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 70-acre “Ulupalakua” viticultural area on the island of Maui, Hawaii. The proposed viticultural area is not within 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.
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Comments must be received by January 11, 2021.
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-2020-0014 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, or U.S. mail, and for full details on how to 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.
TTB received a petition from Mark Beaman, winemaker at Maui Wines, proposing the establishment of the “Ulupalakua” AVA. The proposed Ulupalakua AVA is located within the privately-owned, 18,000-acre Ulupalakua Ranch on the island of Maui, Hawaii. The proposed AVA contains approximately 70 acres, with approximately 16 acres of vineyards. The petition notes that an additional 5 acres of land within the proposed AVA have been prepared with trellising and irrigation in preparation for vineyard expansion. Three other parcels averaging two acres each have also been surveyed for future planting within the proposed AVA. Grape varietals grown within the proposed AVA include Gewurztraminer, Chenin Blanc, Viognier, Grenache, Malbec, and Syrah. Although there is no winery within the boundary of the proposed AVA, grapes from the proposed AVA are made into wine at the Maui Wines facility, which is a short distance south of the proposed AVA.
According to the petition, the distinguishing features of the proposed Ulupalakua AVA include its topography, soils, 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 Ulupalakua AVA and its supporting exhibits.
The term “Ulupalakua” translates from the Hawaiian language as “breadfruit ripened on the back.” The petition states that local folklore tells how an ancient Maui chief would request breadfruit, his favorite fruit, be picked on the far eastern side of Maui and brought to his home on the western side of the island. The harvesters would gather unripe fruit, which would ripen by the time they had reached the area that came to be called Ulupalakua.
Although there is a town several miles south of the proposed AVA called Ulupalakua, the petition provided evidence that the name “Ulupalakua” applies to a region larger than just the town. For example, the proposed Ulupalakua AVA is located on the Ulupalakua Ranch, which the petition states was so named in 1922 to honor the land's history. In 1947, after a visit to the region, Hawaiian composer John P. Watkins was inspired to write a song called “Ulupalakua.” 
A scenic overlook just north of the proposed AVA is labeled “Ulupalakua Scenic Overlook” on Google Maps.
A real estate website describes a house for sale north of both the town of Ulupalakua and the proposed AVA as “a real Ulupalakua gem.” 
The petition also Start Printed Page 71728included a Maui guidebook excerpt titled “Keokea through Ulupalakua.” The excerpt states, “[b]etween Grandma's [Coffee House] and the Tedeschi Winery is the larger area called Ulupalakua.” 
TTB notes that Grandma's Coffee House is located in Keokea, north of the proposed AVA, and the Tedeschi Winery, now called Maui Wines, is located just south of the proposed AVA and north of the town of Ulupalakua. Finally, the wine-oriented website Wine-Searcher describes Ulupalakua as “the only wine region of Hawaii” and notes that “Tedeschi Vineyards' Maui winery, part of the Ulupalakua Ranch Site, * * * makes both grape and pineapple wines.” 
The proposed Ulupalakua AVA is located on the southwestern slopes of Mt. Haleakala and encompasses a series of bench lands that are fully surrounded by steeper, more rugged terrain. The proposed northern and southern boundaries approximate ravines, which mark the northern and southern edges of the bench lands. The proposed eastern boundary is marked by a highway, beyond which the elevation rises steeply. The western boundary follows an elevation contour, beyond which slope angles and the number of drainage and erosional features increase.
The distinguishing features of the proposed Ulupalakua AVA are its topography, soils, and climate.
The proposed Ulupalakua AVA contains a series of four distinct benches that are oriented to the southwest. The benches are gently sloped, with slope angles between 0 and 5 percent, and are separated by more steeply sloped erosional ravines. The petition states that the gentle slopes of the benches minimize the risk of erosion and facilitate safe agriculture. The open, less steep terrain also allows vineyards planted on the benches to receive uniform amounts of sunlight, rainfall, and temperature-moderating cloud cover.
The proposed AVA is surrounded in each direction by more steeply sloped, mountainous terrain. To the west and east of the proposed AVA, the slope angles average 17 percent. To the north and south of the proposed AVA, slope angles average about 15 percent. The regions to the north and west also contain more erosional features, such as ravines, that are less suited for viticulture than the benches of the proposed AVA. The region to the south of the proposed AVA features another ravine comprised of rugged exposed volcanic rocks, which are not well-suited for viticulture.
According to the petition, soils within the proposed Ulupalakua AVA formed from the erosion of ancient alkali lava flows from Mt. Haleakala. The most prominent soil within the proposed AVA is Kula loam, which makes up 80 percent of the soil. Kula loam is derived from weathered basic igneous rock and is well-drained and moderately rapid in permeability. The top soil is typically 8 inches deep, with subsoils reaching around 4 feet before hitting bedrock of andesite and basalt. The remaining 20 percent of the soil of the proposed AVA is comprised of the Io series. Soils of this series are silt loams that gradually acquire more clay deeper in the soil. The top soil is about 10 inches, and subsoils reach basalt and andesite bedrock at around 4 feet. The petition states that the soils of the proposed AVA are fertile enough to produce healthy vines and fruit without promoting excessive vine and leaf growth. Additionally, the uniformity of the soils within the proposed AVA results in a greater consistency in growing conditions for vineyards than can be found in the surrounding regions.
To the south of the proposed Ulupalakua AVA, the soil changes to Kula very rocky loam. This soil consist of very large volcanic rocks and boulders which would not be suitable for vineyards. To the west is a continuation of the same Kula loam that is found in the proposed AVA. However, the petition notes that the top soil in this region has been scoured by erosion and thus would be thinner and not as suitable for viticulture as the Kula loam soils of the proposed AVA. The petition did not provide information on the soils to the north and east of the proposed AVA.
The petition states that although most people would consider Hawaii to be hot, the proposed Ulupalakua AVA is cool due to its elevation and proximity to the 10,000-foot Mt. Haleakala. The proposed AVA sits at elevations between 1,560 and 1,850 feet above sea level. The petition states that temperatures in Maui typically drop 3.5 degrees Fahrenheit for every 1,000 feet of elevation gained.
A 2003 article about Maui Wines notes that “[m]ornings and late afternoons tend to be cool at these elevations * * *.” 
The petition notes that the mild temperatures of the region are even described in John Watkin's song “Ulupalakua”, which contains the line, “[f]amous is Ulupalakua, the pangs of cold evening air * * *.” 
The petition provided information on the average monthly high and low temperatures, as well as the monthly highest and lowest recorded temperatures for the proposed AVA and the region to the north.
Temperature data was not provided for the regions to the east, west, or south. The information is summarized in the following tables.
Table 1—Average Monthly High and Low Temperatures in Degrees Fahrenheit (F)
|Month||Proposed Ulupalakua AVA||Keokea (North)|
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Table 2—Maximum Monthly High and Low Recorded Temperatures in Degrees F
|Month||Proposed Ulupalakua AVA||Keokea (North)|
The data shows that the proposed Ulupalakua AVA has generally mild temperatures, with a 20 degree or less difference between the average high and average low temperatures for any given month. The average monthly low temperatures and lowest recorded monthly temperatures within the proposed AVA do not drop below 50 degrees F, which is generally considered to be the minimum temperature required for vine growth and fruit development.
By contrast, Keokea, which is located to the north of the proposed AVA and at higher elevations, recorded substantially lower temperatures than the proposed AVA for each category, including temperatures below 50 degrees F. According to the petition, the lack of extremes in temperatures within the proposed AVA protect ripening fruit against sunburn and heat stress.
The petition also included information on the average monthly precipitation amounts for the proposed Ulupalakua AVA and the regions to the east and west. Precipitation amounts were not provided for the regions to the south and north. The information is summarized in the following table.
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Table 3—Average Precipitation Amounts in Inches 11
AVA||Makena Bay (West)||Polipoli Springs
The data in the table shows that the proposed Ulupalakua AVA receives substantially more precipitation than the region to the west and less than the region to the east. The petition notes that the differences in rainfall are due to the orographic effects of Mt. Haleakala. As the moist air moves from east to west over the mountain, locations at higher elevations, such as Polipoli Springs, receive more rainfall than regions at lower elevations, such as Makena Bay on the coast. Ulupalakua, which is located at elevations higher than Makena Bay and lower than Polipoli Springs, receives almost twice as much annual rainfall as the lower location and over half as much as the higher location. The petition states that the lower rainfall amounts within the proposed AVA, particularly during the harvest season of June through August, reduce the risk of mildew and rot.
Summary of Distinguishing Features
In summary, the topography, soils, and climate of the proposed Ulupalakua AVA distinguish it from the surrounding regions. The proposed Ulupalakua AVA is characterized by a series of four gently sloped benches comprised of Kula loam and Io soils. Average temperatures are moderate and do not drop below 50 degrees F. Annual precipitation amounts within the proposed AVA are moderate, averaging 30.7 inches.
To the north of the proposed AVA, the slopes are steeper and average about 15 percent. Average temperatures are cooler than within the proposed AVA and do drop below 50 degrees F. To the east of the proposed AVA, on the higher elevations of Mt. Haleakala, the slope angles average 17 percent. Annual precipitation amounts are significantly higher, averaging 50.6 inches. To the south of the proposed AVA, slope angles average about 15 percent, and the soil changes to Kula very rocky loam, which consists of large volcanic rocks and boulders. To the west of the proposed AVA, slope angles average 17 percent. Soils to the west of the proposed AVA are a continuation of the Kula loam soils, but much of the top soil has been scoured by erosion. Annual rainfall amounts are lower than within the proposed AVA, averaging 16.1 inches.
TTB concludes that the petition to establish the 70-acre Ulupalakua 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 Ulupalakua 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 a 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, “Ulupalakua,” 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 “Ulupalakua” 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.
TTB invites comments from interested members of the public on whether it should establish the proposed Ulupalakua AVA. TTB is also interested in receiving comments on the sufficiency and accuracy of the name, boundary, soils, climate, topography, 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 Ulupalakua AVA on wine labels that include the term “Ulupalakua” 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 proposed AVA.
You may submit comments on this notice by using one of the following two methods:
Federal e-Rulemaking Portal: You may send comments via the online comment form posted with this notice within Docket No. TTB-2020-0014 on “Regulations.gov,” the Federal e-rulemaking portal, at https://www.regulations.gov. A direct link to that docket is available under Notice No. 199 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 at the top of the page.
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.
Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 199 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 Start Printed Page 71731comment 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-2020-0014 on the Federal e-rulemaking portal, Regulations.gov, at https://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. 199. You may also reach the relevant docket through the Regulations.gov search page at https://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 obtain copies of this proposed rule, all related petitions, maps and other supporting materials, and any electronic or mailed comments that TTB receives about this proposal at 20 cents per 8.5- x 11-inch page. Please note that TTB is unable to provide copies of USGS maps or any similarly-sized documents that may be included as part of the AVA petition. Contact TTB's Regulations and Rulings Division by email using the web form at https://www.ttb.gov/contact-rrd, or by telephone at 202-453-1039, ext. 175, 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.
Karen A. Thornton 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
(a) Name. The name of the viticultural area described in this section is “Ulupalakua”. For purposes of part 4 of this chapter, “Ulupalakua” is a term of viticultural significance.
(b) Approved maps. The United States Geological Survey (USGS) 1:24,000 scale topographic map used to determine the boundary of the Ulupalakua viticultural area is titled “Makena, Hawaii, 1983.”
(c) Boundary. The Ulupalakua viticultural area is located on the island of Maui, in Hawaii. The boundary of the Ulupalakua viticultural area is as described below:
(1) The beginning point is on the Makena, Hawaii, map at the intersection of an unnamed, light-duty road known locally as State Highway 37 and the northernmost unnamed, unimproved road in the Palauea land division (a land division is known as an “ahupua'a” in Hawaii). From the beginning point, proceed south along State Highway 37 to the next unnamed, unimproved road in the Palauea land division; then
(2) Proceed west in a straight line for approximately 2,700 feet to the 1,560-foot elevation contour; then
(3) Proceed north along the 1,560-foot elevation contour to the northern boundary of the Palauea land division; then
(4) Proceed east along the northern boundary of the Palauea land division to the 1,800-foot elevation contour; then
(5) Proceed south along the 1,800-foot elevation contour for approximately 400 feet to the point where the 1,800-foot elevation contour intersects with an imaginary line drawn from the terminus of the northernmost unnamed, unimproved road in the Palauea land division; then
(6) Proceed east in a straight line for approximately 800 feet, returning to the beginning point.
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Signed: August 14, 2020.
Mary G. Ryan,
Approved: October 9, 2020.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2020-24143 Filed 11-9-20; 8:45 am]
BILLING CODE 4810-31-P