[Federal Register Volume 78, Number 24 (Tuesday, February 5, 2013)]
[Rules and Regulations]
[Pages 8018-8022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02454]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2012-0004; T.D. TTB-110; Re: Notice No. 129]
RIN 1513-AB46


Establishment of the Indiana Uplands Viticultural Area and 
Modification of the Ohio River Valley Viticultural Area

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

ACTION: Final Rule; Treasury Decision.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) establishes 
the approximately 4,800-square mile ``Indiana Uplands'' viticultural 
area in south-central Indiana. TTB also modifies the boundary of the 
established 26,000-square mile Ohio River Valley viticultural area to 
eliminate a potential overlap with the Indiana Uplands viticultural 
area. The modification decreases the size of the Ohio River Valley 
viticultural area by approximately 1,530 square miles. TTB designates 
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 March 7, 2013.

FOR FURTHER INFORMATION CONTACT: Karen A. Thornton, Regulations and 
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW., Box 12, Washington, DC 20005; phone 202-453-1039, ext. 175.

SUPPLEMENTARY INFORMATION: 

[[Page 8019]]

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 FAA Act 
pursuant to section 1111(d) of the Homeland Security Act of 2002, 
codified at 6 U.S.C. 531(d). The Secretary has delegated various 
authorities through Treasury Department Order 120-01 (Revised), dated 
January 21, 2003, to the TTB Administrator to perform the functions and 
duties in the administration and enforcement of this law.
    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) sets 
forth standards for the preparation and submission of petitions for the 
establishment or modification of American viticultural areas and lists 
the approved American 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 having distinguishing features as described in part 9 of 
the regulations and a name and a delineated boundary as established 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 9.12 of the TTB regulations (27 CFR 
9.12) prescribes standards for petitions for the establishment or 
modification of American viticultural areas. Such petitions must 
include the following:
     Evidence that the area within the proposed viticultural 
area boundary is nationally or locally known by the viticultural area 
name specified in the petition;
     An explanation of the basis for defining the boundary of 
the proposed viticultural area;
     A narrative description of the features of the proposed 
viticultural area that affect viticulture, such as climate, geology, 
soils, physical features, and elevation, that make it distinctive and 
distinguish it from adjacent areas outside the proposed viticultural 
area boundary;
     A copy of the appropriate United States Geological Survey 
(USGS) map(s) showing the location of the proposed viticultural area, 
with the boundary of the proposed viticultural area clearly drawn 
thereon; and
     A detailed narrative description of the proposed 
viticultural area boundary based on USGS map markings.

Indiana Uplands Petition

    Jim Butler of Butler Winery in Bloomington, Indiana submitted a 
petition to establish the approximately 4,800-square mile Indiana 
Uplands viticultural area in south-central Indiana. The proposed 
Indiana Uplands viticultural area contains 19 vineyards with 
approximately 200 acres under cultivation, 2 planned vineyards of 15 to 
20 acres each, and 17 wineries; the existing and planned vineyards are 
geographically distributed throughout the proposed viticultural area, 
according to a map submitted with the petition.
    Spanning 110 miles north to south beginning at the line that 
separates Morgan and Monroe Counties, the proposed Indiana Uplands 
viticultural area extends south to the Ohio River at the Kentucky 
border. The proposed viticultural area extends approximately 63 miles 
east to west at its widest point, from Clark County to Martin County. 
Nineteen Indiana counties are located partially or totally within the 
proposed viticultural area: Monroe, Brown, Morgan, Owens, Greene, 
Lawrence, Bartholomew, Orange, Washington, Floyd, Harrison, Perry, 
Crawford, Jackson, Martin, Daviess, Dubois, Scott, and Spencer.

Proposed Modification of the Ohio River Valley Viticultural Area 
Boundary

    TTB notes that approximately 1,530 square miles in the southern 
portion of the Indiana Uplands viticultural area as originally proposed 
in the petition overlapped the approximately 26,000-square mile Ohio 
River Valley viticultural area (27 CFR 9.78). The Ohio River Valley 
viticultural area encompasses the broad valley surrounding the Ohio 
River in Indiana, Kentucky, Ohio, and part of West Virginia; see T.D. 
ATF-144, published in the Federal Register (48 FR 40377) on September 
7, 1983. Seven Indiana counties are partially or totally within the 
area overlapping the Ohio River Valley viticultural area: Washington, 
Clark, Floyd, Harrison, Perry, Crawford, Scott, and Spencer Counties.
    The Indiana Uplands petition presents evidence that the geology, 
soils, topography, and climate of the overlapping portion of the 
proposed viticultural area are largely consistent with the rest of the 
proposed viticultural area and are distinctive when compared to the 
larger Ohio River Valley viticultural area. TTB concluded that the 
features of the portion of the proposed Indiana Uplands viticultural 
area that overlaps the Ohio River Valley viticultural area are 
sufficiently distinct from those within the Ohio River Valley 
viticultural area as to warrant proposing a boundary adjustment to 
eliminate the two areas' potential overlap.
    In communications with TTB, the Indiana Uplands petitioner agreed 
that the distinguishing features of the larger Ohio River Valley 
viticultural area and the overlapping portion of the proposed Indiana 
Uplands viticultural area differ significantly, and he concluded that 
modifying the boundary of the Ohio River Valley viticultural area to 
exclude the overlapping region would be warranted if the proposed 
Indiana Uplands viticultural area were to be established. At TTB's 
request, the petitioner obtained letters from the owners of the 11 
wineries and vineyards that would be affected by the proposed 
modification of the Ohio River Valley viticultural area, all of which 
indicate agreement by the owners with the proposed modification. In the 
letters, the vineyard owners also indicate their willingness to no 
longer to use ``Ohio River Valley'' as an appellation of origin for 
wine produced from their grapes if the boundary is modified.

[[Page 8020]]

Notice of Proposed Rulemaking and Comments Received

    On June 8, 2012, TTB published Notice No. 129 in the Federal 
Register (77 FR 33985) proposing to establish the Indiana Uplands 
viticultural area and to modify the boundary of the existing Ohio River 
Valley viticultural area to eliminate any potential overlap of the two 
areas, as discussed above. In the notice, TTB summarized the evidence 
from the petition regarding the name, boundary, and distinguishing 
features for the proposed Indiana Uplands viticultural area. The 
distinguishing features of the proposed viticultural area include 
geology, topography, climate, and soil. The notice included a 
comparison of the distinguishing features within the proposed 
viticultural area to the immediately surrounding areas. Notice No. 129 
also included an overview of the Ohio River Valley viticultural area 
and a detailed discussion of the differences between the distinguishing 
features within the existing Ohio River Valley viticultural area and 
those of the proposed Indiana Uplands viticultural area. For a 
description of the evidence relating to the name, boundary, and 
distinguishing features of the proposed viticultural area, as well as 
overview of the Ohio River Valley viticultural area and the comparison 
of the distinguishing features of the two areas, see Notice No. 129.
    In Notice No. 129, TTB solicited comments on the accuracy of the 
name, boundary, climatic, and other required information submitted in 
support of the establishment of the Indiana Uplands viticultural area. 
TTB also asked for comments on whether the geographical features of the 
proposed Indiana Uplands viticultural area are so distinguishable from 
the existing Ohio River Valley viticultural area that the boundary of 
the Ohio River Valley viticultural area should be modified to exclude 
the overlapping portion of the proposed viticultural area. In addition, 
TTB specifically asked for comments from industry members whose wine 
labels would potentially be affected by the proposed Ohio River Valley 
viticultural area boundary modification. The comment period closed on 
August 7, 2012.
    During the comment period, TTB received 5 comments in response to 
Notice No. 129. All 5 comments are from growers and winery owners 
within the proposed viticultural area who support the proposed Indiana 
Uplands viticultural area and the proposed modification of the Ohio 
River Valley viticultural area boundary. TTB received no comments 
opposing either the establishment of the Indiana Uplands viticultural 
area as proposed or the proposed modification of the Ohio River Valley 
viticultural area boundary.

TTB Determination Regarding the Proposed Indiana Uplands Viticultural 
Area and Proposed Modification of the Ohio River Valley Viticultural 
Area

    After careful review of the petition and the comments received in 
response to Notice No. 129, TTB finds that the evidence provided by the 
petitioner supports the establishment of the approximately 4,800-square 
mile Indiana Uplands viticultural area. TTB also finds that the 
evidence submitted supports the modification of the boundary of the 
established Ohio River viticultural area so that the Ohio River Valley 
viticultural area and the new established Indiana Uplands viticultural 
area will not overlap. Accordingly, under the authority of the FAA Act, 
section 1111(d) of the Homeland Security Act of 2002, and part 4 of the 
TTB regulations, TTB establishes the ``Indiana Uplands'' viticultural 
area in Monroe, Brown, Morgan, Owens, Greene, Lawrence, Bartholomew, 
Orange, Washington, Floyd, Harrison, Perry, Crawford, Jackson, Martin, 
Daviess, Dubois, Scott, and Spencer Counties, Indiana. TTB also 
modifies the Ohio River Valley boundary as described in Notice No. 129. 
These changes are effective 30 days from the publication date of this 
document.

Boundary Description

    In this final rule, TTB made minor editorial changes to clarify 
some of the language in the written boundary description for the 
Indiana Uplands viticultural area, but the boundary's location is not 
changed from that proposed in Notice No. 121. See the narrative 
boundary description of the Indiana Uplands viticultural area and the 
modification of the Ohio River Valley viticultural area boundary in the 
regulatory texts published at the end of this final rule.

Maps

    The Indiana Uplands petitioner provided the required maps, and TTB 
lists them below in the regulatory text.

Impact on Current Wine Labels

General

    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, its 
name, ``Indiana Uplands,'' is recognized as a name of viticultural 
significance under 27 CFR 4.39(i)(3). The text of the final regulation 
clarifies this point. Once this final rule becomes effective, wine 
bottlers using ``Indiana Uplands'' in a brand name, including a 
trademark, or in another label reference as to the origin of the wine, 
will have to ensure that the product is eligible to use ``Indiana 
Uplands'' 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 
identified as being viticulturally significant 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 for labeling with the 
viticultural area name or other viticulturally significant term and 
that name or 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 viticulturally significant term 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.

Transition Period

    Once this final rule to establish the Indiana Uplands viticultural 
area and to modify the boundary of the Ohio River Valley viticultural 
area becomes effective, a transition rule will apply to labels for 
wines produced from grapes grown in the approximately 1,530 square mile 
area that was formerly within the Ohio River Valley viticultural area. 
A label containing the words ``Ohio River Valley'' in the brand name or 
as an appellation of origin may be used on wine bottled within two 
years from the effective date of this final rule, provided that such 
label was approved prior to the effective date of this final rule and 
that the wine conforms to the standards for use of the label set forth 
in 27 CFR 4.25 or 4.39(i) in effect prior to the final rule. At the end 
of this two-year transition period, if a wine is no longer eligible for 
labeling with the Ohio River Valley viticultural area name (e.g., less 
than 85 percent of the wine is derived from grapes grown in the Ohio 
River Valley viticultural area, as modified in this final rule), then

[[Page 8021]]

a label containing the words ``Ohio River Valley'' in the brand name or 
as an appellation of origin would not be permitted on the bottle. TTB 
believes that the two-year period should provide affected label holders 
with adequate time to use up any existing labels. This transition 
period is described in the regulatory text for the Ohio River Valley 
viticultural area published at the end of this final rule. TTB notes 
that wine eligible for labeling with the Ohio River Valley viticultural 
area name under the new boundary of the Ohio River Valley viticultural 
area will not be affected by this two-year transition period.

Regulatory Flexibility Act

    TTB certifies that this final regulation will not have a 
significant economic impact on a substantial number of small entities. 
The final 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 final rule is not a significant regulatory action as defined 
by Executive Order 12866. Therefore, it requires no regulatory 
assessment.

Drafting Information

    Karen A. Thornton of the Regulations and Rulings Division drafted 
this final rule.

List of Subjects in 27 CFR Part 9

    Wine.

Regulatory Amendment

    For the reasons discussed in the preamble, TTB amends title 27, 
chapter I, part 9, Code of Federal Regulations, 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 section 9.78 by:
0
a. Revising paragraph (c) introductory text and paragraphs (c)(5) and 
(6);
0
b. Redesignating paragraphs (c)(7) through (21) as paragraphs (c)(11) 
through (25); and
0
c. Adding new paragraphs (c)(7) through (10) and (d).
    The revisions and additions read as follows:


Sec.  9.78  Ohio River Valley.

* * * * *
    (c) Boundary. The Ohio River Valley viticultural area is located in 
portions of Indiana, Ohio, West Virginia, and Kentucky. The boundary 
description in paragraphs (c)(1) through (24) of this section includes 
for each point, in parentheses, the name of the map sheet(s) on which 
the point can be found.
* * * * *
    (5) The boundary proceeds in a straight line southeasterly to the 
confluence of the Anderson River and the Ohio River at Troy, Indiana 
(Evansville map).
    (6) The boundary proceeds along the Indiana shoreline of the Ohio 
River (Evansville and Vincennes maps) generally easterly to the mouth 
of French Creek in Franklin Township, Floyd County, Indiana (Louisville 
map).
    (7) The boundary proceeds in a straight line northerly to the peak 
of Lost Knob, then continues in a straight line north-northeasterly 
through the peak of Bald Knob to the junction of State Route 111 and a 
road locally known as W. St. Joe Road at St. Joseph in New Albany 
Township, Floyd County, Indiana (Louisville map).
    (8) The boundary then proceeds on State Route 111 northerly to 
State Route 60 at Bennettsville in Clark County, Indiana, then on State 
Route 60 westerly to Carwood, and then in a straight line northerly to 
the point where the Clark-Scott county line crosses Interstate 65 at 
Underwood, Indiana (Louisville map).
    (9) The boundary proceeds in a straight line northwesterly to Leota 
in Scott County, Indiana (Louisville map).
    (10) The boundary proceeds in a straight line northeasterly to the 
town of New Marion in Ripley County, Indiana (Cincinnati map).
* * * * *
    (d) Transition period. A label containing the words ``Ohio River 
Valley'' in the brand name or as an appellation of origin approved 
prior to March 7, 2013 may be used on wine bottled before March 9, 
2015, if the wine conforms to the standards for use of the label set 
forth in Sec.  4.25 or Sec.  4.39(i) of this chapter in effect prior to 
March 7, 2013.

0
3. Subpart C is amended by adding Sec.  9.228 to read as follows:


Sec.  9.228  Indiana Uplands.

    (a) Name. The name of the viticultural area described in this 
section is ``Indiana Uplands''. For purposes of part 4 of this chapter, 
``Indiana Uplands'' is a term of viticultural significance.
    (b) Approved maps. The six United States Geological Survey 
1:100,000-scale metric topographic maps used to determine the boundary 
of the Indiana Uplands viticultural area are titled:
    (1) Tell City, Indiana--Kentucky, 1991;
    (2) Jasper, Indiana--Kentucky, 1994;
    (3) Bedford, Indiana, 1990;
    (4) Bloomington, Indiana, 1986; Photoinspected 1988;
    (5) Madison, Indiana--Kentucky, 1990; and
    (6) Louisville, Kentucky--Indiana, 1986.
    (c) Boundary. The Indiana Uplands viticultural area is located in 
south-central Indiana. The boundary of the Indiana Uplands viticultural 
area is described as follows:
    (1) The beginning point is on the Tell City map at the confluence 
of the Anderson River and the Ohio River near Troy in Perry County. 
From the beginning point, proceed north-northwesterly in a straight 
line, crossing to the Jasper map, to the intersection of State Roads 62 
and 162, approximately 3.5 miles north of Santa Claus; then
    (2) Proceed north on State Road 162 to its intersection with U.S. 
Route 231 in Jasper; then
    (3) Proceed north on U.S. Route 231, crossing to the Bedford map 
and the Bloomington map, to the intersection of U.S. Route 231 with the 
180-meter contour line in Bloomfield, approximately 0.3 mile south of 
State Road 54; then
    (4) From the west side of U.S. Route 231, proceed northerly along 
the meandering 180-meter contour line, and, after crossing the Owen-
Greene county boundary line, continue northeasterly along the contour 
line to its intersection with the Monroe-Owen county boundary line 
approximately 1 mile south of the confluence of Big Creek and the White 
River; then
    (5) Proceed north, then northeasterly, and then south along the 
Monroe-Owen county boundary line to its intersection with the 200-meter 
contour line, approximately 0.3 mile south of the White River; then
    (6) Proceed easterly along the meandering 200-meter contour line to 
its intersection with State Road 135, south of Morgantown and 
approximately 0.8 mile north of the Morgan-Brown county boundary line; 
then
    (7) Proceed south on State Road 135 to the Morgan-Brown county 
boundary line; then
    (8) Proceed east along the Brown-Morgan country boundary line and 
then

[[Page 8022]]

Brown-Johnson county boundary line to its intersection with the Brown-
Bartholomew county boundary line; then
    (9) Proceed south-southeasterly in a straight line to the 
intersection of State Road 46 and a road locally known as N. County 
Club Road, approximately 1 mile north of Harrison Lake in western 
Bartholomew County; then
    (10) Proceed south-southwesterly in a straight line to the 
intersection of State Road 58 and the Bartholomew-Jackson county 
boundary line; then
    (11) Proceed east along the Bartholomew-Jackson county boundary 
line for approximately 0.4 mile to the county boundary line's first 
intersection with the meandering 200-meter contour line after crossing 
Buck Creek in northwestern Jackson County; then
    (12) Proceed easterly then southwesterly along the meandering 200-
meter contour line, crossing to the Bedford map, to the intersection of 
the contour line with U.S. Route 50; then
    (13) Proceed east on U.S. Route 50 to its intersection with State 
Road 235; then
    (14) Proceed south on State Road 235 to its intersection with the 
railroad tracks in Medora; then
    (15) Proceed southwesterly along the railroad tracks to a point 
next to the intersection of two roads locally known as Sparksville Pike 
Road and Sparks Ferry Road (approximately 0.5 miles east Sparksville) 
and then proceed southeasterly less than 250 feet on Sparks Ferry Road 
to that road's bridge over the East Fork of the White River; then
    (16) Proceed easterly along the East Fork of the White River and 
then the Muscatatuck River to the State Road 135 bridge over the 
Muscatatuck River at Millport; then
    (17) Proceed easterly in a straight line to the confluence of the 
Cammie Thomas Ditch and the Muscatatuck River, located on the northern 
boundary of Washington County; then
    (18) Proceed southeasterly in a straight line, crossing to the 
Madison map, to the intersection of two roads locally known as E. Pull 
Tight Road and N. Pumpkin Center East Road at Pumpkin Center in Gibson 
Township, Washington County; then
    (19) Proceed due south in a straight line for approximately 4.5 
miles to the line's intersection with a road locally known as E. Old 
State Road 56; then
    (20) Proceed easterly and then northeasterly on E. Old State Road 
56 to its intersection with a road locally known in Scott County as S. 
Bloomington Trail, and then continue southeasterly on S. Bloomington 
Trail to its intersection with a road locally known as W. Leota Road at 
Leota; then
    (21) Proceed southeasterly in a straight line to the intersection 
of Interstate 65 and the Scott-Clark counties boundary line at 
Underwood; then
    (22) Proceed south-southwesterly in a straight line, crossing to 
the Louisville map, to the intersection of State Road 60 and a road 
locally known as Carwood Road at Carwood in Clark County; then
    (23) Proceed southeasterly on State Road 60 to its intersection 
with State Road 111 at Bennettsville; then
    (24) Proceed southerly on State Road 111 for approximately 1.8 
miles to its intersection with a road locally known as W. St. Joe Road 
at St. Joseph; then
    (25) Proceed south-southwesterly in a straight line to the 266-
meter elevation point on Bald Knob, then continue south-southwesterly 
in a straight line to the 276-meter elevation point on Lost Knob; then
    (26) Proceed southerly in a straight line to the confluence of 
French Creek and the Ohio River in eastern Franklin Township, Floyd 
County; then
    (27) Proceed (downstream) along the Indiana shoreline of the Ohio 
River, crossing back and forth between the Tell City and Jasper maps, 
returning to the beginning point.

    Signed: November 1, 2012.
John J. Manfreda,
Administrator.
    Approved: November 23, 2012.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2013-02454 Filed 2-4-13; 8:45 am]
BILLING CODE 4810-31-P