Economic Development

Policy Bullseye for the Hawkeye State: Iowa Passes Food Freedom and Home-Based Business Law

Just last month, Iowa passed HF 2431 to allow food and business flexibility for Iowans. With food prices up 10.1% from May 2021, Americans are feeling the grocery price crunch. As a remedy, many are forgoing a return to restaurants and are instead continuing their eating-in habits established during the COVID-19 pandemic. Others are seeking alternatives by producing food themselves or by creating home-based businesses to generate alternative streams of income. Some Americans are even combining these options to become food entrepreneurs by producing food to sell. 

The Iowa bill, which was signed by Governor Kim Reynolds on June 14th, prevents counties in Iowa from prohibiting “a no-impact home-based business” and from requiring the entrepreneurs to “apply, register, or obtain any permit, license, variance, or other types of prior approval.” By removing barriers, the law “helps the new business owner as well as individuals who are buying products and services these home-based businesses provide,” according to ALEC Board Member and Iowa Representative John Wills, who helped sponsor the bill. 

HF 2431 also allows Iowans additional leeway to sell homemade food items. It creates different guidelines and rules for home-based food-producing establishments depending on specific criteria, including if the food is “time/temperature control for safety food.” Depending on the type of food prepared, a food processing establishment might only have to meet certain labeling requirements. Alternatively, if the food requires certain treatment to avoid “pathogenic microorganism growth or toxin formation,” the FPE will need to get a license and is subject to inspections, among other requirements. 

ALEC’s Commerce, Insurance, and Economic Development (CIED) Task Force has similarly aimed model policies: the Home-Based Business Fairness Act and the  Food Freedom Act. As explained in this ALEC blog post, the Home-Based Business Fairness Act lifts restrictions on home-based businesses that have limited to no impact on neighbors. ALEC’s Food Freedom Act similarly lifts restrictions on home-based food businesses that sell “non-potentially hazardous homemade food items” by replacing applicable “licensing, permitting, inspection, packaging, and labeling laws” with limited disclosure requirements. It also allows the sale of “potentially hazardous homemade foods,” though these are subject to stricter guidelines.

As Representative John Wills explained in an ALEC podcast earlier this year, reforms like those in HF 2431 provide “freedom for people to be able to develop businesses and thrive.” With prices increasing due to high inflation, Americans need that freedom from unnecessary and anticompetitive regulations to make choices best for them and their families. 

In Depth: Economic Development

The United States is among the most developed economies in the world. This has led to a standard of living that is simply unmatched throughout the world or throughout history. Even in such a developed and comparatively wealthy nation, policymakers still must allocate resources appropriately to encourage further economic development…

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