[Federal Register: June 15, 2006 (Volume 71, Number 115)]
[Rules and Regulations]
[Page 34525-34527]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jn06-8]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Part 9
[T.D. TTB-49; Re: Notices No. 29 and 35]
RIN 1513-AA72
Realignment of the Santa Lucia Highlands and Arroyo Seco
Viticultural Areas (2003R-083P)
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Final rule; Treasury decision.
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SUMMARY: This Treasury decision realigns a portion of the common
boundary line between the established Santa Lucia Highlands and Arroyo
Seco viticultural areas in Monterey County, California. This
realignment moves approximately 200 acres from the Arroyo Seco
viticultural area to the Santa Lucia Highlands area. 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: July 17, 2006.
FOR FURTHER INFORMATION CONTACT: Nancy Sutton, Regulations and Rulings
Division, Alcohol and Tobacco Tax and Trade Bureau, 925 Lakeville St.,
No. 158, Petaluma, California 94952; telephone 415-271-1254.
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 a product's
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 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,
[[Page 34526]]
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 found 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.
A petition requesting the modification of an established
viticultural area must include the appropriate evidence and maps
described above to support the requested modification.
Santa Lucia Highlands and Arroyo Seco Viticultural Areas Realignment
Petition and Rulemaking
General Background
Paul Thorpe, on behalf of E. & J. Gallo Winery, submitted a
petition to TTB requesting the realignment of a portion of the common
boundary between the established Santa Lucia Highlands viticultural
area (27 CFR 9.139) and the established Arroyo Seco viticultural area
(27 CFR 9.59). Both viticultural areas are within the Monterey
viticultural area (27 CFR 9.98) in Monterey County, California, which
is in turn within the larger multi-county Central Coast viticultural
area (27 CFR 9.75).
A portion of the original common boundary between the Santa Lucia
Highlands and Arroyo Seco viticultural areas follows a straight line
drawn between the intersection of Paraiso and Clark Roads and the
northeast corner of section 5, T19S, R6E, as shown on the USGS Paraiso
Springs, California, quadrangle map. The proposed realignment moves
this portion of the two viticultural areas' common boundary line
approximately 1,000 feet to the east of the Paraiso and Clark Roads
intersection and slightly less than 500 feet to the east of the
northeast corner of section 5, T19S, R6E. Overall, the proposed
realignment transfers approximately 200 acres of land from the Arroyo
Seco viticultural area to the Santa Lucia Highlands area.
Rationale and Evidence for the Proposed Realignment
The proposed realignment of this portion of the common boundary
between the Santa Lucia Highlands and Arroyo Seco viticultural areas
serves three purposes: (1) It brings the western boundary of the Arroyo
Seco viticultural area into conformity with the western boundary of the
historical Arroyo Seco Land Grant, which lends its name to the Arroyo
Seco viticultural area; (2) it conforms the boundary line to land
ownership boundaries; and (3) it ends the current division of the Olsen
Ranch vineyards between the two viticultural areas.
Currently, a thin strip of land outside of the Arroyo Seco Land
Grant lies in the western-most portion of the Arroyo Seco viticultural
area. By moving the common Santa Lucia Highlands and Arroyo Seco
boundary line to the east, this portion of the Arroyo Seco viticultural
area's western boundary will match that of the historic Arroyo Seco
Land Grant.
The vast majority of the Olsen Ranch lies within the Santa Lucia
Highlands viticultural area, while a small portion falls within the
Arroyo Seco viticultural area. Thus, the vineyards on the Olson Ranch,
which were planted after the establishment of the two viticultural
areas, are divided between the Arroyo Seco and Santa Lucia Highlands
viticultural areas. The proposed eastward realignment of the portion of
the two viticultural areas' common boundary line between Clark Road and
section 5, T19S, R6E allows the Olson Ranch vineyards to be totally in
the Santa Lucia Highlands viticultural area.
The dominant physical feature of the proposed realignment area is
the alluvial terracing that differentiates the highlands along the
western edge of the Salinas Valley from the lower elevation valley
floor. These terraces, which are above 600 feet in elevation, match the
terrain found in the Santa Lucia Highlands viticultural area, generally
between 600 feet and 1,200 feet, as shown on USGS topographic maps.
Also, the terraces and higher elevations of the Santa Lucia Highlands
area contrast to the flatter terrain and lower elevation valley floor
found in the Arroyo Seco viticultural area.
The primary soils of the proposed realignment area are of the
Arroyo Seco and Chualar series. These soils are generally loam or
gravelly, sandy loam, with underlying very gravelly material, and they
coincide with the dominant soils of the Santa Lucia Highlands
viticultural area.
The climatic conditions of the realignment area are similar to
those of the Santa Lucia Highlands viticultural area. The rainfall in
the realignment area and the Santa Lucia Highlands area is 10 to 15
inches a year. In contrast, the lower valley floor found in the Arroyo
Seco viticultural area averages less rain, totaling approximately 9.5
inches a year.
Notice of Proposed Rulemaking and Comments Received
On January 24, 2005, TTB published a notice of proposed rulemaking
regarding the realignment of the Santa Lucia Highlands and Arroyo Seco
viticultural area boundaries in the Federal Register (70 FR 3333) as
Notice No. 29. In that notice, TTB requested comments by March 25,
2005, from all interested persons. In response to a request for more
time to study the proposal, on March 8, 2005, we published a notice to
extend the comment period in the Federal Register (70 FR 11178) as
Notice No. 35. In that notice, TTB requested comments by May 25, 2005,
from all interested persons.
In total, TTB received three comments in response to the two
notices. One comment strongly supported the proposed realignment.
Kendall-Jackson Wine Estates submitted two comments, the first of which
requested the additional time to review and evaluate the petition
information. The second Kendall-Jackson comment proposed an additional
boundary realignment of the Santa Lucia Highlands and the Arroyo Seco
viticultural areas common boundary involving approximately 1,200 acres.
This proposed boundary realignment lies north of the originally
proposed Gallo boundary realignment. Although TTB believes the Kendall-
Jackson proposed boundary realignment may have merit, we did not adopt
the proposal in this final rulemaking since it has not been the subject
of prior public notice and comment procedures. Kendall-Jackson may at
any time submit its proposal as a separate viticultural area rulemaking
petition with the required supporting evidence and maps as described
above.
TTB Finding
After careful review of the petition and the comments received, TTB
finds that the evidence submitted supports the boundary realignment
proposed in Notice No. 29. Therefore, under the authority of the
Federal Alcohol Administration Act and part 4 of our regulations, we
realign the boundaries of the Santa Lucia Highlands and Arroyo Seco
viticultural areas in Monterey County, California, effective 30-days
from this document's publication date.
Boundary Description
See the amendments to the narrative boundary descriptions of the
Arroyo Seco and Santa Lucia Highlands viticultural areas in the
regulatory text published at the end of this notice.
Maps
The petitioner provided a copy of the USGS Paraiso Springs
quadrangle map to document the proposed boundary
[[Page 34527]]
realignment. There are no changes to the lists of maps required to
document the boundaries of the amended Arroyo Seco and Santa Lucia
Highlands viticultural areas.
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 realignment of the Santa Lucia Highlands and
Arroyo Seco viticultural areas, wine bottlers using ``Santa Lucia
Highlands'' or ``Arroyo Seco'' in a brand name, including a trademark,
or in another label reference as to the origin of the wine, must
continue to ensure that the product is eligible to use the relevant
viticultural area's name as an appellation of origin.
For a wine to be eligible to use as an appellation of origin the
name of a viticultural area specified in part 9 of the TTB regulations,
at least 85 percent of the grapes used to make the wine must have been
grown within the area represented by that name, 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 as an appellation of origin
and that name 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
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 requirement. 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
Nancy Sutton of the Regulations and Rulings Division drafted this
document.
List of Subjects in 27 CFR Part 9
Wine.
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.
0
2. Section 9.59 is amended by revising paragraph (c)(13), redesignating
paragraphs (c)(14) through (c)(19) as (c)(16) through (c)(21), and
adding new paragraphs (c)(14) and (c)(15) to read as follows:
Sec. 9.59 Arroyo Seco.
* * * * *
(c) * * *
* * * * *
(13) Then east-northeasterly along Clark Road for approximately
1,000 feet to its intersection with an unnamed light-duty road to the
south.
(14) Then in a straight south-southeasterly line for approximately
1.9 miles to the line's intersection with the southeast corner of
section 33, T18S, R6E (this line coincides with the unnamed light duty
road for approximately 0.4 miles and then with the eastern boundaries
of sections 29, 32 and 33, T18S, R6E, which mark this portion of the
western boundary of the historical Arroyo Seco Land Grant).
(15) Then straight west along the southern boundary of section 33,
T18S, R6E, to its southwest corner.
* * * * *
0
3. Section 9.139 is amended by revising paragraphs (c)(9) and (c)(10),
redesignating paragraphs (c)(11) through (c)(21) as (c)(12) through
(c)(22), and adding a new paragraph (c)(11) to read as follows:
Sec. 9.139 Santa Lucia Highlands.
* * * * *
(c) * * *
* * * * *
(9) Then east-northeasterly along Clark Road for approximately
1,000 feet to its intersection with an unnamed light-duty road to the
south.
(10) Then in a straight south-southeasterly line for approximately
1.9 miles to the line's intersection with the southeast corner of
section 33, T18S, R6E (this line coincides with the unnamed light duty
road for about 0.4 miles and then with the eastern boundaries of
sections 29, 32 and 33, T18S, R6E, which mark this portion of the
western boundary of the historical Arroyo Seco Land Grant).
(11) Then straight west along the southern boundaries of sections
33, 32, and 31, T18S, R6E, to the southwest corner of section 31.
* * * * *
Dated: April 16, 2006.
John J. Manfreda,
Administrator.
Approved: May 25, 2006.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. E6-9365 Filed 6-14-06; 8:45 am]
BILLING CODE 4810-31-P