Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Proposed Rules 31853

if the actual cost of the inventory (or, if

appropriate, the allocated cost of the

inventory) was less than or equal to 50

percent of the replacement cost of

physically identical inventory.

Inventory is not considered acquired in

a bargain purchase if the actual cost of

the inventory (or, if appropriate, the

allocated cost of the inventory) was

greater than or equal to 75 percent of the

replacement cost of physically identical

inventory.

(4) Effective date. The rules of this

paragraph (h) are applicable for transfers

on or after the date these regulations are

published in the Federal Register as

final regulations.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

[FR Doc. 00–12174 Filed 5–18–00; 8:45 am]

BILLING CODE 4830–01–U

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG–105089–99]

RIN 1545–AX38

Guidance Under Section 356 Relating

to the Treatment of Nonqualified

Preferred Stock and Other Preferred

Stock in Certain Exchanges and

Distributions; Hearing Cancellation

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Cancellation of notice of public

hearing on proposed rulemaking.

SUMMARY: This document provides

notice of cancellation of a public

hearing on proposed regulations relating

to the treatment of nonqualified

preferred stock and other preferred

stock in certain exchanges and

distributions under section 356 of the

Internal Revenue Code.

DATES: The public hearing originally

scheduled for Wednesday, May 31,

2000, at 10 a.m., is cancelled.

FOR FURTHER INFORMATION CONTACT:

LaNita Van Dyke of the Regulations

Unit, Assistant Chief Counsel

(Corporate), at (202) 622–7180 (not a

toll-free number).

SUPPLEMENTARY INFORMATION: A notice

of proposed rulemaking and notice of

public hearing that appeared in the

Federal Register on January 26, 2000,

(65 FR 4203), announced that a public

hearing was scheduled for May 31,

2000, at 10 a.m., in room 2615, Internal

Revenue Building, 1111 Constitution

Ave., NW., Washington, DC. The subject

of the public hearing is proposed

regulations under section 354, 355, 356,

and 1036 of the Internal Revenue Code.

The deadline for requests to speak and

outlines of oral comments expired on

May 10, 2000.

The notice of proposed rulemaking

and notice of public hearing, instructed

those interested in testifying at the

public hearing to submit a request to

speak and an outline of the topics to be

addressed. As of May 15, 2000, no one

has requested to speak. Therefore, the

public hearing scheduled for May 31,

2000, is cancelled.

Cynthia E. Grigsby,

Chief, Regulations Unit, Assistant Chief

Counsel (Corporate).

[FR Doc. 00–12682 Filed 5–18–00; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and

Firearms

27 CFR Part 9

[Notice No. 897]

RIN 1512–AA07

Red Mountain Viticultural Area (99R–

367P)

AGENCY: Bureau of Alcohol, Tobacco

and Firearms (ATF), Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Bureau of Alcohol,

Tobacco and Firearms (ATF) has

received a petition proposing to

establish a viticultural area within the

State of Washington to be called ‘‘Red

Mountain.’’ The proposed viticultural

area is within Benton County and

entirely within the existing Yakima

Valley viticultural area as described in

the regulations. Mr. Lorne Jacobson of

Hedges Cellars submitted the petition.

Mr. Jacobson believes that ‘‘Red

Mountain’’ is a widely known name for

the petitioned area, that the area is well

defined, and that the area is

distinguished from other areas by its

soil and climate.

DATES: Send your comments on or

before July 18, 2000.

ADDRESSES: Send written comments to:

Chief, Regulations Division, Bureau of

Alcohol, Tobacco and Firearms, P.O.

Box 50221, Washington, DC 20091–0221

(Attn: Notice No. 897).

FOR FURTHER INFORMATION CONTACT:

Jennifer Berry, Regulations Division,

Bureau of Alcohol, Tobacco and

Firearms, 650 Massachusetts Avenue,

NW, Washington, DC 20226, (202) 927–

8210.

SUPPLEMENTARY INFORMATION:

1. Background on Viticultural Areas

What Is ATF’s Authority To Establish a

Viticultural Area?

ATF published Treasury Decision

ATF–53 (43 FR 37672, 54624) on

August 23, 1978. This decision revised

the regulations in 27 CFR part 4,

Labeling and Advertising of Wine, to

allow the establishment of definitive

viticultural areas. The regulations allow

the name of an approved viticultural

area to be used as an appellation of

origin on wine labels and in wine

advertisements. On October 2, 1979,

ATF published Treasury Decision ATF–

60 (44 FR 56692) which added 27 CFR

part 9, American Viticultural Areas, for

the listing of approved American

viticultural areas, the names of which

may be used as appellations of origin.

What Is the Definition of an American

Viticultural Area?

An American viticultural area is a

delimited grape-growing region

distinguishable by geographic features.

Viticultural features such as soil,

climate, elevation, topography, etc.,

distinguish it from surrounding areas.

What Is Required To Establish a

Viticultural Area?

Any interested person may petition

ATF to establish a grape-growing region

as a viticultural area. The petition

should include:

• Evidence that the name of the

proposed viticultural area is locally

and/or nationally known as referring to

the area specified in the petition;

• Historical or current evidence that

the boundaries of the viticultural area

are as specified in the petition;

• Evidence relating to the

geographical characteristics (climate,

soil, elevation, physical features, etc.)

which distinguish the viticultural

features of the proposed area from

surrounding areas;

• A description of the specific

boundaries of the viticultural area,

based on features which can be found

on United States Geological Survey

(U.S.G.S.) maps of the largest applicable

scale; and

• A copy (or copies) of the

appropriate U.S.G.S. map(s) with the

boundaries prominently marked.

2. Red Mountain Petition

ATF has received a petition proposing

to establish a viticultural area within the

State of Washington to be known as

‘‘Red Mountain.’’ The petitioner is Mr.

Lorne Jacobson of Hedges Cellars. The

proposed viticultural area is entirely

within the existing Yakima Valley

31854 Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Proposed Rules

viticultural area described in 27 CFR

9.69. According to Mr. Jacobson, Red

Mountain has a distinct identity that

sets it apart from the rest of the Yakima

Valley viticultural area. He reports that

grapes grown on Red Mountain are

known for their quality and are highly

sought after by Washington State

winemakers.

The proposed area encompasses

approximately 3,400 acres, of which

approximately 600 acres are planted to

vineyards. The petitioner estimates the

proposed area can accommodate 2,700

acres of grape plantings.

What Name Evidence Has Been

Provided?

The petitioner has submitted as

evidence of name recognition several

newspaper and magazine articles

referencing Red Mountain as a wine

producing area. These publications

include: The Seattle Post-Intelligencer;

the Globe and Mail, (Toronto); Wine

Access (Canada); Decanter (UK); and

Wine (UK). Other sources cited by the

petitioner as referring to the wines of

Red Mountain include: Decanter

Magazine Guide to Oregon, Washington

State and Idaho (Third Edition, 1996);

Touring the Washington Wine Country,

published by the Washington Wine

Commission (1997 edition); and

Connoisseur’s Guide to California (July

1997 edition).

Several of these references describe

the geographic and climatic conditions

of Red Mountain as particularly suited

to grape growing. Examples include:

• Decanter Magazine Guide to

Oregon, Washington State and Idaho

(Third Edition, 1996): ‘‘The Red

Mountain region, at the confluence of

the Columbia, Snake and Yakima rivers,

is a relatively warm area, and vineyards

on upper slopes, again with south facing

aspects, are yielding superior wine.

* * *. Evidence is mounting to indicate

that Red Mountain may be one of the

genuine special vineyard sites.’’

• Wine Access, November 1998:

‘‘Although most of Eastern

Washington’s vineyards bask in a hot,

dry climate, Klipsun [an area vineyard]

sits between a gap in the Rattlesnake

and Red Mountains in the lower Yakima

Valley that is regularly blessed with

slightly cooler air that filters through the

gap from Canada. This, along with its

stingy soils best described as sandy,

silty loam, and silty loam over gravel,

helps to explain the elegant,

concentrated nature of the Klipsun

fruit.’’

• Touring the Washington Wine

Country, by the Washington Wine

Commission (1997 edition): ‘‘Many of

the award-winning Cabernet Sauvignons

that emerged from Washington’s first

quarter-century of fine winemaking

used a percentage of their fruit from the

vineyards sloping down from Red

Mountain toward the Yakima River just

above Benton City near Richland. This

site offers good air drainage and light

soils that encourage grape vines to seek

nutrients via deep roots. Irrigated

vineyards allow the grape growers to

control vine vigor and to ease the vines

into dormancy before winter.’’

What Boundary Evidence Has Been

Provided?

The petitioner has submitted as

boundary evidence one U.S.G.S. map

titled ‘‘Benton City, Washington’’ (1974)

on which Red Mountain is prominently

labeled. The proposed viticultural area

starts on the ridgeline of Red Mountain

and then sweeps down in a triangle

toward the southwest, encompassing the

southern slope of the mountain down to

an elevation of 560 feet. The petitioner

notes that there is a small vineyard site

on the eastern bank of the Yakima River,

due west of the proposed boundaries.

He states that this valley floor site has

different growing conditions than those

on the higher elevations of Red

Mountain. There are currently 13

vineyards on Red Mountain, all on the

southwestern slope and within the

proposed boundaries. The oldest of

these vineyards was planted in 1975.

According to the petitioner, these

boundaries contain a grape growing area

with a distinctive character based on

soil, topography and climate.

What Evidence Relating to Geographical

Features Has Been Provided?

The petitioner asserts that

geographical and climatic features of

Red Mountain distinguish it from the

surrounding Yakima Valley viticultural

area.

• Soil: The petitioner states that Red

Mountain’s soil associations (landscapes

with distinctive proportional patterns of

soils) are unique in the Yakima Valley

viticultural area. In support of this

statement, the petitioner has submitted

soil survey maps issued by the U.S.

Department of Agriculture’s Soil

Conservation Service for the Yakima

County and Benton County areas. Using

these maps, the petitioner compared the

soil associations for Red Mountain and

other grape growing areas in the Yakima

Valley viticultural area.

According to the Benton County area

soil survey maps, the dominant soil

association of Red Mountain is WardenShano. A more specific analysis reveals

that the following soils are present

within the Warden-Shano association:

Warden silt loam, Hezel loamy fine

sand, Scooteney silt loam, and Kiona

very stony silt loam. The petitioner

compared this data with soil data for

Gleed, Buena, and Sunnyside, other

grape growing areas in Washington State

within the Yakima Valley viticultural

area. The soil associations of these areas

are composed of Weirman-Ashue,

Harwood-Gorst-Selah, RitzvilleStarbuck, Cowiche-Roza, Warden

Esquatzel, and Quincy-Hezel. Thus,

argues the petitioner, Red Mountain has

a soil association which sets it apart

from the rest of the Yakima Valley

viticultural area.

• Climate: According to the

petitioner, temperatures on Red

Mountain tend to be hotter during the

growing season than those in other areas

of the Yakima Valley viticultural area.

To support this contention, the

petitioner submitted temperature data

gathered from weather stations in the

Washington Public Agriculture Weather

System administered by Washington

State University. He compared data

from the weather stations of Benton

City, Sunnyside, Buena, and Gleed, all

located in the Yakima Valley

viticultural area. The Benton City

station is located on Red Mountain

within the proposed viticultural area. A

comparison of average annual air

temperatures for the years 1995 through

1999 shows that the Benton City station

consistently had the warmest

temperatures. The average temperature

difference between Benton City and

Gleed, the coolest site, ranged from 3.92

to 5.61 degrees.

The petitioner states that the

difference of only a few degrees over the

course of a growing season can produce

dramatic results on the enological

characteristics of wine. He further states

that Red Mountain is typically the first

grape growing area in Washington State

to harvest grapes because of its warmer

temperatures. According to the

petitioner, the warmer temperatures also

help to produce fully mature, ripe

grapes with exceptional balance that

differ substantially in quality from those

of other growing areas in the state.

• Topography: Existing vineyards in

the proposed viticultural area lie on the

southwest-facing slope of Red

Mountain. Elevation ranges of these

vineyards are from approximately 600 to

1,000 feet. The petitioner notes that

there is an immense gap separating the

northwest end of Red Mountain from

the southeast extremity of nearby

Rattlesnake Ridge. He states that cooler,

continental air masses flow south from

Canada through this gap. In addition,

the Yakima River flows north around

Red Mountain before joining the

Columbia River, creating an air drainage

Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Proposed Rules 31855

system. The petitioner further states that

these characteristics, along with the

predominate southwest facing slope of

Red Mountain, serve to flush the warm

daytime air off the face of Red Mountain

and replace it with a cooler air mass.

According to the petitioner, the

resulting growing environment yields

grapes that are both high in sugar (due

to warmer daytime temperatures) and

high in acid (due to lower evening

temperatures).

3. Public Participation

Who May Comment on This Notice?

ATF requests comments from all

interested persons. In addition, ATF

specifically requests comments on the

clarity of this proposed rule and how it

may be made easier to understand.

Comments received on or before the

closing date will be carefully

considered. Comments received after

that date will be given the same

consideration if it is practical to do so.

However, assurance of consideration

can only be given to comments received

on or before the closing date.

Can I Review Comments Received?

Copies of the petition, the proposed

regulations, the appropriate map, and

any written comments received will be

available for public inspection during

normal business hours at the ATF

Reading Room, Office of Liaison and

Public Information, Room 6480, 650

Massachusetts Avenue, NW,

Washington, DC, 20226.

Will ATF Keep My Comments

Confidential?

ATF cannot recognize any material in

comments as confidential. All

comments and materials may be

disclosed to the public. If you consider

your material to be confidential or

inappropriate for disclosure to the

public, you should not include it in the

comments. We may also disclose the

name of any person who submits a

comment.

How Do I Send Facsimile Comments?

You may submit comments of not

more than three pages by facsimile

transmission to (202) 927–8525.

Facsimile comments must:

• Be legible.

• Reference this notice number.

• Be 81⁄2′′ x 11′′ in size.

• Contain a legible written signature.

• Be not more than three pages.

We will not acknowledge receipt of

facsimile transmissions. We will treat

facsimile transmissions as originals.

How Do I Send Electronic Mail (E-mail)

Comments?

You may submit comments by e-mail

by sending the comments to

nprm@atfhq.atf.treas.gov. You must

follow these instructions. E-mail

comments must:

• Contain your name, mailing

address, and e-mail address.

• Reference this notice number.

• Be legible when printed on not

more than three pages 81⁄2′′ x 11′′ in size.

We will not acknowledge receipt of email. We will treat e-mail as originals.

How Do I Send Comments to the ATF

Internet Web Site?

You may also submit comments using

the comment form provided with the

online copy of the proposed rule on the

ATF Internet web site at http://

www.atf.treas.gov/core/regulations/

rules.htm.

Can I Request a Public Hearing?

If you desire the opportunity to

comment orally at a public hearing on

this proposed regulation, you must

submit your request in writing to the

Director within the 60-day comment

period. The Director reserves the right to

determine, in light of all circumstances,

whether a public hearing will be held.

4. Regulatory Analyses and Notices

Does the Paperwork Reduction Act

Apply to This Proposed Rule?

The provisions of the Paperwork

Reduction Act of 1995, 44 U.S.C.

Chapter 35, and its implementing

regulations, 5 CFR part 1320, do not

apply to this notice because no

requirement to collect information is

proposed.

How Does the Regulatory Flexibility Act

Apply to This Proposed Rule?

These proposed regulations will not

have a significant economic impact on

a substantial number of small entities.

The establishment of a viticultural area

is neither an endorsement or approval

by ATF of the quality of wine produced

in the area, but rather an identification

of an area that is distinct from

surrounding areas. ATF believes that the

establishment of viticultural areas

merely allows wineries to more

accurately describe the origin of their

wines to consumers, and helps

consumers identify the wines they

purchase. Thus, any benefit derived

from the use of a viticultural area name

is the result of the proprietor’s own

efforts and consumer acceptance of

wines from that area.

No new requirements are proposed.

Accordingly, a regulatory flexibility

analysis is not required.

Is This a Significant Regulatory Action

as Defined by Executive Order 12866?

It has been determined that this

proposed regulation is not a significant

regulatory action as defined by

Executive Order 12866. Therefore, a

regulatory assessment is not required.

Drafting Information: The principal

author of this document is Jennifer

Berry, Regulations Division, Bureau of

Alcohol, Tobacco, and Firearms.

List of Subjects in 27 CFR Part 9

Administrative practices and

procedures, Consumer protection,

Viticultural areas, Wine.

Authority and Issuance

Accordingly, for the reasons set out in

the preamble, Title 27, Code of Federal

Regulations, part 9, American

Viticultural Areas, is proposed to be

amended as follows:

PART 9—AMERICAN VITICULTURAL

AREAS

Paragraph 1. The authority citation

for part 9 continues to read as follows:

Authority: 27 U.S.C. 205

Subpart C—Approved American

Viticultural Areas

Par. 2. Subpart C is amended by

adding § 9.167 to read as follows:

* * * * *

§ 9.167 Red Mountain.

(a) Name. The name of the viticultural

area described in this section is ‘‘Red

Mountain.’’

(b) Approved Maps. The appropriate

map for determining the boundaries of

the Red Mountain viticultural area is

one U.S.G.S. map titled ‘‘Benton City,

Washington’’ 7.5 minute series

(topographic), (1974).

(c) Boundaries. The Red Mountain

viticultural area is located within

Benton County, Washington, entirely

within the existing Yakima Valley

viticultural area. The boundaries are as

follows:

(1) The northwest boundary beginning

on this map at the intersection of the

560-foot elevation level and the

aqueduct found northwest of the center

of section 32.

(2) Then following the aqueduct east

to its endpoint at an elevation of

approximately 650-feet, again in section

32.

(3) From this point in a straight line

southeast to the 1173-foot peak, located

southeast of the center of section 32.

(4) From this peak southeast in a

straight-line across the lower southwest

corner of section 33 to the 1253-foot

31856 Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Proposed Rules

peak located due north of the center of

section 4.

(5) Then in a straight-line southeast to

the 1410-foot peak located in the

southwest corner of section 3.

(6) From this peak in a straight-line

southeast to the border of Sections 10

and 11 where the power-line crosses

these two sections. This intersection is

northeast of the center of section 10 and

northwest of the center of section 11.

(7) From this point in a straight line

southeast to the 600-foot elevation line

where this intersections State Highway

224 southwest of the center of section

11.

(8) From this point southwest,

following the north side of State

Highway 224, through section 10,

through the southeast corner of section

9, through the northwest corner of

section 16, through section 17 to where

the 560-foot elevation level intercepts

State Highway 224 southwest of the

center of section 17 just east of Demoss

Road.

(9) From this 560-foot elevation point,

running north along this elevation line

through section 17, through section 8,

through section 5 and through section

32 until meeting the beginning point at

the aqueduct in section 32.

Signed: May 11, 2000.

Bradley A. Buckles,

Director.

[FR Doc. 00–12662 Filed 5–18–00; 8:45 am]

BILLING CODE 4810–31–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 167

[USCG–1999–5198]

Port Access Route Study for

Approaches to Los Angeles/Long

Beach

AGENCY: Coast Guard, DOT.

ACTION: Notice of study results.

SUMMARY: The Coast Guard announces

the results of a Port Access Route Study

which evaluated the vessel routing and

traffic management measures for the

approaches to Los Angeles and Long

Beach. The study was necessary because

of major port improvements made to

both ports. It was completed in July,

1999. This document summarizes the

study recommendations.

ADDRESSES: Comments and material

received from the public, as well as

documents mentioned in this preamble

as being available in the docket, are part

of docket USCG–1999–5198 and are

available for inspection or copying at

the Docket Management Facility, U.S.

Department of Transportation, room PL–

401, 400 Seventh Street SW.,

Washington, DC, between 9 a.m. and 5

p.m., Monday through Friday, except

Federal holidays. You may also find this

docket on the Internet at http://

dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: For

questions on this notice, contact

Lieutenant Commander Brian Tetreault,

Vessel Traffic Management Officer,

Eleventh Coast Guard District,

telephone 510–437–2951, e-mail

Btetreault@d11.uscg.mil; or Mike Van

Houten, Aids to Navigation Section

Chief, Eleventh Coast Guard District,

telephone 510–437–2968, e-mail

MVanHouten@d11.uscg.mil. For

questions on viewing the docket, call

Dorothy Walker, Chief, Dockets,

Department of Transportation,

telephone 202–366–9329.

SUPPLEMENTARY INFORMATION: You may

obtain a copy of the Port Access Route

Study (PARS) by contacting either

person at the Eleventh Coast Guard

District listed under FOR FURTHER

INFORMATION CONTACT. A copy is also

available in the public docket at the

address listed under the ADDRESSES

section and electronically on the DMS

Web Site at http://dms.dot.gov.

Geographic coordinates. All

geographic coordinates cited in this

notice utilize the North American

Datum of 1983 (NAD 83).

Definitions

The following definitions should help

you review this document:

Precautionary area means a routing

measure comprising an area within

defined limits where ships must

navigate with particular caution and

within which the direction of traffic

flow may be recommended.

Regulated Navigation Area or RNA is

a water area within a defined boundary

for which regulations for vessels

navigating within the area have been

established under this part.

Separation Zone or line means a zone

or line separating the traffic lanes in

which ships are proceeding in opposite

or nearly opposite directions; or from

the adjacent sea area; or separating

traffic lanes designated for particular

classes of ships proceeding in the same

direction.

Traffic lane means an area within

defined limits in which one-way traffic

is established.

Traffic Separation Scheme or TSS

means a routing measure aimed at the

separation of opposing streams of traffic

by appropriate means and by the

establishment of traffic lanes.

Vessel routing system means any

system of one or more routes or routing

measures aimed at reducing the risk of

casualties; it includes traffic separation

schemes, two-way routes, recommended

tracks, areas to be avoided, inshore

traffic zones, roundabouts,

precautionary areas, and deep-water

routes.

Background and Purpose

When Did the Coast Guard Conduct

This Port Access Route Study (PARS)?

We announced the PARS in a

document published in the Federal

Register on March 11, 1999 (63 FR

12140) and completed the study in July,

1999.

Why Did the Coast Guard Conduct the

PARS?

A PARS was needed to evaluate the

effects of port improvement projects for

the ports of Los Angeles and Long Beach

on navigational safety and vessel traffic

management efficiency, and to

recommend any necessary changes to

existing routing measures. This study

recommends modifications to the

existing TSS’s.

The study area included the navigable

waters of Los Angeles and Long Beach

Harbors, the Los Angeles/Long Beach

TSS, and all waters bounded by the

coastline and the following coordinates:

Latitude Longitude

33°47.00′ N ............... 118°25.40′ W.

33°47.00′ N ............... 118°38.60′ W.

33°15.50′ N ............... 118°38.60′ W.

33°15.50′ N ............... 117°52.70′ W.

33°35.30′ N ............... 117°52.70′ W.

Major port improvement projects for

the Ports of Los Angeles and Long Beach

began in 1995 and should be completed

by June, 2000. These projects include

the following:

• Lengthening of the Los Angeles

Approach Channel to extend

approximately 3.5 nautical miles

beyond the Los Angeles breakwater.

• Deepening of the Los Angeles

Approach Channel to a project depth of

81 feet.

• Slight shift of the Long Beach

Approach to a 355 degrees True

inbound course.

• Deepening of the Long Beach

Approach Channel to a project depth of

69 feet.

Fill and construction activities within

the Los Angeles/Long Beach Harbors

and development of a shallow water

habitat have constricted the amount of

room available for small commercial

and recreational traffic to maneuver

within the Outer Harbor and in the area