CHAPTER 107

FORMERLY

HOUSE SUBSTITUTE NO. 1

FOR

HOUSE BILL NO. 211

AS AMENDED BY

HOUSE AMENDMENT NOS. 1, 2 AND

HOUSE AMENDMENT NO. 1 TO HOUSE AMENDMENT NO. 2,

AND SENATE AMENDMENT NOS. 1 AND 2

AN ACT TO AMEND TITLE 4 OF THE DELAWARE CODE RELATING TO FARM WINERIES IN THE STATE OF DELAWARE.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (three—fifths of all members elected to each House thereof concurring therein):

Section 1. Amend Title 4, Chapter 5, of the Delaware Code by adding thereto a new Section 512B to read, as follows:

"Section 512B. Licenses for Farm Wineries.

(a) Upon proper application and subject to the provisions, restrictions and prohibitions of this title, the Commission may grant a license to any person who is the owner or lessee of a farm winery to manufacture, ferment, blend, age, store, and bottle wine containing fourteen percent or less of ethyl alcohol by volume on the premises designated in the license. For
purposes of this title, a farm winery is defined as an establishment at which the basic ingredients, including but not limited to the harvesting of grapes, to make wine are grown and where wine is fermented or manufactured. Notwithstanding any provisions of this title to the
contrary, a farm winery licensee shall be authorized to sell, deliver, and ship such wine in barrels, bottles, or other closed containers to persons licensed under the provisions of this title to import wine or to purchase wine for the purpose of resale; and to sell and ship wine to persons outside of the State of Delaware in accordance with Title 4 of the Delaware Code.

(b) A farm winery licensee shall also be authorized to store and sell wine on the premises by the bottle, but not for consumption on the premises where sold or in any dependency thereof. All bottles so sold shall be delivered to the purchaser and shall be removed from the premises where sold with the seals of such bottles unbroken.

(c) A farm winery licensee shall be exempt from the distance requirements for establishments licensed, or to be licensed, for
consumption off the premises, as contained in §543(d) of this title, and shall not affect the granting of a license of the same type.

(d) A farm winery licensee may sell, on the licensed premises, food items, souvenirs, wine—related supplies, and educational material as
approved by the Commission.

(e) The Commission may grant a wine tasting license to a farm winery licensee consistent with the provisions of §525 and §554(ee) of this title.

(f) All wine sold by a farm winery licensee shall be in a container which is securely sealed and has attached thereto a label setting forth such information as required by this title, Commission rules, and laws of the State of Delaware.

(g) A farm winery licensee may not engage in any business or activity in the licensed establishment unless authorized by this title or approved by the Commission.

(a) A farm winery licensee shall be authorized to purchase and receive shipments of bottled, finished wine from importers, located within the State of Delaware that are licensed 'n accordance with this title. Such
purchases and shipments, if in bottled, finished form, must be manufactured specifically for the Delaw...e farm onery licensee and bear the private label of the Delaware farm winery licensee on each bottle, and, if being imported from without the State of Delaware, shall be limited, as follows:

(1) During the first year of operation, no more than 10,000 gallons of wine;

(2) During the second year of operation, no more than 7,500 gallons of wine;

(3) During the third year of operation, no more than 5,000 gallons of wine; and

(4) After three years of operation, no more than 25% of the total gallons of wine manufactured within the State of Delaware.

(1) Notwithstanding the importation limitations for bottled wine
established in this paragraph, at such time when there is sufficient quantity, variety, and quality of wine grapes grown in the State of Delaware, then the Secretary of the Department of Agriculture may mandate that all licensed Delaware farm wineries must use at least 51% Delaware-grown fruit in their blend inventories. In the case of
hardship due to crop loss, the Secretary of the Department of Agriculture may issue a special permit to import fruit, juice or other raw materials to compensate for such crop loss. Until such time as the Secretary of the Department of Agriculture makes such mandate, the licensee shall be authorized to import grapes or grape juice from other locations within or outside of the State of Delaware, pursuant to the rules and regulations of the Department of Agriculture, for the purpose of fermentation, blending, bottling and aging.

(i) A farm winery licensee shall be authorized to purchase and receive shipments of unfinished wine in bulk form from suppliers and importers located within and without the State of Delaware that are licensed in accordance with this Title.

(j) A farm winery licensee shall be prohibited from owning or operating or being affiliated with any other manufacturer, importer, supplier, or retailer of alcoholic liquor either within or without this state.

(k) The Commission may promulgate such rules and regulations with respect to the enforcement or furtherance of the objectives and provisions of this section as it may deem necessary, and all such rules and regulations that are not inconsistent with the provisions of this title shall have the force and effect of law.

(1) A Delaware winery or farm winery shall be exempt from the prohibition of sales on Sundays as prescribed in §709 of this title, but is limited on Sundays to the sale hours of 12 noon to 6 p.m. Where any other major holiday, as listed in subsection (e) of §704, falls on Sunday, then sales shall be prohibited pursuant to §709.

(m) A farm winery licensee shall be authorized to export grapes, grape juice, or unfinished wine grown in this State in bulk to persons outside the State of Delaware for crushing, fermenting, bottling and labeling and shall be authorized to receive the finished product from that person, so long as no grapes, grape juice, or wine, grown or manufactured outside the State of Delaware, are added to the finished product."

Section 2. Amend Title 4, Section 554, of the Delaware Code by adding a new subsection, designated as Subsection (gg), which shall read as follows:

"(gg) for a farm winery license, the biennial fee shall be $1,000."

Section 3. Amend Title 4, Section 581 of the Delaware Code by re-lettering existing subsections "(b)" and "(c)" as subsections "(c)" and "(d)" respectively.

Section 4. Amend Title 4, Section 581 of the Delaware Code by adding a new subsection (b) to read therein, as follows

"No person licensed by the Commission as a farm winery may manufacture wine for the purpose of resale without paying to the Department of Finance for each gallon of wine produced, except sacramental wines, $0,97"

Section 5. Amend Title 4, Section 709 of the Delaware Code relating to the Prohibition of Sales at Certain Times, by adding thereto a new subsection (i), to read as follows:

"M. The prohibition of sales on Sunday under subsection (e) of this section shall exclude Delaware Wineries and Farm Wineries, who may sell their product to persons of legal drinking age pursuant to §708 of this title, for consumption off-premises, between the hours of 12 noon and 6 p.m. on Sundays. Where other major holidays as listed in subsection 709 of this section fall on Sunday, sales shall be prohibited on that day."

Approved July 5, 1991.