NEBRASKA: Brand Law passes legislature
LINCOLN, Neb. – A bill containing major reforms to the Nebraska Livestock Brand Act, including allowing the Nebraska Brand Committee to develop and adopt procedures for non-visual identification and electronic “e-inspection” in place of a physical brand inspection, in now law.
LB 572 passed the legislature on May 20 with a final vote 47-1-1 with Sen. John Stinner of Gering casting the lone “no” vote and Sen. Machaela Cavanaugh of Omaha recorded as present and not voting. It was signed into law by Nebraska Gov. Pete Ricketts on May 25.
Use of Electronic Identification (EID) tags and E-inspection are the major flag point among the host of comprehensive updates contained in LB 572, which was introduced by Hastings Sen. Steve Halloran, chairman of the Unicameral’s Ag Committee.
At this point, use of EIDs remains voluntary in Nebraska, however, the brand is still the only “prima facie” proof of ownership.
EID provisions contained in LB 572 will allow producers already using electronic ID tags to satisfy proof of ownership requirements without the presence of a committee brand inspector. The provisions are going to be initially limited to situations where there is no change of ownership occurring until the system is fully implemented.
Producers using EIDs will need to furnish their own tags and scanning equipment; however, the brand committee will maintain a database for the unique animal identifier numbers in order to provide third-party verification for proof of ownership. The Brand Committee also reserves the authority to perform spot-checks to ensure producers are complying with the rules.
The finer points of e-inspection are still to be determined (see: SAFEGUARDS), but the basic idea is that rather than having to schedule and wait for a brand inspector to come out and physically inspect cattle, a producer can scan their EIDs and submit the EID numbers to the brand committee in order to get third-party ownership verification.
The Brand Committee has said in past meetings that it’s seeking to both manage the workload for brand inspectors and the costs of carrying out physical inspections, as well as provide options for producers who are already using EIDs and are concerned about shrink or bio security. With e-inspection, a producer could – in theory – ship cattle at all hours and forgo waiting on a brand inspector. The committee will develop a system of audits, similar to those already used to verify ownership in the registered feedlot sector, on order to further verify the accuracy of e-inspections.
The goal for the committee is that the cost per head for an e-inspection will be cheaper than the per head cost for physical brand inspection, in order to give incentives for producers to adopt that method of inspection.
Before it can approve any non-visual identifier like an EID; the brand committee is required by law to consider the degree to which such a method may be susceptible to error, failure, or fraudulent alteration. A public hearing under the Administrative Procedure Act is required before the Brand Committee adopts any rules or regulations related to EID and E-inspection.
The Brand Committee is in the process of assembling an advisory group to help it develop those rules. More information is expected to be announced at the Committee’s meeting in Valentine on June 15.
The brand committee is required by law to deliver a report to the legislature by December of this year informing senators on the progress made with implementing e-inspection.
AM 686, an amendment to LB 572 introduced by Sen. Steve Erdman of Bayard, provides an extra safeguard by making tampering with an EID tag a Class III felony, (similar to applying or removing a brand to falsely assert ownership of an individual animal or forging a brand certificate to assert ownership). Erdman’s amendment was brought forward after concerns were raised by Independent Cattlemen of Nebraska (ICON) that EID tags could be subject to fraud.
Erdman’s amendment also made the Governor’s appointments to vacant positions on the Brand Committee subject to approval by the legislature. AM 686 passed 36-2, with six senators present and not voting and five excused.
While the brand committee is a cash-fund agency and its operations funded solely by the fees it collects from producers rather than tax dollar appropriations from the general fund, and while the committee is self-sustained, it is still required to submit a budget to the state and undergo the appropriations process in order to spend those funds. That process, while seemingly onerous and unnecessary, is an extra step intended to provide executive and legislative oversight and prevent waste and abuse.
Previous reporting by TSLN had cast doubt about whether the legislature would allow the brand committee access to its cash fund in order to implement the e-inspection program. Gov. Pete Rickett’s budget recommendation to the legislature denied the brand committee’s request to increase the allocation for technology; however the final appropriations bill LB 380, gave the Brand Committee the full $5.6 Million it requested for technology, operations, and personnel.
A major revision to the fee structure was also included in LB 572, which raised the maximum caps the Brand Committee can charge for inspection, brand recording and renewal, and research.
The per-head inspection fee has been statutorily lowered from $1 per head to $0.85 per head until June 2023; a fee reduction that also extends to the per-head rates paid by Registered Feedlots (RFL). After that point the maximum inspection fee charged would be set at the current statutory cap of $1.10 per head.
The $20 flat service fee for local brand inspection will gradually be replaced with a mileage fee calculated from the Brand Inspector’s office to the point of inspection. The details of how those fees will be assessed still need to be ironed out with the brand committee’s technology provider, Nebraska Interactive, as the e-inspection service has taken priority, Danna Schwenk, Technology Coordinator/Project Manager with the Nebraska Brand Committee, said during an interview on Tuesday, June 8.
If you fail to give 48-hours’ notice when requesting a local inspection, a $50 fee will now be assessed. This move is to help give producers an incentive to work with their brand inspectors who need to closely manage their schedules in order to avoid unnecessary accumulation of comp time.
The legislature’s intent behind raising the fee caps is to allow the Brand Committee to adjust for inflation without having to go through the legislative process. Lowering the per-head inspection fee is intended to gradually spend down the brand committee’s nearly $3 Million surplus in its cash reserve.
In recent years, the committee’s cash fund targeted by Stinner and other critics of mandatory brand inspection. Despite having nearly despite having a large surplus in cash reserves, Stinner has erroneously asserted that the committee is not fiscally sustainable. However, because the inspection fee has been capped at $0.85 per head for the next two years, the committee will likely post a loss in revenue over that period, which could give ammunition to Stinner et al. who seek to abolish the Brand Committee and end mandatory brand inspection in Nebraska.
The Brand Committee board discussed at its March meeting the possibility of increasing the other fees to offset the loss to inspection revenue so that the committee remain profit-neutral in order to keep its cash reserve intact. However, that move would likely draw the ire of the senators who have sought to strike a balance between the wants of the state budget office and the appropriations committee.
The rates that the Nebraska Brand Committee will charge for services are likely to be a hot-button issue at the June 15 board meeting in Valentine.
Brand Committee Investigators have long lacked “teeth” when it comes to enforcing certain provisions of the brand act.
In years past, brand investigators would have to turn misdemeanor charges over to the county attorney in the county where a brand law violation occurred. It was up then up to that individual county attorney to pursue or dismiss the case. Since most prosecutors are swamped handling drug trafficking and other criminal cases, few were unwilling to go after minor brand infractions.
With LB 572, Investigators can now issue a waiverable citation, similar to a traffic ticket, with fines up to $200 per head when cattle are knowingly moved outside Nebraska’s brand inspection area without the appropriate inspection.
DAIRY INDUSTRY SCORES A WIN
Milk-producing cows won’t be brand inspected, but their calves that are 30 days old or younger would be inspected when “qualified dairies” sell them to be raised for beef. The law also allows for shipping certificates in place of inspection for dairy heifer calves under-30 days out of state for development.
NO SPECIAL FAVORS FOR RFLS
Despite the exhausting series of LR 378 working group meetings conducted in the fall 2020, support for the Registered Feedlot (RFL) provisions contained in LB 572 had faltered and they were stripped from the bill after overwhelming opposition was heard during the ag committee public hearing in February.
It remains to be seen what bills relating to RFLs and growyards will arise next session.
LAST MINUTE POLITICAL DRAMA
Stinner, who has long been a critic of the Nebraska Brand Committee, introduced several amendments to LB 572 during the session. The first amendment, AM 875, would have directed the Nebraska Department of Agriculture to conduct a study on “the inherent advantages and disadvantages of a voluntary brand inspection program,” and compare it to mandatory inspection.
Stinner’s amendment directly mirrored talking points given during testimony at the bill’s hearing in February by members of the Nebraska Beef Producers Committee, a group of feedlot owners who unsuccessfully sued the Nebraska Brand Committee in 2017 in an attempt to overturn mandatory brand inspection and collection of fees.
Sen. Steve Erdman of Bayard hijacked Stinner’s amendment with an amendment of his own. Erdman’s amendment, AM 1154, inserted language that would have also required the NDA to study the advantages and disadvantages of expanding mandatory brand inspection to the entire state of Nebraska, there-by broadening the base and lowering the fee.
Both amendments were later withdrawn.
Then, on May 18, Stinner introduced AM 1213, which would have disbanded the Nebraska Brand Committee on June 30, 2023. Stinner also led an 11th-hour push on May 19 to return LB 572 to Select File. His motion failed 16-17, with 13 senators present not voting and three senators excused, and AM 1213 was ultimately not even considered.
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