[Federal Register Volume 85, Number 187 (Friday, September 25, 2020)]
[Rules and Regulations]
[Pages 60358-60362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18741]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2019-0006; T.D. TTB-163; Ref: Notice No. 184]
RIN 1513-AC42


Establishment of the Candy Mountain Viticultural Area and 
Modification of the Yakima 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) establishes 
the approximately 815-acre ``Candy Mountain'' viticultural area in 
Benton County, Washington. TTB is also expanding the boundary of the 
existing 1,093-square mile Yakima Valley viticultural area by 
approximately 72 acres in order to avoid a partial overlap with the 
newly established Candy Mountain viticultural area. Both the existing 
Yakima Valley viticultural area and the newly established Candy 
Mountain viticultural area are located entirely within the existing 
Columbia 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.

DATES: This final rule is effective October 26, 2020.

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 the functions 
and duties in the administration and enforcement of these provisions to 
the TTB Administrator through Treasury Order 120-01, dated December 10, 
2013 (superseding Treasury Order 120-01, dated January 24, 2003).
    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

[[Page 60359]]

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;
     If the proposed AVA is to be established within, or 
overlapping, an existing AVA, an explanation that both identifies the 
attributes of the proposed AVA that are consistent with the existing 
AVA and explains how the proposed AVA is sufficiently distinct from the 
existing AVA and therefore appropriate for separate recognition; and
     A detailed narrative description of the proposed AVA 
boundary based on USGS map markings.

Candy Mountain Petition

    TTB received a petition from Dr. Kevin R. Pogue, a professor of 
geology at Whitman College, proposing the establishment of the ``Candy 
Mountain'' AVA in Benton County, Washington. The proposed Candy 
Mountain AVA lies entirely within the established Columbia Valley AVA 
(27 CFR 9.74) and partially within the established Yakima Valley AVA 
(27 CFR 9.69). To avoid the partial overlap, the petition also proposed 
expanding the Yakima Valley AVA by approximately 72 acres so that the 
entire proposed Candy Mountain AVA would be within the established AVA. 
Dr. Pogue submitted the petition on behalf of the following industry 
members with wine businesses within the proposed AVA: Ramer Holtan, who 
is developing a commercial wine grape vineyard on Candy Mountain; 
Premiere Columbia Partners LLC, owners of Candy Mountain Vineyard; and 
Paul and Vickie Kitzke, owners of Kitzke Cellars.
    Within the 815-acre proposed AVA, there are currently two producing 
commercial vineyards, Candy Mountain Vineyard and Kitzke Cellars, which 
cover a total of approximately 54 acres. Additionally, Mr. Holtan has 
secured long-term leases from the Washington Department of Natural 
Resources to plant 200 additional acres of vineyards within the 
proposed AVA. A copy of the lease was included in the petition as 
evidence of Mr. Holtan's intent to grow wine grapes. Currently, Kitzke 
Cellars is the only winery within the proposed AVA, although the 
petition notes that other wineries in Washington produce wines from 
grapes grown within the proposed AVA. According to the petition, the 
distinguishing features of the proposed Candy Mountain AVA are its 
soils and topography.
    The soils of the proposed Candy Mountain AVA are developed from 
wind-deposited silt (loess) and fine sand overlying sediment. The 
sediment is a mixture of gravel and sand that was derived directly from 
surging ice-age flood waters and also includes silt and fine sand that 
settled out of suspension when the flood waters pooled behind 
downstream topographic restrictions. The loess and sediment, in turn, 
both overlay basalt bedrock. The thickness of the flood-water sediment 
within the proposed Candy Mountain AVA gradually decreases as one moves 
up the mountain, and the sediment is not found within the upper 70 feet 
of the proposed AVA. By contrast, the regions to the north, south, and 
west of the mountain and the proposed Candy Mountain AVA are at lower 
elevations and, therefore, have thicker accumulations of flood 
sediments in their soils.
    According to the petition, the soils of the proposed AVA have an 
effect on viticulture. The soils are fairly loose, which allows for 
root expansion. The soils also do not have a large water holding 
capacity, meaning that vineyard owners must monitor soil moisture 
carefully to ensure the vines have adequate access to water. Finally, 
the thin soils allow roots to come into contact with the underlying 
basalt bedrock, which is comprised of calcium-rich feldspars and other 
minerals that are rich in iron and magnesium, such as pyroxene and 
olivine. The petition states that these minerals and nutrients are only 
present in the bedrock, so vines planted in the surrounding regions 
where the soil is thicker do not have the same access to these elements 
as vines planted within the proposed AVA.
    Topography also distinguishes the proposed Candy Mountain AVA from 
the surrounding regions. The proposed Candy Mountain AVA is located on 
the southwest-facing slope of Candy Mountain. Within the proposed AVA, 
elevations range from 640 feet to 1,320 feet, and slope angles are 
gentle to moderate and range from 2 to 20 degrees. Gentle slope angles 
facilitate mechanized vineyard maintenance and harvest. A south-facing 
slope aspect increases the amount per unit area of solar radiation that 
reaches the surface and promotes photosynthesis in the grape vines, as 
well as grape development and maturation.
    By contrast, the valley floor surrounding both the entire Candy 
Mountain and the proposed Candy Mountain AVA is essentially flat, with 
slope angles of less than 2 degrees, and is susceptible to cold air 
pooling and the associated frosts and freezes. Additionally, much of 
the land immediately surrounding the proposed AVA is a valley floor 
with elevations below 640 feet. The exception is the northeastern side 
of Candy Mountain, which has similar elevations to the proposed Candy 
Mountain AVA but was excluded from the proposed AVA due to 
northeasterly slope aspect and steep slope angles of up to 60 degrees.

Proposed Modification of the Yakima Valley AVA

    As previously noted, the petition to establish the proposed Candy 
Mountain AVA also requested an expansion of the established 1,093-
square mile Yakima Valley AVA. The proposed Candy Mountain AVA is 
located in the northeastern portion of the Yakima Valley AVA. Most of 
the proposed Candy Mountain AVA would, if established, be located 
within the current boundary of the Yakima Valley AVA. However, unless 
the boundary of the Yakima Valley AVA is modified, a small portion of 
the proposed Candy

[[Page 60360]]

Mountain AVA would be outside the Yakima Valley AVA. The proposed 
modification of the Yakima Valley AVA boundary would increase the size 
of the established AVA by 72 acres and would result in the entire 
proposed Candy Mountain AVA being within the Yakima Valley AVA.
    The petition states that the vineyards within the proposed 
expansion area are within the proposed Candy Mountain AVA but lie 
approximately 600 feet outside of the current boundary of the Yakima 
Valley AVA. The vineyards did not exist at the time the Yakima Valley 
AVA was established. However, the petition states that the proposed 
expansion area is associated with both the feature known as the Yakima 
Valley and the Yakima Valley AVA. For example, the proposed expansion 
area is part of the larger Yakima River drainage basin, which is a 
characteristic of the Yakima Valley AVA. Additionally, the petition 
states that the owners of Kitzke Cellars, who manage the seven acres of 
vineyards within the proposed expansion area, have aligned themselves 
with the Yakima Valley AVA through their membership in Wine Yakima 
Valley, which is the Yakima Valley AVA's marketing organization.
    The petition asserts that the proposed expansion area has similar 
soils, elevation, slope angles, and slope aspect as the remainder of 
the proposed Candy Mountain AVA, which is within the Yakima Valley AVA. 
The petition also describes the general similarities that the entire 
proposed Candy Mountain AVA shares with the established Yakima Valley 
AVA, such as similar soil series and geology.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 184 in the Federal Register on August 19, 
2019 (84 FR 42863), proposing to establish the Candy Mountain AVA and 
expand the Yakima Valley AVA. In the notice, TTB summarized the 
evidence from the petition regarding the name, boundary, and 
distinguishing features for the proposed AVA and the proposed AVA 
expansion area. The notice also compared the distinguishing features of 
the proposed AVA and the proposed expansion area to the surrounding 
areas. For a detailed description of the evidence relating to the name, 
boundary, and distinguishing features of the proposed AVA and boundary 
modification, and for a detailed comparison of the distinguishing 
features of the proposed AVA to the surrounding areas, see Notice No. 
184.
    In Notice No. 184, 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 Candy Mountain AVA's 
location within the Yakima Valley and Columbia Valley AVAs, TTB 
solicited comments on whether the evidence submitted in the petition 
regarding the distinguishing features of the proposed AVA sufficiently 
differentiates it from the two established AVAs. TTB also requested 
comments on whether the geographic features of the proposed AVA are so 
distinguishable from the two established AVAs that the proposed AVA 
should no longer be part of the established AVAs. The comment period 
closed October 18, 2019.
    In response to Notice No. 184, TTB received a total of two 
comments. One of the comments was from a winery owner who sources 
grapes from both the proposed Candy Mountain AVA and the adjacent Red 
Mountain AVA (27 CFR 9.167). The commenter supports the proposed Candy 
Mountain AVA because ``there do appear to be differences due to a sense 
of place between those two adjacent (proposed) AVAs.'' The second 
comment was from the petitioner, Dr. Kevin Pogue. In his comment, Dr. 
Pogue pointed out that the proposed rule incorrectly identified the 
size of the Yakima Valley AVA as 1,093 acres instead of 1,093 square 
miles. TTB notes that it has corrected the description of the size of 
the Yakima Valley AVA in this final rule document. Neither of the 
comments mentioned the proposed expansion of the established Yakima 
Valley AVA or the inclusion of the proposed Candy Mountain AVA within 
the established Yakima Valley or Columbia Valley AVAs.

TTB Determination

    After careful review of the petition and the comments received in 
response to Notice No. 184, TTB finds that the evidence provided by the 
petitioner supports the establishment of the Candy Mountain AVA and the 
modification of the Yakima Valley AVA boundary. 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 
``Candy Mountain'' AVA in Benton County, Washington, and modifies the 
boundary of the Yakima Valley AVA effective 30 days from the 
publication date of this document.
    TTB has also determined that the Candy Mountain AVA will remain 
part of both the established Columbia Valley AVA and the Yakima Valley 
AVA. As discussed in Notice No. 184, the Candy Mountain AVA shares some 
broad characteristics with both established AVAs. For example, the 
proposed AVA is located within the Yakima River drainage basin, which 
is a characteristic of the Yakima Valley AVA. The Warden-Shano 
Association and the Scootenay-Starbuck Association soils are found 
within both the proposed AVA and the Yakima Valley AVA. Elevations 
within the proposed AVA are under 2,000 feet, which is a general 
characteristic of the Columbia Valley AVA. However, the Candy Mountain 
AVA is located on an isolated mountain, whereas the majority of the 
Yakima Valley and Columbia Valley AVAs are described as broad, flat 
valleys. Additionally, the proposed AVA has steeper slope angles than 
much of the land within the Columbia Valley and Yakima Valley AVAs.

Boundary Description

    See the narrative description of the boundary of the Candy Mountain 
AVA and the Yakima Valley AVA boundary modification in the regulatory 
text published at the end of this final rule.

Maps

    The petitioners provided the required maps, and they are listed 
below in the regulatory text. The Candy Mountain AVA boundary and the 
modified Yakima Valley AVA boundary may also be viewed on the AVA Map 
Explorer on the TTB website, at https://www.ttb.gov/wine/ava-map-explorer.

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.

[[Page 60361]]

    With the establishment of the Candy Mountain AVA, its name, ``Candy 
Mountain,'' 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 regulations clarifies this point. Consequently, wine 
bottlers using the name ``Candy Mountain'' 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 Candy Mountain AVA will not affect the 
existing Columbia Valley or Yakima Valley AVAs, and any bottlers using 
``Columbia Valley'' or ``Yakima Valley'' as an appellation of origin or 
in a brand name for wines made from grapes grown within the Columbia 
Valley or Yakima Valley AVAs will not be affected by the establishment 
of this new AVA. The establishment of the Candy Mountain AVA will allow 
vintners to use ``Candy Mountain,'' ``Yakima Valley,'' and ``Columbia 
Valley'' as appellations of origin for wines made primarily from grapes 
grown within the Candy Mountain AVA if the wines meet the eligibility 
requirements for these appellations.
    The modification of the Yakima Valley AVA boundary will allow 
vintners to use ``Yakima Valley,'' ``Columbia Valley,'' and ``Candy 
Mountain'' as appellations of origin for wines made primarily from 
grapes grown within the expansion area if the wines meet the 
eligibility requirements for these appellations.

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. Amend Sec.  9.69 by revising paragraphs (b) and (c)(4), 
redesignating paragraphs (c)(5) through (c)(10) as paragraphs (c)(11) 
through (16), and adding new paragraphs (c)(5) through (c)(10) to read 
as follows:


Sec.  9.69  Yakima Valley.

* * * * *
    (b) Approved maps. The United States Geological Survey (USGS) maps 
used to determine the boundary of the Yakima Valley viticultural area 
are titled:
    (1) Walla Walla, Washington (1:250,000 scale), 1953; limited 
revision 1963;
    (2) Yakima, Washington (1:250,000 scale), 1958; revised 1971;
    (3) Benton City, WA (1:24,000 scale), 2013;
    (4) Badger Mountain, Washington (1:24,000 scale), 2013; and
    (5) Richland, Washington (1:24,000 scale), 2014.
* * * * *
    (c) * * *
    (4) Then southeast, crossing onto the Benton City map, to the top 
of Red Mountain;
    (5) Then southeast to a point on East Kennedy Road approximately 
2,500 feet east of an intermittent stream flowing north into Lost Lake;
    (6) Then southeast across the top of Candy Mountain, crossing onto 
the Badger Mountain map, and continuing to the intersection with the 
southernmost point of an unnamed road known locally as Arena Road; then
    (7) Proceed north for 0.45 mile along Arena Road, crossing onto the 
Richland map, to the intersection with the 670-foot elevation contour; 
then
    (8) Proceed generally east for 0.4 mile along the elevation contour 
to the intersection with Dallas Road; then
    (9) Proceed south in a straight line for 0.5 mile, crossing onto 
the Badger Mountain map, to the intersection with Interstate 182; then
    (10) Proceed southeast in a straight line, crossing onto the Walla 
Walla map, to the top of Badger Mountain;
* * * * *

0
3. Add Sec.  9.272 to read as follows:


Sec.  9.272  Candy Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``Candy Mountain''. For purposes of part 4 of this chapter, 
``Candy Mountain'' is a term of viticultural significance.
    (b) Approved maps. The three United States Geological Survey (USGS) 
1:24,000 scale topographic maps used to determine the boundary of the 
Candy Mountain viticultural area are titled:
    (1) Badger Mountain, Washington, 2013;
    (2) Benton City, Washington, 2013; and
    (3) Richland, Washington, 2014.
    (c) Boundary. The Candy Mountain viticultural area is located in 
Benton County in Washington. The boundary of the Candy Mountain 
viticultural area is as described below:
    (1) The beginning point is on the Badger Mountain map at the 
southernmost point of an unnamed road known locally as Arena Road. From 
the beginning point, proceed northwest in a straight line for 
approximately 1.85 miles, crossing onto the Benton City map, to the 
intersection with East Kennedy Road NE; then
    (2) Proceed westerly along East Kennedy Road NE for approximately 
2,500 feet to the intersection with an intermittent creek approximately 
0.8 mile south of Lost Lake; then
    (3) Proceed southeasterly along the easternmost fork of the 
intermittent creek to the intersection with Interstate 82; then
    (4) Proceed southeast along Interstate 82 for 2.25 miles, crossing 
over the Richland map and onto the Badger Mountain map, and continuing 
along the ramp onto Interstate 182 to a point due south of the 
intersection of Dallas Road and an unnamed road known locally as East 
260 Private Road NE; then
    (5) Proceed north in a straight line for 0.5 mile, crossing onto 
the Richland map, to the intersection of Dallas Road and the 670-foot 
elevation contour; then
    (6) Proceed west along the 670-foot elevation contour for 0.4 mile 
to the intersection with Arena Road; then
    (7) Proceed southerly along Arena Road for approximately 0.45 
miles, returning to the beginning point.


[[Page 60362]]


    Signed: April 14, 2020.
Mary G. Ryan,
Acting Administrator.
    Approved: August 12, 2020.
Timothy E. Skud,
Deputy Assistant Secretary, Tax, Trade, and Tariff Policy.
[FR Doc. 2020-18741 Filed 9-24-20; 8:45 am]
BILLING CODE 4810-31-P