59996 Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / Rules and Regulations 

2,000-foot contour line to its 

intersection with the eastern boundary 

of section 2, T21N, R13W, immediately 

south of State Route 162 (Dos Rios 

Quadrangle); then 

(2) Proceed straight south along the 

section line, crossing the Middle Fork of 

the Eel River, to the southeast corner of 

section 11, T21N, R13W (Dos Rios 

Quadrangle); then 

(3) Proceed 0.9 mile straight west 

along the southern boundary of section 

11 to its intersection with the 2,000-foot 

elevation line, T21N, R13W (Dos Rios 

Quadrangle); then 

(4) Proceed northerly then westerly 

along the meandering 2,000-foot contour 

line, crossing Big Water Canyon, 

Doghouse Creek, and Eastman Creek, to 

the contour line’s intersection with the 

southern boundary of section 17, T21N, 

R13W (Dos Rios Quadrangle); then 

(5) Proceed 2.1 miles straight west 

along the section line, crossing the Eel 

River, to the section line’s intersection 

with the 2,000-foot contour line along 

the southern boundary of section 18, 

T21N, R13W (Dos Rios Quadrangle); 

then 

(6) Proceed northerly along the 

meandering 2,000-foot contour line, 

crossing between the Dos Rios and 

Laytonville maps (passing around the 

Sims 2208 benchmark near the 

southeast corner of section 36, T22N, 

R14W), and, returning to the Laytonville 

map, continue westerly to the contour 

line’s intersection with the southwest 

corner of section 36, T22N, R14W, at 

Windy Point (Laytonville Quadrangle); 

then 

(7) Proceed 1.2 miles straight north 

along the section line to its intersection 

with the 2,000-foot elevation line, 

section 25, T22N, R14W (Laytonville 

Quadrangle); then 

(8) Proceed northerly along the 

meandering 2,000-foot elevation, 

crossing between the Laytonville and 

Iron Peak maps, and, returning to the 

Iron Peak map, continue along the 

contour line to its intersection with the 

western boundary of section 14 

immediately south of an unnamed 

unimproved road, T22N, R14W (Iron 

Peak Quadrangle); then 

(9) Proceed straight north along the 

section line to the southeast corner of 

section 3, T22N, R14W (Iron Peak 

Quadrangle); then 

(10) Proceed straight west along the 

section line to the southwest corner of 

section 3, T22N, R14W (Iron Peak 

Quadrangle); then 

(11) Proceed straight north along the 

section line to the northwest corner of 

section 3, T22N, R14W (Iron Peak 

Quadrangle); then 

(12) Proceed straight east along the 

section line, crossing the Eel River, to 

the northeast corner of section 2, which 

coincides with the Round Valley Indian 

Reservation’s southern boundary, T22N, 

R14W (Iron Peak Quadrangle); then 

(13) Proceed straight south along the 

section line to the southeast corner of 

section 2, T22N, R14W (Iron Peak 

Quadrangle); then 

(14) Proceed 0.3 mile straight east to 

the section line’s intersection with the 

2,000-foot elevation line along the 

northern boundary of section 12, T22N, 

R14W, west of Eberle Ridge, (Iron Peak 

Quadrangle); and 

(15) Proceed generally southeast along 

the meandering 2,000-foot elevation, 

crossing onto the Covelo West map and 

continuing southerly along the 2,000- 

foot contour line from Stoner Creek in 

section 18, T22N, R13W, and, returning 

to the Dos Rios map, continue 

southeasterly along the 2,000-foot 

contour line (crossing Goforth and 

Poonkinny Creeks), to the beginning 

point at the contour line’s intersection 

with Poonkinny Road. 

Signed: August 15, 2005. 

Vicky I. McDowell, 

Acting Administrator. 

Approved: September 2, 2005. 

Timothy E. Skud, 

Deputy Assistant Secretary (Tax, Trade, and 

Tariff Policy). 

[FR Doc. 05–20546 Filed 10–13–05; 8:45 am] 

BILLING CODE 4810–31–P 

DEPARTMENT OF THE TREASURY 

Alcohol and Tobacco Tax and Trade 

Bureau 

27 CFR Part 9 

[T.D. TTB–35; Re: ATF Notices Nos. 960 

and 966; TTB Notice Nos. 6 and 31] 

RIN 1513–AA39 

Establishment of the Red Hill Douglas 

County, OR Viticultural Area (2001R–

88P) 

AGENCY: Alcohol and Tobacco Tax and 

Trade Bureau, Treasury. 

ACTION: Final rule; Treasury decision. 

SUMMARY: This Treasury decision 

establishes the 5,500-acre Red Hill 

Douglas County, Oregon viticultural 

area. It is totally within the Umpqua 

Valley viticultural area in Douglas 

County, Oregon. 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. 

EFFECTIVE DATE: November 14, 2005. 

FOR FURTHER INFORMATION CONTACT: N.A. 

Sutton, Regulations and Rulings 

Division, Alcohol and Tobacco Tax and 

Trade Bureau, 925 Lakeville St., No. 

158, Petaluma, California 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 

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 

geographical 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 grapegrowing 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; 

Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / Rules and Regulations 59997 

• Historical or current evidence that 

supports setting the boundary of the 

proposed viticultural area as the 

petition specifies; 

• Evidence relating to the 

geographical features, such as climate, 

soils, elevation, and physical features, 

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. 

Red Hill Petition and Rulemakings 

Background 

The Bureau of Alcohol, Tobacco and 

Firearms (ATF), the predecessor agency 

to the Alcohol and Tobacco Tax and 

Trade Bureau (TTB), received a petition 

from Mr. Wayne Hitchings, a vineyard 

owner in the Red Hill area of Douglas 

County, Oregon, to establish the ‘‘Red 

Hill’’ viticultural area. 

The proposed 5,500-acre area is 

entirely within the Umpqua Valley 

viticultural area (27 CFR 9.89) and near 

the small town of Yoncalla, in 

northeastern Douglas County, Oregon. 

At the time of the petition, 

approximately 194 acres were devoted 

to the cultivation of wine grapes, with 

the majority planted to pinot noir. 

Notices of Proposed Rulemaking and 

Comments Received 

Three notices were published 

regarding the establishment of the 

proposed viticultural area with the 

name ‘‘Red Hill (Oregon),’’ and one 

notice was published that proposed 

establishing the viticultural area with 

the name ‘‘Red Hill Douglas County, 

Oregon.’’ The multiple notices stemmed 

from requests for commenting-time 

extensions, based on opposition to the 

‘‘Red Hill (Oregon)’’ proposed name and 

other concerns. 

ATF Notice No. 960 

ATF published the first notice of 

proposed rulemaking regarding the 

establishment of the Red Hill (Oregon) 

viticultural area in the Federal Register 

(67 FR 66079) as Notice No. 960 on 

October 30, 2002. Prior to the 

publication of Notice No. 960, which 

requested public comments on the 

proposed viticultural area, ATF decided 

to include the geographical modifier 

‘‘Oregon’’ with the ‘‘Red Hill’’ name, 

making the proposed name ‘‘Red Hill 

(Oregon).’’ Notice No. 960 explained 

that both the ‘‘Red Hill’’ name and the 

Oregon-modified name were subject to 

public comment. 

Below, we summarize the evidence 

presented in the petition and outlined 

in Notice No. 960. 

1. Name Evidence. 

The Red Hill name has been used in 

Douglas County, Oregon, for more than 

150 years. The name ‘‘Red Hill’’ derives 

from the color of the soil exclusive to 

this area of Douglas County. 

The USGS Drain, Oregon, map labels 

Red Hill in sections 35, 26, and 23, 

T23S/R5W. The map also identifies the 

light duty Red Hill Road that meanders 

through the region. Interstate 5 signage, 

at exit 150 in northern Douglas County, 

Oregon, includes the ‘‘Red Hill’’ name 

and directs travelers to the area. The 

USGS Geographic Names Information 

System identifies Red Hill as an area in 

Douglas County, Oregon. Douglas 

County is located in southwest Oregon, 

as noted on the Oregon-Washington 

American Automobile Association State 

Series map, published February 2003, 

and on page 92, ‘‘Oregon,’’ of the 

American Map 2002 Road Atlas. 

Historically, the Applegate and Scott 

families settled at the foot of Red Hill in 

the mid-19th century. By 1879, settlers 

established a school district in the Red 

Hill area and built a schoolhouse on Red 

Hill Road (identified in the southeast 

corner of the USGS Drain, Oregon, map 

in section 26, T23S/R5W). The school 

district operated until 1943; the Red Hill 

School now stands abandoned. 

‘‘Douglas County Schools, A History 

Outline,’’ by Larry Moulton, October 

2000, includes a hand-drawn map and 

directions to the ‘‘Red Hill School Site.’’

2. Boundary Evidence. 

Red Hill parallels and lies to the east 

of the Interstate 5 highway for 

approximately 8.5 miles. The hill is 

readily seen as a dominant geological 

structure at the Red Hill exit, number 

150, on Interstate 5. The hill runs in a 

north-south direction, with 

predominantly westward sloping. 

The boundaries are based on the 

hillside elevations and the preferred 

viticultural site on the southwest slope. 

The low elevation is the 800-foot 

contour line, and the average high 

elevation is 1,200 feet, the maximum 

altitude for quality grape production in 

the area. Areas below the 800-foot 

elevation become valley terrain 

consistent with the distinctive features 

of the Umpqua Valley viticultural area. 

Red Hill areas above the 1,200-foot 

elevation and on the east side are 

generally owned by a large timber 

concern and are dedicated to reforesting efforts. 

The dominant Jory series soils in the 

proposed viticultural area are mostly 

deep and well drained to the 15-foot 

depth. These soils are volcanic in origin 

and are formed in residuum. Jory soils 

are exclusive to the area of Douglas 

County that lies within the proposed 

viticultural area boundaries, but are also 

found at the higher, adjacent elevations, 

where climate conditions are not 

suitable for viticulture. 

3. Distinguishing Features. 

a. Geology. 

Red Hill is geologically part of the 

Umpqua Formation, with numerous 

rising domes that present an undulating 

appearance. The landform is composed 

of basalts similar to the volcanic rocks 

on the Pacific Ocean floor. 

b. Soil. 

The Jory series, which predominates 

the area, includes the deepest soils and 

forms a uniform reservoir of texture and 

depth across the proposed viticultural 

area. Jory soil is found at 1,900 feet to 

the north and 1,900 feet to the west of 

the southwest corner of section 34, T23S 

and R5W. A soil analysis of the Jory soil 

in this area segregates it into six sections 

when taken to a depth of 60 inches. The 

first two sections (0 to 8 inches and 8 

to 16 inches) are moderately acidic, silty 

clay loam of a reddish brown color. The 

third through the sixth sections (16 to 

24 inches, 24 to 33 inches, 33 to 48 

inches, and 48 to 60 inches, 

respectively) are all strongly acidic. The 

third section is dark reddish brown in 

color, and the fourth through sixth 

sections are dark red. Bedrock is found 

at 60 inches or deeper. 

Mr. Jerry Maul, a former Douglas 

County extension agent, wrote in a letter 

dated March 2, 2001, about the 

appellation status of the Red Hill region 

of Douglas County. He stated that Jory 

soils found at Red Hill and in other 

regions of Oregon are accepted as the 

premier soils in the production of wine 

grapes. To some extent, these soils can 

be found to the north at Dundee Hills, 

Oregon, and in the foothills west of 

Corvallis, Oregon. 

Mr. Walt Barton, an engineering 

technician for the Douglas Soil and 

Water Conservation District, stated in 

his March 7, 2001, letter, ‘‘this soil [Jory 

series] in Douglas County is unique to 

the Red Hill District. * * * In contrast, 

the soils in the surrounding area 

[Umpqua Valley] are shallow or poorly 

drained and are formed from 

sedimentary rock.’’ He also stated that 

the Jory series is deep, well drained, and 

derived from bedrock. 

Appearing less often on Red Hill, and 

mixed within the Jory series, are the 

Nekia, Philomath, and Dixonville series. 

Like the Jory, these series are formed in 

residual soil material from weathered 

basalt and possess similar reddish soil 

59998 Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / Rules and Regulations 

color and drainage characteristics. The 

noticeable difference is found in the 

depth of the soils, with the Jory at 5 to 

15 feet in depth and the other series 

between 3 and 8 feet deep. These welldrained soils change in structure and 

depth below the 800-foot elevation line, 

delineating Red Hill on the western and 

southern flanks, with sedimentary rocks 

at the base. 

c. Climate. 

The Umpqua Valley and Douglas 

County regional climate is largely 

affected by the Pacific Ocean’s coastal 

weather systems 50 miles to the west. 

These storm systems are buffered by the 

Callahans, a group of mountains 

running north and south in the Coast 

Range. The result is a moderate winter 

climate in the proposed viticultural 

area. During the summers, numerous 

Pacific highs replace the winter storm 

patterns with warm, dry weather. These 

climate changes typically occur in May 

and November. 

Temperatures throughout the larger 

Umpqua Valley viticultural area differ 

greatly, creating numerous 

microclimates. In the Red Hill area, a 

portion of the Umpqua Valley 

viticultural area, daytime growing 

temperatures are moderated by 

elevation and surrounding terrain, in 

comparison to lower valley elevations 

that experience warmer daytime 

temperatures as high as 105 °F. Red 

Hill’s average daytime temperature 

during the growing season is 75 °F. 

Temperature recordings at Oakland, 

Sutherlin, and Roseburg, all located 

along Interstate 5 in Douglas County, 

can increase as much as 11 °F from Red 

Hill daytime temperatures. Nighttime 

Red Hill temperatures are typically 7 °F 

lower than those in the surrounding 

areas during the summer months. 

Growing season temperature data, 

collected between 1998 and 2000, came 

from the areas of Red Hill and from the 

Roseburg Regional Airport, which is 

located 20 miles south of Red Hill. 

During this 3-year collection period, the 

average high was 74.5 °F for Roseburg 

and 72.3 °F for Red Hill. The average 

low was 50 °F for Roseburg and 46.4 °F 

for Red Hill. 

The Red Hill microclimate is one of 

a large number of different climates 

within a relatively short distance. The 

climate changes are primarily caused by 

associated landforms and elevation 

differences. Within the elevation range 

of the proposed viticultural area, the 

geographical landform provides cold air 

drainage that maintains frost-free grapegrowing seasons. The nearby vineyards 

on the valley floor, without the benefit 

of the vertical cold air drainage, have 

frequent frosts. 

The Red Hill microclimate also 

includes occasional fog in winter and 

summer. The fog can be extreme, 

completely covering the valley’s floor, 

while Red Hill enjoys full sun. This fog 

condition can also reverse itself, with 

Red Hill being totally blanketed in fog, 

while the valley floor enjoys fog-free 

visibility. 

Elevations of the proposed viticultural 

area are generally at or above 800 feet, 

with most of the terrain below 1,200 

feet. This span of elevations has a 

significant effect on growing conditions. 

The hillside climate allows grapes to 

mature at a slower rate, producing small 

clusters of grapes with high acids and 

intense flavors. 

In his March 2, 2001, letter, Jerry 

Maul explained that the Red Hill bloom 

and ripening dates may be 12 days later 

than the rest of the Umpqua Valley 

viticultural area and 4 to 7 days ahead 

of those of comparable varieties in the 

Willamette Valley viticultural area. Mr. 

Maul also stated that the Willamette 

Valley viticultural area has 10 inches 

more annual rain than the proposed 

viticultural area. 

Average rainfall in the Red Hill area 

is 51 inches at the 1,000-foot elevation, 

which contrasts with 40 inches at the 

600-foot elevation of the Umpqua Valley 

floor. Other areas close to Red Hill all 

have significantly less rainfall, as noted 

in the table below. 

Location name (Oregon) 

Average 

annual 

rainfall 

(inches) 

Red Hill Road ............................... 51.53 

Oakland ........................................ 40.86 

Drain ............................................. 45.70 

Sutherlin ........................................ 41.81 

Roseburg ...................................... 32.44 

Winchester .................................... 34.99 

Notice No. 960 requested public 

comments by December 30, 2002, and 

ATF received nine comments, one in 

support, seven in opposition, and one 

that requested an extension of the 

comment period. The one supporting 

commenter stated that the proposed 

viticultural area is geologically and 

climatically distinct from surrounding 

areas. 

All seven opposing commenters 

expressed concern about the proposed 

‘‘Red Hill (Oregon)’’ name. They cited 

consumer confusion with other Red Hill 

wine regions in Oregon, California, New 

Zealand, and Australia. Several 

commenters who use the geographical 

term ‘‘Red Hills of Dundee’’ on wine 

labels believed the petitioner would be 

capitalizing on that established and 

recognized name. A commenter holding 

the ‘‘Red Hill Vineyard’’ trademark in 

California stated concerns about 

potential brand name confusion. 

The ‘‘Red Hill’’ name, according to a 

commenter, is ‘‘common’’ and 

‘‘generic.’’ Also, the ‘‘Oregon’’ modifier 

is too expansive and encompassing, the 

commenter continued, and suggested 

Douglas County or Umpqua as 

modifiers. The name ‘‘Red Hill’’ in 

Douglas County is not well known 

locally or nationally, according to 

several opposing commenters. One 

commenter questioned if the proposed 

Red Hill (Oregon) area is located in the 

Willamette Valley, in northwest Oregon, 

to the north of Douglas County. 

The Red Hill area in Douglas County, 

according to several commenters, has no 

history of grape-growing or established 

viticulture reputation. They also stated 

that climate, soil, and topography are 

not distinguishable from the Red Hills 

of Dundee, located in the Willamette 

Valley in northwest Oregon. Another 

commenter stated there is red soil ‘‘all 

over the planet.’’

A commenter cited lack of 

justification in selecting the elevation 

range of 800 to 1,200 feet. Another 

commenter noted the entire Red Hill 

landform is not within the proposed 

boundary, and that the proposed 

viticultural area should be renamed to 

reflect the portion of Red Hill within the 

proposed boundary. The commenter 

suggested the name ‘‘Pollack Creek,’’

which is the name of an estuary running 

through the proposed area. 

One commenter requested a 60-day 

extension to the comment period for 

more time to study the petition and 

prepare a comment. 

ATF Notice No. 966 

In response to the commenter’s 

request for an extension of the comment 

period prescribed in Notice No. 960, 

ATF on January 16, 2003, published in 

the Federal Register (68 FR 2262) a 

second notice, No. 966, regarding the 

proposed establishment of the Red Hill 

(Oregon) viticultural area. Notice No. 

966 re-opened the comment period and 

requested public comments by March 

17, 2003. ATF received 16 comments, 

with 12 in support, 2 in opposition, 1 

that suggested a name change, and 1 

that requested an extension of the 

comment period. 

The 12 supporting commenters, with 

the majority living and growing grapes 

in Douglas County, Oregon, stated their 

belief that the Red Hill region is distinct 

from the surrounding areas in soil, 

rainfall, and temperatures. Also, they 

stated that the geology and higher 

elevations on the hillsides are unique to 

the surrounding lower elevations. 

Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / Rules and Regulations 59999 

According to one supporting 

commenter, the Red Hill terrain above 

the 1,200-foot elevation line and on the 

east side of the hill, located outside the 

proposed boundary line, is not 

conducive to successful viticulture. A 

supporting Corvallis, Oregon, vineyard 

owner stated that east-facing slopes 

make poor vineyard sites. 

An Oakland, Oregon, supporting 

commenter stated that the proposed 

viticultural area has cool night 

temperatures, as compared to areas 

outside the proposed boundary, and 

enjoys a frost-free growing season. The 

same commenter noted that the reddish 

Jory soils are isolated on Red Hill from 

the surrounding region. 

A supporting Medford, Oregon, 

horticultural advisor commented that 

the reddish soil is composed of siltsized volcanic ash deposited by wind on 

the hilltops, not in the valleys. The 

commenter also stated that the marine 

influence provides a cooler and wetter 

climate, as compared to the surrounding 

Umpqua Valley area. The horticultural 

advisor stated his belief that the Red 

Hill area is unique to the region and 

deserves its own appellation. 

A supporting Douglas County 

extension agent commented that the 

majority of the County grapes grow 

between 400 and 800 feet in elevation 

and that the elevation level of between 

approximately 800 and 1,200 feet of the 

proposed Red Hill viticultural area is 

the maximum elevation for successful 

ripening of grapes in the Umpqua 

climatic zone. The extension agent 

explained that increased winter and 

spring rainfall levels in the Red Hill 

region contrast to the rainfall of the 

adjacent lower elevation valley vineyard 

sites and that Red Hill has a very 

distinctive Jory soil type. 

A supporting general manager of the 

Douglas County Farmers Co-op 

commented that unique characteristics 

of Red Hill include the soils, 

microclimate, and rainfall. The general 

manager also states that viticulture 

occurs at higher elevations than those of 

most other Douglas County grapegrowing locations. 

According to several supporting 

commenters, the Red Hill name is 

appropriate and has historical 

significance. The ‘‘Red Hill’’ sign at exit 

150 of Interstate 5 in Oregon, according 

to one commenter, is the only ‘‘Red 

Hill’’ designation in that region of the 

Interstate system. Another commenter 

found humor in the idea of public 

confusion among the ‘‘Red Hill,’’ ‘‘Red 

Hills of California,’’ or the ‘‘Red Hills of 

Dundee’’ geographical names. The 

Douglas County extension agent 

confirmed the historical significance of 

the ‘‘Red Hill’’ name for the area. 

The two opposing commenters stated 

their concern about the proposed ‘‘Red 

Hill (Oregon)’’ name. They cited 

consumer confusion with the Red Hills 

of Dundee grape-growing region in the 

Willamette Valley viticultural area of 

northwest Oregon. A commenter 

explained that the grapes from the 

proposed viticultural area lack ‘‘Red 

Hill’’ marketplace recognition. The same 

commenter stated his belief that the 

petition information refers to new 

plantings that have not been 

commercially harvested. In conjunction, 

the commenter questioned the 

distinguishing climatic features 

evidence of the petition, as related to 

the viticultural bloom and ripening 

dates. The other commenter contended 

that there is inadequate historical 

viticultural evidence to support the 

contention that the area produces 

unique wines. Also, the commenter 

stated that no current demand for wines 

from the Red Hill area of Douglas 

County, Oregon, exists. 

One commenter suggested ‘‘Red Hill 

of Oregon’’ as an alternate name to the 

‘‘Red Hill (Oregon)’’ proposed name. 

One commenter requested an 

additional comment period of 60 days to 

allow time for receipt and evaluation of 

a copy of the original petition. 

TTB Notice No. 6 

In response to the commenter’s 

request for an extension of the comment 

period prescribed in Notice No. 966, 

TTB, as the successor agency to ATF, on 

April 24, 2003, published in the Federal 

Register (68 FR 20090) Notice No. 6. 

This third notice re-opened the 

comment period regarding the proposed 

establishment of the Red Hill (Oregon) 

viticultural area. Notice No. 6 requested 

public comments by May 27, 2003. TTB 

received nine comments, three in 

support, one in opposition, and five that 

requested a public hearing. 

The three comments in support of the 

proposed Red Hill (Oregon) viticultural 

area focused on the unique climate 

conditions for viticulture. The owner of 

an Oakland, Oregon, vineyard, located 

about 10 miles south of Red Hill, 

commented that Red Hill is distinct 

from other growing areas in the Umpqua 

Valley viticulture area. The distinctive 

combination of soil, temperature, and 

rainfall pattern, the commenter 

continues, is not repeated elsewhere in 

the Umpqua Valley. Another Oakland 

vineyard owner concurred that the Red 

Hill area is a unique viticultural area. 

The managing partner of an Elkton, 

Oregon, vineyard, located to the westnorthwest of Red Hill, commented, ‘‘I 

have been to this vineyard a number of 

times and the soils, elevation, rainfall 

and climate differentiate this site from 

all others in the Umpqua [Valley] 

AVA.’’

In addition, one supporting 

commenter explained that early settlers 

started using the ‘‘Red Hill’’ name and 

that the petitioner did not coin the ‘‘Red 

Hill’’ name for the purpose of 

petitioning for the establishment of a 

viticultural area. 

The one opposing commenter of the 

proposed Red Hill (Oregon) viticultural 

area discussed possible trade and 

consumer confusion related to the 

proposed name of the viticultural area. 

Two Oregon trademarks in use since 

1970, ‘‘Red Hills Estate’’ and ‘‘Red Hills 

Vineyard,’’ are held by a Willamette 

Valley, Oregon, winery. The commenter 

believes consumer confusion between 

the two trademark names and the 

proposed Red Hill (Oregon) viticultural 

area names will occur. The commenter 

suggested ‘‘Pollack Creek’’ as an 

alternate viticultural area name. 

The five commenters who requested a 

public hearing wished to debate the 

establishment of the proposed Red Hill 

(Oregon) viticultural area. Specific 

reasons included a belief that the name 

Red Hill (Oregon) is not locally or 

nationally recognized and a concern 

that the proposed name could be 

confused with the Red Hills of Dundee 

grape-growing region in the Willamette 

Valley of northwest Oregon. Also, the 

commenters contended that the 

proposed area lacks viticultural history. 

TTB Notice No. 31 

Based on the comments opposed to 

the proposed ‘‘Red Hill (Oregon)’’ name, 

TTB decided to solicit comments on 

‘‘Red Hill Douglas County, Oregon’’ as 

a new name for the proposed 

viticultural area. Accordingly, on 

February 2, 2005, TTB published in the 

Federal Register (70 FR 5397) Notice 

No. 31, which included a revised 

boundary description in the proposed 

regulatory text and re-opened the period 

for public comments through March 4, 

2005. TTB revised the boundary 

description to provide more detail for 

ease in determining the proposed lines 

on the USGS maps. TTB received no 

comments in response to this notice. 

Discussion of Comments 

As indicated above, ATF and TTB 

received a total of 34 public comments 

in response to the three proposed Red 

Hill (Oregon) notices and none in 

response to the notice proposing the 

‘‘Red Hill Douglas County, Oregon’’

name. Opposing commenters supported 

their positions by addressing a number 

60000 Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / Rules and Regulations 

of points, which we summarize and 

respond to below. 

• Lack of name recognition, 

specifically, that the name Red Hill 

(Oregon) is not locally or nationally 

recognized. 

TTB disagrees with this contention. 

As noted in Notice No. 960, the Red Hill 

name, based on reddish soils, has been 

used in Douglas County, Oregon, for 

over 150 years. Today, use of the name 

‘‘Red Hill’’ continues to identify the Red 

Hill landform and farmlands in the area 

and is used on the Interstate 5 exit sign 

number 150. The USGS Drain, Oregon, 

map includes in section 26, T23S/R5W, 

a number of references to place and road 

names that include the words ‘‘Red 

Hill.’’

• Name confusion (with other areas, 

brands, and trademarks). Many 

commenters expressed concern that the 

name is easily confused with other 

names, such as the Red Hills (plural) 

area of Willamette Valley, Red Hills of 

Dundee (Oregon), Red Hills (New 

Zealand), Red Hills Estate (Oregon 

trademark), Red Hills Vineyard (Oregon 

trademark), and Red Hill Vineyard 

(California trademark). 

TTB agrees that establishing a 

viticultural area named Red Hill 

(Oregon) could create potential conflicts 

and/or confusion with other 

geographical area, brand, and trademark 

names used by wine industry members. 

As stated in Notice No. 31, TTB 

determined that the proposed ‘‘Red Hill 

Douglas County, Oregon’’ name 

adequately describes and geographically 

identifies the proposed viticultural area 

and does not create confusion with 

other geographical areas or create 

conflict with other wine industry brand 

or trademark names currently in use. 

• Insufficient boundary evidence. 

Several opposing commenters stated the 

boundaries do not reflect the 

geographical area known as Red Hill in 

Douglas County, Oregon. 

TTB notes that the petition and Notice 

No. 960 both detail the rationale for the 

boundary line determination. Although 

portions of the Red Hill geographical 

formation are outside the boundaries, 

the area conducive to successful 

viticulture, based on soil and climate 

evidence, is included. 

After careful consideration, TTB has 

determined that the proposed Red Hill 

Douglas County, Oregon viticultural 

area boundary lines are appropriate and 

accurate. 

• Lack of justification in selecting the 

elevation range of 800 to 1,200 feet. 

Several commenters questioned the 

use of the approximate 800- to 1,200- 

foot elevation lines for the proposed 

boundaries. 

TTB believes the specified elevation 

is correct. One factor that supports the 

upper range of elevation, as presented 

by the petitioner and confirmed in 

public comments, is the timber 

industry’s extensive land ownership on 

Red Hill. Much of the land at the higher 

elevations, above about 1,200 feet in 

elevation and to the east side of the hill, 

beyond the proposed boundaries, is 

dedicated to reforesting. The Douglas 

County extension agent Steve Renquist 

explained that the proposed upper 

boundary, at the 1,200-foot contour line, 

is the maximum elevation for successful 

grape-ripening in the region. 

TTB, therefore, considers the 800- to 

1,200-foot elevation band to be a 

defining feature of this proposed 

viticultural area. 

• Insufficient distinguishing features, 

for example, climate (especially relating 

to the viticultural bloom and ripening 

dates), soil, and topography. 

The petition stated that the area’s 

growing season temperatures, including 

those of spring and fall, are warmer 

during the day and cooler at night, 

which contrasts to the surrounding 

Umpqua region. According to a former 

Douglas County extension agent, Red 

Hill bloom and ripening dates vary from 

the rest of the Umpqua Valley 

viticultural area and those of 

comparable varieties in the Willamette 

Valley viticultural area. 

The petition also stated that, 

according to horticultural advisor Brian 

Wolf, the Red Hill climate enjoys a 

marine influence, generally cooler and 

wetter, than the surrounding areas. 

Also, it contrasts to the Willamette 

Valley to the north, which has more 

rainfall and cooler temperatures than 

Red Hill. From a climatic perspective, 

including growing temperatures and 

solar radiation, commenters explain that 

the Red Hill area’s east-facing slopes 

and elevations above 1,200 feet are not 

conducive to successful viticulture, and, 

thus, are outside the boundaries of the 

proposed viticultural area. Moreover, 

the proposed Red Hill Douglas County, 

Oregon viticultural area experiences 

distinctive rainfall and temperature 

patterns, a relatively frost-free growing 

season, a west-facing orientation and its 

related solar exposure, and a marine 

influence, as commenters describe. The 

commenters opposed to the proposed 

viticultural area provided no specific 

data to refute the information provided 

in the petition in this regard. 

Regarding the reddish soil of this 

proposed viticultural area, horticultural 

advisor Brian Wolf also stated, 

according to the petition, that it is not 

clay, but silt-sized volcanic ash 

deposited by wind. This red volcanic 

ash exists only on the tops of hills, not 

at the lower elevation valleys, and has 

extraordinary water-holding capability 

that facilitates viticulture. In addition, a 

vineyard owner 4 miles south of Red 

Hill describes his soil as poorly draining 

silt clay mudstone, which contrasts to 

the deep, red, well-drained soil in the 

proposed viticultural area. Finally, the 

letter from engineering technician Walt 

Barton that was submitted with the 

petition stated that, within Douglas 

County, the red Jory series is unique to 

the Red Hill area. Areas surrounding the 

Red Hill region, Mr. Barton explained, 

have contrasting shallow or poorly 

drained soils of sedimentary origin, 

unlike the Red Hill Jory series soils that 

are well drained and derive from 

bedrock. 

TTB believes that these statements 

support the conclusion that the red Jory 

soils of the Red Hill area are a unique 

and distinguishing factor in that area of 

the Umpqua Valley and Douglas 

County, Oregon. The fact that there is 

red soil ‘‘all over the planet,’’ as claimed 

by one opposing commenter, does not 

deny the significance of the soil found 

in the proposed viticultural area. 

As regards topography, the petition 

pointed out that the hillside climate 

allows grapes to mature at a slower rate, 

producing small clusters of grapes with 

high acids and intense flavors. 

Therefore, the hillside elevations of the 

proposed viticultural area are 

distinctive. The proposed boundaries 

are generally limited by the 1,200-foot 

upper elevation and by the east-facing 

hillside slopes where viticulture tends 

to be less successful. Also, below the 

800-foot proposed elevation boundary 

line, the area trends to the Umpqua 

Valley growing environment. The 

opposing commenters provided no 

specific information to refute these 

statements. 

• Lack of grape-growing history and 

established viticulture reputation. 

Several opposing commenters voiced 

concern about the lack of viticultural 

history of the Red Hill area in Douglas 

County, Oregon, and a lack of 

commercial grape harvesting. They 

stated that the area does not have a 

proven record of producing unique 

wines. Another commenter stated that 

there is little commercial demand for 

wines originating from this area. 

TTB notes that the regulations 

pertaining to the establishment of 

viticultural areas do not require the 

existence of a substantial viticultural 

history, a production of unique wines, 

or a demand for wines originating in the 

proposed viticultural area. Therefore, in 

evaluating a petition, TTB does not 

consider as determining factors the 

Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / Rules and Regulations 60001 

questions of whether the viticulture of 

the proposed area is new or established, 

whether the area is producing unique 

wines, or whether wine from the area is 

in demand in the marketplace. 

• Need for public hearings. 

Five opposing commenters requested 

a public hearing to openly discuss the 

petition and present oral arguments. 

However, TTB determined that the 

written comments received in response 

to Notice Nos. 960, 966, and 6, together 

with the information submitted with the 

petition, provided adequate 

information, evidence, and 

documentation on which to base a 

decision. 

TTB Finding 

After careful review of the petition 

and the public comments, TTB believes 

that the evidence submitted with the 

petition supports the establishment of 

the proposed viticultural area under the 

name proposed in Notice No. 31. 

Therefore, under the authority of the 

Federal Alcohol Administration Act and 

part 4 of our regulations, we establish 

the ‘‘Red Hill Douglas County, Oregon’’

viticultural area in Douglas County, 

Oregon, effective 30 days from this 

document’s publication date. 

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 provided the required 

maps, and we list them below in the 

regulatory text. 

Impact on Current Wine Labels 

Part 4 of the TTB regulations prohibits 

any label reference on a wine that 

indicates or implies an origin other than 

the wine’s true place of origin. With the 

establishment of this viticultural area 

and its inclusion in part 9 of the TTB 

regulations, its name, ‘‘Red Hill Douglas 

County, Oregon’’ is recognized as a 

name of viticultural significance. 

Consequently, wine bottlers using ‘‘Red 

Hill Douglas County, 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 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 

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 

Nancy Sutton, Regulations and 

Procedures Division, drafted this 

document. 

List of Subjects in 27 CFR Part 9 

Wine. 

The Regulatory Amendment 

■ For the reasons discussed in the 

preamble, we amend 27 CFR, chapter 1, 

part 9 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 § 9.190 

to read as follows: 

Subpart C—Approved American 

Viticultural Areas 

§ 9.190 Red Hill Douglas County, Oregon. 

(a) Name. The name of the viticultural 

area described in this section is ‘‘Red 

Hill Douglas County, Oregon’’. For 

purposes of part 4 of this chapter, ‘‘Red 

Hill Douglas County, Oregon’’ is a term 

of viticultural significance. 

(b) Approved Maps. The appropriate 

maps for determining the boundary of 

the Red Hill Douglas County, Oregon 

viticultural area are three United States 

Geological Survey (USGS), 1:24,000 

scale, topographic maps. They are: 

(1) Sutherlin, OR (Provisional edition 

1988); 

(2) Scotts Valley, OR (Provisional 

edition 1987); and 

(3) Yoncalla, OR (Provisional edition 

1987). 

(c) Boundary. The Red Hill Douglas 

County, Oregon viticultural area is 

located in Douglas County, Oregon, east 

of Interstate 5 near the hamlet of Rice 

Hill, between the villages of Yoncalla 

and Oakland. 

(1) Beginning on the Yoncalla map 

along the southern boundary of section 

35, T23S/R5W, at the point where a 

pipeline crosses the T23S/T24S 

township line, proceed due west 0.8 

mile along the T23S/T24S township line 

to its intersection with the 800-foot 

contour line just west of Pollock Creek 

in section 34, T23S/R5W (Yoncalla 

Quadrangle); then 

(2) Proceed southerly along the 

meandering 800-foot contour line, cross 

onto the Sutherlin map in section 10, 

T24S/R5W, and continue westerly along 

the 800-foot contour line to its first 

intersection with the eastern boundary 

of section 8, T24S/R5W (Sutherlin 

Quadrangle); then 

(3) Proceed northerly along the 

meandering 800-foot contour line, 

return to the Yoncalla map in section 9, 

T23S/R5W, and continue northerly 

along the 800-foot contour line to its 

intersection with the T23S/T24S 

township line very near the northwest 

corner of section 4, T24S/R5W 

(Yoncalla Quadrangle); then 

(4) Proceed northeasterly along the 

800-foot contour line, cross Wilson 

Creek in the northern portion of section 

23, T23S/R5W, pass onto the Scotts 

Valley map at Section 14, T23S/R5W, 

and continue northeasterly along the 

800-foot contour line to its intersection 

with the R4W/R5W range line, which at 

that point is also the eastern boundary 

of section 1, T23S/R5W (Scotts Valley 

Quadrangle); then 

(5) Proceed southwesterly along the 

800-foot contour line, re-cross the R4W/ 

R5W range line, and continue to the 

second intersection of the 800-foot 

contour line and the pipeline in section 

1, T23/R5W (Scotts Valley Quadrangle); 

then 

(6) Proceed 5.75 miles southwesterly 

along the pipeline, cross Wilson Creek 

in section 24, T23S/R5W, return to the 

Yoncalla map in section 26, T23S/R5W, 

60002 Federal Register / Vol. 70, No. 198 / Friday, October 14, 2005 / Rules and Regulations 

and continue southwesterly along the 

pipeline to the point of beginning at the 

intersection of the pipeline intersection 

and the T23S/T24S township line in 

section 35, T23S/R5W (Yoncalla 

Quadrangle). 

Signed: July 22, 2005. 

John J. Manfreda, 

Administrator. 

Approved: September 2, 2005. 

Timothy E. Skud, 

Deputy Assistant Secretary (Tax, Trade, and 

Tariff Policy). 

[FR Doc. 05–20551 Filed 10–13–05; 8:45 am] 

BILLING CODE 4810–31–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4022 and 4044 

Benefits Payable in Terminated SingleEmployer Plans; Allocation of Assets 

in Single-Employer Plans; Interest 

Assumptions for Valuing and Paying 

Benefits 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Final rule. 

SUMMARY: The Pension Benefit Guaranty 

Corporation’s regulations on Benefits 

Payable in Terminated Single-Employer 

Plans and Allocation of Assets in 

Single-Employer Plans prescribe interest 

assumptions for valuing and paying 

benefits under terminating singleemployer plans. This final rule amends 

the regulations to adopt interest 

assumptions for plans with valuation 

dates in November 2005. Interest 

assumptions are also published on the 

PBGC’s Web site (http://www.pbgc.gov). 

DATES: Effective November 1, 2005. 

FOR FURTHER INFORMATION CONTACT: 

Catherine B. Klion, Attorney, Legislative 

and Regulatory Department, Pension 

Benefit Guaranty Corporation, 1200 K 

Street, NW., Washington, DC 20005, 

202–326–4024. (TTY/TDD users may 

call the Federal relay service toll-free at 

1–800–877–8339 and ask to be 

connected to 202–326–4024.) 

SUPPLEMENTARY INFORMATION: The 

PBGC’s regulations prescribe actuarial 

assumptions—including interest 

assumptions—for valuing and paying 

plan benefits of terminating singleemployer plans covered by title IV of 

the Employee Retirement Income 

Security Act of 1974. The interest 

assumptions are intended to reflect 

current conditions in the financial and 

annuity markets. 

Three sets of interest assumptions are 

prescribed: (1) a set for the valuation of 

benefits for allocation purposes under 

section 4044 (found in Appendix B to 

Part 4044), (2) a set for the PBGC to use 

to determine whether a benefit is 

payable as a lump sum and to determine 

lump-sum amounts to be paid by the 

PBGC (found in Appendix B to Part 

4022), and (3) a set for private-sector 

pension practitioners to refer to if they 

wish to use lump-sum interest rates 

determined using the PBGC’s historical 

methodology (found in Appendix C to 

Part 4022). 

This amendment (1) adds to 

Appendix B to Part 4044 the interest 

assumptions for valuing benefits for 

allocation purposes in plans with 

valuation dates during November 2005, 

(2)adds to Appendix B to Part 4022 the 

interest assumptions for the PBGC to 

use for its own lump-sum payments in 

plans with valuation dates during 

November 2005, and (3) adds to 

Appendix C to Part 4022 the interest 

assumptions for private-sector pension 

practitioners to refer to if they wish to 

use lump-sum interest rates determined 

using the PBGC’s historical 

methodology for valuation dates during 

November 2005. 

For valuation of benefits for allocation 

purposes, the interest assumptions that 

the PBGC will use (set forth in 

Appendix B to part 4044) will be 3.70 

percent for the first 20 years following 

the valuation date and 4.75 percent 

thereafter. These interest assumptions 

represent an increase (from those in 

effect for October 2005) of 0.20 percent 

for the first 20 years following the 

valuation date and are otherwise 

unchanged. 

The interest assumptions that the 

PBGC will use for its own lump-sum 

payments (set forth in Appendix B to 

part 4022) will be 2.50 percent for the 

period during which a benefit is in pay 

status and 4.00 percent during any years 

preceding the benefit’s placement in pay 

status. These interest assumptions 

represent an increase (from those in 

effect for October 2005) of 0.25 percent 

for the period during which a benefit is 

in pay status and are otherwise 

unchanged. 

For private-sector payments, the 

interest assumptions (set forth in 

Appendix C to part 4022) will be the 

same as those used by the PBGC for 

determining and paying lump sums (set 

forth in Appendix B to part 4022). 

The PBGC has determined that notice 

and public comment on this amendment 

are impracticable and contrary to the 

public interest. This finding is based on 

the need to determine and issue new 

interest assumptions promptly so that 

the assumptions can reflect, as 

accurately as possible, current market 

conditions. 

Because of the need to provide 

immediate guidance for the valuation 

and payment of benefits in plans with 

valuation dates during November 2005, 

the PBGC finds that good cause exists 

for making the assumptions set forth in 

this amendment effective less than 30 

days after publication. 

The PBGC has determined that this 

action is not a ‘‘significant regulatory 

action’’ under the criteria set forth in 

Executive Order 12866. 

Because no general notice of proposed 

rulemaking is required for this 

amendment, the Regulatory Flexibility 

Act of 1980 does not apply. See 5 U.S.C. 

601(2). 

List of Subjects 

29 CFR Part 4022 

Employee benefit plans, Pension 

insurance, Pensions, Reporting and 

recordkeeping requirements. 

29 CFR Part 4044 

Employee benefit plans, Pension 

insurance, Pensions. 

■ In consideration of the foregoing, 29 

CFR parts 4022 and 4044 are amended 

as follows: 

PART 4022—BENEFITS PAYABLE IN 

TERMINATED SINGLE-EMPLOYER 

PLANS 

■ 1. The authority citation for part 4022 

continues to read as follows: 

Authority: 29 U.S.C. 1302, 1322, 1322b, 

1341(c)(3)(D), and 1344. 

■ 2. In appendix B to part 4022, Rate Set 

145, as set forth below, is added to the 

table. 

Appendix B to Part 4022—Lump Sum 

Interest Rates For PBGC Payments 

* * * * * 

Rate set 

For plans with a valuation 

date Immediate 

annuity rate 

(percent) 

Deferred annuities 

(percent) 

On or after Before i1 i2 i3 n1 n2