[Federal Register Volume 69, Number 132 (Monday, July 12, 2004)]
[Rules and Regulations]
[Pages 41750-41755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15723]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[T.D. TTB--15; Re: ATF Notice No. 961]
RIN 1513-AA33


Establishment of the Red Hills Lake County Viticultural Area 
(2001R-330P)

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

ACTION: Final rule; Treasury decision.

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SUMMARY: This Treasury decision establishes the Red Hills Lake County 
viticultural area in Lake County in northern California. This new 
viticultural area is entirely within the Clear Lake viticultural area, 
which is, in turn, within the larger multi-county North Coast 
viticultural area. We designate viticultural areas to allow vintners to 
better describe the origin of their wines and to allow consumers to 
better identify wines they may purchase.

DATES: Effective September 10, 2004.

FOR FURTHER INFORMATION CONTACT: N. A. Sutton, Program Manager, 
Regulations and Procedures Division, Alcohol and Tobacco Tax and Trade 
Bureau; telephone 415-271-1254.

SUPPLEMENTARY INFORMATION:

Background on Viticultural Areas

TTB Authority

    Section 205(e) of the Federal Alcohol Administration Act (the FAA 
Act, 27 U.S.C. 201 et seq.) requires that alcohol beverage labels 
provide the consumer with adequate information regarding a product's 
identity and prohibits 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. The Alcohol and Tobacco 
Tax and Trade Bureau (TTB) administers these regulations.
    Part 4 of the TTB regulations (27 CFR part 4) allows the 
establishment of definitive viticultural areas and the use of their 
names as appellations of origin on wine labels and in wine 
advertisements. Part 9 of the TTB regulations (27 CFR part 9) contains 
the list of approved viticultural areas.

Definition

    Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) 
defines a viticultural area for American wine as a delimited grape-
growing region distinguishable by geographical

[[Page 41751]]

features, the boundaries of which have been recognized and defined in 
part 9 of the regulations. These designations allow vintners and 
consumers to attribute a given quality, reputation, or other 
characteristic of a wine made from grapes grown in an area to its 
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.

Requirements

    Section 4.25(e)(2) of the TTB regulations outlines the procedure 
for proposing an American viticultural area and provides that any 
interested party may petition TTB to establish a grape-growing region 
as a viticultural area. Section 9.3(b) of the TTB regulations requires 
the petition to include--
     Evidence that the proposed viticultural area is locally or 
nationally known by the name specified in the petition;
     Historical or current evidence that supports setting the 
boundary of the proposed viticultural area as the petition specifies;
     Evidence relating to the geographical features, such as 
climate, soils, elevation, and physical features, that distinguish the 
proposed viticultural area from surrounding areas;
     A description of the specific boundary of the proposed 
viticultural area, based on features found on United States Geological 
Survey (USGS) maps; and
     A copy of the appropriate USGS map(s) with the proposed 
viticultural area's boundary prominently marked.

Notice of Proposed Rulemaking

Background

    In 2001, the Bureau of Alcohol, Tobacco and Firearms (ATF), the 
predecessor to TTB, received a petition proposing a new viticultural 
area to be called ``Red Hills'' in Lake County, California, about 80 
miles north of San Francisco. Sara Schorske of Compliance Service of 
America filed the petition on behalf of a group of Lake County grape 
growers. Also in 2001, ATF received a separate petition to establish 
the ``Red Hill'' viticultural area in Douglas County, Oregon. ATF 
published notices of proposed rulemaking regarding the two proposed 
viticultural areas in the Federal Register on October 30, 2002--Notice 
No. 960 for Red Hill (Oregon) and Notice No. 961 for Red Hills 
(California).
    The two notices discussed the possible name confusion between the 
proposed Red Hills (plural) and Red Hill (singular) viticultural areas. 
As a remedy, ATF proposed to link the proposed areas' names to the 
State in which they were located and suggested the use of ``Red Hills--
California'' and ``Red Hill--Oregon.'' The two notices requested 
comments from all interested persons by December 30, 2002, and both 
stated:

    Specifically, ATF requests comments on the potential for name 
confusion between the [two proposed areas]. * * * Comments on the 
proposed names and suggestions for other names are encouraged and 
will be given consideration.

    Based on an industry request for additional time, ATF reopened the 
comment periods for both proposed areas until March 17, 2003. (See 
Notice No. 966, published in the Federal Register on January 16, 2003.) 
Comments received in response to Notice No. 960, Red Hill--Oregon will 
be discussed in a separate rulemaking document.

Comments, Evidence and TTB Responses

    TTB received 14 comments regarding the proposed Red Hills--
California viticultural area in response to Notice No. 961. One comment 
opposed the area's establishment. Thirteen comments supported it, and 
some of these comments recommended modifications to its name or 
proposed boundaries. We discuss the comments received regarding the 
area, its name, and its boundaries in detail below.

Opposing Comment

    The owner of the ``Red Hill Vineyard'' trademark opposed the 
proposed Red Hills--California (Notice No. 961) and the Red Hill--
Oregon (Notice No. 960) viticultural areas and stated:

    We are concerned that there will exist confusion with the 
appellation Red Hill or Red Hills and our brand Red Hill Vineyard 
that is located in neither of the proposed appellations. * * * We 
are concerned that the confusion of a brand name and a viticultural 
region would be similar to the confusion with the Napa appellation 
and the Napa Ridge brand. To avoid such confusion, we respectfully 
protest the appellation designations in Notice 961 and 960 so long 
as we own this Mark.

    TTB's response to this comment is discussed in detail below.

General Supporting Comments

    The five members of the Lake County Board of Supervisors signed a 
letter in support of the Red Hills viticultural area petition. In 
addition, TTB received four separate letters from wine industry members 
in support of the Red Hills petition. The supporting letters stated 
that the Red Hills area is a unique grape-growing region with 
distinctive soils and a distinctive microclimate.

Red Hills--Name Change and Evidence

``Red Hills--California'' Name Comments
    We received 4 comments proposing changes to the area's suggested 
name of ``Red Hills--California.'' Three comments strongly opposed the 
use of ``California'' as part of the viticultural area's name. Ms. 
Barbara Snider of Snider Vineyards stated:

    [A] wine using the more generic state designation, 
``California,'' suggests to the consumer that the grapes used to 
make the wine could be grown anywhere in the State, and many times, 
grown in many different areas of the State and blended.

    Another commenter asked, ``How about making the [proposed area] 
`possessive' of the State in which it lies? [i.e.] Red Hills of 
California * * *.''
    The petitioning group also opposed the linking of ``California'' 
with the Red Hills name, believing this would mislead consumers since 
California is such a large State with a wide variety of grape growing 
conditions. The group stated:

    We have invested substantial effort and expense to establish a 
small, premium vineyard area as an [American viticultural area]. * * 
* To prominently associate the area with the name California dilutes 
the area's identity.

    The petitioning group argued in a second letter that, `` 
`California' as a modifier will not be specific enough to distinguish 
our area from other possible grape growing areas,'' including, they 
noted, other possible ``Red Hills'' areas within California.
    The petitioning group at first suggested ``Red Hills District'' as 
the appropriate name for the petitioned viticultural area, and they 
provided examples of this name's usage. Later, during the reopened 
comment period, the petitioning group suggested the use of ``Red Hills 
Lake County'' for the area. Ms. Snider, who had suggested ``Red Hills--
Lake County'' in her first comment, added her support for ``Red Hills--
Lake County'' as the appropriate name for this viticultural area.
Red Hills Lake County Name Evidence
    Arguing that Red Hills Lake County was ``the best and most logical 
name for the proposed appellation,'' the petitioners included 
substantive name evidence with their request showing links between the 
``Red Hills'' and

[[Page 41752]]

``Lake County'' names. For example, Vineyard and Winery Management 
magazine's November/December 2002 issue included an article titled 
``Value Vineyards? Growers Bet on Future of Lake County.'' The article 
included the subheadings ``Red Hills for Red Wines'' and ``The 
Promising Red Hills,'' and described the vineyards and virtues of the 
Red Hills region.
    An article in the July 5, 2001, St. Helena Star titled ``More 
Vineyards, Four More Wineries Slated for Lake County,'' discussed 
vineyard acquisitions in the Red Hills area of Lake County. In February 
1998, Wines and Vines magazine discussed the grape-growing qualities of 
Lake County in an article, ``Red Soil, Red Grapes, But Not Red Ink,'' 
which noted that an area ranch was ``in the Red Hills area southwest of 
[Clear Lake].'' The article quoted a vineyard supervisor who described 
the virtues of the soils and climate of the Red Hills.
    The petitioners submitted other name evidence, including a 1977 
description of the area's ``rolling red soil'' by local historian Henry 
Mauldin. A 1949 account of the Red Hills walnut-growing region in Lake 
County shows its location on both sides of Red Hills Road within the 
viticultural area. Red Hills Road meanders through the area's 
southwestern quadrant and is shown on a Rand McNally county map, the 
Lake County Travel Atlas, DeLorme's Northern California Atlas, and in a 
published list of scenic roads in Lake County.
TTB Response to Name Comments
    As discussed above, the original Red Hills petitioners suggesting 
modifying the petitioned name of their viticultural area to read ``Red 
Hills Lake County.'' They believe that by using ``Lake County'' in 
conjunction with ``Red Hills,'' rather than other modifiers such as 
``District'' or ``California,'' they will be able to better identify 
this name as that of a well-defined region of Lake County in northern 
California. TTB agrees that the ``Red Hills Lake County'' name is 
generally recognized and finds that there is adequate evidence to 
support this name for the viticultural area.
TTB Response to Opposing Comment
    The commenter who objected to the establishment of this area and 
the proposed Red Hill area in Oregon is a winery that holds the 
trademark ``Red Hill Vineyard.'' The proprietor is concerned that there 
will be confusion between the viticultural area(s) and the trademark, 
and stated:

    We are concerned that there will exist confusion with the 
appellation Red Hill or Red Hills and our brand Red Hill Vineyard 
that is located in neither of the proposed appellations. Sebastiani 
has established the Red Hill Vineyard trademark at significant 
expense and would not be willing to relinquish our right to use 
without compensation for the mark. We are concerned that the 
confusion of a brand and a viticultural region would be similar to 
the confusion with the Napa appellation and the Napa Ridge Brand. To 
avoid such confusion we respectfully protest the appellation 
designations in Notice 961 and 960 so long as we own this Mark.

    As with other final rules establishing viticultural areas, the 
information submitted in support of establishing the Red Hills Lake 
County viticultural area shows that TTB is not creating the 
viticultural area name but instead is recognizing an existing 
geographic area. TTB recognizes the interplay between trademarks and 
geographical designations and in the past has rejected proposed 
viticultural area names when their use would be misleading to the 
consumer. At other times TTB or ATF (TTB's predecessor agency) has 
required modifiers such as ``District'', ``Valley,'' or ``Hills'' to 
further distinguish the viticultural area names. This petition has 
evolved from the initial request to establish ``Red Hills'' as a 
viticultural area to the current and final version of ``Red Hills Lake 
County,'' a more narrowly defined name for the new viticultural area.
    We believe that the trademark owner's concern and objection over 
the use of ``Red Hill'' and ``Red Hills'' are addressed by the fact 
that the new viticultural area name will modify ``Red Hills'' with 
``Lake County'' thus minimizing the opportunity for consumers to become 
misled by the use of the new viticultural area name and the trademarked 
name. The establishment of the Red Hills Lake County viticultural area 
will not cause the rule's opponent to ``relinquish'' using the 
trademark ``Red Hill Vineyard'' as a brand name. This is because, 
contrary to the case of ``Napa Valley'' and ``Napa Ridge'' cited by the 
commenter, we do not believe that any confusion will arise between 
``Red Hills Lake County'' and the commenter's ``Red Hill Vineyard.'' We 
note in this regard that the word ``Napa'' when used in a viticultural 
sense is only associated with the Napa Valley in California, with the 
result that any use of the word ``Napa'' to designate the origin for a 
wine not from that geographical area would be inherently misleading and 
therefore precluded. In the present case, however, the words ``Red 
Hills'' taken together or separately do not have comparable 
viticultural import, and it is for this reason that we consider only 
the entire name ``Red Hills Lake County'' and not merely the ``Red 
Hills'' portion of that name to be viticulturally significant.
    Although the commenter who objected to the proposed rule will not 
lose its Red Hills Vineyard brand name as a result of this final rule, 
ATF, TTB's predecessor agency, did indicate in the past:

    It is not the policy of ATF to become involved in purely private 
disputes involving proprietary rights, such as trademark 
infringement suits. However, in the event a direct conflict arises 
between some or all of the rights granted by a registered trademark 
under the Lanham Act and the right to use the name of a viticultural 
area established under the FAA Act, it is the position of ATF that 
the rights applicable to the viticultural area should control. ATF 
believes that the evidence submitted by the petitioner establishes 
that designation of the Wild Horse Valley viticultural area is in 
conformance with the law and regulations. Accordingly, ATF finds 
that Federal registration of the term ``Wild Horse'' does not limit 
the Bureau's authority to establish a viticultural area known as 
``Wild Horse Valley.''

(See the ``Wild Horse Valley'' viticultural area final rule, T.D. ATF-
278, 53 FR 48247, November 30, 1988.)

Boundary Evidence and Changes

Red Hills--General Background
    The Red Hills Lake County viticultural area is located in Lake 
County, California. The new area is within the existing Clear Lake 
viticultural area, which surrounds that large body of water, and which 
is, in turn, within the large, multi-county North Coast viticultural 
area. Historically, walnuts have been the major agricultural crop of 
this area, prospering in the red soil and rolling terrain. Around the 
time of Prohibition, two small vineyards were replaced with walnut 
orchards, but in more recent years growers have replanted several old 
orchards to wine grapes. There are now approximately 3,100 acres of 
vineyards within the Red Hills Lake County viticultural area, and more 
blocks are planned for future development.
    Situated on a tract of rocky, red-colored volcanic soil, the Red 
Hills Lake County viticultural area is distinct from the surrounding 
region. Steep ridges, volcanic mountains, and Clear Lake's southwestern 
shoreline border the area's hilly terrain. These geographical elements 
promote the moderating microclimate and wind patterns that allow for 
favorable grape-growing conditions without damaging frosts.

[[Page 41753]]

Red Hills Boundary Comments
    Two commenters requested expansion of the originally proposed Red 
Hills Lake County western boundary. In their reply comments, the 
original petitioners supported the smaller expansion on Benson Ridge, 
but opposed the other, larger expansion southwest of Kelseyville.
    A comment from Barbara Snider supported the viticultural area 
petition, but requested a western boundary expansion in order to 
include her company's Fortress Vineyard on Benson Ridge, which is 
immediately west of the originally petitioned boundary area. The Snider 
comment included evidence showing the similarity of the soil, 
elevation, climate, and growing conditions found on the Benson Ridge 
area to those found in the Red Hills viticultural area. After studying 
Ms. Snider's comment and evidence, the petitioning group supported the 
expansion of the Red Hills area to include Ms. Snider's and several 
other vineyards on Benson Ridge.
    Mark Welch of Welch Vineyard Management requested a non-contiguous 
expansion of the petitioned Red Hills Lake area outside of its proposed 
western boundary. His proposed 2,180-acre expansion area, southwest of 
Kelseyville, began about 0.75 miles outside of the petitioned 
viticultural area's western boundary line and ran south of State Road 
29 and 175, ending between Big Valley and the Adobe Reservoir on the 
Highland Springs United States Geological Service (USGS) map. Mr. Welch 
contended that this non-contiguous land southwest of Kelseyville is 
similar to the petitioned Red Hills area and included supporting 
evidence in his comment.
    After considering Mr. Welch's comment and evidence, the Red Hills 
petition group opposed the further expansion of their proposed 
viticultural area. The petitioners argued that this second expansion 
area is more appropriately considered a part of the Big Valley, which 
lies to the west of Kelseyville and, therefore, outside of the Red 
Hills.
TTB Response to Boundary Comments
    In response to Ms. Snider's expansion request, we agree with the 
petitioning group that Benson Ridge should be included in the northwest 
corner of the Red Hills Lake County viticultural area. The ridge, at 
the base of Mt. Konocti, and the vineyards on it, including Ms. 
Snider's Fortress Vineyard, have soils, climate, elevation, and wind 
patterns similar to those found elsewhere in the viticultural area.
    We have also carefully studied Mr. Welch's comment and expansion 
request. While noting the red and red-yellow soils from varied origins 
in his proposed expansion area southwest of Kelseyville, Notice No. 961 
stated that a major distinguishing characteristic of the Red Hills area 
is its red, volcanic soil. The Lake County Soil Survey shows the soils 
in the second proposed expansion area are substantially different in 
origin and somewhat different in color from those of the Red Hills.
    Mr. Welch's comment also provided climatic data showing similar 
rainfall and heat summation degree-day totals between his proposed 
expansion area and the petitioned Red Hills area. Mr. Welch's comment 
letter also indicates similar wind patterns in the proposed western 
expansion area and those in the Red Hills Lake County viticultural 
area. As noted in Notice No. 961, another major distinguishing point of 
the Red Hills area is its unique wind pattern, which helps provide 
natural frost protection for crops. However, we find that this proposed 
expansion area has wind patterns that run northward in the morning and 
southward in the afternoon, while a 1979 Geothermal study provided with 
the Red Hills petition shows the viticultural area has a generally 
perpetual west to east wind pattern.
    Given the differences in soil and wind patterns, we believe the 
land in this proposed non-contiguous expansion is, geographically, a 
part of the Big Valley region of Lake County. Also, Mr. Welch did not 
provide name evidence for his proposed expansion area, but deferred to 
the original Red Hills petition. Therefore, we find that the proposed 
expansion area southwest of Kelseyville does not have the same 
distinguishing criteria as the Red Hills Lake County viticultural area.

Area Description and Distinguishing Geographical Features

Physical Features

    Lake County is generally mountainous, with protected, fertile 
valleys allowing agriculture. Clear Lake, a large lake running 
northwest to southeast, and Mt. Konocti, a volcanic mountain to the 
lake's east, are two of the county's dominant geographical points. A 
field of volcanic hills lies southwest of Clear Lake and south of Mt. 
Konocti. These red, rolling hills contrast with the wider valleys and 
higher mountains of the surrounding regions.
    The Red Hills Lake County viticultural area lies within this 
rolling terrain, which is covered with rocky, red volcanic soils. The 
viticultural area's boundaries are based on a combination of geography, 
terrain, soil, and climate factors that contrast with the surrounding 
area. These geographical elements promote the moderating microclimate 
and wind patterns that allow for favorable grape-growing conditions 
without damaging frosts within the area.
    Mt. Konocti and the southwestern shore of Clear Lake border the Red 
Hills Lake County viticultural area on the north. To the south, the 
Mayacmas Mountains, part of California's Coast Ranges, border the area, 
while various ridges border the area on the east and west. The northern 
boundary line excludes Mt. Konocti above its 2,600-foot elevation and 
Clear Lake at its shoreline.
    On its eastern side, the area excludes, at the southeastern end of 
Clear Lake, all of Anderson Flat with its different soils, the town of 
Lower Lake, which sits on an alluvial fan, and a steep ridge with older 
bedrock and different soils.
    The Red Hills Lake County viticultural area's southern boundary 
generally coincides with the Clear Lake viticultural area's boundary 
line and also excludes the higher Mayacmas Mountains. These peaks share 
a common volcanic heritage with the rolling hills, but the steep slopes 
and high elevations are unsuitable for commercial viticulture. The 
area's southwestern corner skirts Boggs Lake, while the western 
boundary excludes Camel Back Ridge and some lower elevations south and 
southeast of Kelseyville.

Soils

    Red, volcanic soils cover over 90% of the Red Hills Lake County 
viticultural area and are primarily composed of Glenview-Bottlerock-
Arrowhead, Konocti-Benridge, and Collayomi-Aiken soil types. These 
reddish-brown soils are high in gravel content and are a primary factor 
for the recent growth of viticulture in the Red Hills Lake County area.
    While the foothills of Mt. Konocti are within the area's northern 
boundary line, this volcanic mountain is not considered part of the Red 
Hills area and serves as a dividing point for several distinct 
geographical areas. A narrow border of red volcanic soils without 
significant gravel content helps define the new area's northern 
boundary along Mt. Konocti's 2,600-foot elevation line. Clear Lake's 
shoreline and marshy terrain have different soils as well.
    The area's eastern boundary follows the edge of its defining 
volcanic field.

[[Page 41754]]

Beyond this field the red soils lack the rock content typical of the 
Red Hills Lake County viticultural area. Even though the red volcanic 
soils of the viticultural area extend south of its boundary line, the 
mountainous terrain to the south precludes commercial viticulture. 
While Salminas Meadow and Seigler Valley are within the larger Clear 
Lake viticultural area, they are excluded from the Red Hills area due 
to their different soils and terrain.
    The area's southwestern corner follows the shoreline of Boggs Lake, 
while the western boundary generally follows Bottle Rock Road along the 
base of Camel Back Ridge and then runs north and then west to 
incorporate Benson Ridge at the base of Mt. Konocti. The ridges beyond 
the southwestern boundary line represent the approximate western extent 
of the prehistoric volcanic flows that form the area's soils and mark a 
change to steeper terrain. The land inside the boundary is geologically 
younger and has more porous volcanic rocks and soils that contrast with 
the bedrock of Franciscan formation beyond the western boundary area.

Climate

    Rainfall in the Red Hills Lake County viticultural area is 
influenced by its location between the Mayacmas Mountains and Clear 
Lake. The mountainous region to the area's south gets about 80 inches 
of rain a year, while Clear Lake to the north averages 22 inches a 
year. The Red Hills area lies between these two places and receives 
from 25 to 40 inches of rain a year.
    Fifty miles inland, the Red Hills Lake County viticultural area's 
relative lack of maritime influence greatly affects the area's 
microclimate, as does its hilly terrain and location between Clear Lake 
and the Mayacmas Mountains. The unique wind patterns in the Red Hills 
area result from the lake-land effect, driven by temperature contrasts 
between the large lake and the adjacent land, as well as the mountain-
valley effect that pushes air either upward or downward in the valleys 
depending on temperatures.
    The combination of the lake-land and the mountain-valley effects 
creates the area's perpetual motion wind machine, creating the unique 
wind systems that blow through its open terrain. These constant winds 
provide natural frost protection for the area's grapevines. Local 
residents confirm that in the early morning hours of cold spring days, 
when temperatures dip below the freezing point, the naturally generated 
winds keep frost from forming on grape shoots, while other Lake County 
viticultural areas require frost protection measures.

Boundary Description

    See the narrative boundary description of the viticultural area in 
the regulatory text published at the end of this notice.

Maps

    The petitioner(s) provided the required maps, and we list them 
below in the regulatory text.

TTB Finding

    After careful review of the petition and the comments, TTB finds 
that the evidence submitted supports the establishment of the 
viticultural area. Therefore, under the authority of the Federal 
Alcohol Administration Act and part 4 of our regulations, we establish 
the ``Red Hills Lake County'' viticultural area in Lake County in 
northern California, effective 60-days from this document's publication 
date.

Impact on Current Wine Labels

    Part 4 of the TTB regulations prohibits any label reference on a 
wine that suggests an origin other than the wine's true place of 
origin. With certain exceptions, the regulations also prohibit the use 
of brand names of viticultural significance, such as the name of a 
State, county, or viticultural area, unless the wine meets the 
appellation of origin requirements for the named geographic area.
    With the establishment of this viticultural area, its name, ``Red 
Hills Lake County,'' becomes a term of viticultural significance. Wine 
bottlers using ``Red Hills Lake County'' in a brand name, including a 
trademark of the entire name, or in another label reference, must 
ensure the product is eligible to use the viticultural area's name as 
an appellation of origin. Because the trademark ``Red Hill Vineyard'' 
is different than ``Red Hills Lake County,'' the establishment of this 
new viticultural area will not result in the Red Hill Vineyard 
trademark owner becoming ineligible to use the trademark as a brand 
name. In other words, the trademark does not contain any words that TTB 
considers viticulturally significant as a result of the establishment 
of the Red Hills Lake County viticultural area.
    For a wine to be eligible to use a viticultural area name listed in 
part 9 of the TTB regulations as an appellation of origin, at least 85 
percent of the grapes used to make the wine must have been grown within 
that viticultural area. If the wine is not eligible to use the 
viticultural area name and that name appears in the wine's brand name 
or in another label reference, the label is not in compliance and the 
bottler must change the brand name or other label reference and obtain 
approval of a new label.
    Different rules apply if a wine has a brand name containing a 
viticultural area name that was used as a brand name on a label 
approved before July 7, 1986. See 27 CFR 4.39(i) for details.

Regulatory Analyses and Notices

Regulatory Flexibility Act

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

Executive Order 12866

    This rule is not a significant regulatory action as defined by 
Executive Order 12866 (58 FR 51735). Therefore, it requires no 
regulatory assessment.

Drafting Information

    N.A. Sutton of the Regulations and Procedures Division drafted this 
final rule document.

List of Subjects in 27 CFR Part 9

    Wine.

The Final Rule

0
For the reasons discussed in the preamble, we amend 27 CFR, chapter 1, 
part 9 as follows:

PART 9--AMERICAN VITICULTURAL AREAS

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

    Authority: 27 U.S.C. 205.

Subpart C--Approved American Viticultural Areas

0
2. Subpart C is amended by adding Sec.  9.169 to read as follows:


Sec.  9.169  Red Hills Lake County.

    (a) Name. The name of the viticultural area described in this 
section is ``Red Hills Lake County''.
    (b) Approved Map. The appropriate maps for determining the boundary 
of the Red Hills Lake County viticultural area are four 1:24,000 Scale 
U.S.G.S. topography maps. They are titled:

[[Page 41755]]

    (1) Clearlake Highlands Quadrangle, CA--Lake Co. 1958, photorevised 
1975;
    (2) Lower Lake Quadrangle, CA--Lake Co. 1958, photorevised 1975;
    (3) Whispering Pines Quadrangle, CA 1958, photoinspected 1975;
    (4) Kelseyville Quadrangle, CA--Lake Co. 1959, photorevised 1975.
    (c) Boundary. The Red Hills Lake County viticultural area is 
located entirely within the Clear Lake viticultural area of Lake 
County, California, on the southwestern shore of Clear Lake, between 
the towns of Lower Lake and Kelseyville, California. The Red Hills Lake 
County viticultural area boundary is as follows:
    (1) Beginning on the Clearlake Highlands map at the intersection of 
the Clear Lake shoreline, south of Slater Island, with the common 
boundary line between sections 3 and 4, T12N, R7W, proceed 
approximately 0.1 miles due south along the common section line to its 
intersection with the 1,400-foot contour line, section 3, T12N, R7W 
(Clearlake Highlands Quadrangle); then
    (2) Proceed east-southeasterly along the meandering 1,400-foot 
contour line onto the Lower Lake map south of Anderson Flat, then 
reverse direction with the contour line and continue westerly, leaving 
the Lower Lake map, to the 1,400-foot contour line's intersection with 
Seigler Canyon Creek, section 10, T12N, R7W (Clearlake Highlands 
Quadrangle); then
    (3) Proceed generally west then south along Seigler Canyon Creek to 
its confluence with Perini Creek, section 9, R7W, T12N, and continue 
southerly about 1.2 miles along Perini Creek to its intersection with 
the 1,800-foot contour line, section 16, R7W, T12N (Clearlake Highlands 
Quadrangle); then
    (4) Continue southerly along the 1,800-foot contour line, crossing 
on to the Whispering Pines map, and, turning westerly, continue along 
the 1,800-foot contour line to its intersection with Copsey Creek, 
section 28, T12N, R7W (Whispering Pines Quadrangle); then
    (5) Proceed generally west-northwest along Copsey Creek to its 
headwaters in section 29, then continue straight west-southwesterly to 
the headwaters of Bad Creek at its intersection with the section 30 
eastern boundary line, and, from that point, proceed approximately 0.1 
miles due west to Big Canyon Road, section 30, T12N, R7W (Whispering 
Pines Quadrangle); then
    (6) Proceed about 1.1 miles north-northwesterly along Big Canyon 
Road, leaving the Whispering Pines map, to its intersection with Loch 
Lomond Road, northeast of Hoberg Airport, section 19, T12N, R7W 
(Clearlake Highlands Quadrangle); then
    (7) Proceed approximately 1.5 miles westerly then southerly along 
Loch Lomond Road, returning to the Whispering Pines map, passing 
through Seigler Springs, to the road's first intersection with the 
2,640-foot contour line, northwest of Bonanza Springs, section 25, 
T12N, R8W (Whispering Pines Quadrangle); then
    (8) From that point, proceed about 1.9 miles northwesterly in a 
straight line, passing through the peak of Seigler Mountain, elevation 
3,692 feet, and returning to the Clearlake Highlands map, to the line's 
intersection with Salmina Road, section 23, T12N, R8W (Clearlake 
Highlands Quadrangle); then
    (9) Proceed 1.25 miles northwesterly along Salmina Road to its 
intersection with State Highway 175, section 15, T12N, R8W (Clearlake 
Highlands Quadrangle); then
    (10) Proceed south 0.6 miles on State Highway 175 to its 
intersection with the section 15 southern boundary line, T12N, R8W 
(Clearlake Highlands Quadrangle); then
    (11) From that point, proceed about 1 mile in a straight 
northwesterly line to the peak of Mt. Hannah, elevation 3,978 feet, 
section 16, T12N, R8W (Clearlake Highlands Quadrangle); then
    (12) From the peak of Mt. Hannah, proceed about 0.8 miles in a 
westerly straight line, crossing on to the Kelseyville map, to the 
intersection of the 3,000-foot contour line with the section 17 east 
boundary line, and continue for about 0.45 miles along the same line of 
direction to the 2,800-foot contour line east of Boggs Lake, section 
17, T12N, R8W (Kelseyville Quadrangle); then
    (13) Proceed northerly and then westerly along the 2,800-foot 
contour line around Boggs Lake to the contour line's intersection with 
Harrington Flat Road, section 18, T12N, R8W (Kelseyville Quadrangle); 
then
    (14) Proceed about 0.4 miles northwesterly along Harrington Flat 
Road to its intersection with Bottle Rock Road, and continue north-
northwesterly along Bottle Rock Road for about 4 miles to its 
intersection with Cole Creek Road to the west and an unimproved road to 
the east, section 25, T13N, R9W (Kelseyville Quadrangle); then
    (15) Proceed east and then northeasterly on the unimproved road 
about 0.4 miles to its intersection with the east-west State Highway 
29/175 and a northerly unimproved road, section 25, T13N, R9W 
(Kelseyville Quadrangle); then
    (16) From that point, cross State Highway 29/175 and proceed about 
1 mile northwesterly along the unnamed, unimproved road to its 
intersection with an east-west unimproved road just north of the common 
boundary line between sections 24 and 25, then go west a short distance 
on that road to the point where the road turns north along the common 
boundary between sections 23 and 24; then
    (17) Proceed 0.5 miles north along the unimproved road marking the 
common boundary between sections 23 and 24 to the road's intersection 
with Wilkinson Road and continue straight north 0.25 miles on Wilkinson 
Road to its intersection with the 1,600-foot elevation line at the 
section 24 western boundary line, T13N, R9W (Kelseyville Quadrangle); 
then
    (18) Proceed about 1.35 miles straight easterly to the 2,493 
benchmark located along an unnamed light-duty road known locally as 
Konocti Road, section 19, T13N, R8W (Kelseyville Quadrangle); then
    (19) Proceed less than 0.2 miles easterly and then northerly along 
the unnamed light-duty road to its intersection with the 2,600-foot 
elevation line, section 19, T13N, R8W (Kelseyville Quadrangle); then
    (20) Proceed about 3.0 miles generally east along the 2,600-foot 
elevation line to its intersection, north of Bell Mine, with an unnamed 
intermittent stream near the section 20 east boundary line, T13N, R8W 
(Kelseyville Quadrangle); then
    (21) Proceed about 1.2 miles in a straight east-northeasterly line 
to the intersection of Konocti Bay Road and Soda Bay Road, and continue 
due east to the shore of Clear Lake, section 22, T13N, R8W (Clearlake 
Highlands Quadrangle); then
    (22) Proceed southeasterly along the shoreline of Clear Lake, 
returning to the point of beginning at the shoreline's intersection 
with the common boundary line between sections 3 and 4, T12N, R7W 
(Clearlake Highlands Quadrangle).

    Signed: May 10, 2004.
Arthur J. Libertucci,
Administrator.
    Approved: June 25, 2004.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 04-15723 Filed 7-9-04; 8:45 am]
BILLING CODE 4810-31-U