Explanation of Statutory Authority
The Wisconsin Department of Agriculture, Trade and Consumer Protection (“DATCP”) has broad general authority, under Wis. Stat. § 93.07 (1), to adopt rules to implement programs under its jurisdiction. DATCP also has general authority under Wis. Stat. § 97.09 (4) to adopt rules specifying standards to protect the public from the sale of adulterated or misbranded foods. DATCP has specific authority, under Wis. Stat. § 97.29 (5), to adopt rules establishing fees; setting facility construction and maintenance standards; and setting rules for the design, installation, maintenance, and cleaning of equipment and utensils; personnel sanitation; food handling and storage; sanitary production and food processing; and food sources and food labeling.
Related Statutes and Rules
21 CFR 117, Current Good Manufacturing Practice, Hazard Analysis, and Risk based Preventive Controls for Human Food, is a critical foundation for the current rule. Related Wisconsin administrative rules include those pertaining to retail food establishments (Wis. Admin. Code ch. ATCP 75 and the Appendix to that rule); dairy plants (Wis. Admin. Code ch. ATCP 65), food warehouses (Wis. Admin. Code ch. ATCP 71), and meat and poultry establishments (Wis. Admin. Code ch. ATCP 55).
Plain Language Analysis
The proposed rule updates Wis. Admin. Code ch. ATCP 70 by adopting certain federal regulations that implement the requirements of the federal Food Safety Modernization Act (“FSMA”) for facilities subject to the new requirements. Specifically, the revised rule incorporates multiple subparts of 21 CFR 117, Current Good Manufacturing Practice, Hazard Analysis, and Risk based Preventive Controls for Human Food, which has superseded 21 CFR 110, Current Good Manufacturing Practice in Manufacturing, Packaging, or Holding Human Food. The subparts of 21 CFR 117 pertain to preventive food safety systems, and have already been referenced in Wis. Admin. Code chs. ATCP 65 (Milk and Milk Products) and ATCP 71 (Food Warehouses and Milk Distributors). Since the majority of Wisconsin federally-registered food facilities subject to 21 CFR 117 are licensed as food processing plants, this rule features similar referencing to inform affected businesses. This revision also ensures that the requirements for Wisconsin-licensed food processing plants that are not subject to the federal rule, are clearly articulated.
The transfer of the Department of Health Services’ (DHS) Food Safety and Recreational Licensing program to DATCP’s Division of Food Safety necessitated the merger of two food safety regulatory systems. One regulatory issue was particularly in need of resolution: Restaurant operators were not allowed to wholesale food under the DHS regulation, while retail food establishment operators under DATCP’s authority could engage in a limited amount of wholesaling without holding a food processing plant license. By statute, restaurants are now licensed as retail food establishments and therefore also enjoy the same limited ability to wholesale food. In the current rule-making process, DATCP initially proposed to retain certain existing limits and requirements from its prior rule concerning food processing activities for wholesale conducted by a retail food establishment. The Board of Agriculture, Trade and Consumer Protection (“Board”) approved a draft rule reflecting this approach at its January 2018 meeting. This final draft also for the first time included definitions of “wholesale” and “retail”. However, after the Board meeting, it became apparent that industry participants felt that less restrictive limits and definitions would still adequately protect public health.
As a result of this feedback, DATCP formed a work group comprised of industry personnel and local health department agent program representatives. The group was tasked with further revision of the rule. During deliberations, the work group concluded that the safety of many wholesale food processing activities, when performed by retail food establishments, could be ensured by compliance with Wis. Admin. Code ch. ATCP 75 and the appendix thereto, Wisconsin Food Code. Thus, compliance with the additional requirements in Wis. Admin. Code ch. ATCP 70 was unnecessary. The work group recognized that additional training would be needed for local health department agent personnel, as well as DATCP sanitarians, who were assigned to retail food establishments performing these wholesale food processing activities. DATCP, as part of its ongoing mission to thoroughly train food safety personnel at the state and local level, is committed to providing both the necessary initial training and ongoing technical support.
The work group’s efforts culminated in a newly revised final draft of Wis. Admin. Code ch. ATCP 70 that redefined “wholesale” and “retail”, clarified the exemption for retail food establishments from the requirement to hold a food processing plant license when conducting limited (not more than 25% of gross annual food sales) wholesale food processing activities, and redrew the boundaries for permitted types of wholesale food processing activities. Perhaps the most salient change was that a transfer of food between two food processing plants or retail food establishments is not regarded as wholesaling, as long the two businesses involved are operated by the same licensed entity, and the firm transferring the food does not relinquish control of the food. This change reflects current guidance from the United States Food and Drug Administration (“FDA”) and the United States Department of Agriculture, Food Safety and Inspection Service.
The revised definitions of “wholesale” and “retail” reflect industry practice and the current interpretation of these terms in the marketplace, as well as FDA’s recent guidance and its sanction of industry practice. The revised definitions also appear in the pending revision to Wis. Admin. Code ch. ATCP 75 (Retail Food Establishments). While the revised rule continues to prohibit retail food establishments from processing canned low-acid or acidified foods for wholesale without holding a food processing plant license and complying with Wis. Admin. Code ch. ATCP 70 requirements, DATCP expects the other updates to clarify and facilitate enhanced business opportunities for retail food establishments in Wisconsin.
Another theme of early discussions of the proposed rule revision was the question of whether additional regulations were necessary to ensure sanitary conditions in food processing plants sharing a building with a residence. The initial draft of the revised rule forbade the licensing of any new or remodeled food processing plant in this situation. However, the working group agreed there was no need for an outright ban or other additional regulation to ensure adequate separation between residential and processing activities or access for DATCP inspections. Accordingly, the proposed revision was deleted.
In addition to resolving these complex issues, the revised rule makes several other changes. The rule adopts the Model Ordinance for molluscan shellfish, now marine shellfish, with the Ordinance replacing all of Wis. Admin. Code s. ATCP 70.21 except for the existing subsection addressing illnesses and outbreaks associated with shellfish. This modification will keep Wisconsin’s regulations current with national standards for shellfish processing and marketing.
This revised rule also:
- Updates the definition of “food processing” to include the activities of a vending machine commissary.
- Updates the definition of “food processing plant” to conform to the statutory definition.
- Clarifies the definition of extended runs, i.e., continuous processing not interrupted by daily cleaning and sanitizing, and the scope of waivers allowing those runs, while clarifying and expanding the list of food processing activities during which daily cleaning and sanitizing are not required. The duration and review of such waivers are also defined.
- Updates certain outdated restrictions on hot-smoked, vacuum-packed fish. Previous requirements were unique to Wisconsin whereas the updates mirror requirements in other states and are based on current FDA guidance.
- Mandates filing and obtaining process-authority approval for processes used in the preparation of canned acidified or low acid foods.
- Enables food processing plants to obtain waivers from DATCP for variances to allow non-standardized and innovative equipment, utensil, processes and procedures. Prior to this revision, waivers and variances could only be obtained by food processing plants for structural and equipment issues. Waivers related to facility construction do not have an expiration date while waivers related to equipment, utensils, processes, procedures, and alternative cleaning and sanitizing frequencies are for a period of five years, but do not expire until the department takes action on a request for reissuance as long as the license holder makes a timely application for reissuance.
- Updates and clarifies language pertaining to the standards for, and testing of, operations water and ingredient water used in the various bottling and processing operations in Wisconsin, as well as finished product sampling and analysis for bottling establishments.
- Expands the scope of bottling rules to encompass more than bottled water and soda, thereby keeping pace with this rapidly changing and innovative segment of the bottling industry.
- Maintains the regulatory floor of $25,000 in sales for food processing plants that are required to pay the canning license fee surcharge.
- Clearly specifies requirements exempted by so-called “grandfather clauses,” that apply to a continuing license-holder who does not increase processing area dimensions (floor-wall junctions, floor drainage, and service sink or curbed drain); install, substantially reconstruct, or extensively alter toilet facilities (separately vented to the outside, equipped with an exhaust fan capable of creating a negative pressure, and do not open directly into a food processing area); install, substantially reconstruct, or extensively alter hand-washing facilities for toilet rooms (tempered or hot-cold mixed water, non-hand operated faucets) or for food processing areas (not located in the food processing area, tempered or hot-cold mixed water, non-hand operated faucets); or install a warewashing sink (3 compartments).
- Requires license holders that install toilet rooms after the effective date of the rule and food processing plants that are initially licensed or licensed to a new operator after the effective date of the rule to have toilet rooms contiguous with the food processing plant.
Federal and Surrounding State Programs
The major federal regulations implementing FSMA and applicable to food processing plants are found in 21 CFR 117. Other federal regulations apply to canned low acid (21 CFR 113) and acidified (21 CFR 114) foods, seafood processing (21 CFR 123) and juice processing (21 CFR 120). Current language on the molluscan shellfish program was deleted in order to adopt the Federal Model Ordinance, applicable to marine shellfish shipped for wholesale, in order to provide that segment of the Wisconsin food industry with regulatory consistency within interstate commerce.
Surrounding State Programs
Michigan, Iowa, and Minnesota license and regulate food processing facilities within their borders as Wisconsin does. Illinois food processors are regulated only by the FDA. Wisconsin, Illinois, and Michigan also have state programs for the National Shellfish Sanitation Program which allows them to receive, process, and ship shellfish interstate.
Data and Analytical Methodologies
In order to identify potential changes to the rule, DATCP reviewed recent changes in FDA regulations such as those implementing FSMA, FDA guidance on the applicability of Hazard Analysis and Critical Control Point (“HACCP”) requirements for juice and seafood processors; Wisconsin statutes and rules for food processing plants, retail food establishments, meat establishments, and dairy plants; and current industrial practices. Upon learning of industry concerns about proposed licensing and regulatory requirements for retail food establishments conducting food processing for wholesale activities, DATCP delayed further consideration of the rule and convened a collaborative work group comprised of industry and local health department agent personnel to review and revise the requirements. The work group’s conclusions are reflected in the present revised rule.
Effect on Small Business
A positive impact of this rule revision on all classes of business is the expanded ability of food processing plants to apply for waivers from requirements related to equipment, utensils, processes or procedures. This change may allow the use of new and innovative techniques and processes so long as the processor can demonstrate that food safety is not compromised. In addition, the costs of facility upgrades necessitated by the loss of a grandfather exemption (see following paragraphs) may be mitigated if the license-holder requests a variance from a facility requirement, provided the variance meets the public health intent of the requirement.
No economic impact comments were received during the August 8, 2017-September 7, 2017 comment period.
Supervisors of DATCP staff who inspect all of licensed food processing plants were surveyed to provide an estimate of the number of license-holders that would be affected by new requirements. DATCP staff knowledgeable in facility construction costs were queried about likely costs of new facility requirements. These staff, in turn, consulted commercial equipment and construction personnel to obtain or verify cost estimates. Finally, an informal economic impact comment period was held between August 20 and September 3, 2019. All licensed food processing plants were contacted by either e-mail (1,378 businesses) or mail (531 businesses) and asked for their assessment of costs they would have to bear due to new requirements. Over 200 responses (greater than 11%) were received.
The estimated economic impact is $656,000 across 1900 businesses. Costs have been attributed to possible one-time upgrades in handwashing sinks, toilet rooms, and exit doors that some firms may have to make.
The rule requires handwashing sinks in toilet rooms or food processing areas to meet modern requirements for mixing of hot and cold water and hands-free operation in newly licensed facilities or in facilities operated by a license-holder continuing since on or before November 1, 2009 in which the handwashing sinks are substantially reconstructed or extensively altered. The requirement is already in place for new license-holders or installations of handwashing sinks in already-licensed food processing plants. DATCP estimates that not more 40 businesses would face the costs of new sink installation. DATCP estimates that costs for these businesses would not exceed $1,000 apiece. The total cost estimate includes $40,000 for handwash sink upgrades. Survey response data support this estimate as approximately 70% of respondents indicated that "none" or "slight" costs would be imposed. Comments indicated a high level of existing compliance with this requirement. Cost estimates listed in the comments ranged from a few hundred dollars to less than $10,000 per business. Some commenters who provided relatively higher cost estimates were apparently unaware that less-expensive "wrist paddle" or "foot pedal" operation would meet the requirement and described the costs and challenges of installing and using electronic-sensor operated faucets.
The rule requires newly installed toilet rooms to be contiguous to the food processing area. This requirement applies if either the toilet room was constructed after the date of this rule or in food processing plants newly opened or operated by a new license-holder after the date of this rule. Pre-existing non-contiguous toilet rooms in a food processing plant operated by the same license-holder since on or before the date of this rule would be allowed, provided applicable state and local regulations were met. DATCP estimates that, based on history, not more than 40 businesses choose to install a toilet room in a given year. Costs of construction could vary widely depending on the situation, but a worst-case estimate of $10,400 per business was used in arriving at the figure of $416,000 included in the total estimated economic impact. Survey responses corroborate DATCP's estimate as more than 80% of respondents indicated none or slight costs for compliance. Most of the written comments indicated that firms were in compliance, either with contiguous toilet rooms or non-contiguous toilet rooms that complied with state and local requirements.
The rule contains a provision that food processing plant exit doors open outwards, consistent with long-standing building code requirements. More than 70% of survey respondents indicated none or slight costs of compliance. Most written comments described compliant exit doors or doors that likely would be approved following the Department's variance process. The costs of door replacements described by a small number of commenters were less than $10,000. DATCP estimates that not more than 40 businesses would face costs of $5,000 or less; a figure of $200,000 is included in the total estimated economic impact.
The rule continues to allow firms operated without changes in processing area dimensions by the same license-holder since on or before June 30, 1989, to be exempt from requirements for coving of floor-wall junctions, floor slope and drains, and provision of service sinks or curbed floor drains for disposal of mop water and similar wastes. Since 1989, these requirements have been enforced on all new license holders pursuant to state statute requiring licenses to be non-transferable. The rule clarifies this interrelationship of statute and administrative rule and thus no "new" costs are added to industry or included in the total estimated economic impact. The Department has added flexibility to the previous requirement for coving to reduce costs that would be faced by "grandfathered" businesses that choose to alter their processing area dimensions or by new license-holders operating in a previously grandfathered facility.
Aside from the above facility-related issues, much of the focus of the proposed rule revision is on the clarification and updating of existing regulations, such as the various exemptions from a food processing plant license and the clarification of various record-keeping requirements. These changes are not anticipated to have a significant financial or other impact.
The rule and revised economic impact analysis were posted for comment September 5-19, 2019.
Questions and comments related to this rule may be directed to:
Steve Ingham, Administrator
Division of Food and Recreational Safety