E6-9364. Expansion of San Francisco Bay and Central Coast Viticultural Areas (2002R-202P)

AGENCY:

Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION:

Final rule; Treasury decision.

SUMMARY:

This Treasury decision expands by approximately 20,000 acres the San Francisco Bay viticultural area and the Central Coast viticultural area in California to conform to the expanded boundary of the Livermore Valley viticultural area. We designate 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:

Effective Date: July 17, 2006.

FOR FURTHER INFORMATION CONTACT:

N.A. Sutton, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 925 Lakeville St., No. 158, Petaluma, California 94952; telephone [phone].

SUPPLEMENTARY INFORMATION:

Background on Viticultural Areas

TTB Authority

Section 105(e) of the Federal Alcohol Administration Act (the FAA Act, 27 U.S.C. 201 et seq.) requires that alcohol beverage labels provide consumers with adequate information regarding product identity and prohibits the use of misleading information on those labels. The FAA Act also authorizes the Secretary of the Treasury to issue regulations to carry out its provisions. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers these regulations.

Part 4 of the TTB regulations (27 CFR part 4) allows the establishment of definitive viticultural areas and 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) contains the list of approved viticultural areas.

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 distinguishable by geographical features, the boundaries of which have been recognized and defined 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 its geographical origin. The establishment of viticultural areas allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of a viticultural area 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 outlines the procedure for proposing an American viticultural area and provides that any interested party may petition TTB to establish a grape-growing region as a viticultural area. Petitioners may use the same procedure to request changes involving existing viticultural areas. Section 9.3(b) of the TTB regulations requires the petition to include—

• Evidence that the proposed viticultural area is locally and/or nationally known by the name specified in the petition;
• Historical or current evidence that supports setting the boundary of the proposed viticultural area as the petition specifies;
• Evidence relating to the geographical features, such as climate, soils, elevation, and physical features, that distinguish the proposed viticultural area from surrounding areas;
• A description of the specific boundary of the proposed viticultural area, based on features found on United States Geological Survey (USGS) maps; and
• A copy of the appropriate USGS map(s) with the proposed viticultural area's boundary prominently marked.

San Francisco Bay and Central Coast Viticultural Areas Expansion Petition and Rulemaking

Background

TTB received a petition from the Livermore Valley Winegrowers Association proposing to expand both the existing San Francisco Bay viticultural area (27 CFR 9.157) and the existing Central Coast viticultural area (27 CFR 9.75). The association made this request in conjunction with, and as a consequence of, its proposed expansion of the Livermore Valley viticultural area (27 CFR 9.46), which is the subject of another final rule document published in this issue of the Federal Register. The petitioner represents most of the vineyards and wineries impacted by these expansions.

The original Livermore Valley viticultural area is entirely within the San Francisco Bay viticultural area, which is, in turn, entirely within the Central Coast viticultural area. To retain this configuration, expansion of the Livermore Valley viticultural area would require the minor expansions of the San Francisco Bay and Central Coast viticultural areas that are the subject of this document.

Below, we summarize the evidence presented in the petition to justify the expansions of the San Francisco Bay and Central Coast viticultural areas.

Rationale and Evidence for the Proposed Expansion

In the years since the Bureau of Alcohol, Tobacco and Firearms (ATF), TTB's predecessor agency, established the current Livermore Valley viticultural area in 1982, ATF also established the Central Coast and San Francisco Bay viticultural areas. Both of these viticultural areas currently encompass the Livermore Valley viticultural area in its entirety and incorporate some of the Livermore Valley area's eastern boundary line as part of their own boundaries. (See: Livermore Valley Viticultural Area, Treasury Decision [T.D] ATF-112, 47 FR 38520, September 1, 1982; Central Coast Viticultural Area, T.D. ATF-216, 50 FR 43130, October 24, 1985, as amended by T.D. ATF-407 64 FR 3023, January 20, 1999; and San Francisco Bay Viticultural Area, T.D. ATF-407, 64 FR 3015, January 20, 1999.)

When ATF established the San Francisco Bay viticultural area and amended the Central Coast viticultural area boundary in 1999, no changes were made to the established boundary line of the Livermore Valley viticultural area. As a result, the Central Coast viticultural area and the San Francisco Bay viticultural area currently share a common boundary line in Alameda County, while the Livermore Valley viticultural area does not share the same boundary line.

The central portion of the Livermore Valley viticultural area's eastern boundary line sits to the west of the current San Francisco Bay and Central Coast viticultural areas' eastern boundary line. This portion of the Livermore Valley viticultural area boundary line is west of the Diablo Range foothills, as noted on the USGS Altamont, Byron Hot Springs, and Mendenhall Springs Quadrangle maps. The common eastern boundary line of the San Francisco Bay and Central Coast viticultural areas is east of the Livermore Valley viticultural area boundary line, along the western foothills and mountains of the Diablo Range, as defined on the USGS Midway and Cedar Mtn. Quadrangle maps.

The preamble of T.D. ATF-407, which established the San Francisco Bay viticultural area, explains that the Diablo Range elevations block the Pacific Ocean's marine air from continuing eastward and inland. Also, the region east of the Diablo Range and the Livermore Valley has higher temperatures, lower humidity, and decreased rainfall typical of an inland, continental climate.

The concurrent petition to expand the Livermore Valley viticultural area provides an opportunity to align the boundaries of all three viticultural areas—Livermore Valley, San Francisco Bay, and Central Coast—into one common boundary line in this region. The proposed expansions of the San Francisco Bay and Central Coast viticultural areas would result in eastern boundaries for these two areas that coincide with the proposed boundary expansion of the Livermore Valley viticultural area. These proposed expansions remain consistent with the essential elements currently recognized by TTB, such as name, regional identity, and distinguishing geographical features, of viticultural areas. Also, they serve consumers by providing clear, unambiguous boundaries that would aid, rather than complicate, their wine buying decisions.

Name and Boundary Evidence

T.D. ATF-407, which established the San Francisco Bay viticultural area and expanded the Central Coast viticultural area to the north, details evidence for name recognition and regional identity for the San Francisco Bay viticultural area and the Central Coast viticultural area. It explains that the counties of San Francisco, Contra Costa, Alameda, Santa Clara, and San Mateo all border the San Francisco Bay body of water and are consistently considered to be part of the San Francisco Bay region. All, or portions of, the five counties listed above are within the established boundary lines of the San Francisco Bay and Central Coast viticultural areas.

To support the expansion of the boundary of the Central Coast viticultural area, the petitioner cited T.D. ATF-407, which maintains that the general marine climate extends north and northwest beyond the originally established boundary of the Central Coast viticultural area. Also, the name recognition of Central Coast, as used by wine writers and in the California State legislature, extends north and west into the five counties surrounding the San Francisco Bay body of water. The names of both the San Francisco Bay and Central Coast viticultural areas are unaffected by the proposed boundary expansions, and therefore the evidence cited in T.D. ATF-407 remains accurate.

The proposed alignment of the San Francisco Bay and Central Coast boundaries with the expanded Livermore Valley boundary is limited to Alameda and Contra Costa Counties. These counties encompass the Central Coast's northeastern region and the San Francisco Bay's eastern region, as noted on the USGS maps and by the written boundary descriptions. While the aligned boundaries for both the San Francisco Bay and Central Coast viticultural areas would expand eastward, they would do so in a limited manner, and the boundaries remain true to the 1999 T.D. ATF-407 regional definitions for both viticultural areas.

In sum, the name recognition for the affected portions of Alameda and Contra Costa Counties continues as the San Francisco Bay area and the larger Central Coast area, as documented in T.D. ATF-407. Also, the distinguishing boundary and climatic characteristics, as described in T.D. ATF-407, including the cooling marine influences from the Pacific Ocean and San Francisco Bay and the natural boundary of the Diablo Range, apply equally to the proposed expansion area.

Notice of Proposed Rulemaking

On May 19, 2005, TTB published a notice of proposed rulemaking regarding the proposed expansion of the San Francisco Bay and Central Coast viticultural areas in the Federal Register (70 FR 28870) as Notice No. 44. In that notice, TTB requested comments by July 18, 2005, from all interested persons. We received no comments in response to that notice.

TTB Finding

After careful review of the petition, TTB finds that the evidence submitted supports the expansion of the two proposed viticultural areas as requested in the petition. Therefore, under the authority of the Federal Alcohol Administration Act and part 4 of our regulations, we amend our regulations to expand the boundaries of the San Francisco Bay and Central Coast viticultural areas in Alameda and Contra Costa Counties, California, effective 30 days from the publication date of this document.

Boundary Description

See the narrative boundary descriptions of the expanded viticultural areas in the amended regulatory texts published at the end of this document.

Maps

The petitioner provided the required maps, and we list them below in the proposed regulatory text.

Impact on Current Wine Labels

The expansion of the San Francisco Bay and Central Coast viticultural areas does not affect currently approved wine labels. The expansions may allow additional vintners to use “San Francisco Bay” and “Central Coast” as appellations of origin on their 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 eligible to use as an appellation of origin the name of a viticultural area specified in part 9 of the TTB regulations, at least 85 percent of the grapes used to make the wine must have been grown within the area represented by that name, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). Different rules apply if a wine has a brand name containing a viticultural area 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.

Regulatory Flexibility Act

We certify that these regulations will not have a significant economic impact on a substantial number of small entities. These regulations impose no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name is 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

This rule is not a significant regulatory action as defined by Executive Order 12866, 58 FR 51735. Therefore, it requires no regulatory assessment.

Drafting Information

N.A. Sutton of the Regulations and Rulings Division drafted this notice.

List of Subjects in 27 CFR Part 9

• Wine

The Regulatory Amendment

For the reasons discussed in the preamble, we amend 27 CFR, chapter 1, part 9, as follows:

PART 9—AMERICAN VITICULTURAL AREAS

1. The authority citation for part 9 continues to read as follows:

Authority: 27 U.S.C. 205.

Subpart C—Approved American Viticultural Areas

2. Section 9.75 is amended by revising the introductory text of paragraph (b), removing the word “and” at the end of paragraph (b)(40), replacing the period with a semicolon at the end of paragraph (b)(41), adding new paragraphs (b)(42) and (b)(43), and revising paragraphs (c)(10) through (c)(16) to read as follows:

§ 9.75

Central Coast.

* * * * *

(b) Approved maps. The approved maps for determining the boundary of the Central Coast viticultural area are the following 43 United States Geological Survey topographic maps:

* * * * *

(42) Midway, California, scale 1:24,000, dated 1953, Photorevised 1980; and

(43) Cedar Mtn., California, scale 1:24,000, dated 1956, Photorevised 1971; minor revision 1994.

(c) * * *

* * * * *

(10) Then proceed southeast in a straight line approximately 1.8 miles to BM 720 in Section 21, Township 2 South, Range 3 East. (Altamont Quadrangle)

(11) Then proceed south-southeast approximately 1 mile to an unnamed 1,147-foot peak in Section 28, Township 2 South, Range 3 East. (Altamont Quadrangle)

(12) Then proceed south-southwest in a straight line approximately 1.1 miles to the intersection of the eastern boundary of Section 32 with Highway 580, Township 2 South, Range 3 East. (Altamont Quadrangle)

(13) Then proceed south-southeast in a straight line approximately 2.7 miles to BM 1602 in Patterson Pass in Section 10, Township 3 South, Range 3 East. (Altamont Quadrangle)

(14) Then proceed south-southeast in a straight line approximately 2.8 miles to BM 1600, adjacent to Tesla Road in Section 26. (Midway Quadrangle)

(15) Then proceed south in a straight line approximately 4.2 miles to BM 1878, 40 feet north of Mines Road, in Section 14, Township 4 South, Range 3 East. (Cedar Mtn. Quadrangle)

(16) Then proceed west-southwest in a straight line approximately 4.2 miles to the southeast corner of Section 19, Township 4 South, Range 3 East. (Mendenhall Springs Quadrangle)

* * * * *

3. Section 9.157 is amended by revising the introductory text of paragraph (b), removing the word “and” at the end of paragraph (b)(41), replacing the period with a semicolon followed by the word “and” at the end of paragraph (b)(42), adding a new paragraph (b)(43), and revising paragraphs (c)(13) through (c)(18) to read as follows:

§ 9.157

San Francisco Bay.

* * * * *

(b) Approved maps. The appropriate maps for determining the boundary of the San Francisco Bay viticultural area are 43 United States Geological Survey topographic maps. They are titled:

* * * * *

(43) Cedar Mtn., California, scale 1:24,000, dated 1956, Photorevised 1971; Minor Revision 1994.

(c) * * *

* * * * *

(13) Then proceed northeast in a straight line approximately 3.2 miles to BM 1878 in Section 14 on the Cedar Mtn. Quadrangle.

(14) Then proceed north in a straight line approximately 4.2 miles to BM 1600 adjacent to Tesla Road in Section 26, Township 3 South, Range 3 East on the Midway Quadrangle.

(15) Then proceed north-northwest in a straight line approximately 2.8 miles to Patterson Pass, BM 1602, in Section 10, Township 3 South, Range 3 East, on the Altamont Quadrangle.

(16) Then proceed north-northwest in a straight line approximately 2.7 miles to the intersection of the eastern boundary of Section 32 with Highway 580 in Township 2 South, Range 3 East.

(17) Then proceed north-northeast in a straight line approximately 1.1 miles to an unnamed peak, elevation 1147, in Section 28, Township 2 South, Range 3 East.

(18) Then proceed north-northwest in a straight line approximately 1 mile to BM 720 in Section 21, Township 2 South, Range 3 East, and proceed northwest in a straight line approximately 1.8 miles to the northeast corner of Section 18 on the Byron Hot Springs Quadrangle, Township 2 South, Range 3 East.

* * * * *

Dated: April 25, 2006.

John J. Manfreda,

Administrator.

Approved: May 25, 2006.

Timothy E. Skud,

Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).