Can Arkansas redirect rice checkoff funds to a trade association that lobbies for the rice industry?

Plain-English summary

State Senator Ronald Caldwell asked whether Arkansas could expand its rice checkoff program to allow part of the assessments to fund a trade association for policy advocacy and lobbying on rice industry issues. The current program collects 1.35¢ per bushel from producers and 1.35¢ from first-buyers, with 50% going to research and 50% to promotion (administered by the Arkansas Rice Research and Promotion Board).

The AG identified two constitutional concerns but did not pre-judge specific legislation. The opinion is a roadmap for drafting, not a yes-or-no answer.

First Amendment: government speech vs. compelled private speech. The U.S. Supreme Court has held that statutes requiring citizens to fund private speech they disagree with are presumptively unconstitutional (Janus v. AFSCME 31 (2018), Keller v. State Bar (1990)). But the First Amendment "does not regulate government speech" (Pleasant Grove City v. Summum (2009)). The line between them is constitutionally critical.

The leading checkoff case is Johanns v. Livestock Marketing Association (2005). The U.S. Supreme Court rejected a First Amendment compelled-subsidy challenge to the federal beef checkoff program. The Court held the beef promotional ads were "government speech" because the federal government "effectively controlled" the speech through the authorizing legislation, regulations, and the Secretary of Agriculture's oversight and removal powers. Even though the Cattlemen's Beef Promotion and Research Board developed specific messages, the messages remained government speech because the government controlled the framework.

The drafting implications from Johanns:
- Build significant government oversight into the legislation: MOUs, reporting requirements, clear goals.
- The state must "effectively control" the speech.
- Beware: lobbying state government with state funds creates a peculiar problem. A challenger could argue speech used to lobby the state cannot also be the state's own speech. The AG suggested the General Assembly limit checkoff-funded lobbying to national or international policy, citing Louisiana statutes (La. Rev. Stat. § 3:3538(D), § 3:3548(D)) that take this approach.

Public-purpose doctrine. Arkansas's public-purpose doctrine, rooted in due process (Chandler v. Board of Trustees of Teacher Retirement System, 236 Ark. 256 (1963)), requires that the appropriation and expenditure of public funds be for a public purpose. Three patterns from the case law:
1. Courts consider whether those who paid the tax receive the benefit, or whether the benefit goes to some other private party.
2. Courts give "great weight" to legislative determinations of public purpose (Turner v. Woodruff, 286 Ark. 66 (1985)).
3. Courts are generally reluctant to sanction public funds for political activities (e.g., Stanson v. Mott (Cal. 1976) limiting public funds for ballot promotion).

Drafting recommendations from the doctrine:
- Include an explicit legislative finding that the trade-association funding serves a public purpose (e.g., supporting Arkansas's rice industry).
- Prohibit campaign contributions and direct support of political candidates (Mississippi's rice statute, Miss. Code Ann. § 69-10-9(2)(d), bars use of rice checkoff funds for "influencing any political activity").
- Limit advocacy to industry-affecting policy, not partisan political activity.
- Reference existing Arkansas restrictions on public funds for ballot-measure advocacy (A.C.A. §§ 7-1-111(b), 7-9-406(c)).

A practical observation. The AG cannot opine on hypothetical legislation. The opinion is a structured caution: yes, this is possible, but the drafting matters more than the policy goal. A bill drafted with the Johanns framework, the public-purpose finding, the political-activity prohibition, and the national/international advocacy limit would have a defensible constitutional posture. A bill that lacks those elements would be vulnerable.

The deeper takeaway: state-administered commodity checkoff programs have constitutional limits that are well-defined in case law. Arkansas can expand its rice checkoff to fund advocacy, but the architecture must be government-speech-friendly and public-purpose-disciplined.

What this means for you

State legislators considering rice checkoff or other commodity-program expansion

When you draft legislation expanding checkoff funds to fund advocacy or lobbying:

1. Design for government speech. Write in clear government oversight: MOU requirements, reporting, audit rights, goal-setting authority for the agency, removal authority. The trade association acts as a contractor, not as an independent speaker.

2. Avoid state-government lobbying. Limit advocacy spending to national or international policy. Lobbying the very legislature that authorized the funds is constitutionally awkward (the speech cannot be both government speech and an attempt to influence that government).

3. Public-purpose findings. Include a legislative finding section explicitly identifying the public purpose served (supporting Arkansas's rice industry, maintaining the state's competitive position in agricultural commerce, etc.).

4. Prohibit political activity. Bar campaign contributions, support for or opposition to candidates, and ballot-measure advocacy. Reference existing Arkansas law on public funds and political activity.

5. Reporting and transparency. Require regular reporting to the General Assembly on how funds are spent. This both supports the government-speech defense and creates an accountability record.

Trade associations representing Arkansas commodity producers

If a checkoff-funded advocacy program is enacted, the trade association would operate under significant state oversight. Plan accordingly:
- Develop internal procedures for separating state-funded advocacy from privately-funded political activity.
- Be prepared for transparency obligations and audit requirements.
- Coordinate closely with the relevant state board on goals and messaging.
- Avoid mixing state-funded speech with the association's own speech in ways that blur the government-speech architecture.

Rice farmers and other producers paying checkoff assessments

You are paying the checkoff fees that would fund the expanded program. Your interests as constitutionally relevant:
- If the program survives a First Amendment challenge as government speech, your individual disagreement with specific advocacy is generally not a basis for objection.
- If the program is struck down, your assessments could be retroactively reduced or refunded.
- Your engagement with the legislative process during drafting is the main practical mechanism for shaping the program.

Constitutional law attorneys advising on commodity programs

The Johanns framework is well-developed in federal courts. Any state-level commodity-checkoff advocacy program needs to:
- Identify the government oversight architecture.
- Address the state-government-lobbying problem.
- Include the public-purpose findings (in Arkansas) or analogous state-law requirements elsewhere.
- Carve out political activity carefully.

Compare to the U.S. beef, pork, and dairy checkoff programs (Capper-Volstead and successor statutes) for federal-level templates.

State agencies administering commodity programs

If the legislation is enacted, the agency (Arkansas Rice Research and Promotion Board, in this case) becomes the principal in the government-speech architecture. The agency:
- Issues the MOU with the trade association.
- Sets goals and approves messaging in the abstract.
- Reviews compliance with statutory restrictions.
- Reports to the legislature.

Build internal procedures for the oversight role before the program launches.

News reporters covering checkoff programs

When you report on a state checkoff program funding a trade association:
- Distinguish promotional speech (which has a long doctrinal pedigree of survival) from political/advocacy speech (which has tighter limits).
- Look for the government-oversight architecture: MOU, reporting, audit rights, goal-setting authority. Without these, the program is constitutionally vulnerable.
- Track lawsuits. Compelled-subsidy challenges arise periodically and can reshape the doctrine.

Common questions

What is a "checkoff" program?
A statutory assessment on agricultural commodities, typically collected at the producer or first-buyer point of sale, used to fund research, promotion, and education for that commodity. Arkansas has rice checkoffs; federally, beef, pork, and dairy have national programs.

Can a checkoff program survive a First Amendment challenge?
The Johanns (2005) decision held the federal beef checkoff was constitutional as government speech. State checkoff programs follow similar analysis. The key is government oversight and control of the speech.

What's the difference between government speech and private speech?
Government speech is the government's own communication, typically with government oversight, control, and approval. Private speech is communication by a private actor. The First Amendment regulates government regulation of private speech but not government's own speech.

Why is state-government lobbying with state funds a problem?
A challenger could argue that speech aimed at influencing the state legislature cannot simultaneously be the state's own speech. The doctrinal posture is awkward. Limiting advocacy to non-state-government policy avoids the issue.

What public-purpose finding language is sufficient?
The legislature should articulate the public benefit specifically: "The General Assembly finds and declares that supporting the Arkansas rice industry through advocacy and policy influence is a public purpose because [reasons]." Generic findings are weaker than specific ones tied to the policy goals.

Can I opt out of paying the checkoff if I disagree?
Generally no, in a properly-structured program. The compelled-subsidy doctrine permits the program to require the assessment if the speech qualifies as government speech.

What if the trade association is also engaged in political activity beyond checkoff funds?
The legislation should require segregation: state-funded activities are separate from privately-funded political activities. Mixing them invites a constitutional challenge.

Does Mississippi's flat ban on political activity work?
Yes, that is one approach. The AG cited Miss. Code Ann. § 69-10-9(2)(d) as a model. A flat ban is simpler than line-drawing between permissible advocacy and impermissible political activity.

Background and statutory framework

Arkansas's rice checkoff program operates under A.C.A. §§ 2-20-501 et seq. Key provisions:
- § 2-20-507(a)(1)-(2): Assessments of 1.35¢ per bushel each from producer and first-buyer.
- §§ 2-20-507(d), 2-20-510: Use of funds for research and promotion.

Federal commodity checkoff programs include the federal beef checkoff (upheld in Johanns), the pork checkoff, and others. The constitutional framework developed for federal programs applies to state programs.

The First Amendment compelled-subsidy doctrine:
- Janus v. AFSCME 31 (2018): public-sector union agency fees unconstitutional.
- Keller v. State Bar (1990): mandatory bar dues for political/ideological activities unconstitutional.
- Pleasant Grove City v. Summum (2009): government speech is not regulated by First Amendment.
- Johanns v. Livestock Marketing Association (2005): federal beef checkoff is government speech.

The Arkansas public-purpose doctrine:
- Chandler v. Board of Trustees of Teacher Retirement System (1963): rooted in due process.
- Turner v. Woodruff (1985): courts give "great weight" to legislative determinations of public purpose.

Restrictions on public funds for political activity:
- A.C.A. § 7-1-111(b): public servants/governmental bodies cannot expend public funds to support or oppose ballot measures.
- A.C.A. § 7-9-406(c): elected officials must report public-fund expenditures over $500 for ballot/legislative advocacy.
- Kidwell v. City of Union (6th Cir. 2006): cities can advocate on issues germane to their function but not for specific candidates.
- Stanson v. Mott (Cal. 1976): public agency must be fair and balanced when distributing information about a ballot issue.

Mississippi's rice checkoff statute (Miss. Code Ann. § 69-10-9(2)(d)) bars use of rice checkoff funds "for the purpose of influencing any political activity." Louisiana's statutes (La. Rev. Stat. § 3:3538(D), § 3:3548(D)) limit checkoff-funded advocacy to national/international policy and prohibit state-level legislative lobbying.

Citations

• A.C.A. § 2-20-507(a)(1)-(2) (rice checkoff assessments)
• A.C.A. § 2-20-507(d), § 2-20-510 (use of funds)
• A.C.A. § 7-1-111(b) (public funds and ballot measures)
• A.C.A. § 7-9-406(c) (reporting public-fund expenditures for advocacy)
• Johanns v. Livestock Marketing Association, 544 U.S. 550 (2005) (federal beef checkoff as government speech)
• Pleasant Grove City v. Summum, 555 U.S. 460 (2009) (government speech doctrine)
• Janus v. AFSCME 31, 138 S. Ct. 2448 (2018) (compelled subsidy)
• Keller v. State Bar of California, 496 U.S. 1 (1990) (mandatory bar dues)
• Thornhill v. Alabama, 310 U.S. 88 (1940) (First Amendment incorporation)
• Chandler v. Board of Trustees of Teacher Retirement System, 236 Ark. 256, 365 S.W.2d 447 (1963)
• Turner v. Woodruff, 286 Ark. 66, 698 S.W.2d 527 (1985)
• Kidwell v. City of Union, 462 F.3d 620 (6th Cir. 2006)
• Stanson v. Mott, 17 Cal. 3d 206, 551 P.2d 1 (1976)
• La. Rev. Stat. § 3:3538(D), § 3:3548(D) (Louisiana rice promotion limits)
• Miss. Code Ann. § 69-10-9(2)(d) (Mississippi rice checkoff political-activity ban)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2023-007
April 27, 2023
The Honorable Ronald Caldwell
State Senator
120 CR 393
Wynne, Arkansas 72396

Dear Senator Caldwell:

I am writing in response to your request for an official opinion regarding rice checkoff funds. As background for your question, you state:

It is my understanding the Arkansas Department of Finance and Administration collects rice check-off funds from rice farmers and the first purchasers of Arkansas rice. Currently, these funds are appropriated/restricted with ½ of the proceeds spent on research and ½ spent on promotion.

Against this background, you ask: "Would there be any constitutional/legal concerns if legislation was enacted to allow for portions of the proceeds to be provided to a state trade association to include services that advocate and influence the development and implementation of policy affecting the Arkansas rice industry?"

RESPONSE

Because the constitutionality of your proposed legislation will depend on how it is crafted and implemented, you will likely want to draft the legislation so that it is considered "government speech" under the First Amendment and that it complies with the public-purpose doctrine.

DISCUSSION

Arkansas law currently levies assessments on the sale of rice grown in Arkansas. These assessments, commonly known as "checkoffs" or "checkoff funds," are set at 1.35¢ per bushel to be paid by the rice producer and at 1.35¢ per bushel to be paid by the buyer at the first point of sale. The Arkansas Rice Research and Promotion Board ("the Board") then uses these funds for rice research, extension, market development, and the promotion of Arkansas's rice industry.

I understand your question as asking whether it would be constitutional to expand the rice checkoff program in two ways: (1) by allowing the assessments to be spent on lobbying and (2) by allowing a private entity to receive and spend those assessments. While I cannot opine on the constitutionality of hypothetical legislation, the substance of which is impossible to review, I have identified two areas of constitutional law that you should consider when drafting legislation to allow rice checkoff funds to be used by a trade association to influence policy: the First Amendment to the U.S. Constitution and the public-purpose doctrine grounded in our state constitution.

I. First Amendment & Government Speech

The First Amendment to the U.S. Constitution, which applies to each state through the Fourteenth Amendment, prohibits the legislature from enacting laws that abridge the freedom of speech. The U.S. Supreme Court has held that, with a few exceptions, a statute is rebuttably presumed to abridge the freedom of speech if the statute requires a citizen to fund private speech with which the citizen disagrees. But since "the Free Speech Clause restricts government regulation of private speech," the clause "does not regulate government speech." Consequently, a proponent of the legislation you describe will likely want to ensure the bill is drafted so that the checkoff funds are used to fund government speech rather than private speech.

The leading government-speech case in the context of checkoff funds is Johanns v. Livestock Marketing Association. Johanns rejected a First Amendment compelled-subsidy challenge to a beef checkoff program, holding that beef promotional campaigns paid for with beef checkoff funds were government speech. The individuals and associations challenging the checkoff program argued that the advertisements were not government speech because they were developed and controlled by the Cattlemen's Beef Promotion and Research Board and the Beef Board's Operating Committee, an arguably nongovernmental entity. However, the Court rejected this argument, reasoning that the promotional campaigns were "effectively controlled by the Federal Government" through the Beef Promotion and Research Act of 1985 (the authorizing legislation), federal regulations, and the Secretary of Agriculture's oversight authority and appointment and removal powers. Thus, it did not matter whether the federal government solicited assistance from a nongovernmental entity in developing the advertisements' specific messages; the messages were still protected as government speech, allowing them to survive a First Amendment challenge.

Johanns provides some guidance for the optimal way to draft the legislation you describe. While I cannot definitively say whether the hypothetical legislation you envision would survive a First Amendment challenge, I do believe there are steps that the General Assembly and the Board can take to reduce the likelihood that such a challenge would succeed. These steps include requiring significant government oversight of the funds' use, such as memoranda of understanding, clear goals and objectives, and reporting requirements. It is also possible that the state's use of checkoff funds to influence policy and legislation at the state level could invite a First Amendment challenge, as a challenger might argue that speech used to lobby state government cannot also be the state government's own speech. Therefore, the General Assembly may wish to include language in proposed legislation that allows for checkoff funds to be used for influencing national or international policy but prevents them from being used to influence policy at the state level.

II. The Public Purpose Doctrine

Legislation directing checkoff funds to a trade association for influencing and developing policy would also need to be drafted to ensure it withstood a challenge under the "public-purpose doctrine." This doctrine, which the Arkansas Supreme Court has rooted in due process, requires that the appropriation and expenditure of public funds be for a public purpose.

In determining whether an expenditure of public funds violates the public-purpose doctrine, courts have displayed at least three patterns of decisions. First, courts will consider whether those who paid the tax receive the intended benefit of that tax or, by contrast, whether some other private individual or entity receives the benefit. Second, even though the judiciary ultimately determines whether an expenditure of public funds meets the public-purpose test, courts afford "great weight" to "legislative determinations of public purposes." That is because the legislature is tasked with determining whether a particular expenditure is for a public purpose. Finally, while courts have reached different conclusions regarding the propriety of the use of public funds to support political activities, most are reluctant to sanction the expenditure of public funds for such purposes.

Given these criteria, there are certain provisions that potential legislation can include to reduce the likelihood of being struck down as a violation of the public-purpose doctrine. Perhaps most importantly, the legislature can include a statement that explicitly finds and declares the expenditure of funds for the purpose of influencing the development and implementation of policy affecting the Arkansas rice industry to be for a public purpose. Additionally, the legislation can prohibit the use of funds to make political campaign contributions.

Senior Assistant Attorney General Kelly Summerside prepared this opinion, which I hereby approve.

Sincerely,

TIM GRIFFIN
Attorney General