Texas Expands Cottage Food Freedom

Texas has become the latest state to expand cottage food freedom, allowing Texans to sell more baked goods and other foods made from their homes. Thanks to HB 970, which went into effect on September 1, “cottage food” now includes candy, cereal, dried fruits and vegetables, vinegar, pickles, mustard, roasted coffee, popcorn and fruit butters, to name just a few of these treats. Texans can now sell these and other baked goods directly to consumers straight from their homes, plus at farmers’ markets, farm stands and fairs hosted by governments or nonprofits.

This isn’t Texas’ first attempt at legalizing modern-day homesteading. Back in 2011, Texas passed SB 81 to liberalize cottage food laws. As The Austin Chronicle pointed out, before that law was enacted,

“…if an entrepreneurial baker wanted to start a legal baked-goods business without opening a brick-and-mortar shop, she had to rent a commercial kitchen, obtain a food handler's certification, and jump through many other prohibitively expensive administrative hoops. Such constraints prevented many, many people from being able to pursue such a goal, and it all seemed a bit excessive for something as innocuous as cookies and cupcakes.”

Bakers in other states have had to pay as much as $25 an hour to bake in commercial kitchens. Now with a cottage food law, Texans can avoid sky-high rent and not worry about having their home kitchens inspected and regulated by the state.

After all, there are alternatives to government regulation. As Michele Simon, co-founder of the Sustainable Economies Law Center, notes, “face-to-face interactions between buyer and seller…incorporate higher levels of trust and accountability.” A cottage foodie that gets her customers sick isn’t going to be in business for long. Plus, as in many other states, Texas’ cottage food law doesn’t apply to “potentially hazardous” foods like meat, shellfish, or dairy products.

Unfortunately, the 2011 bill was riddled with loopholes. Most glaringly, SB 81 allowed local government authorities to regulate or even outright ban cottage food operations, sometimes through zealous zoning.

This time around, Texas’ latest bill closes these loopholes, making it quite popular: HB 970 passed the statehouse 143-2. And while this is a step in the right direction, Texas’ cottage food laws have room for improvement.

HB 970 still maintains an arbitrary gross income cap: If a modern homesteader earns more than $50,000 in a year, her business would no longer qualify as a cottage food operation, meaning she would have to comply with all the red tape cottage food laws are supposed to bypass. Only seven other states cap how much money cottage food entrepreneurs can earn, though fortunately, Texas’ ceiling is higher than most of these other states.

In addition, Texan homesteaders can’t sell their goods through wholesalers, mail orders, or even through the Internet, needlessly curbing their distribution. Let’s hope the Lone Star State can scrap these artificial limits to growth.

-- Nick Sibilla

Nick Sibilla is a writer at the Institute for Justice 

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