§60-1-5c. Alternating wine proprietorships; requirements and limitations.

(a) Notwithstanding the provisions of §60-1-5 of this code, a licensed winery or farm winery may be a party to an alternating wine proprietorship agreement subject to the provisions of this section. As used in this section, "alternating wine proprietorship agreement" means an agreement between a licensed winery or farm winery and a farm entity which allows the farm entity to use the premises of the licensed farm winery to produce wine.

(b) For an alternating wine proprietorship agreement to be lawful:

(1) The farm winery and the farm entity must be in compliance with applicable state laws and rules promulgated thereunder;

(2) The agreement must be between a licensed winery or farm winery and a farm entity located and operating in this state;

(3) The farm entity must produce agricultural products containing sugar as certified by the Agriculture Commissioner and required by law;

(4) Wines produced by the parties must be maintained in separate bonded areas and shall not be comingled;

(5) The farm entity participating in the agreement must separately meet all federal and state requirements for a winery or farm winery;

(6) The farm entity party to the agreement may not produce more than 50,000 gallons of wine and nonfortified dessert wine;

(7) Wine produced by the farm entity party to an agreement must be produced exclusively by natural fermentation;

(8) If port, sherry, or madeira wines are produced by the farm entity party to the agreement, a minimum of 25 percent of the agricultural products used to make the wine must be produced on the farm entity’s property and no more than 25 percent of the agricultural products used may come from an out-of-state source; and

(9) Port, sherry, or madeira wine produced by a party to an alternating wine proprietorship agreement may not exceed 22 percent alcohol by volume and must be matured in wooden barrels or casks.

(c) The commissioner shall propose rules for promulgation in accordance with §29A-3-1 et seq. of this code necessary to effectuate the provisions of this section.