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Alcohol and Tobacco Tax and Trade Bureau, Treasury.
Notice of proposed rulemaking.
The Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes to establish the approximately 15,900-acre “Palos Verdes Peninsula” viticultural area in the southwestern coastal region of Los Angeles County, California. The proposed viticultural area does not lie within, nor does it contain, any other established viticultural area. TTB designates viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase. TTB invites comments on this proposed addition to its regulations.
Comments must be received by July 27, 2020.
You may electronically submit comments to TTB on this proposal, and view copies of this document, its supporting materials, and any comments TTB receives on it within Docket No. TTB-2020-0003 as posted on Regulations.gov (https://www.regulations.gov), the Federal e-rulemaking portal. Please see the “Public Participation” section of this document below for full details on how to comment on this proposal via Regulations.gov, U.S. mail, or hand delivery, and for full details on how to view or obtain copies of this document, its supporting materials, and any comments related to this proposal.
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FOR FURTHER INFORMATION CONTACT:
Karen A. Thornton, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005; phone 202-453-1039, ext. 175.
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Background on Viticultural Areas
Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The Secretary has delegated the functions and duties in the administration and enforcement of these provisions to the TTB Administrator through Treasury Order 120-01, dated December 10, 2013 (superseding Treasury Order 120-01, dated January 24, 2003).
Part 4 of the TTB regulations (27 CFR part 4) authorizes TTB to establish definitive viticultural areas and regulate 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) sets forth standards for the preparation and submission of petitions for the establishment or modification of American viticultural areas (AVAs) and lists the approved AVAs.
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 having distinguishing features, as described in part 9 of the regulations, and a name and a delineated boundary, as established 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 the wine's geographic origin. The establishment of AVAs allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of an AVA is neither an approval nor an endorsement by TTB of the wine produced in that area.
Section 4.25(e)(2) of the TTB regulations (27 CFR 4.25(e)(2)) outlines the procedure for proposing an AVA and provides that any interested party may petition TTB to establish a grape-growing region as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes the standards for petitions for the establishment or modification of AVAs. Petitions to establish an AVA must include the following:
- Evidence that the area within the proposed AVA boundary is nationally or locally known by the AVA name specified in the petition;
- An explanation of the basis for defining the boundary of the proposed AVA;
- A narrative description of the features of the proposed AVA affecting viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposed AVA distinctive and distinguish it from adjacent areas outside the proposed AVA;
- The appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed AVA, with the boundary of the proposed AVA clearly drawn thereon; and
- A detailed narrative description of the proposed AVA boundary based on USGS map markings.
Palos Verdes Peninsula Petition
TTB received a petition from James York, owner of Catalina View Wines, on behalf of the Palos Verdes Peninsula Winegrowers, proposing to establish the “Palos Verdes Peninsula” AVA. The proposed Palos Verdes Peninsula AVA lies within Los Angeles County, California, and contains the cities of Palos Verdes Estates, Rolling Hills Estates, Rancho Palos Verdes, and Rolling Hills, California. The proposed AVA does not overlap with any other existing or proposed AVA. The proposed Palos Verdes Peninsula AVA contains approximately 15,900 acres, including 7 acres of producing vineyards, distributed throughout the proposed AVA. The primary varieties grown in the proposed Palos Verdes Start Printed Page 31417Peninsula AVA consist of Pinot Noir, Chardonnay, Merlot, and Cabernet Sauvignon.
According to the petition, the distinguishing features of the proposed Palos Verdes Peninsula AVA include its geology, soils, topography, and climate. Unless otherwise noted, all information and data pertaining to the proposed AVA contained in this document are from the petition for the proposed Palos Verdes Peninsula AVA and its supporting exhibits.
The proposed Palos Verdes Peninsula AVA takes its name from the Rancho de Los Palos Verdes, which was awarded as a land grant from the Governor of Mexican California in the early 1800s. Use of the term “Palos Verdes Peninsula” to describe the region began during the mid-century development surge of the area.
The petitioner provided several examples of the use of “Palos Verdes Peninsula” to refer to the region of the proposed AVA. For example, many local agencies and organizations utilize the “Palos Verdes Peninsula” reference in their names: Palos Verdes Peninsula United School District, Palos Verdes Peninsula Transit Authority, Palos Verdes Peninsula Land Conservancy, Palos Verdes Peninsula News, and Palos Verdes Peninsula Chamber of Commerce. The petition also provided a list of several books that refer to the Palos Verdes Peninsula in their titles, including Handbook of Wildflowers, Weeds, Wildlife, and Weather of the South Bay and Palos Verdes Peninsula 
and Best Hikes on the Palos Verdes Peninsula.
The proposed Palos Verdes Peninsula AVA is bounded on the west and south by the Pacific Ocean. The northern and eastern boundaries of the proposed AVA coincides with the jurisdictional boundaries of the cities of Palos Verdes Estates, Rolling Hills Estates, Rancho Palos Verdes, and the neighboring cities of Torrance, Lomita and San Pedro (Los Angeles), respectively.
The distinguishing features of the proposed Palos Verdes Peninsula AVA include its geology, soils, topography, and climate.
Geology and Soils
The proposed Palos Verdes Peninsula AVA is an island-like terrain, or an isolated upland peninsula created by tectonic uplift and volcanic activity. During periods of intense geologic activity, the region of the proposed AVA was subjected to repeated cycles of uplift, erosion, submersion, and deposition. Submersion allowed significant amounts of marine deposits to be laid down, which contributed to the soil composition. Uplift created new lands, while erosion wore away the newly-formed lands to create the series of marine terraces that characterize the region's topography today. By contrast, the geology of the surrounding areas is a large coastal plain, consisting mainly of surficial sediments, older surficial sediments, and shallow marine sediments. While the surrounding regions experienced the same ocean fluctuations as the proposed AVA, they did not experience the same intensity of tectonic uplift and volcanic activity.
The geology of the Peninsula consists primarily of the Monterey Formation and ancient landslides. The geology of the Monterey Formation created soils from the Altamont Series, including Altamont Clay Adobe and Altamont Clay Loam. A third soil commonly found in the proposed AVA is the Diablo Clay Adobe. These three soils are rich in clays, adobe, and loamy clay and contain high amounts of calcium. The calcium found in Peninsula soils retains moisture in dry weather while allowing for good drainage. According to the petition, the levels of calcium in the soils produce thicker grape skins than are found on the same grape varietals grown in non-calcareous soils, which increases the amount of color, flavor, and aromatics in the resulting wine.
The lowland areas surrounding the proposed AVA have alluvial-and fluvial-based sedimentary soils (sand and silt) which, according to the petition, generally produce wines with less color, acidity, and tannins, but with more aromas, than clay-and adobe-rich soils. These soils also have lower levels of calcium, and they can retain excessive water which can increase the chances of root disease.
The topography of the proposed Palos Verdes Peninsula AVA is often described as a low altitude mountain of the Coast Range situated between the Los Angeles Plain and the Pacific Ocean. It is covered by rolling hills, incised canyons, and coastal bluffs and terraces. Elevations range from sea level on the west and south to about 1,460 feet above sea level at San Pedro Hill, which is located near the eastern/central area of the Palos Verdes Hills. The slope angles of the vineyards in the proposed AVA range from gentle to high (0-50%). Some vineyards that are planted on steeper slopes have been terraced to allow for drainage/erosion control, equipment access, and solar orientation. The aspects of the vineyard slopes face south, southeast, and southwest, providing year-round solar exposure.
The moderate slopes of the proposed Palos Verdes Peninsula AVA promote: (1) Air flow that helps to minimize mildew, botrytis rot, and frost issues; (2) drainage of excess water that helps to minimize root rot and; (3) direct sun exposure which aids in ripeness and reduces frost risk. South-and southwest-facing slopes promote earlier bud break, bloom, and harvest than other aspects. Southeast-facing slopes bring morning radiation for soil warmth and canopy growth.
In contrast, the surrounding areas have relatively flat topography with elevations ranging from sea level to about 500 feet. Slope angles range from 0-25%. Flatter topography can promote: (1) Reduced air flow which can lead to mildew and botrytis rot; (2) pooling of water which can cause root rot and excessive vegetative growth; and (3) and reduced photosynthesis from diluted sun exposure as it is spread out across a wider surface area.
The climate of the proposed Palos Verdes Peninsula AVA is “Mediterranean warm”, which is characterized by warm, dry summers and mild winters with limited rainfall. The petition also described wind and fog patterns within the proposed AVA and the surrounding regions. However, the petition did not provide enough data for TTB to determine if wind and fog are distinguishing features of the proposed AVA, so those climate aspects are not discussed in this document. All climate information provided in the petition can be viewed in the public docket at https://www.regulations.gov.
The vineyards within the proposed AVA are located in the following microclimates: 
Climate Zone IA and IB (Coastal Zone), Zone III (Middle Highlands, Southeastern Upper Slope), and Zone IV (Middle and Lower North and East Slopes). These zones have Start Printed Page 31418milder temperatures, more fog, higher relative humidity, and slightly more rain than the surrounding areas which are classified as the warmer zones V and VI.
As evidence of these milder temperatures, the petition includes weather data for the proposed AVA and the surrounding areas from the National Oceanic and Atmospheric Administration (NOAA) from 2014 to 2017. The temperature data shows that average monthly temperatures for the proposed Palos Verdes Peninsula AVA range between four and six degrees lower than in the surrounding areas in the colder months, and five to eight degrees lower than in the surrounding areas in the summer months. While the average temperatures of the proposed AVA and the surrounding areas are within a narrow range, the high and low temperatures of the surrounding areas are more extreme than the high and low temperatures of the proposed AVA. Generally, the weather data shows that average spring and summer temperatures of San Pedro and Long Beach, which are farther inland than the proposed AVA, are the warmest of the areas surrounding the proposed AVA.
Table 1—Average Monthly High and Low Temperatures and Extreme Monthly High and Low Temperatures for the Proposed Palos Verdes Peninsula AVA From 2014-2017 in Degrees Fahrenheit
|Month||Average high/low||Extreme high/low|
Table 2—Average Monthly High and Low Temperatures and Extreme Monthly High and Low Temperatures for Surrounding Regions From 2014-2017 in Degrees Fahrenheit
|Month||Location (direction from proposed AVA)|
|Torrance Airport (north)||Redondo Beach (north)||San Pedro (east)||Long Beach (east)|
|Average high/low||Extreme high/low||Average high/low||Extreme high/low||Average high/low||Extreme high/low||Average high/low||Extreme high/low|
Finally, the petition included data on average annual rainfall amounts for locations within the proposed Palos Verdes Peninsula AVA and the surroundings from 2014 to 2017. The data supports the petition's claim that, although the proposed AVA is a dry region, the surrounding inland regions are generally drier than locations within the proposed AVA.
Table 3—Average Monthly Rainfall Amounts for the Proposed Palos Verdes Peninsula AVA From 2014-2017 in Inches
|Month||Rancho Palos Verdes||Palos Verdes Estates||Rolling Hills/Rolling Hills Estates||Average of proposed AVA locations|
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|Average Annual Rainfall||13.08||15.09||13.90||14.03|
Table 4—Average Monthly Rainfall Amounts for Surrounding Regions From 2014-2017 in Inches
|Month||Torrance (north)||Redondo Beach (north)||San Pedro (east)||Long Beach (east)|
|Average Annual Rainfall||10.08||10.40||14.79||12.25|
Summary of Distinguishing Features
In summary, the geology, soils, topography, and climate of the proposed Palos Verdes Peninsula AVA distinguish it from the surrounding regions. The following table, derived from information in the petition, compares the features of the proposed AVA to the features of the surrounding areas.
Table 5—Summary of Characteristics of the Proposed AVA and Surrounding Regions
|Proposed Palos Verdes Peninsula AVA||Hilly topography; clay, adobe, loamy soils with high levels of calcium; south, southeast, and southwest sun exposure; mild temperatures with lower growing season temperatures.|
|North, Northeast, and East of proposed AVA||Flat topography; sandy fertile soils; east-west sun exposure; hot dry climate.|
|South and West of proposed AVA||Pacific Ocean.|
TTB concludes that the petition to establish the approximately 15,900-acre proposed Palos Verdes Peninsula AVA merits consideration and public comment, as invited in this notice of proposed rulemaking.
See the narrative description of the boundary of the petitioned-for AVA in the proposed regulatory text published at the end of this proposed rule.
The petitioner provided the required maps, and they are listed below in the proposed regulatory text. You may also view the proposed Palos Verdes Peninsula AVA boundary on the AVA Map Explorer on the TTB website, at https://www.ttb.gov/wine/ava-map-explorer.
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. For a wine to be labeled with an AVA name, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name, and the wine must meet the other conditions listed in § 4.25(e)(3) of the TTB regulations (27 CFR 4.25(e)(3)). If the wine is not eligible for labeling with an AVA name 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 AVA 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 Start Printed Page 31420a brand name containing an AVA name that was used as a brand name on a label approved before July 7, 1986. See § 4.39(i)(2) of the TTB regulations (27 CFR 4.39(i)(2)) for details.
If TTB establishes this proposed AVA, its name, “Palos Verdes Peninsula AVA,” will be recognized as a name of viticultural significance under § 4.39(i)(3) of the TTB regulations (27 CFR 4.39(i)(3)). The text of the proposed regulation clarifies this point. Consequently, wine bottlers using the name “Palos Verdes Peninsula AVA” in a brand name, including a trademark, or in another label reference as to the origin of the wine, would have to ensure that the product is eligible to use the AVA name as an appellation of origin if this proposed rule is adopted as a final rule. The approval of the proposed Palos Verdes Peninsula AVA would not affect any existing AVA.
TTB invites comments from interested members of the public on whether it should establish the proposed AVA. TTB is also interested in receiving comments on the sufficiency and accuracy of the name, boundary, soils, climate, and other required information submitted in support of the petition. Please provide any available specific information in support of your comments.
Because of the potential impact of the establishment of the proposed Palos Verdes Peninsula AVA on wine labels that include the term “Palos Verdes Peninsula” as discussed above under Impact on Current Wine Labels, TTB is particularly interested in comments regarding whether there will be a conflict between the proposed AVA name and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any anticipated negative economic impact that approval of the proposed AVA will have on an existing viticultural enterprise. TTB is also interested in receiving suggestions for ways to avoid conflicts, for example, by adopting a modified or different name for the AVA.
You may submit comments on this notice by using one of the following three methods:
Federal e-Rulemaking Portal: You may send comments via the online comment form posted with this notice within Docket No. TTB-2020-0003 on “Regulations.gov,” the Federal e-rulemaking portal, at http://www.regulations.gov. A direct link to that docket is available under Notice No. 188 on the TTB website at https://www.ttb.gov/wine/wine-rulemaking.shtml. Supplemental files may be attached to comments submitted via Regulations.gov. For complete instructions on how to use Regulations.gov, visit the site and click on the “Help” tab.
U.S. Mail: You may send comments via postal mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.
Hand Delivery/Courier: You may hand-carry your comments or have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Suite 400, Washington, DC 20005.
Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 188 and include your name and mailing address. Your comments also must be made in English, be legible, and be written in language acceptable for public disclosure. TTB does not acknowledge receipt of comments, and TTB considers all comments as originals.
In your comment, please clearly state if you are commenting for yourself or on behalf of an association, business, or other entity. If you are commenting on behalf of an entity, your comment must include the entity's name, as well as your name and position title. If you comment via Regulations.gov, please enter the entity's name in the “Organization” blank of the online comment form. If you comment via postal mail or hand delivery/courier, please submit your entity's comment on letterhead.
You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing.
All submitted comments and attachments are part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider to be confidential or inappropriate for public disclosure.
TTB will post, and you may view, copies of this notice, selected supporting materials, and any online or mailed comments received about this proposal within Docket No. TTB-2020-0003 on the Federal e-rulemaking portal, Regulations.gov, at http://www.regulations.gov. A direct link to that docket is available on the TTB website at https://www.ttb.gov/wine/wine_rulemaking.shtml under Notice No. 188. You may also reach the relevant docket through the Regulations.gov search page at http://www.regulations.gov. For information on how to use Regulations.gov, click on the site's “Help” tab.
All posted comments will display the commenter's name, organization (if any), city, and State, and, in the case of mailed comments, all address information, including email addresses. TTB may omit voluminous attachments or material that the Bureau considers unsuitable for posting.
You may also view copies of this notice, all related petitions, maps and other supporting materials, and any electronic or mailed comments that TTB receives about this proposal by appointment at the TTB Information Resource Center, 1310 G Street NW, Suite 400, Washington, DC 20005. You may also obtain copies at 20 cents per 8.5- x 11-inch page. Please note that TTB is unable to provide copies of USGS maps or other similarly-sized documents that may be included as part of the AVA petition. Contact TTB's Regulations and Rulings Division at the above address, by email using the web form at https://www.ttb.gov/contact-rrd, or by telephone at 202-453-1039, ext. 175, to schedule an appointment or to request copies of comments or other materials.
Regulatory Flexibility Act
TTB certifies that this proposed regulation, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.
Executive Order 12866
It has been determined that this proposed rule is not a significant regulatory action as defined by Executive Order 12866 of September 30, 1993. Therefore, no regulatory assessment is required.
Caroline Hermann of the Regulations and Rulings Division drafted this notice of proposed rulemaking.
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Proposed Regulatory Amendment
For the reasons discussed in the preamble, TTB proposes to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows:
PART 9—AMERICAN VITICULTURAL AREAS
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1. The authority citation for part 9 continues to read as follows: End Amendment Part
Subpart C—Approved American Viticultural Areas
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2. Subpart C is amended by adding § 9.____to read as follows: End Amendment Part
§ 9.____Palos Verdes Peninsula.
(a) Name. The name of the viticultural area described in this section is “Palos Verdes Peninsula”. For purposes of part 4 of this chapter, “Palos Verdes Peninsula” is a term of viticultural significance.
(b) Approved maps. The three United States Geological Survey (USGS) 1:24,000 scale topographic maps used to determine the boundary of the Palos Verdes Peninsula viticultural area are titled:
(1) Redondo Beach, CA, 1996;
(2) Torrance, Calif., 1964 (photorevised 1981); and
(3) San Pedro Calif., 1964 (photorevised 1981).
(c) Boundary. The Palos Verdes Peninsula viticultural area is located in the southwestern coastal region of Los Angeles County, and contains the cities of Palos Verdes Estates, Rolling Hills, Rolling Hills Estates, and Rancho Palos Verdes, California. The boundary of the Palos Verdes Peninsula viticultural area is as described below:
(1) The beginning point is on the Redondo Beach map at the intersection of the Pacific Ocean and the Torrance corporate boundary at Malaga Cove, R14W/T4S; then
(2) From the beginning point, proceed east, then generally southeast, along the Torrance corporate boundary, crossing onto the Torrance map, to the intersection of the Lomita corporate boundary, R14W/T4S; then
(3) Proceed generally southeast along the Lomita corporate boundary to the intersection with Western Ave, R14W/T4S; then
(4) Proceed south along Western Ave, crossing onto the San Pedro map, to the intersection of the Los Angeles city boundary, R14W/T5S; then
(5) Proceed west, then generally south, then southwest along the Los Angeles city boundary to the intersection with the Pacific Ocean at Palos Verdes Peninsula Park, R14W/T5S; then
(6) Proceed clockwise along the Pacific coastline to return to the beginning point.
End Supplemental Information
Mary G. Ryan,
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade, and Tariff Policy).
[FR Doc. 2020-10363 Filed 5-22-20; 8:45 am]
BILLING CODE 4810-31-P