LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7546 NOTE PREPARED: Jan 16, 2025
BILL NUMBER: HB 1562 BILL AMENDED:
SUBJECT: Farm and Home Based Food Sales.
FIRST AUTHOR: Rep. Smith H BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Explanation of State Expenditures: The bill repeals current small farm and home based vendor regulations.
The bill provides that the Indiana Department of Health (IDOH), a local unit of government, the Health and
Hospital Corporation of Marion County, or a local health department may not impose any rules, regulations,
certifications, or licensing requirements on a small farm or home based vendor that are not required under
federal law.
The bill also exempts public buildings used by small farms and home based vendors from certain public
building regulations.
Effective Date: July 1, 2025.
Explanation of State Expenditures: The bill could initially increase workload for the IDOH to revise any
rules, policies, and guidelines which are not required under federal law that govern home based vendors and
small farms. This could potentially include many restaurants, bed and breakfast establishments, mobile retail
food establishments, and wholesale food establishments and distributors, based on the bill’s definitions.
These changes may ultimately lead to a reduction in workload related to inspections and enforcement under
current law. The IDOH conducts inspections of wholesale food manufacturers and distributors; however, the
majority of enforcement related to the other food establishment entities is handled by local health
departments. [The IDOH's administrative expenditures are currently paid from the Tobacco Master
Settlement Fund.]
A “home based vendor,” as defined by the bill, is a person that prepares and sells food products from the
person’s property and from which not more than $1.5 M in gross sales is received in a single year. A large
number of restaurants in Indiana may fit this definition.
A “small farm,” as defined by the bill, is land that is used for growing crops or raising livestock and from
which not more than $1.5 M in gross sales is received in a single year from the livestock products or
HB 1562 1 cultivated or harvested crops. An estimated 90% of Indiana farms have annual sales under $500,000 and
could meet the definition of a “small farm” under the bill.
Additional Information: Home based vendors are currently exempt from the regulations under IC 16-42-5:
Sanitary Requirements for Food Establishments. The bill maintains this exemption, but expands the
definition of a “home based vendor,” exempting additional entities.
Any entity that would fall under the definition of a “home based vendor” or “small farm” would be exempt
from those regulations, as well as regulations under IC 16-42-5.2: Certified Food Protection Managers (food
handlers). Currently, home based vendors are required to obtain a Food Protection Manager Certification by
an issuer that is accredited by the ANSI National Accreditation Board and must provide a copy of this
certificate to the IDOH or an end consumer upon request. In current law, the IDOH may inspect home
kitchens, or small farms, in the instance of a complaint or if the IDOH believes a health hazard exists.
The IDOH currently has 23 employees in the Food Protection Division. They conduct inspections of food
establishments on state property and wholesale food manufacturers and distributors. They also support local
health departments with resources and training regarding food establishments. IDOH inspections of produce
farms are to ensure compliance with federal regulations. The Food Protection Division also manage other
tasks pertaining to multi-state foodborne illness outbreaks and nationwide recalls.
Explanation of State Revenues: If additional entities are exempt from regulations of sanitary requirements
for food establishments, revenue to the state General Fund from civil penalties could be reduced. Civil
penalties range from $50 to $1,000 per day per violation.
Penalty Provision: Reckless violations of food sanitary requirements or refusals to comply with written
orders from the IDOH by food establishments are Class B misdemeanors. If a significant number of
establishments are excluded from these regulations, fewer misdemeanor violations may occur. However,
court data from FY 2017 through FY 2024 do not show any filed or convicted charges under these statutes.
The following linked document describes the court fees and distribution of the revenue: Court fees imposed
in criminal, juvenile, and civil violation cases.
Explanation of Local Expenditures: The bill could initially increase workload for local units of
government, the Health and Hospital Corporation of Marion County, and local health departments to revise
any rules, policies, and guidelines for home based vendors and small farms, if they are not required under
federal law. This may also include revising rules, policies, and guidelines for food establishments that fit the
bill’s definitions for a home based vendors or small farms (any person or farm that has less than $1.5 M in
gross sales in a single year. See Explanation of State Expenditures).
Conversely, the bill could reduce workload for local health departments as they would no longer need to
inspect home kitchens or small farms in response to a complaint or a belief that a health hazard exists.
Workload may be further reduced for local health departments regarding food establishments that fit the
bill’s definitions for a home based vendor or small farm, as the majority of enforcement and inspections
related to food establishments is done by local health departments. Any applicable federal regulation related
to food establishments, small farms, and home-based vendors would still apply.
The bill could also reduce workload for local fire departments and building inspectors related to inspections
of these entities as the bill provides that public buildings used by home based vendors and small farms are
exempt from Indiana Fire Prevention and Building Safety Commission laws and rules.
HB 1562 2 Penalty Provision: A Class B misdemeanor is punishable by up to 180 days in jail.
Explanation of Local Revenues: The bill would reduce revenue to local health departments and the Health
and Hospital Corporation of Marion County from fees currently received for retail food establishment
licenses and civil penalties from violations of regulations. Licensing fees vary by county. Civil penalty
amounts are set in rule by the IDOH and range from $50 to $1,000 per day per violation.
The bill could also reduce revenue related to civil penalties for certain building code violations as the bill
provides that public buildings used by home based vendors and small farms are exempt from Indiana Fire
Prevention and Building Safety Commission laws and rules.
Penalty Provision: Certain violations of food establishments are Class B misdemeanors. Court data from FY
2017 through FY 2024 do not show any filed or convicted charges under these statutes. The following linked
document describes the court fees and distribution of the revenue: Court fees imposed in criminal, juvenile,
and civil violation cases.
Additional Information: Some counties set retail food establishment license and permit fees based on the
square footage (such as Porter county, ranging from $250 to $600), the number of employees (such as
Monroe County, ranging from $165 to $600), or the category of the establishment type (such as Steuben
County, ranging from $50 to $100). Fees may be lower for partial year permits, temporary event permits, and
limited operations.
State Agencies Affected: Indiana Department of Health.
Local Agencies Affected: Local health departments, fire departments, building inspectors, trial courts, local
law enforcement agencies.
Information Sources: Indiana Supreme Court, Indiana Trial Court Fee Manual;
Indiana State Department of Agriculture:
https://www.in.gov/isda/about/about-indiana-agriculture/;
US Department of Agriculture:
https://www.nass.usda.gov/Statistics_by_State/Indiana/Publications/Annual_Statistical_Bulletin/2223/IN
2223Bulletin.pdf;
Indiana Department of Health:
Registration Application For a Retail Food Establishment, State Form 49677 (R8/5-13);
https://www.in.gov/health/food-protection/files/Home-Based-Vendors-FAQ-FINAL.pdf;
https://www.in.gov/health/food-protection/retail/how-to-start-a-retail-food-business/;
https://www.in.gov/health/food-protection/files/Memo-to-LHDs-HEA-1210-CFPM-FINAL.pdf;
https://www.in.gov/health/food-protection/;
County Retail Food Establishment Licensing and Permit Fee examples: Steuben, Monroe, Porter Counties.
Fiscal Analyst: Heather Puletz, 317-234-9484; Allison Leeuw, 317-234-9465.
HB 1562 3