HF 1006 (LSB 1067HZ (1) 91)

HOUSE FILE 1006

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HF 179)
(SUCCESSOR TO HF 32)

A BILL FOR

An Act providing for the licensing of food processing plants, including certain operations located on the premises of farms or private residences, and providing fees.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 137F.1, subsection 10, Code 2025, is amended to read as follows:
   10.  a.  “Food processing plant” means a any of the following:
   (1)  A commercial operation that manufactures, packages, labels, or stores food for human consumption and does not provide food directly to a consumer for distribution or sale on a wholesale basis.
   (2)  An operation located on the premises of a farm or private residence that stores officially processed packaged meat or poultry raised by the licensee and offered for sale on a wholesale or retail basis.
   b.  “Food processing plant” does not include any of the following:
   a.  (1)  A premises covered by a class “A” beer permit as provided in chapter 123.
   b.  (2)  A premises of a residence in which honey is stored; prepared; packaged, including by placement in a container; labeled; or from which honey is distributed.
   c.  (3)  A premises covered by a class “A” wine permit as provided in chapter 123.
   d.  (1)  (4)  (a)  The premises of a raw milk dairy where raw milk is produced, processed, labeled, marketed, or distributed by a raw milk producer in compliance with chapter 195.
   (2)  (b)  A premises of a raw milk dairy where a raw milk product or raw milk dairy product is manufactured, labeled, marketed, or distributed by a raw milk producer in compliance with chapter 195.
    Sec. 2.  Section 137F.6, subsection 1, paragraph g, Code 2025, is amended by striking the paragraph and inserting in lieu thereof the following:
   g.  (1)  Except as provided in subparagraph (2), for a food processing plant, the annual license fee shall correspond to the annual gross food and beverage sales of the food processing plant, as follows:
   (a)  For annual gross sales of less than two hundred thousand dollars, one hundred fifty dollars.
   (b)  For annual gross sales of at least two hundred thousand dollars but less than two million dollars, three hundred dollars.
   (c)  For annual gross sales of two million dollars or more, five hundred dollars.
   (2)  For a food processing plant operating on the premises of a farm or private residence that stores officially processed packaged meat or poultry derived from animals raised by the licensee and offered for sale on a wholesale or retail basis, the license fee is seventy-five dollars.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   BACKGROUND. Code chapter 137F regulates businesses engaged in commercial food preparation and sale. The regulations are administered and enforced by the department of inspections, appeals, and licensing. One such regulated establishment is a food processing plant (plant) that manufactures, packages, labels, or stores food for human consumption but does not provide food directly to a consumer on a retail basis (Code section 137F.1). A plant must be licensed by the department (Code sections 137F.3 and 137F.4) and pay an associated license fee (Code section 137F.6). In 2023, the general assembly enacted legislation that revised the method used to calculate annual license fees imposed on plants (2023 Iowa Acts, chapter 82). The fee amount is based on a series of increasing steps calculated using the plant’s gross annual sales during the prior year. The first step is $75 for gross sales up to but not including $50,000, the second step is $150 for gross sales of $50,000 or more but less than $200,000, the third step is $300 for gross sales of $200,000 or more but less than $2 million, and the fourth step is $500 for gross sales of $2 million or more (Code section 137F.6).
   BILL’S PROVISIONS —— EXPANDED DESCRIPTION OF FOOD PROCESSING PLANTS. This bill provides that a plant includes an operation located on the premises of a farm or private residence that stores officially processed packaged meat or poultry raised by the licensee and offered for sale on either a wholesale or retail basis.
   BILL’S PROVISIONS —— LICENSE FEES. The bill also revises the license fee schedule for plants. It distinguishes between two categories of plants: the first is a general category and the second is a category of plant where meat is processed on the premises of a farm or private residence. Under the general category, the fee amount is based on a series of three increasing steps calculated again using the plant’s gross annual sales. For a plant with annual gross sales of less than $200,000, the fee amount is $150; for a plant with annual gross sales of at least $200,000 but less than $2 million, the fee amount is $300; and for a plant with annual gross sales of $2 million or more, the fee amount is $500. Under the second category, the fee amount is a flat $75.