[Federal Register Volume 83, Number 240 (Friday, December 14, 2018)]
[Rules and Regulations]
[Pages 64276-64280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27017]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2018-0006; T.D. TTB-155; Ref: Notice No. 175]
RIN 1513-AC39


Establishment of the Van Duzer Corridor Viticultural Area and 
Clarification of the Eola-Amity Hills Viticultural Area Boundary 
Description

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 59,871-acre ``Van Duzer Corridor'' viticultural area 
in Polk and

[[Page 64277]]

Yamhill Counties, Oregon. The viticultural area lies entirely within 
the established Willamette Valley 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. TTB also clarifies the boundary description of the adjacent 
Eola-Amity Hills viticultural area.

DATES: This final rule is effective January 14, 2019.

FOR FURTHER INFORMATION CONTACT: Kaori Flores, 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. 3190.

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, 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 to TTB 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.

Van Duzer Corridor Petition

    TTB received a petition from Mr. Jeff Havlin, the owner of Havlin 
Vineyard and chair of the Van Duzer Corridor AVA Committee, on behalf 
of himself and other local grape growers and vintners proposing the 
establishment of the ``Van Duzer Corridor'' AVA in portions of Yamhill 
and Polk Counties.
    The proposed Van Duzer Corridor AVA is located in Oregon and lies 
entirely within the established Willamette Valley AVA (27 CFR 9.90) and 
covers approximately 59,871 acres. There are 17 commercially-producing 
vineyards covering a total of approximately 1,000 acres, as well as 6 
wineries, within the proposed AVA.
    According to the petition, the distinguishing features of the 
proposed Van Duzer Corridor AVA are its topography, climate, and soils. 
The topography of the proposed Van Duzer Corridor is characterized by 
low elevations and gently rolling hills. The low elevations allow cool 
breezes to flow relatively unimpeded from the Pacific Ocean, through 
the Coastal Ranges, forming a wind corridor gap known as the ``Van 
Duzer Corridor.'' The western end of the Van Duzer Corridor wind gap is 
narrow and squeezed by high elevations to the north and south, leaving 
little room for viticulture. However, the eastern end of the Van Duzer 
Corridor wind gap, where the proposed Van Duzer Corridor AVA is 
located, features the same low elevations, and rolling hills as the 
western portion, with the distinction of having a wider area suitable 
for vineyards. Within the Van Duzer Corridor AVA, the elevation does 
not impede the eastward-flowing marine air, allowing higher wind speeds 
to flow through. In contrast, the surrounding regions all have higher 
elevations.
    Additionally, the climate of the proposed Van Duzer Corridor AVA is 
characterized by consistent high wind speeds and low cumulative growing 
degree day (GDD) accumulations.\1\ The consistently high winds in the 
proposed AVA contribute to thicker grape skins, and raise the levels of 
phenolic compounds in the fruit. In contrast, the wind speeds to the 
north and south-southeast of the proposed AVA are slower. The proposed 
Van Duzer Corridor has lower GDD accumulations than the surrounding 
regions to the north and southeast, indicating that its temperatures 
are generally cooler. The cooler temperatures ripen the fruit slowly, 
creating a longer hang time than for the same grape varietal grown in a 
region with higher GDD accumulations. The longer hang time contributes 
to a reduced acidity level. TTB notes that the petition did not include 
wind speed data and GDD accumulations for the regions to the west and 
south-southwest of the proposed AVA.
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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, 1974), pages 61-64.
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    Lastly, the soils of the proposed Van Duzer Corridor AVA are 
primarily

[[Page 64278]]

uplifted marine sedimentary loams and silts with alluvial overlay, as 
well as some uplifted basalt. The soils are typically shallow, well-
drained, and have a bedrock of siltstone. The high silt and clay levels 
in the soils balance the overall pH level of the soil by buffering 
against a sudden increase or decrease in soil pH. The buffering effect 
is beneficial to vineyards because it boosts the ability of the soils 
to maintain a stable pH level. In contrast, the soils immediately 
outside the northern and western boundaries contain soils from 
different soil series. Farther north and west, the soils contain higher 
concentrations of basalt and other volcanic materials. In contrast, 
east of the proposed Van Duzer Corridor AVA, within the Eola-Amity 
Hills AVA (27 CFR 9.202), the soils contain larger amounts of volcanic 
material than the proposed AVA. Additionally, south of the proposed 
AVA, the soils contain large concentrations of Ice Age loess, which is 
not found in the proposed Van Duzer Corridor AVA.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 175 in the Federal Register on April 6, 
2018 (83 FR 14795), proposing to establish the Van Duzer Corridor 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. 
175.
    In Notice No. 175, TTB solicited comments on the accuracy of the 
name, boundary, and other required information submitted in support of 
the petition. In addition, given the proposed Van Duzer Corridor AVA's 
location within the Willamette Valley AVA, TTB solicited comments on 
whether the evidence submitted in the petition regarding the 
distinguishing features of the proposed AVA sufficiently differentiates 
it from the Willamette Valley AVA. Finally, TTB requested comments on 
whether the geographic features of the proposed AVA are so 
distinguishable from the Willamette Valley AVA that the proposed Van 
Duzer Corridor AVA should no longer be part of the established AVA. The 
comment period closed June 5, 2018.

Comments Received on the Proposed Van Duzer Corridor AVA

    In response to Notice No. 175, TTB received a total of 18 comments. 
Commenters included local residents, members of the wine industry, 
several vineyard employees, wine consultants, and consumers. All of the 
comments generally supported the establishment of the proposed Van 
Duzer Corridor AVA, with six of the commenters noting the effects of 
the proposed AVA's higher wind speeds on the grape skins. Four of the 
commenters also supported the establishment of the proposed Van Duzer 
Corridor AVA due to the marine sedimentary soils and the unique 
topography. None of the comments opposed the establishment of the 
proposed AVA.
    TTB received one comment that supported the establishment of the 
proposed AVA, but the commenter also suggested ``Salt Creek'' as an 
``equally suitable'' and ``much more pleasant'' name. However, TTB 
regulations require a proposed AVA name to be supported by evidence 
that demonstrates the name is currently used to refer to the proposed 
AVA. See Sec.  9.12(a)(1). The commenter did not submit evidence of the 
current use of the name ``Salt Creek'' to refer to the region of the 
proposed AVA, nor did she provide any documentation refuting the 
evidence provided in the petition in support of the name ``Van Duzer 
Corridor.'' Therefore, TTB cannot determine that ``Salt Creek'' is a 
more appropriate name for the proposed AVA than ``Van Duzer Corridor.''
    Another comment asked if the word ``corridor'' could be omitted 
from the AVA name when used as an appellation of origin on wine labels. 
Section 9.12(a)(1) requires an AVA name to be supported by evidence of 
current use of the name to refer to the region. Because neither the 
commenter nor the petitioner provided name evidence that the area is 
simply known as ``Van Duzer,'' TTB cannot determine if ``Van Duzer,'' 
standing alone, would be an appropriate alternative name for the 
proposed AVA. As a result, TTB would only allow the full AVA name ``Van 
Duzer Corridor'' to be used as an appellation of origin on a wine label 
once the proposed AVA is established. However, TTB did not propose to 
designate the phrase ``Van Duzer'' as a term of viticultural 
significance with respect to this proposed AVA, since doing so could 
have an adverse effect on current labels that use ``Van Duzer'' as part 
of a brand name. Therefore, if the proposed AVA is established, the 
phrase ``Van Duzer'' (without the word ``corridor'') may be used as a 
brand name or as part of a brand name on wine labels without having to 
meet the appellation of origin eligibility requirements for the Van 
Duzer Corridor viticultural area.

Clarification of the Eola-Amity Hills AVA Boundary Description

    Because one of the established Eola-Amity Hills AVA boundaries is 
concurrent with the boundary of the proposed Van Duzer Corridor AVA, 
TTB also proposed in Notice No. 175 to clarify the description of 
portions of the Eola-Amity Hills AVA boundary. The clarifications were 
proposed to correct errors in the current description of the boundary. 
TTB received no comments on the proposed boundary clarifications during 
the public comment period for Notice No. 175. Therefore, TTB is 
proceeding with clarifying the description of the Eola-Amity Hills AVA 
boundary in this document.
    The first boundary clarification concerns the description of the 
beginning point of the AVA boundary. The Eola-Amity Hills AVA boundary 
description shall now begin at the intersection of State Highway 22 and 
Rickreall Road instead of the intersection of State Highway 22 and 223, 
which is located west of the town of Rickreall, Oregon. TTB believes 
the erroneous description of the Eola-Amity Hills boundary beginning 
point resulted from a misreading of the markings for State Highway 223 
on the Rickreall, Oregon map. TTB also believes that Oregon wine 
industry members always have understood the Eola-Amity Hills AVA 
boundary to begin at the intersection of State Highway 22 rather than 
at the currently-described beginning point. TTB notes that 
commercially-produced maps of the Eola-Amity Hills AVA show its 
boundary located at the intersection of State Highway 22 and Rickreall 
Road. For example, see the Eola-Amity Hills AVA maps posted at http://eolaamityhills.com/explore-our-region/regional-map/ and http://www.everyvine.com/wine-regions/region/Eola_-_Amity_Hills/.
    Additionally, TTB is further amending the Eola-Amity Hills boundary 
descriptions for clarity. TTB is removing the word ``township'' from 
``township of Bethel'' to add a more precise description of the point 
where the AVA's boundary intersects the 200-foot contour line, and to 
minimize confusion since Bethel appears on the Amity, Oregon Map as the 
name of a crossroads, not as the name of a political or geographic 
township. TTB is also clarifying the direction in which the

[[Page 64279]]

Eola-Amity Hills AVA boundary proceeds along the 200-foot contour line 
from Oak Grove Road, to clarify the point at which that contour line 
intersects Zena Road, and to clarify that the boundary follows Zena 
Road for a short distance to its intersection with Oak Grove Road south 
of Bethel. TTB is also clarifying that the AVA boundary follows 
Frizzell Road to the road's first intersection with the 200-foot 
contour line. Lastly, TTB is clarifying that, in returning to the AVA's 
boundary's beginning point, the boundary crosses from the Amity, Oregon 
map onto the Rickreall, Oregon map. TTB believes the correction and 
clarifications will not affect the ability of any bottler to use the 
Eola-Amity Hills AVA name on a wine label.

TTB Determination

    After careful review of the petition and the comments received in 
response to Notice No. 175. TTB finds that the evidence provided by the 
petitioner supports the establishment of the Van Duzer Corridor 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 ``Van Duzer Corridor'' AVA in portions of Yamhill and 
Polk Counties, Oregon, effective 30 days from the publication date of 
this document.
    TTB has also determined that the Van Duzer Corridor AVA will remain 
part of the established Willamette Valley AVA. As discussed in Notice 
No. 175, the proposed Van Duzer Corridor shares some broad 
characteristics with the established AVA. For example, elevations 
within the proposed AVA are below 1,000 feet, and the soils are 
primarily silty loams and clay loams. However, the proposed Van Duzer 
Corridor AVA's location at the eastern end of the only wind gap in the 
portion of the Coastal Ranges that borders the Willamette Valley AVA 
creates a unique microclimate with persistently high wind speeds and 
lower growing degree day accumulations. The grapes grown in the 
proposed AVA have different physical characteristics, such as thicker 
grape skins, and maturation rates than the same varietals grown in 
other parts of the Willamette Valley AVA.

Boundary Description

    See the narrative description of the boundary of the Van Duzer 
Corridor 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, ``Van Duzer 
Corridor'' 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 ``Van Duzer Corridor'' 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 the 
phrase ``Van Duzer'' as a term of viticultural significance, in order 
to avoid a potential negative effect on current labels that use ``Van 
Duzer'' as part of a brand name on wine labels. Therefore, if the 
proposed AVA is established, the phrase ``Van Duzer'' (without the word 
``corridor'') may be used as a brand name or as part of a brand name on 
wine labels without having to meet the appellation of origin 
eligibility requirements for the Van Duzer Corridor viticultural area.
    The establishment of the Van Duzer Corridor AVA will not affect any 
existing AVA, and any bottlers using ``Willamette Valley'' as an 
appellation of origin or in a brand name for wines made from grapes 
grown within the Willamette Valley AVA will not be affected by the 
establishment of this new AVA. The establishment of the Van Duzer 
Corridor AVA will allow vintners to use ``Van Duzer Corridor'' and 
``Willamette Valley'' as appellations of origin for wines made 
primarily from grapes grown within the Van Duzer Corridor 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

    Kaori Flores 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. Amend Sec.  9.202 by revising paragraphs (c)(1), (12), (13), (15), 
and (16) to read as follows:


Sec.  9.202  Eola-Amity Hills.

* * * * *
    (c) * * *
    (1) The beginning point is on the Rickreall, Oregon, map at the 
intersection of State Highway 22 and Rickreall Road, near the Oak Knoll 
Golf Course, in section 50, T7S, R4W;
* * * * *
    (12) Follow Old Bethel Road, which becomes Oak Grove Road, south 
until the road intersects the 200-foot contour line approximately 400 
feet north of Oak Grove Road's northern intersection with

[[Page 64280]]

Zena Road, just northwest of Bethel; then
    (13) Follow the 200-foot contour line easterly and then southerly 
until its first intersection with Zena Road, and then follow Zena Road 
west approximately 0.25 mile to its southern intersection with Oak 
Grove Road, south of Bethel; then
* * * * *
    (15) Follow Frizzell Road west for approximately 0.25 mile to its 
first intersection with the 200-foot contour line, then
    (16) Follow the 200-foot contour line generally south, crossing 
onto the Rickreall, Oregon, map, until the contour line intersects the 
beginning point.

0
3. Subpart C is amended by adding Sec.  9.265 to read as follows:


Sec.  9.265   Van Duzer Corridor.

    (a) Name. The name of the viticultural area described in this 
section is ``Van Duzer Corridor''. For purposes of part 4 of this 
chapter, ``Van Duzer Corridor'' is a term of viticultural significance.
    (b) Approved maps. The five United States Geological Survey (USGS) 
1:24,000 scale topographic maps used to determine the boundary of the 
Van Duzer Corridor viticultural area are titled:
    (1) Sheridan, Oreg., 1956; revised 1992;
    (2) Ballston, Oreg., 1956; revised 1992;
    (3) Dallas, Oreg., 1974; photorevised 1986;
    (4) Amity, Oreg., 1957; revised 1993; and
    (5) Rickreall, Oreg., 1969; photorevised 1976;
    (c) Boundary. The Van Duzer Corridor viticultural area is located 
in Polk and Yamhill Counties, in Oregon. The boundary of the Van Duzer 
Corridor viticultural area is as described below:
    (1) The beginning point is on the Sheridan map at the intersection 
of State Highway 22 and Red Prairie Road. From the beginning point, 
proceed southeasterly along State Highway 22 for a total of 12.4 miles, 
crossing over the Ballston and Dallas maps and onto the Rickreall map, 
to the intersection of the highway with the 200-foot elevation contour 
west of the Oak Knoll Golf Course; then
    (2) Proceed north on the 200-foot elevation contour, crossing onto 
the Amity map, to the third intersection of the elevation contour with 
Frizzell Road; then
    (3) Proceed east on Frizzell Road for 0.3 mile to the intersection 
of the road with Oak Grove Road; then
    (4) Proceed north along Oak Grove Road for 1.7 miles to the 
intersection of the road with Zena Road; then
    (5) Proceed east on Zena Road for approximately 0.25 mile to the 
second intersection of the road with the 200-foot elevation contour; 
then
    (6) Proceed northwest along the 200-foot elevation contour to the 
intersection of the elevation contour with Oak Grove Road; then
    (7) Proceed north along Oak Grove Road (which becomes Old Bethel 
Road) approximately 7.75 miles to the intersection of the road with 
Patty Lane; then
    (8) Proceed west in a straight line for a total of 10.8 miles, 
crossing over the Ballston map and onto the Sheridan map, to the 
intersection of the line with State Highway 18; then
    (9) Proceed southwest along State Highway 18 for 0.3 miles to the 
intersection of the highway with Red Prairie Road; then
    (10) Proceed south along Red Prairie Road for approximately 5.3 
miles, returning to the beginning point.

    Signed: October 9, 2018.
John J. Manfreda,
Administrator.
    Approved: December 4, 2018.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2018-27017 Filed 12-13-18; 8:45 am]
 BILLING CODE 4810-31-P