[Federal Register Volume 77, Number 178 (Thursday, September 13, 2012)]
[Rules and Regulations]
[Pages 56541-56544]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-22595]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2011-0011; T.D. TTB-107; Ref: Notice No. 125]
RIN 1513-AB83


Establishment of the Inwood 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 28,441-acre ``Inwood Valley'' viticultural area in Shasta County, 
California. 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: Effective Date: October 15, 2012.

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 various 
authorities through Treasury Department Order 120-01 (Revised), dated 
January 21, 2003, to the TTB Administrator to perform the functions and 
duties in the administration and enforcement of this law.
    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

[[Page 56542]]

advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets 
forth standards for the preparation and submission of petitions for the 
establishment or modification of American viticultural areas and lists 
the approved American 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 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 its 
geographic 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. Section 9.12 of the TTB regulations (27 CFR 
9.12) prescribes standards for petitions for the establishment or 
modification of American viticultural areas. Such petitions must 
include the following:
     Evidence that the area within the proposed viticultural 
area boundary is nationally or locally known by the viticultural area 
name specified in the petition;
     An explanation of the basis for defining the boundary of 
the proposed viticultural area;
     A narrative description of the features of the proposed 
viticultural area that affect viticulture, such as climate, geology, 
soils, physical features, and elevation, that make it distinctive and 
distinguish it from adjacent areas outside the viticultural area 
boundary;
     A copy of the appropriate United States Geological Survey 
(USGS) map(s) showing the location of the proposed viticultural area, 
with the boundary of the proposed viticultural area clearly drawn 
thereon; and
     A detailed narrative description of the proposed 
viticultural area boundary based on USGS map markings.

Inwood Valley Petition

    TTB received a petition from consulting geographer Patrick Shabram, 
on behalf of himself and Anselmo Vineyards of Inwood Valley, 
California, proposing the establishment of the ``Inwood Valley'' 
American viticultural area. The original petition proposed a 
viticultural area containing approximately 32,647 acres, with 60 acres 
on 4 commercially-producing vineyards and 14 acres planned for further 
viticultural development. After reviewing the original petition, TTB 
suggested to the petitioner that the boundary of the proposed 
viticultural area be modified in order to conform to the requirements 
of Sec.  9.12 of the TTB regulations (27 CFR 9.12), which requires a 
petitioned-for viticultural area to be an area in which viticulture 
exists and to contain features distinguishable from the surrounding 
area. Acting on this request, Patrick Shabram, the consulting 
geographer who submitted the original petition on behalf of Anselmo 
Vineyards, submitted an addendum to the petition, proposing a modified 
boundary that used lines drawn between identifiable features on the 
USGS maps to approximate the limits of the distinguishing soil types of 
the proposed viticultural area and to exclude portions of the proposed 
viticultural area that do not contain viticulture. The proposed 
modifications reduced the size of the proposed viticultural area to 
28,298 acres and were not intended to affect any grape growers located 
within the originally petitioned-for viticultural area.
    The proposed Inwood Valley viticultural area, located in rural, 
southern Shasta County in north-central California, does not overlap, 
or otherwise involve, any existing or proposed viticultural areas.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 125 in the Federal Register on December 5, 
2011 (76 FR 75830), proposing to establish the Inwood Valley 
viticultural area, based on the modified boundary as discussed above. 
In the notice, TTB summarized the evidence from the petition regarding 
the name, boundary, and distinguishing features for the proposed 
viticultural area. The distinguishing features of the proposed 
viticultural area include geology, topography, climate, native 
vegetation, and soil. The notice also included a comparison of the 
distinguishing features to the surrounding area. For a description of 
the evidence relating to the name, boundary, and distinguishing 
features of the proposed viticultural area, see Notice No. 125.
    In Notice No. 125, TTB solicited comments on the accuracy of the 
name, boundary, climactic, and other required information submitted in 
support of the petition. The comment period closed on February 3, 2012.
    During the comment period, TTB received four comments in response 
to Notice No. 125. The commenters included two self-identified wine 
industry members and two commenters who did not list any affiliation. 
Three of the comments support the establishment of the proposed Inwood 
Valley viticultural area. TTB also received one comment outside of the 
comment period, as discussed later in this section.
    One of the three supporting comments, comment 2, also states that 
the main purpose of the American viticultural area program is not to 
provide more information to consumers, but instead to boost the local 
economy and provide vintners with a more competitive advantage in the 
marketplace. TTB notes that its regulations regarding the approval of 
American viticultural areas and their use on labels are intended to 
ensure that such statements provide adequate information about the 
identity and origin of the product and are not misleading. Whether or 
not, and to what extent, there is any economic benefit from the 
approval of a viticultural area is not a factor that TTB considers in 
determining whether or not to approve a petition for a viticultural 
area.
    The fourth comment objects to the proposed ``Inwood Valley'' name, 
stating that people do not correlate the name ``Inwood'' with Northern 
California, and that the word ``valley'' is ``nongeographical.'' 
Rather, the comment contends that the word ``valley'' is often used as 
a marketing tool to promote the idea of nature and fresh produce, and 
that making the name ``Inwood Valley'' viticulturally significant would 
prohibit wine bottlers outside the proposed viticultural area that 
currently use the name ``Inwood'' on their labels from later adding 
``valley'' to their labels or brand name if they believed it would be 
in their best marketing interest to do so. The comment cites Inwood 
Estates Vineyard and Winery in Dallas, Texas, as an example of a winery 
that would be prohibited from adding ``valley'' to its name if ``Inwood 
Valley'' becomes a term of viticultural significance. The commenter did 
not claim any association with Inwood Estates Vineyard and Winery and 
did not comment on any other aspect of the petition.

[[Page 56543]]

    Section 9.12(a)(1) of the TTB regulations requires that the area 
within the proposed viticultural area ``must be nationally or locally 
known by the name specified in the petition.'' As stated in Notice No. 
125, TTB has determined the name evidence submitted by the petitioner 
shows that the region within the proposed viticultural area is known 
locally as ``Inwood Valley.'' The evidence provided with the petition 
indicates that local residents and businesses within the proposed 
viticultural area use the name ``Inwood Valley,'' and that the name 
``Inwood Valley'' accurately describes the region in which the proposed 
viticultural area is located. TTB further adds that ``Inwood,'' by 
itself, is not recognized as having viticultural significance, and that 
the word ``valley'' is commonly used in American viticultural area 
names; there are 40 American viticultural area names containing the 
word ``valley'' in California alone.
    TTB is not aware of any current label holder that will be adversely 
affected by the establishment of the Inwood Valley viticultural area 
and the designation of the full name ``Inwood Valley'' as a term of 
viticultural significance. Such establishment also will not affect any 
current or future label holders using the word ``Inwood,'' standing 
alone, on wine labels. For example, the ability of Inwood Estates 
Vineyard and Winery to use ``Inwood Estates'' or ``Inwood Winery'' on a 
wine label would not be affected by the publication of this final rule. 
With regard to the restriction on the use of the term ``Inwood Valley'' 
on future labels, TTB specifically noted in Notice No. 125 that any 
current or future label holder wishing to use the term on a wine label 
must ensure that the wine meets the eligibility requirements for the 
appellation.
    After the close of the comment period, TTB received a comment from 
a vineyard owner requesting that the southern boundary of the proposed 
viticultural area be modified in order to include his vineyard. The 
commenter stated that his vineyard was within the boundary of the 
viticultural area as originally proposed in the petition, and that he 
became aware of the boundary line modification and the resultant 
exclusion of his vineyard only after the comment period had closed. 
According to the vineyard owner, his property is located immediately 
adjacent to the viticultural area boundary proposed in Notice No. 125 
and currently has 2.5 acres of planted vineyards, with 4 more acres of 
vineyards planned in the near future. After being informed of the 
commenter's request, Mr. Shabram sent a letter to TTB acknowledging 
that the exclusion of the vineyard was inadvertent and stating that the 
geographical features of the vineyard are similar to those of the 
viticultural area proposed in Notice No. 125.
    TTB notes that, as stated in Notice No. 125, the proposed boundary 
was based on marked features on USGS maps that approximately follow the 
distinguishing features of elevation and soil types. TTB believes a 
slight modification to the boundary to include the vineyard at issue is 
consistent with the distinguishing features evidence submitted with the 
petition and discussed in Notice No. 125. Also, although the comment 
period had already closed when the comment was received, TTB 
specifically noted in the proposed rule its interest in comments 
relating to the appropriateness of the proposed boundary.
    Accordingly, given the circumstances of the exclusion of the 
commenter's vineyard from the proposed viticultural area and the 
potential impact of the rulemaking on the commenter, TTB concludes that 
the boundary should be modified so that the additional vineyard is 
included within the Inwood Valley viticultural area. Mr. Shabram 
provided TTB with the modifications to the boundary description based 
on markings appearing on the applicable USGS maps, and the letters from 
the vineyard owner and Mr. Shabram are included in the rulemaking 
docket. The boundary modification adds 143 acres to the Inwood Valley 
viticultural area, for a total of 28,441 acres, with approximately 62.5 
acres dedicated to 5 commercially-producing vineyards.

TTB Determination

    After careful review of the petition and the comments received, TTB 
finds that the evidence provided by the petitioner supports the 
establishment of the 28,441-acre Inwood Valley viticultural area as 
proposed in Notice No. 125 and modified by the alteration to the 
boundary description discussed below. Accordingly, under the authority 
of the FAA Act, section 1111(d) of the Homeland Security Act of 2002, 
and part 4 of the TTB regulations, TTB establishes the ``Inwood 
Valley'' viticultural area in Shasta County, California, effective 30 
days from the publication date of this document.

Boundary Description

    See the narrative boundary description of the viticultural area in 
the regulatory text published at the end of this final rule. Paragraphs 
(c)(17) and (18) of the final boundary description of the viticultural 
area differ from the description in the proposed rule, consistent with 
the modification of the southern portion of the boundary line discussed 
above. In addition, TTB clarified the wording of other boundary 
descriptions within paragraph (c) but the location of the boundary as 
described in those sections did not change from that proposed in Notice 
No. 125.

Maps

    The petitioner provided the required maps, and TTB lists them below 
in the regulatory text.

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. With the establishment of this viticultural area, its 
name, ``Inwood Valley,'' is recognized as a name of viticultural 
significance under 27 CFR 4.39(i)(3). The text of the new regulation 
clarifies this point. Once this final rule becomes effective, wine 
bottlers using ``Inwood Valley'' 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 
viticultural area name as an appellation of origin.
    For a wine to be labeled with a viticultural area name or with a 
brand name that includes a viticultural area name or other term 
identified as being viticulturally significant in part 9 of the TTB 
regulations, at least 85 percent of the wine must be derived from 
grapes grown within the area represented by that name or other term, 
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 the 
viticultural area name or other viticulturally significant term and 
that name or term 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 viticultural area name or 
other viticulturally significant term 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 a 
viticultural area name or other term of viticultural significance 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

    TTB certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. The 
regulation imposes no new

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reporting, recordkeeping, or other administrative requirement. Any 
benefit derived from the use of a viticultural area 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

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

Drafting Information

    Karen A. Thornton 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, 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.  9.226 to read as follows:


Sec.  9.226  Inwood Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Inwood Valley''. For purposes of part 4 of this chapter, 
``Inwood Valley'' is a term of viticultural significance.
    (b) Approved maps. The five United States Geological Survey 
1:24,000 scale topographic maps used to determine the boundary of the 
Inwood Valley viticultural area are titled:
    (1) Clough Gulch, California--Shasta County, Provisional edition 
1985;
    (2) Inwood, California--Shasta County, Provisional edition 1985;
    (3) Hagaman Gulch, California--Shasta County, Provisional edition 
1985;
    (4) Shingletown, California--Shasta County, Provisional edition 
1985; and
    (5) Tuscan Buttes NE., California, 1965, Photoinspected 1976.
    (c) Boundary. The Inwood Valley viticultural area is located in 
Shasta County, California. The boundary of the Inwood Valley 
viticultural area is as described below:
    (1) The beginning point is on the Clough Gulch map at BM 
(Benchmark) 1254.4 located along State Route 44 in T31N/R2W. From the 
beginning point, proceed east-northeasterly in a straight line 
approximately 4.1 miles, onto the Inwood map, to the 1,786-foot 
elevation point, section 17, T31N/R1W; then
    (2) Proceed east-northeasterly in a straight line approximately 2.1 
miles to the 2,086-foot elevation point, section 15, T31N/R1W; then
    (3) Proceed north-northeasterly in a straight line approximately 
0.7 mile to the marked 1,648-foot elevation point (which should be 
marked as 2,648 feet based on its two adjacent elevation lines) on Bear 
Creek Ridge, section 10, T31N/R1W; then
    (4) Proceed east-northeasterly in a straight line approximately 0.8 
mile to the 2,952-foot elevation point (located between two 
transmission lines), section 11, T31N/R1W; then
    (5) Proceed east-northeasterly in a straight line approximately 1.2 
miles to the 3,042-foot summit of Blue Mountain, section 1, T31N/R1W; 
then
    (6) Proceed easterly in a straight line approximately 0.7 mile, 
crossing over the R1W/R1E ``Mt. Diablo Meridian'' line, to the 3,104-
foot elevation point, section 6, T31N/R1E; then
    (7) Proceed east-northeasterly in a straight line approximately 2.2 
miles to the summit of Alamine Peak, section 32, T32N/R1E; then
    (8) Proceed southeasterly in a straight line approximately 2.1 
miles, onto the Hagaman Gulch map, to Bear Pen Springs, section 10, 
T31N/R1E; then
    (9) Proceed west-southwesterly in a straight line approximately 0.8 
mile to the 3,373-foot summit of Chalk Mountain, section 9, T31N/R1E; 
then
    (10) Proceed south-southwesterly in a straight line approximately 1 
mile, returning to the Inwood map, to 2,756-foot elevation point, 
section 17, T31N/R1E; then
    (11) Proceed south in a straight line approximately 0.6 mile to the 
intersection of that line with an improved road marked ``Private'' at 
the southern boundary of section 17, T31N/R1E; then
    (12) Proceed south-southwesterly along that ``Private'' road 
approximately 1.6 miles to the marked gate of the ``Private'' road at 
the road's intersection with unnamed improved and unimproved roads, 
section 29, T31N/R1E; then
    (13) Proceed southwesterly in a straight line approximately 1.6 
miles, onto the Shingletown map, to the intersection of that line with 
State Route 44 and an unnamed improved road (known locally as Ash Creek 
Road), section 31, T31N/R1E; then
    (14) Proceed southwesterly in a straight line approximately 0.2 
miles to the 3,334-foot elevation point, section 31, T31N/R1E; then
    (15) Proceed southwesterly in a straight line approximately 1.5 
miles, crossing over the R1W/R1E ``Mt. Diablo Meridian'' line, to the 
3,029-foot elevation point on Shingletown Ridge, section 1, T30N/R1W; 
then
    (16) Proceed westerly in a straight line approximately 1.6 miles to 
the 2,435-foot elevation point, section 3, T30N/R1W; then
    (17) Proceed west-southwesterly in a straight line approximately 
1.7 miles to the 2,065-foot elevation point (southeast of a marked 
Borrow Pit), section 8, T30N/R1W; then
    (18) Proceed west-northwesterly in a straight line approximately 
5.2 miles, onto the Tuscan Buttes NE map, to the 956-foot elevation 
point near an unnamed spring in section 33, T31N/R2W; then
    (19) Proceed north in a straight line approximately 1.7 miles, onto 
the Clough Gulch map, to BM 1048.1 on State Route 44, section 28, T31N/
R2W; then
    (20) Proceed east along State Route 44 approximately 1.1 miles, 
returning to the beginning point.

    Signed: July 26, 2012.
John J. Manfreda,
Administrator.
    Approved: August 2, 2012.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2012-22595 Filed 9-12-12; 8:45 am]
BILLING CODE 4810-31-P