AGO Opinion 98033
Nebraska Dairy Industry Development Act
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this program are repealed.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(or PL 98-108) be repealed, rescinded, or otherwise terminated,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terminated or repealed.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time current control and disbursement of funds is repealed or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been repealed.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repealed, the second part of the Act which grants powers to the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
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
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
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.
Deputy Attorney General