[Federal Register Volume 68, Number 173 (Monday, September 8, 2003)]
[Proposed Rules]
[Pages 52875-52878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22762]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Notice No. 15]
RIN 1513--AA41


Proposed Eola Hills Viticultural Area (2002R-216P)

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau proposes to 
establish Eola Hills as a viticultural area in Oregon. The proposed 
viticultural area is entirely within the existing Willamette Valley 
viticultural area and encompasses roughly 37,900 acres within Polk and 
Yamhill Counties. We designate viticultural areas to allow bottlers to 
better describe the origin of wines and allow consumers to better 
identify the wines they may purchase. We invite comments on this 
proposed addition to our regulations, particularly from bottlers who 
use brand names similar to that of the proposed area.

DATES: We must receive written comments on or before November 7, 2003.

ADDRESSES: You may send comments to any of the following addresses--
    [sbull] Chief, Regulations and Procedures Division, Alcohol and 
Tobacco Tax and Trade Bureau, P.O. Box 50221, Washington, DC 20091-0221 
(Attn: Notice No. 15);
    [sbull] 202-927-8525 (facsimile);
    [sbull] [email protected] (e-mail); or
    [sbull] http://www.ttb.gov/alcohol/rules/index.htm. An online 
comment form is posted with this notice on our Web site.
    You may view copies of the petition, this notice, the appropriate 
maps, and any comments we receive about this notice by appointment at 
the ATF Reference Library, 650 Massachusetts Avenue, NW., Washington, 
DC 20226; phone 202-927-7890. You may also access copies of the notice 
and comments on our Web site at http://www.ttb.gov/alcohol/rules/index.htm.
    See the Public Participation section of this notice for specific 
instructions and requirements for submitting comments and for 
information on how to request a public hearing.

FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco 
Tax and Trade Bureau, Regulations and Procedures Division, P.O. Box 
18152, Roanoke, Virginia 24014; telephone 540-344-9333.

SUPPLEMENTARY INFORMATION: 

TTB Background

Has Passage of the Homeland Security Act Affected Department of 
Treasury Rulemaking?

    Effective January 24, 2003, the Homeland Security Act of 2002 
divided the Bureau of Alcohol, Tobacco and Firearms into two agencies, 
the Alcohol and Tobacco Tax and Trade Bureau in the Department of the 
Treasury and the Bureau of Alcohol, Tobacco, Firearms and Explosives in 
the Department of Justice. Regulation of wine labeling, including 
viticultural area designations, is the responsibility of the new TTB. 
References to ATF in this document relate to events that occurred prior 
to January 24, 2003, or to functions that the Bureau of Alcohol, 
Tobacco, Firearms and Explosives continues to perform.

Background on Viticultural Areas

What Is 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, while prohibiting 
the use of misleading information on such labels. The FAA Act also 
authorizes the Secretary of the Treasury to issue regulations to carry 
out its provisions, and the Secretary has delegated this authority to 
the Alcohol and Tobacco Tax and Trade Bureau.
    Regulations in 27 CFR Part 4, Labeling and Advertising of Wine, 
allow the establishment of definitive viticultural areas and the use of 
their names as appellations 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 a Viticultural Area?

    Title 27 CFR 4.25a(e)(1) defines an American viticultural area as a 
delimited grape-growing region distinguishable by geographic features 
whose boundaries have been delineated in subpart C of part 9. These 
designations allow consumers and vintners to attribute a given quality, 
reputation, or other characteristic of wine made from grapes grown in 
an area to its geographic origin.

What Is Required To Establish a Viticultural Area?

    Section 4.25a(e)(2) outlines the procedure for proposing an 
American viticultural area. Anyone interested 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 of growing conditions, such as climate, soils, 
elevation, physical features, etc., that distinguish the proposed area 
from surrounding areas;
    [sbull] A description of the specific boundaries of the proposed 
viticultural area, based on features shown on United States Geological 
Survey-approved (USGS) maps; and
    [sbull] Copies of the appropriate USGS-approved map(s) with the 
boundaries prominently marked.

What Impact May This Notice Have on Current Wine Labels?

    As appellations of origin, viticultural area names have geographic 
significance. Our 27 CFR part 4 label regulations prohibit the use of a 
brand name with geographic significance on a wine unless the wine meets 
the appellation of origin requirements for the named area. Our 
regulations also prohibit any other label references that suggest an 
origin other than the true place of origin of the wine.

[[Page 52876]]

    If we establish this proposed viticultural area, bottlers who use 
brand names, including trademarks, like Eola Hills must ensure that 
their existing products are eligible to use the viticultural area's 
name 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, and the wine must meet the other requirements of 27 
CFR 4.25a(e)(3).
    If a wine is not eligible for the appellation, the bottler must 
change the brand name or other label reference and obtain approval of a 
new label. Different rules apply if a wine in this category has a brand 
name used on a label approved prior to July 7, 1986. See 27 CFR 4.39(i) 
for details.

Eola Hills Petition

    Mr. Russell Raney of Evesham Wood Vineyard, Salem, Oregon, 
petitioned ATF for the establishment of a viticultural area to be 
called ``Eola Hills.'' The proposed viticultural area is within the 
State of Oregon and entirely within the existing Willamette Valley 
viticultural area described in 27 CFR 9.90. The petitioner estimates 
that the proposed area encompasses 37,900 acres, with about 1,244 acres 
planted to vines. Currently 12 wineries operate within the proposed 
area.

What Name Evidence Has Been Provided?

    As historical evidence of the use of the name ``Eola Hills,'' the 
petitioner submitted an excerpt from ``Oregon Geographic Names'' 
(published by the Oregon Historical Society, 5th Edition, 1982, pp. 
294-295). This source states that the Eola Hills were named for the 
village of Eola, which is situated at the southern end of the ridge. On 
January 17, 1856, the Oregon territorial legislature incorporated the 
village as ``Eola,'' a name derived from Aeolus, the Greek god of 
winds. The book further states that the Eola Hills ``constitute one of 
the important groups of isolated hills in the Willamette Valley.'' It 
goes on to explain that the hills have been known by other names, but 
the name ``Eola Hills seems firmly established.''
    For additional name evidence, the petitioner also submitted several 
maps that identify the proposed area as ``Eola Hills.'' Four of the 
United States Geological Survey maps used to show the proposed 
boundaries (Rickreall, Salem West, Mission Bottom, and Amity) identify 
the area as Eola Hills. The petitioner also submitted two geologic maps 
of the area that are issued by the State of Oregon's Department of 
Geology and Mineral Industries. Both prominently label the area ``Eola 
Hills.''
    According to the petitioner, Eola Hills has name recognition and a 
reputation for quality among wine consumers both in and out of Oregon. 
For this reason, vineyards and wineries within the proposed area 
utilize the name frequently in their promotional literature. The 
petitioner submitted two promotional maps demonstrating this. One map, 
entitled ``The Wine Appellations of Oregon,'' issued by the Oregon Wine 
Marketing Coalition, portrays the Eola Hills area as a subregion within 
the Willamette Valley. The other map, entitled ``Eola Hills Winegrowing 
Region, Willamette Valley Oregon,'' shows the location of all vineyards 
and wineries in the proposed area.
    The petitioner notes that a small portion of the proposed area is 
sometimes referred to as ``Amity Hills.'' ``Oregon Geographic Names'' 
describes Amity Hills as a northern extension of the Eola Hills that is 
separated from the main ridge by a pass east of the town of Amity. USGS 
maps for McMinnville and Amity, Oregon, identify this area as Amity 
Hills. However, the geologic maps issued by Oregon's Department of 
Geology and Mineral Industries identify it as part of the Eola Hills. 
The petitioner argues that, for the purpose of wine designation, 
consumers in Oregon have come to recognize the entire area as a single 
unit known as ``Eola Hills.'' He also states that vintners in the Amity 
Hills portion of the proposed area support the designation of Eola 
Hills for the entire area.

What Boundary Evidence Has Been Provided?

    As evidence of the boundaries, the petitioner submitted with the 
petition six USGS topographic maps on which the Eola Hills are dominant 
features. The main ridge of the Eola Hills runs north to south, 
starting approximately 5\3/4\ miles northeast of the town of Amity and 
extending south for 16 miles to Oregon highway 22, just north of the 
Willamette River at West Salem. At their widest point, toward the 
southern end, the Eola Hills are about 6\1/2\ miles across, from 
Wallace Road in the east to U.S. highway 99 in the west.
    The petitioner uses the 200-foot contour line as the predominant 
boundary marker. He notes that he occasionally diverges to use roads or 
highways where they form a more convenient boundary and to exclude land 
not deemed suitable for grape cultivation due to soil type, elevation, 
or urban development.

What Evidence of Distinctive Growing Conditions Has Been Provided?

Soil and Geology
    The petitioner states that the soils and geology of the Eola Hills 
are distinctive from those of the surrounding areas in two regards:
    [sbull] The prevailing basalt-derived soils are clearly shallower 
than the soils of other hills of the North Willamette Valley, and
    [sbull] The well-drained basalt soils are very different from the 
alluvial soils of the surrounding valley floor.
    As evidence of this, Mr. Raney submitted two geologic maps issued 
by the State of Oregon's Department of Geology and Mineral Industries. 
One is entitled ``Geologic Map of the Rickreall and Salem Quadrangles, 
Oregon''; the other is entitled ``Preliminary Geologic Map of the Amity 
and Mission Bottom Quadrangles, Oregon.'' According to these documents, 
volcanic basalt rock from the lava flows of the Miocene era underlies 
the Eola Hills, with areas of marine sedimentary rock from the 
Oligocene era at the lower elevations of the ridge. The soils in the 
middle and higher elevations of the Eola Hills are largely well-
drained, silty-clay loams weathered from basalt, while on the lower 
slopes, silt loams weathered from sedimentary rock predominate, 
particularly on the west-facing slopes.
    According to soil survey maps published by the Soil Conservation 
Service of the U.S. Department of Agriculture, the dominant basalt-
derived soils in the Eola Hills are Nekia (recently reclassified as 
``Gelderman'' series), Ritner, and Jory series soils. The preponderance 
of the shallower Nekia-Gelderman soils in the Eola Hills differentiates 
them from the Red Hills farther north, where the Jory soil series 
predominates. The Nekia-Gelderman soils have a much lower water 
capacity than the Jory soil series. The most frequently occurring 
sedimentary soils in the Eola Hills are the Steiwer, Chehulpum, and 
Helmick series, especially on the west side of the ridge. The third 
major soil group in the Eola Hills is comprised of those soils formed 
from alluvial deposits, the most common of which is the Woodburn silt 
loam series. Such alluvial soils generally occur only on the lowest 
elevations of the proposed viticultural area (below 300 feet). Like the 
above-mentioned soils, this third group, too, can provide suitable 
conditions for wine grapes if sufficient slope exists for good water 
drainage.
    Finally, the Eola Hills are surrounded on almost all sides by, and 
are easily distinguished from, Willamette Valley

[[Page 52877]]

terrace land. With few exceptions, this terrace land lies below the 
200-foot elevation line and is characterized by less well-drained 
alluvial soils. According to the petitioner, this type of soil is 
generally not suitable for the cultivation of premium wine grapes. 
Therefore, land below 200 feet is not included in the proposed Eola 
Hills boundaries.
Topography
    The main ridge of the Eola Hills runs north-south and has numerous 
lateral ridges that run east-west on both sides. Slopes on the west 
side of the ridge tend to be somewhat steeper and pocketed, and they 
fall away below 200 feet more abruptly than those slopes on the east 
side, which tend to be gentler and more extensive. Both sides, however, 
provide vineyards sites with very similar soils and growing conditions. 
The highest point in the south end of the hills is 1,093 feet. In the 
central area, near the Polk-Yamhill County line, the ridge peaks at 
around 1,160 feet; in the north, it peaks at 863 feet. The majority of 
Eola Hills vineyard sites are found in the elevation range of 250-700 
feet, although suitable sites exist above this elevation, given proper 
sun exposure and microclimate. The most common orientation of vineyards 
here is south, southwestern, and southeastern. However, in gently 
sloping terrain, due east- and due west-facing sites are also capable 
of producing high quality wine grapes.
Climate
    According to the petitioner, the Eola Hills are blessed with a 
temperate climate. Summers are warm, but seldom excessively hot, while 
winters are mild, with temperatures usually above freezing. Annual 
rainfall ranges from under 40 inches on the southeastern edge of the 
Eola Hills to more than 45 inches in the higher elevations. More 
important, only about 15 percent of the total annual rainfall in the 
mid-Willamette Valley occurs from April through September. Thus, 
rainfall averages during the growing season are uniform throughout the 
Eola Hills.
    The petitioner states that the Eola Hills are influenced more by 
their position due east of the Van Duzer Corridor than by their 
location in the rain-shadow of the Coast Range. Ocean winds vented 
through this Corridor often cause late-afternoon, summer temperatures 
to drop dramatically, which further distinguishes the area from the 
hills further north. During the growing season, average maximum 
temperatures at the middle elevations range from 62[deg] F in April to 
83[deg] F in July. This contributes to the ideal conditions for the 
``cool-climate'' grape varieties which dominate in Eola Hills 
vineyards, such as Pinot Noir, Pinot Gris, and Chardonnay.
    The petitioner notes that Eola Hills slopes experience greater heat 
accumulation during the growing season than does the surrounding 
Willamette Valley floor, due to the effects of thermal inversion. Cool 
air drains toward the valley floor during the night, which layers 
warmer air on the lower slopes. To demonstrate the differences between 
sites in the Eola Hills and the valley floor, the petitioner submitted 
monthly heat accumulation data that compares a valley floor site, the 
site of the Salem, Oregon, airport, and an Eola Hills vineyard site, 
Seven Springs Vineyard, for the years 1992-95. This data showed that 
the Seven Springs Vineyard site had consistently higher seasonal heat 
accumulation for the years in question. According to data gathered from 
the Salem WSO Airport, a typical vineyard site in the Eola Hills has a 
growing season (April 1 to October 31) heat accumulation range of 
2,300-2,500 degree-days, with a base of 60[deg] F. Based on standards 
for determining climatic regions using temperature summation, this 
places it high in the Region 1 category (2,500 degree-days or less).

What Boundary Descriptions Have Been Provided?

    The proposed Eola Hills viticultural area is located in the 
northern half of the existing Willamette Valley viticultural area in 
Oregon. Two-thirds of the area lies within Polk County, while the 
northern one-third extends into Yamhill County. A detailed description 
of the proposed boundaries can be found in the proposed regulations 
below in this notice.

What Maps Were Provided?

    The petitioner provided the required maps, and we list them in the 
proposed regulation.

Public Participation

    We request comments from anyone interested. Please support your 
comments with specific information about the proposed area's name, 
growing conditions, or boundaries.
    Because of the potential impact of an Eola Hills viticultural area 
on current brand names that include ``Eola,'' we are particularly 
interested in comments regarding the proposed area's name. Are there 
other names for this area that would not conflict with current brand 
names? We are also interested in suggestions for preventing conflicts 
between viticultural area names and brand names of geographic 
significance, as discussed above under ``What impact may this notice 
have on current wine labels?''
    All comments must include your name and mailing address, reference 
this notice number, and be legible and written in language acceptable 
for public disclosure.
    Although we do not acknowledge receipt, we will consider your 
comments if we receive them on or before the closing date. We will 
consider comments received after the closing date if we can. We regard 
all comments as originals.

Will TTB Keep My Comments Confidential?

    We do not recognize any submitted material as confidential. All 
comments are part of the public record and subject to disclosure. Do 
not enclose in your comments any material you consider confidential or 
inappropriate for disclosure.

How May I Submit Comments?

    You may submit comments in any of four ways.
    [sbull] By mail: You may send written comments to TTB at the 
address listed in the ADDRESSES section.
    [sbull] By facsimile: You may submit comments by facsimile 
transmission to 202-927-8525. Faxed comments must--
    (1) Be on 8.5- by 11-inch paper;
    (2) Contain a legible, written signature; and
    (3) Be five or less pages long. This limitation assures electronic 
access to our equipment. We will not accept faxed comments that exceed 
five pages.
    [sbull] By e-mail: You may e-mail comments to [email protected]. 
Comments transmitted by electronic mail must--
    (1) Contain your e-mail address;
    (2) Reference this notice number on the subject line; and
    (3) Be legible when printed on 8.5- by 11-inch paper
    [sbull] By online form: We provide a comment form with the online 
copy of this notice on our Web site at http://www.ttb.gov/alcohol/rules/index.htm. Select the ``Send comments via email'' link under this 
notice number.
    You may also write to the Administrator to ask for a public 
hearing. The Administrator reserves the right to determine, in light of 
all circumstances, whether a public hearing will be held.

What Information Will TTB Disclose?

    You may view copies of this notice, the petition, the appropriate 
maps, and any comments received by appointment at the ATF Reference 
Library in room

[[Page 52878]]

6480 at 650 Massachusetts Avenue, NW., Washington, DC 20226. You may 
also obtain copies at 20 cents per 8.5- x 11-inch page. Contact the ATF 
Librarian at the above address or telephone 202-927-7890 to schedule an 
appointment or to request copies of comments.
    For your convenience, we will post this notice and the comments 
received on the TTB Web site. All posted comments will show the names 
of commenters, but not street addresses, telephone numbers, or e-mail 
addresses. We may also omit voluminous attachments or material that we 
consider unsuitable for posting. In all cases, the full comment will be 
available in the ATF Reference Library. To access the online copy of 
this notice, visit at http://www.ttb.gov/alcohol/rules/index.htm. 
Select the ``View Comments'' link under this notice number to view the 
posted comments.

Regulatory Analyses and Notices

Does the Paperwork Reduction Act Apply to This Proposed Rule?

    We propose no requirement to collect information. Therefore, the 
provisions of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507, and 
its implementing regulations, 5 CFR part 1320, do not apply.

Does The Regulatory Flexibility Act Apply to This Proposed Rule?

    We certify that this regulation, if adopted, will not have a 
significant economic impact on a substantial number of small entities, 
including small businesses. The proposal imposes no new reporting, 
recordkeeping, or other administrative requirements.
    The establishment of viticultural areas represents neither our 
endorsement nor approval of the quality of wine made from grapes grown 
in the designated areas. Rather, the system allows us to identify areas 
distinct from one another. In turn, identifying viticultural areas lets 
wineries describe more accurately the origin of their wines to 
consumers and helps consumers identify the wines they purchase. Thus, 
any benefit derived from using a viticultural area name results from a 
proprietor's efforts and consumer acceptance of wines from that area. 
Therefore, no regulatory flexibility analysis is required.

Does Executive Order 12866 Define This NPRM as a Significant Regulatory 
Action?

    This proposed rule is not a ``significant regulatory action'' as 
defined by Executive Order 12866. Therefore, no regulatory assessment 
is required.

Drafting Information

    Jennifer Berry of the Regulations and Procedures Division, Alcohol 
and Tobacco Tax and Trade Bureau, drafted this notice.

List of Subjects in 27 CFR Part 9

    Wine.

Authority and Issuance

    For the reasons discussed in the preamble, we propose to amend 
Title 27, Code of Federal Regulations, Part 9, American Viticultural 
Areas as follows:

PART 9--AMERICAN VITICULTURAL AREAS

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

    Authority: 27 U.S.C. 205.

    2. Subpart C is amended by adding Sec.  9.-------- to read as 
follows:

Subpart C--Approved American Viticultural Areas


Sec.  9.--------  Eola Hills.

    (a) Name. The name of the viticultural area described in this 
section is ``Eola Hills''.
    (b) Approved Maps. The six USGS, 1:24,000 scale, topographic maps 
used to determine the boundaries of the Eola Hills viticultural area 
are titled--
    (1) Rickreall, Oregon, 1969, photorevised 1976;
    (2) Salem West, Oregon, 1969, photorevised 1986;
    (3) Mission Bottom, Oregon, 1957, revised 1993;
    (4) Dayton, Oregon, 1957, revised 1992;
    (5) McMinnville, Oregon, 1957, revised 1992; and
    (6) Amity, Oregon, 1957, revised 1993.
    (c) Boundary. The Eola Hills viticultural area is located in the 
State of Oregon, within Polk and Yamhill Counties, and entirely within 
the Willamette Valley viticultural area. The area's boundary is defined 
as follows--
    (1) Begin on the Rickreall, Oregon, map, at the intersection of 
State Highways 22 and 223; then
    (2) Proceed east on highway 22 to its intersection with Doaks Ferry 
Road on the Salem West, Oregon, map; then
    (3) Proceed northeast on Doaks Ferry Road to its intersection with 
the 200-foot contour line southeast of Gibson Gulch, in section 65; 
then
    (4) Follow the 200-foot contour line in a westerly loop until it 
rejoins Doaks Ferry Road; then
    (5) Continue north on Doaks Ferry Road to its intersection with 
highway 221; then
    (6) Continue north on State Highway 221 to its intersection with 
the 200-foot contour line at the point where the contour line departs 
from highway 221 and runs southwest along the southern edge of Spring 
Valley (section 53 on the Mission Bottom, Oregon, map); then
    (7) Follow the 200-foot contour line first south onto the Salem 
West, Oregon, map, then northwest around the southern and western edge 
of Spring Valley and back on to the Mission Bottom, Oregon, map; then
    (8) Continue to follow the 200-foot contour line generally north on 
the Mission Bottom, Oregon, map, crossing onto and back from the Amity, 
Oregon, map and continue past the Yamhill County line and onto the 
Dayton, Oregon, map; then
    (9) Follow the 200-foot contour line from the Dayton, Oregon, map 
onto the McMinnville, Oregon, map and back to the Dayton, Oregon, map 
and continue around the northeast edge of the Amity Hills spur of the 
Eola Hills; then
    (10) Follow the 200-foot contour line onto the McMinnville, Oregon, 
map as it continues around the northern and western periphery of the 
Amity Hills spur; then
    (11) Follow the 200-foot contour line onto the Amity, Oregon, map 
as it heads first south, then generally southeast, then generally 
south, along the western edge of the Eola Hills until it intersects Old 
Bethel Road at a point just north of the Polk County line; then
    (12) Follow Old Bethel Road, which becomes Oak Grove Road, south 
until it intersects with the 200-foot contour line just northwest of 
the township of Bethel; then
    (13) Follow the 200-foot contour line around in a southeasterly 
loop until it again intersects Oak Grove Road where Oak Grove and Zena 
Roads intersect; then
    (14) Follow Oak Grove Road south until it intersects with Frizzell 
Road; then
    (15) Follow Frizzell Road west for three-tenths mile until it 
intersects with the 200-foot contour line; then
    (16) Follow the 200-foot contour line generally south until it 
intersects with the starting point on the Rickreall, Oregon, map.

    Signed: August 6, 2003.
Arthur J. Libertucci,
Administrator.
[FR Doc. 03-22762 Filed 9-5-03; 8:45 am]
BILLING CODE 4810-31-P