California Cottage Food Act Introduced In State Assembly
Decorating By jason_kraft Updated 12 Nov 2012 , 4:47am by ellavanilla
OK, call me lazy, but I don't have any time to read thru the bill - is there a quick bullet point document or website someone has that lists what the final bill says? And when does it comes into effect?
Thanks!
To summarize: Starting Jan 1, 2013, you no longer need a commercial inspected kitchen in California to make and sell non-potentially-hazardous food up to $35K/year gross ($45K in 2014, $50K in 2015 and beyond) either direct to consumers or wholesale within the state. Only private homes qualify.
You still must register (there may be a fee) and self-certify with local law enforcement to confirm that commercial food prep is not concurrent with anything else, no kids or pets are in the kitchen, and everything is clean. There are no inspections unless someone reports you and problems are found with your food, but enforcement officers can enter your facility during hours of operation or "reasonable times". Fees are more expensive if you sell wholesale.
You must complete a food processor course within 3 months of registering. Food you sell must be labeled with "Made in a home kitchen", the food name, your business name, the county name, your registration number, and ingredients in descending order.
Businesses are still responsible for compliance with zoning laws, municipal business licensing laws, HOA restrictions, and collecting sales tax if applicable (it usually won't be in CA).
Here's the list from the enrolled bill text:
(b) This list of nonpotentially hazardous foods shall include, but
not be limited to, all of the following:
(1) Baked goods without cream, custard, or meat fillings, such as
breads, biscuits, churros, cookies, pastries, and tortillas.
(2) Candy, such as brittle and toffee.
(3) Chocolate-covered nonperishable foods, such as nuts and dried
fruit.
(4) Dried fruit.
(5) Dried pasta.
(6) Dry baking mixes.
(7) Fruit pies, fruit empanadas, and fruit tamales.
(
Granola, cereals, and trail mixes.
(9) Herb blends and dried mole paste.
(10) Honey and sweet sorghum syrup.
(11) Jams, jellies, preserves, and fruit butter that comply with
the standard described in Part 150 of Title 21 of the Code of Federal
Regulations.
(12) Nut mixes and nut butters.
(13) Popcorn.
(14) Vinegar and mustard.
(15) Roasted coffee and dried tea.
(16) Waffle cones and pizelles.
http://legiscan.com/gaits/text/662966
http://www.theselc.org/cottagefood/cottage-food-lawscottage-food-law-bill-language
The site has been down for updates, but I know they have a list of the foods you can sell, don't know it they have a bullet point.
Hurm - I'm curious if one could combine commercial baking with home baking - for example I'd never attempt a 4 tiered cake at my house, but it would be nice to just make that small order of cupcakes from home instead of having to drag myself into the bakery for 2 dozen cupcakes. Any thought? I mean, I already have permits and licenses and all the jazz I need to bake commercially, has there been any discussion about combining the two? Would the income cap still apply? Because $35K isn't that much at all, especially where I live. Or maybe the 2 "businesses" would need to be separate?
Your thoughts?
Hurm - I'm curious if one could combine commercial baking with home baking - for example I'd never attempt a 4 tiered cake at my house, but it would be nice to just make that small order of cupcakes from home instead of having to drag myself into the bakery for 2 dozen cupcakes. Any thought? I mean, I already have permits and licenses and all the jazz I need to bake commercially, has there been any discussion about combining the two? Would the income cap still apply? Because $35K isn't that much at all, especially where I live. Or maybe the 2 "businesses" would need to be separate?
Your thoughts?
Your cottage food operation would have to be operated completely from your residence. I guess you could also maintain your license and commercial kitchen as a separate business, but that sounds like a headache. If you already have your whole business set up commercially, it would make sense to continue that way, without all the restrictions applied to cottage food operators.
The law defines a cottage food operation as being in a residence.
SEC. 7. Section 113758 is added to the Health and Safety Code, to read:
113758. (a) Cottage food operation means an enterprise that has not more than the amount in gross annual sales that is specified in this subdivision, is operated by a cottage food operator, and has not more than one full-time equivalent cottage food employee, not including a family member or household member of the cottage food operator, within the registered or permitted area of a private home where the cottage food operator resides and where cottage food products are prepared or packaged for direct, indirect, or direct and indirect sale to consumers pursuant to this part. In 2013, the enterprise shall not have more than thirty-five thousand dollar ($35,000) in gross annual sales in the calendar year. In 2014, the enterprise shall not have more than forty-five thousand dollars ($45,000) in gross annual sales in the calendar year. Commencing in 2015, and each subsequent year thereafter, the enterprise shall not have more than fifty thousand dollars ($50,000) in gross annual sales in the calendar year. A cottage food operation includes both of the following:
My interpretation is that the two businesses would need to be separate. But I don't see anything stopping you from subcontracting orders from your main business to your CFL business (which would then need a Class B license for indirect sales). The income cap would apply to the CFL business, but since you are essentially selling to yourself at a markup you could adjust the wholesale "selling" price down (within reason of course) if you think you'll be in danger of hitting the cap.
The downside is that you would need to maintain two sets of books, two brand identities, two insurance policies, etc., but the rent savings might be worth it. You probably wouldn't even need a new LLC since your existing LLC could own both businesses.
Hurm. I'll look into it. Thanks for the direction!
YIPPEE!!!
I just spent hours poring over the bill and condensing it to the pertinent points for a Class A baker.
I honestly NEVER thought this could happen in California. Color me pleasantly surprised. Even though I may never bake for profit, it is darned nice to know I CAN!
Thanks again to Jason and others for keeping us updated throughout this process.
WOW!!! California has a Cottage Food Law!!! I am amazed and extremely excited!!!
I do have a question though. Since it stipulates that you can not use cream or custard fillings. Does that include things like SMBC or IMBC? Does that include pastry cream too? And would you (we) be telling customers that you can not use those?
What fillings could you use then?
Thanks in advance for your replies 
This is so exciting!!! But of course my family and friends have burned me out on caking for free that I can't stomach the thought of actually going into business.
But maybe in a year or so I will feel differently.
I could cry right now, i'm so freaking happy!!!
cakenewbe: There are some helpful sites on facebook regarding the new law and questions about it. One is Cottage Food Law-supporters of AB1616. If you facebook search Cal cottage law, they should show up.
I do have a question though. Since it stipulates that you can not use cream or custard fillings. Does that include things like SMBC or IMBC? Does that include pastry cream too? And would you (we) be telling customers that you can not use those?
Here's where some education will help you. That's what those food safe courses are for.
So this is how you have to think under this law:
SBMC and IBMC are made from butter and meringue. Did you see those on the forbidden list?
Fruit curds are made from fruit juice, eggs, butter, sugar, water, starch. Are those limited?
OOPS--can you skip the egg part of the fruit curd for compliance? Jason, please?
"without cream, custard" theoretically includes pastry cream, pudding, cream cheese, ganache, whipped cream, and icings/frostings made with cream or cream cheese or custard.
Is custard defined as milk/cream cooked with starch and/or egg? Jason?
You MUST refuse to provide such components of baked goods to customers simply saying "state law regulations, sorry". People generally accept the concern for their safety.
Now what does this list allow for cake decorators? Jason you're the expert.
Let me illustrate one legal example that does not involve more than a minimum of chemicals. Instant pudding mix may be milk-free (check label). If so then you can blend 1 pack pudding mix and 1 cup water and whip that stiff mass into 1 cup shortening with 1 cup sugar to make a "whipped frosting" that complies with the law.With real vanilla or other extracts, it tastes a whole lot better than the commercial stuff that has titanium dioxide and only artificial flavours.
Someone started a FB group for people to specifically discuss getting your CA food business started: https://www.facebook.com/groups/Creatingyourcaliforniacottagefoodbusiness/
It's kind of a mess, since there are a lot of specifics still be decided with regards to the law, and a lot of these people don't have the first clue about how to start or run a business.
Regarding which cream fillings will be allowed, it isn't clear whether ultimate authority for determining this lies with the state public health office or local county health depts...the former is in charge of maintaining the list of allowed items (which is a little vague at this point), but the latter has been tasked with enforcement.
The way this usually works is that anything requiring refrigeration is generally not allowed, but to be sure you can have a product tested to determine acidity and water activity to tell you whether or not it is "potentially hazardous" (meaning at risk for growth of bacteria). There are companies that specialize in this testing, one is Food Safety Net, they have labs in LA and Fresno. http://www.food-safetynet.com/
I just found out that Gov. Brown signed this one tonight. Like others I totally thought this was a long shot! I'm THRILLED! I see more of my profits go down the drain in kitchen fees! It will be wonderful not to have to lug my stuff all the time too!
As for the "perishables"...I don't use them. I saw someone added ganache to the list but that is shelf stable so it, along with the fondant and buttercream recipes I use, are just fine at room temp and I don't refrigerate them. I don't use creams and such that have to be refrigerated because I believe it dries out the cake.
I'm over the moon!!!
Cat
I have a simple questions: What defines a "private home" ? Is a townhome owned privately a private home?
Thanks!
I have a simple questions: What defines a "private home" ? Is a townhome owned privately a private home?
Thanks!
Section 113758(b)(6):
âPrivate homeâ means a dwelling, including an apartment or other leased space, where individuals reside.
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201120120AB1616
So a townhouse would be fine, as would a rented apartment. If you have an HOA you would need to check the bylaws though, as some HOAs have restrictions on home-based businesses.
The Sustainable Economies Law Center (one of the organizations responsible for pushing through AB1616) posted a FAQ on their web site for questions about the new law.
http://www.theselc.org/faq/
I'm excited to see that Orange County already has information available online AND for my needs, it looks like I will need a permit, but not an inspection, which pleases me, because they just make me nervous! I'm so so happy that my dreams to have a functioning bakery didn't die with the economy in 2008! I'm working on my new business plan!
jen
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