[Federal Register Volume 89, Number 81 (Thursday, April 25, 2024)]
[Rules and Regulations]
[Pages 31632-31636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08868]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2022-0008; T.D. TTB-193; Ref: Notice No. 214]
RIN 1513-AC85


Establishment of the Yucaipa 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 36,467-acre ``Yucaipa Valley'' American viticultural area (AVA) in 
San Bernardino County, California. The Yucaipa Valley 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.

[[Page 31633]]


DATES: This final rule is effective May 28, 2024.

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.
    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.

Yucaipa Valley AVA Petition

    TTB received a petition from the Yucaipa Valley Wine Alliance, 
proposing establishment of the ``Yucaipa Valley'' AVA. The proposed AVA 
is in San Bernardino County, California, and is not within any 
established AVA. The proposed AVA covers 36,467 acres and includes 
approximately 23 vineyards and two wineries. The petition identifies 
the distinguishing features of the proposed Yucaipa Valley AVA as its 
elevation and climate.
    The proposed Yucaipa Valley AVA is a region of rolling hills in the 
foothills of the San Bernardino Mountains and includes the incorporated 
municipalities of Yucaipa and Calimesa and the unincorporated area of 
Oak Glen. Elevations within the proposed Yucaipa Valley AVA range from 
2,000 to 4,600 feet. According to the petition, sunlight becomes more 
concentrated at high elevations. As a result, grapes receive a ``tan,'' 
which results in thicker skin than the same varietals grown at lower 
elevations. The petition states that thick skins contribute to the 
color and tannin levels of the resulting wine and protect developing 
grapes from the dramatic climate shifts that can occur in high altitude 
vineyards.
    By contrast, Yucaipa Ridge, which is located to the immediate north 
and northeast of the proposed Yucaipa Valley AVA, is a mountain range 
of steep slopes with elevations up to 2,000 feet higher than the 
proposed AVA. The region east of the proposed AVA has elevations 
similar to those within the proposed AVA but is not included in the 
proposed AVA because it is largely uninhabited and undeveloped, has few 
roads, is largely covered by a national forest that is not available 
for commercial viticulture, and does not have historical ties to the 
region known as the Yucaipa Valley. Cherry Valley and Beaumont are 
communities which extend from the southeast to the south of the 
proposed AVA and have elevations similar to those in the lower portions 
of the proposed AVA. However, these areas do not have the rolling hills 
found in the Yucaipa Valley. The San Timoteo Canyon extends from the 
southwest to the south of the proposed AVA and has elevations that are 
lower than those in the proposed AVA, ranging from 1,600 to 2,000 feet. 
To the west of the proposed AVA is the Redlands Valley, which also has 
lower elevations ranging from 1,100 to 2,000 feet.
    The petition described the climate of the proposed Yucaipa Valley 
AVA as a hot, dry climate suitable for growing grape varietals such as 
Cabernet Sauvignon, Merlot, Zinfandel, Syrah, Malbec, Nebbiolo, 
Barbera, and Petite Sirah. Within the city of Yucaipa, the average high 
temperature is 78.3 degrees Fahrenheit (F), and the average low 
temperature is 48.7 degrees F. August is typically the warmest month, 
with an average high of 97 degrees F, and December is typically the 
coolest month, with an average minimum temperature of 40 degrees F. The 
record high temperature in the city of Yucaipa is 114 degrees F, while 
the record low temperature is 11 degrees F. The city of Yucaipa 
receives an average cumulative rainfall of 4.14 inches during the 
growing season of April through October. The average amount of 
precipitation for the city of Yucaipa during the winter months, 
November through March, is substantially greater, 15.35 inches, with an 
average of one inch being snow.
    By contrast, the region to the west of the proposed AVA, is 
slightly warmer and drier, while the region to the north and northeast 
is cooler. The average high temperature in the city of Redlands, 
located west of the proposed AVA, is 79.6 degrees F, and the average

[[Page 31634]]

low temperature is 50.5 degrees F. August is typically the warmest 
month in Redlands, with an average high of 96 degrees F, and December 
is typically the coolest month, with an average minimum temperature of 
40 degrees F. The record high temperature in Redlands is 118 degrees F, 
and the record low temperature is 18 degrees F. Redlands receives an 
average of 10.86 inches of winter precipitation, but seldom receives 
snow due to its warmer winter temperatures. In the community of Forest 
Falls, located to the north and northeast of the proposed AVA, the 
average high temperature is 61.5 degrees F, and the average low 
temperature is 40.9 degrees F. August is typically the warmest month in 
Forest Falls, with an average high of 81 degrees F. The record high 
temperature is 106 degrees F, and the record low temperature is 5 
degrees F. The petition did not include temperature data from the 
regions to the northwest, east, and south of the proposed Yucaipa 
Valley AVA but did note that the city of Beaumont, located south and 
southeast of the proposed AVA, receives an average winter precipitation 
amount very similar to that of the proposed AVA, although it seldom has 
any snow.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 214 in the Federal Register on September 
21, 2022 (87 FR 57657), proposing to establish the Yucaipa Valley 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 included information from the petition comparing 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. 214. In Notice No. 214, 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 November 21, 2022.

Comments Received

    In response to Notice No. 214, TTB received twelve comments. Eight 
of the comments fully support the proposed AVA (comments 1, 2, 3, 4, 6, 
7, 8, and 10). The comments state that, among other things, the 
proposed AVA could increase consumer awareness of wines from the area 
and promote economic development in the city of Yucaipa and in the 
other communities within and near the proposed AVA.
    Two comments (comments 11 and 12) agree that the petition fulfilled 
TTB's requirements for the establishment of an AVA. These commenters, 
however, believe that before deciding to establish the AVA, TTB should 
conduct studies on the effects the AVA may have. Comment 11 believes 
TTB should study the effect of a potential AVA on ``property values, 
displaced ownership, or general effects on the market'' for occupants 
of the area, regardless of whether they are involved in the wine 
industry. Comment 12 suggests that TTB study the effects an AVA may 
have on water consumption because an AVA may promote increased 
agricultural activities and, therefore, increase water consumption in a 
region that has limited water resources.
    Two comments (comments 5 and 9) oppose the proposed Yucaipa Valley 
AVA. Comment 5 states that the region is ``too small for such a 
venture,'' that the proposed vineyards are close to an earthquake fault 
line, that citizens do not want the vineyards depleting the ``already 
low'' local water table, and that establishing an AVA could increase 
traffic on small streets and raise the risk of drunk drivers. Comment 9 
also opposes the proposed AVA due to the potential for increased 
traffic and drunk driving that could ``pose a serious threat to local 
drivers, pedestrians, and children in the community.'' Additionally, 
the commenter expresses concern that an AVA designation could raise 
property values and property taxes if the increased tourism also leads 
to a rise in the purchase of vacation homes in the area. The commenter 
also believes that small vineyards in the proposed AVA ``may have to 
restructure their winemaking processes to comply with this 85 percent 
standard required to attach the AVA label to their wines.'' The 
commenter asserts that such a move could be costly because it ``will 
require winemakers to develop new formulas, increase grape production, 
and adapt their facilities to accommodate the changes.''

TTB Response

    TTB establishes AVAs to allow winemakers to better describe, in 
labeling and advertising, the origins of their wines and to allow 
consumers to better identify wines they may purchase. TTB reviews any 
petition submitted to it to establish an AVA and determines if the 
petition meets the regulatory criteria. Labeling and advertising of 
wines using an AVA is voluntary, and approving an AVA does not apply 
any new requirements on grape growers or winemakers in the region other 
than any addressed in the section ``Impact on Current Wine Labels.'' 
Any potential impacts on such things as economic growth or an increase 
in tourism would be because of the efforts of businesses or other 
interests in using the AVA name in promoting the region or the wines 
and because of consumer acceptance of wines from that area.
    With respect to concerns about increased financial burdens for 
local wine industry members, as noted above, the use of an AVA name on 
a wine label is completely voluntary. Winemakers who believe it would 
be costly for them to comply with the 85 percent requirement for use of 
the AVA name can choose not to use the AVA name and can continue to 
operate their businesses as usual. Therefore, any additional costs 
incurred from the use of an AVA name on a wine label would be the 
result of the decisions of the individual winemaker and not the direct 
result of the rulemaking.
    Finally, when establishing an AVA to allow winemakers to better 
describe the origins of their wines, TTB is not required to determine 
the possible effects of this administrative regulatory action on 
property values or the environment. Furthermore, TTB notes that comment 
10, submitted by the Third District Supervisor of the San Bernardino 
County Board of Supervisors in support of the proposed AVA, 
acknowledges the importance of protecting water resources in the county 
and states that vineyards have little impact on the water reserves as 
they require far less water than other agricultural crops.

TTB Determination

    After careful review of the petition and comments, TTB finds that 
the evidence provided by the petitioner supports the establishment of 
the Yucaipa Valley 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 ``Yucaipa Valley'' 
AVA in San Bernardino County, California, effective 30 days from the 
publication date of this document.

Boundary Description

    See the narrative description of the boundary of the Yucaipa Valley 
AVA in the regulatory text published at the end of this final rule.

[[Page 31635]]

Maps

    The petitioner provided the required maps, and they are listed 
below in the regulatory text. The Yucaipa 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 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 Yucaipa Valley AVA, its name, 
``Yucaipa Valley,'' 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 ``Yucaipa Valley'' 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 Yucaipa Valley AVA will not affect any 
existing AVA. The establishment of the Yucaipa Valley AVA will allow 
vintners to use ``Yucaipa Valley'' as an appellation of origin for 
wines made primarily from grapes grown within the Yucaipa Valley 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, as amended. 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. Add Sec.  9.293 to read as follows:


Sec.  9.293  Yucaipa Valley AVA.

    (a) Name. The name of the viticultural area described in this 
section is ``Yucaipa Valley''. For purposes of part 4 of this chapter, 
``Yucaipa Valley'' is a term of viticultural significance.
    (b) Approved maps. The 4 United States Geological Survey (USGS) 
1:24,000 scale topographic maps used to determine the boundary of the 
Yucaipa Valley viticultural area are:
    (1) Yucaipa, CA, 1996;
    (2) Forest Falls, CA, 1996;
    (3) Beaumont, CA, 1996; and
    (4) El Casco, CA, 1967; photorevised 1979.
    (c) Boundary. The Yucaipa Valley viticultural area is located in 
San Bernardino County, California. The boundary of the Yucaipa Valley 
viticultural area is as described as follows:
    (1) The boundary begins on the Yucaipa map at the intersection of 
Highway 38/Mill Creek Road and the western boundary of section 13, T1S/
R2W. From the beginning point, proceed northeast along Highway 38/Mill 
Creek Road to the 2,924-foot benchmark in section 13; then
    (2) Proceed east in a straight line to the 3,800-foot elevation 
contour in section 18, T1S/R1W; then
    (3) Proceed east-southeasterly along the 3,800-foot elevation 
contour, crossing onto the Forest Falls map, and continuing along the 
3,800-foot elevation contour to its intersection with Wilson Creek 
along the eastern boundary of section 21, T1S/R1W; then
    (4) Proceed northerly along Wilson Creek to its intersection with 
the 4,400-foot elevation contour in section 22, T1S/R1W; then
    (5) Proceed south-southeasterly along the 4,400-foot elevation 
contour to its intersection with Birch Creek in section 26, T1S/RR1W; 
then
    (6) Proceed northeasterly along Birch Creek to its intersection 
with the 5,200-foot elevation contour in section 23, T1S/R1W; then
    (7) Proceed south-southeasterly along the 5,200-foot elevation 
contour to its intersection with the eastern branch of Little San 
Gorgonio Creek along the San Bernardino National Forest boundary in 
section 31, T1S/R1E; then
    (8) Proceed southwesterly along the eastern branch of Little San 
Gorgonio Creek to its confluence with the main channel of Little San 
Gorgonio Creek near the gaging station in section 1, R1W/T2S; then
    (9) Proceed southwesterly along the main channel of Little San 
Gorgonio Creek, crossing onto the Beaumont map, and continuing along 
the creek to its intersection with Orchard Avenue in section 22, T2S/
R1W; then
    (10) Proceed west along Orchard Street to the point where the road 
makes a sharp turn south and becomes locally known as Taylor Street 
along the western boundary of section 28, T2S/R1W; then
    (11) Proceed south along Taylor Street to its intersection with 
Vineland Avenue in section 28, T2S/R1W; then
    (12) Proceed west along Vineland Avenue to its intersection with an 
unnamed road known locally as Union Street along the western edge of 
the Beaumont map in section 29, T2S/R1W; then
    (13) Proceed south along Union Street to its intersection with 
Woodland Avenue in section 29, T2S/R1W; then
    (14) Proceed west along Woodland Avenue, crossing onto the El Casco 
map, where the road becomes known as Cherry Valley Boulevard, and 
continue west along Cherry Valley Boulevard to its intersection with 
Interstate 10 in the Tract Between San Jacinto and San Gorgonio, T2S/
R2W; then
    (15) Proceed southeasterly along Interstate 10 to its intersection 
with the

[[Page 31636]]

first unnamed, intermittent stream in section 32, T2S/R1W; then
    (16) Proceed west in a straight line to the western boundary of 
section 31, T2S/R1W; then
    (17) Proceed north along the western boundary of section 31 to the 
southernmost transmission line at the northwest corner of section 31, 
T2S/R1W; then
    (18) Proceed northwesterly along the transmission line to its 
intersection with San Timoteo Canyon Road in the Tract Between San 
Jacinto and San Gorgonio, T2S/R2W; then
    (19) Proceed northwesterly along San Timoteo Canyon Road to its 
intersection with the western boundary of the Tract Between San Jacinto 
and San Gorgonio, T2S/R2W; then
    (20) Proceed north, then northeasterly along the boundary of the 
tract to its intersection with the southwestern corner of section 22, 
T2S/R2W; then
    (21) Proceed north along the western boundary of section 22 to its 
intersection with the southeastern corner of section 16, T2S/R2W; then
    (22) Proceed west along the southern boundaries of sections 16 and 
17 to the southwestern corner of section 17, T2S/R2W; then
    (23) Proceed north along the western boundary of section 17, 
crossing onto the Yucaipa map and continuing along the western boundary 
of section 17 to its intersection with the Riverside-San Bernardino 
County line along the northern boundary of section 17, T2S/R2W; then
    (24) Proceed east along the Riverside-San Bernardino County line to 
its intersection with the eastern boundary of section 17, T2S/R2W; then
    (25) Proceed north in a straight line to the boundary of the San 
Bernardino Land Grant, T2S/R2W; then
    (26) Proceed west along the land grant boundary to its intersection 
with the eastern boundary of section 8, T2S/R2W; then
    (27) Proceed north along the eastern boundaries of sections 8 and 5 
to the intersection of the northeast corner of section 5 and an unnamed 
road known locally as Highview Drive, T2S/R2W; then
    (28) Proceed northwest in a straight line to its intersection with 
Interstate 10 west of an unnamed light-duty road known locally as Knoll 
Road in the San Bernardino Land Grant, T2S/R2W; then
    (29) Proceed northeast in a straight line to the northeast corner 
of section 32, T1S/R2W; then
    (30) Proceed east along the northern boundaries of sections 33, 34, 
and 35 to the southwestern corner of section 25, T1S/R2W; then
    (31) Proceed north along the western boundaries of sections 25, 24, 
and 13 to the intersection of the western boundary of section 13 and 
Highway 38/Mill Creek Road, T1S/R2W, which is the beginning point.

    Signed: April 19, 2024.
Mary G. Ryan,
Administrator.
    Approved: April 20, 2024.
Aviva R. Aron-Dine,
Acting Assistant Secretary (Tax Policy).
[FR Doc. 2024-08868 Filed 4-24-24; 8:45 am]
BILLING CODE 4810-31-P