[Federal Register Volume 81, Number 42 (Thursday, March 3, 2016)]
[Rules and Regulations]
[Pages 11113-11116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04760]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2015-0009; T.D. TTB-135; Ref: Notice No. 153]
RIN 1513-AC20


Establishment of the Loess Hills 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 12,897-square mile ``Loess Hills District'' 
viticultural area in western Iowa and northwestern Missouri. This new 
viticultural area is not located within any other 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 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 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;

[[Page 11114]]

     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.

Loess Hills District Petition

    TTB received a petition from Shirley Frederiksen, on behalf of the 
Western Iowa Grape Growers Association and the Golden Hills Resource 
Conservation and Development organization proposing the establishment 
of the ``Loess Hills District'' AVA in western Iowa and northwestern 
Missouri. The proposed AVA covers a long, narrow north-south orientated 
swath of land along the Big Sioux and Missouri Rivers, covering 12,897 
square miles from Hawarden, Iowa, to Craig, Missouri. There are 
approximately 66 commercially-producing vineyards covering a total of 
112 acres distributed throughout the proposed AVA, along with 13 
wineries. The proposed Loess Hills District AVA is not located within 
any established AVA.
    According to the petition, the distinguishing features of the 
proposed Loess Hills District AVA are its soil, topography, and 
climate. The proposed AVA is located in a region characterized by 
extremely deep layers of wind-deposited soil called ``loess.'' Loess is 
a loose, crumbly soil comprised of quartz, feldspar, mica, and other 
materials which were ground into a fine powder by glaciers during the 
Ice Ages. When the glaciers melted, the water pushed this glacial flour 
down the Missouri River Valley. When the waters receded, the exposed 
silt dried and was picked up by the prevailing westerly winds and 
redeposited over broad areas.
    The heaviest, coarsest loess particles were deposited along the 
Missouri River, within the proposed Loess Hills District AVA, and 
formed a landscape of rolling-to-steep hills. According to the 
petition, the rolling topography allows cold air to drain away from the 
vineyards, thus reducing the threat of frost. By contrast, the terrain 
in the regions to the north, south, and east of the proposed AVA is 
marked by broadly undulating hills with shallower slopes and lower 
elevations than are found within the proposed AVA. The terrain west of 
the proposed AVA is dominated by wide, flat flood plains.
    The loess deposits within the proposed AVA reach depths of up to 
300 feet, which are the thickest deposits of loess within the United 
States. The petition states that the thickness of the loess within the 
proposed AVA enables roots to extend deep into the soil without being 
stopped by a restrictive barrier such as denser soils or bedrock. The 
lack of a restrictive barrier also allows water to drain away from the 
roots quickly, which reduces the risk of fungal diseases and rot. In 
comparison, in every direction outside the proposed AVA, the depth of 
loess is 20 feet or less, which is significantly shallower than within 
the proposed AVA.
    The petition also states that the proposed Loess Hills District AVA 
has a long growing season and relatively high annual precipitation 
amounts. The early last-spring-frost date reduces the risk that tender 
new buds and shoots will be damaged by spring frosts, and the late 
first-fall-frost date allows adequate time for late-maturing varieties 
of grapes, including Norton, Chambourcin, and Noiret, to ripen before 
frost can damage the fruit. The high precipitation amounts provide 
adequate hydration for the vines, so irrigation is seldom necessary 
within the proposed AVA. However, the rainfall amounts also pose a risk 
of erosion due to both the steepness of the hillsides and the loose, 
crumbly nature of the soils. When compared to the proposed AVA, the 
regions to the north, east, and west have shorter growing seasons. To 
the south of the proposed AVA, the growing season is longer. Annual 
precipitation amounts in the region south of the proposed AVA are 
higher, while the precipitation amounts in the region to the west are 
lower than those found within the proposed AVA.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 153 in the Federal Register on June 18, 
2015 (80 FR 34857), proposing to establish the Loess Hills 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 features of the surrounding areas. For a 
detailed description of the evidence relating to the name, boundary, 
and distinguishing features of the proposed AVA, and for a detailed 
comparison of the distinguishing features of the proposed AVA to the 
surrounding areas, see Notice No. 153.
    In Notice No. 153, TTB solicited comments on the accuracy of the 
name, boundary, and other required information submitted in support of 
the petition. The comment period closed on August 17, 2015. TTB did not 
receive any comments in response to Notice No. 153.

TTB Determination

    After careful review of the petition, TTB finds that the evidence 
provided by the petitioner supports the establishment of the Loess 
Hills District 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 establishes the ``Loess Hills District'' 
AVA in western Iowa and northwestern Missouri, effective 30 days from 
the publication date of this document.

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, ``Loess Hills 
District,'' will be 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

[[Page 11115]]

name ``Loess Hills 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. TTB is not designating ``Loess Hills,'' standing 
alone, as a term of viticultural significance due to the current use of 
``Loess Hills,'' standing alone, as a brand name on wine labels.
    The establishment of the Loess Hills District AVA will not affect 
any existing AVA. The establishment of the Loess Hills District AVA 
will allow vintners to use ``Loess Hills District'' as an appellation 
of origin for wines made primarily from grapes grown within the Loess 
Hills 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

    TTB has 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.  9.255 to read as follows:


Sec.  9.255  Loess Hills District.

    (a) Name. The name of the viticultural area described in this 
section is ``Loess Hills District''. For purposes of part 4 of this 
chapter, ``Loess Hills District'' is a term of viticultural 
significance.
    (b) Approved maps. The 13 United States Geological Survey (USGS) 
1:100,000 scale topographic maps used to determine the boundary of the 
Loess Hills District viticultural area are titled:
    (1) Rock Rapids, Iowa-South Dakota, 1985;
    (2) Sioux City North, Iowa-South Dakota-Nebraska, 1986; 
photoinspected 1990;
    (3) Storm Lake, Iowa, 1985; photoinspected 1990;
    (4) Ida Grove, Iowa, 1985; photoinspected 1990;
    (5) Carroll, Iowa, 1993;
    (6) Guthrie Center, Iowa, 1993;
    (7) Creston, Iowa, 1993;
    (8) Omaha, Nebraska-Iowa, 1985; photoinspected, 1990;
    (9) Nebraska City, Nebraska-Iowa-Missouri, 1993;
    (10) Falls City, Nebraska-Missouri, 1986; photoinspected 1991;
    (11) Harlan, Iowa-Nebraska, 1980;
    (12) Blair, Nebraska-Iowa, 1986; photoinspected 1988; and
    (13) Sioux City South, Iowa-Nebraska-South Dakota, 1986; 
photoinspected 1990.
    (c) Boundary. The Loess Hills District viticultural area is located 
in Fremont, Page, Mills, Montgomery, Pottawattamie, Cass, Harrison, 
Shelby, Audubon, Monona, Crawford, Carroll, Woodbury, Ida, Sac, 
Plymouth, and Sioux Counties in western Iowa and Atchison and Holt 
Counties in northwestern Missouri. The boundary of the Loess Hills 
District viticultural area is as described below:
    (1) The beginning point is on the Rock Rapids, Iowa-South Dakota 
map, in Sioux County, Iowa, at the intersection of the Big Sioux River 
and an unnamed road known locally as County Road B30 (360th Street), 
east of Hudson, South Dakota. From the beginning point, proceed east on 
County Road B30 approximately 3 miles to a road known locally as County 
Road K22 (Coolidge Avenue); then
    (2) Proceed south on County Road K22 approximately 3 miles to a 
road known locally as County Road B40 (390th Street); then
    (3) Proceed east on County Road B40 approximately 4 miles to a road 
known locally as County Road K30 (Eagle Avenue); then
    (4) Proceed south on County Road K30 approximately 13.1 miles, 
crossing onto the Sioux City North, Iowa-South Dakota-Nebraska map and 
continuing into Plymouth County, Iowa, to a road known locally as 
County Road C12 (110th Street), at Craig, Iowa; then
    (5) Proceed east on County Road C12 approximately 2 miles to a road 
known locally as County Road K42 (Jade Avenue), at the marked 436-meter 
elevation point; then
    (6) Proceed south on County Road K42 approximately 10 miles to a 
road known locally as County Road C38; then
    (7) Proceed east on County Road C38 approximately 6.4 miles to a 
road known locally as County Road K49 (7th Avenue SE), approximately 2 
miles south of La Mars, Iowa; then
    (8) Proceed south on County Road K49 approximately 4 miles to a 
road known locally as County Road C44 (230th Street); then
    (9) Proceed east on County Road C44 approximately 5 miles to a road 
known locally as County Road K64 (Oyens Avenue); then
    (10) Proceed south on County Road K64 approximately 4.1 miles to a 
road known locally as County Road C60 (290th Street); then
    (11) Proceed east on County Road C60 approximately 5 miles, 
crossing onto the Storm Lake, Iowa map, to State Highway 140; then
    (12) Proceed south on State Highway 140 approximately 3.2 miles to 
a road known locally as County Road L14 (Knox Avenue) in Kingsley, 
Iowa; then
    (13) Proceed south on County Road L14 approximately 2.7 miles, 
crossing into Woodbury County, Iowa, to a road known locally as County 
Road D12 (110th Street); then
    (14) Proceed east on County Road D12 approximately 5 miles to a 
road known locally as County Road L25 (Minnesota Avenue) near Pierson, 
Iowa; then
    (15) Proceed south on County Road L25 approximately 4.5 miles, 
crossing onto the Ida Grove, Iowa map, to U.S. Highway 20; then
    (16) Proceed east on U.S. Highway 20 approximately 22.5 miles, 
crossing into Ida County, Iowa, to a road known locally as County Road 
M25 (Market Avenue); then
    (17) Proceed south on County Road M25 approximately 9.8 miles to 
State Highway 175 east of Ida Grove, Iowa; then
    (18) Proceed east on State Highway 175 approximately 4.1 miles to a 
road known locally as Country Highway M31 (Quail Avenue) near Arthur, 
Iowa; then
    (19) Proceed south on Country Highway M31 approximately 4.4 miles 
to a road known locally as County Road D59 (300th Street); then
    (20) Proceed east on County Road D59 approximately 13 miles, 
crossing into Sac County, Iowa, to a road known

[[Page 11116]]

locally as County Road M64 (Needham Avenue/Center Street) at Wall Lake, 
Iowa; then
    (21) Proceed south on County Road M64 approximately 6.2 miles to a 
road known locally as County Road E16 (120th Street); then
    (22) Proceed east into Carroll County, Iowa, on County Road E16 
approximately 6 miles, crossing onto the Carroll, Iowa map, to Breda, 
Iowa, and then continue east on State Highway 217 (East Main Street) 
approximately 5 miles to U.S. Highway 71; then
    (23) Proceed south on U.S. Highway 71 approximately 3 miles to a 
road known locally as County Road E26 (140th Street); then
    (24) Proceed east on County Road E26 approximately 5 miles to a 
road known locally as County Road N38 (Quail Avenue); then
    (25) Proceed south on County Road N38 approximately 5 miles to U.S. 
Highway 30 (Lincoln Highway); then
    (26) Proceed east on U.S. Highway 30 approximately 3 miles to a 
road known locally as County Road N44 (Colorado Street) in Glidden, 
Iowa; then
    (27) Proceed south on County Road N44 approximately 8 miles, 
crossing onto the Guthrie Center, Iowa map, to a road known locally as 
County Road E57 (280th Street); then
    (28) Proceed east on County Road E57 approximately 2 miles to a 
road known locally as County Road N44 (Velvet Avenue); then
    (29) Proceed south on County Road N44 approximately 5.4 miles to 
State Highway 141 (330th Street) at Coon Rapids, Iowa; then
    (30) Proceed west on State Highway 141 approximately 12 miles to 
U.S. Highway 71 at Lynx Avenue southeast of Templeton, Iowa; then
    (31) Proceed south on U.S. Highway 71 approximately 35.9 miles, 
crossing into Audubon County, Iowa, and then Cass County, Iowa, and 
onto the Creston, Iowa map, to U.S. Highway 6/State Highway 83 east of 
Atlantic, Iowa; then
    (32) Proceed west, then southwest, then west on U.S. Highway 6 
approximately 18.9 miles, crossing onto the Omaha, Nebraska-Iowa map 
and into Pottawattamie County, Iowa, to a road known locally as County 
Road M47 (500th Street) approximately 1 mile west of Walnut Creek; then
    (33) Proceed south on County Road M47 approximately 12 miles, 
crossing into Montgomery County, Iowa to a road known locally as County 
Road H12 (110th Street); then
    (34) Proceed west on County Road H12 approximately 8.9 miles, 
crossing into Mills County, Iowa, to U.S. Highway 59; then
    (35) Proceed south on U.S. Highway 59 approximately 20.2 miles, 
crossing onto the Nebraska City, Nebraska-Iowa-Missouri map and into 
Page County, Iowa, to a road known locally as County Road J14 (130th 
Street); then
    (36) Proceed east on County Road J14 approximately 4 miles to a 
road known locally as County Road M41 (D Avenue); then
    (37) Proceed south on County Road M41 approximately 1.7 miles to 
State Highway 48 at Essex, Iowa; then
    (38) Proceed northeast then east on State Highway 48 approximately 
1.2 miles to a road known locally as County Road M41 (E Avenue); then
    (39) Proceed south on County Road M41 approximately 7 miles to 
State Highway 2 (210th Street); then
    (40) Proceed east on State Highway 2 approximately 8 miles to a 
road known locally as M Avenue; then
    (41) Proceed south on M Avenue, then east on a road known locally 
as County Road M60 (Maple Avenue), approximately 6.4 total miles, to a 
road known locally as County Road J52 (270th Street); then
    (42) Proceed south in a straight line approximately 3.5 miles to 
the intersection of 304th Street and Maple Avenue (approximately 1.2 
miles southwest of College Springs, Iowa), and then continue south on 
Maple Avenue for 0.5 mile to a road known locally as County Road J64 
(310th Street); then
    (43) Proceed west on County Road J64 approximately 4.5 miles to a 
road known locally as County Road M48 (Hackberry Avenue); then
    (44) Proceed south on County Road M48 approximately 1.2 miles to 
the Iowa-Missouri State line at Blanchard, Iowa, and, crossing into 
Atchison County, Missouri, where County Road M48 becomes State Road M, 
and continue generally south on State Road M approximately 11.2 miles, 
crossing onto the Falls City, Nebraska-Missouri map, to U.S. Highway 
136; then
    (45) Proceed west on U.S. Highway 136 approximately 1 mile to State 
Road N; then
    (46) Proceed south on State Road N 15 miles, crossing into Holt 
County, Missouri, to State Road C; then
    (47) Proceed west then south on State Road C approximately 3 miles 
to U.S. Highway 59; then
    (48) Proceed northwest on U.S. Highway 59 approximately 2 miles to 
the highway's first intersection with Interstate Highway 29 near Craig, 
Missouri; then
    (49) Proceed generally north along Interstate Highway 29, crossing 
into Atchison County, Missouri, and onto the Nebraska City, Nebraska-
Iowa-Missouri map, and continuing into Freemont County and Mills 
County, Iowa, then crossing onto the Omaha, Nebraska-Iowa map and into 
Pottawattamie County, Iowa; then crossing onto the Harlan, Iowa-
Nebraska map and into Harrison County, Iowa; then continuing onto the 
Blair, Nebraska-Iowa map and into Monona County, Iowa; then crossing 
onto the Sioux City South, Iowa-Nebraska-South Dakota Map and into 
Woodbury County for a total of approximately 185 miles, to the 
intersection of Interstate Highway 29 with the Big Sioux River at Sioux 
City, Iowa; then
    (50) Proceed generally north (upstream) along the meandering Big 
Sioux River, crossing onto the Sioux City North, Iowa-South Dakota-
Nebraska map and into Plymouth County and Sioux County, Iowa, and 
continuing onto the Rock Rapids, Iowa-South Dakota map for a total of 
approximately 50 miles, returning to the beginning point.

    Signed: January 29, 2016.
John J. Manfreda,
Administrator.
    Approved: February 11, 2016.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade, and Tariff Policy).
[FR Doc. 2016-04760 Filed 3-2-16; 8:45 am]
BILLING CODE 4810-31-P