History of the Beef Checkoff How we got where we are today

2 Numerous bills introduced in 1975 One Senate Bill –S. 772 introduced February 20, 1975 Six House Bills –H.R introduced February 25, 1975 –H.R introduced June 5, 1975 –H.R introduced June 23, 1975 –H.R introduced June 23, 1975 –H.R introduced July 9, 1975 –H.R introduced July 10, 1975

3 Congress Passes H.R October 2, 1975 – H.R passes House by vote of 229 yeas to 189 nays. December 2, 1975 – Amended version of H.R passes Senate by vote of 47 yeas to 36 nays. Senate insists on its amendments and requests a conference with the House. House rejects Senate amendments but agrees to a conference.

4 Conference Report (April 15, 1976) Agreed to prohibit false and misleading claims. Agreed to require creation of an executive committee. Secretary to make appointments to the Beef Board from nominations submitted by general farm organizations (House bill didn’t have comparable provision). Agreed that annual budgets of the Beef Board did not need approval by House and Senate Agricultural Committees. Cattle slaughtered for a producer’s own use not subject to assessment provided the producer is the sole owner of the cattle. Aggregate rate of assessment not to exceed one-half of 1%. Regarding referendum, producers required to submit evidence of their eligibility to vote at the time of voting and may vote in person or by mail. Any person may challenge the eligibility of any voter in the referendum. The challenged may appeal to the Secretary and, in event of any adverse ruling, obtain judicial review in US district court. No penalty for violating any provision is applicable unless the violation of the order or assessment is “willful” and the maximum penalty shall not exceed $1000 (House wanted minimum penalty of $1,000, max of $10,000).

5 Beef Research & Information Act of 1976 Signed into law May 28, 1976

Referendum To pass, referendum required: –50% of registered producers to cast a vote –Approval by 2/3 of those voting Referendum Failed –Approved by only 57%

7 Agricultural Credit Act of 1978 Amended the Beef Act by changing the referendum requirement from 2/3 approval to a simple majority 1980 Referendum Referendum Failed (approved by only 35%)

8 Beef Research & Information Act of 1985 Made several changes to the existing Act: –Selection of board members Eligible organizations –Rate of assessment and collection ½ of 1% of value vs. $1.00 –Creation of Operating Committee 10 Federation and 10 Beef Board members –Referendum requirements Refund until referendum 50% + 1 requirement

9 Selection of Board Members Old law: –Members nominated by qualified producer organizations, associations, general farm organizations and cooperatives (regardless of geographic location) New law: –Members nominated by qualified state organizations which is strictly defined –Members nominated by Importers

10 Rate & Collection of Assessments Old law: –Rate of assessment not to exceed ½ of 1 percent of the value of the animal –Assessments remitted directly to national board New law: –Rate of assessment $1 per head of cattle –Assessments collected by QSBCs –QSBCs entitled to keep up to 50 cents per head

11 Creation of Operating Committee Old law: –Beef Board responsible for all aspects of the program New law: –Operating Committee composed of 10 members of the Board and 10 producers elected by the Federation –Committee responsible for developing promotion and research budgets and projects

12 Referendum Old law: –50% of registered producers required to cast a vote –Referendum must be passed by simple majority New law: –Must be passed by 50% of producers voting in referendum (lower requirement)

Referendum Passed 79% in favor

14 Definitions Established national non-profit industry-governed organizations: –Are nonprofit organizations pursuant to sections 501(c) (3), (5) or (6) of the Internal Revenue Code –Are governed by a board of directors representing the cattle or beef industry on a national basis; and –Were active and ongoing before the enactment of the Act. Eligible organizations –Any organization which has been certified by the Secretary pursuant to the Act and the Order as being eligible to submit nominations for membership on the Board. Qualified State Beef Council –A beef promotion entity that is authorized by State statute or a beef promotion entity organized and operating within a State that receives voluntary assessments or contributions; conducts beef promotion, research, and consumer and industry information programs; and that is certified by the Board pursuant to the Order as the beef promotion entity in such State. Federation –The Beef Industry Council of the National Live Stock and Meat Board, or any successor organization to the Beef Industry Council, which includes as its State affiliates the qualified State beef councils.

Beef Board, National Live Stock & Meat Board and NCA work through organizational relationships –Competition for funding –Lack of direction for program –Overlapping programs –Lack of efficiency (duplicate resources) –Too many voices

State Beef Councils caught in middle –Operating Committee struggled to prioritize funding –No overall plan for program

17 NCA/Meat Board Merger in 1996 National Cattlemen’s Association merges with the National Live Stock and Meat Board to form National Cattlemen's Beef Association (NCBA) Federation merged into NCBA CBB not merged since it is a quasi- governmental entity

18 Merger Principles One voice – one plan Long-range planning concept Focus for program –Long Range Plan –Budget Committee –Joint program committees Producer Communications Committee –Operating Committee responsibility –Beef Board responsibility Industry coordination –State and national –Policy and checkoff

19 Constitutional Litigation ( ) Challenge to Beef Checkoff Act –First Amendment –Government speech doctrine Constitutionality upheld –Government speech doctrine applied –Government oversight and CBB processes to carry out fiduciary duty key elements of decision State Beef Councils protected by Supreme Court decision

20 Industry Change Cattle industry landscape changing –Several voices in policy debate –State Beef Councils composed of representatives of various cattle organizations –Create competing interests Increased scrutiny –Review of NCBA financial system –CBB Board representation reflects industry diversity

21 Industry Change NCBA Governance Task Force recommendations –Debate within industry on roles of organizations –Change of political administrations CBB committee recommendations to change Beef Checkoff Act –Debate within cattle industry as to how to represent all cattlemen that pay assessment

22 Guiding Principles Partnership between CBB and QSBCs to manage program Need to utilize existing resources to carry out program Recognition that industry landscape has changed Need to protect checkoff program as industry asset

23 Existing Policy Organizations American National CattleWomen U.S. Meat Export Federation National Cattlemen’s Beef Association American Farm Bureau Federation National Farmers Union R-CALF USA