ATTORNEY GENERAL OF TEXAS 

GREG ABBOTT 

March 27,2003 

The Honorable Susan Combs, Commissioner 

Texas Department of Agriculture 

P.O. Box 12847 

Austin, Texas 78711 

Opinion No. GA-0049 

Re: Whether the Texas Corn Producers 

Board may collect an assessment on corn 

ensilage (RQ-06 19-JC) 

Dear Commissioner Combs: 

You ask about the authority of the Texas Corn Producers Board (“the Board”) to collect an 

assessment on corn ensilage.’ 

The Board is an agricultural commodity producers board governed by chapter 41 of the 

Agriculture Code. Under chapter 41, a nonprofit organization representing producers of an 

agricultural commodity may petition the Commissioner of Agriculture (“the Commissioner”) “for 

certification as the organization authorized to conduct an assessment referendum and an election of 

a commodity producers board.” TEX. AGRIC. CODE ANN. 3 41.01 l(a) (Vernon 1995).* If, on the 

basis of testimony presented at the public hearing, the Commissioner determines that the 

organization is representative of producers of the agricultural commodity and that the petition 

conforms to chapter 4 1, the Commissioner shall certify that the organization is representative of the 

producers of the commodity and is authorized to conduct the assessment referendum and board 

election. See id. 5 41.012(b). 

Chapter 4 1 provides that the organization may conduct a referendum of the producers of the 

agricultural commodity on the proposition of whether the producers shall levy an assessment on 

themselves “to finance programs of research, disease and insect control, predator control, education, 

and promotion designed to encourage the production, marketing, and use of the commodity” and may 

conduct an election of members to a commodity producers board for the commodity. Id. fj 41.02 1. 

‘Letter from Honorable Susan Combs, Commissioner, Texas Department of Agriculture, to Honorable John 

Cornyn, Texas Attorney General (Sept. 30, 2002) (on file with Opinion Committee) [hereinafter Request Letter]. 

*See also TEX. AGRIC. CODE ANN. $ 41.002( 1) (V ernon 1995) (“‘Agricultural commodity’ means an 

agricultural, horticultural, viticultural, or vegetable product, bees and honey, planting seed, rice, livestock or livestock 

product, or poultry or poultry product, produced in this state, either in its natural state or as processed by the producer. 

The term does not include flax or cattle.“), (6) (“‘Producer’ means a person engaged in the business of producing or 

causing to be produced for commercial purposes an agricultural commodity. The term includes the owner of a farm on 

which the commodity is produced and the owner’s tenant or sharecropper.“). 
The Honorable Susan Combs - Page 2 (GA-0049) 

A board is established if the Commissioner “finds that two-thirds or more of those voting in the 

election voted in favor of the referendum proposition or that those voting in favor of the proposition 

produced at least 50 percent of the volume of production of the commodity during the relevant 

production period,” id. § 41.031 (standards for certification), and “certifies adoption of [the] 

referendum proposition.” Id. 8 4 1.05 1. 

Significantly, article XVI, section 68 of the Texas Constitution, which authorizes the 

legislature to provide for agricultural commodity assessments such as the one at issue here, requires 

these referenda. See TEX. CONST. art. XVI, 9 68 (“The legislature may provide for the advancement 

of food and fiber in this state by providing representative associations of agricultural producers with 

authority to collect such refundable assessments on their product sales as may be approved by 

referenda of producers. All revenue collected shall be used solely to finance programs of marketing, 

promotion, research, and education relating to that commodity.“). Prior to the adoption of article 

XVI, section 68, the Texas Supreme Court had held that an assessment collected by an agricultural 

commodity producers board under the statutory predecessor to chapter 41 of the Agriculture Code 

constituted an occupation tax on an agricultural pursuit in violation of article VIII, section 1 of the 

Texas Constitution. See Conlen Grain and Mercantile, Inc. v. Tex. Grain Sorghum Producers Bd., 

5 19 S.W.2d 620 (Tex. 1975). For this reason, an assessment must be adopted under and in 

conformance with article XVI, section 68 in order to pass constitutional muster. 

Subchapter D of chapter 41 establishes the powers and duties of an agricultural commodity 

producers board. A board “is a state agency” for many purposes,3 and it may adopt rules consistent 

with the purposes of chapter 41. See TEX. AGRIC. CODE ANN. 8 41.058(b) (Vernon 1995). Under 

section 41.058(d), a board “shall set the rate of the assessment,” but the “rate may not exceed the 

maximum established in the election authorizing the assessment or a subsequent election establishing 

a maximum rate.” Id. 9 41.058(d). Section 41.084 authorizes a board, at any board election, to 

submit to the voters a proposition to increase the maximum rate of assessment. See id. 8 41.084 

(“The proposition is approved and the new maximum rate is in effect if two-thirds or more of those 

voting vote in favor of the proposition or if those voting in favor of the proposition produced at least 

50 percent of the volume of production of the commodity during the relevant production period.“). 

Generally, agricultural commodity producers do not pay the assessments directly, but rather the 

processors4 of the commodity deduct assessments from the purchase price of the commodity and 

remit them to the board. See id. 5 41.08 1. 

You inform us that the Board was established pursuant to a referendum of corn producers in 

1980. Pursuant to the referendum, the corn producers approved a proposition “to assess themselves 

‘See id. 5 41.052(a) (Vernon Supp. 2003) (board is state agency for indemnification purposes and is exempt 

from taxation to same extent as other state agencies), (b) (board is governmental unit for purposes of section 101 .OOl, 

Civil Practice and Remedies Code and chapters 551 and 552, Government Code). 

4See id. 3 41.002(5) (Vernon 1995) (“‘Processor’ means a person within this state who: (A) is a purchaser, 

warehouseman, processor, or other commercial handler of an agricultural commodity; (B) processes planting seeds; or 

(C) is the mortgagee of an agricultural commodity if the mortgage did not cover the commodity in its state as a growing 

crop and if the mortgage was executed at a time when the commodity was ready for marketing.“). 
The Honorable Susan Combs - Page 3 (GA-0049) 

not to exceed l% cent per bushel to be collected at the point of first sale, to finance programs of 

research, development, marketing and use of Texas corn.” See Request Letter, supra note 1 

(Attachment, Exhibit I). The 1980 referendum was limited to seven counties. See id. In 1990, the 

Board held a second referendum that extended its jurisdiction to all Texas counties, but that did not 

change the terms of the assessment. See id. (Attachment, Exhibit II). 

You also inform us that since its inception in 1980, the Board has assessed dry kernel corn 

but has not assessed corn ensilage, which you describe as a substance that “includes kernels of corn 

as an ingredient, but also includes other substances, such as corn plant parts, whatever else is picked 

up in the field, and water.” Id. at 2. Dry kernel corn is sold by the pound or bushel whereas corn 

ensilage “is sold as a wet substance by the ton.” See id. The dry kernel corn assessment is coliected 

at the warehouse or elevator, where it is sold. “[Elnsilage is generally sold directly from the farm 

to dairies and other cattle-feeding operations.” Id. 

The Board would like to begin collecting an assessment on corn ensilage without holding a 

referendum to approve the assessment. See id. at 1. Accordingly, you ask “( 1) whether or not ‘corn 

ensilage’ may be included in the definition of ‘corn’ for purposes of implementing the current . . . 

producer assessment on corn; and (2) whether such an assessment on ‘corn ensilage’ may be 

collected without conducting another grower referendum seeking grower approval of the 

assessment.” Id. 

We construe a referendum proposition in light of the intent of the voters who approved it. 

The constitution requires that the assessment must be approved by a referendum of corn producers, 

as does chapter 41 of the Agriculture Code. See TEX. CONST. art. XVI, 5 68 (authorizing 

assessments “as may be approved by referenda of producers”); TEX. AGFUC. CODE ANN. 

$5 41.058(d), 41.084 (Vernon 1995). The constitutional and statutory “conditions and safeguards 

surrounding the tax voted at the time of the election thereon became a part of the very election 

itself.” San Saba County v. MeCraw, 108 S.W.2d 200,203 (Tex. 1937) (citation omitted). ‘A tax 

or bond proposition and constitutional and statutory conditions and safeguards are a contract with 

the voters, and any attempt to substantially alter the rights and expectations of the voters will be 

treated as a violation of the constitutional provision authorizing the tax and of article I, section 16 

of the Texas Constitution, which prohibits laws impairing the obligation of contracts. See id. ; see 

also Troy Dodson Constr. Co. v. McClelland, 993 F.2d 1211, 1216 (5th Cir. 1993) (where the 

electorate has approved the issuance ofbonds, bond proceeds may be expended only for the purposes 

for which the bonds were approved); Barrington v. Cokinos, 338 S.W.2d 133, 142 (Tex. 1960) 

(same); Tex. Att’y Gen. Op. No. JC-0494 (2002) at 1 (“When the law requires that voters approve 

a tax, proceeds of the tax may only be used for the purposes approved by the voters.“). 

The Board was established twenty-three years ago to collect an assessment on corn to finance 

corn research and marketing. See Request Letter, supra note 1 (Attachment, Exhibit I). The Board 

has assessed only dry kernel corn for the last twenty-three years. See id. at 2. The fact that the Board 

has never assessed corn ensilage and has only recently begun to explore the possibility indicates that 

the voters who approved the 1980 and 1990 referenda did not consider corn ensilage “corn” within 

the scope of the referenda. Further supporting this conclusion is that the proposition approved by 
The Honorable Susan Combs - Page 4 (GA-0049) 

the corn producers provides for an assessment “not to exceed % centper bushel.” Id. (Attachment, 

Exhibit I) (emphasis added). As you have noted, corn ensilage contains materials other than corn 

kernels, including corn plant parts and water, and is not measured by the bushel, but rather by the 

ton. See id. at 2. As a result, corn ensilage is outside the scope of the proposition. 

Because corn ensilage is not “corn” within the meaning of the referenda, the collection of an 

assessment on corn ensilage would “exceed the maximum [rate of assessment] established in the 

election authorizing the assessment,” in violation of section 41.058(d). See TEX. AGRIC. CODE ANN. 

8 41.058(d) (V emon 1995) (“The board shall set the rate of the assessment. The rate may not exceed 

the maximum established in the election authorizing the assessment or a subsequent election 

establishing a maximum rate.“). Accordingly, the Board may not collect an assessment on corn 

ensilage unless the state’s corn producers approve such an assessment in a referendum held under 

section 41.084. See id. 8 41.084 (authorizing board, at any board election, to submit to the voters 

a proposition to increase the maximum rate of assessment). 
The Honorable Susan Combs - Page 5 (GA-0049) 

SUMMARY 

Corn ensilage is not “corn” for purposes of the 1980 and 1990 

referenda authorizing the Texas Corn Producers Board to collect an 

assessment on corn. The Board may not collect an assessment on 

“corn ensilage” unless the corn producers of the state approve such an 

assessment in an election held under section 4 1.084 of the Agriculture 

Code. 

Very truly yours, 

BARRY R. MCBEE 

First Assistant Attorney General 

DON R. WTLLETT 

Deputy Attorney General - General Counsel 

NANCY S. FULLER 

Chair, Opinion Committee 

Mary R. Crouter 

Assistant Attorney General, Opinion Committee