasive authority for interpretation of the Food Code.
Eliminate Duplicity of Inspections and Licenses. Grocery stores are licensed and inspected by the MDA, and restaurants by a local health department. Currently, some establishments (e.g., grocery stores that also contain restaurants) are required to be licensed by the MDA and by the local health department, as well as be subjected to inspections by both agencies. Instead, the bill would base the license category for any establishment on the predominant part of the food business.
Temporary and mobile licenses. Currently, there are seven licensing categories for mobile and temporary food service establishments. The bill would instead simplify the categories into four categories: mobile food establishments; temporary food establishments; special transitory food units (this new category would allow operation throughout the state year-round with a single license); and limited retail food establishments (for establishments in a fixed location and would include both retail food establishments and retail grocery stores). All four establishment categories would have to meet the same food safety requirements under the FDA 1999 Food Code. The bill would include licensing criteria for a special transitory food unit license.
Fixed licenses. Licenses for food establishments with fixed locations would be based in part on whether or not food service was offered and by the size of the establishment (e.g., under current provisions, a convenience store and a food processor such as Kellogg's would carry the same license). The categories would be as follows:
The bill would add the following to the list of establishments that are exempt from licensure requirements: a produce stand offering only whole uncut fresh fruits and vegetables; and a retail food establishment that 1) only sells prepackaged, non-potentially-hazardous foods and 2), offers only an incidental amount of food, such as the sale of single-service packages (e.g., a card shop selling seasonal candy). The bill would also expand the exemption for temporary food establishments with no food preparation that use only single-service articles and serve only non-potentially-hazardous food or beverage to include grocery stores with packaged foods.
Licenses and fees. All licenses, except for temporary licenses which are valid for up to 14 days, would have to be renewed on April 30 of each year. License fees that are charged by the MDA for establishments directly inspected and regulated by the department would be changed as follows:
In addition, the additional state license fees, which are service fees submitted to the department by the local health departments, would be updated to reflect inflationary increases. A vending machine location fee, mobile food service establishment, and temporary food service establishment fee would be increased to $2.50; a food service establishment fee to $19; and a mobile food establishment commissary fee would be set at $19 and a special transitory food unit fee at $30.
Education Funds. The bill would create two new revolving funds in the Department of Treasury. A consumer food safety education fund to provide statewide training and education to consumers on food safety would be funded by a $3 surcharge for each food establishment category (vending machines and fee-exempt food establishments would be exempted). An industry food-safety education fund to provide statewide training and education on food safety to food service establishment employees and agents of the director of the MDA charged with enforcing the Food Law would be funded by a $2 surcharge on the above licensees. An advisory committee consisting of at least nine members representing consumers, industry, government, and academia would advise the MDA of the use of the funds. Money remaining in a fund at the end of a fiscal year would not revert to the general fund, but would remain in the fund.
Penalties. The bill would consolidate and unify the penalty sections of the various food laws into a single penalty section. Prohibited acts would remain virtually the same as current law. However, under the bill, it would also be unlawful to remove a tag, seal, or mark placed by the director of the MDA on a food that was unsafe for consumption; make a false statement, representation, or certification in any application, report, plan, or other required documentation; and fail to establish or maintain any record or make any report required under the bill or the federal Food, Drug, and Cosmetic Act, or refuse access to or verification or copying of any such required record (the latter parallels the federal standard for low-acid canning laws).
Other changes in the penalty clauses include the expansion of the department's authority to levy administrative fines to all categories of establishments, in addition to other fines imposed under the bill for violations. An administrative fine could not be imposed for more than $500 for a first offense and $1,000 for a second or subsequent offense. A person could also be assessed the actual costs of the investigation of the violation. Each day of any continuing violation would not be considered a separate violation. The department would be prohibited from imposing administrative fines in the aggregate amount of more than $4,000 per location for a firm with annual gross receipts of $500,000 or less and $8,000 per location for a firm with annual gross receipts of over $500,000 during any 12-month period. An administrative fine could only be levied for violations involving critical or repeated violations that remain uncorrected beyond the time frame for correction that was approved, directed, or ordered by the director under sections of the federal Food Code. The department could not impose an administrative fine for a noncritical violation of the Food Code unless at least 30 calendar days had been allowed for correction after the inspection. When a licensee or registrant exhausts all available administrative remedies but is still unsatisfied with the final decision or order, the final decision or order could be reviewed by the courts as provided by law.
In addition, a defendant convicted of a violation could be assessed an amount to cover the department's costs to investigate the violation. The assessment for costs would have to be paid to the state treasury and credited to the MDA for the enforcement of the act. Further, the bill would increase the fine for a misdemeanor conviction to a minimum fine of $250 and maximum of $2,500, and increase the fine for a felony conviction to not more than $10,000 plus twice the amount of any economic benefit associated with the violation, or both. A felony charge would also include possible imprisonment for up to four years.
Bare-hands Contact. Under the FDA 1999 Food Code, food employees, except when washing fruits and vegetables or when otherwise approved, may not touch ready-to-eat foods with their bare hands, and are required to use suitable utensils such as spatulas and tongs. The bill, by way of clarification, would establish a procedure for establishments to follow in meeting the federal regulation's allowance for an "otherwise approved" practice for bare-hands contact of food. Among other things, the procedure would have to include the establishment of a documented food safety training program for all employees having bare-hands contact with ready-to-eat foods and a documented plan to periodically monitor employee compliance with the training. A licensee implementing alternative procedures would be required to periodically review its operations, verify the effectiveness of the alternative practices and procedures, and monitor when and where ready-to-eat foods are handled by its employees. If the department determined that a health risk existed, it could require a licensee to modify or suspend the alternative practices and procedures implemented under the bill.
Miscellaneous Provisions.
Repeals and Rescissions. The following acts and parts of acts would be repealed six months after the bill's effective date:
The following rules would be rescinded six months after the bill's effective date: R 285.538, R285.549, R285.554, R 285.556, R 285.557, R 285.558, and R 325.25101-R 325.26008 of the Michigan Administrative Code. Further, beginning six months after the bill's effective date, R 285.553 of the Michigan Administrative Code would not apply to any food establishments under the bill except for farm crop storages that are exempt from the provisions of the bill.
FISCAL IMPLICATIONS:
According to the House Fiscal Agency, the bill could result in additional state license fee revenue and could also result in additional state administrative costs to the Department of Agriculture. In a fiscal note dated 7-27-00, the agency reports that the department estimates that the new license fee schedule could increase revenues by about $830,000, from the current level of $900,000 to just under $1.7 million. Revenue from licensing fees is earmarked for enforcement and administration of the act. The bill also authorizes the department to charge for new food safety-related services that it provides. The amount of revenue generated from the provision of these services will be contingent upon the demand for services. Revenue from these fees is earmarked for enforcement of the act.
The agency reports that the bill's provision to assess administrative fines up to $1,000 and the actual costs of an investigation for violations of the act could also increase departmental revenues. The bill increases the minimum and maximum penalties for misdemeanor and felony violations and also allows the department to assess the costs of the investigation against the violator. Revenue recouped from investigative costs is earmarked for enforcement of the act.
The bill creates a new Food Safety Education Fund that will be administered by the department and funded by a $3 surcharge on each food establishment license. The fund will be used to provide statewide training and education to consumers on food safety, and the agency reports in its fiscal note that the surcharge would increase state revenues by $150,000 annually. An Industry Food Safety Education Fund would also be created. The fund would be funded by a $2 surcharge on each food service establishment license and would be used to provide statewide training and education to food service establishment employees and agents of the MDA who enforce the act. The $2 surcharge is expected to increase state revenues by $70,000 annually.
Finally, the House Fiscal Agency reports that the bill could result in additional state administrative costs for the Department of Agriculture. The agency estimates that $1.2 million would be needed to implement and administer the bill, which would include the cost of an additional ten full-time employees. However, the agency estimates that $760,000 of these costs will be covered by restricted funds and $490,000 from general fund/general purpose revenue.
According to Department of Agriculture staff, the bill could result in an initial increase in costs for local health departments to train licensees about the required lower handling temperature for cold foods. However, the bill is not expected to result in any ongoing costs for implementation. (2-15-00)
ARGUMENTS:
For:
Anyone attempting to read through Michigan's food laws can quickly see why it is advantageous to consolidate them. Currently, the "food laws" are really 12 different sets of state statutes and administrative regulations; the federal Food, Drug, and Cosmetic Act; and the federal Food Code. Trying to find all pertinent regulations for a specific type of establishment or specific function is a time-consuming and difficult task. The bill is an attempt to consolidate the various laws and eliminate conflicting provisions. Many provisions are updated to reflect current standards and much confusing language is clarified for better understanding. In short, the bill would enable a person to go to one document to find most of the applicable standards and regulations. Though it does adopt some other laws by reference (the above two federal statutes are adopted by reference, as are several other federal laws and regulations and industry standards), the bill would provide a central document rather than the 12 different sets of state law as currently exists.
For:
Perhaps the single most significant aspect of the bill is that it eliminates the duplication of inspections and licensing that is occurring now. For example, restaurants are licensed and inspected by local health departments, and grocery stores by the Department of Agriculture. However, in today's changing marketplace, many grocery stores have restaurants within their establishments, such as food courts, and some restaurants sell packaged foods. Currently, these types of establishments may be licensed and inspected by both agencies. Besides being costly and inefficient, there are conflicts in the way the two agencies approach implementing the laws, and conflicts in some provisions of the laws. Therefore, a business owner may find himself or herself in compliance with one set of regulations, and in violation of others. The bill would rectify this situation.
For:
The bill would restructure the licensing system so that those establishments that offer services carrying a greater risk of transmitting food-borne illness through contamination would also pay higher license fees to support appropriate inspections. For example, a small convenience store that does not offer ready-to-eat foods like hot dogs, hot coffee, and so forth should not have to pay the same license fee or be subjected to the same number of inspections that a large restaurant or grocery store with a food court should have. The bill would allow the department and the local health department to maximize resources by focusing on those establishments that carry a greater potential risk for transmitting diseases through contaminated food.
For:
The bill consolidates and enhances the penalties available under current law. Minimum and maximum fines are increased for misdemeanor offenses, and a stiffer penalty is set in place for felony convictions. Perhaps the change that has the most potential for stemming violations of the food laws is the provision expanding the use of administrative fines and sanctions to all sectors of the food industry, not just those regulated under the Michigan Comminuted Meat Law (according to department staff, the institution of administrative sanctions resulted in a big decrease in violations). This will give the Department of Agriculture a broader range of enforcement tools, rather than having to bring criminal charges and go through the court system.
Response:
The bill would place a cap on the amount of fines that the department can levy upon a single business in a year, restrict administrative fines to those involving critical violations or repeat violations not corrected within 30 days, and prohibit the department from fining a business for multiple days in which the violation occurred. This could defeat the whole purpose of expanding the administrative fines to all businesses. Most businesses are very willing to work towards compliance. Allowing broader use of administrative sanctions should improve the current system, not worsen it. If the department suspected a business of multiple violations over the course of a year, but was only allowed to levy fines up to $4,000 or $8,000 (depending on the yearly revenue of the business), the department could be forced to levy criminal charges to motivate the business to compliance. It would be a shame for a licensee to face a criminal record for having excess fat in the hamburger! Plus, going through the criminal justice system results in increased costs both to taxpayers and the licensees. Besides, the department would have some discretion in levying fines. If experience under the new law shows that licensees are being unfairly fined, then the provisions can be adjusted at a future date. Above all else, it must be remembered that these laws are in place to reduce and eliminate illness and death caused by contaminated food. The public safety must be protected.
For:
According to the Department of Agriculture, about 80 percent of illnesses transmitted by contaminated food could have been prevented by the consistent and proper use of wearing gloves when preparing ready-to-eat foods. Food-borne illnesses can be very serious. In recent years, several food-borne illnesses have resulted in the deaths of many people and severe illnesses in others. Women can suffer miscarriage as a result of ingesting pathogens in food, hepatitis B can cause serious illness and premature death, and so on. Children and the elderly, as well as those with compromised immune systems, are most at risk. A single worker not washing his or her hands after using the bathroom, working when infected with a communicable disease, or working around food with an open cut on his or her hand can affect hundreds, and in the case of the tainted strawberries in Western Michigan a few years ago, thousands.
Some object to provisions that require establishments to institute effective training programs for employees, and so forth. These provisions are not meant to be overly burdensome, but to require an establishment to give careful thought to an alternative plan. What may seem easy to implement in thought can be quite problematic in practice. When trying to think through implementation, it may become clear that bare-hand contact for certain tasks could result in a greater risk of transmission of food-borne illnesses.
Against:
As the bill is written, local health departments would lose the authority and enforcement powers to ensure that exhaust ventilation systems in restaurants are appropriate to the establishments and meet current industry regulations. Under departmental rules that will be rescinded by the bill, the Department of Agriculture is required to publish a description of ventilation systems and their specific uses, which the local health departments use in their inspections. The bill instead simply requires that exhaust ventilation systems be designed, constructed, and installed in compliance with applicable state law. Representatives of local health departments say that this would place inspection and oversight of ventilation systems under the responsibility of the Department of Consumer and Industry Services, which lacks the resources to provide the same level of inspection services that the local health departments are currently providing. Though the FDA Code, which would be adopted by reference, does touch on ventilation systems, it is vague and could cause implementation problems. An easy solution would be to remove the language rescinding R 325.26001, or to incorporate the language within the rule into the bill.
Analyst: S. Stutzky