[Federal Register Volume 83, Number 234 (Thursday, December 6, 2018)]
[Rules and Regulations]
[Pages 62707-62710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26320]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2018-0005; T.D. TTB-152; Ref: Notice No. 174]
RIN 1513-AC38


Establishment of the Upper Hudson 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 1,500-square mile ``Upper Hudson'' viticultural area 
in all or portions of Albany, Montgomery, Rensselaer, Saratoga, 
Schenectady, Schoharie, and Washington Counties in New York. The Upper 
Hudson viticultural area is not 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 January 7, 2019.

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,

[[Page 62708]]

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, 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 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.

Upper Hudson Petition

    TTB received a petition from Andrew and Kathleen Weber, owners of 
Northern Cross Vineyard, on behalf of local grape growers and vintners, 
proposing to establish the ``Upper Hudson'' AVA in all or portions of 
Albany, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, and 
Washington Counties in New York. The proposed Upper Hudson AVA covers 
approximately 1,500-square miles and is not located within any other 
AVA. There are 19 commercial vineyards with attached wineries covering 
approximately 67.5 acres within the proposed AVA. According to the 
petition, several vineyard owners are planning to expand their 
vineyards by a total of an additional 14 acres in the near future, and 
4 new vineyards are also planned.
    According to the petition, the distinguishing feature of the 
proposed AVA is its climate, relying on the USDA plant hardiness zone 
map and the growing degree day accumulations (GDDs) \1\ for the 
proposed AVA and the surrounding areas.
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    \1\ In the Winkler climate classification system, annual heat 
accumulation during the growing season, measured in annual growing 
degree days (GDDs), defines climatic regions. One GDD accumulates 
for each degree Fahrenheit that a day's mean temperature is above 50 
degrees, the minimum temperature required for grapevine growth. See 
Albert J. Winkler, General Viticulture (Berkeley: University of 
California Press, 2d ed. 1974), pages 61-64.
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Plant Hardiness Zones

    According to the USDA plant hardiness zone map, which ranges from 
the coolest zone 1 to the warmest zone 13, the proposed Upper Hudson 
AVA falls into zones 5a and 5b. Average minimum temperatures in these 
zones range from -20 to -15 degrees F. The petition states that these 
average minimum winter temperatures are cold enough to damage or even 
kill many varieties of grapes. Therefore, vineyard owners within the 
proposed AVA plant cold hardy varieties such as Marquette, Frontenac, 
La Crescent, and La Crosse, which have been developed to withstand 
temperatures as low as -30 degrees F. Regions to the immediate east and 
west of the proposed Upper Hudson AVA are also classified as zones 5a 
and 5b. Regions farther to the west and northwest of the proposed AVA 
are classified as zones 3b, 4a, and 4b, with average minimum 
temperatures between -35 and -25 degrees F. The region to the south of 
the proposed AVA is classified as zones 6a and 6b with average minimum 
temperatures between -10 and 0 degrees F, and able to grow a wider 
variety of grapes.

Growing Degree Days

    The petition states that the locations within the proposed AVA 
achieved GDD accumulations ranging between 2,300 and 2,700. A GDD 
accumulation of over 2,500 is generally considered to be the minimum 
GDD accumulations needed to ripen most varieties of grapes.\2\ 
According to the petition, the locations within the proposed AVA reach 
2,500 GDDs late in September, meaning that the fruit typically has only 
a few weeks to continue maturing before the first frost sets in. The 
petition states that, as a result, wineries often must work with tart 
fruit and remove the tartness as part of the winemaking process through 
the use of malolactic fermentation, pH adjustment, or residual sugars.
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    \2\ Id. at 61-64, 143.
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    Locations to the north and south of the proposed AVA have GDD 
accumulations over 2,700 due to the warming effects of Lake Champlain 
and the tidal portion of the Hudson River respectively. The petition 
states that grapes in these warmer regions have more time to mature 
before the first frost, so the grapes ``have the tartness removed in 
the vineyard.''
    The remaining locations, to the east, southeast, southwest, and 
west of the proposed Upper Hudson AVA, all have lower GDD accumulations 
than the proposed AVA. The petition claims that viticulture in these 
regions would be difficult because the GDD accumulations would not 
reach the levels necessary to reliably ripen most varieties of grapes.
    As a result of its climate, the proposed Upper Hudson AVA is 
suitable for growing cold-hardy grape hybrids, but not the grape 
varieties that are commonly grown farther south within the established 
Hudson River Region AVA.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 174 in the Federal Register on April 9, 
2018 (83 FR 15091), proposing to establish the Upper

[[Page 62709]]

Hudson 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 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. 174. In Notice No. 174, 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 June 8, 2018.

Comments Received

    In response to Notice No. 174, TTB received seven comments, all of 
which expressed support for the proposed AVA. Some of the commenters 
suggested that the proposed AVA will increase tourism and provide 
economic benefits to the region. Others suggested that the 
establishment of the proposed Upper Hudson AVA will help to showcase 
the uniqueness of this area based on its climate. TTB did not receive 
any comments opposing the proposed AVA.

TTB Determination

    After careful review of the petition and the comments received in 
response to Notice No. 174, TTB finds that the evidence provided by the 
petitioner supports the establishment of the Upper Hudson 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 ``Upper Hudson'' AVA in in all or 
portions of Albany, Montgomery, Rensselaer, Saratoga, Schenectady, 
Schoharie, and Washington Counties in New York, effective 30 days from 
the publication date of this document.

Boundary Description

    See the narrative description of the boundary of the Upper Hudson 
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, ``Upper Hudson,'' 
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 ``Upper Hudson'' 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 Upper Hudson AVA will 
not affect any existing AVA. The establishment of the Upper Hudson AVA 
will allow vintners to use ``Upper Hudson'' as an appellation of origin 
for wines made primarily from grapes grown within the Upper Hudson AVA 
if the wines meet the eligibility requirements for the appellation.

Regulatory Flexibility Act

    TTB certifies that this regulation will not have a significant 
adverse 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

    Caroline Hermann 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.  9.264 to read as follows:


Sec.  9.264  Upper Hudson.

    (a) Name. The name of the viticultural area described in this 
section is ``Upper Hudson''. For purposes of part 4 of this chapter, 
``Upper Hudson'' is a term of viticultural significance.
    (b) Approved maps. The four United States Geological Survey (USGS) 
1:100,000 scale topographic maps used to determine the boundary of the 
Upper Hudson viticultural area are titled:
    (1) Glens Falls, New York--Vermont, 1989;
    (2) Albany, New York--Massachusetts--Vermont, 1989;
    (3) Amsterdam, New York, 1985; photoinspected 1990; and
    (4) Gloversville, New York, 1985; photoinspected 1992.
    (c) Boundary. The Upper Hudson viticultural area is located in 
Albany, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, and 
Washington Counties in New York. The boundary of the Upper Hudson 
viticultural area is as described below:
    (1) The point of the beginning is on the Glens Falls map at the 
intersection of U.S. Highway 9 and State Highway 32, in Glens Falls. 
From the beginning point, proceed east on State Highway 32 to its 
intersection with State Highway 254; then
    (2) Proceed southeasterly along State Highway 254 to its 
intersection with U.S. Highway 4 in Hudson Falls; then
    (3) Proceed south along U.S. Highway 4 to its intersection with 
State Highway 197 in Fort Edward; then
    (4) Proceed east, then southeast along State Highway 197 to its 
intersection with State Highway 40 in Argyle; then

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    (5) Proceed southeast in a straight line to the intersection of 
State Highway 29 and State Highway 22 in Greenwich Junction; then
    (6) Proceed south along State Highway 22, crossing onto the Albany 
map, to the highway's intersection with State Highway 7 in Hoosick; 
then
    (7) Proceed southwest along State Highway 7, crossing the Hudson 
River, to the highway's intersection with State Highway 32 in Green 
Island; then
    (8) Proceed south on State Highway 32 to its intersection with U.S. 
Highway 20 in Albany; then
    (9) Proceed west on U.S. Highway 20 its intersection with U.S. 
Highway 9; then
    (10) Proceed southwest along U.S. Highway 9 to its intersection 
with State Highway 443; then
    (11) Proceed southwest, then westerly along State Highway 443, 
crossing onto the Amsterdam map, to the highway's intersection with an 
unnamed state highway known locally as State Highway 30 in Vroman 
Corners; then
    (12) Proceed northwesterly along State Highway 30 to its 
intersection with State Highway 30A in Sidney Corners; then
    (13) Proceed north along State Highway 30A, crossing over the 
Mohawk River, to the highway's intersection with State Highway 5 in 
Fonda; then
    (14) Proceed east along State Highway 5 to its intersection with 
State Highway 67 in Amsterdam; then
    (15) Proceed east along State Highway 67 to its intersection with 
an unnamed light-duty road known locally as Morrow Road; then
    (16) Proceed northeast in a straight line, crossing over the 
southeastern corner of the Gloversville map and onto the Glens Falls 
map, to the point where Daly Creek empties into Great Sacandaga Lake; 
then
    (17) Proceed northeast, then east along the southern shore of Great 
Sacandaga Lake to its confluence with the Hudson River in the town of 
Lake Luzerne; then
    (18) Proceed south, then easterly along the southern bank of the 
Hudson River to its intersection with U.S. Highway 9 in South Glens 
Falls; then
    (19) Proceed northwest along U.S. Highway 9, crossing the Hudson 
River, and returning to the beginning point.

    Signed: September 10, 2018.
John J. Manfreda,
Administrator.
    Approved: November 13, 2018.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade, and Tariff Policy).
[FR Doc. 2018-26320 Filed 12-4-18; 8:45 am]
 BILLING CODE 4810-31-P