A one-word law change that would have made North Dakota's state-specific beef checkoff an opt-in rather than an opt-out program failed earlier this month.
The state House defeated House Bill 1487 on a 41-53 vote on Feb. 9.
The federal beef checkoff is a $1-per-head assessment on each beef animal sold. In North Dakota, half of the money goes to the Cattlemen's Beef Board, a national marketing and research program designed to increase the demand for beef at home and abroad, while half of it stays with the North Dakota Beef Commission. The checkoff is mandatory, and money cannot be refunded.
To boost the funds going to the North Dakota Beef Commission for research, education and promotion of beef, the North Dakota Legislature in 2015 enacted a state-specific checkoff that kept an additional dollar per head with the North Dakota Beef Commission. The assessment must be paid on each head of cattle sold, but producers can ask for their money back.
HB 1487 would have altered just one word in state law, changing that cattle producers "must" pay the state assessment to that they "may" pay it. The proposal would have allowed cattle producers to choose whether to pay the assessment rather than being forced to pay and then ask for the money back.
In a fiscal note attached to the bill that was prepared by the Beef Commission at the request of the North Dakota Legislative Council, the commission estimates the bill could have had a more than $1 million per year impact on the Beef Commission, resulting in the loss of several full-time positions as well as research and marketing programs.
"Realizing the fact that there will be people who won't support the checkoff, and that there will also be people that have always supported the program but will not be willing to pay the price of beef promotion, research and education programs that benefit all but aren't being paid for by all, the best and fairest assumption the ND Beef Commission can make is that a voluntary program will yield little to no participation," the fiscal note said.
The bill sponsor, Rep. Sebastian Ertelt, R-Lisbon, on the House floor called that argument "disingenous," saying that there is no evidence that the state checkoff would go away if it were not compulsory. The House Agriculture Committee, which gave the bill a do-not pass recommendation, took two hours of testimony on the issue, mostly from those who wanted to see the bill passed. Part of the issue, he said, is that the Beef Commission is an appointed, rather than elected, board, and many producers do not feel they have a voice on it. He also called the Beef Commission's fiscal note on the bill
Ertelt also argued that some producers feel beef packers are benefiting from the checkoff rather than the producers themselves.
Rep. Paul Thomas, R-Velva, who carried the bill on the floor, said in the latest biennium, 5.74% or producers requested refunds of North Dakota checkoff funds, representing 12% of total funds. The House Agriculture Committee gave the bill a do-not-pass recommendation.
"An overwhelming majority of people support investing in their industry through promotion, education and research to make it better," he said.
Rep. Jeff Magrum, R-Hazelton, questioned whether the checkoff is truly voluntary, given that someone who does not pay their assessment can be charged with a Class B misdemeanor. Rep. Luke Simons, R-Dickinson, and Rep. Kathy Skroch, R-Lidgerwood, both beef producers, spoke in favor of the bill and said the current system is not truly voluntary.
"There's a huge number of individuals who support this, and for those who don't, this simply means they have a firm trap door to be able to get out of that mandated checkoff contribution," Skroch said.
Rep. Jon Nelson, R-Rugby, said perhaps the problem is that the Beef Commission should be an elected board rather than appointed. But Rep. Dennis Johnson, R-Devils Lake, said such arguments were "drifting away toward other issues" rather than the bill at hand. He urged a no vote on the bill.
"It's pretty easy to get the refund if you fill out the paper properly," he said.