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Texas Agriculture Archive

November 7, 2003

Texas legislature okays
state checkoff effort

By Mike Barnett
Editor

Texas beef producers now have an option for self-promotion if courts uphold a ruling that the national beef checkoff program is unconstitutional.

During the last special session on redistricting, the Texas Legislature passed a law providing the opportunity to establish a state beef check-off program. The bill was signed into law by Gov. Rick Perry on Oct. 13.

"Developing a state checkoff program is probably the best thing we could do," said Jon Johnson, associate director for commodity and regulatory activities for Texas Farm Bureau. "This checkoff will take the place of the national checkoff should the courts declare it unconstitutional. We have to maintain some method of promotion for beef products."

The law is timely in light of continuing attacks in the courts on commodity checkoff programs.

The Eighth Circuit Court of Appeals denied a request on Oct. 17 for a rehearing on a July decision that declared the national beef checkoff unconstitutional.

However, on Oct. 29, the Court approved a request that will allow the beef checkoff program to continue while the U.S. Department of Justice seeks Supreme Court Review.

With the stay in place, producers must continue to pay the mandatory $1-per-head checkoff each time a bovine animal is sold until the case moves toward the Supreme Court.

On Oct. 22, the Sixth Circuit Court upheld a decision by the U.S. District Court for the Western District of Michigan that declared the pork checkoff program unconstitutional. The District Court held that requiring the payment of the assessment via the checkoff program violates the First Amendment rights of pork producers by compelling them to subsidize speech with which they do not agree.

Under the new Texas legislation, if the national beef checkoff program is suspended—either temporarily or permanently—the Texas Beef Council could petition the agricultural commissioner to implement a referendum among individuals who the previous 12 months had paid into beef checkoff programs. Public notice would be required 60 days prior to an election.

"Beef producers would have an up or down vote on approving the program," said Ken Hodges, Texas Farm Bureau associate legislative director, noting that those individuals would be informed of the rules and regulations governing the program. "Simple majority, and it is based on `one man, one vote' so to speak. It's not on volume. It's not on size. If an individual sells cattle, he's given an opportunity to vote."

The Texas checkoff would be similar to the national beef checkoff in that it would be mandatory. Checkoff amount, Hodges said, is not expected to exceed $1. Unlike the national program, however, the Texas checkoff would have a refund provision.

"That probably lessens the likelihood of strong opposition being built to this since the refund provision is there," Hodges said. "Those individuals who do not support a checkoff program wouldn't need to vote against it. Instead, they could file for a refund and get the money they pay into checkoff programs."

Under the legislation, the Texas Beef Council would be the entity that would run the checkoff program's research, marketing and educational aspects in-state. It would continue with the same directors and in the current form with the exception of one board member would be added.

"The organization make-up of the Texas Beef Council would remain the same except for the Texas Livestock Marketing Association, which currently has one designated board slot. It would have two," Hodges said.

Texas Farm Bureau (TFB) has three seats on the Texas Beef Council. TFB State Director Dan Dierschke is chairman-elect of the Council. TFB State Director Regan Kirk is a TBC board member as is former TFB State Director Hope Huffman.

Provisions are also in place in the event that only a portion of the national program is ruled unconstitutional by the courts.

"There's the possibility that only one part of the national beef checkoff program might be ruled unconstitutional, maybe the advertising part," Hodges said. "But research, education, might pass muster with the courts. Then those parts would continue to be handled by the national beef checkoff program at perhaps a reduced checkoff amount.

"There's a lot of hypotheticals that could occur. But if that were the case—say the national was taking 50 cents per head—it's expected that the state beef checkoff program would only take an additional 50 cents to keep it at the $1 level, and Texas would continue to advertise within the state."

Hodges noted that the entire organized beef—industry in Texas pulled together to get the legislation passed during the last tumultuous session on redistricting.

"There was open discussion among the organizations and all the problems were worked out so there was unamimous support from all the organized cattle associations in the State of Texas—from the breeders to the feeders and the Cattle Raisers and the Farm Bureau, in-between."

"It was something that had to be pulled together quickly. We had to jump that large hurdle—redistricting," he said. "We were able to get Democrats and Republicans alike to work on this, and push it through all the muddy water."