[Federal Register Volume 70, Number 198 (Friday, October 14, 2005)]
[Rules and Regulations]
[Pages 59996-60002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20551]


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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.

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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 grape-growing region 
as a viticultural area. Section 9.3(b) of the TTB regulations requires 
the petition to include--
    <bullet> Evidence that the proposed viticultural area is locally 
and/or nationally known by the name specified in the petition;

[[Page 59997]]

    <bullet> Historical or current evidence that supports setting the 
boundary of the proposed viticultural area as the petition specifies;
    <bullet> Evidence relating to the geographical features, such as 
climate, soils, elevation, and physical features, that distinguish the 
proposed viticultural area from surrounding areas;
    <bullet> A description of the specific boundary of the proposed 
viticultural area, based on features found on United States Geological 
Survey (USGS) maps; and
    <bullet> A copy of the appropriate USGS map(s) with the proposed 
viticultural area's boundary prominently marked.

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 re-
foresting 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

[[Page 59998]]

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 well-drained 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 [deg]F. Red Hill's average daytime 
temperature during the growing season is 75 [deg]F. Temperature 
recordings at Oakland, Sutherlin, and Roseburg, all located along 
Interstate 5 in Douglas County, can increase as much as 11 [deg]F from 
Red Hill daytime temperatures. Nighttime Red Hill temperatures are 
typically 7 [deg]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 [deg]F for Roseburg and 
72.3 [deg]F for Red Hill. The average low was 50 [deg]F for Roseburg 
and 46.4 [deg]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 grape-growing 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.

------------------------------------------------------------------------
                                                                Average
                                                                 annual
                    Location name (Oregon)                      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.

[[Page 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 silt-sized 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 grape-growing 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 west-northwest 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

[[Page 60000]]

of points, which we summarize and respond to below.
    <bullet> 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.''
    <bullet> 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.
    <bullet> 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.
    <bullet> 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.
    <bullet> 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.
    <bullet> 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

[[Page 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.
    <bullet> 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

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

PART 9--AMERICAN VITICULTURAL AREAS

0
1. The authority citation for part 9 continues to read as follows:

    Authority: 27 U.S.C. 205.


0
2. Amend subpart C by adding Sec.  9.190 to read as follows:

Subpart C--Approved American Viticultural Areas


Sec.  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,

[[Page 60002]]

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