Food Safety Modernization Act

Spring 2016
State Sales Tax Changes

In another move affecting some cheese makers and other food processors, Maine has substantially changed its sales tax rules regarding food. No longer is the tax as straight-forward as groceries (non-taxable) and prepared food (always taxable). Now some groceries are taxable. For example, a mix called a “DIP” is taxable. A mix called a “SPREAD” is exempt. A cheese SPREAD, flavored or plain, is exempt. Examples: “Pimento Cheese Spread” is exempt; “Chili Cheese Dip” is taxable. For more fun reading, see my summary of the complex new rules at
https://www.mainecheeseguild.org/?p=4632.
– Eric Rector

Takeaway for Cheese Makers and Other Food Processors

With a sidebar for produce farmers and processors

By Eric Rector

The Food Safety Modernization Act (FSMA – see the glossary below), the first major overhaul of U.S. food safety practices since 1938, includes new regulations for produce farms and for facilities that process food for people to eat. It was signed into law by President Obama on January 4, 2011, and on Nov. 13, 2015, the FDA released its final FSMA rules. The act is intended to shift the focus from responding to contamination to preventing it. Following are important points that I summarized for the Maine Cheese Guild and that may help other farmers and processors.

Have you registered your facility with the FDA?

If not, it’s not too late to do so. This requires completing an online form, and then updating that form every two years. (https://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/default.htm)

Do you expect to become a Qualified Facility (QF) beginning in 2018?

If YES, then

• you must begin keeping financial records in 2016 that will prove you meet the sales criteria beginning in 2018

• you must plan to submit the required Attestations for QF status by December 18, 2018

If NO, then are you a “Small Business” (fewer than 500 employees)?

• If YES, then you have until late 2017 to comply with the full HARPC provisions.

• If NO, then you have until late 2016 to comply with the full HARPC provisions.

Key Dates for Implementing FSMA

January 1, 2013

• Registration of Food Facilities is required of most food processors, including cheese makers and dairy processors. It’s never too late to register … (https://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/default.htm)

September 17, 2015

• Official start date for cheese makers to implement new FDA rules

January 1, 2016

• Sales records must begin to be retained if a manufacturer wishes to become a Qualified Facility (QF)

December 17, 2018

• QFs that choose not to implement HARPC provisions must have submitted required Attestations:

• a statement that their financial records show they satisfy the definition of a “very small business”

• a statement that the facility complies with the relevant non-federal food safety laws (i.e., state licensing and regulation)

• This option includes additional labeling requirements.

Details

In response to the new statutory provisions of the FSMA, the FDA has amended its Current Good Manufacturing Practices (CGMPs) in two fundamental ways: first by modernizing the longstanding current good manufacturing practice requirements; second by adding requirements for domestic and foreign facilities subject to its regulation for Registration of Food Facilities to establish and implement Hazard Analysis and Risk-based Preventive Controls (HARPC) for human food.

The FDA also revised certain definitions for Registration of Food Facilities to clarify the scope of the exemption from registration requirements provided for “farms” and, in so doing, to clarify which domestic and foreign facilities are subject to the requirements for HARPC for human food.

The Federal Register lists exemptions at https://www.federalregister.gov/articles/2015/09/17/2015-21920/current-good-manufacturing-practice-hazard-analysis-and-risk-based-preventive-controls-for-human#p-2979.

A more readable list of exempt products appears at https://sustainableagriculture.net/blog/pc-rule-analysis-part-2/.

Dairy farms that only ship their milk probably fall under the “farm” exemption. (Each farmer must determine this for him or herself.) Cheese making and dairy processing do not fall under the exemption for “farms,” so these food processors will be expected to follow the amended CGMPs and HARPC provisions.

Cheese makers and dairy processers (as well as other food processers) who meet the definition of a “Qualified Facility” (QF) will still have to follow the new CGMP (much as farmers who wish to use the word “organic” but are exempt from certification are still expected to follow the USDA NOP Rule). Qualified Facilities will not be required to meet the HARPC provisions as long as they maintain their QF status by updating their Food Facility registration and updating their Attestations of sales, licensing and labeling. If a QF plans to start operating after the very small business compliance date – Sept. 17, 2018 – then it must submit the attestations before it starts operating.

Qualified Facility status may be withdrawn by the FDA for two reasons:

• There is an active investigation of a foodborne illness outbreak that is directly linked to the Qualified Facility;

• and/or FDA determines that it is necessary to protect the public health and prevent or mitigate a foodborne illness outbreak based on conditions or conduct associated with the QF that are material to the safety of the food manufactured, processed, packed or held at such facility.

If QF status is withdrawn, that food facility would then be inspected regularly to ensure it meets the same HARPC provisions as all other non-QF food businesses.

The FDA has said it will issue guidance in the future explaining the types of records that a QF must maintain to comply with the rule. Also, no form or webpage is currently available for submitting attestations.

Records that must be maintained to support the various exemptions from certain parts of this rule are subject to review upon inspection. Records must be kept as either original records, true copies (i.e. photocopies, pictures, scanned copies or other accurate reproductions) or as electronic records. This means you are not required to keep all of your records electronically, although you may choose to.

Financial records that are maintained to document the status of a QF – that is, the preceding three years’ worth of sales – must be retained at the facility as long as necessary to support the facility’s status during the applicable calendar year. All other records must be retained for at least two years after the date they were prepared.

Do not confuse “Qualified Facility” with “Qualified Individual,” who is important in any non-QF. Qualified Individuals are workers with the education, training or experience (or some combination of the three) necessary to manufacture, process, pack or hold clean and safe food as appropriate to their assigned duties. They also must receive training in the principles of food hygiene and food safety, including the importance of employee health and personal hygiene – again, as appropriate to the food, the facility and the individual’s assigned duties.

Supervisors must also have the education, training or experience (or some combination) necessary to supervise the production of clean and safe food. Facilities must retain records documenting the training provided to employees as required by the rule.

The rule does not specify a specific training program, but it does acknowledge that the Food Safety Preventive Controls Alliance has been funded by FDA to develop a model curriculum that can be used in-house to provide the needed training as can online CGMP or other food safety courses.

The above information was repurposed from https://sustainableagriculture.net/blog/pc-rule-analysis-part-2/.

Produce Safety Rule

The FDA Food Safety Modernization Act (FSMA) Produce Safety rule is now final, and the earliest compliance dates for some farms begin one year after the effective date of the final rule, November 2015. The final rule is a combination of the original proposal and revisions outlined in the supplemental proposal. The definitions of “farm” and related terms were revised in the final Preventive Controls for Human Food rule, and the same definitions of those terms are used in this rule to establish produce safety standards. Produce operations whose only activities are within the farm definition are not required to register with FDA as food facilities and thus are not subject to the preventive controls regulations.

Here are compliance dates for activities covered under the Produce Rule, except for those involving sprouts:

• very small businesses (those with more than $25,000 but no more than $250,000 in average annual produce sales during the previous three-year period): four years (2019)

• small businesses (those with more than $250,000 but no more than $500,000 in average annual produce sales during the previous three-year period): three years (2018)

• all other farms: two years (2017)

For more information, see https://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm334114.htm.

– Dave Colson, MOFGA

Glossary of Terms for Cheese Makers Under FSMA

FSMA (often pronounced “FIZZ mah”) – Food Safety and Modernization Act, signed into law in 2011, which tasked the U.S. Food and Drug Administration (FDA) to review and re-regulate (where necessary) the rules and process for ensuring the safety of the food supply in the United States. (https://www.fda.gov/Food/GuidanceRegulation/FSMA/)

CGMPsCurrent Good Manufacturing Practices: the guiding rulebook for safe food manufacturing and processing in the United States. (https://www.federalregister.gov/articles/2015/09/17/2015-21920/current-good-manufacturing-practice-hazard-analysis-and-risk-based-preventive-controls-for-human)

HACCP (often pronounced “HASS ip”) – Hazards Analysis of Critical Control Points: a program for identifying and documenting the food safety practices of a food manufacturer and/or processor

PC RulePreventive Controls Rule: a new addition to CGMPs under the FSMA that adds prevention of potential food safety threats to the HACCP protocol of controlling present food safety risks. (See CGMP link above.)

HARPC (often pronounced “harp SEE”) – Hazards Analysis and Risk-based Preventive Controls: combines HACCP and the PC Rule to create a set of documents for each food manufacturer/processor who will be audited regularly by the FDA and other regulators (https://en.wikipedia.org/wiki/Hazard_analysis_and_critical_control_points)

QFQualified Facility: the FDA’s term for a food manufacturer/processor who is a “very small business” as defined and that the facility remains in the good graces of its local regulators and inspectors. This is stated in the form of two annual Attestations:

• your facility “grosses less than $1 million in annual sales of human food averaged over the three preceding business years” and can prove it with retained sales and financial records;

• your facility complies with all non-federal (i.e. state and local) regulatory requirements (i.e., your licenses are up-to-date).

QFs must also provide consumers with the name and complete business address of the facility where the food was manufactured or processed via a label, sign at point of sale, documents arriving along with the food in the normal course of business (i.e., an invoice) or electronically for Internet sales. (https://www.federalregister.gov/articles/2015/09/17/2015-21920/current-good-manufacturing-practice-hazard-analysis-and-risk-based-preventive-controls-for-human#p-2967)

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