[Federal Register Volume 69, Number 235 (Wednesday, December 8, 2004)]
[Rules and Regulations]
[Pages 70889-70893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26865]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 9

[TTB T.D.-19; Re: Notice No. 17]
RIN: 1513-AA75


Establishment of the Southern Oregon Viticultural Area (2002R-
338P)

AGENCY: Alcohol and Tobacco Tax and Trade Bureau (TTB), Treasury.

ACTION: Final rule; Treasury decision.

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SUMMARY: This Treasury decision establishes the Southern Oregon 
viticultural area in portions of Douglas, Jackson, and Josephine 
Counties in southwestern Oregon. The established Applegate Valley, 
Rogue Valley, and Umpqua Valley viticultural areas are within 
boundaries of the Southern Oregon 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: This rule is effective February 7, 2005.

FOR FURTHER INFORMATION CONTACT: N.A. Sutton, Program Manager, 
Regulations and Procedures Division, Alcohol and Tobacco Tax and Trade 
Bureau, 925 Lakeville St., <greek-i>158, Petaluma, CA 94952; telephone 
415-271-1254.

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 the consumer with adequate information regarding a product's 
identity and prohibits the use of misleading information on such 
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

[[Page 70890]]

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

Southern Oregon Petition

General Background

    In 2002, we received a petition from H. Earl Jones, a winemaker, 
and Dr. Gregory V. Jones, an associate professor of geography, 
requesting establishment of the ``Southern Oregon'' viticultural area. 
Located between the Coast Range and the Cascade Mountains, the Southern 
Oregon viticultural area covers portions of Douglas, Jackson, and 
Josephine Counties in southwestern Oregon. Beginning about 25 miles 
south of Eugene, the boundary area extends 125 miles south to the 
Oregon-California border. At its widest point the viticultural area is 
about 60 miles across.
    The Southern Oregon viticultural area's boundary encompasses 
approximately 2,001,430 acres and includes the communities of 
Sutherlin, Roseburg, Grants Pass, Medford, and Ashland, Oregon. There 
are approximately 120 vineyards, with more than 3,000 acres planted to 
a wide range of vinifera grapes, and 17 commercial wineries within the 
area as of the 2002 petition filing. Both warm and cool climate wine 
grape varietals are successfully grown in the region.
    The Southern Oregon viticultural area encompasses the established 
Umpqua Valley (27 CFR 9.89) and Rogue Valley (27 CFR 9.132) 
viticultural areas. A third established viticultural area, Applegate 
Valley (27 CFR 9.165), is entirely within the Rogue Valley area. TTB 
emphasizes that the boundaries and name usage of these three 
viticultural areas are not affected by the approval of the larger, 
encompassing Southern Oregon viticultural area.
    The Southern Oregon viticultural area contains a series of high 
intermountain valleys that share a warm, sunny, arid climate and 
contain old, complex soils derived from bedrock. The warm Southern 
Oregon viticultural area is distinguishable from the cooler Willamette 
Valley to the north, the Pacific coastal regions to the west, and the 
region east of the Cascade Mountains.
    Below, we summarize the information and evidence presented in the 
2002 Southern Oregon petition.

Viticultural History

    Historically, grapes have been grown in the Southern Oregon 
viticultural area since 1852, when Peter Britt operated a winery in 
Jacksonville, Oregon, that produced wine for local miners. Shortly 
thereafter, Jesse Applegate planted 1,200 grape vines in Umpqua, 
Oregon.
    Modern day viticulture began in 1959, when Richard Summers founded 
Hillcrest Vineyard and produced 230 gallons of Riesling. The early 
1970s saw the establishment of vineyards in the Umpqua and Rogue 
valleys by the Henry Estate Winery, Girardet Wine Cellars, and the 
Valley View Winery. Wine grape plantings have increased to 3,000 acres.

Name Evidence

    The Encyclopedia of Oregon defines ``Southern Oregon'' as 
``extending from the Calapooya Mountains southward to the [California] 
State line between the Cascades and the Coast Range.'' Geographical 
references to Southern Oregon are found in multiple business page 
listings in the telephone books of Douglas, Jackson, and Josephine 
Counties. East of the Southern Oregon boundary area, the Klamath Falls 
and Lakeview community telephone books indicate that that region is 
known as Central Oregon. The American Automobile Association map of 
Oregon labels the regions surrounding the Southern Oregon area as the 
Willamette Valley (north), the Cascade Range (east), the State of 
California (south), and the Coast Range (west), which meets the Pacific 
Ocean to define the Oregon coastline.
    Wine industry publications, including the Wine Business Monthly and 
Northwest Palate magazines, refer to wine grape production in Jackson, 
Josephine, and Douglas Counties as ``Southern Oregon.'' Wine industry 
members in the area believe that a ``Southern Oregon'' appellation will 
have more relevance to consumers since it accurately describes the 
origin of the area's wines and helps distinguish them from Oregon's 
Willamette Valley wines, which are significantly different.

Boundary Evidence

    The Southern Oregon viticultural area boundaries are based on a 
combination of climate, terrain, and soil factors that contrast with 
the nearby Willamette Valley, the Pacific coastal area, and Eastern 
Oregon region. The boundaries encompass three established viticultural 
areas (Umpqua Valley, Rogue Valley, and Applegate Valley) and a 
connecting valley corridor of similar viticultural potential. The 
boundaries of the three viticultural areas are well established and 
clearly documented in 27 CFR part 9, and there will be no changes to 
their boundaries.
    The 12- by 17-mile north-south corridor in Douglas County 
connecting the Umpqua Valley and Rogue Valley viticultural areas has 
the same physical features as the viticultural areas to its north and 
south. A series of township and range lines, as noted on USGS maps, 
define the boundaries of the connecting corridor, which is roughly 
centered on Interstate 5 between the communities of Canyonville and 
Glendale Junction.

Distinguishing Features

Topography
    The Southern Oregon area contains a varied, mountainous topography 
with vineyards typically situated in high mountain valleys. The Coast 
Range, in particular the Klamaths, forms a natural barrier to the west. 
This high mountain range barrier prevents marine air from freely moving 
inland to the Southern Oregon viticultural area. It also casts a

[[Page 70891]]

rain shadow on the south and east regions of the Southern Oregon area.
    To the north, a gap in the Coast Range allows cooling Pacific 
maritime air to flow into the Willamette Valley viticultural area. This 
contrast becomes more apparent as one travels south from the cooler, 
lower-elevation Willamette Valley into the warmer, higher elevations of 
the Southern Oregon area. Many vineyards in the Umpqua Valley are above 
1,000 feet in elevation, and those to the south in the Rogue Valley are 
typically at elevations of 1,200 feet to 2,000 feet.
Soils
    The Southern Oregon viticultural area soils evolved slowly from 
ancient rock formations, predominantly from the 200 million year-old 
Klamath Mountains. These ancient mountains, which extend from 
California to the latitude of Roseburg, Oregon, are comprised of 
sedimentary rock. Over time, a slow and complex geologic process 
crushed, metamorphosed, and modified these rock formations.
    The old geology and soils of the Southern Oregon viticultural area 
generally contrast with that of the surrounding regions beyond the 
area's boundaries. To the north, the Willamette Valley has a more 
recent geologic history. Formed 25 million years ago as an extension of 
the Pacific Ocean, or perhaps as multiple interconnected bays, the 
Willamette Valley gradually filled with sediments and occasional basalt 
lava flows. The glacial Lake Missoula floods also deposited silts and 
sediments in the valley. To the west, the Pacific coastal zone's soils 
are more highly weathered and consist of a mix of soils from earlier 
volcanoes and oceanic crust terrains. To the east, the Cascade 
Mountains are comprised of mostly young volcanic soils, and beyond the 
Cascades are the arid desert and prairie soils of Eastern Oregon.
Temperature
    The Southern Oregon viticultural area has the warmest growing 
conditions in the state of Oregon, thus allowing for the practice of 
``warm climate viticulture.'' This warm growing climate impacts the 
grape varietals grown, quality, and harvest dates. Also, growers use 
cooler microclimates within the Southern Oregon area to produce some 
``cool climate'' wine grape varietals.
    The table below shows the growing season temperatures in and around 
the Southern Oregon area.

------------------------------------------------------------------------
                                                    Annual
                                                   average      Annual
                                                   growing     average
   Region and relationship to Southern  Oregon      season     growing
                                                   degree-   temperature
                                                     days
------------------------------------------------------------------------
Southern Oregon viticultural area...............      2,508   61 [deg]F
Oregon Coast (west).............................      1,369   56 [deg]F
Willamette Valley (north).......................      2,034   59 [deg]F
Eastern Oregon (east)...........................      1,625  55.5 [deg]F
------------------------------------------------------------------------

    The Southern Oregon area climate is comparatively warmer and drier 
than the Willamette Valley to the north. Harvest may start 10 days 
earlier in Southern Oregon for identical varieties, such as Pinot Noir 
and Pinot Gris. The coastal region, despite having the longest growing 
season, does not accumulate enough heat to ripen most grape varieties. 
It also has high rainfall amounts that subject grapes to mildew and 
botrytis. Finally, the Eastern Oregon region has a cooler and shorter 
growing season climate due to its elevation and distance from the 
Pacific Ocean. The cold winters east of the Cascade Range leave vines 
vulnerable to frost kill, and the short growing season is insufficient 
to ripen fruit.
Rainfall
    The Southern Oregon viticultural area receives significantly less 
rainfall than the coastal region to its west and the Willamette Valley 
to its north. Annual rainfall averages 35 inches in the Rogue Valley 
and 32 inches in the Umpqua Valley. By comparison, the Coast Range, and 
Willamette Valley, average 77 and 47 inches of annual rainfall, 
respectively, while eastern Oregon averages 20 inches of annual 
precipitation.

Boundary Description

    See the narrative boundary description of the viticultural area in 
the regulatory text published at the end of this notice.

Maps

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

Notice of Proposed Rulemaking and TTB Finding

    TTB published a notice of proposed rulemaking on the establishment 
of the Southern Oregon viticultural area in the September 18, 2003, 
Federal Register as Notice No. 17 (68 FR 54696). In that notice, we 
requested comments from all interested persons by November 17, 2003. We 
received 13 comments in response to Notice No. 17. All commenters 
supported the establishment of the Southern Oregon viticultural area, 
with most emphasizing the area's distinct climatic and geographic 
features.
    After careful review, TTB finds that the evidence submitted with 
the petition supports the establishment of the proposed viticultural 
area. Therefore, under the authority of the Federal Alcohol 
Administration Act and part 4 of our regulations, we establish the 
``Southern Oregon'' viticultural area in Douglas, Jackson, and 
Josephine Counties, Oregon, effective 60-days from this document's 
publication date.

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 and 
its inclusion in part 9 of the TTB regulations, its name, ``Southern 
Oregon,'' is recognized as a name of viticultural significance. 
Consequently, wine bottlers using ``Southern Oregon'' in a brand name, 
including a trademark, or in another label reference as to the origin 
of the wine, must ensure that the product is eligible to use the 
viticultural area's name as an appellation 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). If the wine is not 
eligible to use the viticultural area name as an appellation of origin 
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 viticultural area 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 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 Analyses and Notices

Regulatory Flexibility Act

    We certify that this regulation will not have a significant 
economic impact on a substantial number of small entities. This 
regulation imposes no new reporting, recordkeeping, or other 
administrative requirement. Any benefit derived from the use of a 
viticultural

[[Page 70892]]

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 Procedures Division drafted this 
document.

List of Subjects in 27 CFR Part 9

    Wine.

The Final Rule

0
For the reasons discussed in the preamble, we amend 27 CFR, chapter 1, 
part 9 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.  9.179 to read as follows:


Sec.  9.179  Southern Oregon.

    (a) Name. The name of the viticultural area described in this 
section is ``Southern Oregon''.
    (b) Approved maps. The appropriate maps for determining the 
boundary of the Southern Oregon viticultural area are two 1:250,000 
scale, USGS topography maps. They are titled:
    (1) Roseburg, Oregon--1958, revised 1970; and
    (2) Medford, Oregon; California--1955, revised 1976.
    (c) Boundary. The Southern Oregon viticultural area is located 
entirely within Douglas, Jackson, and Josephine Counties, Oregon. The 
beginning point is on the Roseburg map at the intersection of 
Interstate Highway 5 and the Douglas-Lane County line, T21S, R4W.
    (1) From the beginning point, proceed north along the Douglas-Lane 
County line approximately 0.5 miles to the 1,000-foot contour line; 
then
    (2) Proceed northwest along the 1,000-foot contour line to the 
Douglas-Lane County line; then west along the County line approximately 
2.5 miles, returning to the 1,000-foot contour line; then in a 
generally westerly direction along the 1,000-foot contour line to its 
first intersection with the R9W-R10W range line; then
    (3) Proceed along the 1,000-foot contour line, crossing the R9W-
R10W range line four more times; then proceed south along the R9W-R10W 
range line approximately 2.75 miles to the center of the Umpqua River; 
then along a straight line in an easterly direction approximately 6.25 
miles to the intersection of range line R8W-R9W with the center of the 
Umpqua River; then south along range line R8W-R9W approximately 3.5 
miles to its intersection with township line T22S-T23S; then
    (4) Proceed southeast approximately 8.5 miles along a straight line 
to the intersection of township line T23S-T24S with range line R7W-R8W; 
then south along the R7W-R8W range line approximately 8 miles to its 
intersection with the 1,000-foot contour line; then in a southeasterly 
direction in a straight line approximately 3.5 miles toward the 
intersection of township line T25S-T26S with range line R6W-R7W, but 
stopping short at the 1,000-foot contour line; then
    (5) Proceed in a southerly direction along the 1,000-foot contour 
line to the intersection of township line T27S-T28S with range line 
R7W-R8W; then in a southwesterly direction in a straight line 
approximately 3.5 miles toward the intersection of township line T28S-
T29S with range line R8W-R9W, but stopping short and returning to the 
1,000-foot contour line near the center of T28S, R8W; then generally 
south along the 1,000-foot contour line to its intersection with 
township line T29S-T30S; then
    (6) Proceed east along township line T29S-T30S approximately 0.33 
mile, rejoining the 1,000-foot contour line; then in a northerly and 
eventually a southerly direction along the 1,000-foot contour line, 
passing onto the Medford map, and past the town of Riddle to range line 
R6W-R7W; then south along the R6W-R7W range line approximately 15 miles 
to the Josephine-Douglas County line; then in a general northeasterly 
direction along the County line to its intersection with Interstate 5 
approximately 1.3 miles south of Cow Creek ; then
    (7) Proceed southerly and southwesterly along southbound Interstate 
5 to its junction with Wolf Creek and then north about 500 feet to the 
Southern Pacific Railway line; then westerly and southerly out of the 
town of Wolf Creek along the Southern Pacific Railway line to the rail 
line's intersection with Hugo Road at the town of Hugo; then 
southwesterly along Hugo Road to the point where Hugo Road crosses 
Jumpoff Joe Creek; then westerly and downstream along that creek to the 
intersection of Jumpoff Joe Creek and the Rogue River; then
    (8) Proceed northwesterly and downstream along the Rogue River to 
the first point where the Wild and Scenic Rogue River designated area 
touches the easterly boundary of the Siskiyou National Forest, just 
south of Galice; then
    (9) Proceed in a generally southwesterly direction (with many 
diversions) along the easterly border of the Siskiyou National Forest 
to the 42 degree 0 minute north latitude line; then easterly along the 
latitude line to the point where the Siskiyou National Forest boundary 
again crosses into Oregon, approximately 1 mile east of U.S. Highway 
199; then
    (10) Proceed in a generally northeasterly direction and then in a 
southeasterly direction (with many diversions) along the northern 
boundary of the Siskiyou National Forest to the point where the 
Siskiyou National Forest touches the Rogue River National Forest at Big 
Sugarloaf Peak; then
    (11) Proceed in a generally easterly direction (with many 
diversions) along the northern border of the Rogue River National 
Forest to the point where the Rogue River National Forest intersects 
with Slide Creek approximately 6 miles southeast of Ashland; then
    (12) Proceed southeasterly and northeasterly along Slide Creek to 
the point where the creek intersects State Route 273; then 
northwesterly along State Route 273 to the point where it intersects 
State Highway 66; then proceed in an easterly direction approximately 5 
miles along State Route 66 to the east line of T39S, R2E; then
    (13) Proceed north along the east line of T39S, R2E to the 
northeast corner of T39S, R2E; then westerly approximately 5 miles 
along the north line of T39S, R2E, to the 2,600 foot contour line; then 
in a northerly direction following the 2,600 foot counter line across 
Walker Creek and then in a southwesterly direction to the point where 
the 2,600 foot contour line touches the east line of T38S, R1E; then
    (14) Proceed northerly along the east line of T38S, R1E, to the 
northeast corner of T38S, R1E; then
    (15) Proceed westerly along the north line of T38S, R1E, to the 
northwest corner of T38S, R1E; then
    (16) Proceed northerly along the west line of T37S, R1E, to the 
northwest corner of T37S, R1E; then
    (17) Proceed easterly along the north lines of T37S, R1E, and T37S, 
R2E, to the southeast corner of T36S, R2E; then

[[Page 70893]]

    (18) Proceed northerly along the east line of T36S, R2E, to the 
northeast corner of T36S, R2E; then
    (19) Proceed westerly along the north line of T36S, R2E, to the 
northwest comer of T36S, R2E; then
    (20) Proceed northerly along the east line of T35S, R1E, to the 
northeast comer of T35S, R1E; then
    (21) Proceed westerly along the north line of T35S, R1E, to the 
northwest corner of T35S, R1E; then
    (22) Proceed northerly along the east line of T34S, R1W, to the 
northeast corner of T34S, R1W; then
    (23) Proceed westerly along the common boundary line of T34S-T33S 
to the northwest corner of T34S, R5W; then
    (24) Proceed northerly along the west line of T33S, R5W, to the 
Josephine-Douglas County line; thence in a generally east, 
northeasterly direction along the county line to the intersection of 
R3W-R4W range line; thence north along the R3W-R4W range line 
approximately 11.8 miles to the 1,000-foot contour line just south of 
State Route 227 southeast of the town of Days Creek; then
    (25) Proceed in an easterly, westerly, and eventually northerly 
along the 1,000-foot contour line, crossing to the Roseburg map from 
the Medford map, to a point approximately 3.5 miles east of Dillard, 
where the contour line crosses Interstate 5 on the Roseburg map; thence 
northeast along Interstate 5 approximately 0.25 mile, returning to the 
1,000-foot contour line; thence in a generally northeasterly, 
southeasterly, northwesterly, and eventually northeasterly along the 
1,000-foot contour line past the town of Idleyld Park to the R2W-R3W 
range line; then
    (26) Proceed north along range line R2W-R3W approximately 1.75 
miles to the T25S-T26S township line; thence west along township line 
T25S-T26S approximately .25 mile, returning to the 1,000-foot contour 
line; thence in a generally westerly and then a northerly direction 
along the 1,000-foot contour line toward the valley of Calapooya Creek 
to the R3W-R4W range line; thence north along range line R3W-R4W 
approximately 2.25 miles, back to the 1,000-foot contour line; then
    (27) Proceed in a westerly and then a northerly direction along the 
1,000-foot contour line to the T23S-T24S township line, then east along 
the T23S-T24S township line approximately 2.75 miles to the 1,000-foot 
contour line; then in a northerly direction along the 1,000-foot 
contour line to its intersection with the Douglas-Lane County line; 
thence north along the county line approximately 0.75 mile to the 
beginning point.

    Signed: November 1, 2004.
Arthur J. Libertucci,
Administrator.

    Dated: November 29, 2004.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 04-26865 Filed 12-7-04; 8:45 am]
BILLING CODE 4810-31-P