AGO Opinion 98033

Nebraska Dairy Industry Development Act
Opinion 98033

DATE: August 13, 1998

SUBJECT: Nebraska Dairy Industry Development Act

REQUESTED BY: Larry E. Sitzman, Director Department of Agriculture

WRITTEN BY: Don Stenberg, Attorney General

Steve Grasz, Deputy Attorney General

You have requested an Attorney General's Opinion concerning

the authority of the Nebraska Dairy Industry Development Board.

The Dairy Industry Development Act, Neb. Rev. Stat. Ann. §§ 2-

3948 to 2-3964 (Michie 1995) (the 'Act'), was created as

'contingency' legislation which would allow a Nebraska appointed

board to receive and disperse promotional income to qualified dairy

promotion agencies in case Federal statutes currently administering

this program are repealed. Federal legislation sets the dairy

producer assessment on commercially used milk. A portion of the

assessment is allocated to the National Dairy Promotion and

Research Board, and the remaining portion is allocated through the

Federal Order Promotion Agency #65 to local promotion agencies in

and around Nebraska.

Should the Federal Order Advertising and Promotion Agency #65

(or PL 98-108) be repealed, rescinded, or otherwise terminated,

Nebraska producers would technically lose control of this promotion

money. The Act, therefore, was created to have the Nebraska Dairy

Development Board (the Board) in place in the event current programs are

terminated or repealed. The responsibilities of the Board to

disperse funds to qualified state and regional programs for

advertising, research, and nutrition education will commence at the

time current control and disbursement of funds is repealed or

terminated. As of this date, neither relevant Federal statute has

been repealed. Thus, the Act currently grants authority to create

the Board, but the Board is powerless. If the Federal statutes are

repealed, the second part of the Act which grants powers to the

Board will become operative on that date.

The following should answer your specific questions, assuming

the remaining provisions of the Act become effective on March 31,


1. Can the Nebraska Dairy Industry Development Board

officially meet prior to March 31, 1999?

No. Neb. Rev. Stat. §§ 2-3951 to 2-3954 provide for the

creation of the Board, the appointment of members of the Board,

and the procedures for filling vacancies. These sections became

operative on July 15, 1992. However, section 2-3955, which

provides for Board meetings, is not yet operative. Thus, the Board

has no statutory authority to meet.

As a state agency, the Board's authority is limited by state

statute. The Nebraska Supreme Court has held that

"[a]dministrative bodies . . . have only that authority

specifically conferred upon them by statute or by construction

necessary to achieve the purpose of the relevant act." Jolly v.

State, 252 Neb. 289, 562 N.W.2d 61 (1997). See also PLPSO v.

Papillion/ La Vista School Dist., 252 Neb. 308, 562 N.W.2d 335

(1997); Southeast Rur. Vol. Fire Dept. v. Neb. Dept. of Rev., 251

Neb. 852, 560 N.W.2d 436 (1997); Grand Island Latin Club v.

Nebraska Liquor Control Com'n, 251 Neb. 61, 554 N.W.2d 778 (1996);

CenTra, Inc. v. Chandler Ins. Co., Ltd., 248 Neb. 844, 540 N.W.2d

318 (1995), cert. denied, 116 S.Ct. 1681 (1996); Chrysler Corp. v.

Lee Janssen Motor Co., 248 Neb. 281, 534 N.W.2d 568 (1995); and

Ventura v. State Equal Opportunity Com'n, 246 Neb. 116, 517 N.W.2d

368 (1994).

Past Attorney General Opinions have also recognized this

principle. See, e.g., Neb. Op. Atty. Gen No. 92014, February 27,

1992 ("A state agency has only that power which has been given to

it by the legislature"); Neb. Op. Atty. Gen No. 91056, June 18,

1991 ("We believe it goes without saying that the Department of

Roads of the State of Nebraska, which is a code agency, has only

such powers as are given it by the Legislature"); Neb. Op. Atty.

Gen No. 435, July 11, 1980 ("As a statutory creation, a public

power district is a mere agency of the state without any powers or

authority except such as the Legislature may confer upon it"); Neb.

Op. Atty. Gen No. 231, December 22, 1977 ("[T]he Game and Parks

Commission, as an agency of state government, possesses only those

powers granted it by the Legislature"). Thus, until the sections

granting power to the Board become operative, the Board may not

officially meet or take action.

2. Can the Board formally seat themselves, elect

officers, hire administrative personnel or services,

adopt rules and regulations, sign contracts with the

Nebraska Department of Agriculture for services, and

handle other anticipated functions such as contacting

first purchasers of milk regarding the change in

procedures prior to March 31, 1999?

No. Although the Board is created under the Act as of July

15, 1992, the Board's powers and duties, as included under Neb.

Rev. Stat. §§ 2-3955 to 2-3963, are not operative until the

relevant Federal statutes are repealed. Section 2-3964 clearly

provides that:

Sections 2-3955 to 2-3963 shall become operative on the

date as of which the Dairy Production Stabilization Act

of 1983, Public Law 98-108, as amended, is repealed or on

the date as of which the Advertising and Promotion

Program and Agency, as provided in accordance with 7

C.F.R. 1065.110, as amended, is repealed, rescinded, or

otherwise terminated.

Neb. Rev. Stat. § 2-3964 (1997). Section 2-3957 specifically refers to the powers granted

to the Board. Such powers listed include: contracting for administrative and audit services which

are necessary for the proper operation of the Act, adopting and promulgating rules and regulations

to carry out the Act, and exercising all incidental powers useful or necessary to carry out the Act.

Neb. Rev. Stat. § 2-3957 (1997). However, since this section is not yet operative, the Board

lacks statutory authority to take any action. Again, as referred to in the previous answer, the

Board may only act within the bounds of statutory authority.

3. Are there any limitations as to which kind of organization can be hired

by the Board to provide administrative services? For instance, the American

Dairy Association of Nebraska Inc., has indicated that they may be interested

in supporting the Board to provide administrative services. They are also a

qualified program who will be requesting promotion funding from Board.

The Act provides that the Board, when operative, may contract for administrative services

which are necessary for the proper operation of the Dairy Industry Development Act. See Neb.

Rev. Stat. § 2-3957. The Act does not forbid administrative contracts with organizations which

also receive funding from the Board as a qualified program. Thus, such a contract appears to be


under the Act. However, the Board does not have statutory authority to enter into such a contract

until sections 2-3948 to 2-3954 become operative.

Sincerely yours,


Attorney General

Steve Grasz

Deputy Attorney General