By Marsha Mercer Stateline.org
WWR Article Summary (tl;dr) As the food truck industry has grown, the lines between food trucks and stand-alone restaurants have blurred. Food truck operators often move to brick-and-mortar locations while established restaurants add food trucks. This has led to a need for states across the country to redefine existing laws in order regulate the industry.
As food trucks started rolling onto American streets a decade or so ago, states set health standards for them but left specific rules for mobile food vendors to cities and counties.
Now, faced with a complicated and sometimes conflicting system of local regulations, permits and inspections, some states are stepping in to cut the red tape.
In Utah, a new law that allows food trucks to move among localities with a single license goes into effect next month.
"As far as I know, we're the first state to take this step," said state Sen. Deidre Henderson, a Republican, who led the push for the statewide law. "Unlike most issues, this was difficult in that there were no states to model after."
In Maryland, the Legislature passed a less-sweeping bill that is being reviewed by Republican Gov. Larry Hogan. A new law in Washington state requires all mobile food trucks to have a state permit and inspection. The law removed a previous exemption for trucks used outside the state for six months or more. Other state measures are more targeted, such as allowing mobile food vending in commuter lots in one planning district in Virginia.
In all, 13 states have considered 37 bills involving some aspect of food truck regulation since 2015, according to the National Conference of State Legislatures (NCSL). Only a handful of the bills became law, but none were controversial, said Doug Farquhar, NCSL's program director for environmental health.
Some 4,130 food trucks operate in nearly 300 American cities, with each truck averaging almost $291,000 in revenue, according to the U.S. Chamber of Commerce Foundation.
"As we get more and more food trucks, we get to the point where states need to regulate this industry," Farquhar said. Every state extended existing state health department rules for restaurants to food trucks, he said. But food trucks raise new questions.
For example, while ice cream stands, hot dog carts and lunch wagons serving pre-made sandwiches and snacks at construction sites are nothing new, gourmet food trucks that cook raw food on-site presented new food safety challenges, such as access to hot water for hand-washing and sanitary food preparation.
"If you're constantly out, where does the wastewater go and the trash? Those are novel problems you don't have with a stand-alone restaurant," Farquhar said.
The U.S. food truck industry is one of the strongest food service areas, the market research firm IBISWorld reported in November. The industry grew nearly 8 percent a year from 2011 to 2016. But it is reaching its saturation point in many cities, the report said, with annual revenue growth expected to slow to 3 percent through 2021.
As the industry has grown, the lines between food trucks and stand-alone restaurants have blurred. Food truck operators often move to brick-and-mortar locations while established restaurants add food trucks, according to the National Restaurant Association.
Still, restaurateurs worry about competition from mobile vendors parked close to brick-and-mortar establishments, and some municipalities set parking time and location limits. Some, like a 30-minute parking rule in Sacramento, California, were later lifted.
In North Carolina, the Charlotte City Council last month revised its food truck ordinance, reducing permitting rules and allowing the trucks to stay open later and park closer to homes. But it added a rule that food trucks not be located within 50 feet of a restaurant without the owner's approval.
Food truck owners complain that complying with myriad local rules is costly and time-consuming and hampers their ability to do business in multiple jurisdictions.
"We had very different regulations, often conflicting fire and safety regulations, and fees from county to county and city to city," said Utah's Henderson, who was approached by the Libertas Institute, a think tank in Utah that promotes free market policies, about the need for a statewide food truck law.
Utah has 29 counties and about 300 cities and towns. In West Jordan, a food truck license costs $1,400 and is good for only six months. The truck is prohibited from operating in the city the rest of the year. North Salt Lake requires license renewal four times a year, $800 in all.
Under the new Utah law, localities retain some control over when and where food trucks can operate, but they cannot ban food trucks entirely or charge high fees to generate revenue, Henderson said.
She conceded the law may need tweaks. One concern is how localities will collect tax revenue from mobile vendors operating in different locations.
"I hope we hit the mark, and I think we did," she said. "We may make changes, but we're off to a good start."
Dave Pulford spent 30 years in the mortgage business before he started selling sliders from his UpSlideDown Dave food truck in Maryland five years ago. He expanded his menu to include full-size sandwiches, bought a second truck and is building out a third.
"Trucks like mine go to five different jurisdictions, Montgomery, Howard and Ann Arundel counties, the District of Columbia and Baltimore City," said Pulford, who is also the president of the Maryland Mobile Food Vending Association. "I'd like to go to eight."
But every license renewal "takes me off the road for a day, and I have to make up $2,000 in lost revenues and the $1,000-plus in fees," he said. Each jurisdiction charges a different fee.
"Get a license in each locality? I get that. But there should be one law everybody has to follow," he said, adding that caterers or restaurants in Maryland can operate statewide with one license.
"Am I a mobile vendor, a restaurant on wheels, a caterer? I think I'm all of the above," Pulford said.
Last year, he talked about his business challenges with Maryland state Del. Warren Miller, a Republican whose grandmother happened to operate a lunch wagon at construction sites in Howard County after she retired from a school cafeteria. "She made simple lunch stuff," Miller said. "Food trucks now are sophisticated."
Miller sponsored the bill requiring county health departments to issue a reciprocity license to any mobile food truck that holds a valid license in its home county and is operating within 90 miles of its base. The bill also limits the fee for the reciprocity license to $300.
"This changes the way food trucks are regulated. It puts the responsibility on the home county," Miller said. "This means there are a lot more days in the year that the operator is out selling food rather than getting permits."
The Maryland bill focuses on licensing and does not limit localities' regulation of food trucks on their streets as Utah's law does. For example, Annapolis, the state capital, can continue to ban food trucks.
Miller's bill failed last year, but after a rewrite, the new bill sailed through both houses, slowing only so that more legislators could sign on as co-sponsors.
Both Miller and Utah's Henderson said they worked with restaurateurs, food truck owners, local officials and health and fire departments in writing successful bills.
But reciprocity laws mark a new approach. And in Maryland, some officials worried that food truck operators will choose as their home county one whose rules are less stringent, but the bill allows local inspections.
Maryland bases its regulations on federal food safety law, meaning standards for food trucks are consistent in localities statewide, said Dr. Clifford Mitchell, director of the environmental health bureau of the Maryland Department of Health and Mental Hygiene.
The goal, he said, was to ensure all trucks in the state "operate in a safe fashion, follow the same procedures, and are equipped and appropriately managed."