HBA-MPM C.S.H.B. 3598 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 3598
By: Capelo
Public Health
4/10/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, the Texas Department of Health (TDH) regulates distressed food,
drugs, devices, and cosmetics for the purpose of reintroducing these goods
into normal commerce.  TDH regulates the goods using applicable provisions
of the  Texas Food, Drug, and Cosmetic Act and the Texas Food, Drug,
Device, and Cosmetic Salvage Act.  These two acts work in unison to protect
consumers from unnecessary health risks associated with adulterated and
misbranded products. C.S.H.B. 3598 clarifies the authority granted to TDH
through the Texas Food, Drug, and Cosmetic Act as it applies to licensed
salvagers. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Board of Health in SECTION 7
(Section 432.011, Health and Safety Code) of this bill. 

ANALYSIS

C.S.H.B. 3598 amends the Health and Safety Code to provide that the Texas
Food, Drug, and Cosmetic Act applies to a food, drug, device, or cosmetic
that is distressed merchandise or has been subject to reconditioning in
accordance with the Texas Food, Drug, Device, and Cosmetic Salvage Act. The
bill provides that in relation to distressed merchandise, law prohibiting
the introduction, delivery, holding, receipt, or distribution in commerce
of goods that are adulterated or misbranded does not prohibit the
introduction, delivery, holding, or receipt in commerce for the purpose of
reconditioning according to the Texas Food, Drug, Device, and Cosmetic
Salvage Act. 

The bill prohibits the commissioner of health (commissioner) or an
authorized agent from detaining or embargoing an article, including an
article that is distressed merchandise, that is in the possession of a
person licensed under the Texas Food, Drug, Device, and Cosmetic Salvage
Act and that is being held for the purposes of reconditioning unless the
commissioner or agent finds or has probable cause to believe that the
article cannot be adequately and lawfully reconditioned.  The bill
authorizes the Texas Department of Health (TDH) to detain or embargo an
article, including distressed merchandise that is in the possession of a
person licensed under the Texas Food, Drug, Device, and Cosmetic Salvage
Act and that is being held for reconditioning if TDH has reason to believe
that the article cannot be adequately and lawfully reconditioned.  The bill
provides an affirmative defense to prosecution under these provisions if
the conduct charged is exempt because the actions were for the purposes of
reconditioning. 

C.S.H.B. 3598 provides that a salvage operator or salvage broker who is
engaging only within the scope of the license issued Texas Food, Drug,
Device, and Cosmetic Salvage Act is not required to also be licensed under
the Texas Food, Drug, and Cosmetic Act. 

The bill requires the Texas Board of Health to adopt rules prescribing
standards for salvaged food, drugs, devices, and cosmetics in separate
subchapters. 



 EFFECTIVE DATE

On passage, of if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3598 differs from the original bill by specifying that regarding
distressed merchandise, law prohibiting the introduction or delivery,
receipt, or distribution in commerce of goods that are adulterated or
misbranded does not prohibit the holding of merchandise for the purpose of
reconditioning according to the Texas Food, Drug, Device, and Cosmetic
Salvage Act. The substitute modifies the definition of "distressed
merchandise" to include any food, drug, device, or cosmetic that has been
subjected to conditions that result in either its strength, purity, or
quality falling below that which it purports or is represented to possess. 

The substitute also removes provisions from the original exempting a person
who holds a license under the Texas Food, Drug, Device, and Cosmetic
Salvage Act as a food manufacturer or food wholesaler. The substitute
requires the board to adopt rules prescribing standards for salvaged food,
drugs, devices, and cosmetics in separate subchapters.