[Federal Register Volume 73, Number 81 (Friday, April 25, 2008)]
[Rules and Regulations]
[Pages 22273-22277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9106]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2007-0012; T.D. TTB-69; Re: Notice No. 63]
RIN 1513-AB20


Establishment of the Swan Creek Viticultural Area (2005R-414P)

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

ACTION: Final rule; Treasury decision.

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SUMMARY: This Treasury decision establishes the ``Swan Creek'' 
viticultural area in Wilkes, Yadkin, and Iredell Counties, North 
Carolina. 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 Date: May 27, 2008.

FOR FURTHER INFORMATION CONTACT: N. A. Sutton, Regulations and Rulings 
Division, Alcohol and Tobacco Tax and Trade Bureau, 925 Lakeville 
Street, No. 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 (FAA Act), 
27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe 
regulations for the labeling of wine, distilled spirits, and malt 
beverages. The FAA Act provides that these regulations should, among 
other things, prohibit consumer deception and the use of misleading 
statements on labels, and ensure that labels provide the consumer with 
adequate information as to the identity and quality of the product. The 
Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the 
regulations promulgated under the FAA Act.
    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 geographical 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 
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.

Swan Creek Viticultural Area

Background

    Raffaldini Vineyards submitted a petition to establish the 96,000-
acre ``Swan Creek'' viticultural area on behalf of the Vineyards of 
Swan Creek, a trade association representing a group of vineyards and 
wineries in northwestern North Carolina. Three wineries and 75 acres of 
vineyards are located within the proposed Swan Creek viticulture area. 
The boundary of the proposed viticultural area incorporates portions of 
Wilkes, Yadkin, and Iredell Counties and includes a portion of the 
established Yadkin Valley viticultural area (27 CFR 9.174). We 
summarize below the evidence submitted in support of the petition.

Name and Boundary Evidence

    The petitioner explains that the geographical name ``Swan Creek'' 
refers to a village in the approximate center of the proposed 
viticultural area, as well as a Yadkin River tributary creek system. As 
shown in the southwest portion of the provided 1:100,000-scale USGS 
Winston-Salem, North Carolina topographic map, Swan Creek village sits 
in the Brushy Mountains south of the Yadkin River. East and West Swan 
Creeks run north from the mountains before joining together as Swan 
Creek to the northwest of the village. The creek then empties into the 
Yadkin River approximately three miles west of Jonesville. Also, an 
undated State of North Carolina Department of Environment, Health, and 
Natural Resources document lists Swan Creek, West Swan Creek, and East 
Swan Creek as streams in the Yadkin-Pee Dee River Basin.
    The DeLorme North Carolina Atlas and Gazetteer identifies the 
village as ``Swancreek,'' with East Swan Creek and West Swan Creek to 
its northwest. The petitioner explains that both names, ``Swan Creek'' 
and ``Swancreek,'' reference the proposed viticultural area region. 
However, the two-word spelling is the more common usage for businesses, 
roads, creeks, and historical documents, which led the petitioner to 
identify the proposed viticultural area as ``Swan Creek.''
    As further evidence of the significance of the ``Swan Creek'' name 
within the proposed area, the local Wilkes Telephone Membership Corp. 
telephone book, which covers the region that includes the proposed 
viticultural area, lists an airport, a church, and three

[[Page 22274]]

businesses using ``Swan Creek'' in their names. Also, the September 7, 
2004, minutes of a Yadkin County Commission meeting includes a 
reference to the Swan Creek area and improvements to Swan Creek Road. 
Additionally, a National Weather Service bulletin from January 13, 
2005, warns of the possibility of a tornado in the Swan Creek area. The 
name is also repeatedly used in the ``Vineyards of Swan Creek Wine 
Trail'' Web site (http://www.swancreekvineyards.com).
    The petitioner relies on geographical and man-made elements 
identifiable on the supplied USGS maps to define and draw the boundary 
for the proposed viticultural area. Climate data and historic evidence 
that documents the breadth of the ``Swan Creek'' name also legitimize 
the proposed boundary line, according to the petitioner.
    From the regional history of the Yadkin Valley, the petitioner 
connects the ``Swan Creek'' name to stories of Revolutionary War 
soldiers traveling along the Yadkin River, the proposed Swan Creek 
viticultural area's northern boundary line, while en route to the 
pivotal battle at King's Mountain in South Carolina. Also, during the 
Civil War, Union Major General George Stoneman led troops through the 
Swan Creek region to Virginia. Historic manuscripts maintain that 
frontiersman Daniel Boone homesteaded in the Swan Creek region in the 
1750s.
    According to the petition, farming become more prominent in the 
Swan Creek area after the Civil War, the Swan Creek area, and 
agriculture continues to characterize this rural region. Today, 
agriculture in the Swan Creek region includes viticulture, with 75 
acres within the proposed Swan Creek viticultural area currently 
dedicated to grape growing.
    The geology of the Swan Creek region, along with its minor climatic 
variation, also creates distinguishing viticultural features upon which 
to base the proposed Swan Creek viticultural area's boundary. The 
entire proposed viticultural area lies within the Yadkin River Basin. 
The general uniformity in the Swan Creek region's soils is attributable 
to the natural weathering process of the Brushy Mountains and the 
Brevard Shear Zone, a major fault system that also defines the Blue 
Ridge Escarpment in the area. The homogeneous soil within the proposed 
viticultural area is unlike the varied soils and rock types found in 
other parts of the Yadkin Valley viticultural area.
    The proposed Swan Creek viticultural area boundary overlaps the 
established Yadkin Valley viticultural area as shown in the table 
below.

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                                                                                 Overlapping         Percent
                    Viticultural areas                         Total acres          acres          overlapping
----------------------------------------------------------------------------------------------------------------
Yadkin Valley.............................................         1,416,000            57,600                 4
Swan Creek (Proposed).....................................            96,000            57,600                60
----------------------------------------------------------------------------------------------------------------

    The northern 60 percent of the proposed Swan Creek viticultural 
area sits within the Yadkin Valley viticultural area, with the 
remaining 40 percent south of the Yadkin Valley viticultural area 
boundary line, according to the petition maps. The discussion below 
includes evidence regarding the differences between the established 
Yadkin Valley viticultural area and the proposed Swan Creek 
viticultural area, which, according to the petitioner, justifies the 
proposed boundary line.

Distinguishing Features

    Situated in the moderate elevations of the Brushy Mountains, and 
bordering the Yadkin River on the north, the proposed Swan Creek 
viticultural area's geographical location is responsible for the area's 
temperate climate and homogenous soil as compared to surrounding areas, 
according to the petitioner.
Topography
    The Brushy Mountains run through the center of the Swan Creek 
region, with elevations in the proposed Swan Creek viticultural area 
varying between 1,000 feet and 2,000 feet, according to the USGS maps 
submitted with the petition. Within the proposed viticultural area the 
Brushy Mountains have elevations lower than the Blue Ridge Mountains to 
the west but higher than the other surrounding areas. The Blue Ridge 
Mountain region to the immediate west of the proposed boundary line 
rises to elevations of 3,000 to 5,000 feet. To the east and south of 
the proposed viticultural area, the elevation drops to between 500 and 
1,000 feet.
Climate
    Both the Yadkin River, which serves as the proposed Swan Creek 
viticultural area's northern boundary line, and that portion of the 
Brushy Mountains located within the proposed viticultural area serve as 
climatically moderating influences.
    The Swan Creek region has an average annual high temperature of 
68.9 [deg]F and an average annual low temperature of 42.8 [deg]F. The 
table below shows the contrasting temperatures in the regions beyond 
the proposed viticultural area's boundary line, as collected by the 
Southeast Regional Climate Center (SERCC) of the National Climatic Data 
Center.

------------------------------------------------------------------------
                                      Average annual     Average annual
                                         maximum            minimum
              Region                  temperature in     temperature in
                                         degrees            degrees
                                        Fahrenheit         Fahrenheit
------------------------------------------------------------------------
Swan Creek........................               68.9               42.8
West and northwest................               59.8               40.4
South and east....................               70.6               46.6
Yadkin Valley.....................               69.5               44.8
------------------------------------------------------------------------

    The SERCC data shows that the Swan Creek area is generally warmer 
than the regions to the west and northwest, cooler than the regions to 
the south and east, and slightly cooler than the Yadkin Valley as a 
whole. Also, average January temperatures of 20[deg] F to 25[deg] F 
make the Swan Creek region less prone to Pierce's Disease, which 
adversely affects vineyards, than the majority of the Yadkin Valley 
viticultural area.

[[Page 22275]]

    The proposed Swan Creek viticultural area averages 3,576 degree 
days of heat accumulation annually, which puts it in climatic region 
IV, according to temperature data collected by the SERCC. (As a 
measurement of heat accumulation during the growing season, one degree 
day accumulates for each degree Fahrenheit that a day's mean 
temperature is above 50 degrees, which is the minimum temperature 
required for grapevine growth. (See ``General Viticulture,'' by Albert 
J. Winkler, University of California Press, 1974.)
    The surrounding areas, based on Amerine and Winkler heat summation 
definitions, include climatic regions IV and V to the east, region V to 
the south, and region I to the west-northwest.
    The frost-free season of the proposed Swan Creek viticultural area 
extends on average from April 19 to October 17 annually, according to 
the ``Average Last Spring Frost Dates for Selected North Carolina 
Locations,'' horticulture information leaflets (published December 1996 
and revised December 1998), by Katharine Perry, North Carolina State 
University. According to the petition, this frost-free season is nearly 
identical to Surry County, which is part of the Yadkin Valley 
viticultural area located immediately northeast of the proposed Swan 
Creek viticultural area. However, southeast of the proposed 
viticultural area, but also within the Yadkin Valley viticultural area, 
the Davidson County frost-free season runs on average from March 31 to 
October 31, resulting in a month less frost than in the proposed Swan 
Creek viticultural area. The frost-free season varies in counties 
outside the Yadkin Valley viticultural area and the proposed Swan Creek 
viticultural area, extending three weeks longer to the east and lasting 
four to six weeks less in regions to the west and northwest.
    The growing season of the proposed Swan Creek viticultural area 
averages 170 to 190 days annually, according to Perry's ``Average 
Growing Seasons for Selected North Carolina Locations,'' horticulture 
information leaflets (published December 1996 and revised December 
1998). Again, this growing season is almost identical to Surry County, 
located immediately northeast within the Yadkin Valley viticultural 
area. However, according to Perry's data, Davidson County averages a 
214-day growing season annually, or between 24 and 44 more growing days 
than the proposed Swan Creek viticultural area. Similarly, the petition 
shows that Guilford County to the east has an annual growing season of 
between 199 and 210 days. Counties to the west and northwest of the 
Swan Creek region have a significantly shorter growing season, lasting 
an average of 139 to 162 days.
Precipitation
    The petitioner attributes the moderate rainfall within the proposed 
viticultural area to the protective influence of the Brushy Mountains. 
Rainfall within the proposed Swan Creek viticultural area averages 48.6 
inches annually, based on SERCC data, with the local grape growers 
surveyed by the petitioner recording less rainfall at their own weather 
stations. The areas to the west and northwest of the proposed 
viticultural area average 57 inches each year, while regions to the 
south and east average 44.4 inches of rain annually.
    Furthermore, snowfall within the proposed Swan Creek viticultural 
area averages 6.3 inches annually, based on SERCC records, which is far 
less than the data recorded at weather stations in surrounding areas.
Geology
    The documentation and evidence provided for the petition by Matthew 
Mayberry of the Mayberry Land Company, Elkin, North Carolina, indicate 
that the geology of the proposed Swan Creek viticultural area is shaped 
by plate tectonics and a spectrum of uplift and erosion for the entire 
Appalachian Mountains building cycle. The Swan Creek region is part of 
the larger Appalachian Mountain Range area that has gone through at 
least three cycles of uplift and erosion, with each cycle lasting 
around 300 million years. Also, the weathering and erosion cycles 
created the resulting Piedmont and Blue Ridge surfaces found in the 
proposed viticultural area today.
    Mr. Mayberry explains that the four predominant rock types in the 
proposed viticultural area are Henderson Gneiss, Granite, Biotite 
Gneiss and Biotite Amphibolite Gneiss, and Sillimanite Mica Schist. 
These types underlay more than 90 percent of the Swan Creek area, with 
the latter three predominant in the southern half of the area. Along 
the proposed north boundary line at the Yadkin River the predominant 
rock types include Ashe Formation, Utramafics, and Granitic Rocks of 
the Crossnore Group.
Soil
    The soil information in the Swan Creek viticultural area petition 
is compiled from the published soil surveys of Wilkes, Yadkin, and 
Iredell Counties in North Carolina. Roy Mathis, Soil Specialist for 
Correlations, Natural Resources Conservation Service, United States 
Department of Agriculture, provided the soil information included in 
the petition.
    The areas surrounding the proposed Swan Creek viticultural area 
have soils with differing characteristics, Mr. Mathis explains. The 
areas to the south and east have high shrink-swell clayey soils, which 
are less desirable for agriculture. To the west and north are the 
mountainous rocks and soils of the encroaching Blue Ridge Mountains. 
Also, the Yadkin Valley viticultural area, which surrounds the proposed 
Swan Creek viticultural area to the west, north, and east, has a 
greater variety of soil types and temperature regimes.
    The proposed Swan Creek viticultural area mesic temperature regime 
has soil temperatures of 47 [deg]F to 59 [deg]F at the depth of 20 
inches, according to Mr. Mathis. In comparison, the Yadkin Valley 
viticultural area is in both the mesic and thermic temperature regimes, 
with much warmer soil temperatures at the same depth that range from 59 
[deg]F to 72 [deg]F at the same soil depth.
    Mr. Mathis explains that the soils in the proposed Swan Creek 
viticultural area are primarily saprolite, a soft, clay-rich soil 
derived from weathered felsic (acidic) metamorphic rocks of the Inner 
Piedmont Belt such as granites, schists, and gneisses. The region 
includes a small area of Sauratown Belt with the rocks being primarily 
metagraywacke. In contrast, the surrounding west and north areas 
include residuum (saprolite) weathered from felsic metamorphic rocks 
such as gneisses, schists, and phyllites of the Blue Ridge Geologic 
Belt and Smith River Allochothon. The saprolite in the surrounding area 
to the east is composed of weathered igneous intrusive rocks like 
granites, gabbros, and diorites, as well as some gneisses and schists 
of the Charlotte Belt.
    Evard and Cowee soils, which have moderate permeability and are 
well-drained with a loamy surface and sub-soil layer, predominate in 
the Brushy Mountains. The dominant ridge top soils of the proposed Swan 
Creek viticultural area also include the Fairview and Clifford series. 
These soils have sandy clay loam or clay loam surface layers with red 
clayey sub-soils, and are well-drained with moderate permeability.
    Rhodhiss series is the dominant soil on the steep side slopes 
within the proposed viticultural area boundary. This well-drained soil 
has a loamy surface and moderate permeability at the sub-soil level. 
Mr. Mathis notes that Fairview, Clifford, and Rhodhiss soils all have 
bedrock deeper than 60 inches.
    The Yadkin River, at the northern boundary of the proposed Swan 
Creek

[[Page 22276]]

viticultural area, has alluvial soil diversity with textures and 
drainage. In general, most of the proposed Swan Creek viticultural area 
soils are acidic and low in natural fertility.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 63 regarding the proposed Swan Creek 
viticultural area in the Federal Register on September 12, 2006 (71 FR 
53612). In response to that notice, we received one comment supporting 
establishment of the proposed Swan Creek viticultural area from U.S. 
Representative Virginia Foxx of North Carolina.

TTB Finding

    After careful review of the petition, TTB finds that the evidence 
submitted supports the establishment of the proposed viticultural area. 
Although a portion of the proposed viticultural area falls within the 
boundary of the existing Yadkin Valley viticultural area, and 
notwithstanding the fact that the two areas share some common features, 
we believe that the submitted evidence regarding climate and soil type 
and temperature supports the conclusion that the proposed new 
viticultural area is sufficiently different from the rest of the Yadkin 
Valley viticultural area. We also believe that establishment of the new 
viticultural area without changing the boundary of the existing 
viticultural area to exclude the overlap area would best protect labels 
and other commercial interests of existing viticultural entities within 
the overlap area. Accordingly, under the authority of the Federal 
Alcohol Administration Act and part 4 of our regulations, we establish 
the ``Swan Creek'' American viticultural area in Wilkes, Yadkin, and 
Iredell Counties, North Carolina, effective 30 days from the 
publication date of this document.

Boundary Description

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

Maps

    The maps for determining the boundary of the viticultural area are 
listed below in the regulatory text.

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. With the establishment of this viticultural area and 
its inclusion in part 9 of the TTB regulations, its name, ``Swan 
Creek,'' is recognized under 27 CFR 4.39(i)(3) as a name of 
viticultural significance. The text of the new regulation clarifies 
this point. Consequently, wine bottlers using ``Swan Creek'' in a brand 
name, including a trademark, or in another label reference as to the 
origin of the wine, must ensure that the product is eligible to use the 
viticultural area's name as an appellation of origin.
    For a wine to be labeled with a viticultural area name or with a 
brand name that includes a viticultural area name or other term 
specified as having viticultural significance in part 9 of the TTB 
regulations, at least 85 percent of the wine must be derived from 
grapes grown within the area represented by that name or other term, 
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 or other term of viticultural significance as an appellation of 
origin and that name or other term 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 or other term of viticultural significance appears in another 
reference on the label in a misleading manner, the bottler would have 
to obtain approval of a new label.
    Different rules apply if a wine has a brand name containing a 
viticultural area name or other term of viticultural significance that 
was used as a brand name on a label approved before July 7, 1986. See 
27 CFR 4.39(i)(2) for details.

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. Therefore, it requires no regulatory assessment.

Drafting Information

    N. A. Sutton of the Regulations and Rulings Division drafted this 
notice.

List of Subjects in 27 CFR Part 9

    Wine.

The Regulatory Amendment

0
For the reasons discussed in the preamble, we amend title 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. Amend subpart C by adding Sec.  9.211 to read as follows:


Sec.  9.211  Swan Creek.

    (a) Name. The name of the viticultural area described in this 
section is ``Swan Creek''. For purposes of part 4 of this chapter, 
``Swan Creek'' is a term of viticultural significance.
    (b) Approved Maps. The appropriate maps for determining the 
boundaries of the Swan Creek viticultural area are three United States 
Geological Survey (USGS) 1:100,000 scale topographic maps. They are 
titled:
    (1) Winston-Salem, North Carolina, 1984, photoinspected 1982;
    (2) Boone, North Carolina-Tennessee, 1985; and
    (3) Salisbury, North Carolina, 1985, photoinspected 1983.
    (c) Boundary. The Swan Creek viticultural area is located in 
Wilkes, Yadkin, and Iredell Counties, North Carolina. The boundary of 
the Swan Creek viticultural area is as described below:
    (1) The beginning point is on the Winston-Salem, North Carolina map 
at the intersection of the Yadkin River and U.S. Highway 21, along the 
Surry-Yadkin county line, between Elkin and Jonesville;
    (2) From the beginning point, proceed 24.6 miles generally south on 
U.S. Highway 21, crossing onto the Salisbury, North Carolina map, to 
the intersection of U.S. Highway 21 with Rocky Creek at Turnersburg; 
then
    (3) Proceed 12.3 miles generally north and west along Rocky Creek, 
returning to the Winston-Salem map, to the intersection of Rocky Creek 
with State Highway 115 at New Hope in the southwest corner of the map; 
then
    (4) Proceed 15.5 miles generally northwest along State Highway 115, 
crossing onto the Boone, North Carolina-Tennessee map, to the 
intersection of State Highway 115 and the Yadkin River, at North 
Wilkesboro; and
    (5) Proceed 16.7 miles generally east-northeast along the Yadkin 
River,

[[Page 22277]]

crossing onto the Winston-Salem map, and return to the beginning point.

    Signed: January 18, 2008.
John J. Manfreda,
Administrator.
    Approved: March 13, 2008.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. E8-9106 Filed 4-24-08; 8:45 am]
BILLING CODE 4810-31-P