[Federal Register Volume 65, Number 241 (Thursday, December 14, 2000)]
[Rules and Regulations]
[Pages 78096-78099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31595]


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DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and Firearms

27 CFR Part 9

[T.D. ATF-434; Re: Notice No. 874]
RIN 1512-AA07


Applegate Valley Viticultural Area [99R-112P]

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of 
the Treasury.

ACTION: Final rule, Treasury decision.

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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is 
establishing a viticultural area located within the State of Oregon, to 
be known as ``Applegate Valley.'' The petition for this viticultural 
area was filed by Mr. Barnard E. Smith, President, The Academy of Wine 
of Oregon Inc. ATF believes that the establishment of viticultural 
areas and the subsequent use of viticultural area names as appellations 
of origin in wine labeling and advertising allows wineries to designate 
the specific areas where the grapes used to make the wine were grown 
and enables consumers to better identify the wines they purchase.

EFFECTIVE DATE: February 12, 2001.

FOR FURTHER INFORMATION CONTACT: Tim DeVanney, Regulations Division, 
(202-927-8210), Bureau of Alcohol, Tobacco and Firearms, 650 
Massachusetts Avenue, NW., Washington, DC 20226.

SUPPLEMENTARY INFORMATION:

Background

    On August 23, 1978, ATF published Treasury Decision ATF-53 (43 FR 
37672, 54624) revising regulations in 27 CFR part 4. These regulations 
allow the establishment of definite American viticultural areas (AVAs). 
The regulations also allow the name of an approved viticultural area to 
be used as an appellation of origin in the labeling and advertising of 
wine.
    On October 2, 1979, ATF published Treasury Decision ATF-60 (44 FR 
56692), which added a new part 9 to 27 CFR, providing for the listing 
of approved AVAs. Section 4.25a(e)(1), title 27, CFR, defines an AVA as 
a delimited grape-growing region distinguishable by geographical 
features, the boundaries of which have been delineated in subpart C of 
part 9. Section 4.25a(e)(2) outlines the procedure for proposing an 
AVA. Any interested person may petition ATF to establish a grape-
growing region as a viticultural area. The petition should include:
    (a) Evidence that the name of the proposed viticultural area is 
locally and/or nationally known as referring to the area specified in 
the petition;
    (b) Historical or current evidence that the boundaries of the 
viticultural area are as specified in the petition;
    (c) Evidence relating to the geographical features (climate, soil, 
elevation, physical features, etc.) which distinguish the viticultural 
features of the proposed area from surrounding areas;
    (d) A description of 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
    (e) A copy of the appropriate U.S.G.S. map(s) with the boundaries 
prominently marked.

Petition

    ATF has received a petition from Mr. Barnard E. Smith, President, 
The Academy of Wine of Oregon Inc., proposing to establish a 
viticultural area within the State of Oregon, to be known as 
``Applegate Valley.'' The viticultural area is located entirely within 
the Rogue Valley AVA. The viticultural area is in Josephine and Jackson 
Counties. Mr. Smith believes that Applegate Valley is a widely known 
name for the petitioned area, that the area is well defined, and

[[Page 78097]]

that the area is distinguished from other areas by its soil and 
climate.
    The Applegate Valley has been a grape-growing region since 1870 
when A. H. Carson began planting 30 acres of grapes along North 
Applegate Road. There are now 23 vineyards in the valley. In the 
original petition, Mr. Smith noted there were six bonded wineries and 
235 acres of grapes in the proposed area. Since the publication of the 
notice, the petitioner amended his statement regarding the number of 
bonded wineries: there are four bonded wineries in the Applegate 
Valley. One commentor provided an acreage update by stating that there 
are now over 340 acres that have been planted to grapes within the 
Applegate Valley.

Notice of Proposed Rulemaking

    In response to this petition, ATF published a notice of proposed 
rulemaking, Notice No. 874, in the Federal Register on May 6, 1999 [64 
FR 24308], proposing the establishment of the Applegate Valley 
viticultural area. The notice requested comments from interested 
persons by July 6, 1999.

Name Evidence

    ATF found that usage of the name Applegate Valley is well 
established. There are many businesses, organizations and at least one 
community event (the Applegate Valley Harvest Festival), that employ 
the use of this name. The Applegate River was named for one or more of 
the Applegate brothers who explored the area in 1846. The U.S.G.S. map 
used to show the boundaries of the area (Medford, Oregon; California 
1955, Revised 1976, (NK 10-5), scale 1:250,000) uses the name Applegate 
River and shows the town of Applegate within the Applegate Valley 
viticultural area. The following are evidence of Applegate Valley's 
name recognition.
     ``The Wine Appellations of Oregon'' map published by the 
Oregon Wine Marketing Coalition shows the Applegate Valley and mentions 
it in its notes.
     The Oxford Companion to Wine (first edition) mentions the 
Applegate Valley on page 693.
     The Oregon Winegrape Growers' Guide devotes several 
paragraphs to a discussion of the Applegate Valley as one of Oregon's 
grape-growing areas.
     Treasury Decision ATF-310 (The Rogue Valley Viticultural 
Area) refers to the Applegate Valley within the Rogue Valley 
viticultural area.

Geographical Features

Evidence of Boundaries and Topography

    The boundaries of the viticultural area are within Jackson and 
Josephine Counties in the State of Oregon. The area is entirely within 
the Rogue Valley viticultural area. The Rogue Valley viticultural area 
has three distinct subregions: Applegate Valley and two other valleys 
that have not been designated as AVAs, Illinois Valley and Bear Creek 
Valley. The Illinois Valley lies to the west of the Applegate Valley 
and Bear Creek Valley lies directly to the east of the AVA.
    The Applegate Valley is approximately 50 miles long, running from 
its southeast origins near the California border, in a generally 
northwest direction, to where it joins the Rogue River, just west of 
Grants Pass.
    Applegate Valley is surrounded by the Siskiyou Mountains. The 
Siskiyou Mountains are believed to have been created in the Jurassic 
period by up-thrusts of the ocean floor as a plate forced its way under 
the continental shelf. To Applegate Valley's east and south is the 
Rogue River National Forest. To its west is the Siskiyou National 
Forest. Both of the National Forests' boundaries have been identified 
by the U.S. Forest Service and were used to identify the boundaries of 
the Applegate Valley AVA where appropriate. A portion of the western 
boundaries, and most of the northern boundaries, are established by 
straight-line segments drawn between prominent physical features of the 
terrain, mostly mountaintops. The boundaries of the Applegate Valley 
AVA are more particularly discussed in Sec. 9.165(c) of the 
regulations, as identified at the end of this Treasury Decision.

Soil

    The petitioner submitted a soil analysis listing the principal soil 
series from Applegate Valley, Bear Creek Valley and Illinois Valley 
vineyards. As indicated earlier, these three subregions are located in 
the Rogue Valley viticultural area. The principal soil series from 
vineyards located in each of these subregions are: (1) Applegate 
Valley: Central Point, Cove, Kerby, Manita, Ruch and Shefflein; (2) 
Bear Creek Valley: Agate-Winlow Complex, Brockman, Carney, Central 
Point, Coleman, Darrow, Evans, Holland, Medford, Provig-Agate Complex, 
Ruch, Selmac, Shefflein, Vannoy and Wapato; (3) Illinois Valley: 
Brockman, Cornutt-Dubakella Complex, Foehlin, Kerby, Pollard and 
Takilma. Based on this soil analysis, the Applegate Valley and Bear 
Creek Valley vineyards have three principal soil series in common: 
Central Point, Ruch and Shefflein. It is also apparent that Illinois 
Valley and Applegate Valley vineyards have one principal soil series in 
common, Kerby.
    Soil types in the Applegate Valley are generally granite in origin 
as opposed to the volcanic origin of the Cascade Mountains to the east. 
Most of the Applegate Valley vineyards are planted on stream terraces 
or alluvial fans providing deep well-drained soils. The leaching of the 
more basic soil components found in the Illinois Valley have left the 
soil slightly more acidic than the soils in the Applegate Valley. The 
soils to the east of Applegate Valley near Bear Creek Valley tend to be 
less acidic than the soils in the Applegate Valley. Applegate Valley 
soils have a pH of between 6.1 and 6.5. In The Oregon Winegrape 
Growers' Guide, Ken Browning writes that a pH of 6.0 to 6.5 is ideal 
for desirable microbiological activity, nutrient availability, and 
nutrient balance.

Climate

    The natural geographic boundaries of the Applegate Valley provide 
for its distinct climate in terms of rainfall, degree-days and 
temperature. Specifically, the Siskiyou Mountains separate the 
Applegate Valley's western side from the Illinois Valley and its 
eastern side from Bear Creek Valley. This further accentuates climatic 
differences between the three valleys, coupled with a lessening of the 
marine influence, when moving from a west to east direction.
    According to The Oregon Winegrape Growers' Guide, ``As one moves 
from west to east, or from the Illinois River Valley including Selma to 
the Applegate Valley and into the Rogue Valley, good grape-growing 
sites generally become warmer due to the lessening of the marine air 
influence.'' The Oregon Winegrape Growers' Guide goes on to point out 
that earlier ripening varieties such as Pinot noir, Early Muscat, and 
Gewurztraminer, do well in the Illinois Valley. In contrast, the 
Applegate Valley with its Region II temperature range can ripen 
Cabernet Sauvignon, Merlot, and Chardonnay two to three weeks earlier 
than is possible in the Illinois Valley.
    As mentioned earlier, Applegate Valley AVA is located in Jackson 
and Josephine Counties. The USDA Natural Resources Conservation 
Service, National Water and Climate Center, has climate data for 
Jackson and Josephine Counties, which is available from the USDA web 
site at http://wcc.nrcs.

[[Page 78098]]

usda.gov/water/climate/. Temperature and precipitation differences in 
Applegate Valley and surrounding areas are illustrated by the data 
collected during 1961 through 1990 at five weather stations. The Ruch 
weather station is located inside the Applegate Valley AVA boundaries 
and data from that site is used to approximate the climate conditions 
of this viticultural area. The four other weather stations located 
outside the AVA, are: (1) Cave Junction, located in the Illinois 
Valley, in Josephine County, which is in close proximity to the AVA's 
southwest boundaries; (2) Grants Pass, in Josephine County, which is in 
close proximity the AVA's northwest boundaries; (3) Medford, located in 
the Bear Creek Valley in Jackson County, which is in close proximity to 
the AVA's northeast boundaries; and (4) Ashland, also in Jackson 
County, which is in close proximity to the AVA's southeast boundaries.
    Climatological statistics are as follows: Cave Junction (Illinois 
Valley) has an average annual precipitation of 59.57 inches. Average 
annual precipitation declines steadily, when proceeding in a generally 
eastern direction: starting with Grants Pass at 30.89 inches, into 
Applegate Valley at Ruch with 26.01 inches, then Medford, in Bear Creek 
Valley, with 20.56 inches and finally, Ashland reporting 19.26 inches. 
This illustrates the following precipitation differences when comparing 
each of the four weather sites with the Ruch (Applegate Valley) site: 
Cave Junction had the highest precipitation with 33.56 inches more than 
Ruch; Grants Pass had 4.9 inches more; Medford had 5.5 inches less; and 
Ashland with 6.8 inches less than Ruch. This shows that Applegate 
Valley has a distinct and measurable climatic difference from its 
surrounding areas in terms of average annual precipitation.
    The growing degree-days records (from the same source as the 
precipitation records presented above) provide another climatic 
difference between the Applegate Valley and the surrounding areas. A 
growing degree-day is defined as a unit of heat available for plant 
growth. It is calculated by taking the average daily temperature 
(adding the maximum and minimum daily temperatures, then dividing by 
two) and subtracting the temperature below which growth is minimal for 
the principal crops in the area. The temperature threshold used for 
determining minimal growth was 40 degrees Fahrenheit. The temperature 
data places the average yearly degree-days at the Ruch site (Applegate 
Valley) at 5108. The average yearly degree-days, beginning with the 
stations outside of the Applegate Valley boundaries are as follows: 
Southwest at Cave Junction (Illinois Valley) registers 5008 degree-
days; northwest at Grants Pass reported 5689; northeast at Medford 
(Bear Creek Valley) measured 5086, and southeast at Ashland had 4836. 
In comparing the degree-days of Ruch (Applegate Valley) with the four 
others, it is clear that a measurable difference in degree-days exists 
between Applegate Valley and the surrounding areas: The largest 
temperature variation was at Grants Pass, which had 583 more degree-
days than Applegate Valley, and the smallest difference was at Medford 
(Bear Creek Valley), which had 20 degree-days less than Applegate 
Valley.

Comments on Notice of Proposed Rulemaking

    ATF received 28 letters of comment in response to Notice No. 874. 
Of the 28 comments ATF received, 22 (with a total of 27 signatures) 
favored creating the Applegate Valley viticultural area; six (with a 
total of seven signatures) were opposed. The petitioner submitted 
additional supporting documentation about soil and climate for areas 
within and outside of the viticultural area, which was included in the 
rulemaking record. This information included soil maps, precipitation 
and temperature records. All of these comments were given careful 
consideration in the preparation of the final rule.
    Commentors who supported the establishment of an Applegate Valley 
AVA confirmed that Applegate Valley has distinct weather and growing 
conditions. One respondent, Mr. Robert Kerivan, President of Bridgeview 
Vineyards, stated that the Applegate Valley is known for Bordeaux style 
grapes--merlot, syrah and cabernet sauvignon--specifically due to its 
warmer climate. Four of the commentors specifically noted the distinct 
soils of Applegate Valley along with six who cited the unique 
geographic features of the AVA. Climate was the most common basis for 
support with 16 commentors in favor of Applegate Valley's AVA approval.
    The respondents opposed to establishing Applegate Valley 
viticultural area challenge the existence of significant differences 
between Applegate Valley and the surrounding Rogue Valley viticultural 
area. The majority of the opposition based their objection on the 
overall similarity of the climate and soils of the Rogue Valley 
viticultural area and the Applegate Valley. One commentor noted that 
the different soils of the Rogue Valley viticultural area are ``a 
jigsaw puzzle of soils which occur repeatedly in all parts of the 
region.'' Opponents want the Rogue Valley left as one area. Three of 
the six opposing commentors expressed concerns about the fragmenting of 
the Rogue Valley viticultural area. Two of these commentors stated that 
there should not be an Applegate Valley AVA since the quality of the 
wine is not distinct from those produced in the surrounding areas. Yet, 
both commentors describe the wine from Applegate Valley as ``bland'' 
and ``brash.'' One of the commentors voiced concerns about having ``a 
noticeable negative financial impact on the other established wineries 
and growers'' outside the Applegate Valley AVA.

ATF's Decision

    ATF believes that the evidence supports the establishment of an 
Applegate Valley AVA. While ATF agrees there are similarities 
associated with Applegate Valley and the surrounding Rogue Valley, we 
believe that the confluence of distinctions, in soil, climate and name 
recognition, are sufficient to demarcate the Applegate Valley as an 
AVA. As evidenced above, the petition clearly satisfies the criteria in 
27 CFR 4.25(a)(e)(2) with respect to name recognition, boundaries and 
geographical features. As set forth above, Applegate Valley is also 
recognized as having a distinct climate from the areas that surround 
it.
    The Applegate Valley is encompassed by the Rogue Valley and, 
therefore, is considered a sub-appellation of the Rogue Valley. (A sub-
appellation is the smaller delimited grape-growing region that is 
bounded by the larger delimited grape-growing region.) As with many 
sub-appellations, the similarities are implicitly recognized by the 
approval of the primary appellation. Rogue Valley, the primary 
appellation, and Applegate Valley, the sub-appellation, are not 
exceptions to this situation.
    Marketing materials for Rogue Valley wineries, along with 
viticultural reference books, cite the Applegate Valley as a distinct 
sub-appellation. Ted Jordan Meredith, in his book Northwest Wine 
Companion, specifically describes the Applegate Valley as being ``one 
of the warmest grape-growing areas in western Oregon * * *''. A web 
page titled TOUR WINE COUNTRY by The Oregon Pinot Noir Club (http://www.oregonpinotnoir.com/Merchant/tourrgsm.htm) states that Rogue Valley 
has three distinct sub-appellations. Of these three areas, ``the 
Applegate Valley with a warmer climate is known for Cabernet Sauvignon, 
Cabernet franc, and Merlot.'' Another web site, WINES NORTHWEST--A 
GUIDE TO THE

[[Page 78099]]

WINE COUNTRY OF THE PACIFIC NORTHWEST (http://www. winesnw.com/rogue.html), mentions Applegate Valley as the smallest of Rogue 
Valley's sub regions. They state that Applegate Valley is ``drier and 
warmer than the Illinois Valley subregion to its west, yet not as warm 
and dry as Bear Creek Valley to the east.''
    With respect to concerns about breaking up the Rogue Valley, as 
previously stated, Rogue Valley AVA encompasses Applegate Valley. In 
accordance with ATF regulations, an overlapping area is entitled to 
more than one viticultural designation. Wine that meets the criteria 
described in 27 CFR 4.25a(e)(4), may be labeled with Rogue Valley or 
Applegate Valley or with both viticultural areas as the appellation(s) 
of origin. Therefore, ATF does not view this as a fragmentation of the 
existing Rogue Valley, but as an option for wineries to provide 
consumers with more specific information about the origin of the wine.
    Moreover, to the extent certain commentors opposed the 
establishment of the Applegate Valley AVA on the basis that the wine 
made from grapes produced in that area is not distinct or that the 
establishment of the Applegate Valley AVA will present an adverse 
financial impact on the area, these concerns are not criteria for 
denying a petition to establish an AVA under 27 CFR 4.27a(e)(2). 
Moreover, approval of an AVA does not, in any manner, constitute the 
endorsement of a particular wine. Rather, any benefit derived from the 
use of a viticultural area name is the result of the proprietor's own 
efforts and consumer acceptance of wines from a particular area.

Boundary

    The boundaries of the Applegate Valley viticultural area may be 
found on one U.S.G.S. map titled ``Medford, Oregon; California'' (NK 
10-5) scale 1:250,000 (1955, revised 1976). The boundaries are 
described in Sec. 9.165.

Executive Order 12866

    It has been determined that this regulation is not a significant 
regulatory action as defined in Executive Order 12866. Accordingly, 
this final rule is not subject to the analysis required by this 
Executive Order.

Regulatory Flexibility Act

    It is hereby certified that this regulation will not have a 
significant economic impact on a substantial number of small entities. 
Any benefit derived from the use of a viticultural area name is the 
result of the proprietor's own efforts and consumer acceptance of wines 
from a particular area. No new requirements are imposed. Accordingly, a 
regulatory flexibility analysis is not required.

Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(j)) and its implementing regulations, 5 CFR part 1320, do not 
apply to this final rule because no requirement to collect information 
is imposed.

Drafting Information

    The principal author of this document is Tim DeVanney, Regulations 
Division, Bureau of Alcohol, Tobacco and Firearms.

List of Subjects in 27 CFR Part 9

    Administrative practices and procedures, Consumer protection, 
Viticultural areas, Wine.

Authority and Issuance

    Title 27, Code of Federal Regulations, part 9, American 
Viticultural Areas, is amended as follows:

PART 9--AMERICAN VITICULTURAL AREAS

    Paragraph 1. The authority citation for part 9 continues to read as 
follows:

    Authority: 27 U.S.C. 205.

    Par. 2. In subpart C is amended by adding Sec. 9.165 to read as 
follows:

Subpart C--Approved American Viticultural Areas

* * * * *


Sec. 9.165  Applegate Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Applegate Valley.''
    (b) Approved maps. The appropriate map for determining the 
boundaries of the Applegate Valley viticultural area is one U.S.G.S. 
map titled ``Medford, Oregon; California'' (NK 10-5) scale 1:250,000 
(1955, revised 1976).
    (c) Boundaries. The Applegate Valley viticultural area is located 
in the State of Oregon within Jackson and Josephine Counties, and 
entirely within the existing Rogue Valley viticultural area. The 
boundaries are as follows:
    (1) Beginning at the confluence of the Applegate River with the 
Rogue River approximately 5 miles west of Grants Pass, the boundary 
proceeds due west to the boundary of the Siskiyou National Forest north 
of Dutcher Creek;
    (2) Then in a straight line in a southerly and westerly direction 
along the boundary of the Siskiyou National Forest to Highway 199;
    (3) Then in a straight line easterly to the peak of Roundtop 
Mountain (4693 feet);
    (4) Then in a straight line easterly and southerly to the peak of 
Mungers Butte;
    (5) Then in a straight line southerly and westerly to Holcomb Peak;
    (6) Then in a generally southeasterly direction along the eastern 
boundary of the Siskiyou National Forest until it joins the northern 
boundary of the Rogue River National Forest;
    (7) Then easterly along the northern boundary of the Rogue River 
National forest to a point due south of the peak of Bald Mountain;
    (8) Then due north to the peak of Bald Mountain (5635 feet);
    (9) Then in a straight-line northerly and westerly to the lookout 
tower on Anderson Butte;
    (10) Then in a straight line northerly and westerly to the peak of 
an unnamed mountain with an elevation of 3181 feet;
    (11) Then in a straight line northerly and westerly to the peak of 
Timber Mountain;
    (12) Then in a straight line westerly and southerly to the middle 
peak of Billy Mountain;
    (13) Then, northerly and westerly by straight lines connecting a 
series of five unnamed peaks with elevations of approximately 3600, 
4000, 3800, 3400, and 3800 feet, respectively;
    (14) Then in a straight line northerly and easterly to Grants Pass 
Peak;
    (15) Then in a straight line westerly to Jerome Prairie;
    (16) Then in a straight line northwesterly to the confluence of the 
Applegate River and the Rogue River and the point of the beginning.

    Dated: October 16, 2000.
Bradley A. Buckles,
Director.

    Approved: November 1, 2000.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 00-31595 Filed 12-13-00; 8:45 am]
BILLING CODE 4810-31-P