An act to amend and reenact sections 5-01-01 and 5-01-19.1, and subsection 2 of section 5-01-19.2 of the North Dakota Century Code, relating to the definitions of a domestic and manufacturing distillery and satellite loc, the official text

Sixty-ninth Legislative Assembly of North Dakota In Regular Session Commencing Tuesday, January 7, 2025
HOUSE BILL NO. 1466 (Representatives Dockter, Berg, O'Brien, Toman)
(Senators Larson, Mathern)
AN ACT to amend and reenact sections 5-01-01 and 5-01-19.1, and subsection 2 of section 5-01-19.2 of the North Dakota Century Code, relating to the definitions of a domestic and manufacturing distillery and satellite locations.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA: SECTION 1. AMENDMENT. Section 5-01-01 of the North Dakota Century Code is amended and
reenacted as follows: 5-01-01. Definitions. In this title: 1. "Alcohol" means neutral spirits distilled at or above one hundred ninety degrees proof, whether or not such product is subsequently reduced, for nonindustrial use. 2. "Alcoholic beverages" means any liquid suitable for drinking by human beings, which contains one-half of one percent or more of alcohol by volume. 3. "Beer" means any malt beverage containing one-half of one percent or more of alcohol by volume and includes an alcoholic beverage made by the fermentation of malt substitutes, including rice, grain of any kind, glucose, sugar, or molasses, which has not undergone distillation. 4. "Bottle or can" means any container, regardless of the material from which made, having a capacity less than a bulk container for use for the sale of malt beverages at retail. 5. "Direct shipper" means a person that is licensed by the commissioner and ships or causes to be shipped alcoholic beverages directly into this state to a consumer for the consumer's personal use and not for resale. 6. "Distilled spirits" means any alcoholic beverage that is not beer, wine, sparkling wine, or alcohol. 7. "Domestic distillery" means a distillery that produces twenty-five thousand gallons [94635 liters] or fewer of distilled spirits per year. 8. "In bulk" means in containers having a capacity not less than one-sixth barrel for use for the sale of malt beverages at retail.
8.9. "Licensed alcohol carrier" means a person licensed to transport or deliver alcoholic beverages to a consumer without first having the alcoholic beverage delivered through a wholesaler licensed in this state.
9.10. "Licensed logistics shipper" means a person that provides fulfillment house services, including warehousing, packaging, distribution, order processing, or shipment of alcoholic beverages on behalf of a licensed direct shipper and by way of a licensed alcohol carrier.
10.11. "Licensed premises" means the premises on which beer, liquor, or alcoholic beverages are normally sold or dispensed and must be delineated by diagram or blueprint which must be included with the license application or the license renewal application.

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11.12. "Liquor" means any alcoholic beverage except beer.

12.13. "Local governing body" means the governing entity of a city, county, or federally recognized Indian tribe in this state.

13.14. "Local license" means a city, county, or tribal retail alcoholic beverage license issued by the appropriate local governing body.

15. "Manufacturing distillery" means a distillery that produces forty thousand gallons [151416 liters] or fewer of distilled spirits per year.

14.16.

"Microbrew pub" means a brewer that brews ten thousand or fewer barrels of beer per year and sells beer produced or manufactured on the premises for consumption on or off the premises or serves beer produced or manufactured on the premises for purposes of sampling the beer.

15.17. "Organization" means a domestic or foreign corporation, general partnership, limited partnership, or limited liability company.

18. "Satellite location" means an offsite location owned or leased by a manufacturing distillery to conduct retail operations.

16.19. "Sparkling wine" means wine made effervescent with carbon dioxide.

17.20. "Supplier" means an alcoholic beverage manufacturer, importer, marketer, or wholesaler selling alcoholic beverages to a wholesaler licensed in this state for purposes of resale.

18.21. "Tribal licensee" means a person issued a local license by the governing body of a federally recognized Indian tribe in this state for the retail sale of alcoholic beverages within the exterior tribal reservation boundaries.

19.22. "Twenty-one years of age" means it is after eight a.m. on the date twenty-one years after a person's date of birth.

20.23. "Wine" means the alcoholic beverage obtained by fermentation of agricultural products containing natural or added sugar or such beverage fortified with brandy and containing not more than twenty-four percent alcohol by volume.

SECTION 2. AMENDMENT. Section 5-01-19.1 of the North Dakota Century Code is amended and reenacted as follows:

5-01-19.1. Direct sale by domestic distilleries.

1. A domestic distillery that produces no more than twelve thousand proof gallons [4200045425 liters] of spirits per year may sell and deliver, onsite or offsite, the spirits produced by the distillery directly to licensed retailers. The distillery may sell and deliver spirits onsite to a licensed retailer that presents the retailer's license or a photocopy of the license. The distillery may deliver the spirits offsite if the distillery:

a. Uses the distillery's equipment, trucks, and employees to deliver the spirits;

b. Contracts with a licensed distributor to ship and deliver the spirits to the retailer; or

c. Contracts with a common carrier to ship and deliver the spirits to the retailer directly from the distillery or the distillery's warehouse.

2. The total amount of spirits each domestic distillery may sell or deliver directly to all licensed retailers may not exceed two hundred cases per year. Individual shipments delivered by

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common carrier may not exceed three cases a day for each licensed retailer. A case may not exceed two and thirty-eight hundredths gallons [9 liters]. 3. As used in this section, "proof gallon" means a gallon [3.783.79 liters] of liquid at sixty degrees Fahrenheit [15.5 degrees Celsius] which contains fifty percent ethyl alcohol by volume or its equivalent. SECTION 3. AMENDMENT. Subsection 2 of section 5-01-19.2 of the North Dakota Century Code is amended and reenacted as follows: 2. A manufacturing distillery may sell spirits produced by that distillery at off sale, in retail lots, and not for resale, and may sell or direct ship its spirits to persons inside or outside the state in a manner consistent with the laws of the place of the sale or delivery in total quantities not in excess of twenty-five thousandforty thousand gallons [94635151416 liters] in a calendar year. a. Direct sales within this state are limited to two and thirty-eight hundredths gallons
[9 liters] or less per month per person for personal use and not for resale. The packaging must conform with the labeling requirements in section 5-01-16. A licensee may dispense free samples of the spirits offered for sale. Subject to local ordinance, sales at off sale may be made on Sundays between twelve noon and twelve midnight. b. A manufacturing distillery may hold events inside its premises and at its satellite location. The tax commissioner may issue event permits for not more than forty event days per calendar year to a manufacturing distillery to allow the manufacturing distillery, subject to local ordinance, to give free samples of its product and to sell its product by the glass or in closed containers at on-premises events on the premises, off the premises, and at its satellite location. c. A manufacturing distillery may not engage in any wholesaling activities. Except as provided by section 5-01-19.1, all sales and deliveries of spirits to any other retail licensed premises in this state may be made only through a licensed North Dakota liquor wholesaler. However, a manufacturing distillery may sell distilled spirits to a domestic winery if the distilled spirits were produced from products provided to the manufacturing distillery by the domestic winery.

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____________________________ Speaker of the House

____________________________ President of the Senate

____________________________ Chief Clerk of the House

____________________________ Secretary of the Senate

This certifies that the within bill originated in the House of Representatives of the Sixty-ninth Legislative Assembly of North Dakota and is known on the records of that body as House Bill No. 1466.

House Vote: Senate Vote:

Yeas 90 Yeas 45

Nays 0 Nays 0

Absent 4 Absent 2

____________________________ Chief Clerk of the House
Received by the Governor at ________M. on _____________________________________, 2025. Approved at ________M. on __________________________________________________, 2025.

____________________________ Governor
Filed in this office this ___________day of _______________________________________, 2025, at ________ o’clock ________M.

____________________________ Secretary of State