[Federal Register Volume 76, Number 13 (Thursday, January 20, 2011)]
[Rules and Regulations]
[Pages 3489-3502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-1138]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Parts 4, 9, and 70
[Docket No. TTB-2007-0068; T.D. TTB-90; Re: Notice Nos. 78 and 80]
RIN 1513-AB39
Revision of American Viticultural Area Regulations
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Final rule; Treasury decision.
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SUMMARY: In this Treasury decision, the Alcohol and Tobacco Tax and
Trade Bureau amends the regulations concerning the establishment of
American viticultural areas (AVAs). The changes provide clearer
regulatory standards for the establishment of AVAs and clarify the
rules for preparing, submitting, and processing viticultural area
petitions.
DATES: Effective Date: This final rule is effective on February 22,
2011.
FOR FURTHER INFORMATION CONTACT: Rita D. Butler, Regulations and
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G
Street, NW., Suite 200-E, Washington, DC 20220; telephone: 202-453-
2101.
SUPPLEMENTARY INFORMATION:
Background
TTB Authority
Section 105(e) of the Federal Alcohol Administration Act (FAA Act),
27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe
regulations for the labeling of wine, distilled spirits, and malt
beverages. The FAA Act provides that these regulations should, among
other things, prohibit consumer deception and the use of misleading
statements on labels, and ensure that labels provide the consumer with
adequate information as to the identity and quality of the product. The
Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the
regulations promulgated under the FAA Act.
Part 4 of the TTB regulations (27 CFR part 4) provides for the
establishment of definitive viticultural areas and for 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)
prescribes the standards for submitting a petition to establish a new
American viticultural area (AVA) or to modify an existing AVA, and it
contains a list with descriptions of all approved AVAs. Part
[[Page 3490]]
70 of the TTB regulations (27 CFR part 70) concerns procedure and
administration and includes, at Sec. 70.701 (27 CFR 70.701),
provisions regarding rulemaking procedures.
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 geographic features, the boundaries
of which have been recognized and defined in part 9 of the TTB
regulations. These AVA 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 geographic 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.
Current AVA Petition Process
Section 9.3 of the TTB regulations (27 CFR 9.3) sets forth the
current procedure and standards for the establishment of AVAs.
Paragraph (a) of that section states that TTB will use the rulemaking
process based on petitions to establish AVAs received in accordance
with Sec. Sec. 4.25(e)(2) and 70.701(c). Paragraph (b) of Sec. 9.3
provides that a petition for the establishment of an AVA must contain
the following:
Evidence that the name of the viticultural area is locally
and/or nationally known as referring to the area specified in the
application;
Historical or current evidence that the boundaries of the
viticultural area are as specified in the application;
Evidence relating to the geographical features (climate,
soil, elevation, physical features, etc.) which distinguish the
viticultural features of the proposed area from surrounding areas;
The specific boundaries of the viticultural area, based on
features which can be found on United States Geological Survey
(U.S.G.S.) maps of the largest applicable scale; and
A copy of the appropriate U.S.G.S. map(s) with the
boundaries prominently marked.
Notice of Proposed Rulemaking
On November 20, 2007, TTB published a notice of proposed
rulemaking, Notice No. 78, in the Federal Register (72 FR 65261)
setting forth, among other things, a revision of subparts A and B of
part 9. The original comment period closing date of January 22, 2008,
was extended an additional 60 days in Notice No. 80, published in the
Federal Register (72 FR 71290) on December 17, 2007.
In Notice No. 78, TTB and Treasury stated that a comprehensive
review of the AVA program was warranted in order to maintain the
integrity of the program. We considered the impact that the
establishment of an AVA can have on the use of existing brand names. In
this regard, we stated that we did not believe it to be appropriate for
a government agency to choose between competing commercial interests,
in the context of the labeling provisions of the FAA Act, where a
conflict exists between a proposed AVA name and an established brand
name used on a wine label approved by TTB, if such choices can be
avoided.
We also noted that there has been an increase in the number of
petitions for the establishment of new AVAs within already existing
AVAs. Since recognizing the existence of an AVA is based on the idea
that the defined area is unique for viticultural purposes with
reference to what is outside it, we stated that preserving the
integrity of the AVA program warrants clarifying the standards
concerning the establishment of new AVAs within existing AVAs.
Finally, we believed that there was a need to explain and clarify
the AVA petition submission and review process and to clearly state the
existing authority to deny, and the grounds for denying, an AVA
rulemaking petition.
AVA Name and Brand Name Conflict
As we stated in Notice No. 78, the designation of a new AVA can
create a conflict with existing brand names. This conflict can arise
because a brand name that includes an approved AVA name may not be used
unless at least 85 percent of the wine is derived from grapes grown
within the boundaries of the AVA. See 27 CFR 4.25(e)(3). Moreover, TTB
prohibits the use of misleading brand names (27 CFR 4.33), and also
prohibits brand names that tend to create the impression that the wine
is entitled to bear a designation recognized by TTB unless the wine
meets the requirements for that designation (27 CFR 4.39(a)(8)). The
establishment of a new AVA could also give rise to a misleading
impression regarding the provenance of a wine that carries a known
brand name similar to the AVA name but that does not meet the 85
percent requirement that applies to AVA name usage, thereby not
providing the consumer with adequate information as to the identity and
quality of the wine and creating confusion for consumers.
TTB noted in Notice No. 78 that the effect of the current
regulatory provisions is to give precedence to the establishment of an
AVA over the use of a brand name on a previously approved label. This
precedence is derived from the combined effect of the appellation of
origin and geographic brand name requirements of 27 CFR 4.25(e) and
4.39(i)(1). If a wine is not eligible for labeling with the
viticultural area name and that name appears in the brand name, then
the label would not be in compliance with TTB regulations and TTB would
require the bottler to obtain approval of a new label with a new brand
name in order to market it. Therefore, vintners are on notice that the
decision to establish a brand name having geographical significance
could result in the continued use of that brand name being restricted
or prohibited by the subsequent establishment of an AVA using an
identical or similar name. Whenever possible, however, TTB works with
petitioners to amend petitions in order to limit the adverse impact on
established brand names because established brand names have value to
label holders, the sudden use of a new AVA name on labels instead of a
long-established brand name may be confusing to consumers, and the AVA
process can be used intentionally as a method of limiting competition
from pre-existing brand name holders.
AVAs Within AVAs
Notice No. 78 noted that, in recent years, TTB has received an
increasing number of petitions that propose a boundary change to an
existing AVA, the establishment of an AVA entirely or partially within
an existing AVA, or the establishment of a new, larger AVA that would
encompass all of one or more existing AVAs. Such petitions can create
the appearance of a conflict or inconsistency because, with reference
to the criteria set forth in Sec. 9.3(b), the new petition might draw
into question the accuracy and validity of the evidence presented in
support of the establishment of the existing AVA or the legitimacy of
the justification for establishing a new AVA. For example, with
reference to the boundary description and the geographical features
criteria, a change in an existing AVA boundary, or the adoption of a
new AVA within an existing AVA, could suggest that the original
boundary was improperly drawn or that there is no unity or consistency
in the features of the existing AVA that give it a unique
[[Page 3491]]
and distinctive identity in a viticultural sense.
Further, we noted in Notice No. 78 that when a new AVA is
established entirely within an existing AVA, depending on the unique
facts presented in each AVA petition, an argument could be made that
the smaller AVA is, by its very existence, distinct from the AVA that
surrounds it, with the result that wine produced within it should not
be labeled with the name of the larger AVA.
Petition Submission and Review Process
In Notice No. 78, we noted that the part 9 regulations could more
completely describe the submission and review process, including the
various actions that TTB may take at each stage of the AVA petitioning
procedure.
Under TTB's current AVA petition process, we process all AVA
petitions that are submitted to us. TTB's practice is to work with the
petitioner both before and after submission of the petition to ensure
that it contains all necessary information. TTB specialists spend
considerable time reviewing the petition, contacting the petitioner,
and requesting missing evidence from the petitioner. In some cases,
deficient petitions are returned to the petitioner for revision and
resubmission. Only after the petition is perfected (that is, it appears
to contain all of the information required under Sec. 9.3) do we
proceed with preparation of an appropriate rulemaking document. As we
noted in Notice No. 78, as a general rule, the practice of TTB has been
to accept the information provided by the petitioner in a perfected
petition with the assumption that the information provided is correct.
TTB does not conduct a detailed, separate investigation of the validity
of the petition evidence at that point. To confirm or refute the
information provided by the petitioner, TTB has relied on comments
provided in response to the published notice of proposed rulemaking
(NPRM).
We also noted in Notice No. 78 that whereas the TTB regulations in
part 9 speak in terms of what an AVA petition must contain, they do not
clearly reflect the fundamental administrative principle that the
authority to grant carries a concomitant authority to deny an AVA
petition. We have come to realize that some believe that all that is
necessary to successfully petition for the establishment of an AVA is
to submit a petition with evidence under the terms of Sec. 9.3(b).
We also noted that TTB has authority not to initiate rulemaking, or
not to approve the petitioned-for AVA action after publication of a
proposal, for any one of a number of reasons, such as:
The evidence submitted with the petition does not
adequately support use of the name proposed for a new AVA;
The evidence of distinguishing features submitted with the
petition does not support drawing or redrawing the AVA boundary as
proposed;
The extent of viticulture within the proposed boundary is
not sufficient to constitute a grape-growing region within the
intendment of the AVA program; or
Approval of a proposed new AVA would be inconsistent with
the purpose of the FAA Act, contrary to another statute or regulation,
or otherwise not in the public interest.
Summary of Proposed Changes
In Notice No. 78, TTB proposed to amend three provisions within
part 4 of the TTB regulations that concern AVAs, to revise subparts A
and B of part 9 of the TTB regulations, to amend various sections
within subpart C of part 9, and to amend one provision within part 70
of the TTB regulations.
Part 4 Amendments
To permit the establishment of an AVA and at the same time mitigate
the impact on existing brand labels which contain terms that would be
viticulturally significant if the proposed AVA was established, TTB
proposed in Notice No. 78 to amend Sec. 4.39(i) of the TTB regulations
(27 CFR 4.39(i)) by adding a new ``grandfathering'' standard that would
apply in the case of AVAs established after adoption of the final rule
in this matter and that would be based on a specified number of years
that an affected Certificate of Label Approval (COLA) had been issued
and that the brand label had been in actual commercial use prior to
receipt by TTB of a perfected AVA petition.
By way of background, Notice No. 78 noted that at the beginning of
the AVA program, TTB's predecessor agency and Treasury adopted Sec.
4.39(i) to permit the continued use of brand names that had been used
in COLAs issued before July 7, 1986, subject to application of any one
of three conditions. This original ``grandfather'' approach was
intended to protect brand names that had existed prior to the
development of the AVA program. This solution did not specifically
address conflicts between AVAs and brand names in COLAs that came into
existence after July 7, 1986, although it effectively put all vintners
on notice that the use of a brand name with geographic significance
could later be restricted by the establishment of a viticultural area.
While TTB in Notice No. 78 noted its intention to continue to work
with future AVA petitioners to limit the adverse impact on established
brand names, TTB also recognized that sometimes it would not be
possible to amend a petition to achieve this result. To address this
possibility, TTB proposed a new grandfathering standard.
In addition, we proposed in Notice No. 78 to update two provisions
within Sec. 4.25(e) and conform them to the proposed changes to part 9
described below.
Part 9 Amendments
Notice No. 78 proposed to revise subparts A and B of part 9 to
clarify the operation of the AVA petition and rulemaking process by
explaining how a petitioner must submit an AVA petition to TTB, by
setting forth with considerably greater specificity what information a
petition must contain, and by explaining how TTB would process these
petitions. In addition to setting forth standards for the establishment
of an AVA, the proposed amendments addressed the requirements for
proposed boundary and name changes to existing AVAs to ensure that an
AVA proposal published by TTB to change an existing AVA (for example, a
boundary expansion) would have adequate supporting evidence. The
specification of requirements for boundary changes was proposed to
ensure that TTB receives petitions that conform to AVA regulatory
standards rather than to considerations that are not central to the AVA
concept.
The proposed regulatory language also reflected the principle that
TTB may decide not to proceed with rulemaking after receipt of a
petition, in which case TTB would provide an explanation of the
decision to the petitioner. The proposed amendments also specifically
delineated the authority of TTB to decide not to proceed with approval
of the petitioned-for AVA action after publication of the NPRM. The
proposed regulatory amendments attempted to make a clear distinction
between the petition process and the rulemaking process, because a
decision not to go forward may be made at either stage.
The proposed amendments in subpart C involved the addition of
statements regarding the viticultural significance of names of
previously established AVAs, or notable portions of those names, for
wine labeling purposes under part 4 of the TTB regulations. TTB stated
in Notice No. 78 that these amendments were consistent with the
practice employed by TTB over the past several
[[Page 3492]]
years of including a second sentence in paragraph (a) of each section
covering a new AVA, to specify what is viticulturally significant as a
result of the establishment of the AVA. While in many cases only the
full name of the AVA was specified in each of the subpart C amendments
proposed in Notice No. 78, in some instances a portion of the name was
also identified as viticulturally significant if, based on TTB's label
approval practice, its use on a label could be taken to represent the
full AVA name. We specifically invited comments on whether any existing
labels would be at risk if the proposed amendments were adopted as a
final rule.
Comments Invited on the Regulatory Proposals
In Notice No. 78, TTB invited interested parties to comment on the
proposed rulemaking and regulatory texts. In addition, we invited
comments on the following specific questions:
1. Whether additional or different standards should apply to the
establishment of an AVA; for example, whether there should be a
requirement that a specified percentage of the land mass of the
proposed AVA be involved in viticultural activities.
2. Whether in some or all cases the establishment of a smaller AVA
located within the boundaries of a larger AVA should result in a
prohibition against the use of the larger AVA name on wine labels.
3. Whether the use of a ``grandfather'' provision to avoid
conflicts between an established brand name and the establishment of a
proposed AVA is appropriate.
4. Whether the terms of the proposed ``grandfather '' provision are
appropriate and, if so, what time periods should apply to establish
commercial use of the brand name involved in a conflict.
5. Whether it would be more appropriate to adopt an alternative to
the ``grandfather'' provision proposed that would apply to brand names
that have longstanding commercial use under one or more existing
certificates of label approval without specifying a time period.
6. What type of dispelling information would prevent consumers from
being misled as to the origin of the wine when a ``grandfather''
provision applies. Other comments for a requirement on dispelling
information were encouraged.
Comments Received and TTB Analyses/Responses
TTB received 191 comments in response to Notice No. 78. The table
below summarizes who submitted comments and the number of comments
submitted.
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Number of
Who submitted comments comments
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Federal Government......................................... 2
State Government........................................... 2
Local Government........................................... 6
Wine Industry Members...................................... 88
Interest Groups/Trade Organizations........................ 31
Concerned Citizens......................................... 48
Other...................................................... 14
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Total.................................................. 191
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In the category of Interest Groups/Trade Organizations, there were
no consumer groups that submitted comments. With regard to Concerned
Citizens, it cannot be determined in what capacity the commenters have
submitted their comments (e.g., as consumers, or as owners of an
alcohol beverage business).
Twenty-four of the comments received were either requests for
extension of the Notice No. 78 comment period or requests that TTB end
the suspension of AVA petition processing then in place. The latter
comments were submitted in support of the then-proposed Lehigh Valley
AVA, which was established on March 11, 2008, by T.D. TTB-66 (73 FR
12870). Since the Notice No. 78 comment period was extended as
requested, the establishment of the Lehigh Valley AVA was approved, and
the suspension was ended, these issues have been resolved as the
commenters had requested and are now moot.
Comments From Government Officials
We received a comment from one U.S. Senator, a joint comment from
two U.S. Congressional Representatives, and comments from one
California State Senator and several other California State and local
government officials concerning Notice No. 78. All of the commenters
expressed general opposition to Notice No. 78, and a number of the
commenters expressed opposition to specific portions of the proposed
regulations. All of the commenters also opposed TTB Notice No. 77,
published in the Federal Register on November 20, 2007 (72 FR 65256),
which proposed the establishment of a ``Calistoga'' AVA.
One U.S. Senator's comment was in the form of a letter to the
Secretary of the Treasury to ``express my opposition to the Notices * *
* as the actions in these rules will have a detrimental affect on the
way wine is identified, branded and labeled in the United States.'' The
Senator's comment further noted that ``California's wine industry
contributes over $125 billion annually to the Nation's economy.''
Two Members of the U.S. House of Representatives wrote a joint
letter to the Secretary of the Treasury and the TTB Administrator to
``express our grave concern over two Notices * * * which would
significantly and detrimentally alter the American Viticultural Area
(AVA) system.'' They further stated, ``Even after the successful
establishment of 189 viticultural areas by rulemaking, TTB now proposes
major changes in Notices No. 77 and 78 that would have substantial,
complicated and irreparable consequences for the future of America's
growing wine industry, which now contributes over $100 billion a year
to our economy.'' In addition, they stated, ``We strongly believe that
the existing AVA regulations have successfully served their purpose for
over twenty years, and in fact, work very well. These NPRMs are not
needed and are not supported by the wine industry.'' Fifty-nine other
Members of Congress also signed the letter.
A California State Senator submitted the contents of California
Senate Joint Resolution 22, which she stated was passed unanimously in
the State Senate and the State Assembly, ``as a statement of the
California Legislature's concern and opposition to'' Notice Nos. 77 and
78. She further stated that the ``Senate and the Assembly of the State
of California, jointly request the Tobacco Tax and Trade Bureau to
protect and preserve the ability of California wineries, as well as all
American wineries, to contribute to the economy of California and the
nation by withdrawing the Notices.''
The Secretary of the California Department of Food and Agriculture
had concerns with our regulatory proposals, stating, ``The revised
regulations provide certain wine brands the right to market and sell
their products with deceptive labels, leading consumers to believe
their wines are from grapes grown in certain appellations or winemaking
regions, when they are not.'' This commenter also believes that these
proposals ``are far-reaching and could have substantial and severe
consequences for all U.S. wine regions and wine brands.''
The city manager of Calistoga, California, opposed changes (in
Notice Nos. 77 and 78) that would ``eliminate the common and
internationally understood practice of nesting wine appellations within
larger wine appellations. Napa Valley is a highly recognized and
respected wine growing region throughout the world.''
[[Page 3493]]
The mayor of Paso Robles, California, opposed the proposed changes
in Notice Nos. 77 and 78, stating that ``the TTB proposed revisions to
the regulations * * * will undermine decades of work on the part of the
wine industry.'' He stated further, ``The effects of these proposals
are far-reaching and will have substantial and severe consequences to
all U.S. wine regions and wine brands and to the truth in labeling
rights of consumers.'' In specific regard to Notice No. 78, he wrote
that it ``threatens to eliminate the common and internationally
understood practice of `nesting' wine appellations within larger wine
appellations.'' He also stated that ``this proposal [Notice No. 78]
looks to create `Rolling Grandfather' clauses that will allow new
brands that would undermine the basic tenets of established law by
allowing the use of misdescriptive geographic brands on an ongoing
basis and creates loopholes for a select few.'' He also stated, ``These
regulations will have a substantial negative impact on consumer
confidence and compromise the integrity of the American wine
industry.''
The chair of the Napa County Board of Supervisors opposed our
proposals in Notice No. 78, stating, ``The Board also opposes Notice
78, which would end the common and internationally understood practice
of `nesting' wine appellations * * *. Nesting transmits crucial
information to consumers.'' He also provided a copy of a Resolution
passed by the board in regard to this opposition.
The Napa County agricultural commissioner also opposed our
proposals in Notice No. 78, stating, ``I also oppose Notice 78, which
would end the common and internationally understood practice of
`nesting' wine appellations * * *. Nesting transmits crucial
information to consumers.''
The president of the Napa County Farm Bureau opposed our proposals
in Notice No. 78, stating that the Bureau, ``[o]pposes the
comprehensive and sweeping AVA regulatory changes proposed in Notice
78. We do not support the rolling grandfather date which supplements
[27 CFR] 4.39(i), or the elimination of the common and internationally
understood practice of `nesting' wine appellations.''
TTB Response
TTB appreciates the concerns and reservations these officials have
expressed over our proposed changes to the AVA regulations. We
recognize that viticulture and wine making are industries important to
the American economy and are especially important to the economy of the
State of California. However, we disagree with those commenters who
suggested that the regulatory proposals we made in Notice No. 78 would
result in a severe economic impact or have other substantial
consequences on the wine industry, and we note in this regard that no
specific data were provided to support these general statements.
As we stated in Notice No. 78, the proposals we made were intended
to strengthen the AVA program. As one commenter pointed out, the
regulations for the establishment of AVAs are over 20 years old.
Although these regulations may have been initially successful in
getting the AVA program ``off the ground,'' the regulations have not
been updated to address a number of procedural and substantive issues
or the problems with AVA petitions that have arisen over the years. At
the time of publication of Notice No. 78, some of the AVA issues or
petition problems encountered by TTB were as follows:
Petitions to create an AVA were incomplete for numerous
reasons.
Petitions to expand an existing AVA where the acreage to
be added to the existing AVA has no viticulture and where no
significant viticulture is planned in the near future.
Petitions to expand an existing AVA for the purpose of
including adjacent viticultural acreage, with no evidence that the
expansion area has any geographical features in common with the
existing AVA.
Petitions to expand an existing AVA for the purpose of
including adjacent viticultural acreage where the evidence submitted
clearly shows that the geographical features of the adjacent acreage
are incompatible with those of the existing AVA.
Petitions from separate petitioners to create an AVA
within an existing AVA where their respective requests are inconsistent
with each other because they provide conflicting geographical features
evidence for the same area.
Petitions where the proposed AVA name conflicted with the
brand names on existing labels.
Based on the issues and problems outlined above, we believe that
the AVA program has not operated as well as some of these commenters
suggest, and that the current part 9 regulations do not provide
sufficient clarity and transparency regarding the AVA petition and
approval process and regarding the manner in which TTB exercises its
authority in that process. The part 9 proposals set forth in Notice No.
78 were not a radical departure from the current regulatory standards
but rather were a necessary elaboration on those standards in order to
clarify existing petition requirements and existing TTB authority
regarding the processing of AVA petitions. Since the comment period
closed on this proposal on March 20, 2008, TTB has continued to process
AVA petitions and to publish proposed and final regulatory actions with
respect to petitions submitted. However, TTB continues to encounter the
issues and problems described above and therefore, TTB believes that
the need for the proposed regulations remains.
With regard to the comments opposing the proposed Calistoga
viticultural area, which was the subject of Notice No. 77, these
comments are outside the scope of this rulemaking and were addressed in
a separate final rulemaking action specific to Notice No. 77 (see T.D.
TTB-83, 74 FR 64602, December 8, 2009). With regard to the comments
concerning the specific topics of ``nesting'' and the proposed
``grandfather provision,'' we received a number of other comments
concerning these proposals. We discuss these additional comments and
provide a response to all the comments received on these specific
issues below.
Other Comments in General Opposition
Fifteen other commenters generally opposed the proposed revisions,
without detailing that opposition to any specific provision or issue.
For example, the Wine Institute commented, ``TTB already has the
ability to deal with complex issues and unanticipated controversies
fairly * * * TTB can issue policy statements, guidance documents, and
manuals on AVA establishment with interpretive and procedural
guidelines * * * Wine Institute believes that these alternatives are
preferable than the proposed regulatory changes, which could lead to
unintended consequences.'' This commenter added that TTB has a 27-year
record of successful AVA rulemaking, is acting under what appears to be
``an artificial sense of urgency,'' and should continue to use the
existing regulations. Other commenters asserted that the proposed
provisions ``have far reaching consequences'' or are ``inconsistent
with fair and sound practices,'' that ``consumers will not be protected
under the proposed regulations,'' or that ``the current regulations do
a good job.''
TTB Response
As explained in detail in Notice No. 78, TTB and Treasury believed
that there were valid reasons for proposing the regulatory changes. The
specific regulatory proposals were crafted after much deliberation
within TTB and
[[Page 3494]]
Treasury regarding: (1) Our duty to protect the consumer under the FAA
Act; (2) our desire to be fair to, and to protect the economic
interests of, all stakeholders; and (3) the long-term viability and
credibility of the AVA program. We disagree with the suggestion that
these regulations were developed in haste without substantial
consideration as to their overall impact on the AVA program. Moreover,
these general statements in opposition were not accompanied by any
supporting data. Finally, as regards the use of other alternatives such
as policy statements, guidance, or manuals, these alternatives are not
binding on either the public or TTB and therefore are inadequate
substitutes for regulatory action.
Comments on Specific Issues
The remaining 144 comments addressed one or more of the following
issues:
Whether a minimum percentage of landmass should be
involved in viticultural activities for proposed AVAs;
Whether the establishment of a smaller AVA within a larger
AVA should prevent the use of the larger AVA name;
Whether the establishment of a smaller AVA within a larger
AVA (``nesting'') should be eliminated;
Whether the proposed new part 4 grandfather provision, or
an alternative grandfather approach, should be adopted, and if so, what
type of dispelling information is appropriate;
Whether the procedural provisions proposed for part 9
should be adopted; and
Whether the statements of viticultural significance
proposed for part 9 are appropriate.
Below are comment summaries and TTB responses by issue.
Comments on Minimum Percentage of Landmass
Proposed Sec. 9.12(a)(1), which concerns name evidence, stated
that the name identified for the proposed AVA ``must be currently and
directly associated with an area in which viticulture exists.'' Also,
proposed Sec. 9.14(b)(2)(i) stated as one of the reasons for
withdrawing a proposal, the fact that the extent of viticulture within
the proposed boundary ``is not sufficient to constitute a grape-growing
region as specified in Sec. 9.11(a).'' However, in the proposed
regulatory texts we did not specify a minimum requirement for
viticultural activities.
As noted above, in the ``comments invited'' section of Notice No.
78, TTB asked whether there should be a requirement that a specified
percentage of the landmass of the proposed AVA be involved in
viticultural activities. Eight comments specifically addressed this
question--two in favor and six in opposition.
One commenter in favor of such a standard wrote:
The need for more reflective AVAs grows exponentially as the
U.S. wine market expands into the global market. * * * TTB has
invited comments concerning standards for establishment of an AVA.
As to percentage of land involved in viticultural activities I would
offer the following: ``viticultural activities'' must be defined.
Only grape growing is space sensitive and thus in connection with
AVAs only vineyards should be considered viticultural activity. It
is inappropriate for TTB to grant AVA status to large areas of land
not used in viticulture.
This commenter further noted that we did not define ``viticultural
activities'' in such a context within Notice No. 78. Determining that a
region be ``known for grape-growing'' should be sufficient to establish
the fact that there are existing viticultural activities occurring in
the area.
The Paso Robles AVA Committee (PRAVAC), which is comprised of 35
wineries and 25 grape growers, favored such a standard and wrote, ``TTB
may reasonably require that petitioners demonstrate some minimum amount
of viticulture in the proposed new area.'' The PRAVAC requested that
``any such threshold be fixed as a minimum acreage planted to
vineyard,'' and added:
Unless some critical mass of viticulture exists in an area, it
is difficult to identify which unique features actually do affect
the grapes grown in that region. A minimum acreage provides an
easily ascertainable standard that also effectively fixes a minimum
size for AVAs, thereby preventing additional subdivision into
miniscule, vineyard-sized AVAs. Unlike potentially cultivated land,
the existence of which is subject to individual interpretation,
vineyard acreage is readily visible and easy to measure.
The remaining commenters who addressed this topic opposed a
standard that would require a specific percentage of landmass of a
proposed AVA to be involved in viticultural activities. In this regard,
one of these commenters stated that ``the purpose of an AVA designation
is to identify a place of special character,'' and asked, ``What does
percentage of acreage have to do with this?''
Another commenter wrote that ``this rule change should be
considered to be in restraint of trade and could only be considered to
benefit the established areas to the detriment of developing areas. The
Government should not be penalizing the establishment of new
vineyards.''
One commenter argued that the objective of the AVA program is to
allow vintners and consumers to attribute a given quality, reputation,
or other characteristic of wine made from grapes grown in an area to
its geographic origin. This person further stated that the ``percentage
of landmass is not compatible with the objective, nor does it in any
way help the smaller wine producing areas at all.''
A commenter on behalf of Triassic Legacy Vineyards wrote:
The promise of an appellation to entice wine enthusiasts to
purchase the wines is a major factor in encouraging landowners to
make the huge investment of time energy and money to become growers
and vintners. I respectfully request that the concept of requiring
that an AVA have some percentage of total area under viticulture be
abandoned.
Finally, a commenter on behalf of Tablas Creek Vineyard stated:
While density of a plantation is a factor in determining the
importance of an AVA, that density should be measured against the
available planting acres in the appellation and not the simple total
geographic area. The economic importance of grape/wine production to
the area should also be noted.
TTB Response
TTB believes that the proposed regulatory language concerning this
issue should be adopted without change. As stated in Notice No. 78, one
of the key reasons for proposing changes to these regulations is to
maintain the integrity of the AVA program, and requiring a sufficient
amount of viticulture within a proposed AVA is necessary in order to
ensure that designation of the AVA has meaning. For example, we do not
believe that if a grape grower plants five acres of grapes in an area
encompassing 10,000 square miles, that amount of viticulture is
sufficient to justify the designation of an AVA.
On the other hand, for several reasons TTB does not believe it is
appropriate to establish a specific percentage of landmass as a
requirement for establishing an AVA. First, TTB recognizes that often
the reason that petitioners seek AVA designations is to assist in the
marketing of their wines, and we are concerned that a minimum
percentage of landmass requirement might overly favor established
areas. Second, although establishing by regulation a precise minimum
percentage standard would provide an easy, mechanical method for TTB to
decide whether sufficient viticulture exists in the proposed AVA, we
believe that such an across-the-board,
[[Page 3495]]
mechanical rule could operate to the detriment of the AVA program by
discounting the possibility of future expansion of viticulture within
the area. We believe that where it might appear that the amount of
acreage devoted to viticulture is too small in comparison to the size
of the proposed AVA, other relevant factors could exist (such as the
number of vineyards established and how they are dispersed within the
proposed AVA), which could lead to the conclusion that the extent of
viticulture within the proposed AVA is sufficient. TTB recognizes that
the lack of dispersed viticulture in a proposed AVA could warrant a
closer review of the sufficiency of the distinguishing geographical
features and name evidence provided in the petition, but these issues
should be reviewed on a case-by-case basis.
TTB also recognizes that the regulations require the boundaries to
be delineated based upon certain distinguishing features, such as
climate, geology, soils, physical features, and elevation, in addition
to the name of the area. For example, a watershed or ridge-line may
provide the best marker to delimit the area. Sometimes those features
that are common to the area may far exceed the actual grape-growing
then occurring. Therefore, grape-growing areas and boundaries based on
geographic features are unlikely to be exactly alike. The proposed
regulatory texts were intended to underscore the fundamental principle
behind every AVA petition, that is, that viticulture already exists
within the boundary proposed for the new AVA, and we believe that the
texts achieve that result.
Finally, we do not agree with the suggestion that we also consider
the economic importance of grape/wine production to the area as part of
the analysis of the sufficiency of viticulture in the proposed AVA. An
area may be known to consumers as a grape-growing region whether or not
grape/wine production is important to the overall economy of the area,
and, accordingly, we do not believe adding this consideration would be
appropriate.
Comments on Whether Approval of a Smaller AVA Should Prevent Use of a
Larger Surrounding AVA Name and Whether Nesting of AVAs Should Be
Eliminated
In proposed Sec. 9.12(b), which concerns AVAs within AVAs, we
stated:
If the petition proposes the establishment of a new AVA entirely
within, or overlapping, an existing AVA, the evidence submitted
under paragraph (a) of this section must include information that
both identifies the attributes of the proposed AVA that are
consistent with the existing AVA and explains how the proposed AVA
is sufficiently distinct from the existing AVA and therefore
appropriate for separate recognition. If the petition proposes the
establishment of a new AVA that is larger than, and encompasses, all
of one or more existing AVAs, the evidence submitted under paragraph
(a) of this section must include information addressing whether, and
to what extent, the attributes of the proposed AVA are consistent
with those of the existing AVA(s). In any case in which an AVA would
be created entirely within another AVA, whether by the establishment
of a new, larger AVA or by the establishment of a new AVA within an
existing AVA, the petition must dispel any apparent inconsistency or
explain why it is acceptable. When a smaller AVA has name
recognition and features that so clearly distinguish it from a
larger AVA that surrounds it, TTB may determine in the course of the
rulemaking that it is not part of the larger AVA and that wine
produced from grapes grown within the smaller AVA would not be
entitled to use the name of the larger AVA as an appellation of
origin or in a brand name.
As noted above, in the ``comments invited'' section of Notice No.
78, TTB asked whether in some or all cases the establishment of a
smaller AVA located within the boundaries of a larger AVA should result
in a prohibition against the use of the larger AVA name on wine labels.
Twenty-four commenters specifically address this question--two in favor
of such a prohibition and 22 opposed to it.
One of the two commenters in favor asserted that more than one AVA
on one wine label is inherently contradictory to the regulations in
proposed Sec. 9.12(b). This commenter further stated that nesting
``weakens consumer understanding of AVAs.'' Though opposed to the
concept of nesting, this commenter stated that it is unfair to change
the regulations by not allowing wine producers to put both the sub-AVA
and larger AVA on its wine labels. This commenter suggested that TTB
allow wine producers to use sub-AVAs in conjunction with ``political
appellations.''
The other commenter in favor of such a prohibition expressed
concern that some small AVAs within larger AVAs ``are not based on
oenological, environmental, topographical or historical differences but
are intended for an egotistical or economical basis, only.'' For this
reason, this commenter supported the proposed changes regarding the
establishment of an AVA within another AVA.
Of the 22 comments in opposition to the proposed regulatory text,
many of them argued, in essence, that an AVA within a larger AVA makes
sense, helps to better identify and define the wine, is already part of
the existing AVA program (many businesses established and built
themselves up based on this concept), and coincides with other
countries' practices. For example, one commenter stated that ``more
than three-fourths of all existing AVAs are located inside another AVA
* * * AVAs within AVAs help consumers both better understand
viticultural distinctions that may exist within a larger AVA and gain
information about the origin and thus value of a particular wine.''
Commenters who opposed this proposal also asserted that it is
always better for the consumer to have more information about where a
wine comes from. Some pointed out that the use of the larger, and
therefore probably more well-known, AVA name aids the consumer in
determining where the sub-AVA is located.
A commenter on behalf of Premier Pacific Vineyards stated that the
proposals in Notice No. 78 ``will have tangible negative effects on
wine consumers and the industry.'' This commenter further stated, ``Not
allowing producers to list all the information on the wine's origin by
limiting the description to a small AVA without providing the often
more familiar larger AVA, removes useful information from the consumer.
Changing the rules in a way that makes the origin of wine and labeling
more confusing or less descriptive represents a disservice to the
consumer.''
The president of Appellation St. Helena, which represents 60
wineries and 7 vineyards, stated that this provision is ``a huge step
backward'' and that it ``flies in the face of all of the other great
wine growing regions worldwide that go to great lengths to encourage
detailed naming of specific places.''
A commenter affiliated with the University of California, Davis,
wrote that the ``concept of hierarchical classification, or nesting
finer-scale places within courser-scale places, is both global and
almost ubiquitous.'' Further, as an analogy to different levels for
specifying AVAs, several commenters discussed the classification system
of dogs. These commenters wrote that a Yorkie is a Terrier which is a
dog. They further stipulated that no one will refute the fact that
though a Yorkie is not the same as all terriers and a Terrier is not
the same as all dogs, they are all in fact dogs and therefore share
similar characteristics.
With regard to the companion issue of whether the nesting of AVAs
should be eliminated, TTB received 36 comments, all in opposition. Many
of these commenters share the belief that nesting
[[Page 3496]]
is a common worldwide practice that consumers understand.
One of these commenters stated:
An AVA contained within a larger AVA is and should remain part
of the larger AVA * * * Informed consumers already understand that
viticultural distinctiveness is measured at multiple levels. Most
major wine producing countries recognize this fact and formally
incorporate varying levels of viticultural distinctiveness into
their regulations. For example, Australia's regulations describe
zones, regions, and sub-regions, all of which are geographical
indications of the source of grapes, which, like AVAs, contain no
quality controls or quality connotations, but which require a
showing of varying levels of viticultural distinctiveness; Chile has
regions and sub-regions; and in France, the Burgundy and Bordeaux
appellations are divided into districts, communes and even smaller
appellation areas. Formal regulatory recognition of multiple levels
of viticultural distinctiveness exists throughout the world because
such recognition leads to logical, organized and understandable
appellations of origin and, ultimately, well-informed consumers. In
none of these countries are smaller AVAs carved out from
surrounding, larger AVAs.
A commenter on behalf of the PRAVAC argued that ``every appellation
system in the world utilizes geographic nesting to specify the origin
of wines, and consumers worldwide are already familiar with this
concept.'' This commenter further stated that ``nesting itself is
fundamental to the existence of a meaningful appellation system * * *
TTB must not enact rules that threaten this structure.''
A commenter on behalf of Premier Vineyards wrote that ``nested or
telescoping AVAs are consistent with the TTB's goal of identifying and
defining geographic areas (AVAs) that have unique geographic features
that result in distinctive grapes and wine.'' However, another
commenter on behalf of Sonoma County Vintners stated that ``this does
not mean that TTB should not limit overlaps that do not meet the tests
for creating an AVA.''
TTB Response
TTB believes there is merit in the comments received asserting that
nesting should not be prohibited, and that recognition of a smaller AVA
should not by definition prohibit the use of the viticultural name of
the larger AVA in which it lies. TTB agrees that consumer interests are
served by greater specificity within a hierarchy, where a true
hierarchy exists.
However, TTB notes that a determination that a hierarchy of grape-
growing regions based on similar yet distinguishable geographical
features exists, rather than a situation in which an entirely different
grape-growing region lies within another grape-growing region, must be
based on the facts related to the geographical features presented in
the AVA petition under consideration. The comments received in response
to Notice No. 78 do not convince us that the mere fact that a proposed
AVA would be located within an existing AVA is sufficient to allow the
use of either the existing AVA name or the proposed AVA name, at the
sole discretion of the vintner.
For example, if an existing AVA is defined as being a large valley
and its distinguishing geographical features are those that are found
on the valley floor, it may be appropriate to approve a proposed AVA
described as being situated in whole or in part on the same valley
floor within the existing AVA if the proposed AVA shares some of the
geographical features with the existing AVA but at the same time has
other geographical features that are sufficiently distinctive as to
warrant its own AVA designation. On the other hand, if within that
large valley AVA there is a mountain on which a petitioner proposes to
establish a new AVA above the 500-foot elevation line, the evidence
provided in the petition might demonstrate that the distinguishing
features of the proposed AVA bear no relationship to those of the
valley floor. In the latter case, the new petition has demonstrated
that this is not a hierarchical situation involving some sharing of
common features but rather is a proposal to establish an entirely
distinctive AVA. In such a case, TTB believes it may be inappropriate
to take a regulatory action that could cause consumers mistakenly to
conclude that wine produced from grapes grown within the petitioned-for
AVA has the same characteristics as wine produced from grapes grown in
the existing AVA.
Based on our experience in reviewing petitions for the
establishment of AVAs, we have found that in the vast majority of cases
petitioners who propose the establishment of an AVA within an existing
AVA, and who provide evidence that there are sufficiently
distinguishable geographical features in the proposed AVA to warrant
its recognition, can also establish through the evidence submitted that
the proposed AVA has some geographical features that are sufficiently
similar to those of the existing AVA so as to allow it still to be
considered a part of the existing AVA. In those very rare instances in
which no notable common geographical features between the two AVAs can
be found, we believe that permitting the use of both AVA names for wine
sourced from the grapes grown within the proposed AVA could be
misleading to the consumer, and it would not be appropriate for TTB to
take regulatory action which would produce that result.
After careful consideration of the comments submitted, TTB has
determined that it would be inappropriate to adopt regulatory language
that prohibits future approvals of AVAs that entirely surround or lie
entirely within, or that overlap, existing AVAs, provided such
approvals are adequately justified through petition evidence and
rulemaking procedures. TTB also believes that the decision as to
whether or not a proposed AVA that entirely surrounds, lies entirely
within, or overlaps, an existing AVA should prohibit label holders from
using the existing AVA name on the wine labels as well should be made
on a case-by-case basis considering the evidence submitted by the
proposing AVA petitioner. The regulatory language as proposed in Notice
No. 78 is consistent with these principles and will afford sufficient
flexibility under the case-by-case approach. TTB notes the intent of
the provisions dealing with AVAs within AVAs is to apply it
prospectively to newly established areas only. AVAs already established
within AVAs will not be affected by these provisions.
Comments on the New Part 4 Grandfather Provision
The text proposed in Notice No. 78 for new Sec. 4.39(i)(3) stated:
(3) Brand names that do not meet the requirements of paragraph
(i)(2) of this section and that contain the name of a viticultural
area or other term of viticultural significance established under
part 9 of this chapter on or after [INSERT EFFECTIVE DATE OF FINAL
RULE] may be used in conjunction with information which the
appropriate TTB officer finds to be sufficient to dispel the
impression that the geographic area suggested by the brand name is
indicative of the origin of the wine, provided that the brand name:
(i) Was used in an existing certificate of label approval issued
prior to the 5-year period immediately preceding receipt of the
perfected petition for establishment of the viticultural area; and
(ii) Was in actual commercial use on labels for at least 3 years
during that 5-year period.
As noted above, in the ``comments invited'' section of Notice No.
78, TTB asked whether the use of a grandfather provision to avoid
conflicts between an established brand name and the establishment of a
proposed AVA is appropriate. Of the 191 comments received, 107 comments
specifically addressed this issue--2 in favor of using such a
grandfather provision and 105 opposed to its use.
[[Page 3497]]
A commenter on behalf of Compliance Service of America, whose
services include the preparation and filing of AVA petitions, stated in
favor of the grandfather provision, ``It is understandable the TTB sees
this problem and its effect more completely than many industry members,
because TTB has been forced to find the solutions for the competing
interests of the parties.'' This commenter further stated, ``The
problem of conflicts between new AVAs and existing brands continues to
exist and is becoming even more prevalent as more * * * AVAs are
created. With the growth of the US wine industry and the proliferation
of AVAs, conflicts will only become more frequent, and will continue to
be devastating to wineries that have literally put the viticultural
area on the map.'' This commenter cited the petitioned-for Eola Hills
AVA as an example, pointing out that Eola Hills Winery developed the
region as a grape-growing region and essentially created the
viticultural significance of the name Eola Hills. The commenter
asserted that the establishment of the AVA would have had an adverse
impact on the use of the winery's brand name and noted that the problem
was narrowly avoided by adding a modifier to the AVA name so that the
AVA name established is Eola-Amity Hills.
A commenter representing Calistoga Partners, L.P., also in favor of
the grandfather provision, wrote:
We believe that TTB's proposed rulemaking in Notice No. 78 is
fundamentally a fair resolution of the potential conflicts between
the rights of brand owners who had brand names in actual commercial
use based on existing certificates of label approval and the rights
of those who wish to establish a new AVA, and represents a
reasonable compromise that we would strongly support.
Most of the 105 commenters who opposed the grandfather provision
wrote that they believe the proposed provision would allow misleading,
confusing, and/or deceptive wine labels in the marketplace and thereby
harm consumers. Many of these commenters further asserted that the
grandfather provision will have far reaching consequences that will
degrade the integrity of the AVA system. A number of these commenters
specifically referred to the issues discussed in Notice No. 77,
regarding the proposed establishment of a Calistoga viticultural area,
as an example of problems that a grandfather provision can create.
The president of the Washington Wine Institute wrote that the
grandfather proposals put forth in Notice No. 78 ``are not sufficient
to protect against deceptive labeling and consumer misunderstanding; in
fact, they are a step backwards from both industry and governmental
efforts to provide consumers with accurate and comprehensible
information about the wine in the bottle.''
The commenter on behalf of the PRAVAC wrote:
Current law applies two different sets of labeling rules for the
industry: One set of rules applies to geographic brands used in
COLAs issued prior to July 7, 1986, and a different set--the
labeling rules set forth in the current regulations--governs every
other geographic brand in the U.S. marketplace. While not a perfect
solution, at least these two groups are easily identifiable and not
subject to change. The number of grandfathered brands with
misdescriptive names is finite, thus limiting the chances for
consumer deception.
This commenter further stated that the proposed changes to the
regulations would create three sets of labeling rules: (1) For brands
on COLAs issued prior to July 7, 1986; (2) for geographic brands used
on COLAs issued at least 5 years prior to the date on which a petition
for a conflicting AVA is ``perfected'' that also have been used in
commerce for at least 3 of those 5 years; and (3) for brands on COLAs
that do not fall into either of the preceding categories. This
commenter added that ``this solution is inadvisable.'' This commenter
also provided an example of a name conflict involving a petitioned-for
AVA within the Paso Robles AVA, the proposed El Pomar District AVA,
which was resolved with the owners of the potentially conflicting COLAs
by their consenting to the use of the proposed AVA name prior to
submission of the petition.
The president of the industry trade association Wine America,
wrote:
The grandfathering clause would allow already existing
geographic brand names that contain a reference to a new AVA to
continue to be used as long as they were on a COLA approved at least
five years before filing of an AVA petition and have been in actual
commercial use for at least three years of those five years. This
change in regulation is driven by concern that petitioners may
propose AVAs to limit competition to the detriment of established
businesses.
This commenter added that this proposal ``creates consumer
confusion, it undermines the value of the appellation for wineries
properly using the appellation, and we believe the TTB has sufficient
authority to resolve such conflicts through other means.''
The president of the board of directors for the Napa Valley
Vintners trade association raised concern on the issue, stating:
This proposed rule requiring five years of ownership of COLA and
three years of use in commerce * * * is contrary to TTB's consumer
protection mandate set under the FAA Act. It has no basis in, and is
contrary to, recognized trademark and unfair competition law and
does not comport with the provisions of Article 23 of the Agreement
on Trade-Related Aspects of Intellectual Property Rights * * *. As
mandated by the FAA Act, TTB's primary function in the regulation of
wine labeling is to protect consumers by ensuring that they are not
misled. The proposed grandfather rule in Notice No. 78 is contrary
to this Congressional mandate.
Many of the commenters indicated that they believe the current
regulations in existence for more than 20 years are fair to all
concerned and do not believe it is fair to change this provision now
because industry members have been playing by these rules for 20 plus
years. Several commenters pointed to TTB's regulations, which prohibit
the use of misleading and deceptive labeling. Other commenters pointed
out that TTB has the responsibility to protect the public from
misleading labels.
One commenter further asserted that the grandfather provisions are
not in line with the FAA Act. This commenter pointed to the TTB
regulations that outline the label revocation procedure set forth in 27
CFR part 13, subpart D. In discussing the establishment of this
procedure, this commenter stated that TTB made the following
observation, ``Paragraph 1 of Form 5100.31 [Application for and
Certification/Exemption of Label/Bottle Approval] does not constitute
trademark protection.''
A commenter on behalf of the International Trademark Association
wrote:
[The] proposal advocated by TTB fails to properly consider the
principle of ``first in time, first in right'' priority and the fact
that U.S. trademark and unfair competition laws recognize the
establishment of rights in trademarks and geographical indications
based on use and consumer recognition without the necessity of any
type of registration. Accordingly, the grandfather proposal
advocated in NPRM No. 78, and effectively applied in NPRM No. 77,
does not ensure that the valid rights of either trademark owners or
the users of geographical indications or the interest of consumers,
will be protected.
As noted above, in the ``comments invited'' section of Notice No.
78, TTB asked whether it would be more appropriate to adopt an
alternative to the grandfather provision that would apply to brand
names that have longstanding commercial use under one or more existing
certificates of label approval without specifying a time period. Four
commenters specifically
[[Page 3498]]
responded to this question--all in opposition to the use of such an
alternative.
Also as noted above, in the ``comments invited'' section of Notice
No. 78, TTB asked for comments on what type of dispelling information
would prevent consumers from being misled as to the origin of the wine
when a grandfather provision applies as well as for other comments for
a requirement on dispelling information. Twenty-two commenters
specifically responded to this comment solicitation, all in opposition
to using dispelling information to avoid misleading consumers.
Several of these commenters stated that disclaimers will not be
effective in avoiding the misleading of consumers when consumers are
purchasing wine from a wine list in a restaurant or online. For
example, the Napa Chamber of Commerce believes that ``disclaimers
hidden on back labels do not help consumers make informed choices when
choosing from a wine list.'' In addition, the president of Duckhorn
Wine Company stated that ``additional wording on the label to help
clarify the origin of wines * * * will not dispel confusion as most
consumers will not see the label before they order wine in a restaurant
or purchase wine online.'' Another commenter wrote, ``Consumers
purchasing wine via mail-order or the Internet * * * purchase wine with
brand names that include wine region names with the belief that the
wine is from the region identified in the brand name.''
Some commenters provided references to studies that indicate that
dispelling information is not effective in avoiding consumer deception
or confusion. One commenter stated that ``more frequently courts have
found disclaimers to be ineffective,'' and that ``[t]his judicial
skepticism over disclaimers is supported by the scholarly literature''
such as the article by Jacob Jacoby and George Szybillo entitled ``Why
Disclaimers Fail.'' The commenter noted that ``disclaimers generally
are not likely to be effective because the information provided does
not automatically translate into the desired effect, i.e.,
comprehension.'' This commenter also added that ``using a disclaimer or
other dispelling label information to suggest that wine with a
misleading geographic brand name is not from the place identified * * *
will be ineffective because consumers will neither read nor absorb the
disclaimer information in the retail purchase environment.''
Finally, as noted above, in Notice No. 78 TTB proposed a 5-year/3-
year standard for applying the proposed new grandfather provision in
Sec. 4.39(i) when it is not possible otherwise to limit the adverse
impact on established brand names when a new AVA is approved. In order
for the grandfather provision to apply to a brand name, the COLA for
the label carrying that brand name must have been issued at least 5
years prior to the receipt of the perfected petition for establishment
of the new AVA. Additionally, the label in question must have been in
actual commercial use for at least 3 years during that 5-year period.
A few commenters specifically opposed this provision. The commenter
on behalf of the International Trademark Association wrote, ``This 5-
year COLA/3-year in use rule is arbitrary and capricious and does not
reflect any recognized standard for the acquisition of trademark rights
and does not protect the rights of trademark owners.''
TTB Response
The comments in opposition to the addition of a new grandfather
provision to Sec. 4.39(i), in part, have caused us to reassess our
proposal. In response to the two comments favoring the grandfather
provision, as noted below, in almost all cases in which a potential
conflict has arisen between a proposed new AVA name and a brand name
used on a label, our predecessor agency and we have been able to find a
mutually satisfactory solution that would permit the establishment of
the AVA with the least negative impact on current label holders while
also protecting consumers. We believe that we will continue to be able
to resolve future conflicts this way without need for a new grandfather
provision. We recognize that there may be the rare case in which a
mutually satisfactory solution cannot be found. In such cases we
believe that a case-by-case resolution is a better approach than to
create a new grandfather provision as a default resolution. Moreover,
we believe that adoption of the new grandfather provision as proposed
could lead to over-reliance on it, thus unnecessarily increasing the
use of labels that must carry dispelling information, and could
increase the risk of consumer confusion. Accordingly, we have
determined not to adopt the new grandfather provision proposed in
Notice No. 78. We reserve reconsideration of this issue in the future
should circumstances warrant.
In the past, when a conflict has arisen between an existing
approved label and a proposed AVA name, TTB or its predecessor agency,
the viticultural area petitioners, and/or the affected label holders
usually have been able to satisfactorily resolve the conflict. For
example, we have approved a modified name for the AVA, as in the case
of the ``Oak Knoll District of Napa Valley'' viticultural area (T.D.
TTB-9, 69 FR 8562) and the ``Diamond Mountain District'' viticultural
area (T.D. ATF-456, 66 FR 29698), or we have approved an entirely
different name, as in the case of the ``Chalone'' viticultural area
(T.D. ATF-107, 47 FR 25519). In these and similar cases, TTB or its
predecessor agency found that name evidence supported the use of the
modified or different name, that the modified or different name was
associated with the proposed viticultural area boundaries, and that use
of the approved name reduced potential consumer confusion with long-
standing existing labels. The commenter on behalf of Compliance Service
of America described a similar circumstance involving the proposed
``Eola Hills'' name in a comment cited above.
We have also in some cases designated new AVAs that limit the use
of existing labels when the affected label holders have indicated that
they understood the restrictive effect and did not object to the
designation (e.g., ``Lake Chelan'' AVA, T.D. TTB-76, published in the
Federal Register at 74 FR 19409 on April 29, 2009). In another case we
withdrew the proposal to establish the AVA for insufficient name
evidence while acknowledging the principle that an established brand
name could be a factor in deciding not to establish a proposed AVA
because it would create consumer confusion (see Notice No. 84,
published in the Federal Register at 73 FR 34902 on June 19, 2008,
withdrawing the ``Tulocay'' AVA proposal). And in the recent
``Calistoga'' AVA case, we resolved the issue by providing a three-year
transitional period to afford the affected brand name holders time to
adjust their business models to the new AVA rule (see T.D. TTB-83,
published in the Federal Register at 74 FR 64602 on December 8, 2009).
In all of these cases, TTB and its predecessor agency, most often with
the cooperation of the affected parties, have been able to resolve the
issue without the need for a new grandfather provision under Sec.
4.39(i).
We believe it is preferable for all the parties who would be
affected by AVA rulemaking to resolve any conflicts through solutions
that protect the interests of, and are acceptable to, all concerned
parties, including consumers, rather than to rely on TTB to resolve the
issue through rulemaking. We continue to believe that most conflicts
can be resolved in such a manner. As such,
[[Page 3499]]
TTB will continue to seek resolution of these conflicts on a case-by-
case basis.
As to the comments regarding dispelling information that would have
been required as part of a grandfathering standard under the proposed
rule, we continue to believe that dispelling information is appropriate
and effective in certain situations, but because we are not adopting a
grandfathering standard with a dispelling information requirement in
this final rule, we do not need to respond further to these comments.
Regarding the comment that our regulatory proposal would be in
conflict with international agreements and trademark rights, the
decision not to include a grandfather provision in this final rule
makes it unnecessary to address the comment in this rulemaking.
Finally, we have decided not to adopt any of the other proposed
editorial-type changes to Sec. 4.39(i) because any change may result
in unintended debate and confusion as to its interpretation.
Comments on Whether the Part 9 Procedural Provisions Should Be Adopted
In Notice No. 78, TTB proposed amendments to the part 9 texts to
clarify the rules for preparing, submitting, and processing AVA
petitions. A few commenters specifically addressed these changes,
stating that while they are not opposed to the proposed procedural
changes, they do not see them as necessary. Other commenters stated
that the current regulations work well for the industry and consumers,
and one commenter specifically mentioned the ``Draft AVA Manual''
developed by TTB as a useful document in preparing an AVA petition.
TTB Response
TTB has determined that the proposed regulatory provisions in
question should be adopted without change. TTB proposed these
regulatory changes based on what we have learned over the years in
reviewing and acting on AVA petitions. We will strengthen the process
through providing more effective guidance to the public by including
details in our regulations on how to petition for the establishment or
modification of an AVA and on what evidence is necessary to support a
petition, and by clearly stating the actions we might take in response
to petitions or comments received. The regulatory changes in question
do not impose new standards but rather represent a codification of
longstanding administrative authority and practice and address a need
for greater transparency regarding the AVA regulatory process. Finally,
with regard to the ``Draft AVA Manual,'' we do not believe that such a
publication is an appropriate substitute for clear, detailed,
regulatory texts.
Comments on Statements of Viticultural Significance
In Notice No. 78, TTB proposed to amend existing sections within
subpart C of part 9 by adding statements regarding the viticultural
significance for wine labeling purposes of viticultural area names or
key portions of those names. One commenter stated that ``TTB should
[not] promulgate terms of viticultural significance without explaining
the criteria for the selection so that the industry can provide
meaningful comments.''
TTB Response
At this time, TTB is reserving the addition of regulatory text
delineating which terms TTB would consider to have viticultural
significance for possible future rulemaking. Such future rulemaking
would provide TTB with the opportunity to gather additional information
concerning the impact of such changes on existing brand names. In the
interim, TTB's existing authority to determine terms of viticultural
significance is unaffected (see 27 CFR 4.39(i)(3)).
Conclusion
Accordingly, we are adopting the proposed regulatory amendments
with the changes as discussed above. We have also made several non-
substantive, editorial changes to the regulatory texts to enhance their
readability and precision.
Regulatory Analysis and Notices
Executive Order 12866
This rule is not a significant regulatory action as defined by
Executive Order 12866. Therefore, it requires no regulatory assessment.
Regulatory Flexibility Act
We certify that these regulations, if adopted, would not have a
significant economic impact on a substantial number of small entities.
These regulations more specifically state the type of explanations a
petitioner must submit in order to support the establishment of a new
viticultural area or modify an existing area, but these regulations
would not impose additional associated costs because the specific data
that petitioners would rely on to develop these explanations under
these revised regulations are already a part of the data set required
of petitioners under existing rules. As noted in Notice No. 78 and in
this final rule document, the regulatory amendments do not impose new
standards but rather represent a codification of longstanding
administrative authority and practice. Therefore, no regulatory
flexibility analysis is required.
Paperwork Reduction Act
The collection of information contained in this final regulation
has been reviewed and approved by the Office of Management and Budget
(OMB) in accordance with the requirements of the Paperwork Reduction
Act (44 U.S.C. 3507(d)) under control number 1513-0127. An agency may
not conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a valid control number
assigned by OMB.
The collection of information in this regulation is in 27 CFR 9.11
and 9.12. This information is required to petition TTB to establish a
new AVA or to change an existing AVA. This information will be used to
verify evidence sources and to determine whether the information is
sufficient to begin the rulemaking process (that is, proceed to a
notice of proposed rulemaking). The collection of information is
required to obtain a benefit. The likely respondents are non-profit
institutions and small businesses or organizations.
Drafting Information
Rita D. Butler of the Regulations and Rulings Division drafted this
document.
List of Subjects
27 CFR Part 4
Advertising, Customs duties and inspection, Imports, Labeling,
Packaging and containers, Reporting and recordkeeping requirements,
Trade practices, and Wine.
27 CFR Part 9
Wine.
27 CFR Part 70
Administrative practice and procedure, Claims, Excise taxes,
Freedom of information, Law enforcement, Penalties, Reporting and
recordkeeping requirements, and Surety bonds.
Amendments to the Regulations
For the reasons discussed in the preamble, TTB amends 27 CFR,
chapter I, parts 4, 9, and 70, as follows:
[[Page 3500]]
PART 4--LABELING AND ADVERTISING OF WINE
0
1. The authority citation for part 4 continues to read as follows:
Authority: 27 U.S.C. 205, unless otherwise noted.
0
2. In Sec. 4.25, paragraphs (e)(1)(i) and (e)(2) are revised to read
as follows:
Sec. 4.25 Appellations of origin.
* * * * *
(e) Viticultural area--(1) Definition--(i) American wine. A
delimited grape-growing region having distinguishing features as
described in part 9 of this chapter and a name and a delineated
boundary as established in part 9 of this chapter.
* * * * *
(2) Establishment of American viticultural areas. A petition for
the establishment of an American viticultural area may be made to the
Administrator by any interested party, pursuant to part 9 and Sec.
70.701(c) of this chapter. The petition must be made in written form
and must contain the information specified in Sec. 9.12 of this
chapter.
* * * * *
PART 9--AMERICAN VITICULTURAL AREAS
0
3. The authority citation for part 9 continues to read as follows:
Authority: 27 U.S.C. 205.
0
4. A new Sec. 9.0 is added before subpart A to read as follows:
Sec. 9.0 Scope.
The regulations in this part relate to American viticultural areas
created under the authority of the Federal Alcohol Administration Act
and referred to in Sec. 4.25(e) of this chapter.
0
5. Subpart A is revised to read as follows:
Subpart A--General Provisions
Sec.
9.1 Definitions.
9.2 Territorial extent.
9.3 Delegations of the Administrator.
Subpart A--General Provisions
Sec. 9.1 Definitions.
(a) General. For purposes of this part, and unless the specific
context otherwise requires, the following terms shall have the meanings
indicated:
Administrator. The Administrator, Alcohol and Tobacco Tax and Trade
Bureau, Department of the Treasury, Washington, DC.
American viticultural area. A viticultural area as defined in Sec.
4.25(e)(1)(i) of this chapter.
Appropriate TTB officer. An officer or employee of the Alcohol and
Tobacco Tax and Trade Bureau authorized to perform any functions
relating to the administration or enforcement of this part by TTB Order
1135.9, Delegation of the Administrator's Authorities in 27 CFR Part 9,
American Viticultural Areas.
Approved map. The U.S.G.S. map(s) used to define the boundary of an
approved AVA.
AVA. An American viticultural area.
Perfected petition. A petition containing all of the evidence
meeting the requirements of Sec. 9.12 and containing sufficient
supporting information for TTB to decide whether or not to proceed with
rulemaking to establish a new AVA or to change an existing AVA.
Person. An individual, partnership, association, corporation, or
other entity.
Petition. A written request to establish a new AVA or to change an
existing AVA, signed by the petitioner or an authorized agent of the
petitioner, and submitted in accordance with this part and Sec.
70.701(c) of this chapter.
Petitioner. An individual or entity that submits a petition to TTB.
Term of viticultural significance. A name recognized under Sec.
4.39(i)(3) of this chapter.
TTB. The Alcohol and Tobacco Tax and Trade Bureau, Department of
the Treasury, Washington, DC.
U.S.G.S. The United States Geological Survey.
(b) Use of other terms. Any other term defined in the Federal
Alcohol Administration Act and used in this part shall have the same
meaning assigned to it by that Act.
Sec. 9.2 Territorial extent.
This part applies to the several States of the United States, the
District of Columbia, and Puerto Rico.
Sec. 9.3 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained
in this part are delegated to appropriate TTB officers. Those TTB
officers are specified in TTB Order 1135.9, Delegation of the
Administrator's Authorities in 27 CFR Part 9, American Viticultural
Areas. You may obtain a copy of this order by accessing the TTB Web
site (http://www.ttb.gov) or by mailing a request to the Alcohol and
Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street,
Room 1516, Cincinnati, OH 45202.
0
6. Subpart B is revised to read as follows:
Subpart B--AVA Petitions
Sec.
9.11 Submission of AVA petitions.
9.12 AVA petition requirements.
9.13 Initial processing of AVA petitions.
9.14 AVA rulemaking process.
Subpart B--AVA Petitions
Sec. 9.11 Submission of AVA petitions.
(a) Procedure for petitioner. Any person may submit an AVA petition
to TTB to establish a grape-growing region as a new AVA, to change the
boundary of an existing AVA, or to change the name of an existing AVA.
The petitioner is responsible for including with the petition all of
the information specified in Sec. 9.12. The person submitting the
petition is also responsible for providing timely and complete
responses to TTB requests for additional information to support the
petition.
(b) How and where to submit an AVA petition. The AVA petition may
be sent to TTB using the U.S. Postal Service or a private delivery
service. A petition sent through the U.S. Postal Service should be
addressed to: Regulations and Rulings Division, Alcohol and Tobacco Tax
and Trade Bureau, 1310 G Street, NW., Washington, DC 20220. A petition
sent via a private delivery service should be directed to: Regulations
and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, Suite
200E, 1310 G Street, NW., Washington, DC 20005.
(c) Purpose and effect of submission of AVA petitions. The
submission of a petition under this subpart is intended to provide TTB
with sufficient documentation to propose the establishment of a new AVA
or to propose changing the name or boundary of an existing AVA. After
considering the petition evidence and any other relevant information,
TTB shall decide what action to take in response to a petition and
shall so advise the petitioner. Nothing in this chapter shall, or shall
be interpreted to, compel any Department of the Treasury official to
proceed to rulemaking in response to a submitted petition.
Sec. 9.12 AVA petition requirements.
(a) Establishment of an AVA in general. A petition for the
establishment of a new AVA must include all of the evidentiary
materials and other information specified in this section. The petition
must contain sufficient information, data, and evidence such that no
independent verification or research is required by TTB.
(1) Name evidence. The name identified for the proposed AVA must
[[Page 3501]]
be currently and directly associated with an area in which viticulture
exists. All of the area within the proposed AVA boundary must be
nationally or locally known by the name specified in the petition,
although the use of that name may extend beyond the proposed AVA
boundary. The name evidence must conform to the following rules:
(i) Name usage. The petition must completely explain, in narrative
form, the manner in which the name is used for the area covered by the
proposed AVA.
(ii) Source of name and name evidence. The name and the evidence in
support of it must come from sources independent of the petitioner.
Appropriate name evidence sources include, but are not limited to,
historical and modern government or commercial maps, books, newspapers,
magazines, tourist and other promotional materials, local business or
school names, and road names. Whenever practicable, the petitioner must
include with the petition copies of the name evidence materials,
appropriately cross-referenced in the petition narrative. Although
anecdotal information by itself is not sufficient, statements taken
from local residents with knowledge of the name and its use may also be
included to support other name evidence.
(2) Boundary evidence. The petition must explain in detail the
basis for defining the boundary of the proposed AVA as set forth in the
petition. This explanation must have reference to the name evidence and
other distinguishing features information required under this section.
In support of the proposed boundary, the petition must outline the
commonalities or similarities within that boundary and must explain
with specificity how those elements are different in the adjacent areas
outside that boundary.
(3) Distinguishing features. The petition must provide, in
narrative form, a description of the common or similar features of the
proposed AVA affecting viticulture that make it distinctive. The
petition must also explain with specificity in what way these features
affect viticulture and how they are distinguished viticulturally from
features associated with adjacent areas outside the proposed AVA
boundary. For purposes of this section, information relating to
distinguishing features affecting viticulture includes the following:
(i) Climate. Temperature, precipitation, wind, fog, solar
orientation and radiation, and other climate information;
(ii) Geology. Underlying formations, landforms, and such
geophysical events as earthquakes, eruptions, and major floods;
(iii) Soils. Soil series or phases of a soil series, denoting
parent material, texture, slope, permeability, soil reaction, drainage,
and fertility;
(iv) Physical features. Flat, hilly, or mountainous topography,
geographical formations, bodies of water, watersheds, irrigation
resources, and other physical features; and
(v) Elevation. Minimum and maximum elevations.
(4) Maps and boundary description. (i) Maps. The petitioner must
submit with the petition, in an appropriate scale, the U.S.G.S. map(s)
showing the location of the proposed AVA. The exact boundary of the AVA
must be prominently and clearly drawn on the maps without obscuring the
underlying features that define the boundary line. U.S.G.S. maps may be
obtained from the U.S. Geological Survey, Branch of Distribution. If
the map name is not known, the petitioner may request a map index by
State.
(ii) Boundary description. The petition must include a detailed
narrative description of the proposed AVA boundary based on U.S.G.S.
map markings. This description must have a specific beginning point,
must proceed unbroken from that point in a clockwise direction, and
must return to that beginning point to complete the boundary
description. The boundary description must refer to easily discernable
reference points on the U.S.G.S. maps. The proposed AVA boundary
description may rely on any of the following map features:
(A) State, county, township, forest, and other political entity
lines;
(B) Highways, roads (including unimproved roads), and trails;
(C) Contour or elevation lines;
(D) Natural geographical features, including rivers, streams,
creeks, ridges, and marked elevation points (such as summits or
benchmarks);
(E) Human-made features (such as bridges, buildings, windmills, or
water tanks); and
(F) Straight lines between marked intersections, human-made
features, or other map points.
(b) AVAs within AVAs. If the petition proposes the establishment of
a new AVA entirely within, or overlapping, an existing AVA, the
evidence submitted under paragraph (a) of this section must include
information that both identifies the attributes of the proposed AVA
that are consistent with the existing AVA and explains how the proposed
AVA is sufficiently distinct from the existing AVA and therefore
appropriate for separate recognition. If the petition proposes the
establishment of a new AVA that is larger than, and encompasses, all of
one or more existing AVAs, the evidence submitted under paragraph (a)
of this section must include information addressing whether, and to
what extent, the attributes of the proposed AVA are consistent with
those of the existing AVA(s). In any case in which an AVA would be
created entirely within another AVA, whether by the establishment of a
new, larger AVA or by the establishment of a new AVA within an existing
one, the petition must explain why establishment of the AVA is
acceptable. When a smaller AVA has name recognition and features that
so clearly distinguish it from a larger AVA that surrounds it, TTB may
determine in the course of the rulemaking that it is not part of the
larger AVA and that wine produced from grapes grown within the smaller
AVA would not be entitled to use the name of the larger AVA as an
appellation of origin or in a brand name.
(c) Modification of an existing AVA.
(1) Boundary change. If a petition seeks to change the boundary of
an existing AVA, the petitioner must include with the petition all
relevant evidence and other information specified for a new AVA
petition in paragraphs (a) and (b) of this section. This evidence or
information must include, at a minimum, the following:
(i) Name evidence. If the proposed change involves an expansion of
the existing boundary, the petition must show how the name of the
existing AVA also applies to the expansion area. If the proposed change
would result in a decrease in the size of an existing AVA, the petition
must explain, if so, the extent to which the AVA name does not apply to
the excluded area.
(ii) Distinguishing features. The petition must demonstrate that
the area covered by the proposed change has, or does not have,
distinguishing features affecting viticulture that are essentially the
same as those of the existing AVA. If the proposed change involves an
expansion of the existing AVA, the petition must demonstrate that the
area covered by the expansion has the same distinguishing features as
those of the existing AVA and has different features from those of the
area outside the proposed, new boundary. If the proposed change would
result in a decrease in the size of an existing AVA, the petition must
explain how the distinguishing features of the excluded area are
different from those within the boundary of the smaller AVA. In all
[[Page 3502]]
cases the distinguishing features must affect viticulture.
(iii) Boundary evidence and description. The petition must explain
how the boundary of the existing AVA was incorrectly or incompletely
defined or is no longer accurate due to new evidence or changed
circumstances, with reference to the name evidence and distinguishing
features of the existing AVA and of the area affected by the proposed
boundary change. The petition must include the appropriate U.S.G.S.
maps with the proposed boundary change drawn on them and must provide a
detailed narrative description of the changed boundary.
(2) Name change. If a petition seeks to change the name of an
existing AVA, the petition must establish the suitability of that name
change by providing the name evidence specified in paragraph (a)(1) of
this section.
Sec. 9.13 Initial processing of AVA petitions.
(a) TTB notification to petitioner of petition receipt. The
appropriate TTB officer will acknowledge receipt of a submitted
petition. This notification will be in a letter sent to the petitioner
within 30 days of receipt of the petition.
(b) Acceptance of a perfected petition or return of a deficient
petition to the petitioner. The appropriate TTB officer will perform an
initial review of the petition to determine whether it is a perfected
petition. If the petition is not perfected, the appropriate TTB officer
will return it to the petitioner without prejudice to resubmission in
perfected form. If the petition is perfected, TTB will decide whether
to proceed with rulemaking under Sec. 9.14 and will advise the
petitioner in writing of that decision. If TTB decides to proceed with
rulemaking, TTB will advise the petitioner of the date of receipt of
the perfected petition. If TTB decides not to proceed with rulemaking,
TTB will advise the petitioner of the reasons for that decision.
(c) Notice of pending petition. When a perfected petition is
accepted for rulemaking, TTB will place a notice to that effect on the
TTB Web site.
Sec. 9.14 AVA rulemaking process.
(a) Notice of proposed rulemaking. If TTB determines that
rulemaking in response to a petition is appropriate, TTB will prepare
and publish a notice of proposed rulemaking (NPRM) in the Federal
Register to solicit public comments on the petitioned-for AVA action.
(b) Final action. Following the close of the NPRM comment period,
TTB will review any submitted comments and any other available relevant
information and will take one of the following actions:
(1) Prepare a final rule for publication in the Federal Register
adopting the proposed AVA action, with or without changes;
(2) Prepare a notice for publication in the Federal Register
withdrawing the proposal and setting forth the reasons for the
withdrawal. Reasons for withdrawal of a proposal must include at least
one of the following:
(i) The extent of viticulture within the proposed boundary is not
sufficient to constitute a grape-growing region as specified in Sec.
9.11(a); or
(ii) The name, boundary, or distinguishing features evidence does
not meet the standards for such evidence set forth in Sec. 9.12; or
(iii) The petitioned-for action would be inconsistent with one of
the purposes of the Federal Alcohol Administration Act or any other
Federal statute or regulation or would be otherwise contrary to the
public interest;
(3) Prepare a new NPRM for publication in the Federal Register
setting forth a modified AVA action for public comment; or
(4) Take any other action deemed appropriate by TTB as authorized
by law.
PART 70--PROCEDURE AND ADMINISTRATION
0
7. The authority citation for part 70 continues to read as follows:
Authority: 5 U.S.C. 301 and 552; 26 U.S.C. 4181, 4182, 5146,
5203, 5207, 5275, 5367, 5415, 5504, 5555, 5684(a), 5741, 5761(b),
5802, 6020, 6021, 6064, 6102, 6155, 6159, 6201, 6203, 6204, 6301,
6303, 6311, 6313, 6314, 6321, 6323, 6325, 6326, 6331-6343, 6401-
6404, 6407, 6416, 6423, 6501-6503, 6511, 6513, 6514, 6532, 6601,
6602, 6611, 6621, 6622, 6651, 6653, 6656-6658, 6665, 6671, 6672,
6701, 6723, 6801, 6862, 6863, 6901, 7011, 7101, 7102, 7121, 7122,
7207, 7209, 7214, 7304, 7401, 7403, 7406, 7423, 7424, 7425, 7426,
7429, 7430, 7432, 7502, 7503, 7505, 7506, 7513, 7601-7606, 7608-
7610, 7622, 7623, 7653, 7805.
0
8. Section 70.701 is amended by adding a sentence at the end of
paragraph (c) to read as follows: ``A petition to establish a new
American viticultural area or to modify an existing American
viticultural area is subject to the rules in part 9 of this chapter.''
Signed: October 1, 2010.
John J. Manfreda,
Administrator.
Approved: October 1, 2010.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade, and Tariff Policy).
[FR Doc. 2011-1138 Filed 1-19-11; 8:45 am]
BILLING CODE 4810-31-P