LINCOLN — A legislative proposal to revamp the state agency that promotes the use and purchase of Nebraska's corn crop ran into a wall of criticism Tuesday.
Opponents said that turning the Nebraska Corn Board, a state agency created in 1978, into an entity independent of state government would be improper and maybe illegal.
“Show me where members of the board of a private corporation can vote to raise an excise tax,” said State Sen. Ernie Chambers of Omaha, referring to the half-cent per bushel “checkoff” paid by farmers when corn is sold.
Those checkoff payments resulted in a $6.2 million budget for the Corn Board this year.
Currently, board members are appointed by the governor. But under Legislative Bill 354, corn farmers would directly elect, by district, eight of the nine members of the new Nebraska Corn Promotion Board.
That kind of accountability is attractive to farmers, according to John Hansen of the Nebraska Farmers Union. His group supports the bill along with the Nebraska Farmers Union, Nebraska Cattlemen and the Nebraska Agri-Business Association.
Corn producers, Hansen said, also like the bill because it would allow them to obtain refunds of their corn checkoff payments if they are unhappy with the corn board.
State Sen. Tyson Larson of O'Neill, sponsor of LB 354, said that creating an independent corn-promotion board would make it more “grower-centered” as opposed to a state agency, which can be burdened by state government red tape.
But several senators joined Chambers in expressing concerns about creating a “quasi” government, private agency to spend funds collected by the state.
Hoskins Sen. Dave Bloomfield said he expects 60 percent to 80 percent of corn farmers to seek refunds of the corn checkoff payments, leaving only small farmers to foot the bill for trade and corn promotion efforts.
Larson said that the legality of his bill is backed up by an informal opinion from the Nebraska Attorney General's Office. He added that other commodity boards that allow refunds only see 2 percent to 4 percent of farmers asking for their money back.
The bill was inspired, in part, by an effort in 2009 by Gov. Dave Heineman to utilize checkoff funds paid to the corn board and other state commodity boards to patch a hole in the state budget. That effort created a fire storm among farmers, and was ultimately dropped. But LB 354 would ensure that a raid on corn checkoff funds could never happen.
The Legislature adjourned Tuesday before the corn board bill reached a first-round vote. Chambers vowed to defeat the bill. Larson said he planned to meet with its backers to determine how best to proceed.
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