If signed, the new law would mean smaller chicken farms could sell to restaurants only under certain conditions.
Indiana ranks third nationally in egg production, and preventing avian flu from reaching the state's birds is crucial.
An outbreak of avian flu in states across the Midwest earlier this year prompted the Indiana Board of Animal Health to issue a ban on poultry shows.
The avian flu has killed about 10 percent of the nation's laying flock population.
State-inspected meat processing facilities in Indiana must now receive clear test results on their meat products before shipping them.
WFIU’s Dan Goldblatt grew up on a small chicken farm himself and takes a look at 4-H families who teach their kids poultry farming, from chick to frying pan.