(a) Except as provided by paragraph (b) of this section, the requirements of this part do not apply to by-products of human food production, or the off-farm packing and holding of raw agricultural commodities, that are packed or held by that human food facility for distribution as animal food if:

(1)(i) The human food facility is subject to and in compliance with subpart B of part 117 of this chapter and in compliance with all applicable human food safety requirements of the Federal Food, Drug, and Cosmetic Act and implementing regulations; or

(ii) For the off-farm packing and holding of produce (as defined in part 112 of this chapter), the human food facility is subject to and in compliance with § 117.8 of this chapter and in compliance with all applicable human food safety requirements of the Federal Food, Drug, and Cosmetic Act and implementing regulations; and

(2) The human food facility does not further manufacture or process the by-products intended for use as animal food.

(b) The human food by-products for use as animal food identified in paragraph (a) of this section must be held and distributed by that facility in accordance with §§ 507.28 and 117.95 of this chapter.