[Federal Register Volume 86, Number 115 (Thursday, June 17, 2021)]
[Rules and Regulations]
[Pages 32189-32191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12770]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2020-0003; T.D. TTB-166; Ref: Notice No. 188]
RIN 1513-AC70


Establishment of the Palos Verdes Peninsula 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 15,900-acre ``Palos Verdes Peninsula'' viticultural 
area in the southwestern coastal region of Los Angeles County, 
California. The Palos Verdes Peninsula viticultural area is not located 
within, nor does it contain, any 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 July 19, 2021.

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 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;

[[Page 32190]]

     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;
     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.

Palos Verdes Peninsula Petition

    TTB received a petition from James York, owner of Catalina View 
Wines, on behalf of the Palos Verdes Peninsula Winegrowers, proposing 
to establish the ``Palos Verdes Peninsula'' AVA. The proposed AVA is 
located in Los Angeles County, California, and includes the cities of 
Palos Verdes Estates, Rolling Hills Estates, Rancho Palos Verdes, and 
Rolling Hills, California. The proposed AVA is not located within, nor 
does it contain, any established AVA. Within the 15,900-acre proposed 
AVA, there are 7 acres of commercial vineyards. The distinguishing 
features of the proposed Palos Verdes Peninsula AVA are its geology, 
soils, topography, and climate.
    The proposed Palos Verdes Peninsula AVA is located on an isolated 
upland peninsula created by tectonic uplift and volcanic activity. 
Periods of intense geologic activity subjected the region of the 
proposed AVA to repeated cycles of uplift, erosion, submersion, and 
deposition. The submersion process laid down significant amounts of 
marine deposits, which contributed to the soil composition. Uplift 
created new lands, while erosion wore away the newly-formed lands to 
create the series of marine terraces that characterize the region's 
topography today. The geology of the proposed AVA consists primarily of 
the Monterey Formation and ancient landslides, which formed the basis 
for two of the primary soils of the proposed AVA--Altamont Clay Adobe 
and Altamont Clay Loam. A third soil commonly found in the proposed AVA 
is the Diablo Clay Adobe. These three soils are rich in clays, adobe, 
and loamy clay and contain high amounts of calcium. The soils retain 
moisture in dry weather while allowing for good drainage. According to 
the petition, the levels of calcium in the soils produce thicker grape 
skins than are found on the same grape varietals grown in non-
calcareous soils. The thicker grape skins increase the amount of color, 
flavor, and aromatics in the resulting wine.
    The topography of the proposed Palos Verdes Peninsula AVA consists 
of a low altitude mountain of the Coast Range situated between the Los 
Angeles Plain and the Pacific Ocean. Rolling hills, incised canyons, 
and coastal bluffs and terraces cover the proposed AVA. Elevations 
range from sea level on the western and southern edges of the proposed 
AVA to about 1,460 feet above sea level at San Pedro Hill, which is 
located near the eastern/central area of the Palos Verdes Hills. The 
slope angles of the vineyards in the proposed AVA range from gentle to 
high (0-50%). Terracing the vineyards that are planted on steeper 
slopes allows for drainage/erosion control, equipment access, and 
optimal solar orientation. The moderate slopes within the proposed AVA 
promote air flow to minimize mildew and frost risk and also allow for 
drainage of excess water. The aspects of the vineyard slopes face 
south, southeast, and southwest, providing year-round solar exposure. 
South-facing and southwest-facing slopes promote earlier bud break, 
bloom, and harvest than other aspects. Southeast-facing slopes bring 
morning radiation for soil warmth and canopy growth.
    The climate of the proposed Palos Verdes Peninsula AVA is 
``Mediterranean warm,'' which is characterized by warm, dry summers and 
mild winters with limited rainfall. Average monthly high temperatures 
within the proposed AVA range from 63 to 74 degrees Fahrenheit (F), and 
average monthly low temperatures range from 48 to 62 degrees F. Extreme 
monthly highs range from 74 to 84 degrees F, and extreme monthly lows 
range from 46 to 60 degrees. Average annual rainfall within the 
proposed AVA is 14.03 inches. According to the petition, these climatic 
conditions are suitable for growing grape varietals such as Pinot Noir, 
Chardonnay, Merlot, and Cabernet Sauvignon.
    To the south and west of the proposed Palos Verdes Peninsula AVA is 
the Pacific Ocean. To the north, northeast, and east of the proposed 
AVA are relatively flat lowland areas with elevations ranging from sea 
level to about 500 feet and slope angles of 25 percent or less. These 
lowland regions experienced less intense levels of tectonic uplift and 
volcanic activity, and the geology consists mainly of surficial 
sediments, older surficial sediments, and shallow marine sediments. 
Soils to the north, northeast, and east of the proposed AVA have lower 
levels of clay and calcium than the soils of the proposed AVA. Monthly 
average temperatures in the regions surrounding the proposed AVA are 
generally warmer, ranging between 4 and 6 degrees F higher in the 
colder months and between 5 and 8 degrees F higher in the warmer 
months. The average highest and lowest monthly temperatures in the 
surrounding regions are also more extreme than those within the 
proposed Palos Verdes Peninsula. Finally, the average annual rainfall 
amounts are generally lower in the regions surrounding the proposed 
AVA.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 188 in the Federal Register on May 26, 
2020 (85 FR 31416), proposing to establish the Palos Verde Peninsula 
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. 188.
    In Notice No. 188, TTB solicited comments on the accuracy of the 
name, boundary, and other required information submitted in support of 
the petition. The comment period closed July 27, 2020.
    In response to Notice No. 188, TTB received a total of four 
comments. The commenters included local wine industry members and a 
former member of the Rancho Palos Verdes Planning Commission. All of 
the comments supported the establishment of the proposed Palos Verdes 
Peninsula AVA. Two of the comments expressed support for the proposed 
AVA due to its unique characteristics (comments 3 and 4), one comment 
supported the proposal due to the quality of wines produced from grapes 
grown in the region (comment 1), and the fourth comment expressed 
general support for the proposal without offering an explanation 
(comment 2).

TTB Determination

    After careful review of the petition and the comments received in 
response to Notice No. 188, TTB finds that the evidence provided by the 
petitioner supports the establishment of the Palos Verdes Peninsula 
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

[[Page 32191]]

the ``Palos Verdes Peninsula'' AVA in Los Angeles County, California, 
effective 30 days from the publication date of this document.

Boundary Description

    See the narrative description of the boundary of the Palos Verdes 
Peninsula AVA 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. You may also view the Palos Verdes 
Peninsula AVA boundary 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 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 the Palos Verdes Peninsula AVA, its name, 
``Palos Verdes Peninsula,'' 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 ``Palos Verdes Peninsula'' 
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.

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.  9.274 to read as follows:


Sec.  9.274   Palos Verdes Peninsula.

    (a) Name. The name of the viticultural area described in this 
section is ``Palos Verdes Peninsula''. For purposes of part 4 of this 
chapter, ``Palos Verdes Peninsula'' 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 
Palos Verdes Peninsula viticultural area are titled:
    (1) Redondo Beach, CA, 1996;
    (2) Torrance, Calif., 1964 (photorevised 1981); and
    (3) San Pedro Calif., 1964 (photorevised 1981).
    (c) Boundary. The Palos Verdes Peninsula viticultural area is 
located in the southwestern coastal region of Los Angeles County, and 
contains the cities of Palos Verdes Estates, Rolling Hills, Rolling 
Hills Estates, and Rancho Palos Verdes, California. The boundary of the 
Palos Verdes Peninsula viticultural area is as described below:
    (1) The beginning point is on the Redondo Beach map at the 
intersection of the Pacific Ocean and the Torrance corporate boundary 
at Malaga Cove, R14W/T4S; then
    (2) From the beginning point, proceed east, then generally 
southeast, along the Torrance corporate boundary, crossing onto the 
Torrance map, to the corporate boundary's intersection with the Lomita 
corporate boundary, R14W/T4S; then
    (3) Proceed generally southeast along the Lomita corporate boundary 
to its intersection with Western Avenue, R14W/T4S; then
    (4) Proceed south along Western Avenue, crossing onto the San Pedro 
map, to the road's intersection with the Los Angeles city boundary, 
R14W/T5S; then
    (5) Proceed west, then generally south, then southwest along the 
Los Angeles city boundary to its intersection with the Pacific Ocean at 
Palos Verdes Peninsula Park, R14W/T5S; then
    (6) Proceed clockwise along the Pacific coastline to return to the 
beginning point.

    Signed: December 1, 2020.
Mary G. Ryan,
Administrator.
    Approved: January 5, 2021.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2021-12770 Filed 6-16-21; 8:45 am]
BILLING CODE 4810-31-P