(a)
Any producer who meets any of the requirements specified by subdivision (b) may apply to the secretary prior to the formation of the commission, or apply to the commission after its formation, for, and, if found eligible, shall, at the discretion of the commission, receive either an exemption from, or a refund of, the assessment.
(b)
A producer shall be eligible to claim an exemption from, or refund of, the assessment for winegrapes grown by the producer, with regard to which the producer does any of the following:
(1)
Processes winegrapes that are grown by the producer. However, the producer shall not be eligible for an exemption or refund of assessments on winegrapes that are grown and sold, but a producer who is also a vintner, and who commercially sells less than 25 tons of winegrapes in a marketing season, is not subject to assessment.
(2)
Sells to a related vintner or a related handler.
(3)
Contracts or otherwise arranges with a related vintner for processing into wine, with the producer retaining ownership of the wine for sale other than in bottled form.
(4)
Is a producer who is also a vintner and who contracts or otherwise arranges with a nonrelated vintner for processing his or her winegrapes into wine and retains ownership of the wine for sale other than in bottled form.
(c)
For the purpose of this section, an agricultural nonprofit cooperative association is not a “related vintner” or a “related handler.” A vintner or handler is a “related vintner” or “related handler” if any one of the following relationships exists:
(1)
The producer has an ownership interest in the vintner or handler processing the winegrapes. For purposes of this paragraph, the term “ownership interest” does not include an interest that is limited to ownership of shares of stock in a vintner or handler that is a publicly traded stock corporation, unless the ownership interest includes a right to management or control in the corporation.
(2)
The vintner or handler processing the winegrapes has an ownership interest in the producer.
(3)
The producer, or any person controlling the producer, if the producer is not a natural person, is a member of the immediate family of the vintner or handler processing the winegrapes, or of any person controlling the vintner or handler, if the vintner or handler is not a natural person. For the purpose of this paragraph, “member of the immediate family” means parents, spouses, and children.
(d)
In order to be eligible for the exemption or refund, the producer shall file a claim with the secretary prior to formation of the commission and with the commission after its formation on a form prescribed by the commission attesting to the facts establishing the producer’s right to the exemption or refund. The secretary or the commission shall then determine whether the claim should be granted.
(e)
The commission shall serve written notice on the claimant of its decision within 30 days of receipt of the claim. All approved claims shall be subject to verification through an independent audit of the claimant and the related vintner’s or handler’s business records by the commission or its duly authorized agent or, in the case of a local commission, by the secretary or his or her duly authorized agent. The local commission shall not serve as the secretary’s duly authorized agent for purposes of auditing business records.
(f)
Every producer receiving an exemption or refund shall, in addition to the requirements of Section 74954, maintain sales invoices, and all other business documents specified by the commission as necessary to verify the claim. The records shall be preserved for a period of two years and shall be offered and submitted for inspection at any reasonable time upon written demand of the commission or its duly authorized agent or, in the case of a local commission, by the secretary or his or her duly authorized agent. The local commission shall not serve as the secretary’s duly authorized agent for purposes of records inspection.
(g)
No claim of exemption or refund shall be approved by the commission after two years from the date the assessment was due. Failure to file a claim of exemption or refund within that two-year period constitutes a waiver of all claims or demands for an exemption or refund against the commission.
