Legally, that's not true. Basically it needs to be made of 51% corn, not distilled beyond 80% ABV, and then there are a bunch of other restrictions regarding alcohol content the barrels it's aged in, etc. It also has to be made in the US.
I won't argue that Kentucky bourbon is best, but your no-state lines laws are likely more to do with distribution than anything else. Technically, in MN, we can't ship or carry any alcoholic beverages across state lines (even though everyone does anyway).
Sorry. I'm such a downer when it comes to liquor laws. Here's a fun link to read, though!
Whoops.. nice try.
http://en.wikipedia.org/wiki/Bourbon_whiskey
it may be made in the exact same way but it must be fermented in an oak charred barrel. If it wasn't made it Kentucky it has to be called "Blended Whiskey".
Also the Seasons and temperature changes is what gives Kentucky whiskey/Bourbon its unique flavor. You can't get that anywhere else in the world.