[Federal Register Volume 79, Number 138 (Friday, July 18, 2014)]
[Rules and Regulations]
[Pages 41891-41894]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16919]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2013-0008; T.D. TTB-120; Ref: Notice No. 139]
RIN 1513-AC02


Establishment of the Upper Hiwassee Highlands 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 approximately 690-square mile ``Upper Hiwassee Highlands'' 
viticultural area in Cherokee and Clay Counties, North Carolina, and 
Towns, Union, and Fannin Counties, Georgia. The viticultural area does 
not lie within or contain any other established viticultural area. TTB 
designates viticultural areas to allow vintners to better describe the 
origin of their wines and to allow consumers to better identify wines 
they may purchase.

DATES: This final rule is effective August 18, 2014.

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 
December 10, 2013, 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) authorizes 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) 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 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

[[Page 41892]]

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 outlines the procedure 
for proposing an AVA and provides that any interested party may 
petition TTB to establish a grape-growing region as an AVA. Section 
9.12 of the TTB regulations (27 CFR 9.12) prescribes the standards for 
petitions for the establishment of 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 that affect 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.

Upper Hiwassee Highlands Petition

    TTB received a petition from Eric Carlson, owner of Calaboose 
Cellars, on behalf of himself and members of the Vineyard and Winery 
Operators of the Upper Hiwassee River Basin group, proposing the 
establishment of the approximately 690-square mile ``Upper Hiwassee 
Highlands'' AVA. The proposed AVA is located in the southern 
Appalachian Mountains within the upper Hiwassee River basin in all or 
portions of Cherokee and Clay Counties in southwestern North Carolina 
and Towns, Union, and Fannin Counties in northwestern Georgia. The 
proposed AVA contains 26 commercially producing vineyards, growing 
approximately 54 acres of French-American hybrids, American grape 
varieties, and Vitis vinifera. According to the petition, present 
vineyard operators estimate they will expand their plantings by an 
additional 75.5 acres within the next 5 years. Five wineries were 
operating within the proposed AVA at the time the petition was 
submitted. According to the petition, the distinguishing features of 
the proposed Upper Hiwassee Highlands AVA include topography, 
temperature, and soils.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 139 in the Federal Register on July 12, 
2013 (78 FR 41891), proposing to establish the Upper Hiwassee Highlands 
AVA. In the document, TTB summarized the evidence from the petition 
regarding the name, boundary, and distinguishing features for the 
proposed AVA. The distinguishing features of the proposed AVA include 
topography, temperature, and soils. The document also compared the 
distinguishing features of the proposed AVA to the surrounding areas. 
For a description of the evidence relating to the name, boundary, and 
distinguishing features of the proposed AVA, and for a comparison of 
the distinguishing features of the proposed AVA to the surrounding 
areas, see Notice No. 139.
    In Notice No. 139, TTB solicited comments on the accuracy of the 
name, boundary, climatic, and other required information submitted in 
support of the petition. The comment period closed on September 10, 
2013.
    In response to Notice No. 139, TTB received a total of 37 comments, 
all of which supported the establishment of the Upper Hiwassee 
Highlands AVA. Among the commenters were the Clay County (NC) Chamber 
of Commerce; the Clay County Travel and Tourism Board of Directors; the 
Clay County Economic Development Commission; the Cherokee County (NC) 
Director of Economic Development; the Cherokee County Board of 
Commissioners; the Cherokee County Tourism Development Authority; the 
Cherokee County Chamber of Commerce; the Agricultural Extension Agent 
for Cherokee County; the Director of Economic Development for Tri-
County Community College in Murphy, North Carolina; Southern 
Appalachian Family Farms, which promotes local and alternative 
sustainable markets for agricultural products; the Director of 
Fermentation Sciences at Appalachian State University; the Georgia 
Department of Agriculture; the Tourism Division of the Georgia 
Department of Economic Development; the Towns County (GA) Chamber of 
Commerce; a Commissioner for Union County (GA); and the Blairsville-
Union County Chamber of Commerce. After the comment period closed, TTB 
received a comment by mail from Senator Johnny Isakson of Georgia, 
expressing support for the proposed AVA. The Senator's comment was 
added to the rulemaking docket. TTB received no comments opposing the 
Upper Hiwassee Highlands AVA, as proposed.

TTB Determination

    After careful review of the petition and the comments received in 
response to Notice No. 139, TTB finds that the evidence provided by the 
petitioner supports the establishment of the approximately 690-square 
mile Upper Hiwassee Highlands AVA. 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 ``Upper Hiwassee 
Highlands'' AVA in Cherokee and Clay Counties, North Carolina, and 
Towns, Union, and Fannin Counties, Georgia, effective 30 days from the 
publication date of this document.

Boundary Description

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

Maps

    The petitioner provided the required maps, and they are listed 
below in the regulatory text.

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 AVA, its name, ``Upper 
Hiwassee Highlands,'' 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 regulation clarifies this point. Once this 
final rule becomes effective, wine bottlers using the name ``Upper 
Hiwassee Highlands'' 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 AVA name as an 
appellation of origin.
    The establishment of the Upper Hiwassee Highlands AVA will not 
affect any existing AVA. The establishment of the Upper Hiwassee 
Highlands AVA will allow vintners to use ``Upper Hiwassee Highlands'' 
as an appellation of origin for wines made from grapes grown within the 
Upper Hiwassee Highlands AVA, if the wines meet the

[[Page 41893]]

eligibility requirements for the appellation.
    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 Sec.  4.25(e)(3) of the 
TTB regulations (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 Sec.  4.39(i)(2) of the TTB regulations (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 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 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

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.  9.234 to read as follows:


Sec.  9.234  Upper Hiwassee Highlands.

    (a) Name. The name of the viticultural area described in this 
section is ``Upper Hiwassee Highlands''. For purposes of part 4 of this 
chapter, ``Upper Hiwassee Highlands'' is a term of viticultural 
significance.
    (b) Approved maps. The 24 United States Geological Survey (USGS) 
1:24,000 scale topographic maps used to determine the boundary of the 
Upper Hiwassee Highlands viticultural area are titled:
    (1) Unaka, NC/TN, 1957; photorevised 1978;
    (2) McDaniel Bald, NC/TN, 1957; photoinspected 1976;
    (3) Marble, NC, 1938; photorevised 1990;
    (4) Andrews, NC, 1938; photorevised 1990;
    (5) Topton, NC, 1957; photoinspected 1976;
    (6) Peachtree, NC, 1937; photorevised 1973;
    (7) Hayesville, NC, 1966; photorevised 1978; photoinspected 1987;
    (8) Shooting Creek, NC, 1957; photorevised 1990;
    (9) Rainbow Springs, NC, 1957; photorevised 1978;
    (10) Macedonia, GA/NC, 1988;
    (11) Hightower Bald, GA/NC, 1988;
    (12) Tray Mountain, GA, 1957; photorevised 1985;
    (13) Jacks Gap, GA, 1988;
    (14) Hiawassee, GA/NC, 1988;
    (15) Blairsville, GA/NC, 1988;
    (16) Cowrock, GA, 1988;
    (17) Coosa Bald, GA, 1988;
    (18) Neels Gap, GA, 1988;
    (19) Mulky Gap, GA, 1965;
    (20) Wilscot, GA, 1947;
    (21) Nottely Dam, GA/NC, 1988;
    (22) Culberson, NC/GA, 1988;
    (23) Persimmon Creek, NC, 1957; photorevised 1978; and
    (24) Isabella, TN/NC, 1957; photorevised 1978.
    (c) Boundary. The Upper Hiwassee Highlands viticultural area is 
located in Cherokee and Clay Counties, North Carolina, and Towns, 
Union, and Fannin Counties, Georgia. The boundary of the Upper Hiwassee 
Highlands viticultural area is as described below:
    (1) The beginning point is in Cherokee County, North Carolina, on 
the Unaka map at the intersection of the northwestern end of the 
Hiwassee Dam and an unnamed light-duty road known locally as Hiwassee 
Dam Access Road.
    (2) From the beginning point, proceed northwesterly on Hiwassee Dam 
Access Road approximately 4.2 miles to the road's intersection with an 
unnamed light-duty road known locally as Joe Brown Highway; then
    (3) Proceed northeasterly on Joe Brown Highway approximately 1.4 
miles to the highway's intersection with an unnamed light-duty road 
known locally as Burrell Mountain Road; then
    (4) Proceed east-northeasterly along a straight line (drawn from 
the intersection of Joe Brown Highway and Burrell Mountain Road to the 
peak of Bird Knob) to the point where the line intersects the 2,400-
foot elevation line west of Bird Knob; then
    (5) Proceed initially southerly and then easterly along the 
meandering 2,400-foot elevation line and continue to follow the 
elevation line in an overall clockwise direction through Cherokee and 
Clay Counties, North Carolina, and then Towns and Union Counties, 
Georgia, crossing over as necessary the McDaniel Bald, Marble, Andrews, 
Topton, Peachtree, Hayesville, Shooting Creek, Rainbow Springs, 
Macedonia, Hightower Bald, Tray Mountain, Jacks Gap, Hiwassee, 
Blairsville, Cowrock, Coosa Bald, Neels Gap, and Mulky Gap maps and 
ending on the Wilscot map, at the intersection of the 2,400-foot 
elevation line with the Union-Fannin County boundary line at Skeenah 
Gap; then
    (6) Proceed northerly along the meandering Union-Fannin County 
boundary line, crossing over the Mulky Gap and Nottely Dam maps and 
onto the Culberson map, to the summit of High Top Mountain; then
    (7) Proceed northwesterly in a straight line approximately one mile 
to the intersection of two unnamed light-duty roads known locally as 
Cutcane Road and Mt. Herman Road, near Mt. Herman Church; then
    (8) Proceed northwesterly on Mt. Herman Road approximately one mile 
to the road's intersection with State Spur 60 (Murphy Highway); then
    (9) Proceed southwesterly on State Spur 60 (Murphy Highway) 
approximately 2 miles to the road's intersection with an unnamed light-
duty road known locally as Knollwood Road; then
    (10) Proceed northwesterly in a straight line approximately 1.75 
miles to the summit of Watson Mountain; then
    (11) Proceed northeasterly in a straight line approximately 2.15 
miles, crossing onto the Persimmon Creek map, to the line's 
intersection with the wagon and jeep track at the southernmost summit 
of Vance Mountain in Cherokee County, North Carolina; then

[[Page 41894]]

    (12) Proceed north-northwesterly along the wagon and jeep track 
approximately 0.8 mile to the track's intersection with a marked foot 
trail near the 2,200-foot elevation line on the northern spur of Vance 
Mountain; then
    (13) Proceed north-northwesterly along the foot trail approximately 
0.5 mile to the trail's intersection with an unnamed road known locally 
as Wallace Road, and then continue north-northwesterly along Wallace 
Road approximately 0.4 mile to the road's intersection with U.S. 
Highway 64 near Hothouse; then
    (14) Proceed westerly along U.S. Highway 64 approximately one mile 
to the highway's intersection with a marked northerly foot trail at 
Nealy Gap; then
    (15) Proceed northerly along the marked foot trail, briefly 
crossing to and from the Isabella map, to the foot trail's intersection 
with an unnamed unimproved road, and then continue northerly on the 
unimproved road to its intersection with a second unnamed unimproved 
road known locally as Charles Laney Road, a total approximate distance 
of 0.75 mile; then
    (16) Proceed northwesterly on the unnamed unimproved road known 
locally as Charles Laney Road, crossing onto the Isabella map, to the 
road's end, and then continue north-northwesterly on a marked foot 
trail to the trail's intersection with a wagon and jeep track at 
Wolfpen Gap, a total approximate distance of one mile; then
    (17) Proceed easterly and then northeasterly along the wagon and 
jeep trail, crossing onto the Persimmon Creek map, to the 3,284-foot 
benchmark (MLB 1514) on Payne Mountain, then continue northeasterly on 
the wagon and jeep trail (which is partially marked as a foot trail) 
along the ridge line of Payne Mountain to the peak of Harris Top, then 
continue north-northeasterly on the wagon and jeep trail to the peak of 
Beaver Top, a total approximate distance of 2.75 miles; then
    (18) Proceed northeasterly approximately 0.25 mile on the wagon and 
jeep trail to the point where the trail turns sharply to the southeast 
at a summit within the 2,480-foot elevation line on the western 
shoulder of Indian Grave Gap; then
    (19) Proceed north in a straight line approximately 0.95 mile to 
the summit of Candy Mountain, and then continue north-northwest in a 
straight line approximately 0.45 mile to the line's intersection with 
an unnamed light-duty road known locally as Candy Mountain Road; then
    (20) Proceed east-northeasterly on Candy Mountain Road 
approximately 0.8 mile to the 1,740-foot benchmark (BM HR 116); then
    (21) Proceed northerly in a straight line approximately 1.2 miles 
to the southernmost peak of Ghormley Mountain (within the 2,440-foot 
elevation line); then
    (22) Proceed north-northeast in a straight line approximately 1.3 
miles to the intersection of an unnamed light-duty road known locally 
as Lower Bear Paw Road and an unnamed unimproved road just south of 
Reids Chapel (the chapel is shown along the southern edge of the Unaka 
map); then
    (23) Proceed northerly on Lower Bear Paw Road approximately 0.35 
mile, crossing onto the Unaka map, to the road's intersection with an 
unnamed light-duty road known locally as Hiwassee Dam Access Road; then
    (24) Proceed easterly and then northerly along Hiwassee Dam Access 
Road approximately 2.9 miles, returning to the beginning point at the 
northwestern end of Hiwassee Dam.

    Signed: April 15, 2014.
John J. Manfreda,
Administrator.
    Approved: May 7, 2014.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2014-16919 Filed 7-17-14; 8:45 am]
BILLING CODE 4810-31-P