[Federal Register Volume 70, Number 14 (Monday, January 24, 2005)]
[Proposed Rules]
[Pages 3333-3335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-1192]



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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Notice No. 29]
RIN: 1513-AA72


Proposed Realignment of the Santa Lucia Highlands and Arroyo Seco 
Viticultural Areas (2003R-083P)

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau proposes to 
realign a portion of the common boundary line between the established 
Santa Lucia Highlands and Arroyo Seco viticultural areas in Monterey 
County, California. 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. We invite comments on these 
proposed amendments to our regulations.

DATES: We must receive written comments on or before March 25, 2005.

ADDRESSES: You may send comments to any of the following addresses:
     Chief, Regulations and Procedures Division, Alcohol and 
Tobacco Tax and Trade Bureau, Attn: Notice No. 29, P.O. Box 14412, 
Washington, DC 20044-4412.
     202-927-8525 (facsimile).
     [email protected] (e-mail).
     http://www.ttb.gov/alcohol/rules/index.htm. An online 
comment form is posted with this notice on our Web site.
     http://www.regulations.gov (Federal e-rulemaking portal; 
follow instructions for submitting comments).
    You may view copies of this notice, the petition, the appropriate 
maps, and any comments we receive about this proposal by appointment at 
the TTB Library, 1310 G Street, NW., Washington, DC 20220. To make an 
appointment, call 202-927-2400. You may also access copies of the 
notice and comments online 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: N.A. Sutton, Program Manager, 
Regulations and Procedures Division, Alcohol and Tobacco Tax and Trade 
Bureau, 925 Lakeville Street, 158, Petaluma, CA 94952; 
telephone 415-271-1254.

SUPPLEMENTARY INFORMATION: 

Background on Viticultural Areas

TTB Authority

    Section 105(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 those 
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 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. Petitioners may use the same procedure to 
request changes involving existing viticultural areas. Section 9.3(b) 
of the TTB regulations requires the petition to include--
     Evidence that the proposed viticultural area is locally 
and/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, elevation, physical features, and soils, 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.

Santa Lucia Highlands and Arroyo Seco Realignment Petition

Background

    Paul Thorpe, on behalf of E. & J. Gallo Winery, submitted a 
petition to TTB requesting the realignment of a portion of the common 
boundary between the established Santa Lucia Highlands viticultural 
area (27 CFR 9.139) and the established Arroyo Seco viticultural area 
(27 CFR 9.59). Both viticultural areas are within the Monterey 
viticultural area (27 CFR 9.98) in Monterey County, California, which 
is in turn within the larger multi-county Central Coast viticultural 
area (27 CFR 9.75).
    Currently, the portion of the originally established common 
boundary in question follows a straight line drawn between the 
intersection of Paraiso and Clark Roads and the northeast corner of 
section 5, T19S, R6E, as shown on the United States Geological Survey 
(USGS) Paraiso Springs, California, quadrangle map.
    The proposed realignment would move this portion of the two areas' 
common boundary line about 1,000 to the east of the Paraiso and Clark 
Roads intersection and less than 500 feet to the east of the northeast 
corner of section 5, T19S, R6E. This realignment would transfer about 
200 acres of land currently within the Arroyo Seco viticultural area to 
the Santa Lucia Highlands area.

Rationale and Evidence for the Proposed Realignment

    According to the petitioner, the proposed realignment of this 
portion of the common boundary between the Santa Lucia Highlands and 
Arroyo Seco viticultural areas would serve three purposes: (1) It would 
bring the western boundary of the Arroyo Seco viticultural area into 
conformity with the western boundary of the historical Arroyo Seco Land 
Grant, which lends it name to the Arroyo Seco viticultural area; (2) it 
would conform the boundary line to land ownership boundaries; and (3) 
it would end the current division of the

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Olsen Ranch vineyards between the two viticultural areas.
    Currently, a thin strip of land outside of the Arroyo Seco Land 
Grant is within the western-most portion of the Arroyo Seco 
viticultural area. By moving the common Santa Lucia Highlands and 
Arroyo Seco boundary line to the east, the Arroyo Seco Land Grant and 
Arroyo Seco viticultural area will have the same western boundary line.
    The petitioner owns the Olsen Ranch, the great majority of which 
lies within the Santa Lucia Highlands viticultural area. Currently, the 
vineyards on the Olson Ranch, which were planted after the 
establishment of the two viticultural areas, are divided between the 
Arroyo Seco and Santa Lucia Highlands viticultural areas. By realigning 
this portion of common boundary line between the two viticultural 
areas, the Olson Ranch vineyards will be completely within the Santa 
Lucia Highlands viticultural area.
    The petition also explains that the dominant physical feature of 
the proposed realignment area is the alluvial terracing that 
differentiates the highlands along the western edge of the Salinas 
Valley from the lower elevation valley floor. These terraces, which are 
above 600 feet in elevation, match the terrain found in the Santa Lucia 
Highlands viticultural area, the elevation of which is generally 
between 600 feet and 1,200 feet, as the provided USGS map shows. Also, 
the terraces and higher elevations of the Santa Lucia Highlands area 
contrast to the flatter terrain and lower elevation valley floor found 
in the Arroyo Seco viticultural area.
    The primary soils of the proposed realignment area are of the 
Arroyo Seco and Chualar series, according to the 1978 U.S. Department 
of Agriculture Soil Survey of Monterey County, California, cited in the 
petition. These soils are generally loam or gravelly, sandy loam, with 
underlying very gravelly material, and they coincide with the dominant 
soils of the Santa Lucia Highlands viticultural area, according to the 
petition.
    The petition states that the climatic conditions of the proposed 
realignment area are similar to the Santa Lucia Highlands viticultural 
area. The rainfall in the proposed realignment area and the Santa Lucia 
Highlands area is 10 to 15 inches a year, according to the petition. In 
contrast, the lower valley floor found in the Arroyo Seco viticultural 
area averages less rain at 9.5 inches a year.

TTB Finding

    Based on the information provided in the petition, we believe that 
it is appropriate to propose the boundary realignment between the 
Arroyo Seco and Santa Lucia Highlands viticultural areas requested in 
the petition. Accordingly, we set forth below proposed amendments to 
the boundary descriptions for the two viticultural areas found in 
Sec. Sec.  9.59 and 9.139 of the TTB regulations.

Impact on Current Wine Labels

    Part 4 of the TTB regulations prohibits any label reference on a 
wine that indicates or implies an origin other than the wine's true 
place of origin. If we realign the boundary between the established 
Santa Lucia Highlands and Arroyo Seco viticultural areas, wine bottlers 
using ``Santa Lucia Highlands'' or ``Arroyo Seco'' in a brand name, 
including a trademark, or in another label reference as to the origin 
of the wine, will still have to ensure that the product is eligible to 
use the relevant viticultural area's name as an appellation of origin.
    For a wine to be eligible to use as an appellation of origin the 
name of a viticultural area specified in part 9 of the TTB regulations, 
at least 85 percent of the grapes used to make the wine must have been 
grown within the area represented by that name, and the wine must meet 
the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not 
eligible to use the viticultural area name as an appellation of origin 
and that name appears in the brand name, then the label is not in 
compliance and the bottler must change the brand name and obtain 
approval of a new label. Similarly, if the viticultural area name 
appears in another reference on the label in a misleading manner, the 
bottler would have to obtain approval of a new label. Accordingly, if a 
new label or a previously approved label uses the names ``Santa Lucia 
Highlands'' or ``Arroyo Seco'' for a wine that does not meet the 85 
percent standard, the new label will not be approved, and the 
previously approved label will be subject to revocation, upon the 
effective date of the approval of the boundary change.
    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)(2) for details.

Public Participation

Comments Invited

    We invite comments from interested members of the public on whether 
we should realign the portion of the common boundary between the Santa 
Lucia Highlands and Arroyo Seco viticultural areas as described above. 
We are especially interested in the use of the ``Santa Lucia 
Highlands'' and ``Arroyo Seco'' names as they apply to the land within 
the proposed realignment zone. We are also interested in comments on 
the impact, if any, that the proposed viticultural areas' realignment 
may have on current wine labels. Please support your comments with 
specific information about the viticultural areas' names, boundaries, 
distinguishing features, or impact on current wine labels.

Submitting Comments

    Please submit your comments by the closing date shown above in this 
notice. Your comments must include this notice number and your name and 
mailing address. Your comments must be legible and written in language 
acceptable for public disclosure. We do not acknowledge receipt of 
comments, and we consider all comments as originals. You may submit 
comments in one of five ways:
     Mail: You may send written comments to TTB at the address 
listed in the ADDRESSES section.
     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 no more than five pages long. This limitation assures 
electronic access to our equipment. We will not accept faxed comments 
that exceed five pages.
     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.
     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 e-mail'' link under 
this notice number.
     Federal e-Rulemaking Portal: To submit comments to us via 
the Federal e-rulemaking portal, visit http://www.regulations.gov and 
follow the instructions for submitting comments.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine, in light of all circumstances, whether to hold a public 
hearing.

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Confidentiality

    All submitted material is part of the public record and subject to 
disclosure. Do not enclose any material in your comments that you 
consider confidential or inappropriate for public disclosure.

Public Disclosure

    You may view copies of this notice, the petition, the appropriate 
maps, and any comments we receive by appointment at the TTB Library at 
1310 G Street, NW., Washington, DC 20220. You may also obtain copies at 
20 cents per 8.5- by 11-inch page. Contact our librarian at the above 
address or telephone (202) 927-2400 to schedule an appointment or to 
request copies of comments.
    For your convenience, we will post this notice and any comments we 
receive on this proposal on the TTB Web site. We may omit voluminous 
attachments or material that we consider unsuitable for posting. In all 
cases, the full comment will be available in the TTB Library. To access 
the online copy of this notice, visit http://www.ttb.gov/alcohol/rules/index.htm. Select the ``View Comments'' link under this notice number 
to view the posted comments.

Regulatory Flexibility Act

    We certify that this proposed regulation, if adopted, would not 
have a significant economic impact on a substantial number of small 
entities. The proposed regulation imposes no new reporting, 
recordkeeping, or other administrative requirement. Any benefit derived 
from the use of a viticultural area name would be 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 proposed rule is not a significant regulatory action as 
defined by Executive Order 12866, 58 FR 51735. Therefore, it requires 
no regulatory assessment.

Drafting Information

    Nancy Sutton of the Regulations and Procedures Division drafted 
this notice.

List of Subjects in 27 CFR Part 9

    Wine.

Proposed Regulatory Amendment

    For the reasons discussed in the preamble, we propose to amend 
title 27, chapter 1, part 9, Code of Federal Regulations, 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. Section 9.59 is amended by revising paragraph (c)(13), 
redesignating paragraphs (c)(14) through (c)(19) as (c)(16) through 
(c)(21), and adding new paragraphs (c)(14) and (c)(15) to read as 
follows:


Sec.  9.59  Arroyo Seco.

* * * * *
    (c) Boundary. * * *
* * * * *
    (13) Then east-northeasterly along Clark Road for approximately 
1,000 feet to its intersection with an unnamed light-duty road to the 
south.
    (14) Then in a straight south-southeasterly line for approximately 
1.9 miles to the line's intersection with the southeast corner of 
section 33, T18S, R6E (this line coincides with the unnamed light duty 
road for approximately 0.4 miles and later with the eastern boundaries 
of sections 32 and 33, T18S, R6E, which mark the western boundary of 
the historical Arroyo Seco Land Grant).
    (15) Then straight west along the southern boundary of section 33, 
T18S, R6E, to its southwest corner.
* * * * *
    3. Section 9.139 is amended by revising paragraphs (c)(9) and 
(c)(10), redesignating paragraphs (c)(11) through (c)(21) as (c)(12) 
through (c)(22), and adding new paragraph (c)(11) to read as follows:


Sec.  9.139  Santa Lucia Highlands.

* * * * *
    (c) Boundary. * * *
* * * * *
    (9) Then east-northeasterly along Clark Road for approximately 
1,000 feet to its intersection with an unnamed light-duty road to the 
south.
    (10) Then in a straight south-southeasterly line for approximately 
1.9 miles to the line's intersection with the southeast corner of 
section 33, T18S, R6E (this line coincides with the unnamed light duty 
road for about 0.4 miles and later with the eastern boundaries of 
sections 32 and 33, T18S, R6E, which mark the western boundary of the 
historical Arroyo Seco Land Grant).
    (11) Then straight west along the southern boundaries of sections 
33, 32, and 31, T18S, R6E, to the southwest corner of section 31.
* * * * *

    Signed: January 10, 2005.
John J. Manfreda,
Administrator.
[FR Doc. 05-1192 Filed 1-21-05; 8:45 am]
BILLING CODE 4810-31-P