2022-11717. Establishment of the Upper Lake Valley Viticultural Area and Modification of the Clear Lake 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 17,360-acre “Upper Lake Valley” viticultural area in Lake County, California. TTB also expands the boundary of the existing 1,093-square mile Clear Lake viticultural area so that the Upper Lake Valley viticultural area is wholly within it. Both viticultural areas are located within the established North Coast 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 5, 2022.

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 [phone], 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, or modify the boundary of an AVA, must include the following:

• Evidence that the area within the proposed AVA boundary, or the region within the proposed expansion area, 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 or defining the boundary of the proposed expansion area;
• A narrative description of the features of the proposed AVA or proposed expansion area affecting viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposed AVA or expansion area distinctive and distinguish it from adjacent areas outside the proposed AVA boundary or established AVA boundary;
• The appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed AVA or proposed expansion area, with the boundary of the proposed AVA or proposed expansion area clearly drawn thereon;
• If the proposed AVA or proposed expansion area is to be established within, or overlapping, an existing AVA, an explanation that both identifies the attributes of the proposed AVA or proposed expansion area that are consistent with the existing AVA, and explains how the proposed AVA or proposed expansion area is sufficiently distinct from the existing AVA and therefore appropriate for separate recognition; and
• A detailed narrative description of the proposed AVA or proposed expansion area boundary based on USGS map markings.

Petition To Establish the Upper Lake Valley AVA and Modify the Boundary of the Clear Lake AVA

TTB received a petition from Terry Dereniuk, on behalf of the Growers of Upper Lake Valley, proposing the establishment of the “Upper Lake Valley” AVA. The proposed Upper Lake Valley AVA is located within Lake County, California, and lies within the established North Coast AVA (27 CFR 9.30) and partially within the established Clear Lake AVA (27 CFR 9.99). The proposed AVA contains approximately 17,360 acres and has 16 commercial vineyards covering a total of approximately 300 acres. At the time the petition was submitted, at least one additional vineyard was planned within the proposed AVA.

Although most of the proposed Upper Lake Valley AVA is located within the existing Clear Lake AVA, a small portion of the northwest corner of the proposed AVA would, if established, extend beyond the boundary of the Clear Lake AVA. To address the overlap of the two AVAs and account for viticultural similarities between the proposed Upper Lake Valley AVA and the larger Clear Lake AVA, the petition also proposes to expand the boundary of the Clear Lake AVA so that the entire proposed Upper Lake Valley AVA would be included within the Clear Lake AVA. The distinguishing features of the proposed Upper Lake Valley AVA are its hydrogeology, soils, and climate.

According to the petition, the proposed Upper Lake Valley AVA has four identified water-bearing formations: Quaternary alluvium; Pleistocene terrace deposits; Pleistocene lake and floodplain deposits; and Plio-pleistocene cache creek. These formations make up the Upper Lake Groundwater Basin, which covers the majority of the proposed AVA. The petition states that groundwater levels within the Upper Lake Groundwater Basin are generally within 10 feet of the surface and fluctuate between 5 and 15 feet lower in the fall. Lowering of water levels during dry months is not excessive and is balanced by rapid recovery of water level elevations during the wet months. The groundwater of the Upper Lake Groundwater Basin has high levels of iron, manganese, and calcium and low levels of boron and dissolved solids. The petition states that although the high levels of iron and manganese may clog irrigation equipment, the high levels of calcium and low levels of boron and dissolved solids are beneficial to grapevine growth.

The Gravelly Valley Groundwater Basin lies to the north of the proposed Upper Lake Valley AVA, within the Mendocino National Forest. The petition states that no additional information was available about the hydrogeology of this basin. To the east of the proposed AVA is the High Valley Groundwater Basin, which is characterized by rocks of the Jurassic-Cretaceous Franciscan Formation and Quaternary Holocene volcanics. The groundwater contains high levels of ammonia, phosphorous, chloride, iron, boron, and manganese. The springtime groundwater level is 10 to 30 feet below the surface, with the summer drawdown 5 to 10 feet below the spring level.

Clear Lake is to the immediate south of the proposed AVA, while the Big Valley Groundwater Basin is farther south. The prominent groundwater formations in the Big Valley Groundwater Basin are Quaternary Alluvium and Upper Pliocene to Lower Pliocene Volcanic Ash Deposit. Groundwater levels in the northern portion of the Big Valley Groundwater Basin are usually 5 feet below the surface and decrease 10 to 50 feet during the summer. In the uplands of the basin, the depth to water in the spring is much deeper, ranging from 70 to 90 feet below the surface and dropping an additional 30 to 40 feet over the summer. Boron is an impairment in the water in some parts of the basin. At levels of 2 mg/l or above, Boron is toxic to most plants. To the west of the proposed AVA is the Scotts Valley Groundwater Basin, which consists of rocks from the Jurassic-Cretaceous Franciscan Formation. Depth to water in the spring is 10 feet below the surface on the average, with summer drawdown ranging from 30 to 60 feet below spring levels depending on location across the basin. Boron, iron, and manganese are impairments of groundwater in this basin.

According to the petition, soils from three general soil map units make up over 56 percent of the total area of the proposed Upper Lake Valley AVA: Millsholm-Skyhigh-Bressa; Still-Lupoyoma; and Tulelake-Fluvaquentic-Haplawuolls. Millsholm-Skyhigh-Bressa soils are formed from sandstone and shale and are primarily loams and clay loams. They are moderately deep, moderately-well to well-drained, and have slopes that range from moderately sloping to steep. These soils are shallower than soils in the other two map units. They may still be suitable for viticulture, however, since the petition states the quality of fruit is better, although yields are usually lower, on soils limited in depth by hardpan, rock, or clay substrata. Soils from the Still-Lupoyoma general map unit occur on the nearly-level valley floors and consist of very deep, moderately-well to well-drained loams and silt loams. According to the petition, most vineyards in the proposed AVA are planted on these soils due to their gentle slopes, which create less of an erosion hazard and provide good drainage. These soils are also deep, which allows roots to extend further. Soils from the Tulelake-Fluvaquentic-Haplawuolls map unit are very deep, poorly drained silty clay loams that occur in marshy and reclaimed areas around Clear Lake and Tule Lake. The petition states these soils can be suitable for viticulture if the poor drainage can be mitigated.

To the north of the proposed Upper Lake Valley AVA, the soils belong to the Maymen-Etsel and the Sanhedrin-Speaker-Kekawaka soil map units. These shallow soils contain outcroppings of large stones and are not very prevalent in the proposed AVA. To the east of the proposed AVA, the most common soil map units are the Maymen-Etsel, Sobrante-Guenoc-Hambright, and the Sanhedrin-Speake-Kekawaka units, which are also not common within the proposed AVA and occur mostly on very steep slopes. South of the proposed AVA, within the Big Valley District AVA (27 CFR 9.232), the soils belong to the Cole-Clear Lake Variant-Clear Lake general soil map unit. To the west of the proposed AVA, the soils are from the Millsholm-Skyhigh-Bressa soil map unit and then transition to the Maymen-Etsel soil map unit in the higher elevations of the Mayacamas Mountains.

According to the petition, the climate of the proposed Upper Lake Valley AVA is characterized by high annual rainfall amounts, a relatively short frost-free period, low-speed but frequent winds, and low median growing degree (GDD) accumulations.^[1] Annual predicted rainfall amounts within the Upper Lake Groundwater Basin, where the proposed AVA is located, range from 35 to 43 inches, which provides sufficient hydration for grapevines. To the east, west and south of the proposed AVA, annual predicted rainfall amounts are lower, while in the region to the north, the annual predicted rainfall is approximately 49 inches.

The proposed AVA has a median of 202 frost-free days per year. The median, minimum, and maximum frost-free periods within the proposed AVA are substantially shorter than those of the established AVAs to the east, southeast, and west. The median and maximum frost-free periods in the proposed AVA are longer than their counterparts in most AVAs to the south of the proposed AVA, with the exception of the established Red Hills Lake County AVA (27 CFR 9.169). The number of frost-free days in the region to the north of the proposed AVA was not available. Late frosts can damage new vine growth and early frosts can impact the ability of grapes to reach a desirable sugar level.

The median GDD accumulation in the proposed Upper Lake Valley AVA is 3,158, while the maximum is 3,434 and the minimum is 2,809. According to the petition, GDD accumulations within the proposed AVA are suitable for growing a variety of grapes, including Sauvignon Blanc. The median GDD accumulation for the proposed AVA is substantially smaller than those of established AVAs to the east, southeast, south, and west. The maximum GDD accumulation in the proposed AVA is less than the maximum GDD accumulation in each of these established AVAs, with the exception of Benmore Valley AVA (27 CFR 9.142) to the west and Big Valley District-Lake County AVA (27 CFR 9.232) to the south. The minimum GDD accumulation in the proposed AVA is lower than those of established AVAs to the east, southeast, south, and west. GDD data was not provided for the region to the north of the proposed AVA.

Within the proposed AVA, wind speeds between 1 and 5 miles per hour account for 82.88 percent of the daytime wind speeds and 88.86 percent of nighttime wind speeds. Winds with speeds below 1 mile per hour, defined as “calm,” occurred only 2.23 percent of the time during daytime hours and 3.04 percent of the time during nighttime hours. Wind speeds greater than 20 miles per hour were not recorded within the proposed AVA. The petition states that constant, gentle winds keep grapes and leaf canopies cool and dry, and reduce the risk of mildew. According to the petition, a larger percentage of wind speeds in three established AVAs to the southeast and south of the proposed AVA are less than 1 mile per hour, and in two of these AVAs, winds with speeds exceeding 20 miles per hour were recorded. Wind speed data was not available for the regions to the north and west of the proposed AVA.

The petition also requested the expansion of the Clear Lake AVA boundary so that the entire proposed Upper Lake Valley would be contained within it. The petition noted that the proposed expansion area, located in the northern portion of Scotts Valley along Scotts Creek, has elevations within the range of those found elsewhere in the Clear Lake AVA. T.D. ATF-147, which established the Clear Lake AVA, states that elevations for vineyards planted within the AVA range from 1,300 to 1,800 feet. For comparison, the expansion petition notes that the vineyard within the proposed expansion area sits at 1,360 feet. The expansion petition also notes that T.D. ATF-147 included a map of the Clear Lake watershed, which was described as having an important effect on the climate of the Clear Lake AVA. The expansion petition notes that the map includes all of Scotts Valley, including the proposed expansion area, in the Clear Lake watershed. Finally, T.D. ATF-147 stated that the climate of the Clear Lake AVA places it in Winkler Regions II and III. The expansion petition notes that annual GDD accumulations in the proposed expansion area range from 2,985 to 3,364, which also places the proposed expansion area in Winkler Regions II and III.

Notice of Proposed Rulemaking and Comments Received

TTB published Notice No. 200 in the Federal Register on April 16, 2021 (86 FR 20102), proposing to establish the Upper Lake Valley AVA and expand the boundary of the established Clear Lake 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 area, including the existing Clear Lake and North Coast AVAs, and provided a comparison of the features of the proposed expansion area to those of the established Clear Lake AVA. 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 and the proposed expansion area to the surrounding areas, see Notice No. 200. In Notice No. 200, 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 June 15, 2021.

TTB received two comments in response to Notice No. 200. One comment was anonymous, and the second comment was submitted by the Lake County Winegrape Commission. Both comments support establishing the proposed Upper Lake Valley AVA and also specifically supported the proposed expansion of the Clear Lake AVA.

TTB Determination

After careful review of the petition, TTB finds that the evidence provided by the petitioner supports the establishment of the Upper Lake 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 “Upper Lake Valley” AVA in Lake County, California. Additionally, TTB expands the boundary of the Clear Lake AVA in order to entirely encompass the Upper Lake Valley AVA. The establishment of the Upper Lake Valley AVA and the expansion of the Clear Lake AVA are both effective 30 days from the publication date of this document.

Boundary Description

See the narrative description of the boundary of the Upper Lake Valley AVA and the modified Clear Lake AVA boundary 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 Upper Lake Valley AVA boundary and the expanded Clear Lake 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 Upper Lake Valley AVA, its name, “Upper Lake Valley,” will be recognized as a name of viticultural significance under § 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 “Upper Lake 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 Upper Lake Valley AVA will allow vintners to use “Upper Lake Valley” and “North Coast” as appellations of origin for wines made primarily from grapes grown within the Upper Lake Valley AVA if the wines meet the eligibility requirements for the appellations. The expansion of the Clear Lake AVA will also allow vintners to use “Clear Lake” as an appellation of origin for wines made primarily from grapes grown anywhere in the Upper Lake Valley AVA if the wines meet the eligibility requirements for the appellation.

Bottlers who wish to label their wines with “Upper Lake Valley” as an appellation of origin must obtain a new Certificate of Label Approval (COLA) for the label, even if the currently approved label already contains another AVA appellation of origin. Please do not submit COLA requests to TTB before the date shown in the Dates section of this document, or your request will be rejected.

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

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. Amend § 9.99 by:

a. Removing the period at the end of paragraph (b)(4) and adding a semicolon in its place;

b. Adding paragraph (b)(5);

c. Redesignating paragraphs (c)(11) through (c)(17) as paragraphs (c)(15) through (c)(21); and

d. Adding new paragraphs (c)(11) through (c)(14).

The additions read as follows:

§ 9.99

Clear Lake.

* * * * *

(b) * * *

(5) “Upper Lake Quadrangle, California,” 7.5 minute series, 1996.

(c) * * *

(11) Then southeasterly in a straight line, crossing onto the Upper Lake quadrangle, to the intersection of the 1,600-foot elevation contour and an unnamed 4-wheel drive road in Section 9, T15N/R10W;

(12) Then northwesterly, then southwesterly along the 1,600-foot elevation contour to a point in Section 8, T15N/R10W, that is due north of the westernmost structure in a row of three structures located south of Scotts Creek;

(13) Then south in a straight line, crossing over Scotts Creek and the westernmost structure, to the intersection with an unnamed, unimproved road and the 1,600-foot elevation contour in Section 17, T15N/R10W;

(14) Then generally east along the 1,600-foot elevation contour to its second intersection with an unnamed, unimproved road in section 15, T15N/R10W;

* * * * *

3. Add § 9.286 to read as follows:

§ 9.286

Upper Lake Valley.

(a) Name. The name of the viticultural area described in this section is “Upper Lake Valley”. For purposes of part 4 of this chapter, “Upper Lake Valley” is a term of viticultural significance.

(b) Approved maps. The four United States Geological Survey (USGS) 1:24,000 scale topographic maps used to determine the boundary of the Upper Lake Valley viticultural area are titled:

(1) Lakeport, 1958; photorevised 1978; minor revision 1994;

(2) Upper Lake, 1996;

(3) Bartlett Mountain, 1996; and

(4) Lucerne, 1996.

(c) Boundary. The Upper Lake Valley viticultural area is located in Lake County, California. The boundary of the Upper Lake Valley viticultural area is as described as follows:

(1) The beginning point is on the Lakeport map at the intersection of Lyons Creek and the western shore of Clear Lake in Section 31, T15N/R9W. From the beginning point, proceed south in a straight line to an unnamed light-duty road known locally as Lafferty Road; then

(2) Proceed west along Lafferty Road to its intersection with an unnamed secondary highway known locally as Lakeshore Boulevard; then

(3) Proceed north on Lakeshore Boulevard to its intersection with an unnamed light-duty road known locally as Whalen Way; then

(4) Proceed west on Whalen Way to its intersection with State Highway 29; then

(5) Proceed north on State Highway 29, crossing onto the Upper Lake map, to the intersection of the highway and the southern boundary of Section 13, T15N, R10W; then

(6) Proceed west along the southern boundary of Sections 13 and 14 to the intersection of the southern boundary of Section 14 with the 1,600-foot elevation contour; then

(7) Proceed in a generally northwesterly direction along the meandering 1,600-foot elevation contour to its intersection with an unnamed, unimproved road in Section 17, T15N/R10W; then

(8) Proceed north in a straight line, crossing Scotts Creek, to the 1,600-foot elevation contour in Section 8, T15N/R10W; then

(9) Proceed northeasterly, then southeasterly along the 1,600-foot elevation contour to its intersection with an unnamed 4-wheel drive road in Section 9, T15N/R10W; then

(10) Proceed northwest in a straight line to the marked 2,325-foot elevation point on Hell's Peak; then

(11) Proceed southeast in a straight line to the intersection of the 1,600-foot elevation contour and the southern boundary of Section 30 along the Mendocino National Forest boundary, T16N/R9W; then

(12) Proceed southeast along the meandering 1,600-foot elevation contour to its third intersection with the Mendocino National Forest boundary, along the eastern boundary of Section 31, T16N/R9W; then

(13) Proceed south, then west along the Mendocino National Forest boundary to its intersection with the 1,600-foot elevation contour along the northern boundary of Section 5, T15N/R9W; then

(14) Proceed southeasterly along the meandering 1,600-foot elevation contour, crossing onto the Bartlett Mountain map, to the intersection of the 1,600-foot elevation contour and the Mendocino National Forest boundary along the eastern boundary of Section 9, T15N/9RW; then

(15) Proceed south, then east along the Mendocino National Forest boundary to its intersection with the 1,600-foot elevation contour along the northern boundary of Section 15, T15N/R9W; then

(16) Proceed south, then northwest along the meandering 1,600-foot elevation contour, crossing onto the Upper Lake map, and continuing southeasterly along the 1,600-foot elevation contour crossing back and forth between the Bartlett Mountain map and the Upper Lake map, to the intersection of the 1,600-foot elevation contour and an unimproved 4-wheel drive road in Section 21, T15N/R9W; then

(17) Continue southeast along the 1,600-foot elevation contour, crossing onto the Lucerne map, to the intersection of the 1,600-foot elevation contour and an unimproved 4-wheel drive road in Section 36, T15N/R9W; then

(18) Proceed south in a straight line to the shoreline of Clear Lake; then

(19) Proceed northeasterly along the shoreline of Clear Lake, crossing onto the Lakeport map, and continuing southwesterly along the shoreline, crossing Rodman Slough, to return to the beginning point.

Signed: May 25, 2022.

Mary G. Ryan,

Administrator.

Approved: May 26, 2022.

Timothy E. Skud,

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

Footnotes

1.  Heat summation is calculated as the sum of the mean monthly temperature above 50 degrees Fahrenheit (F) during the growing season from April 1 to October 31 and is expressed as growing degree days (GDDs). A baseline of 50 degrees F is used because there is almost no shoot growth below this temperature. See Albert J. Winkler et al., General Viticulture (Berkeley: University of California Press, 2nd ed. 1974), pages 67-71.