[Federal Register Volume 81, Number 140 (Thursday, July 21, 2016)]
[Rules and Regulations]
[Pages 47289-47291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17274]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2015-0011; T.D. TTB-139; Ref: Notice No. 155]
RIN 1513-AC22


Establishment of the Tip of the Mitt 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 2,760-square mile ``Tip of the Mitt'' viticultural 
area in all or portions of Charlevoix, Emmet, Cheboygan, Presque Isle, 
Alpena, and Antrim Counties in Michigan. The viticultural area is not 
located within, nor does it contain, 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 August 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 of the Treasury has 
delegated various authorities through Treasury Department Order 120-01, 
dated December 10, 2013 (superseding Treasury Order 120-01, 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;
     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.

Tip of the Mitt Petition

    TTB received a petition from the Straits Area Grape Growers 
Association, on behalf of winery and vineyard owners in the northern 
portion of Michigan's Lower Peninsula, proposing the establishment of 
the ``Tip of the Mitt'' AVA. The proposed AVA contains approximately 
2,760 square miles, and there are 41 commercially-producing vineyards 
covering a total of 94 acres distributed throughout the proposed AVA, 
along with 8 wineries. According to the petition, an additional 48 
acres of vineyards and 4 new wineries are planned for the near future. 
The proposed Tip of the Mitt AVA is not located within any established 
AVA.

[[Page 47290]]

According to the petition, the distinguishing features of the proposed 
Tip of the Mitt AVA include its climate and soils.
    The proposed AVA is bordered by Grand Traverse Bay, Little Traverse 
Bay, and Lake Michigan to the west; the Straits of Mackinac to the 
north; and Lake Huron to the east. The presence of large bodies of 
water on three sides of the proposed AVA has a moderating effect on the 
climate, providing slightly warmer annual high temperatures than are 
found south of the proposed AVA. The proposed Tip of the Mitt AVA also 
has fewer days with high temperatures below both 0 and 32 degrees 
Fahrenheit than the region to the south, meaning that temperatures do 
not drop low enough to cause severe damage to cold-hardy grape 
varietals such as Marechal Foch and Leon Millot. The proposed AVA also 
has a longer growing season and higher growing degree day accumulations 
than the region to the south, providing ample time for mid-to-late 
season grape varietals such as Frontenac to ripen.
    With respect to soils, the proposed Tip of the Mitt AVA 
predominately contains coarse-textured glacial till and Lacustrine sand 
and gravel. Soils that contain either glacial outwash sand or ice-
contact sand and gravel are present only in small amounts within the 
proposed AVA and are more common in the region to the south. The soils 
within the proposed AVA have high levels of organic matter, which 
prevents nutrients from leaching rapidly. The soils also have high 
water-holding capacities, so vineyard owners take steps to reduce 
moisture accumulation, such as planting cover crops between rows to 
absorb excess water. By contrast, the soils in the region south of the 
proposed AVA have lower levels of organic matter and lower water-
holding capacities. Finally, the soils within the proposed AVA do not 
heat as quickly in the spring as soils that contain high levels of sand 
and gravel, so bud-break is naturally delayed until the risk of late 
spring frosts has passed.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 155 in the Federal Register on August 6, 
2015 (80 FR 46883), proposing to establish the Tip of the Mitt AVA. In 
the notice, TTB summarized the evidence from the petition regarding the 
name, boundary, and distinguishing features for the proposed AVA. The 
notice 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. 155.
    In Notice No. 155, 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 October 5, 2015. TTB 
received 14 comments in response to Notice No. 155. All 14 commenters 
supported the establishment of the proposed AVA. Commenters included 
self-identified local winery and vineyard owners and operators; members 
of the Straits Area Grape Growers Association; the Corporate and 
Community Education Training Coordinator for North Central Michigan 
College in Petoskey, MI; an Agricultural Innovation Counselor with 
Michigan State University's Product Center; and several individuals who 
did not describe any affiliation with the wine industry. Many of the 
commenters stated that the region's climate and the ability to grow a 
variety of cold-hardy grape varietals distinguish the proposed AVA from 
the region to the south. Several of the commenters supported the 
proposed AVA as a way to showcase the region's wines and promote 
tourism to the region. TTB did not receive any comments opposing the 
establishment of the proposed AVA.

Proposed Name Change

    One commenter (comment 6) supported the establishment of the 
proposed AVA but did not support the proposed name. The commenter 
stated that he believed ``Tip of the Mitt'' was a ``whimsical'' name 
that is ``Michigan slang'' and ``doesn't provide the public with an 
accurate geographical description'' of where the proposed AVA is 
located. The commenter suggested ``The Straits'' or ``Little Traverse'' 
as alternate names for the proposed AVA, but did not provide any 
evidence to support the alternative AVA names.
    Section 9.12(a)(1) of TTB regulations requires, among other things, 
that: (1) A proposed AVA name be currently and directly associated with 
an area in which viticulture exists; (2) the proposed name apply to all 
of the area within the proposed AVA; and (3) the region of the proposed 
AVA be known nationally or locally by the proposed name. Although 
``Little Traverse'' and ``The Straits'' both refer to geographical 
features within the proposed AVA, the commenter did not provide 
evidence to show that the entire region of the proposed AVA is known 
locally or nationally by either of those names. Additionally, ``The 
Straits'' could apply to any of the numerous straits in the United 
States and is therefore unsuitable as an AVA name without a 
geographical modifier. Therefore, TTB does not believe that either 
``Little Traverse'' or ``The Straits'' meets the regulatory 
requirements for an AVA name.
    TTB believes that the petition to establish the Tip of the Mitt AVA 
provided sufficient evidence to demonstrate that the name ``Tip of the 
Mitt'' is widely used throughout the proposed AVA to describe the 
region. The petition included names of local businesses and 
organizations and regional events that use the phrase in their names. 
Therefore, TTB has determined that ``Tip of the Mitt'' meets the 
regulatory requirements for an AVA name as set forth in Sec.  9.12(a).

TTB Determination

    After careful review of the petition and the comments received, TTB 
finds that the evidence provided by the petitioner supports the 
establishment of the Tip of the Mitt 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 
``Tip of the Mitt'' AVA in the northern portion of Michigan's Lower 
Peninsula, 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

[[Page 47291]]

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, ``Tip of the Mitt,'' 
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 
name ``Tip of the Mitt'' 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.
    The establishment of the Tip of the Mitt AVA will not affect any 
existing AVA. The establishment of the Tip of the Mitt AVA will allow 
vintners to use ``Tip of the Mitt'' as an appellation of origin for 
wines made primarily from grapes grown within the Tip of the Mitt 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. Subpart C is amended by adding Sec.  9.257 to read as follows:


Sec.  9.257  Tip of the Mitt.

    (a) Name. The name of the viticultural area described in this 
section is ``Tip of the Mitt''. For purposes of part 4 of this chapter, 
``Tip of the Mitt'' is a term of viticultural significance.
    (b) Approved maps. The 2 United States Geological Survey (USGS) 
1:250,000 scale topographic maps used to determine the boundary of the 
Tip of the Mitt viticultural area are titled:
    (1) Cheboygan, Michigan, 1955; revised 1981; and
    (2) Alpena, Mich., US-Ontario, Can.; 1954.
    (c) Boundary. The Tip of the Mitt viticultural area is located in 
all or portions of Charlevoix, Emmet, Cheboygan, Presque Isle, Alpena, 
and Antrim Counties in Michigan. The boundary of the Tip of the Mitt 
viticultural area is as described below:
    (1) The beginning point is on the Cheboygan map, at the point where 
the Mackinac Bridge intersects the southern shoreline of the Straits of 
Mackinac. From the beginning point, proceed east-southeasterly along 
the shoreline of the South Channel of the Straits of Mackinac and Lake 
Huron, crossing onto the Alpena map and continuing to follow the Lake 
Huron shoreline and then the Thunder Bay shoreline to the point where 
the Thunder Bay shoreline intersects the common T31N/T30N township line 
south of the city of Alpena and north of Bare Point; then
    (2) Proceed northwesterly in a straight line to the intersection of 
an unnamed medium-duty road known locally as Long Rapids Road and an 
unnamed light-duty road known locally as Cathro Road; then
    (3) Proceed west in a straight line to the line's intersection with 
State Highway 65 and an unnamed light-duty road known locally as Hibner 
Road; then
    (4) Proceed northwesterly in a straight line to the intersection of 
the Presque Isle, Alpena, and Montmorency county lines; then
    (5) Proceed west along the southern boundary of Presque Isle 
County, crossing onto the Cheboygan map, to the point where the Presque 
Isle county line becomes the southern boundary of Cheboygan County, and 
continuing along the Cheboygan county line to the intersection of the 
Cheboygan county line with the eastern boundary of Charlevoix County; 
then
    (6) Proceed south then east along the Charlevoix county line to the 
intersection of the Charlevoix county line with the eastern boundary of 
Antrim County; then
    (7) Proceed south along the Antrim county line to the point where 
the county line turns due east; then
    (8) Proceed west in a straight line to the eastern shoreline of 
Grand Traverse Bay; then
    (9) Proceed north-northeasterly along the shorelines of Grand 
Traverse Bay, Lake Michigan, Little Traverse Bay, Sturgeon Bay, Trails 
End Bay, and the Straits of Mackinac, returning to the beginning point.

    Signed: June 29, 2016.
John J. Manfreda,
Administrator.
    Approved: July 10, 2016.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2016-17274 Filed 7-20-16; 8:45 am]
 BILLING CODE 4310-31-P