Court Opinion

ID: 3261942
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:32:38.908087+00
Date Added: 2024-06-11T12:58:01.795399
License: Public Domain

The Honorable Bob McGinnis State Representative Rt. 3, Box 197 Marianna, Arkansas 72360
Dear Representative McGinnis:
This is in response to your request for an opinion on whether two project proposals of the Arkansas Soybean Promotion Board represent proper expenditures of soybean "checkoff"1
funds from Arkansas producers.
Some explanation is necessary. The Arkansas Soybean Promotion Board is created at A.C.A. § 2-20-404. Effective July 1, 1989, an assessment of two cents per bushel on all soybeans grown within the state is levied and collected as a deduction from the amount paid the producer at the first point of sale. A.C.A. § 2-20-406
(Supp. 1989). Another provision, however, provides that any soybean producer may request and receive a refund of the amount deducted from the sale if: 1) he makes written request with the Director of DFA within forty-five days of the sale, and 2) he supplies adequate documentation, and 3) the application is filed not later than July 1 of each year. A.C.A. § 2-20-408. The Arkansas Soybean Promotion Board is the recipient of the funds which are not refunded. Section 2-20-409 governs their expenditure as follows:
  (a) The Arkansas Soybean Promotion Board shall plan and conduct a program of research, market development, and advertising designed to promote the soybean industry in Arkansas.
  (b)(1)(A) The board is authorized to use the funds derived from the assessments imposed in this subchapter for these purposes, including basic administration expenses of the plan.
Your question is whether two "project proposals" of the board fall within the authorized use of the funds as set out above.
Project Proposal II-1 declares as its "Constraint/Problem," the fact that:
  Elevator managers and bookkeepers have a great influence on producers of soybeans and often are the ones that encourage producers to apply for a checkoff refund. First purchasers need to be educated on the Soybean Promotion and Research Checkoff and how it can increase profit opportunities for Arkansas soybean growers.
The proposal sets as its activities the visiting of over one hundred elevators in the state to educate the managers and staff on the importance of the "checkoff." Also proposed is the publication of a quarterly "Research and Promotion Update" to all elevator managers, and the production of brochures detailing "Arkansas funded checkoff success stories." The proposal also calls for the presentation to bookkeepers of a "token of appreciation."
Project Proposal PC 1 lists as its "Constraint/Problem" the fact that:
  Many soybean producers in Arkansas do not know that their checkoff dollars fund a major part of the soybean research conducted in Arkansas or 80 countries around the world to increase the demand for soybeans. The refund rate has increased from less than two percent in 1983 to eleven percent in 1989. If farmers knew that their checkoff funds were controlled by farmers and directed to projects that lower their production costs and increase the demand for their product, refunds should be reduced.
The goals of the proposal are to reach as many soybean producers in Arkansas as possible through regular news releases, Soybean Digest Inserts, and displays at farm shows and expos.
The success of both proposals is to be measured by the rate of refunds requested of the assessments authorized by A.C.A. §2-20-406.
These proposed expenditures of funds will fall within the purposes of A.C.A. § 2-20-409 if they are spent on a program of research, market development, or advertising designed to promote the soybean industry in Arkansas, or if they are spent for "basic administration" expenses of the plan. A.C.A. § 2-20-409.
It might be contended that the expenditure of funds in accordance with these proposals would fall outside the authorized purposes of § 2-2-409, because they are not aimed so much at promoting the soybean industry in Arkansas, as they are at promoting the funding of the Arkansas Soybean Promotion Board. The ultimate goal of both proposals is to decrease the number of "checkoff refunds" requested by producers, thus increasing the funds available to the board for its activities. Admittedly, increased funding of the board may ultimately lead to an enhanced capacity of the board to meet the purposes of A.C.A. § 2-2-409, (to promote the soybean industry). We cannot conclude, however, that this type of expenditure was contemplated by the legislature as an appropriate use of these funds.
It is my opinion, similarly, that these proposed expenditures of funds do not represent "basic administration expenses" of the plan. The two proposals are not "basic." They represent a large scale undertaking to reduce the amount of assessment refunds requested by producers.
It is thus my opinion that the use of soybean assessments for the two proposals might be successfully challenged as unauthorized by A.C.A. § 2-20-409. If the Arkansas Soybean Promotion Board has experienced a curtailment of its funding due to increased requests for refunds, its recourse is to seek alternate funding options through the legislative process.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana L. Cunningham.
Sincerely,
WINSTON BRYANT Attorney General
WB:arb
1 This term does not appear in the statutes, but is presumably used to refer to the assessments authorized at A.C.A. § 2-20-406.