SECTION 5.  Section 437.001, Health and Safety Code, is
      amended by amending Subdivisions (1) and (3) and adding
      Subdivisions (2-a), (2-b), (3-a), and (5) to read as follows:
                   (1)  "Board" means the executive commissioner [Texas
      Board of Health].
                   (2-a)  "Baked good" includes cookies, cakes, breads,
      Danish, donuts, pastries, pies, and other items that are prepared
      by baking the item in an oven.  A baked good does not include a
      potentially hazardous food item as defined by department rule.
                   (2-b)  "Cottage food production operation" means an
      individual, operating out of the individual's home, who:
                         (A)  produces a baked good, a canned jam or jelly,
      or a dried herb or herb mix for sale at the person's home;
                         (B)  has an annual gross income of $50,000 or less
      from the sale of food described by Paragraph (A); and
                         (C)  sells the foods produced under Paragraph (A)
      only directly to consumers.
                   (3)  "Department" means the [Texas] Department of State
      Health Services.
                   (3-a)  "Executive commissioner" means the executive
      commissioner of the Health and Human Services Commission.
                   (5)  "Home" means a primary residence that contains a
      kitchen and appliances designed for common residential usage.
             SECTION 6.  Chapter 437, Health and Safety Code, is amended
      by adding Sections 437.0191, 437.0192, 437.0193, and 437.0194 to
      read as follows:
             Sec. 437.0191.  EXEMPTION FOR COTTAGE FOOD PRODUCTION
      OPERATIONS. A cottage food production operation is not a food
      service establishment for purposes of this chapter.
             Sec. 437.0192.  REGULATION OF COTTAGE FOOD PRODUCTION
      OPERATIONS BY LOCAL HEALTH DEPARTMENT PROHIBITED; COMPLAINTS.
      (a)  A local health department may not regulate the production of
      food at a cottage food production operation.
             (b)  Each local health department and the department shall
      maintain a record of a complaint made by a person against a cottage
      food production operation.
             Sec. 437.0193.  LABELING REQUIREMENTS FOR COTTAGE FOOD
      PRODUCTION OPERATIONS. The executive commissioner shall adopt
      rules requiring a cottage food production operation to label all of
      the foods described in Section 437.001(2-b)(A) that the operation
      sells to consumers.  The label must include the name and address of
      the cottage food production operation and a statement that the food
      is not inspected by the department or a local health department.
             Sec. 437.0194.  SALES BY COTTAGE FOOD PRODUCTION OPERATIONS
      THROUGH THE INTERNET PROHIBITED. A cottage food production
      operation may not sell any of the foods described in Section
      437.001(2-b)(A) through the Internet.