Hiya! Where are you at? (Salem, here)
The dept you're looking for is the Dept of Agriculture, believe it or not. The food safety stuff through the Health Dept is close, but if you're looking for non-legislative info regarding home bakeries, Agriculture's where to go.
Domestic (primary) kitchen bakeries and second-kitchen bakeries are treated differently. The relevant laws are in ORS 625 and OAR 603-021; you can get to these through the state site. (Going from memory - I'm away from my bookmarks.)
I don't think that a food handlers license is required, but a pre-license inspection is required (they'll give you the license application during your inspection), and if you are going to build your kitchen, you need to submit blueprints (not applicable if it's an existing kitchen).
The laws are pretty easy; your licensing fee is $75 annually for under $1k or $5k. However, I cannot stress this enough - **Check out your city/county's legislation on home businesses!** Marion County wants $2k a year for home-based businesses with very few exceptions. (My henna business is exempt; a cake business would not be).