H.F. 2431 Section 1. NEW SECTION . 335.35 Home-based businesses. 1 1. For purposes of this section: 2 a. “Goods” means any merchandise, equipment, products, 3 supplies, or materials. 4 b. “Home-based business” means any business for the 5 manufacture, provision, or sale of goods or services that is 6 owned and operated by the owner or tenant of the residential 7 property on which the business operates. 8 c. “No-impact home-based business” means a home-based 9 business for which all of the following apply: 10 (1) The total number of on-site employees and clients does 11 not exceed the county occupancy limit for the residential 12 property. 13 (2) The business activities are characterized by all of the 14 following: 15 (a) The activities are limited to the sale of lawful goods 16 and services. 17 (b) The activities do not generate on-street parking or a 18 substantial increase in traffic through the residential area. 19 (c) The activities occur inside the residential dwelling or 20 in the yard of the residential property. 21 (d) The activities are not visible from a street adjacent to 22 the residential property. 23 2. The use of a residential property for a home-based 24 business is a permitted use. However, this subsection does not 25 supersede any of the following: 26 a. A deed restriction, covenant, or agreement restricting 27 the use of land. 28 b. A master deed, bylaw, or other document applicable to a 29 common interest ownership community. 30 3. A county shall not prohibit a no-impact home-based 31 business or otherwise require a person to apply, register, or 32 obtain any permit, license, variance, or other type of prior 33 approval from the county to operate a no-impact home-based 34 business. 35 -1- LSB 5079HV (1) 89 js/ns 1/ 5

H.F. 2431 4. A county may establish reasonable regulations on a 1 home-based business if the regulations are narrowly tailored 2 for any of the following purposes: 3 a. The protection of the public health and safety, including 4 rules and regulations related to fire or building codes, health 5 and sanitation, transportation or traffic control, solid or 6 hazardous waste, pollution, or noise control. 7 b. Ensuring that the business is all of the following: 8 (1) Compatible with residential use of the property and 9 surrounding residential use. 10 (2) Secondary to the use of the property as a residence. 11 (3) Complying with state and federal laws and paying 12 applicable taxes. 13 c. Limiting or prohibiting the operation of a home-based 14 business for the purposes of selling alcoholic beverages or 15 illegal drugs, operating or maintaining a structured sober 16 living home, creating or selling pornography, providing nude 17 or topless dancing, or operating any other adult-oriented 18 business. 19 5. A county shall not require as a condition of operating a 20 home-based business that the property be rezoned for commercial 21 use or that the business owner install or equip fire sprinklers 22 in a single-family detached residential dwelling or any 23 residential dwelling with not more than two dwelling units. 24 6. In any proceeding alleging that a county regulation 25 does not comply with this section, the county that enacted the 26 regulation must establish by clear and convincing evidence that 27 the regulation complies with this section. 28 Sec. 2. NEW SECTION . 414.33 Home-based businesses. 29 1. For purposes of this section: 30 a. “Goods” means any merchandise, equipment, products, 31 supplies, or materials. 32 b. “Home-based business” means any business for the 33 manufacture, provision, or sale of goods or services that is 34 owned and operated by the owner or tenant of the residential 35 -2- LSB 5079HV (1) 89 js/ns 2/ 5

H.F. 2431 property on which the business operates. 1 c. “No-impact home-based business” means a home-based 2 business for which all of the following apply: 3 (1) The total number of on-site employees and clients 4 does not exceed the city occupancy limit for the residential 5 property. 6 (2) The business activities are characterized by all of the 7 following: 8 (a) The activities are limited to the sale of lawful goods 9 and services. 10 (b) The activities do not generate on-street parking or a 11 substantial increase in traffic through the residential area. 12 (c) The activities occur inside the residential dwelling or 13 in the yard of the residential property. 14 (d) The activities are not visible from a street adjacent to 15 the residential property. 16 2. The use of a residential property for a home-based 17 business is a permitted use. However, this subsection does not 18 supersede any of the following: 19 a. A deed restriction, covenant, or agreement restricting 20 the use of land. 21 b. A master deed, bylaw, or other document applicable to a 22 common interest ownership community. 23 3. A city shall not prohibit a no-impact home-based business 24 or otherwise require a person to apply, register, or obtain any 25 permit, license, variance, or other type of prior approval from 26 the city to operate a no-impact home-based business. 27 4. A city may establish reasonable regulations on a 28 home-based business if the regulations are narrowly tailored 29 for any of the following purposes: 30 a. The protection of the public health and safety, including 31 rules and regulations related to fire or building codes, health 32 and sanitation, transportation or traffic control, solid or 33 hazardous waste, pollution, or noise control. 34 b. Ensuring that the business is all of the following: 35 -3- LSB 5079HV (1) 89 js/ns 3/ 5

H.F. 2431 (1) Compatible with residential use of the property and 1 surrounding residential use. 2 (2) Secondary to the use of the property as a residence. 3 (3) Complying with state and federal laws and paying 4 applicable taxes. 5 c. Limiting or prohibiting the operation of a home-based 6 business for the purposes of selling alcoholic beverages or 7 illegal drugs, operating or maintaining a structured sober 8 living home, creating or selling pornography, providing nude 9 or topless dancing, or operating any other adult-oriented 10 business. 11 5. A city shall not require as a condition of operating a 12 home-based business that the property be rezoned for commercial 13 use or that the business owner install or equip fire sprinklers 14 in a single-family detached residential dwelling or any 15 residential dwelling with not more than two dwelling units. 16 6. In any proceeding alleging that a city regulation 17 does not comply with this section, the city that enacted the 18 regulation must establish by clear and convincing evidence that 19 the regulation complies with this section. 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill relates to the regulation of home-based businesses 24 by counties and cities. The bill defines the terms “goods”, 25 “home-based business”, and “no-impact home-based business”. 26 For purposes of local government regulation, the bill states 27 that a home-based business is a generally permitted use of a 28 residential property, other than as prohibited by covenant or 29 ownership community agreement. The bill prohibits a county or 30 city from prohibiting or requiring prior approval to operate 31 a no-impact home-based business. The bill allows a county 32 or city to regulate home-based businesses as long as such 33 regulations are narrowly tailored to purposes provided in the 34 bill. The bill prohibits a county or city from requiring 35 -4- LSB 5079HV (1) 89 js/ns 4/ 5

H.F. 2431 as a condition of operating a home-based business that the 1 property be rezoned for commercial use or that the business 2 owner install or equip fire sprinklers in a single-family 3 detached residential dwelling or any residential dwelling with 4 not more than two dwelling units. In any proceeding alleging 5 that a regulation does not comply with the bill, the county or 6 city that enacted the regulation must establish by clear and 7 convincing evidence that the regulation complies with the bill. 8 -5- LSB 5079HV (1) 89 js/ns 5/ 5