[Federal Register Volume 86, Number 124 (Thursday, July 1, 2021)]
[Rules and Regulations]
[Pages 34955-34957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14058]



[[Page 34955]]

-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2020-0014; T.D. TTB-171; Ref: Notice No. 199]
RIN 1513-AC65


Establishment of the Ulupalakua Viticultural Area

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Final rule; Treasury decision.

-----------------------------------------------------------------------

SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) establishes 
the approximately 70-acre ``Ulupalakua'' viticultural area (AVA) on the 
island of Maui, Hawaii. The Ulupalakua 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 2, 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, once approved, a name and a delineated boundary 
codified 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 allows any interested 
party to 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 to establish or modify 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.

Ulupalakua AVA Petition

    TTB received a petition from Mark Beaman, winemaker at Maui Wines, 
proposing the establishment of the ``Ulupalakua'' AVA. The proposed AVA 
is located within the privately-owned, 18,000-acre Ulupalakua Ranch on 
the island of Maui, Hawaii. The proposed AVA contains approximately 70 
acres, with approximately 16 acres of vineyards. Although there is no 
winery within the boundary of the proposed AVA, grapes from the 
proposed AVA are made into wine at the Maui Wines facility, which is a 
short distance south of the proposed AVA. According to the petition, 
the distinguishing features of the proposed Ulupalakua AVA include its 
topography, soils, and climate.
    The proposed Ulupalakua AVA contains a series of four distinct 
benches that are oriented to the southwest. The benches are gently 
sloped, with slope angles between 0 and 5 percent, and are separated by 
steeper erosional ravines. The petition states that the gentle slopes 
of the benches minimize the risk of erosion, facilitate safe 
agriculture, and allow vineyards planted on the benches to receive 
uniform amounts of sunlight, rainfall, and temperature-moderating cloud 
cover. By contrast, the surrounding regions all contain steeper slopes. 
The petition notes that the regions to the north, west, and east of the 
proposed AVA have average slope angles of 15 to 17 percent. The 
petition also notes that the regions to the north and west of the 
proposed AVA contain more erosional features, such as ravines, which 
are less suitable for viticulture than gently sloping benches. 
Furthermore, the region to the south of the proposed AVA contains 
rugged, exposed volcanic rocks that are not suitable for viticulture.
    The soils of the proposed Ulupalakua AVA formed from the erosion of 
ancient alkali lava flows from Mt. Haleakala. Kula loam makes up 80 
percent of the soil of the proposed AVA and is derived from weathered 
basic igneous rocks. The remaining 20 percent of the soils of the 
proposed AVA are comprised of the Io series, which are silt loams that 
gradually acquire more clay deeper in the soils. According to the 
petition, the soils of the proposed AVA are fertile enough to produce 
healthy vines and fruit without promoting excessive vine and leaf 
growth. Additionally, the uniformity of the soils within the proposed 
AVA results in a greater consistency in growing conditions for 
vineyards than can be found in the

[[Page 34956]]

surrounding regions. To the south of the proposed AVA, the soil changes 
to Kula very rocky loam, which consists of very large volcanic rocks 
and boulders which would not be suitable for vineyards. The same Kula 
soil found within the proposed AVA is also found to the west, but the 
petition notes that the topsoil west of the proposed AVA has been 
scoured by erosion and would be thinner and not as suitable for 
viticulture. The petition did not provide information on the soils to 
the north and east of the proposed AVA.
    Within the proposed Ulupalakua AVA, annual temperatures are 
moderate and do not drop below 50 degrees Fahrenheit (F), which is 
generally considered to be the minimum temperature required for grape 
vine growth and fruit development. The difference between the average 
high and low temperatures each month in the proposed AVA is typically 
20 degrees or less. The proposed AVA receives an average of 30.7 inches 
of rainfall a year and less than 2 inches per month in the harvest 
months of July and August. According to the petition, the low rainfall 
amounts during harvest reduce the risk of mildew and rot, while the 
mild temperatures protect ripening fruit against sunburn and heat 
stress.
    The petition states that the proposed AVA's climate is influenced 
by its proximity to Mt. Haleakala. To the north of the proposed 
Ulupalakua AVA, on the higher slopes of the mountain, annual 
temperatures are cooler and temperatures drop below 50 degrees F. 
Because moist air moves from east to west over the mountain, regions to 
the east of the proposed AVA typically receive higher average annual 
rainfall amounts, while elevations to the west of the proposed AVA have 
less rainfall. The petition did not include temperature data for 
locations to the east, west, or south of the proposed AVA, nor did it 
include precipitation data for regions to the north and south of the 
proposed AVA.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 199 in the Federal Register on November 
10, 2020 (85 FR 71726), proposing to establish the Ulupalakua 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. 
199. In Notice No. 199, 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 January 11, 2021.
    In response to Notice No. 199, TTB received one comment. However, 
the comment did not contain information related to the proposed AVA or 
to the AVA program in general, and was not posted to the public docket.

TTB Determination

    After careful review of the petition, TTB finds that the evidence 
provided by the petitioner supports the establishment of the Ulupalakua 
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 ``Ulupalakua'' AVA in Hawaii, 
effective 30 days from the publication date of this document.

Boundary Description

    See the narrative description of the boundary of the Ulupalakua 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. The Ulupalakua 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 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 Ulupalakua AVA, its name, 
``Ulupalakua,'' 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 ``Ulupalakua'' in a brand 
name, including a trademark, or in another label reference 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 Ulupalakua AVA will not affect any 
existing AVA. The establishment of the Ulupalakua AVA will allow 
vintners to use ``Ulupalakua'' as an appellation of origin for wines 
made primarily from grapes grown within the Ulupalakua 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.

    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.

[[Page 34957]]

Subpart C--Approved American Viticultural Areas

0
2. Subpart C is amended by adding Sec.  9.278 to read as follows:


Sec.  9.278  Ulupalakua AVA.

    (a) Name. The name of the viticultural area described in this 
section is ``Ulupalakua''. For purposes of part 4 of this chapter, 
``Ulupalakua'' is a term of viticultural significance.
    (b) Approved maps. The United States Geological Survey (USGS) 
1:24,000 scale topographic maps used to determine the boundary of the 
Ulupalakua viticultural area is titled ``Makena, Hawaii, 1983.''
    (c) Boundary. The Ulupalakua viticultural area is located on the 
island of Maui, in Hawaii. The boundary of the Ulupalakua viticultural 
area is as described in paragraphs (c)(1) through (6) of this section:
    (1) The beginning point is on the Makena, Hawaii, map at the 
intersection of an unnamed, light-duty road known locally as State 
Highway 37 and the northernmost unnamed, unimproved road in the Palauea 
land division (a land division is known as an ``ahupua'a'' in Hawaii). 
From the beginning point, proceed south along State Highway 37 to the 
next unnamed, unimproved road in the Palauea land division; then
    (2) Proceed west in a straight line for approximately 2,700 feet to 
the 1,560-foot elevation contour; then
    (3) Proceed north along the 1,560-foot elevation contour to the 
northern boundary of the Palauea land division; then
    (4) Proceed east along the northern boundary of the Palauea land 
division to the 1,800-foot elevation contour; then
    (5) Proceed south along the 1,800-foot elevation contour for 
approximately 400 feet to the point where the 1,800-foot elevation 
contour intersects with an imaginary line drawn from the terminus of 
the northernmost unnamed, unimproved road in the Palauea land division; 
then
    (6) Proceed east in a straight line for approximately 800 feet, 
returning to the beginning point.

    Signed: June 21, 2021.
Mary G. Ryan,
Administrator.

    Approved: June 21, 2021.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2021-14058 Filed 6-30-21; 8:45 am]
BILLING CODE 4810-31-P