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 Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau 27 CFR Part 9
[Notice No. 32]
RIN: 1513-AA90
 AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
 ACTION: Notice of proposed rulemaking.
 SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau proposes to establish the 38,000-acre “Covelo” viticultural area in Mendocino County, California, about 150 miles north of San Francisco. 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. We invite comments on this proposed addition to our regulations.
 DATES: We must receive written comments on or before April 4, 2005.
 ADDRESSES: You may send comments to any of the following addresses: Chief, Regulations and Procedures Division, Alcohol and Tobacco Tax and Trade Bureau, Attn: Notice No. 32, P.O. Box 14412, Washington, DC 20044-4412.
                    202-927-8525 (facsimile).
                    *nprm@ttb.gov*
                         (e-mail).
                    *http://www.ttb.gov/​alcohol/​rules/​index.htm.*
                         An online comment form is posted with this notice on our Web site.
                    *http://www.regulations.gov*
                         (Federal e-rulemaking portal; follow instructions for submitting comments). You may view copies of this notice, the petition, the appropriate maps, and any comments we receive about this proposal by appointment at the TTB Library, 1310 G Street, NW., Washington, DC 20220. To make an appointment, call 202-927-2400. You may also access copies of the notice and comments online at 
                        *http://www.ttb.gov/​alcohol/​rules/​index.htm.* See the Public Participation section of this notice for specific instructions and requirements for submitting comments, and for information on how to request a public hearing.
 FOR FURTHER INFORMATION CONTACT: N. A. Sutton, AVA Program Manager, Regulations and Procedures Division, Alcohol and Tobacco Tax and Trade Bureau, 925 Lakeville Street, No.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 those 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 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— Evidence that the proposed viticultural area is locally and/or nationally known by the name specified in the petition;
                Historical or current evidence that supports setting the boundary of the proposed viticultural area as the petition specifies;( print page 5394)
                Evidence relating to the geographical features, such as climate, elevation, physical features, and soils, that distinguish the proposed viticultural area from surrounding areas;
                A description of the specific boundary of the proposed viticultural area, based on features found on United States Geological Survey (USGS) maps; and
                A copy of the appropriate USGS map(s) with the proposed viticultural area's boundary prominently marked. Covelo Petition Ralph Carter of Sonoma, California, submitted a petition to establish the “Covelo” viticultural area in northern Mendocino County, California. The proposed Covelo area is about 150 miles north of San Francisco and 45 miles north of Ukiah. The proposed boundary encompasses Round Valley, Williams Valley, and the surrounding foothills. The small, rural town of Covelo lies within Round Valley, and a portion of the Round Valley Indian Reservation overlaps the proposed area's northern end. This 38,000-acre area currently has 2 acres of planted grape vines, with the potential for more vineyard development in the valley and on the surrounding hillsides, according to the petition. The petition does not document a history of grape growing in the proposed area. According to the petition, the bowl-shaped basin of Round Valley, which lies within the proposed Covelo viticultural area, is distinctly different from the long, narrow valleys more commonly found in Mendocino County. In addition, the petition notes that the soils in the proposed Covelo area are, for the most part, very deep, nearly level loam, which differ significantly from the soils in the surrounding areas. The proposed Covelo area has a shorter growing season when compared with other Mendocino County viticultural areas, the petition states, along with comparatively high annual rain levels and some snow. Name Evidence Covelo is the name of a small, rural town within Round Valley in Mendocino County, California. The town appears on the United States Geological Survey (USGS) quadrangle maps of Covelo East and Covelo West, and on the 2002 Rand McNally California map provided with the petition. The California State Automobile Association's Mendocino and Sonoma Coast map identifies Covelo as a rural township in northwest California. The 1988 DeLorme Northern California map also shows the town of Covelo and “Covelo Road” (State Highway 162), which runs through the proposed viticultural area. The National Oceanic and Atmospheric Administration's California Climatological Data report of October 1999 includes temperature data for the Covelo weather station. The Covelo East USGS quadrangle map shows that the Covelo Ranger Station is about a mile north of the town. Boundary Evidence The distinctive elements of the proposed Covelo viticultural area, the petition states, are its geography, climate, and growing season. The proposed Covelo area, as described in the petition and noted on USGS maps, is largely a round, flat valley isolated from surrounding regions by a ring of foothills and mountains. The petitioner included the foothills immediately adjacent to valley floor within the proposed area because of the hillside's viticultural potential, but excluded the higher and steeper mountainous terrain beyond the proposed area's boundary since that mountainous terrain is less suitable for commercial viticulture. The petition explains that the proposed area's boundaries encompass Covelo's microclimate, which is created by the distinct combination of the area's geographic self-containment and its inland location. The area's climate has significant day and night temperature differences, and a short grape-growing season. This isolated valley climate differs from the marine-influenced climate found in most of the surrounding regions of Mendocino County. The petitioner drew the proposed area's boundary using a series of peaks and elevation benchmarks in the hills surrounding the Round and Williams Valleys. These elevation points vary from a low of 1,762 feet on the proposed area's southern boundary to a high of 2,792 feet on its northern boundary. Growing Conditions Geography The proposed Covelo viticultural area's boundary surrounds Round Valley, the bowl-shaped basin in which the town of Covelo lies. This broad, round, and flat-floored valley differs significantly from the long, narrow valleys commonly found in mountainous areas of Mendocino County, according to the petition. The proposed area also includes the smaller Williams Valley, located to Round Valley's northeast, and the hillsides that surround the two valleys. The provided USGS maps note that Round Valley's floor varies from 1,310 feet in elevation in the southeast to 1,480 feet in elevation in the northwest, while the surrounding hillsides are less than 2,800 feet high. As noted above, the petitioner used a series of peaks and elevation points under 2,800 feet in elevation to draw the boundary of the proposed Covelo viticultural area. In contrast to the proposed area, the higher elevations of the mountains that surround it vary between 4,000 and 7,000 feet in elevation, according to the petition. These higher mountains, the petition explains, geographically and climatically isolate the proposed Covelo viticultural area from surrounding regions. Climate The high mountain peaks that surround the proposed area, and the Coast Range, which parallels the Pacific Ocean to the area's west, block the inland flow of climate-moderating marine air and fog into the proposed Covelo viticultural area, according to the petition. Given this geographic isolation, the petition notes, the proposed Covelo viticultural area has a continental climate, which has greater temperature swings and a shorter growing season than the marine-influenced climate commonly found in the surrounding regions of Mendocino County. The proposed Covelo viticultural area's short growing season, the petition emphasizes, may be its most distinguishing characteristic. The frost-free growing season is commonly 125 days, or about four months, long. Covelo's average growing season minimum temperature is also significantly lower than that of the established Potter Valley viticultural area (27 CFR 9.82), which is about 33 miles to the proposed area's south. The petition states that with 3,000 degree days, the Covelo viticultural area marginally falls into Region 3, of Winkler's climate classification system. (During the growing season, one degree day accumulates for each degree Fahrenheit that a day's average temperature is above 50 degrees, which is the minimum temperature required for grapevine growth. See “General Viticulture,” by Albert J. Winkler, University of California Press, 1974.) The table below shows the petitioner's comparison of degree day for grape-growing regions near the proposed Covelo viticultural area. 
                    ( print page 5395) Mendocino grape-growing 
                             regions
Summation of growing season 
                             degree-day unitsCovelo
3,000Hopland
3,313Potter Valley viticultural area (27 CFR 9.82)
3,341Redwood Valley viticultural area (27 CFR 9.153)
2,914Ukiah
3,460Willits
2,224
 According to the petition, the proposed Covelo viticultural area's summer temperatures have greater day-to-night variations (between 40 and 66 degrees in the valley) than the areas surrounding it. Also, in October (the final month of the summer growing season) the proposed viticultural area has 90 fewer degree-day units of heat than other Region 3 viticultural areas in the Mendocino region. The proposed Covelo viticultural area, the petition notes, receives an average of 40 inches of rain a year, which is the highest average of any valley in northern Mendocino County. The petition explains, however, that annual rainfall in the proposed area varies widely. In 1998, the proposed Covelo viticultural area received 65 inches of rain, while in 2000, it received 36 inches, according to the National Oceanic and Atmospheric Administration's Climatological Data Annual Summary reports of California for 1997 through 2001, which were included in the petition. In addition, the proposed Covelo viticultural area's valley basin receives about 7 inches of snow annually, with higher amounts falling on the surrounding hillsides. Geology and Soils The petition notes that the proposed Covelo viticultural area is composed of alluvial plains, alluvial fans, and a valley basin, which are geographically younger than the surrounding higher elevations. While the alluvial deposits on the valley floor share the mineralogy of the Franciscan rocks of the surrounding hills, the petition explains that Covelo's valley basin soils differ distinctly from the soils found in the foothills surrounding the valley. As noted in the petition, Feliz-Russian-Cole soils cover about 50 percent of the proposed Covelo viticultural area. These soils, which are found in the Round Valley basin, have neutral-to-alkaline soil pH chemistry, in contrast with the acidity found in the hillside soils. The Sanhedren-Speaker-Kekawaka association, which is a deep to very deep, well-drained loam and gravelly loam, predominates in the northern, eastern, and western foothills surrounding Round Valley, according to the petition. In the southern foothills, the Dingman-Beaughton-Henneke association (a well-drained, gravelly loam and cobbly clay loam) and the Hopland-Yorktree-Witherell association (a well-drained loam and sandy loam) predominate. The petition adds that soils of the Franciscan Formation, a blue schist and semi-schist of Franciscan Complex, cover the mountainous terrain above the proposed area's boundary. Boundary Description See the narrative boundary description of the petitioned-for viticultural area in the proposed regulatory text published at the end of this notice. Maps The petitioner(s) provided the required maps, and we list them below in the proposed 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. If we establish this proposed viticultural area, its name, “Covelo,” will be recognized as a name of viticultural significance. Consequently, wine bottlers using “Covelo” 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's name as an appellation of origin. The proposed part 9 regulatory text set forth in this document specifies the “Covelo” name as a term of viticultural significance for purposes of part 4 of the TTB regulations. 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. Accordingly, if a new label or a previously approved label uses the name “Covelo” for a wine that does not meet the 85 percent standard, the new label will not be approved, and the previously approved label will be subject to revocation, upon the effective date of the approval of the Covelo viticultural area. 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. Public Participation Comments Invited We invite comments from interested members of the public on whether we should establish the proposed viticultural area. We are also interested in receiving comments on the sufficiency and accuracy of the name, boundary, climactic, and other required information submitted in support of the petition. Please provide any available specific information in support of your comments. Because of the potential impact of the establishment of the proposed Covelo viticultural area on brand labels that include the words “Covelo” as discussed above under Impact on Current Wine Labels, we are particularly interested in comments regarding whether there will be a conflict between the proposed area name and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any negative economic impact that approval of the proposed viticultural area will have on an existing viticultural enterprise. We are also interested in receiving suggestions for ways to avoid any conflicts, for example by adopting a modified or different name for the viticultural area. Submitting Comments Please submit your comments by the closing date shown above in this notice. Your comments must include this notice number and your name and mailing address. Your comments must be legible and written in language acceptable for public disclosure. We do not acknowledge receipt of comments, and we consider all comments as originals. You may submit comments in one of five ways: *Mail:*
                     You may send written comments to TTB at the address listed in the 
                    **ADDRESSES**
                     section.
                *Facsimile:*
                     You may submit comments by facsimile transmission to 202-927-8525. Faxed comments must— (1) Be on 8.5- by 11-inch paper; 
                    ( print page 5396) (2) Contain a legible, written signature; and (3) Be no more than five pages long. This limitation assures electronic access to our equipment. We will not accept faxed comments that exceed five pages. *E-mail:*
                     You may e-mail comments to 
                    *nprm@ttb.gov.*
                     Comments transmitted by electronic mail must— (1) Contain your e-mail address; (2) Reference this notice number on the subject line; and (3) Be legible when printed on 8.5- by 11-inch paper. *Online form:*
                     We provide a comment form with the online copy of this notice on our Web site at 
                    *http://www.ttb.gov/​alcohol/​rules/​index.htm.*
                     Select the “Send comments via e-mail” link under this notice number. *Federal e-Rulemaking Portal:*
                     To submit comments to us via the Federal e-rulemaking portal, visit 
                    *http://www.regulations.gov*
                     and follow the instructions for submitting comments. You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine, in light of all circumstances, whether to hold a public hearing. Confidentiality All submitted material is part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider confidential or inappropriate for public disclosure. Public Disclosure You may view copies of this notice, the petition, the appropriate maps, and any comments we receive by appointment at the TTB Library at 1310 G Street, NW., Washington, DC 20220. You may also obtain copies at 20 cents per 8.5- × 11-inch page. Contact our librarian at the above address or telephone 202-927-2400 to schedule an appointment or to request copies of comments. For your convenience, we will post this notice and any comments we receive on this proposal on the TTB Web site. We may omit voluminous attachments or material that we consider unsuitable for posting. In all cases, the full comment will be available in the TTB Library. To access the online copy of this notice, visit 
                    *http://www.ttb.gov/​alcohol/​rules/​index.htm.*
                     Select the “View Comments” link under this notice number to view the posted comments. Regulatory Flexibility Act We certify that this proposed regulation, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed regulation imposes no new 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 proposed 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 notice. List of Subjects in 27 CFR Part 9 Wine
 Proposed Regulatory Amendment For the reasons discussed in the preamble, we propose to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows: PART 9—AMERICAN VITICULTURAL AREAS 1. The authority citation for part 9 continues to read as follows: Authority:
                        27 U.S.C. 205. 2. Amend subpart C by adding § 9.__ to read as follows: Subpart C—Approved American Viticultural Areas § 9.__
  (a) 
                                *Name.*
                                 The name of the viticultural area described in this section is “Covelo”. For purposes of part 4 of this chapter, “Covelo” is a term of viticultural significance. (b) 
                                *Approved Maps.*
                                 The appropriate maps for determining the boundaries of the Covelo viticultural area are four United States Geological Survey (USGS) 1:24,000 scale topographic maps. They are titled: (1) Dos Rios, California Quadrangle—Mendocino Co., 7.5 Minute Series, edition of 1967, revised 1994; (2) Covelo West, California Quadrangle—Mendocino Co., 7.5 Minute Series, edition of 1967, photoinspected 1973; (3) Covelo East, California Quadrangle—Mendocino Co., 7.5 Minute Series, edition of 1967, revised 1994; and (4) Jamison Ridge, California Quadrangle—Mendocino Co., 7.5 Minute Series, edition of 1967, revised 1994. (c) 
                                *Boundary.*
                                 The Covelo viticultural area surrounds the town of Covelo in northern Mendocino County, California, about 30 miles east of the Pacific Coastline. The area's boundaries are defined as follows— (1) Beginning on the Dos Rios Quadrangle map at the intersection of State Highway 162 and the section 25 and 36 boundary line, T22N, R13W (labeled Inspiration Point on the map), proceed west 0.3 miles on Highway 162 to BM 2006 in section 36, T22N, R13W; then (2) Proceed straight west-northwest 1.5 miles to the 2,537-foot elevation point in the northwest quadrant of section 26, T22N, R13W, Dos Rios Quadrangle; then (3) Proceed straight northwest 1.6 miles to the 2,488-foot peak in the northwest quadrant of section 22, T22N, R13W, Covelo West Quadrangle; then (4) Proceed straight north-northwest 0.75 miles to the 2,262-foot peak on the section 15 and 16 boundary line, and continue straight north 1.6 miles to the 2,247-foot peak on the section 3 and 4 boundary line; then (5) Proceed straight northerly 1 mile to the 1,974-foot peak on the shared T22N and T23N boundary line, Covelo West Quadrangle, and continue straight north 1.6 miles to the 2,290-foot peak in the northwest quadrant of section 27, T23N, R13W, Covelo West Quadrangle; then (6) Proceed straight northeast 1.2 miles to the 2,397-foot peak in the northeast quadrant of section 22, and continue straight northeast 1.5 miles to BM 2210 in the northeast quadrant of section 14, T23N, R13W, Covelo West Quadrangle; then (7) Proceed straight east-southeast 1.75 miles to the 2,792-foot peak in the southwest quadrant of section 18, T23, R12W, Covelo East Quadrangle; then (8) Proceed straight north-northeasterly 0.9 mile to the 2,430-foot elevation point in the southeast quadrant of section 7, T23N, R12W, Covelo East Quadrangle; then (9) Proceed straight east-northeast 1.6 miles to the peak of Coyote Rock in section 9, T23N, R12W, Covelo East Quadrangle; then (10) Proceed straight east-southeast 1.55 miles to the 2,435-foot elevation point in the northern half of section 15, and continue straight southeast 2.3 miles to the 2,066-foot peak in the southwest quadrant of section 24, T23N, R12W, Covelo East Quadrangle; then (11) Proceed straight south-southwest 0.6 mile to the 2,024-foot peak near the 
                                ( print page 5397)
                                section 26 eastern boundary line, T23N, R12W, Covelo East Quadrangle; then (12) Proceed straight west-southwest 1.9 miles to the 2,183-foot peak in the northwest quadrant of section 34, T23N, R12W, Covelo East Quadrangle; then (13) Proceed straight south-southeast 1.2 miles to the 1,953-foot peak in the northeast quadrant of section 3, T22N, R12W, Covelo East Quadrangle; then (14) Proceed straight southerly 0.9 mile to the 2,012-foot peak in the northeast quadrant of section 10, T22N, R12W, Covelo East Quadrangle; then (15) Proceed straight south-southeast 1.4 miles along Dingman Ridge to the 2,228-foot peak along the section 14 and 15 boundary line, T22N, R12W, Covelo East Quadrangle; then (16) Proceed straight southeast 0.95 mile to the 2,398-foot peak in the northeast quadrant of section 23, T22N, R12W, Covelo East Quadrangle; then (17) Proceed straight south-southeast 1.75 miles to the 2,474-foot elevation point along the section 25 and 26 boundary line, T22N, R12W, Jamison Ridge Quadrangle; then (18) Proceed straight west-southwest 0.9 mile to BM 2217 in the southwest quadrant of section 26, and continue straight westerly 1.5 miles to the 2,230-foot peak northwest of Iron Spring, in the southeast quadrant of section 28, T22N, R12W, Jamison Ridge Quadrangle; then (19) Proceed straight southwest 0.65 mile to the 2,022-foot peak along the unimproved road in section 33, T22N, R12W, Jamison Ridge Quadrangle; then (20) Proceed straight west-northwest 1.5 miles to the 1,762-foot peak in the northeast quadrant of section 31, and continue in the same line of direction 1.1 miles to the beginning point at the intersection of State Highway 162 and the section 25 and 36 boundary line, T22N, R13W (labeled Inspiration Point), on the Dos Rios Quadrangle map.
 Signed: January 25, 2005. John J. Manfreda, Administrator.


[FR Doc. 05-1875 Filed 2-1-05; 8:45 am] BILLING CODE 4810-31-P