Support if Amended

Peter Ruddock, Founder- Resilient Foodsheds

Earlier in February a new bill was introduced in the California State Senate by Senator Lena Gonzalez (D – 33):  SB 972 would amend the 2018 law passed as SB 946, titled “Sidewalk Vendors.”

Advocates in Los Angeles had worked on improving the law governing sidewalk vendors, often known as “Food Carts,” for years locally, with little success.  They brought their campaign to the state legislature and celebrated successful passage of SB 946, legalizing sidewalk vending not only in Los Angeles, but throughout California.  

Despite that legalization, it has been a frustrating three years, with regulation required by the law rolling in slowly and often with a narrow interpretation, which makes it difficult and/or expensive to operate a legal food cart, where it is possible at all. So, it is not surprising that advocates are returning to the legislature to amend the law, to ensure that it becomes possible for people to safely and legally operate their micro-enterprise food enterprises.

Food carts have existed for many years, whether they are legal or not.  People make a living from them; other people patronize them regularly.  Like any endeavor, they can cause problems, but on the whole they cause no more than other businesses.  Regulating them will decrease what problems do exist and make them safer, better, tax-paying businesses.  Advocates are to be applauded for working to make this happen and so SB 972 deserves strong consideration.

The authors have made an interesting connection.  They have proposed changing other micro-enterprise food laws to decrease costs for sidewalk vendors, namely letting them source the products of their carts from their own Cottage Food Operations or Micro Enterprise Home Kitchen Operations (MEHKOs).  

This is a very interesting idea, but one that needs some care in implementation.  Among other things, the authors, wanting to ensure at least a living wage for those Sidewalk Vendors who try to make such a wage, have removed all income caps from Cottage Food Operators and from MEHKOs, as well as number of meal caps from MEHKOs.  Here is where a problem lies, as these caps go to the very heart of a micro-enterprise food operation.  Such operations are regulated differently than other food operations because they are capped in size, and therefore will not have the same problems that a full-scale business might have due to their inherently smaller size.

The cap on Cottage Food was raised just last year, though it arguably still does not generate a living wage for operators.  The cap on MEHKOs is arguably way too low, but the law – also enacted in 2018, as AB 626, and also slow to roll in – is new.  To date, only ten jurisdictions in California have begun issuing MEHKO permits.  A few others are in process of adoption, but the majority are waiting for the early adopters to report in or simply sitting on the sidelines.  And so it seems premature to modify caps again, though over time it is expected that these limits will increase, or perhaps be replaced with different limits.  

But the concept of some kind of limits to micro-enterprise seems intrinsic to the very concept of micro-enterprise.  It is expected by many regulators and constituents. Environmental health officials want limits to increase confidence in food safety.  City code enforcement officials want limits to avoid neighborhood nuisance issues.  And restaurateurs expect limits to guarantee against unfair competition.

Restaurateurs occasionally already suggest that micro-enterprise food enterprises are unfair competition.  They can be competition, but they are not unfair.  Operating a restaurant with these limits would simply not work.  But remove them from the micro-enterprises and they would become unfair – wouldn’t many restaurateurs want to work from home if they could have exactly the same business with less regulation?  Undoubtedly many would.

It is, unfortunately, expected that while this bill exists in its unamended form, many jurisdictions that are investigating adopting the MEHKO law will suspend their process while they wait for some certainty.  Moreover, if the bill were to pass without amendment, it can be assumed that many jurisdictions would withdraw their intention of adopting the MEHKO law, something which would hurt not only would-be MEHKOs, but the very constituents the bill aims to support, would-be sidewalk vendors.

And so, while the intent behind SB 972 is worthy of support, this bill can only be supported if it is amended to acknowledge limits for micro-enterprise food enterprises.