[Federal Register Volume 68, Number 128 (Thursday, July 3, 2003)]
[Rules and Regulations]
[Pages 39833-39836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16703]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[TTB T.D.-3; Re: Notice No. 957]
RIN 1512-AC70


Seneca Lake Viticultural Area (99R-260P)

AGENCY: Alcohol and Tobacco Tax and Trade Bureau (TTB), Treasury.

ACTION: Treasury decision, final rule.

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SUMMARY: This Treasury decision establishes the ``Seneca Lake'' 
viticultural area located in upstate New York. The Seneca Lake 
viticultural area encompasses about 204,600 acres of land surrounding 
Seneca Lake within the established Finger Lakes viticultural area. We 
take this action under the authority of the Federal Alcohol 
Administration Act and our wine labeling and advertising regulations.

EFFECTIVE DATE: This final rule is effective on September 2, 2003.

FOR FURTHER INFORMATION CONTACT: Kristy Col[oacute]n, Regulations and 
Procedures Division, Alcohol and Tobacco Tax and Trade Bureau, 650 
Massachusetts Avenue, NW., Washington, DC 20226; (202) 927-8210.

SUPPLEMENTARY INFORMATION:

Background on Viticultural Areas

What Is Treasury's and TTB's Authority To Establish a Viticultural 
Area?

    The Federal Alcohol Administration Act (FAA Act) at 27 U.S.C. 
205(e) requires that alcohol beverage labels provide the consumer with 
adequate information regarding a product's identity and prohibits the 
use of deceptive information on such labels. The FAA Act also 
authorizes the Secretary of the Treasury to issue regulations to carry 
out the Act's provisions.
    Regulations in 27 CFR part 4, Labeling and Advertising of Wine, 
allow the establishment of definitive viticultural areas. The 
regulations allow the name of an approved viticultural area to be used 
as an appellation of origin on wine labels and in wine advertisements. 
Title 27 CFR Part 9, American Viticultural Areas, contains the list of 
approved viticultural areas.

What Is the Definition of an American Viticultural Area?

    Section 4.25a(e)(1), title 27 CFR, defines an American viticultural 
area as a delimited grape-growing region distinguishable by 
geographical features, the boundaries of which have been delineated in 
subpart C of part 9. The establishment of viticultural areas allows the 
identification of regions where a given quality, reputation, or other 
characteristics of the wine is essentially attributable to its 
geographic origin. The establishment of viticultural areas is intended 
to help wineries to accurately describe the origin of their wines to 
consumers and to help consumers identify the wines they purchase. 
Establishment of a viticultural area is neither an approval nor 
endorsement of the wine produced there.

What Is Required To Establish a Viticultural Area?

    Section 4.25a(e)(2) outlines the procedure for proposing an 
American viticultural area. Any interested person may petition TTB to 
establish a grape-growing region as a viticultural area. The petition 
must include:
    [sbull] Evidence that the proposed viticultural area is locally 
and/or nationally known by the name specified in the petition;
    [sbull] Historical or current evidence that the boundaries of the 
proposed viticultural area are as specified in the petition;
    [sbull] Evidence that the proposed area's growing conditions, such 
as climate, soils, elevation, physical features, etc., distinguish it 
from surrounding areas;
    [sbull] A description of the proposed viticultural area's specific 
boundaries, based on features found on United States Geological Survey 
(USGS)-approved maps; and
    [sbull] A copy of the appropriate USGS-approved map(s) with the 
boundaries prominently marked.

Impact on Current Wine Labels

    With the establishment of this viticultural area, bottlers who use 
brand names like Seneca Lake may be affected. If you fall in this 
category, you must ensure that your existing products are eligible to 
use the name of the viticultural area as an appellation of origin. For 
a wine to be eligible, at least 85 percent of the grapes in the wine 
must have been grown within the viticultural area.
    If the wine is not eligible for the appellation, you must change 
the brand name and obtain approval of a new label. Different rules 
apply if you label a wine in this category with a label approved prior 
to July 7, 1986. See 27 CFR 4.39(i) for details. Additionally, if you 
use the viticultural area name on a wine label in a context other than 
appellation of origin, the general prohibitions against misleading 
representation in part 4 of the regulations apply.

Rulemaking Proceeding

ATF-TTB Transition

    Effective January 24, 2003, the Homeland Security Act of 2002 
divided the Bureau of Alcohol, Tobacco and Firearms (ATF) into two new 
agencies, the Alcohol and Tobacco Tax and Trade Bureau (TTB) in the 
Department of the Treasury and the Bureau of Alcohol, Tobacco, 
Firearms, and Explosives in the Department of Justice. The regulation 
and taxation of alcohol beverages remains a function of the Department 
of the Treasury and is the responsibility of TTB. References to the 
former ATF and the new TTB in this document reflect the time frame, 
before or after January 24, 2003.

Seneca Lake Petition

    ATF received a petition from Ms. Beverly Stamp of Lakewood 
Vineyards in Watkins Glen, New York, proposing to establish the 
``Seneca Lake'' viticultural area. The petitioned area included 
portions of Schuyler, Yates, Ontario, and Seneca counties in upstate 
New York and covers approximately 204,600 acres of primarily rural 
agricultural and forestland. Of that total, 3,756 acres are planted to 
grapes. There are currently 33 wineries on or near Seneca Lake, one of 
New York's eleven Finger Lakes. The Cayuga Lake viticultural area lies 
to the east of the area, and both are entirely within the established 
Finger Lakes viticultural area.

Notice of Proposed Rulemaking

    ATF published a notice of proposed rulemaking regarding the Seneca 
Lake viticultural area in the October 21, 2002, Federal Register as 
Notice No. 957 (67 FR 64575). In that notice, ATF requested comments by 
December 21, 2002, from

[[Page 39834]]

all interested persons concerning the establishment of this 
viticultural area. ATF received one comment regarding Notice No. 957 
from Representative Amo Houghton of New York's 31st Congressional 
District. Representative Houghton supported the establishment of the 
Seneca Lake viticultural area and commented, ``It is the largest, most 
diverse community of wine producers in the Eastern United States. The 
twenty-one wineries along the shores of Seneca Lake offer individual 
and unique expressions from one of America's finest wine districts * * 
*. Carved by glaciers, and surrounded by vineyards since the mid 
1800's--a Seneca Lake viticultural area has already been created 
through geologic and human history.'' Additionally, Representative 
Houghton mentioned benefits to the viticultural area's establishment. 
``This unique area's recognition by the ATF would perfectly complement 
an existing regional framework of tourism, research and economic 
development, and promotion of the Seneca Lake identity and all that it 
represents. This would be of great benefit to consumers who seek 
products that allow them [to] capture, in a bottle, the essence of 
places and regions that enthrall them.''

What Evidence Was Provided To Show the Name ``Seneca Lake'' Is Locally 
or Nationally Known?

    According to the petitioner, Seneca Lake was named after the Seneca 
people of the Iroquois Nation who lived along its shores hundreds of 
years ago. Many local places and geographic features are named after 
the Seneca people. These include, for example, Seneca Lake, Seneca 
County, the Seneca River, Seneca Castle, Seneca Army Depot, and Seneca 
Lake State Park. Additionally, the organization known as the Seneca 
Lake Winery Association includes many of the area's wineries.
    To demonstrate that the area is locally and nationally known as 
``Seneca Lake,'' the petitioner included several newspaper and magazine 
articles as evidence of the name's use. In an article from the 
Rochester, New York Democrat and Chronicle newspaper of November 15, 
1999, entitled ``Your Land, Our Land: Finger Lakes in the Fast Lane,'' 
Ray Spencer, vice president of operations of Glenora Wine Cellars, 
stated that many ``already refer to Seneca Lake as `the Napa Valley of 
the East.' '' In the February 1997 issue of Wines & Vines, a California 
based magazine, author Philip Hiaring described his visit to the Seneca 
Lake region and his interviews with winery owners and winemakers.
    In addition, Seneca Lake is mentioned in ``The Oxford Companion to 
the Wines of North America.'' The book states that Seneca Lake is 
surrounded by more than two-dozen wineries, is one of the two largest 
Finger Lakes, and is the deepest ``with the greatest heat storing 
capacity, offering the surrounding hillsides the strongest mesoclimatic 
benefit.'' While the lake's first winery was built in 1866, the book 
notes that the emergence of vinifera varieties resulted in an increase 
of winery openings in the 1980's that brought new momentum to the 
region's grape-growing industry.

What Boundary Evidence Was Provided?

    The boundaries of the Seneca Lake viticultural area encompass about 
204,600 acres of largely rural land surrounding Seneca Lake, the 
largest of upstate New York's eleven Finger Lakes. While some of the 
road names used in the boundary description do not appear on the 
submitted USGS maps, the petitioner provided the locally known names of 
these roads, as well as a more detailed map of the town of Watkins Glen 
indicating minor roads.
    Using roads and streams, the petitioner drew the Seneca Lake 
viticultural area's boundaries to contain the vineyards influenced by 
the lake's climatic effect. In addition, the petitioner noted that 
distinct ridges divide Seneca Lake from its closest neighbor, Cayuga 
Lake, and the nearly 800-foot elevation change within the 7.5 miles 
between them gives the two lakes their own microclimates.

What Evidence Relating to Growing Conditions Was Provided?

    The ``lake effect'' weather phenomenon makes the Seneca Lake 
viticultural area a ``unique and superb'' wine-growing region, 
according to the petitioner. The ``Oxford Companion to Wine'', 
published by the Oxford University Press, Inc., New York, describes 
lake effect as ``the year-round influence on vineyards from nearby 
large lakes which permits vine-growing in the northeast United States 
and Ontario in Canada despite their high latitude.''
    The ``Oxford Companion'' also notes that the lake effect influence 
on grape vines changes with the seasons. It states that:

    In the winter, the large lakes provide moisture to the 
prevailing westerly winds, which creates a deep snow cover, 
protecting vines from winter freeze even in very low temperatures. * 
* * In spring, the westerly winds blow across the frozen lake and 
become cooler. These cooler breezes blowing on the vines retard bud-
break until the danger of frost has passed. In summer the lake warms 
up. By autumn/fall, the westerly winds are warmed as they blow 
across the lake. The warm breezes on the vines lengthen the growing 
season (balancing the late start to the growing season) by delaying 
the first frost.

    The petitioner also provided an extract from Richard Figiel's book 
``Culture in a Glass,'' that describes how the lake effect phenomenon 
affects the Finger Lakes region. Noting that both Seneca and Cayuga 
Lakes drop well below sea level, Figiel states that since the lakes are 
``(n)arrow slices of water with relatively little surface area, they 
tend to maintain a stable temperature throughout the year.'' Figiel 
notes that the depth and heat storing capacity of the lakes act as a 
large radiator for the surrounding area during the winter months. ``Not 
only do the lakes take the edge off frigid upstate winters, often 
keeping vineyards 10-15[deg] warmer than locations just a half mile 
away,'' the book adds, ``but they also cushion the transitions of 
spring and fall.'' Figiel also points out that the ``(d)istinct 
microclimates along the hillsides rising from the lakeshores make it 
possible to reliably ripen grapes in a region that is generally too 
cold for viticulture * * *.''
    The petitioner stated that it is the size and depth of Seneca Lake 
that gives the lake its ability to influence the local climate. 
Additionally, a report provided by the petitioner, entitled 
``Viticultural Distinction of Seneca Lake in the New York Finger 
Lakes'', includes a physical description of Seneca Lake. The report 
states that, ``Seneca Lake is the largest of the Finger Lakes covering 
67.7 square miles. The lake is 35.1 miles long and is an average of 1.9 
miles wide with a shoreline of 75.4 miles. It has a volume of 4.2 
trillion gallons with a maximum depth of 634 feet. At 150 feet, the 
water temperature remains at 39[deg]F (4[deg]C) year around. Above that 
level, the water temperature varies seasonally, but the surface 
temperature generally does not go below 39.5[deg]F (4[deg]C).'' While 
Seneca Lake chills down, the petition adds, it rarely freezes during 
the winter months. The petition also noted that the Seneca region has 
the longest frost-free period in the Finger Lakes, with a growing 
season of about 190 days. In contrast, neighboring Cayuga Lake's 
growing season is only 165 to 170 days long.
    Seneca Lake's latent heat storage capacity alters the local climate 
to such an extent, the petition stated, that grapes can be grown in an 
area where they otherwise would not survive the cold temperatures of 
early spring, or the late autumn frosts. Together with the good

[[Page 39835]]

air drainage offered by the slopes leading to its shore, the lake's 
water temperature provides cool breezes in the spring, preventing early 
bud break in the fruit. In the fall, the lake's warmth delays early 
frosts, and in the winter it raises temperatures so that bud damage is 
lessened.
    According to the petitioner, it is this ability to protect a crop 
from extreme temperatures during both the growing and dormant seasons 
that distinguishes the Seneca Lake viticultural area from the 
surrounding areas. This lake effect is strongest within about one-half 
mile of Seneca Lake. For this reason, the more tender vinifera 
varieties are planted within this zone, while hardier American 
varieties and hybrids can be planted higher on the slopes. The 
petitioner added that smaller lakes, even those the size of Cayuga 
Lake, do not have the same level of latent heat capacity and, 
therefore, do not modify the local climate to the same extent as Seneca 
Lake.

Regulatory Analyses and Notices

Is This a Significant Regulatory Action as Defined by Executive Order 
12866?

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

How Does the Regulatory Flexibility Act Apply to This Final Rule?

    TTB certifies that the regulations will not have a significant 
economic impact on a substantial number of small entities. This 
regulation imposes no new reporting, recordkeeping, or other 
administrative requirement. Any benefit derived from the use of a 
viticultural area name is the result of a proprietor's own efforts and 
consumer acceptance of wines from that area. Therefore, no regulatory 
flexibility analysis is required.

Does the Paperwork Reduction Act Apply to This Final Rule?

    The Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35, and its 
implementing regulations, 5 CFR part 1320, do not apply to this final 
rule because there are no new or revised record keeping or reporting 
requirements.

Drafting Information

    The principal author of this document is Kristy Colon, Regulations 
and Procedures Division, Alcohol and Tobacco Tax and Trade Bureau.

List of Subjects in 27 CFR Part 9

    Administrative practice and procedure, Alcohol and alcoholic 
beverages, Consumer protection, and Wine.

Authority and Issuance

0
For the reasons discussed in the preamble, title 27, Code of Federal 
Regulations, Part 9, American Viticultural Areas, is amended as 
follows;

PART 9--AMERICAN VITICULTURAL AREAS

0
1. The authority citation for part 9 continues to read as follows:

    Authority: 27 U.S.C. 205.

Subpart C--Approved American Viticultural Areas

0
2. Subpart C is amended by adding Sec.  9.128 to read as follows:


Sec.  9.128  Seneca Lake

    (a) Name. The name of the viticultural area described in this 
section is ``Seneca Lake''.
    (b) Approved Maps. The appropriate maps for determining the 
boundary of the Seneca Lake viticultural area are 13 United States 
Geological Survey (USGS) topographic maps (Scale: 1:24,000). The maps 
are titled:
    (1) Burdett Quadrangle (New York--Schuyler Co. 1950 (photoinspected 
1976));
    (2) Montour Falls Quadrangle (New York 1978 (photorevised 1976));
    (3) Beaver Dams Quadrangle (New York 1953);
    (4) Reading Center Quadrangle (New York 1950 (photorevised 1978));
    (5) Dundee Quadrangle (New York 1942 (photoinspected 1976));
    (6) Dresden Quadrangle (New York 1943 (photorevised 1978));
    (7) Penn Yan Quadrangle (New York--Yates Co. 1942 (photoinspected 
1976));
    (8) Stanley Quadrangle (New York 1952);
    (9) Phelps Quadrangle (New York--Ontario Co. 1953);
    (10) Geneva North Quadrangle (New York 1953 (photorevised 1976));
    (11) Geneva South Quadrangle (New York 1953 (photorevised 1978));
    (12) Ovid Quadrangle (New York--Seneca Co. 1970); and
    (13) Lodi Quadrangle (New York 1942).
    (c) Boundaries. The Seneca Lake viticultural area surrounds Seneca 
Lake in upstate New York and is located in portions of Schuyler, Yates, 
Ontario, and Seneca counties. The boundaries are as follows:
    (1) Beginning in the town of Watkins Glen at the State Route 414 
bridge over the New York State Barge Canal, follow the Canal south 
approximately 0.2 miles to the mouth of Glen Creek, on the Burdette, 
N.Y. map;
    (2) Follow Glen Creek upstream (west), crossing onto the Montour 
Falls, N.Y. map and continuing to the road locally known as the Van 
Zandt Hollow Road on the Beaver Dams, N.Y. map;
    (3) Proceed north on Van Zandt Hollow Road to Cross Road;
    (4) Continue north on Cross Road, which changes to Cretsley Road, 
to its intersection with Mud Lake Road (County Road 23) on the Reading 
Center, N.Y. map;
    (5) Proceed west approximately 0.7 miles on County Road 23 to its 
intersection with Pre-emption Road;
    (6) Then continue north on Pre-emption Road along the Dundee, N.Y., 
Penn Yan, N.Y. and Dresden, N.Y. maps, for approximately 18 miles to 
its junction with an unnamed light duty road just east of Keuka Lake 
Outlet on the Penn Yan, N.Y. map;
    (7) Follow the unnamed light duty road across the Keuka Outlet, 
traveling approximately 0.3 miles to its junction in Seneca Mills with 
an unnamed light duty road, known locally as Outlet Road;
    (8) Follow Outlet Road west along the north bank of the Keuka 
Outlet approximately 0.6 miles, until the road forks;
    (9) At the fork, continue north approximately 1 mile, on an unnamed 
light duty road know locally as Stiles Road, to its junction with Pre-
emption Road.
    (10) Then proceed north 14.6 miles on Pre-emption Road across the 
Stanley, N.Y. map, to an unnamed medium duty road, known locally as 
County Road 4, on the Phelps, N.Y. map;
    (11) Continue west approximately 4.5 miles on County Road 4 to its 
intersection with Orleans Road in Seneca Castle;
    (12) Then proceed north on Orleans Road, which becomes Seneca 
Castle Road, for 2.1 miles, to Warner Corners where the name of the 
road changes to Wheat Road;
    (13) Continue north from Warner Corners on Wheat Road approximately 
1.9 miles to its intersection with State Route 88;
    (14) Continue north on State Route 88 approximately 1.4 miles, to 
its intersection with State Route 96 at Knickerbocker Corner;
    (15) Continue east on State Route 96 approximately 10.4 miles, to 
the intersection with Brewer Road on the Geneva North, N.Y. map;

[[Page 39836]]

    (16) Follow Brewer Road south approximately 1.8 miles to the 
intersection with U.S. Route 20/State Route 5;
    (17) At the intersection of Brewer Road and U.S. Route 20/State 
Route 5, continue south approximately 0.1 miles, following an imaginary 
line to the south bank of the Seneca River;
    (18) Follow the south bank of the Seneca River east approximately 
0.1 miles to the mouth of the Kendig Creek;
    (19) Continue south following the Kendig Creek approximately 3.3 
miles to the Creek's intersection with Yellow Tavern Road on the Geneva 
South, N.Y. map;
    (20) Follow Yellow Tavern Road west approximately 0.1 miles, to its 
intersection with Post Road;
    (21) Follow Post Road south approximately 1.4 miles to its junction 
with State Route 96A;
    (22) Then follow State Route 96A south 17.5 miles across the 
Dresden, N.Y., Ovid, N.Y., and Lodi, N.Y. maps to the village of Lodi;
    (23) In Lodi, continue south where State Route 96A changes to S. 
Main Street and then changes to an unnamed medium duty road (known 
locally as Center Road-Country Road 137);
    (24) Continue south on Center Road-Country Road 137 for 
approximately 4.9 miles to the Seneca/Schuyler County Line;
    (25) Then proceed west 0.5 miles on the county line to Logan Road;
    (26) Then proceed 8.6 miles south on Logan Road to State Route 227 
(identified by the petitioner as State Route 79) on the Burdette, N.Y. 
map;
    (27) Then proceed approximately 800 feet east on Route 227 to 
Skyline Drive;
    (28) Then proceed south on Skyline Drive for 2.5 miles to an 
unnamed stream;
    (29) Follow the unnamed stream west approximately 0.6 miles to its 
intersection with State Route 414; and
    (30) Continue west on State Route 414 approximately 0.5 miles to 
the beginning point on the bridge over the New York State Barge Canal.

    Dated: May 14, 2003.
Arthur J. Libertucci,
Administrator.

    Approved: June 4, 2003.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 03-16703 Filed 7-2-03; 8:45 am]
BILLING CODE 4810-31-P