The California Retail Food Code establishes uniform health and sanitation standards for retail food facilities for regulation by the State Department of Public Health. It requires local enforcement agencies to enforce these provisions.

Before 2012, the California Retail Food Code (CRFC) required all food sold to consumers to be made at an inspected commercial kitchen. With the passage of the California Homemade Food Act known as "cottage food operations" (CFO) in 2013, specific low risk (i.e., shelf-stable, non-perishable) food products such as bread, fruit jams, and dried fruit could be made in private home kitchens and be sold to consumers under limited conditions.

On September 18, 2018, then-Governor Brown signed Assembly Bill 626 (AB 626), amending the California Retail Food Code. AB 626 became effective January 1, 2019. This Bill established a "microenterprise home kitchen operation" (MEHKO) as a new category of a retail food facility. It would define MEHKO as a restricted food service facility where a resident operates in a private home, and food is stored, handled, prepared for, and may be served to consumers.

Specified requirements under AB626, among others, include:

• The operation has no more than one full-time equivalent food employee, not including a family member or household member,
• Food is prepared, cooked, and served on the same day,
• Food preparation is limited to no more than 30 individual meals per day, or the approximate equivalent of meal components when sold separately, and no more than 60 individual meals, or the approximate equivalent of meal components when sold separately, per week. The local enforcement agency may decrease the limit of the number of individual meals prepared based on the food preparation capacity of the operation. Still, it shall not, in any case, increase the limit of the number of individual meals prepared.;
• The operation has no more than fifty thousand ($50,000) in verifiable gross annual sales, as adjusted annually for inflation based on the California Consumer Price Index.

• Etc.

Although AB 626 passed California State Legislature and was signed by then-Governor Brown, the Bill authorizes, either by ordinance or resolution, the governing body of a city, County, or City and County to permit microenterprise home, kitchen operations if certain conditions are met.

After AB 626, a clean-up bill (Assembly Bill 377; AB377) was signed into law by Governor Newsom. AB 377 became effective on October 7, 2019.

This clean-up bill includes and clarifies the following:

1. Prohibits a MEHKO from producing, manufacturing, processing, freezing, or packaging milk or milk products, including but not limited to cheese and ice cream;
2. Modifies the conditions for a city, County, or City and County to permit MEHKO(s) within its jurisdiction. The County is the only entity allowed to opt-in by ordinance or resolution, except if a city has its own environmental health enforcement agency (e.g., City of Berkeley);
3. Modifies the inspections and food safety standards applicable to MEHKO;
4. Prohibits an internet food service intermediary or a MEHKO from using the word 'catering' or any variation of that word in a listing or advertisement of a microenterprise home kitchen operation's offer of food for sale;
5. Requires MHKO to include specific information, including its permit number, in its advertising; and
6. Prohibits third-party delivery service from delivering food produced by a MEHKO, except to an individual who has a physical or mental condition that is a disability that limits the individual's ability to access the food without the assistance of a third party delivery service.

Staff, with the assistance of Michelle Rubalcava, County Lobbyist, have invited Rexford Scott, Legislative Aide, and lead staffer of AB 626/377 to provide the Board with expertise on the policy and implementation of Microenterprise Home Kitchen Operations.

April 13, 2021, The Board of Supervisors received a presentation from staff and discussed the potential adoption of an ordinance permitting Microenterprise Home Kitchen Operations (MEHKOs) to operate within the County of San Benito.

From the April 13, 2021 Board meeting, no action was taken. Board consensus took the MEHKO item back to the Intergovernmental Committee to discuss further and receive input from respective Cities, the City of Hollister and the City of San Juan Bautista.

The MEHKO item was presented to the Intergovernmental Committee on June 3, 2021, and it was agreed that representatives from both Cities would take the item back to the respective boards.

San Juan Bautista City Council, on June 15, 2021, heard and discussed Microenterprise Home Kitchen Operations in the City of San Juan Bautista. The consensus of the Council was to opt-out of the program.

No definite input has been received from the City of Hollister; it was tentatively placed on March 7, 2022, Hollister City Council Meeting Agenda for further discussion.