WATER DEMAND COMMITTEE MEETING
ITEM:		ACTION ITEM
2.	DISCUSS CALIFORNIA HOMEMADE FOOD ACT, AB 1616, WATER PERMIT REQUIREMENT
Meeting Date:			August 13, 2013	Budgeted:	N/A
From:			David J. Stoldt	Program/		N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Pintar	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation:
CEQA Compliance: N/A

SUMMARY: Staff recently received an inquiry regarding the California Homemade Food Act (AB 1616), also known as the Cottage Food Operation (CFO). The new law became effective January 1, 2013. A CFO is an enterprise at a private home where specific low-risk food products that do not require refrigeration are prepared or packaged for sale to consumers.

Staff learned that the Jurisdictions do not require a permit for CFOs. However, applicants must hold a valid permit issued by the Monterey County Environmental Health Department (MCEHD). There are two classifications of Cottage Food Operations: Class A for direct sales and Class B for direct and indirect sales.

• “Direct Sale” means a transaction between a CFO operator and a consumer, where the consumer purchases the cottage food product directly from the CFO. Direct sales include, but are not limited to, transactions at holiday bazaars or other temporary events such as bake sales or food swaps; transactions at farm stands, certified farmers’ markets, or through community-supported agriculture subscriptions; and transactions occurring in person in the cottage food operation. CFO products cannot be sold to retail food facilities, wholesale, or by mail order. Products cannot be sold out of state. Internet sales must be picked up or delivered in person within the state of California. The registration requires a completed application, self-certification checklist, and an annual fee of $65.00.

• “Indirect Sale” means an interaction between a CFO, a third-party retailer, and a consumer, where the consumer purchases cottage food products made by the CFO from a third-party retailer that holds a valid permit issued by the local environmental health agency in their jurisdiction. Indirect sales include, but are not limited to, sales made to retail shops or to retail food facilities where food may be immediately consumed on the premises. CFO products can be sold to retail food facilities or by mail order. Products cannot be sold out of state. Internet sales must be picked up or delivered in person within the state of California. The annual permit requires a completed application, kitchen inspection completed by MCEHD staff, and an annual fee of $260.00.

DISCUSSION: Residential Water Demand is determined by the number and types of water fixtures. Each fixture in a residence has a fixture unit value and is equivalent to 0.010 acre-foot. District Rule 20, Permits Required, requires a Water Permit when new water fixtures are installed in a Residential Use. Staff is requesting direction on whether the District should require a Water Permit for Cottage Food Operations when no new water fixtures are being installed in a Residential Use. , consider, however, that water use may increase due to washing, rinsing, and sanitizing of any equipment used in food preparation, washing and sanitizing hands and arms, and water used as an ingredient of cottage food. Furthermore, a CFO can have one full-time equivalent employee.

RECOMMENDATION: The Water Demand Committee should discuss its position on the California Homemade Food Act. The committee should provide direction to staff regarding drafting a Resolution to address the need of a Water Permit.

IMPACT ON STAFF/RESOURCES: N/A

EXHIBIT

2-A California Homemade Food Act Frequently Asked Questions Sheet

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