[Federal Register Volume 81, Number 42 (Thursday, March 3, 2016)]
[Rules and Regulations]
[Pages 11110-11113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04710]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2015-0008; T.D. TTB-134; Ref: Notice No. 152]
RIN 1513-AC21


Expansion of the Willamette 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) is 
expanding the approximately 5,360-square mile ``Willamette Valley'' 
viticultural area in northwestern Oregon, by approximately 29 square 
miles. Neither the established viticultural area nor the expansion area 
is located within any other established 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 April 4, 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

[[Page 11111]]

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 Order 120-
01 (Revised), ``Alcohol and Tobacco Tax and Trade Bureau,'' dated 
January 24, 2003), to the TTB Administrator to perform the functions 
and duties in the administration and enforcement of these laws.
    Part 4 of the TTB regulations (27 CFR part 4) authorizes 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 the 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. Petitioners may use the same process to request changes 
involving established AVAs. Section 9.12 of the TTB regulations (27 CFR 
9.12) prescribes standards for petitions for modifying established 
AVAs. Petitions to expand an established AVA must include the 
following:
     Evidence that the area within the proposed expansion area 
boundary is nationally or locally known by the name of the established 
AVA;
     An explanation of the basis for defining the boundary of 
the proposed expansion area;
     A narrative description of the features of the proposed 
expansion area that affect viticulture, such as climate, geology, 
soils, physical features, and elevation, that make the proposed 
expansion area similar to the established AVA and distinguish it from 
adjacent areas outside the established AVA boundary;
     The appropriate United States Geological Survey (USGS) 
map(s) showing the location of the proposed expansion area, with the 
boundary of the proposed expansion area clearly drawn thereon; and
     A detailed narrative description of the proposed expansion 
area boundary based on USGS map markings.

Petition to Expand the Willamette Valley AVA

    TTB received a petition from Steve Thomson, the executive vice 
president of King Estate Winery in Eugene, Oregon, proposing to expand 
the established ``Willamette Valley'' AVA in northwestern Oregon. The 
Willamette Valley AVA (27 CFR 9.90) was established by T.D. ATF-162, 
which was published in the Federal Register on December 1, 1983 (48 FR 
54221). The Willamette Valley AVA covers approximately 5,360 square 
miles in Benton, Lane, Linn, Clackamas, Lincoln, Marion, Multnomah, 
Polk, Tillamook, Washington, and Yamhill Counties. Neither the proposed 
expansion area nor the established AVA are located within any other 
established AVA.
    The proposed expansion area is located in Lane County and is 
adjacent to the southern tip of the established Willamette Valley AVA 
boundary and covers approximately 29 square miles. The King Estate 
Winery operates one of the two commercial vineyards that cover a total 
of 508 acres within the proposed expansion area, and provided 
information that the second vineyard owner also supports the proposed 
expansion. The King Estate Winery and the second vineyard each have a 
winery within the proposed expansion area. A third winery is also 
included in the proposed expansion area; however, it does not operate a 
vineyard within the proposed expansion area. The vineyards and wineries 
did not exist at the time the Willamette Valley AVA was established in 
1983 and currently are not within any AVA. The petition included 
letters from the president of the Willamette Valley Wineries 
Association and the president of the Oregon Winegrowers Association in 
support of the proposed expansion.
    According to the petition, the topography, soils, and climate of 
the proposed expansion area are similar to those of the established 
Willamette Valley AVA. The petition states that both the proposed 
expansion area and the established AVA are composed of rolling hills 
and valleys between the Coast Range Mountains to the west and the 
Cascade Mountains to the east. Elevations within the proposed AVA range 
from 500 feet to 1,200 feet, which is within the range of elevations 
found in the established AVA. By contrast, the region outside both the 
proposed expansion area and the Willamette Valley AVA is marked by 
mountainous terrain with higher elevations. The proposed expansion area 
and the established AVA are also within the watersheds of both the 
Willamette and the Siuslaw Rivers, whereas the region to the south of 
both the proposed expansion area and the established AVA drains 
exclusively into the Umpqua River.
    The petition describes the soils within both the proposed expansion 
area and the Willamette Valley AVA as having a ``xeric'' moisture 
regime of soil classification, meaning that they typically retain low 
amounts of moisture and generally have depleted their moisture reserves 
by the end of the growing season. Common soil series within both the 
proposed expansion area and the established AVA include Bellpine, Jory, 
Willakenzie, Dupee, and Peavine. The petition states that although 
Peavine soils are found outside the proposed expansion area and the 
established AVA, other soils such as Blanchley, Honeygrove Complex, 
Bohanon, Preacher, Klickitat, Kirney, and Digger Complex soils are also 
present and are not found in either the proposed expansion area or the 
Willamette Valley AVA. Additionally, the soils of the surrounding 
region are described as having an ``udic'' moisture regime of soil 
classification, meaning the soils typically retain even amounts of 
water throughout the year.
    The petition compared the climate of the proposed expansion area to 
the climates of several established AVAs that are also located within 
the larger Willamette Valley AVA, as well as to the climate of the 
Umpqua Valley AVA (27 CFR 9.89), which is adjacent to the southernmost 
point of the Willamette Valley AVA and south of the proposed

[[Page 11112]]

expansion area. The petition shows that the annual mean temperature, 
growing season precipitation amounts, and growing degree day 
accumulations within the proposed expansion area are slightly lower 
than those of the AVAs within the Willamette Valley AVA. However, the 
climate data from the proposed expansion area is more similar to the 
climate data from the AVAs located within the Willamette Valley AVA 
than to the climate data from the Umpqua Valley AVA.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 152 in the Federal Register on June 18, 
2015 (80 FR 34864), proposing to expand the Willamette Valley AVA. In 
the document, TTB summarized the evidence from the petition regarding 
the name, boundary, and distinguishing features for the proposed 
expansion area. For a detailed description of the evidence relating to 
the name, boundary, and distinguishing features of the proposed 
expansion area, and for a comparison of the distinguishing features of 
the proposed expansion area to the surrounding areas and to the 
established Willamette Valley AVA, see Notice No. 152.
    In Notice No. 152, TTB solicited comments on the accuracy of the 
name, boundary, climatic, and other required information submitted in 
support of the petition. The comment period closed on August 17, 2015. 
TTB received two comments in response to Notice No. 152. The first 
comment (Comment 1) did not directly address the proposed expansion of 
the Willamette Valley AVA and, instead, issued a general caution 
against establishing too many AVAs in any given area, as rapid or 
uncontrolled growth may cause long-term harm to the economy, quality of 
life, and agricultural diversity of the community. TTB considers this 
comment to be outside the scope of the proposed rule.
    The second comment (Comment 2) identified two typographical errors 
in the proposed regulatory text of Notice No. 152. The commenter noted 
that in paragraph (c)(17) of the proposed regulatory text, Oregon State 
Highway 99 was incorrectly referred to as Interstate Highway 99. TTB 
agrees that the State highway was incorrectly designated in the 
proposed regulatory text, and the correction has been made in the final 
rule text. The commenter also stated that U.S. Highway 26 was 
incorrectly identified as Interstate Highway 26 in redesignated 
paragraph (c)(32). Although TTB did not propose to change the text of 
redesignated paragraph (c)(32) in Notice No. 152, the commenter is 
correct that the Federal highway is improperly designated in that 
paragraph as it currently appears in the Code of Federal Regulations. 
Therefore, TTB is also making that edit in the final rule text of this 
document.

TTB Determination

    After careful review of the petition and comments received, TTB 
finds that the topography, soil, and climate evidence provided by the 
petitioner sufficiently demonstrates that the proposed expansion area 
is similar to the established Willamette Valley AVA and should also be 
recognized as part of that AVA. Accordingly, under the authority of the 
FAA Act, section 1111(d) of the Homeland Security Act of 2002, and 
parts 4 and 9 of the TTB regulations, TTB expands the 5,360-square mile 
``Willamette Valley'' AVA to include the approximately 29-square mile 
expansion area as described in Notice No. 152, effective 30 days from 
the publication date of this document.
    In the regulatory text of this final rule, TTB is also correcting a 
typographical error that appeared in proposed paragraph (c)(17) and a 
second typographical error that was identified by a commenter in 
redesignated paragraph (c)(32). These corrections will properly 
identify two roads as a State highway and a Federal highway, 
respectively. No other changes have been made to the regulatory text.

Boundary Description

    See the narrative description of the boundary of the AVA expansion 
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 Sec.  
4.25(e)(3) of the TTB regulations (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 Sec.  4.39(i)(2) of the TTB regulations (27 CFR 4.39(i)(2)) for 
details.
    The expansion of the Willamette Valley AVA will not affect any 
other existing AVA, and bottlers using ``Willamette Valley'' as an 
appellation of origin or in a brand name for wines made from grapes 
within the established Willamette Valley AVA will not be affected by 
this expansion. The expansion will allow vintners to use ``Willamette 
Valley'' as an appellation of origin for wines made primarily from 
grapes grown within the expansion area 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 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.


[[Page 11113]]



Subpart C--Approved American Viticultural Areas

0
2. Section 9.90 is amended by revising paragraph (b) introductory text, 
adding paragraph (b)(4), removing paragraphs (c)(11) through (13), 
redesignating paragraphs (c)(14) through (32) as paragraphs (c)(18) 
through (36), revising newly redesignated paragraph (c)(32), and adding 
paragraphs (c)(11) through (17) to read as follows:


Sec.  9.90  Willamette Valley.

* * * * *
    (b) Approved maps. The approved maps for determining the boundaries 
of the Willamette Valley viticultural area are three U.S.G.S. Oregon 
maps scaled 1:250,000 and one U.S.G.S. Oregon map scaled 1:24,000. They 
are entitled:
* * * * *
    (4) ``Letz Creek, OR'' (revised 1984).
    (c) * * *
    (11) Northeast, then southeast along the 1,000 foot contour line 
approximately 12 miles to its intersection with the R5W/R6W range line;
    (12) South along the R5W/R6W range line approximately 0.25 mile to 
the intersection with the 1,000 foot contour line;
    (13) Generally southeast along the meandering 1,000 foot contour 
line, crossing onto the Letz Creek map, to a point on the 1,000 foot 
contour line located due north of the intersection of Siuslaw River 
Road and Fire Road;
    (14) South in a straight line approximately 0.55 mile, crossing 
over the Siuslaw River and the intersection of Siuslaw River Road and 
Fire Road, to the 1,000 foot contour line;
    (15) Generally southeast along the meandering 1,000 foot contour 
line, crossing onto the Roseburg, Oregon map, to the intersection of 
the 1,000 foot contour line with the Lane/Douglas County line;
    (16) East along the Lane/Douglas County line approximately 3.8 
miles to the intersection with the 1,000 foot contour line just east of 
the South Fork of the Siuslaw River;
    (17) Generally north, then northeast along the 1,000 foot contour 
line around Spencer Butte, and then generally south to a point along 
the Lane/Douglas County line 0.5 mile north of State Highway 99;
* * * * *
    (32) North along R5E/R6E 10.5 miles to a point where it intersects 
the Mount Hood National Forest boundary (approximately three miles 
north of U.S. Highway 26);
* * * * *

    Signed: February 8, 2016.
John J. Manfreda,
Administrator.
    Approved: February 11, 2016.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2016-04710 Filed 3-2-16; 8:45 am]
BILLING CODE 4810-31-P