Is It Illegal To Get Cost Reimb????

Business By cakemama2010 Updated 8 Sep 2010 , 3:48am by BarbieAnnPlaysWithHerFOOD

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cakemama2010 Posted 24 Aug 2010 , 6:47pm
post #1 of 66

I live in Florida and therefore can't bake from home. I've looked around online and can't find an answer...is it illegal to have customers only reimburse for the cost of supplies as long as my labor is free?? Any thoughts and opinions would be great!

65 replies
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cai0311 Posted 24 Aug 2010 , 6:51pm
post #2 of 66

This has been addressed many times.

It is illegal to receive any form of payment even if just enough to cover expenses.

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kelleym Posted 24 Aug 2010 , 7:00pm
post #3 of 66

You should call your local Health Department or Department of Agriculture to get the answer to your question.

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Penny7271 Posted 24 Aug 2010 , 7:01pm
post #4 of 66

Illegal is illegal. It is the same thing in my state. I cannot accept anything from anybody for making a cake. I would love to have a business....but it can never be in my home. And I am not in a place to set up a shop or rent space in a kitchen right now. Maybe someday.

As hard as it is to accept...I must follow the law. And certainly I don't like the consequences if I am discovered selling cakes illegally.

I wish that everyone would just follow the rules...

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tiggerjo Posted 24 Aug 2010 , 7:27pm
post #5 of 66

I am from NY and don't know the rules about home baking but my guess is that it is illegal. My question, is how do the Amish get away with it with no fines. Not only do they sell roadside here but right from their porches. I have constant even heat in my Electric oven and RUNNING water in my kitchen. What's up with that.

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Larkin121 Posted 24 Aug 2010 , 7:30pm
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One of those things that's really dependent on your local HD. You said customers, which is a strange word to use... usually if someone is baking and being reimbursed for the ingredients it's just a friend or family member. Here, it's not legal to sell baked goods from a home. Very technically, you also can't be reimbursed for the ingredients. However, HD isn't searching out someone making a cake for grandma that grandma gave you ingredients or reimbursed ingredient cost for. They're after you if you start doing this on an ongoing basis, for friends of friends and so forth. Some people get very worked up on this topic... I don't sell my cakes, I don't do cakes other than for family and friends and I only let them reimburse me for EXACT ingredient costs (when it's not just a gift from me, which isn't often). I'd call your HD. In most cases, they tell you the full extent of the law, but if you ask if you can make your mom a cake and have her cover the ingredients, the answer is almost always, "Well, technically no, but we'd have no way of knowing that and that's between you and your mom."

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schnumvf Posted 24 Aug 2010 , 8:18pm
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@ tiggerjo Amish have running water and ovens too. They just use gas or generators. How they go about selling w/o a license.... thats another story.

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jason_kraft Posted 24 Aug 2010 , 8:34pm
post #8 of 66
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Originally Posted by tiggerjo

My question, is how do the Amish get away with it with no fines.



They don't.

http://www.usatoday.com/news/health/2007-03-14-amish-food-safety_N.htm

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3GCakes Posted 24 Aug 2010 , 8:51pm
post #9 of 66
Quote:
Originally Posted by cakemama2010

I live in Florida and therefore can't bake from home. I've looked around online and can't find an answer...is it illegal to have customers only reimburse for the cost of supplies as long as my labor is free?? Any thoughts and opinions would be great!




I don't see how being reimbursed for cost....penny for penny....is illegal. Does this standard only apply to food? I wonder.

This would make living in America extremely difficult. I couldn't babysit someone's child if they only paid me the amount of money it costs to make a peanut butter sandwich.

I couldn't fix someone's railing on a front porch if they only paid me for the screws it took.

It's puzzling...and troubling. What the heck kind of world would such a system create? ---oh wait. I think we see it on the news everyday.

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jason_kraft Posted 24 Aug 2010 , 9:04pm
post #10 of 66
Quote:
Originally Posted by 3GCakes

Quote:
Originally Posted by cakemama2010

I live in Florida and therefore can't bake from home. I've looked around online and can't find an answer...is it illegal to have customers only reimburse for the cost of supplies as long as my labor is free?? Any thoughts and opinions would be great!



I don't see how being reimbursed for cost....penny for penny....is illegal. Does this standard only apply to food? I wonder.



The issue is accepting any form of compensation (cash, ingredients, and/or services) for food made in a kitchen that is not licensed. The compensation, even if it's only a penny, makes the transaction commercial, and licensing requirements kick in at that point. It has nothing to do with the amount of compensation.

Of course, in practice if you limit your commercial transactions to your close friends and family and you don't advertise, you are probably OK, since the health department wouldn't know what you were doing. Just remember that every time someone pays you for something they ingest, you are exposed to a huge amount of liability if something goes wrong (like the recent salmonella outbreak). If someone gets sick, you could potentially lose all your personal assets if you are not properly protected with an LLC and liability insurance.

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What the heck kind of world would such a system create?



A world where people who sell food for mass consumption are held to a higher standard of safety than someone making dinner for their family at home. Sounds fair to me.

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Penny7271 Posted 24 Aug 2010 , 9:11pm
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It goes back to the amount...making a cake for a friend or family member every now and then - not a problem. Doing it as a business with many customers - there is the problem.

Babysitting for a friend or neighbor - not a problem. Running an unlicensed day care center out of your home - there is a problem.

The rules are there for the protection of both the provider and the providee. I don't like it. I would LOVE to say YES to the all of the requests I have gotten this past year (I stopped counting at about 30) to make cakes/cupcakes for people. But I can't since I have to respect the law.

What if I had unknowingly used one of those eggs that was eventually recalled? And someone got sick? I am not licensed, I am not insured. I could lose everything - depending on the actions that are taken. Then, I feel awful that I made someone sick PLUS my life is in financial shambles.

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kelleym Posted 24 Aug 2010 , 9:25pm
post #12 of 66
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The issue is accepting any form of compensation (cash, ingredients, and/or services) for food made in a kitchen that is not licensed. The compensation, even if it's only a penny, makes the transaction commercial, and licensing requirements kick in at that point.



This is not true everywhere, which is why the OP, and everyone in her situation, should call their local HD or Dept. of Ag to find out their local rules.

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jason_kraft Posted 24 Aug 2010 , 9:25pm
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The babysitting example is a good illustration of how the liability issue is not limited to food. If you babysit for a friend as a favor and someone is injured, you should be covered under either your homeowners insurance policy or the friend's HOI policy, depending on where you were babysitting.

However, if you accept money in exchange for your babysitting services, you are NOT covered under homeowners insurance unless you have a rider that covers business activity. Most HOI policies specifically exclude claims relating to business activity.

Again, if you are babysitting commercially for someone you know well and you're not worried about being sued if something goes wrong, you are probably OK, but advertising your services and babysitting for strangers greatly increases your exposure to risk.

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3GCakes Posted 24 Aug 2010 , 9:30pm
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Here's the thing: Do we want the gov't stepping into our food supply....because if they had their way...they'd probably just treat every food particle with radiation.

There is an extreme to both sides. There are those who drop food on the floor, lick the beaters, then ice the cake. Then there are those who use high-quality local ingredients, sell farm-fresh foods, and even under the best of circumstances (because we live in an imperfect world) cannot 100% guarantee safety.

I don't want the gov't coming in, and controlling my food supply....irradiating all of it, or even dictating what **I** can buy under my own free will.

Once that happens, there will be no **scratch** baking--there will be no advantage to buying from *local* suppliers, there will be no foods that are **unprocessed**.

These laws give in to fear. Just like the recent egg recall---we can all count on the gov't stepping in...and pasteurizing to their heart's content. Even if it means pasteurizing with radiation or any method they choose.

There will always be risks with any food...from anywhere. How much regulation will we put up with...before the regulation itself is causing us to be unhealthy?

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jason_kraft Posted 24 Aug 2010 , 9:31pm
post #15 of 66
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Originally Posted by kelleym

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The issue is accepting any form of compensation (cash, ingredients, and/or services) for food made in a kitchen that is not licensed. The compensation, even if it's only a penny, makes the transaction commercial, and licensing requirements kick in at that point.


This is not true everywhere, which is why the OP, and everyone in her situation, should call their local HD or Dept. of Ag to find out their local rules.



Good point...accepting compensation makes a transaction commercial by definition, but in some areas commercial transactions do not require licensing if the income is below a certain level.

Of course, the exposure to liability is still present for all income levels above $0.

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jason_kraft Posted 24 Aug 2010 , 9:39pm
post #16 of 66
Quote:
Originally Posted by 3GCakes

Here's the thing: Do we want the gov't stepping into our food supply....because if they had their way...they'd probably just treat every food particle with radiation.



The government already closely regulates our food supply, in fact that's why the FDA and USDA exist. I'm not sure about your food, but my food certainly isn't irradiated. icon_smile.gif

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There is an extreme to both sides. There are those who drop food on the floor, lick the beaters, then ice the cake. Then there are those who use high-quality local ingredients, sell farm-fresh foods, and even under the best of circumstances (because we live in an imperfect world) cannot 100% guarantee safety.



No one is required to guarantee 100% safety. Licensing and inspection ensures people who make food for others follow proper procedures in order to minimize risk.

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even dictating what **I** can buy under my own free will.



I agree with you there...laws banning trans fats make no sense to me. Labeling and transparency, yes, but not banning. If someone wants to eat trans fats, they should be made aware that they are doing so by the packaging, and then they should make their own decision.

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Once that happens, there will be no **scratch** baking



Why would food safety regulations stop people from baking from scratch?

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These laws give in to fear. Just like the recent egg recall---we can all count on the gov't stepping in...and pasteurizing to their heart's content.



Except they've already stepped in and recalled the contaminated eggs. No forced pasteurization here.

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3GCakes Posted 24 Aug 2010 , 9:56pm
post #17 of 66
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by 3GCakes

Here's the thing: Do we want the gov't stepping into our food supply....because if they had their way...they'd probably just treat every food particle with radiation.


The government already closely regulates our food supply, in fact that's why the FDA and USDA exist. I'm not sure about your food, but my food certainly isn't irradiated. icon_smile.gif

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There is an extreme to both sides. There are those who drop food on the floor, lick the beaters, then ice the cake. Then there are those who use high-quality local ingredients, sell farm-fresh foods, and even under the best of circumstances (because we live in an imperfect world) cannot 100% guarantee safety.


No one is required to guarantee 100% safety. Licensing and inspection ensures people who make food for others follow proper procedures in order to minimize risk.

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even dictating what **I** can buy under my own free will.


I agree with you there...laws banning trans fats make no sense to me. Labeling and transparency, yes, but not banning. If someone wants to eat trans fats, they should be made aware that they are doing so by the packaging, and then they should make their own decision.

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Once that happens, there will be no **scratch** baking


Why would food safety regulations stop people from baking from scratch?

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These laws give in to fear. Just like the recent egg recall---we can all count on the gov't stepping in...and pasteurizing to their heart's content.


Except they've already stepped in and recalled the contaminated eggs. No forced pasteurization here.




They recalled 380 million eggs. Now...consider that most chickens in every store DO have some salmonella presence.

And I must insist: I am not a conspiracy theorist: but I can see something written on a wall:

http://www.naturalnews.com/029539_salmonella_eggs.html

ANd yes...people do make money off of such stories, but we must all be aware. There is such a possibility. I don't want the gov't to control my food. **I* want to control my food.

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cakemama2010 Posted 24 Aug 2010 , 9:58pm
post #18 of 66

Thanks everyone!! I figured as much. I'm still pretty new at this and really just want to practice cakes without breaking the law. But I also don't want to dig into my own pockets as much if I didn't have to. I was hoping if a potential customer (for lack of a better word-I wouldn't ask fam and friends for anything) bought the ingredients that it wasn't the same as "selling". I DID call the Health Dept and got put on hold for 10 mins and transferred twice, so I gave up and posted here. I really appreciate all the responses!!

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Loucinda Posted 24 Aug 2010 , 11:35pm
post #19 of 66

Contact your local HD - here in Ohio you can make and bake and sell as much as you want to LEGALLY without being licensed. (as long as it does not require refrigeration)

I choose to be licensed, but I don't HAVE to be. There is no limit on how much I can profit in a year either.

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jason_kraft Posted 24 Aug 2010 , 11:47pm
post #20 of 66
Quote:
Originally Posted by Loucinda

Contact your local HD - here in Ohio you can make and bake and sell as much as you want to LEGALLY without being licensed. (as long as it does not require refrigeration)

I choose to be licensed, but I don't HAVE to be. There is no limit on how much I can profit in a year either.



So what can you bake that doesn't require refrigeration? The only things I can think of are vegan cookies, muffins, and pies, since anything made with eggs or dairy would be out.

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kelleym Posted 24 Aug 2010 , 11:50pm
post #21 of 66
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by Loucinda

Contact your local HD - here in Ohio you can make and bake and sell as much as you want to LEGALLY without being licensed. (as long as it does not require refrigeration)

I choose to be licensed, but I don't HAVE to be. There is no limit on how much I can profit in a year either.


So what can you bake that doesn't require refrigeration? The only things I can think of are vegan cookies, muffins, and pies, since anything made with eggs or dairy would be out.



That is not true, there is a specific formula that defines a non-potentially hazardous food. Many cakes and cookies are non-potentially hazardous. Do you keep cookies in the refrigerator?

http://www.deh.enr.state.nc.us/ehs/Food/020614_Potentially_Hazardous_Desserts.pdf

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jason_kraft Posted 24 Aug 2010 , 11:54pm
post #22 of 66
Quote:
Originally Posted by kelleym

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Originally Posted by jasonkraft

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Originally Posted by Loucinda

Contact your local HD - here in Ohio you can make and bake and sell as much as you want to LEGALLY without being licensed. (as long as it does not require refrigeration)

I choose to be licensed, but I don't HAVE to be. There is no limit on how much I can profit in a year either.


So what can you bake that doesn't require refrigeration? The only things I can think of are vegan cookies, muffins, and pies, since anything made with eggs or dairy would be out.


That is not true, there is a specific formula that defines a non-potentially hazardous food. Many cakes and cookies are non-potentially hazardous. Do you keep cookies in the refrigerator?

http://www.deh.enr.state.nc.us/ehs/Food/020614_Potentially_Hazardous_Desserts.pdf



The Ohio law says that cottage food makers may not process potentially hazardous foods. Eggs and most dairy products are potentially hazardous.

That's why I mentioned vegan products, since they do not use eggs or dairy.

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kelleym Posted 24 Aug 2010 , 11:56pm
post #23 of 66

I know all about the Ohio law. Please stop trying to scare people with misinformation.

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jason_kraft Posted 24 Aug 2010 , 11:58pm
post #24 of 66
Quote:
Originally Posted by kelleym

I know all about the Ohio law.



So what is your interpretation of the Ohio 901:3-20-05 Prohibition "A cottage food operation may not: (A) Process potentially hazardous foods"?

I'm not trying to "scare" people, I'm just trying to get a better idea of what the OH law does and does not allow.

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kelleym Posted 25 Aug 2010 , 12:05am
post #25 of 66

From Chuck Kirchner, Ohio Department of Agriculture:

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We also have Cottage Foods which allows non-potentially hazardous baked goods to be made in the Home kitchen without inspection and without being licensed. Those products are only permitted to be sold within Ohio as long as they are properly labeled. This category has been growing at a greater rate than Home Bakeries.




This is from an email correspondence between him and myself. I've done my homework, and then some, on Cottage Food Laws. I'm not interested in arguing semantics of another state's law with you. I just want to point out that it's really irresponsible to be advising people about laws and regulations that you have no personal knowledge of.

Everyone should follow the law. Everyone should have liability insurance if you have a business. But everyone should also contact their local authorities to find out what the regulations in their area are.

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jason_kraft Posted 25 Aug 2010 , 12:15am
post #26 of 66
Quote:
Originally Posted by kelleym

From Chuck Kirchner, Ohio Department of Agriculture:

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We also have Cottage Foods which allows non-potentially hazardous baked goods to be made in the Home kitchen without inspection and without being licensed. Those products are only permitted to be sold within Ohio as long as they are properly labeled. This category has been growing at a greater rate than Home Bakeries.



That quote doesn't address my concern about processing ingredients that are potentially hazardous, even if the final product is NPH.

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This is from an email correspondence between him and myself. I've done my homework, and then some, on Cottage Food Laws. I'm not interested in arguing semantics of another state's law with you. I just want to point out that it's really irresponsible to be advising people about laws and regulations that you have no personal knowledge of.



I'm not "advising" anyone of anything...if you read my posts, I've only quoted the text of the law and asked questions.

I had not read the Ohio Cottage Food law before today, but the prohibition against processing PH foods stuck out as a potentially major issue for commercial home bakers, depending on how it is interpreted by the state and county health depts. I would be interested in seeing an official response from OH on this, I did a quick search but didn't come up with anything.

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Everyone should follow the law. Everyone should have liability insurance if you have a business. But everyone should also contact their local authorities to find out what the regulations in their area are.



I agree 100%. Everyone should also do their best to understand the regulations in their area, and the way the OH law is written is somewhat unclear, at least IMO.

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kelleym Posted 25 Aug 2010 , 12:23am
post #27 of 66

It's unclear if you're searching for technicalities to seize on. It's not unclear to the Department of Agriculture, or the thousands of legal home bakers in that state.

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jason_kraft Posted 25 Aug 2010 , 12:44am
post #28 of 66
Quote:
Originally Posted by kelleym

It's unclear if you're searching for technicalities to seize on. It's not unclear to the Department of Agriculture, or the thousands of legal home bakers in that state.



Has the OH DoA made a statement clarifying this provision?

The clarity of the law to existing home bakers is irrelevant, as they do not officially interpret and enforce the law. Most people don't even read the law.

I only read the OH law in the first place because someone had mentioned that there was no income limit, which seemed unusual for a cottage food law. Hopefully the prohibition on processing PH food refers to the finished goods and not the ingredients, as it stands that particular provision was sloppily written IMO.

The MI law is much clearer, since there is no mention of "processing" PH food. In fact, MI specifically mentions cake as an OK item. However, MI does not have separate classifications for "home bakeries" (in OH: $10/year fee, no carpet in kitchen or pets in home) and "cottage food manufacturers" as OH does.

http://www.legislature.mi.gov/%28S%28ssza4ffcuqmzbb55r3fdofqq%29%29/mileg.aspx?page=getObject&objectName=mcl-289-1105
http://michigan.gov/mda/0,1607,7-125-50772_45851-240577--,00.html
http://www.agri.ohio.gov/licensing/odalicensing.aspx?div=Food%20Safety

Just to be clear, home bakers in OH should not panic because of the above discussion. As long as you operate in good faith within the cottage food law as you understand it you should be fine.

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bizatchgirl Posted 25 Aug 2010 , 1:01am
post #29 of 66

Hi KelleyM! You are my hero. I wish you were in Az working to establish change for our Cottage Food laws. I hope that once Tx gets on the wagon, more states will follow.

I wonder since you have put so much effort and research into all the cottage food laws and such...if you would know if I'd be ok (as a home baker, non-licensed) to donate a cake to a (church) silent auction for a charitable event.

I wouldn't be too concerned if I was just donating the cake outright, but I was asked if I could donate a certificate so that the person could choose their design at a later date. To me, that line gets awfully close to 'advertising'.

Am I good because I'm not accepting money, or should I still check in with my local DoH?

Thanks for your help

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Loucinda Posted 25 Aug 2010 , 1:04am
post #30 of 66

I have complete trust in the inspector and the Ohio Dept. Of Agriculture. I can give you his name and phone number for you to debate with him what is allowed and what is not. I KNOW what is, I LIVE here, and I have talked with him on several occasions.

For me, I will follow the direction of the food safety specialists here in Ohio that regulate (and license) me.

jasonkraft, you ARE posting info that is incorrect, whether you want to admit it or not.

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