Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO:
KRS
260.165,
260.166,
260.167,
260.168,
260.175
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
260.175(3) authorizes the
Kentucky Department of Agriculture, in collaboration with the Kentucky Grape
and Wine Council (KGWC) and the Department of Tourism, to promulgate
administrative regulations to administer the Kentucky Small Farm Wineries
Support Fund and requires the establishment of standards for the use and
distribution of these funds including reporting requirements. This
administrative regulation establishes the necessary standards.
Section 1. Definitions.
(1) "Fund" means any portion of the annual
deposit from the general fund into the Kentucky Small Farm Wineries Support
Fund established by
KRS
260.175(2).
(2) "KGWC" means the Kentucky Grape and Wine
Council established by
KRS
260.165.
(3) "Local marketing cost-share program" is
defined by
KRS
260.175(2)(b).
(4) "Small farm winery" is defined by
KRS
241.010(56).
(5) "Wholesaler" means a licensed wholesaler
as described in
KRS
260.175(2)(d).
Section 2.
(1) The Kentucky Small Farm Wineries Support
Fund shall be maintained in four (4) unique accounts based on the statutory
categories in
KRS
260.175(2)(a) -
(d).
(2) The KGWC shall approve all
fund expenditures based on voting procedures set forth in their bylaws and
shall authorize the Kentucky Department of Agriculture to dispense the funds
pursuant to Sections 3 and 4 of this administrative regulation.
(3) The annual report required by
KRS
260.166(2)(f) shall contain
a summary of all:
(a) Program
activity;
(b) Participants;
and
(c) Expenditures relating to
the fund.
(4) The
Kentucky Department of Agriculture shall assist in the:
(a) Management of reports;
(b) Program documentation; and
(c) Approval of participants.
Section 3. The Wine
Wholesaler Reimbursement Program. The funds in this program shall be dispersed
based on the criteria established in this section.
(1) The reimbursement rate for a wholesaler
shall be twenty (20) dollars per case of wine produced by a small farm winery
with a valid Kentucky license.
(2)
To receive reimbursement, a wholesaler shall:
(a) Apply for participation in the
reimbursement program on the "Application" and "Wine Approval Request" portions
of the Wholesaler Reimbursement Program Application and receive written
confirmation of receipt from the KGWC prior to delivery of the wine;
(b) Request reimbursement on the
"Reimbursement Request" portion of the Wholesaler Reimbursement Program
Application within ninety (90) days after the wine is delivered;
(c) Sell and deliver eligible wine for the
same price as was purchased; and
(d) Provide a printed report to the KGWC that
includes eligible wine purchase price, sale price, and proof of
delivery.
(3) A
wholesaler distributing wine pursuant to
KRS
260.175(2)(d) shall not:
(a) Be reimbursed for any products of a small
farm winery that is participating in an active marketing contract with a
licensed wholesaler;
(b) Be
required to undertake any marketing or promotional responsibilities for the
KGWC approved wine; or
(c) Request
or receive any reimbursement until the eligible wine is delivered.
(4) The annual fund shall be
divided equally into two (2) biannual program periods.
(5) The availability of funds shall be a
combination of the biannual portion and any unencumbered funds from the
previous program periods.
(6) The
KGWC shall:
(a) Mail a written notice of the
new program period to all licensed small farm wineries each June and December,
requiring the winery to confirm if it will have products participating in this
program;
(b) Calculate a cap for
the products of each participating small farm winery in January and July, based
on the amount of funds available and the number of licensed wineries who
confirm participation in the program period; and
(c) Mail a written notice of the cap for the
program period to all small farm wineries that confirm active participation in
the program and to all licensed wholesalers.
(7) Only a licensed Kentucky wholesaler may
participate in this program.
Section
4. The Kentucky Grape and Wine Marketing Cost-Share Program. The
funds in this program shall be dispersed based on the criteria established in
this section.
(1) The primary purpose of the
expenditure shall be for the promotion or sale of Kentucky grapes, grape
products, or wine.
(2) A small farm
winery shall be eligible for reimbursement not to exceed fifty (50) percent of
total qualified expenditures.
(3)
(a) A small farm winery shall apply for
participation in the reimbursement program on the "Application", "Advertising
Plan", and "Expenditure Report" portions of the Small Farm Winery Marketing
Cost-Share Program Application.
(b)
All expenditures shall be approved by the KGWC in advance.
(c) Expenditures shall not be reimbursed
unless the applicant submits a copy of the receipts for the expenditures and a
copy or photo of the expenditures.
(4) Eligible expenditures shall clearly
display a small farm winery logo or name and be defined as:
(a) An internet, print, radio, or television
advertisement; development of these advertisements, and postage and hosting
fees;
(b) A promotional item to be
given away;
(c) Billboards and
signage with permanent lettering or logo for the purpose of promoting a small
farm winery;
(d) Uniform apparel
that shall be worn by operators or employees;
(e) Logo design;
(f) Booth rental space and competition entry
fees;
(g) Off site retail store
point of sale items; or
(h) Other
novel or unique items or proposals as approved by a vote of the KGWC.
(5) The following expenditures
shall not be eligible for reimbursement from this fund:
(a) Equipment without a primary purpose of
advertising grapes or wine;
(b)
Blank or modifiable signage, electronics, or electronic media
products;
(c) Blank paper products
or ink;
(d) Promotional items that
do not permanently or clearly display the small farm winery logo or
name;
(e) Food or wine products
served at special events, tradeshows, farmers' markets, and festivals;
or
(f) Membership dues or
registration fees.
(6)
The annual fund shall be divided equally into two (2) bi-annual program
periods.
(7) The availability of
funds shall be a combination of the bi-annual portion and any unencumbered
funds from the previous program periods.
(8) The KGWC shall:
(a) Mail a written notice of the new program
period to all licensed small farm wineries each June and December requiring the
winery to confirm by mail or electronically if it will participate in this
program;
(b) Calculate a cap for
each participating small farm winery in January and July, based on the number
of licensed wineries who confirm participation in the program period and the
amount of funds available; and
(c)
Mail a written notice of the cap for the program period to all small farm
wineries that confirm active participation in the program.
(9) The applicant shall submit a request for
reimbursement to the KGWC within ninety (90) days of completion of the last
approved expenditure on the "Expenditure Report" portion of the Small Farm
Winery Marketing Cost-Share Program Application.
(10) A new small farm winery shall be
eligible for funds in the bi-annual program period following license
approval.
(11) The Kentucky
Department of Agriculture shall evaluate submitted applications on a monthly
basis and submit a report to the KGWC at regular meetings.
(12) The KGWC shall offer recommendations,
approval, or denial of applications within two (2) regular meetings of report
submission.
(13) Applicants shall
submit their previous year's grape yields by variety, and the previous year's
number of gallons of wine produced (not bottled or sold) by variety and source
(Kentucky produced or sourced out of state). Data submitted shall be considered
confidential.
Section 5.
Incorporation by Reference.
(1) The following
material is incorporated by reference:
(a)
"Wholesaler Reimbursement Program Application", 11/16; and
(b) "Small Farm Winery Marketing Cost-Share
Program Application", 11/16.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Kentucky Department of
Agriculture, Office of Marketing and Promotions, 111 Corporate Drive,
Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.
33 Ky.R. 2833;
3165; eff. 5-4-2007; 36 Ky.R. 1108; eff. 1-14-2010; 43 Ky.R. 1031; 1377; eff.
3-3-2017.
STATUTORY AUTHORITY:
KRS
260.166(2)(c) 3.,
260.167(3), 260.175(3)