BILL ANALYSIS

Senate Research Center	C.S.S.B. 1864
89R23041 SCF-D	By: Johnson
	Health & Human Services
	4/10/2025
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

As the price of eggs increases and consumer choice decreases, it is necessary to examine the scope of egg production and provide residents in the state with a wider variety of options while also supplying high quality, safe products. Under current law, individuals selling eggs from their own flock are allowed to sell ungraded eggs directly to consumers; however, regulations prohibit retailers and wholesalers from purchasing ungraded eggs. To grade eggs, producers must acquire potentially costly licenses, and this requirement prevents small egg producers from selling their eggs.

Creating an option for ungraded licensure would allow small egg producers better access to this market and promote transparency in the industry. Under this bill, small egg producers would be permitted to sell up to 120 dozen eggs a week at wholesale, on the condition that they label the cartons with information associated with the producer and the eggs being sold. Ungraded eggs are currently sold directly to consumers in Texas, and there are no indications that their safety has been a problem. This bill would authorize these producers to sell to retailers and wholesalers and align with current standards for direct-to-consumer transactions.

S.B. 1864 would permit individuals to sell ungraded eggs to retailer and wholesalers if the eggs are clearly labeled with specific identifying information and if they hold an ungraded dealer-wholesaler license obtained from the Texas Department of Agriculture (TDA). Furthermore, the individuals must also keep detailed records for applicable products and follow sanitation procedures as laid out in statute. Lowering barriers for entry while maintaining public trust in the quality of products for smaller scale producers to access the retail market would improve purchasing options for consumers and bolster local economies that rely on these operations.

C.S.S.B. 1864 would allow individuals to sell any quantity of ungraded eggs directly to consumers, up to 500 dozen ungraded eggs per week at wholesale and cap the annual registration fee by TDA to $50.00 to align with small scale production practices. It also requires individuals to refrigerate the eggs within 36 hours of collection, maintain the eggs at a temperature of 45 degrees Fahrenheit or below during storage and distribution, and states that a state agency or political subdivision may not restrict an individual described by Section 132.021(b) of the Texas Agriculture Code from participating in this practice.

C.S.S.B. 1864 amends current law relating to egg grading and the selling of ungraded eggs and authorizes a fee.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 132.002, Agriculture Code, as follows:

Sec. 132.002. New heading: SALE OF UNGRADED EGGS BY PRODUCER. (a) Creates an exception under this section.

(b) Authorizes a person who produces eggs as described by Subsection (a) to sell any quantity of ungraded eggs directly to consumers in this state and, subject to Subsections (d) and (e), up to 500 dozen ungraded eggs per week at wholesale in this state.

(c) Requires a person who sells ungraded eggs as provided by Subsection (b) to label the cartons of eggs with a label that is legible, appears on the top panel of the carton, and contains the word "ungraded," the producer's name, the producer's address, the date the carton was packed, and, if the eggs are sold or offered for sale at wholesale, the producer's registration number as provided by Subsection (d).

(d) Requires a person to register with the Texas Department of Agriculture (TDA) if the person produces eggs as described by Subsection (a) and sells eggs at wholesale. Authorizes TDA to set an annual registration fee of not more than $50.

(e) Requires a person who sells eggs as described by Subsection (d) to maintain records as provided by Section 132.061 (Records), within 36 hours of collecting the eggs, refrigerate the eggs, maintain the eggs at an ambient temperature of 45 degrees Fahrenheit or below during storage and distribution, and follow the sanitation requirements of Section 132.045 (Sanitation Required) when handling eggs sold or offered for sale at wholesale.

(f) Prohibits a state agency or political subdivision from prohibiting a person described by Section 132.021(b) (relating to entities that buy or sell eggs but are not required to obtain a license from TDA) from purchasing, reselling, or using eggs described by Subsection (c).

SECTION 2. Effective date: upon passage or September 1, 2025.