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It's hardly unusual to hear small-business owners gripe about licensing requirements or complain that heavy-handed regulations are driving them into the red.

So when Multnomah County shut down an enterprise last week for operating without a license, you might just sigh and say, there they go again.

Except this entrepreneur was a 7-year-old named Julie Murphy. Her business was a lemonade stand at the Last Thursday monthly art fair in Northeast Portland. The government regulation she violated? Failing to get a $120 temporary restaurant license.

Turns out that kids' lemonade stands -- those constants of summertime -- are supposed to get a permit in Oregon, particularly at big events that happen to be patrolled regularly by county health inspectors.

"I understand the reason behind what they're doing and it's a neighborhood event, and they're trying to generate revenue," said Jon Kawaguchi, environmental health supervisor for the Multnomah County Health Department. "But we still need to put the public's health first."

Julie had become enamored of the idea of having a stand after watching an episode of cartoon pig Olivia running one, said her mother, Maria Fife. The two live in Oregon City, but Fife knew her daughter would get few customers if she set up her stand at home.

Plus, Fife had just attended Last Thursday along Portland's Northeast Alberta Street for the first time and loved the friendly feel and the diversity of the grass-roots event. She put the two things together and promised to take her daughter in July.

The girl worked on a sign, coloring in the letters and decorating it with a drawing of a person saying "Yummy." She made a list of supplies.

Then, with gallons of bottled water and packets of Kool-Aid, they drove up last Thursday with a friend and her daughter. They loaded a wheelbarrow that Julie steered to the corner of Northeast 26th and Alberta and settled into a space between a painter and a couple who sold handmade bags and kids' clothing.

Even before her daughter had finished making the first batch of lemonade, a man walked up to buy a 50-cent cup.

"They wanted to support a little 7-year-old to earn a little extra summer loot," she said. "People know what's going on."

Even so, Julie was careful about making the lemonade, cleaning her hands with hand sanitizer, using a scoop for the bagged ice and keeping everything covered when it wasn't in use, Fife said.

After 20 minutes, a "lady with a clipboard" came over and asked for their license. When Fife explained they didn't have one, the woman told them they would need to leave or possibly face a $500 fine.

Surprised, Fife started to pack up. The people staffing the booths next to them encouraged the two to stay, telling them the inspectors had no right to kick them out of the neighborhood gathering. They also suggested that they give away the lemonade and accept donations instead and one of them made an announcement to the crowd to support the lemonade stand.

That's when business really picked up -- and two inspectors came back, Fife said. Julie started crying, while her mother packed up and others confronted the inspectors. "It was a very big scene," Fife said.

Technically, any lemonade stand -- even one on your front lawn -- must be licensed under state law, said Eric Pippert, the food-borne illness prevention program manager for the state's public health division. But county inspectors are unlikely to go after kids selling lemonade on their front lawn unless, he conceded, their front lawn happens to be on Alberta Street during Last Thursday.

"When you go to a public event and set up shop, you're suddenly engaging in commerce," he said. "The fact that you're small-scale I don't think is relevant."

Kawaguchi, who oversees the two county inspectors involved, said they must be fair and consistent in their monitoring, no matter the age of the person. "Our role is to protect the public," he said.

The county's shutdown of the lemonade stand was publicized by Michael Franklin, the man at the booth next to Fife and her daughter. Franklin contributes to the Bottom Up Radio Network, an online anarchist site, and interviewed Fife for his show.

Franklin is also organizing a "Lemonade Revolt" for Last Thursday in August. He's calling on anarchists, neighbors and others to come early for the event and grab space for lemonade stands on Alberta between Northeast 25th and Northeast 26th.

As for Julie, the 7-year-old still tells her mother "it was a bad day." When she complains about the health inspector, Fife reminds her that the woman was just doing her job. She also promised to help her try again -- at an upcoming neighborhood garage sale.

While Fife said she does see the need for some food safety regulation, she thinks the county went too far in trying to control events as unstructured as Last Thursday.

"As far as Last Thursday is concerned, people know when they are coming there that it's more or less a free-for-all," she said. "It's gotten to the point where they need to be in all of our decisions. They don't trust us to make good choices on our own."

No need to jack up the price of a glass of lemonade. Turns out kids won't have to shell out $120 for a health permit to run their lemonade stands after all.

Multnomah County's top elected official apologized Thursday for health inspectors who forced a 7-year-old girl to shut down her stand last week because she didn't have a food-safety permit.

Chairman Jeff Cogen also said he has directed county health department workers to use "professional discretion" in doing their jobs.

Inspectors told Julie Murphy and her mother, Maria Fife, to stop selling lemonade at the monthly Last Thursday arts festival in Northeast Portland last week. State law technically requires that even lemonade stands have temporary restaurant licenses, which cost $120 for one day.

Cogen said the inspectors were "following the rule book," but should consider that food-safety laws are aimed at adults engaged in a professional food business, not kids running lemonade stands.

"A lemonade stand is a classic, iconic American kid thing to do," he said. "I don't want to be in the business of shutting that down."

Cogen talked with Fife for five to 10 minutes to apologize.

Fife said she appreciated his apology after the furor and her daughter was happy because "she's starting to see it had some effect."

Fife also said a radio station has offered to sponsor a lemonade stand for Julie.

The mother and her daughter had gone to Last Thursday because it seemed like a fun place for Julie to open her first lemonade stand, said Fife, who lives in Oregon City.

But after 20 minutes of selling lemonade made from their gallon jugs of bottled water and Kool-Aid packets, a health inspector asked for their license. They didn't have one, and the inspector warned them to stop or face up to a $500 fine.

Initially, vendors at other booths encouraged them to stay, but the inspector returned with another woman. The crowd surrounded the two inspectors, who felt threatened, Cogen said. Fife and her daughter, who left the street fair crying, packed up and the two inspectors left.

Several people who read about the stand in The Oregonian offered to pay the girl's fee so she can sell lemonade. In addition, one of the Last Thursday vendors is planning a "lemonade revolt" at the festival this month.

Cogen and health department officials said they aren't sure what their response will be if people set up unlicensed lemonade stands, as the protest calls for. Cogen emphasized that his employees' safety is also a top concern for him.

The problem illustrates an ongoing dilemma for the health department -- and other local agencies -- in regulating aspects of Last Thursday, Cogen said.

Unlike other events including the upcoming Bite of Oregon or the Cinco de Mayo festival, the free-form Last Thursday fair along Northeast Alberta Street doesn't have a single organizer who takes charge of signing up vendors. People set up booths on a first-come, first-served basis. They don't have to register for space in advance.

The county health department still needs to monitor the food operations at Last Thursday for public health reasons, said Wendy Lear, director of business services for the county health department. Instead of dealing with a single organizer -- who typically has a list of participating vendors and could provide the basic sanitation and hand-washing facilities -- health inspectors have to check with each vendor.

The festival has grown in scope and in cost to taxpayers. In February, the city said it spends about $10,000 a month in the summer for police, security, barricades and traffic control for Last Thursday. Residents have complained of festival-goers urinating and vomiting in front of their houses and other drunken and rowdy behavior.

City Commissioner Amanda Fritz said she and Mayor Sam Adams will present a plan for Last Thursday in the next two weeks. She declined to discuss details, though she noted that vendors at Last Thursday don't pay vendor fees, which she said is "different from any other street fair" in Portland.

She added she believes the health inspectors were right to shut down the lemonade stand.

"When you've got 15,000 people, it's no longer a neighborhood event, it's a regional event," she said. "The county has the responsibility to fairly enforce the rules on permits and food handlers' permits."

City Commissioner Amanda Fritz said she and Mayor Sam Adams will present a plan for Last Thursday in the next two weeks. She declined to discuss details, though she noted that vendors at Last Thursday don't pay vendor fees, which she said is "different from any other street fair" in Portland.

She added she believes the health inspectors were right to shut down the lemonade stand.