If you’re a crazy cottage food nerd like me, chances are that you’ve already heard too much about California’s AB 626 bill for “microenterprise home kitchen operations“, which has been described as a “game changer” for the cottage food industry. But I trust that you have better things to do than read cottage food laws for fun, so I’ll provide some info about the bill below.
However, this article isn’t just about California’s new law… it’s about a seemingly small detail that can easily derail a law that otherwise has great things going for it.
First, let’s catch you up to speed with California’s new, first-of-its-kind law. It was signed into law in September 2018, and will go into effect starting in 2019. What makes it so unique?
- It allows home cooks to legitimately start mini-restaurants from their home kitchen
- Home cooks can use the law to sell virtually any kind of food (a true first for the industry)
- Home kitchens are exempt from many of the requirements that commercial kitchens have to follow
A Nasty Surprise
Wow, did the cottage food industry just jump light-years ahead of itself? Were health departments not paying attention?
Many people probably think the health committee approved this bill because of all the restrictions included in it: same-day food prep, $50K sales limit, no more than 60 meals per week, no indirect sales, etc. And it’s true — those are significant limitations. But even those would not have been likely to appease a health official who has bigger things to worry about than a micro-restaurant movement.
So what could have been in this bill to allow it to pass? Here’s the line:
“The governing body of a city or county, or city and county, shall have full discretion to authorize, by ordinance or resolution, the permitting of microenterprise home kitchen operations in accordance with this chapter.”
Do you understand what that line means? It means that this law has no authority whatsoever. Instead, this law is simply a guideline for a city or county, IF they would like to allow these food establishments in their area. And yes, that’s a big IF. Trust me when I say that to a health committee, that line is, by far, the most important one in the bill.
A Lesson From Illinois
I can’t help but be reminded of Chloe Stirling’s Home Kitchen Operation law in Illinois. Back in 2014, 11-year-old Chloe got nationwide attention when she was shutdown by health officials for illegally selling cupcakes from home. Tons of support followed… she even appeared on the Rachel Ray show and received a brand new commercial kitchen. Legislators created a bill to legally allow a business like Chloe’s, and it would have been very unpopular to nix it. So instead, they added this line:
“This Section applies only to a home kitchen operation located in a municipality, township, or county where the local governing body has adopted an ordinance authorizing the direct sale of baked goods as described in Section 4 of this Act.”
Everyone was overjoyed when that bill passed. The initial bill had met with resistance, but then it was rewritten (guess what was added?) and received overwhelming support. The legislators who passed it looked like heroes for young, budding entrepreneurs. This is what Chloe’s mom said in response:
“We are so excited. When we originally wrote the bill, we were kind of reaching for the moon, and that is actually the bill that ended up passing. So we couldn’t be happier with it.”
How many counties ended up adopting the new law? Very few. I don’t know exactly how many, but I’m pretty confident that (4 years later) it is fewer than a dozen out of 102 counties. And some of those counties took over two years to create an ordinance. The vast majority of comments I get are from frustrated people who can’t believe they can’t use their state’s “law”. This comment really sums it up:
“I’m in DuPage County… When I called there, the guy kind of laughed at me and said that they had no intention of adopting it. I’m kind of at a loss as to what to do to get this to go through.”
The Dangers of Local Regulation
When a cottage food bill gets passed, there are basically three ways it can go:
- It can explicitly require counties or cities to create an ordinance to allow the law.
- It can explicitly prevent counties or cities from disallowing the law.
- It can do neither, which typically allows counties or cities to interpret the bill as they see fit.
Of the options, the first is the worst, the second is the best, and the last is the most common.
Why doesn’t every bill just go with Option #2? Because it is much, much harder to get all parties to agree on passing a bill that automatically applies to everyone in the state. Choose Option #3 (or especially Option #1), and the bill has a much higher chance of becoming law.
There are many examples of all three options, but for the sake of brevity, let’s look at Texas. After the Great Recession, they spent years trying to pass a cottage food law. Although they met with great resistance, they finally passed an extremely restrictive law. The restrictions were enough to satisfy the health committee, and they even added this line:
“A local health department may not regulate the production of food at a cottage food production operation.”
But it wasn’t good enough. Many cities and counties banned cottage food operations based on zoning laws. So even though health departments couldn’t regulate them, the cities and counties regulated them by saying that their homes were not allowed to operate as food businesses in residential zones. This led to a lot of frustration, of course.
Fortunately, that initial bill served as a stepping stone to greater things. A couple years later, they passed an amendment that greatly loosened the restrictions. And this time, they made no mistake by adding this line:
“A municipal zoning ordinance may not prohibit the use of a home for cottage food product operations.”
Now Texas has a good cottage food law, and everyone can use it.
The Dangers of Statewide Regulation
This can happen on a statewide level, too, and the ramifications can be even more severe. Whenever there is something baked into a bill that requires a part of government to take action, it can lead to major delays and frustration.
“The director [of the Ag Department] may adopt, by rule, requirements for cottage food operations.”
It took about a year for them to create rules for cottage food operations, and when they finally did, they were so complicated that now, very few people in Washington actually use that law.
“The Commissioner of Public Health, after consulting with the Commissioner of Consumer Protection, shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to allow the preparation of food in a private residential dwelling for sale for human consumption.”
It took over a year to create those regulations, but then they got stuck in a back-and-forth approval process that never led to a resolution. THREE YEARS after the initial law passed, they finally abandoned the approval process and added the regulations directly to a new bill in 2018. On October 1st, 2018, Connecticut residents finally had a cottage food law to use!
Why Does This Even Happen?
If the health departments never have an intent to pass a law, or make it amenable to a normal citizen, why don’t they just dismiss the idea outright and shut it down from the beginning?
Truthfully, most of the time, that’s exactly what happens. For instance, in Virginia, some people tried to pass a food freedom law. In short, those efforts never got very far in their legislative sessions. This has also happened to many cottage food bills that were too ambitious in their first attempt.
But sometimes, it’s not that easy, especially when their is a lot of public support for an idea, such as when super-cute Chloe was the face of Illinois’ Home Kitchen Operation bill. In California right now, there is a lot of press in support of the illegal food producers that have been shutdown by health officials recently. In fact, CA’s original cottage food law stemmed from such a shutdown back in 2011.
In cases where there is a lot of public support, legislators know that they can’t ignore the issue. If they dismiss the bill in this legislative session, it will just come back again next time, and they might make some enemies along the way. Since they don’t agree with it, they instead add conditions to the bill to remove much of its power, which essentially pushes the responsibility off to someone else. Passing a bill is a complex process, and of course each process is unique and isn’t that simple, but that’s often the crux of why this type of wheel-spinning can happen.
Be Aware of the Opposition
By now you’re probably thinking, “Wow, please remind me never to get involved with passing a cottage food law!”
But in reality, what I’ve outlined above represents some of the worst of what I’ve seen in the cottage food industry over the past decade. For every law that’s gone sour, there are many that have flourished.
For instance, Texas seems to be a polarized state: most states don’t use zoning laws to block a cottage food law. Illinois is also extreme: the health/ag departments in most states don’t worry much about a low-risk cupcake business like Chloe’s.
But the examples above do remind us that we need to be aware when there IS resistance to an idea. And make no mistake about it: there is plenty of resistance to California’s new law. It goes against the grain of what the vast majority of health departments believe.
The Silver Lining
My intent is not to say that California’s new bill should never have been created. In fact, overall, I think it’s a great thing, for the following reasons:
- It has started a bevy of discussion and excitement in CA about selling homemade food
- It will allow the few cities/counties who want it (mainly Riverside) to adopt an ordinance and allow these businesses to operate legally
- It plants the seed for a future amendment, which can make this idea more widely accepted in the future
I personally have spoken with some of the people who started CA’s new bill, and I think very highly of them. In short, the C.O.O.K. Alliance initiated the bill, and that alliance was started by the creators of Josephine, a popular Berkeley tech startup that fostered the sale of illegal homemade meals (until they hit regulatory issues from Alameda County in 2016, and ultimately closed their doors in early 2018).
Those people are quite exceptional and I don’t mean to dismiss their massive effort to get a law like this into place. To be honest, I really didn’t think they could pull it off, even with all of the restrictions that were added. It’s quite impressive and commendable, and I respect them all the more for it.
But we also have to be realistic about what this new law represents. Will it make a large impact in the food economy in California next year? No. Will it allow most Californians to start mini-restaurants in 2019? No. Will we see a swell of new tech startups trying to capitalize on this new industry? Well, yes (actually we already have), but maybe prematurely. Will it be frustrating to most of the home cooks that have gotten so excited about this bill? Yes, it likely will.
My hope is that this new law will lead to greater things. The C.O.O.K. Alliance hopes that this law will provide a model for other states to consider, and I do too. Maybe this law won’t transform the food economy by itself, but at least it’s a promising starting point.