[Federal Register Volume 83, Number 240 (Friday, December 14, 2018)]
[Rules and Regulations]
[Pages 64272-64274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27125]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[Docket No. TTB-2018-0004; T.D. TTB-154; Ref: Notice No. 173]
RIN 1513-AC37


Expansion of the Monticello 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) is 
expanding the approximately 1,320-square mile ``Monticello'' 
viticultural area in Albemarle, Greene, Nelson, and Orange Counties, in 
Virginia, by approximately 166 square miles, into Fluvanna County, 
Virginia. The established viticultural area and the expansion area are 
not located within 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 January 14, 2019.

FOR FURTHER INFORMATION CONTACT: Trevar D. Kolodny, Regulations and 
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW, Box 12, Washington, DC 20005; phone 202-559-6222.

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

[[Page 64273]]

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, dated December 
10, 2013 (superseding Treasury Order 120-01, dated January 24, 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) 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 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 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 provides that any 
interested party may petition TTB to establish a grape-growing region 
as an AVA. Petitioners may use the same process to request changes 
involving established AVAs. Section 9.12 of the TTB regulations (27 CFR 
9.12) prescribes standards for petitions for modifying established 
AVAs. Petitions to expand an established AVA must include the 
following:
    <bullet> Evidence that the area within the proposed expansion area 
boundary is nationally or locally known by the name of the established 
AVA;
    <bullet> An explanation of the basis for defining the boundary of 
the proposed expansion area;
    <bullet> A narrative description of the features of the proposed 
expansion area that affect viticulture, such as climate, geology, 
soils, physical features, and elevation, that make the proposed 
expansion area similar to the established AVA and distinguish it from 
adjacent areas outside the established AVA boundary;
    <bullet> The appropriate United States Geological Survey (USGS) 
map(s) showing the location of the proposed expansion area, with the 
boundary of the proposed expansion area clearly drawn thereon; and
    <bullet> A detailed narrative description of the proposed expansion 
area boundary based on USGS map markings.

Petition To Expand the Monticello AVA

    TTB received a petition from George Cushnie, co-owner of Thistle 
Gate Vineyard, submitted on behalf of himself and a second vineyard 
owner, proposing to expand the established Monticello AVA. The 
Monticello AVA (27 CFR 9.48) was established by T.D. ATF-164, which was 
published in the Federal Register on January 23, 1984 (49 FR 2758). The 
Monticello AVA covers approximately 1,320 square miles in Albemarle, 
Greene, Nelson, and Orange Counties in Virginia. The Monticello AVA and 
the proposed expansion area do not overlap any other established or 
proposed AVAs.
    The proposed expansion area extends beyond the Albemarle County 
line, which currently serves as the southeastern border of the 
established AVA, to encompass approximately 166 square miles of 
Fluvanna County, between the James and Rivanna Rivers. The petition 
included a letter from the President of the Jeffersonian Wine Grape 
Growers Society, an association of over 30 wineries within the existing 
Monticello AVA, supporting the proposed expansion.
    When the petition was filed, there were two commercially-producing 
vineyards covering a total of approximately 15 acres within the 
proposed expansion area. Since the petition was filed, an additional 
vineyard has been established in the proposed expansion area, covering 
approximately 6.5 acres.
    According to the petition, the soils and climate of the proposed 
expansion area are similar to those of the established Monticello AVA. 
The soils in Fluvanna County consist of the Nason, Manteo, Tatum, and 
Louisburg types, which are also the main soil types found in Albemarle 
County, which forms the heart of the existing AVA, and Orange County, 
which forms the northeast portion of the existing AVA. The petition 
further notes that the Nelson and Manteo soils are Virginia soils 
particularly well-suited to viticulture, given that they are silty 
loams, characterized by moderate levels of nutritious organic content 
and good drainage conditions.
    The climate of the proposed expansion is similar to the climate of 
the existing AVA. Gaps in the Blue Ridge Mountains to the east cause 
``rivers of cold air'' to flow through corridors that converge east of 
the Monticello AVA and the new expansion area. As a result, 
temperatures in the Monticello AVA and the proposed expansion area are 
4-5 [deg]F warmer than the climate in the surrounding areas outside the 
Monticello AVA. This warmer weather allows for a longer growing season 
and protection from frosts, which can be fatal to ripening grapes. This 
warmer weather was an important factor in establishing the Monticello 
AVA in 1982, and is a point of similarity that the proposed expansion 
area shares with the existing AVA, in contrast to surrounding areas. 
The growing season of the proposed expansion area is typically a 
minimum of 190 or even 200 days, which is similar to the 190-200 day 
average of the Orange County portion of the Monticello AVA. By 
contrast, the lands further east and south of the proposed expansion 
area average 150 days and less.

Notice of Proposed Rulemaking and Comments Received

    TTB published Notice No. 173 in the Federal Register on April 6, 
2018 (83 FR 14787), proposing to expand the Monticello AVA. In the 
notice, TTB summarized the evidence from the petition regarding the 
name, boundary, and distinguishing features for the proposed expansion 
area. For a detailed description of the evidence relating to the name, 
boundary, and distinguishing features of the proposed expansion area, 
and for a comparison of the distinguishing features of the proposed 
expansion area to the surrounding areas and to the established 
Monticello AVA, see Notice No. 173.

Comments Received

    In Notice No. 173, 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 June 5, 2018.
    In response to Notice No. 173, TTB received one comment from Will 
and

[[Page 64274]]

Leah Wentz, who have established a vineyard in the proposed expansion 
area, and who supported the proposed expansion of the Monticello AVA. 
They claim that they selected their vineyard site in Fluvanna County 
based on the various viticultural attributes of the area, especially 
including its climate and soils, which they said were accurately 
described in the initial petition. TTB did not receive any comments 
objecting to the proposed AVA expansion.

TTB Determination

    After careful review of the petition, TTB finds that the evidence 
provided by the petitioner sufficiently demonstrates that the proposed 
expansion area shares the characteristics of the established Monticello 
AVA and should also be recognized as part of that 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 
expands the 1,320 square mile ``Monticello'' AVA to include the 
approximately 166 square mile expansion area as described in Notice No. 
173, effective 30 days from the publication date of this document.

Boundary Description

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

Maps

    The petitioner provided the required maps, and they are codified 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. 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.
    The expansion of the Monticello AVA will not affect any other 
existing AVA, and bottlers using ``Monticello'' as an appellation of 
origin or in a brand name for wines made from grapes within the 
``Monticello'' AVA will not be affected by this expansion of the 
Monticello AVA. The expansion of the Monticello AVA will allow vintners 
to use ``Monticello'' as an appellation of origin for wines made 
primarily from grapes grown within the expansion area 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 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

    Trevar D. Kolodny 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. Section 9.48 is amended by revising paragraph (c)(16), redesignating 
paragraph (c)(17) as (c)(19), and adding new paragraph (c)(17) and 
paragraph (c)(18) to read as follows:


Sec.  9.48  Monticello.

* * * * *
    (c) * * *
    (16) Then continuing southwest along the county line to its 
intersection with the Rivanna River;
    (17) Then southeast along the Rivanna River to its confluence with 
the James River, near the Fluvanna-Goochland County line;
    (18) Then southwest, then northwest along the James River to its 
intersection with the Albemarle County line;
* * * * *

    Signed: September 5, 2018.
John J. Manfreda,
Administrator.
    Approved: December 4, 2018.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2018-27125 Filed 12-13-18; 8:45 am]
 BILLING CODE 4810-31-P