[Federal Register: July 17, 2006 (Volume 71, Number 136)]
[Rules and Regulations]
[Page 40400-40404]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jy06-8]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Part 9
[T.D. TTB-51; Re: Notice No. 15]
RIN 1513-AA41
Establishment of the Eola-Amity Hills Viticultural Area (2002R-
216P)
AGENCY: Alcohol and Tobacco Tax and Trade Bureau (TTB), Treasury.
ACTION: Final rule; Treasury decision.
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SUMMARY: This Treasury decision establishes the Eola-Amity Hills
viticultural area in Oregon. The viticultural area is entirely within
the existing Willamette Valley viticultural area and encompasses
roughly 37,900 acres within Polk and Yamhill Counties. We designate
viticultural areas to allow vintners to better describe the origin of
their wines and to allow consumers to better identify wines they may
purchase.
DATES: Effective Date: August 16, 2006.
FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco
Tax and Trade Bureau, Regulations and Rulings Division, P.O. Box 18152,
Roanoke, Virginia 24014; telephone 540-344-9333.
SUPPLEMENTARY INFORMATION:
Background on Viticultural Areas
TTB Authority
Section 105(e) of the Federal Alcohol Administration Act (the FAA
Act, 27 U.S.C. 201 et seq.) requires that alcohol beverage labels
provide consumers with adequate information regarding product identity
and prohibits the use of misleading information on those labels. The
FAA Act also authorizes the Secretary of the Treasury to issue
regulations to carry out its provisions. The Alcohol and Tobacco Tax
and Trade Bureau (TTB) administers these regulations.
Part 4 of the TTB regulations (27 CFR part 4) allows the
establishment of definitive viticultural areas and the use of their
names as appellations of origin
[[Page 40401]]
on wine labels and in wine advertisements. Part 9 of the TTB
regulations (27 CFR part 9) contains the list of approved viticultural
areas.
Definition
Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i))
defines a viticultural area for American wine as a delimited grape-
growing region distinguishable by geographical features, the boundaries
of which have been recognized and defined in part 9 of the regulations.
These designations allow vintners and consumers to attribute a given
quality, reputation, or other characteristic of a wine made from grapes
grown in an area to its geographical origin. The establishment of
viticultural areas allows vintners to describe more accurately the
origin of their wines to consumers and helps consumers to identify
wines they may purchase. Establishment of a viticultural area is
neither an approval nor an endorsement by TTB of the wine produced in
that area.
Requirements
Section 4.25(e)(2) of the TTB regulations outlines the procedure
for proposing an American viticultural area and provides that any
interested party may petition TTB to establish a grape-growing region
as a viticultural area. Section 9.3(b) of the TTB regulations requires
the petition to include--
Evidence that the proposed viticultural area is locally
and/or nationally known by the name specified in the petition;
Historical or current evidence that supports setting the
boundary of the proposed viticultural area as the petition specifies;
Evidence relating to the geographical features, such as
climate, soils, elevation, and physical features, that distinguish the
proposed viticultural area from surrounding areas;
A description of the specific boundary of the proposed
viticultural area, based on features shown on United States Geological
Survey (USGS) maps; and
A copy of the appropriate USGS map(s) with the proposed
viticultural area's boundary prominently marked.
Rulemaking Proceedings
Eola Hills Petition
Mr. Russell Raney of Evesham Wood Vineyard and Mr. Ted Casteel of
Bethel Heights Vineyard, both of Salem, Oregon, petitioned TTB for the
establishment of a viticultural area to be called ``Eola Hills.'' The
proposed viticultural area is within the State of Oregon and entirely
within the existing Willamette Valley viticultural area described in 27
CFR 9.90. The petitioners estimate that the proposed area encompasses
37,900 acres, about 1,244 acres of which are planted to vines. At the
time of the petition, 12 wineries operated within the proposed area. We
summarize below the evidence submitted with the petition.
Name Evidence
As historical evidence of the use of the name ``Eola Hills,'' the
petitioners submitted an excerpt from ``Oregon Geographic Names''
(published by the Oregon Historical Society, 5th edition, 1982, pp.
294-295). This source states that the Eola Hills were named for the
village of Eola, situated at the southern end of the ridge. On January
17, 1856, the Oregon territorial legislature incorporated the village
as ``Eola,'' a name derived from Aeolus, the Classical Greek god of
winds. The source further states that the Eola Hills ``constitute one
of the important groups of isolated hills in the Willamette Valley.''
It goes on to explain that the hills have been known by other names,
but the name ``Eola Hills seems firmly established.''
For additional name evidence, the petitioners also submitted
several maps that identify the area as ``Eola Hills.'' Four of the USGS
maps used to show the boundaries (Rickreall, Salem West, Mission
Bottom, and Amity) identify the area as Eola Hills. The petitioners
also submitted two geologic maps of the area issued by the State of
Oregon's Department of Geology and Mineral Industries. Both prominently
label the area ``Eola Hills.''
According to the petitioners, Eola Hills has name recognition and a
reputation for quality among wine consumers both in and outside of
Oregon. For this reason, vineyards and wineries within the area utilize
the name frequently in their promotional literature. The petitioners
submitted two promotional maps demonstrating this fact. One map,
entitled ``The Wine Appellations of Oregon,'' issued by the Oregon Wine
Marketing Coalition, portrays the Eola Hills area as a subregion within
the Willamette Valley. The other map, entitled ``Eola Hills Winegrowing
Region, Willamette Valley Oregon,'' shows the location of all vineyards
and wineries in the area.
The petitioners note that a small portion of the proposed
viticultural area is sometimes referred to as ``Amity Hills.'' ``Oregon
Geographic Names'' describes the Amity Hills as a northern extension of
the Eola Hills separated from the main ridge by a pass east of the town
of Amity. USGS maps for McMinnville and Amity, Oregon, identify this
area as Amity Hills. However, the geologic maps issued by Oregon's
Department of Geology and Mineral Industries identify this area as part
of the Eola Hills. The petitioners argue that, for the purpose of wine
designation, consumers in Oregon have come to recognize the entire area
as a single unit known as ``Eola Hills.'' They also state that vintners
in the Amity Hills portion of the area support the designation of Eola
Hills for the entire area.
Boundary Evidence
As evidence of the boundary, the petitioners submitted with the
petition six USGS topographic maps on which the Eola Hills are dominant
features. The main ridge of the Eola Hills runs north to south,
starting approximately 5\3/4\ miles northeast of the town of Amity and
extending south for 16 miles to Oregon Highway 22, just north of the
Willamette River at West Salem. At their widest point, toward the
southern end, the Eola Hills are about 6\1/2\ miles across, from
Wallace Road in the east to U.S. Highway 99 in the west.
The petitioners use the 200-foot contour line as the predominant
boundary marker. They note that they occasionally diverge to use roads
or highways where they form a more convenient boundary and to exclude
land not deemed suitable for grape cultivation due to soil type,
elevation, or urban development.
Distinguishing Features
Soils and Geology
The petitioners state that the soils and geology of the Eola Hills,
compared to those of the surrounding areas, are distinctive in two
regards. The petitioners note that the prevailing basalt-derived soils
of the Eola Hills are shallower than the soils of other hills in the
north Willamette Valley, and that these well drained basalt soils are
very different from the alluvial soils of the surrounding valley floor.
As evidence of these differences, the petitioners submitted two
geologic maps issued by the State of Oregon's Department of Geology and
Mineral Industries. One is entitled ``Geologic Map of the Rickreall and
Salem Quadrangles, Oregon;'' the other is entitled ``Preliminary
Geologic Map of the Amity and Mission Bottom Quadrangles, Oregon.''
According to these documents, volcanic basalt rock from the lava flows
of the Miocene epoch underlies the Eola Hills, and marine sedimentary
rock of the Oligocene epoch underlies areas at the lower elevations of
the ridge. The soils
[[Page 40402]]
at the middle and higher elevations of the Eola Hills are largely well
drained silty clay loams weathered from basalt; those on the lower
slopes are silt loams weathered predominantly from sedimentary rock,
particularly on the west-facing slopes.
According to soil survey maps issued by the U.S. Department of
Agriculture, Soil Conservation Service, the dominant basalt-derived
soils on the Eola Hills are Nekia soils (recently reclassified as
Gelderman soils) and Ritner and Jory soils. The preponderance of the
shallower Nekia and Gelderman soils in the Eola Hills differentiates
the Eola Hills from the Red Hills farther north, where Jory soils are
predominant. Nekia and Gelderman soils have a much lower available
water capacity than Jory soils. The most common sedimentary soils on
the Eola Hills are Steiwer, Chehulpum, and Helmick soils, especially on
the west side of the ridge. Also in the Eola Hills are soils formed in
alluvial deposits, the most common of which are the silt loam Woodburn
soils. Such alluvial soils generally are only at the lowest elevations
of the proposed viticultural area (below 300 feet). Like the soils
mentioned above, these alluvial soils also are suitable for wine grapes
if they are on slopes steep enough for good water drainage.
Finally, the Eola Hills are surrounded on almost all sides by, and
are easily distinguished from, terraces of the Willamette Valley. With
few exceptions, the terraces lie below the 200-foot elevation line and
are characterized by less drained alluvial soils. According to the
petitioners, the soils on these terraces generally are not suitable for
the cultivation of premium wine grapes. Therefore, land below an
elevation of 200 feet is not included within the proposed Eola Hills
boundary.
Topography
The main ridge of the Eola Hills runs north-south and has numerous
lateral ridges that run east-west on both sides. Slopes on the west
side of the ridge tend to be somewhat steeper and pocketed, and they
fall away below an elevation of 200 feet more abruptly than the slopes
on the east side, which tend to be gentler and more extensive. Both
sides, however, provide vineyard sites with very similar soils and
growing conditions. The highest point in the south end of the hills is
1,093 feet. In the central area, near the Polk-Yamhill County line, the
ridge peaks at around 1,160 feet; in the north, it peaks at 863 feet.
The majority of vineyards in the Eola Hills are at elevations ranging
from 250 to 700 feet, although suitable sites, given proper sun
exposure and microclimate, are found above these elevations. Most
vineyards in the Eola Hills have a southern, southwestern, or
southeastern orientation. However, on gently sloping terrain, east- and
west-facing sites are also capable of producing high quality wine
grapes.
Climate
According to the petitioners, the Eola Hills are blessed with a
temperate climate. Summers are warm, but seldom excessively hot;
winters are mild, and in winter, temperatures are usually above
freezing. Annual rainfall ranges from under 40 inches on the
southeastern edge of the Eola Hills to more than 45 inches in the
higher elevations. More important, only about 15 percent of the total
annual rainfall in the mid-Willamette Valley occurs from April through
September. Thus, rainfall averages during the growing season are
uniform throughout the Eola Hills.
The petitioners state that the Eola Hills are influenced more by
their position due east of the Van Duzer corridor than by their
location in the rain shadow of the Coast Range. Summer ocean winds
vented through the corridor often cause dramatic late afternoon drops
in temperature, which further distinguish the area from the hills
further north. During the growing season, average maximum temperatures
at the middle elevations range from 62 [deg]F in April to 83 [deg]F in
July. These factors contribute to the ideal conditions for the ``cool-
climate'' grape varieties that dominate in Eola Hills vineyards, such
as Pinot Noir, Pinot Gris, and Chardonnay.
The petitioners note that due to the effects of thermal inversion,
during the growing season heat accumulation is greater on the slopes of
the Eola Hills than on the floor of the surrounding Willamette Valley.
Cool air, which drains toward the valley floor during the night, layers
warmer air on the lower slopes. The petitioners submitted monthly heat
accumulation data that compared a site at the Salem, OR airport on the
valley floor with a site at the Seven Springs Vineyard in the Eola
Hills for the years 1992-95. The data showed that, for those years,
seasonal heat accumulation at the Seven Springs Vineyard site was
consistently higher than that at the Salem airport site. Typically, the
Seven Springs Vineyard site in the Eola Hills has, during the growing
season (April 1 to October 31), a heat accumulation range of 2,300-
2,500 degree days, with a base of 60 [deg]F. Based on standards for
determining climatic regions using temperature summation, this heat
accumulation range places the vineyard high in the Region 1 category
(2,500 degree days or less).
Notice of Proposed Rulemaking
On September 8, 2003, TTB published in the Federal Register (68 FR
52875) as Notice No. 15 a notice of proposed rulemaking regarding the
establishment of the Eola Hills viticultural area. The comment period
was originally scheduled to end on November 7, 2003. However, we
received a request from a winery, Eola Hills Wine Cellars, Inc., of
Salem, Oregon, to extend the comment period an additional 60 days. The
winery stated it needed additional time to gather evidence to support
its comment. In consideration of this and in light of the impact that
the approval of the proposed Eola Hills viticultural area might have on
Eola Hills Wine Cellars' wine labels, we published Notice No. 22 on
November 7, 2003 (68 FR 63042), extending the comment period to January
6, 2004.
Comments Received
TTB received 86 comments regarding the proposed Eola Hills
viticultural area. Nearly all of the comments discussed the impact that
establishment of an area named ``Eola Hills'' would have on Eola Hills
Wine Cellars and its existing labels.
Eola Hills Wine Cellars, in its comments, opposed the proposed name
because it would severely restrict its ability to use its ``Eola
Hills'' and ``Eola Hills Wine Cellars'' brand names. The winery noted
that because it depends on grapes from outside the proposed Eola Hills
viticultural area to produce the wines labeled with these brand names,
its wines will not qualify for viticultural area labeling. At least 85
percent of the wine must be derived from grapes grown within the
viticultural area in order for the winery to use its brand names. The
winery stated that it must obtain some of its grapes from outside the
Eola Hills area in order to maintain consistent production. Even though
the winery has been using the ``Eola Hills Wine Cellars'' brand name on
its labels since 1988, it is ineligible for the grandfather provision
in 27 CFR 4.39(i)(2), which applies only to brand names used on
certificates of label approval issued prior to July 7, 1986. The winery
stated that it has worked for years building recognition for its brand
names. To lose the use of these names would be, it stated, financially
devastating to the winery.
The winery also argued that naming the area ``Eola Hills'' will
cause consumers to confuse wines labeled with the new viticultural area
name with Eola Hills Wine Cellars' wines. It
[[Page 40403]]
contends that the Eola Hills area is known to consumers because of the
reputation of Eola Hills Wine Cellars, and the petitioners are
capitalizing on this reputation. In order to protect its name, the
winery has applied for trademark status for its brand names with the
U.S. Patent and Trademark Office.
For these reasons, Eola Hills Wine Cellars urged that another name
be used for the viticultural area. It proposed the names ``Brunk House
District,'' ``Eola/Amity Hills District,'' and ``Amity Hills/Eola Hills
District'' as alternative names. The winery also requested that it be
granted an exemption under TTB regulations to continue to use its brand
names, ``Eola Hills'' and ``Eola Hills Wine Cellars,'' on its wines
regardless of the origin of the grapes used to produce the wine. The
winery ended its comment by requesting that TTB hold a hearing
regarding the naming of the viticultural area.
Most of the other comments sympathized with the Eola Hills Wine
Cellars position. Forty-one commenters stated that they opposed the new
area unless a new name is found or some provision made allowing the
winery unrestricted use of its brand names. Thirty other comments
expressed support for the proposal as published, but urged that Eola
Hills Wine Cellars be permitted to operate as if it were eligible for
the grandfather provision of Sec. 4.39(i). These commenters argued
that the current grandfather date of July 7, 1986, is arbitrary and
penalizes newer wine producing areas that have developed since that
date. Several remaining comments expressed complete opposition to the
proposal because of this issue, while a few expressed complete support.
In an effort to find a solution to the problem, the petitioners
submitted comments proposing new names for the area--Amity-Eola
District, Aeolus Hills (District), and Aeolian Hills (District). They
also requested that TTB create a grandfather clause that would permit
Eola Hills Wine Cellars to continue using its brand names. Recently,
the petitioners advised TTB by e-mail that they would accept a change
in the proposed name to ``Eola-Amity Hills.''
TTB Finding
After careful consideration of the evidence submitted in support of
the petition and the public comments received, TTB finds that there is
a substantial basis for the establishment of the viticultural area
under the name ``Eola-Amity Hills.'' The petitioners submitted
sufficient evidence of the viticultural distinctiveness of the proposed
area, and nothing in the comments contradicted that evidence. The
petitioners also submitted sufficient evidence (discussed above under
``Name Evidence'') that a portion of the proposed viticultural area is
known as ``Amity Hills.'' As explained earlier, the distinguishing
features evidence for Eola Hills applies equally to the Amity Hills
portion of the proposed area. Consumers therefore will know that the
name ``Eola-Amity Hills'' refers to the area. Sufficient evidence was
not submitted to support any of the other proposed alternative names.
In addition, the name ``Eola-Amity Hills'' will adequately distinguish
the viticultural area from the Eola Hills Wine Cellars brand name.
Upon the effective date of this final rule, TTB will recognize only
the entire name ``Eola-Amity Hills'' as having viticultural
significance, and therefore Eola Hills Wine Cellars may continue to use
its ``Eola Hills'' and ``Eola Hills Wine Cellars'' brand names on its
wines. With the adoption of ``Eola-Amity Hills'' as the name of the new
viticultural area, it is not necessary to address the issue of a
``grandfather'' provision for Eola Hills Wine Cellars.
TTB is not granting Eola Hills Wine Cellars' request for a public
hearing to discuss the name of the viticultural area. We have
determined that a hearing is not necessary because the public record as
described above provides a sufficient basis for a decision.
Based on the above, we conclude that it is appropriate to establish
the viticultural area under the name ``Eola-Amity Hills.'' Therefore,
under the authority of the Federal Alcohol Administration Act and part
4 of our regulations, we establish the Eola-Amity Hills viticultural
area in Polk and Yamhill Counties, Oregon, effective 30 days from this
document's publication date.
Boundary Description
See the narrative boundary description of the viticultural area in
the regulatory text published at the end of this document.
Maps
The maps for determining the boundary of the viticultural area are
listed below in the regulatory text.
Impact on Current Wine Labels
Part 4 of the TTB regulations prohibits any label reference on a
wine that indicates or implies an origin other than the wine's true
place of origin. With the establishment of this viticultural area and
its inclusion in part 9 of the TTB regulations, its name, ``Eola-Amity
Hills'' is recognized under 27 CFR 4.39(i)(3) as a name of viticultural
significance. The text of the new regulation clarifies this point.
Consequently, wine bottlers using ``Eola-Amity Hills'' in a brand name,
including a trademark, or in another label reference as to the origin
of the wine, will have to ensure that the product is eligible to use
the viticultural area's name as an appellation of origin.
For a wine to be eligible to use as an appellation of origin a
viticultural area name or other term specified as being viticulturally
significant in part 9 of the TTB regulations, at least 85 percent of
the wine must be derived from grapes grown within the area represented
by that name or other term, and the wine must meet the other conditions
listed in 27 CFR 4.25(e)(3). If the wine is not eligible to use the
viticultural area name or other term as an appellation of origin and
that name or term appears in the brand name, then the label is not in
compliance and the bottler must change the brand name and obtain
approval of a new label. Similarly, if the viticultural area name or
other term appears in another reference on the label in a misleading
manner, the bottler would have to obtain approval of a new label.
Different rules apply if a wine has a brand name containing a
viticultural area name that was used as a brand name on a label
approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.
Regulatory Flexibility Act
We certify that this regulation will not have a significant
economic impact on a substantial number of small entities. This
regulation imposes no new reporting, recordkeeping, or other
administrative requirements. Any benefit derived from the use of a
viticultural area name is the result of a proprietor's efforts and
consumer acceptance of wines from that area. Therefore, no regulatory
flexibility analysis is required.
Executive Order 12866
This rule is not a significant regulatory action as defined by
Executive Order 12866 (58 FR 51735). Therefore, it requires no
regulatory assessment.
Drafting Information
Jennifer Berry of the Regulations and Rulings Division drafted this
document.
List of Subjects in 27 CFR Part 9
Wine.
[[Page 40404]]
The Regulatory Amendment
0
For the reasons discussed in the preamble, we amend 27 CFR, chapter 1,
part 9, as follows:
PART 9--AMERICAN VITICULTURAL AREAS
0
1. The authority citation for part 9 continues to read as follows:
Authority: 27 U.S.C. 205.
Subpart C--Approved American Viticultural Areas
0
2. Subpart C is amended by adding Sec. 9.202 to read as follows:
Sec. 9.202 Eola-Amity Hills.
(a) Name. The name of the viticultural area described in this
section is ``Eola-Amity Hills''. For purposes of part 4 of this
chapter, ``Eola-Amity Hills'' is a term of viticultural significance.
(b) Approved maps. The appropriate maps for determining the
boundary of the Eola-Amity Hills viticultural area are six United
States Geological Survey 1:24,000 scale topographic maps. They are
titled--
(1) Rickreall, Oregon, 1969, photorevised 1976;
(2) Salem West, Oregon, 1969, photorevised 1986;
(3) Mission Bottom, Oregon, 1957, revised 1993;
(4) Dayton, Oregon, 1957, revised 1992;
(5) McMinnville, Oregon, 1957, revised 1992; and
(6) Amity, Oregon, 1957, revised 1993.
(c) Boundary. The Eola-Amity Hills viticultural area is located in
the State of Oregon, within Polk and Yamhill Counties, and is entirely
within the Willamette Valley viticultural area. The area's boundary is
defined as follows--
(1) The beginning point is on the Rickreall, Oregon, map, at the
intersection of State Highways 22 and 223;
(2) From the beginning point, proceed east on State Highway 22 to
its intersection with Doaks Ferry Road on the Salem West, Oregon, map;
then
(3) Proceed northeast on Doaks Ferry Road to its intersection with
the 200-foot contour line southeast of Gibson Gulch, in section 65;
then
(4) Follow the 200-foot contour line in a westerly loop until it
rejoins Doaks Ferry Road; then
(5) Continue north on Doaks Ferry Road to its intersection with
State Highway 221; then
(6) Continue north on State Highway 221 to its intersection with
the 200-foot contour line at the point where the contour line departs
from Highway 221 and runs southwest along the southern edge of Spring
Valley (section 53 on the Mission Bottom, Oregon, map); then
(7) Follow the 200-foot contour line first south onto the Salem
West, Oregon, map, then northwest around the southern and western edge
of Spring Valley and back on to the Mission Bottom, Oregon, map; then
(8) Continue to follow the 200-foot contour line generally north on
the Mission Bottom, Oregon, map, crossing onto and back from the Amity,
Oregon, map and continue past the Yamhill County line and onto the
Dayton, Oregon, map; then
(9) Follow the 200-foot contour line from the Dayton, Oregon, map
onto the McMinnville, Oregon, map and back to the Dayton, Oregon, map
and continue around the northeast edge of the Amity Hills spur of the
Eola Hills; then
(10) Follow the 200-foot contour line onto the McMinnville, Oregon,
map as it continues around the northern and western periphery of the
Amity Hills spur; then
(11) Follow the 200-foot contour line onto the Amity, Oregon, map
as it heads first south, then generally southeast, then generally
south, along the western edge of the Eola Hills until it intersects Old
Bethel Road at a point just north of the Polk County line; then
(12) Follow Old Bethel Road, which becomes Oak Grove Road, south
until it intersects with the 200-foot contour line just northwest of
the township of Bethel; then
(13) Follow the 200-foot contour line around in a southeasterly
loop until it again intersects Oak Grove Road where Oak Grove and Zena
Roads intersect; then
(14) Follow Oak Grove Road south until it intersects with Frizzell
Road; then
(15) Follow Frizzell Road west for three-tenths mile until it
intersects with the 200-foot contour line; then
(16) Follow the 200-foot contour line generally south until it
intersects with the beginning point.
Signed: May 9, 2006.
John J. Manfreda,
Administrator.
Approved: June 15, 2006.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. E6-11077 Filed 7-14-06; 8:45 am]
BILLING CODE 4810-31-P