[Federal Register Volume 81, Number 13 (Thursday, January 21, 2016)]
[Rules and Regulations]
[Pages 3327-3329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01155]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2015-0004; T.D. TTB-132; Ref: Notice No. 148]
RIN 1513-AC11


Establishment of the Los Olivos District 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 22,820-acre ``Los Olivos District'' viticultural area 
in Santa Barbara County, California. The viticultural area is located 
within the Santa Ynez Valley viticultural area and the larger, 
multicounty Central Coast viticultural area. 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: This final rule is effective February 22, 2016.

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:

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, dated December 
10, 2013 (superseding Treasury Department Order 120-01, dated January 
24, 2003), to the TTB Administrator to perform the functions and duties 
in the administration and enforcement of these provisions.
    Part 4 of the TTB regulations (27 CFR part 4) authorizes TTB to 
establish definitive viticultural areas and regulate 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 (AVAs) and 
lists the approved AVAs.

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 the 
wine's geographic origin. The establishment of AVAs allows vintners to 
describe more accurately the origin of their wines to consumers and 
helps consumers to identify wines they may purchase. Establishment of 
an AVA 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 (27 CFR 4.25(e)(2)) 
outlines the procedure for proposing an AVA and provides that any 
interested party may petition TTB to establish a grape-growing region 
as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes 
standards for petitions for the establishment or modification of AVAs. 
Petitions to establish an AVA must include the following:
     Evidence that the area within the proposed AVA boundary is 
nationally or locally known by the AVA name specified in the petition;
     An explanation of the basis for defining the boundary of 
the proposed AVA;
     A narrative description of the features of the proposed 
AVA affecting viticulture, such as climate, geology, soils, physical 
features, and elevation, that make the proposed AVA distinctive and 
distinguish it from adjacent areas outside the proposed AVA boundary;
     The appropriate United States Geological Survey (USGS) 
map(s) showing the location of the proposed AVA, with the boundary of 
the proposed AVA clearly drawn thereon; and
     A detailed narrative description of the proposed AVA 
boundary based on USGS map markings.

Los Olivos District Petition

    TTB received a petition from C. Frederic Brander, owner and 
winemaker of the Brander Vineyard, proposing the establishment of the 
``Los Olivos District'' AVA in Santa Barbara County, California. There 
are 12 bonded wineries and approximately 47 commercially producing 
vineyards covering a total of 1,120 acres within the proposed AVA. The 
proposed Los Olivos District AVA shares its western boundary with the 
eastern boundary of the Ballard Canyon AVA (27 CFR 9.230) and its 
eastern boundary with the western boundary of the Happy Canyon of Santa 
Barbara AVA (27 CR 9.217), but it does not overlap either of these 
AVAs. It is located within the Santa Ynez Valley viticultural area and 
the larger, multicounty Central Coast viticultural area.
    According to the petition, the distinguishing features of the 
proposed Los Olivos District AVA include its topography, soils, and 
climate. The proposed AVA is located on a broad alluvial terrace plain 
of the Santa Ynez

[[Page 3328]]

River. The topography of the proposed AVA is relatively uniform, with 
nearly flat terrain that gently slopes southward toward the Santa Ynez 
River. The lack of steeply sloped hills reduces the risk of erosion and 
facilitates mechanical tiling and harvesting in the vineyards. 
Additionally, the open terrain allows vineyards throughout the proposed 
AVA to receive uniform amounts of sunlight, rainfall, and temperature-
moderating fog because there are no significant hills or mountains 
within the proposed AVA to block the rainfall and fog or to shade the 
vineyards. By contrast, the regions surrounding the proposed Los Olivos 
District all have higher elevations and steep, rugged terrain.
    Over 95 percent of the soils within the proposed Los Olivos 
District AVA are from the Positas-Ballard-Santa Ynez soil association 
and are derived from alluvium, including Orcutt sand and terrace 
deposits. The soils are moderately to well drained gravelly fine sandy 
loams and clay loams with low to moderate fertility. The soils within 
the proposed AVA drain quickly enough to reduce the risk of root 
disease but do not drain so excessively as to require frequent 
irrigation. Soil nutrient levels within the proposed AVA are adequate 
to produce healthy vines and fruit without promoting excessive growth. 
By contrast, the majority of soils in the surrounding regions are not 
from the Positas-Ballard-Santa Ynez soil association and are generally 
less fertile and drain faster.
    Within the Central Coast AVA, where the proposed Los Olivos 
District AVA is located, temperatures are affected by cooling marine 
fog. However, the proposed Los Olivos District AVA is located about 30 
miles inland from the Pacific Ocean, so much of the marine fog has 
diminished by the time it reaches the proposed AVA in the late 
afternoon. The thin fog within the proposed AVA allows the daytime 
temperatures to rise higher and the nighttime temperatures to drop 
lower than in the regions farther to the west, where heavy fog is 
present throughout the day. The region to the east receives even less 
fog than the proposed AVA, so daytime temperatures rise higher and 
nighttime temperatures drop lower. The warm daytime temperatures within 
the proposed AVA encourage fruit maturation and sugar production, and 
the cool nighttime temperatures minimize acid loss.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 148 in the Federal Register on March 3, 
2015 (80 FR 11355), proposing to establish the Los Olivos District AVA. 
In the document, TTB summarized the evidence from the petition 
regarding the name, boundary, and distinguishing features for the 
proposed AVA. The document also compared the distinguishing features of 
the proposed AVA to the surrounding areas. In Notice No. 148, TTB 
solicited comments on the accuracy of the name, boundary, and other 
required information submitted in support of the petition. In addition, 
TTB solicited comments on whether the geographic features of the 
proposed Los Olivos District are so distinguishable from the 
established Santa Ynez Valley AVA and the Central Coast AVA that the 
proposed AVA should not be part of either established AVA. The comment 
period closed on May 4, 2015.
    In response to Notice No. 148, TTB received 76 comments, all of 
which supported the establishment of the Los Olivos District AVA, with 
many citing to its distinct topography, climate, and soils. The 
comments did not raise any new issues concerning the proposed AVA. TTB 
received no comments opposing the establishment of the Los Olivos 
District AVA. TTB also did not receive any comments in response to its 
question of whether the proposed Los Olivos District AVA is so 
distinguishable from the established Santa Ynez Valley AVA or the 
established Central Coast AVA that the proposed AVA should not be part 
of either established AVA.

TTB Determination

    After careful review of the petition and the comment received in 
response to Notice No. 148, TTB finds that the evidence provided by the 
petitioner supports the establishment of the Los Olivos District AVA. 
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 ``Los Olivos District'' AVA in Santa Barbara County, 
California, effective 30 days from the publication date of this 
document.
    TTB has also determined that the Los Olivos District AVA will 
remain part of both the established Santa Ynez Valley AVA and the 
established Central Coast AVA. As discussed in Notice No. 148, the Los 
Olivos District AVA receives some of the marine breezes and fog that 
are the primary characteristics of both the Santa Ynez Valley AVA and 
the Central Coast AVA. However, due to its central location within the 
Santa Ynez Valley AVA, the Los Olivos District AVA receives less marine 
air and heavy fog than the western portion of the Santa Ynez Valley 
AVA, which is closer to the Pacific Ocean, and it receives more cooling 
breezes and fog than the eastern portion. The topography of the Los 
Olivos District AVA is also more uniform than that of the Santa Ynez 
Valley AVA, which has mountains and canyons as well as flatter terrain. 
Additionally, due to its smaller size, the Los Olivos District AVA is 
more uniform in its geographical and climatic characteristics than the 
much larger, multicounty Central Coast AVA.

Boundary Description

    See the narrative description of the boundary of the AVA in the 
regulatory text published at the end of this final rule.

Maps

    The petitioner provided the required maps, and they 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. For a wine to be labeled with an AVA name or with a 
brand name that includes an AVA name, at least 85 percent of the wine 
must be derived from grapes 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 for labeling with an AVA name 
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 AVA name 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 an AVA 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.
    With the establishment of this AVA, its name, ``Los Olivos 
District,'' is recognized as a name of viticultural significance under 
Sec.  4.39(i)(3) of the TTB regulations (27 CFR 4.39(i)(3)). The text 
of the regulation clarifies this point. Consequently, wine bottlers 
using the name ``Los Olivos District'' 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 the AVA name as 
an appellation of origin. In Notice No. 148, TTB proposed to recognize 
``Los Olivos,'' standing alone, as a term of viticultural significance. 
However TTB is not designating ``Los Olivos,''

[[Page 3329]]

standing alone, as a term of viticultural significance in this final 
rule. We make this change in light of new information concerning the 
current use of ``Los Olivos'' on wine labels.
    The approval of the Los Olivos District AVA does not affect any 
existing AVA, and this approval does not affect any bottlers using 
``Central Coast'' or ``Santa Ynez Valley'' as an appellation of origin 
or in a brand name for wines made from grapes grown within the Central 
Coast or Santa Ynez Valley AVAs. The establishment of the Los Olivos 
District AVA allows vintners to use ``Los Olivos District,'' ``Santa 
Ynez Valley,'' and ``Central Coast'' as appellations of origin for 
wines made from grapes grown within the Los Olivos District AVA, if the 
wines meet the eligibility requirements for the appellation.

Regulatory Flexibility Act

    TTB certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. The 
regulation imposes no new reporting, recordkeeping, or other 
administrative requirement. Any benefit derived from the use of an AVA 
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

    It has been determined that this final rule is not a significant 
regulatory action as defined by Executive Order 12866 of September 30, 
1993. Therefore, no regulatory assessment is required.

Drafting Information

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

List of Subjects in 27 CFR Part 9

    Wine.

The 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. Add Sec.  9.253 to subpart C to read as follows:


Sec.  9.253  Los Olivos District.

    (a) Name. The name of the viticultural area described in this 
section is ``Los Olivos District''. For purposes of part 4 of this 
chapter, ``Los Olivos District'' is a term of viticultural 
significance.
    (b) Approved maps. The four United States Geological Survey (USGS) 
1:24,000 scale topographic maps used to determine the boundary of the 
Los Olivos District viticultural area are titled:
    (1) Los Olivos, CA, 1995;
    (2) Zaca Creek, Calif., 1959;
    (3) Solvang, CA, 1995; and
    (4) Santa Ynez, CA, 1995.
    (c) Boundary. The Los Olivos District viticultural area is located 
in Santa Barbara County, California. The boundary of the Los Olivos 
District viticultural area is as described below:
    (1) The beginning point is on the Los Olivos map at the 
intersection of Foxen Canyon Road with California State Road 154 (known 
locally as San Marcos Pass Road/Chumash Highway), section 23, T7N/R31W.
    (2) From the beginning point, proceed southwesterly in a straight 
line approximately 0.3 mile, crossing onto the Zaca Creek map, to the 
intersection of Ballard Canyon Road and an unnamed, unimproved road 
known locally as Los Olivos Meadows Drive, T7N/R31W; then
    (3) Proceed south-southeasterly in a straight line approximately 1 
mile, crossing onto the Los Olivos map, to a marked, unnamed structure 
within a circular-shaped 920-foot contour line in the southwest corner 
of section 26, T7N/R31W; then
    (4) Proceed south-southwesterly in a straight line approximately 
1.25 miles, crossing onto the Zaca Creek map, to the point marked by 
the ``Ball'' 801-foot elevation control point, T6N/R31W; then
    (5) Proceed south-southwesterly in a straight line approximately 
1.45 miles, crossing onto the Solvang map, to a marked, unnamed 775-
foot peak, T6N/R31W; then
    (6) Proceed south-southwesterly in a straight line approximately 
0.55 mile to a marked communication tower located within the 760-foot 
contour line, T6N/R31W; then
    (7) Proceed south-southeasterly in a straight line approximately 
0.6 mile to the intersection of Chalk Hill Road with an unnamed creek 
descending from Adobe Canyon, northwest of the unnamed road known 
locally as Fredensborg Canyon Road, T6N/R31W; then
    (8) Proceed southwesterly (downstream) along the creek 
approximately 1 mile to the creek's intersection with the Santa Ynez 
River, T6N/R31W; then
    (9) Proceed easterly (upstream) along the Santa Ynez River 
approximately 8 miles, crossing onto the Santa Ynez map, to the river's 
intersection with State Highway 154, T6N/R30W; then
    (10) Proceed north-northwest in a straight line approximately 1.2 
miles to the marked 924-foot elevation point, T6R/R30W; then
    (11) Proceed north-northwest in a straight line 1.2 miles to the 
``Y'' in an unimproved road 0.1 mile south of the 800-foot contour 
line, west of Happy Canyon Road, T6R/R30W; then
    (12) Proceed north-northwest in a straight line for 0.5 mile, 
crossing onto the Los Olivos map, and continuing approximately 2.3 
miles to the third intersection of the line with the 1,000-foot contour 
line northwest of BM 812, T7N/R30W; then
    (13) Proceed westerly along the meandering 1,000-foot contour line 
to the contour line's intersection with an unnamed, unimproved road, an 
unnamed light-duty road, and the northern boundary line of section 23, 
T7N/R31W; then
    (14) Proceed northerly, then westerly, along the unnamed, 
unimproved road to Figueroa Mountain Road, near the marked 895-foot 
elevation, T7N/R31W; then
    (15) Proceed north on Figueroa Mountain Road approximately 400 feet 
to the 920-foot contour line, T7N/R31W; then
    (16) Proceed initially south, then northwesterly along the 
meandering 920-foot contour line, crossing onto the Zaca Creek map, to 
Foxen Canyon Road, T7N/R31W; then
    (17) Proceed southeasterly on Foxen Canyon Road approximately 1.7 
miles, crossing onto the Los Olivos map, returning to the beginning 
point.

    Signed: December 9, 2015.
John J. Manfreda,
Administrator.
    Approved: January 14, 2016.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2016-01155 Filed 1-20-16; 8:45 am]
 BILLING CODE 4810-31-P