Proposed Establishment of the Saddle Rock-Malibu Viticultural Area (2003R-110P)

AGENCY:

Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The Alcohol and Tobacco Tax and Trade Bureau proposes to establish the “Saddle Rock-Malibu” viticultural area in Los Angeles County, California. The proposed area consists of approximately 2,090 acres, approximately 5 miles inland from the Pacific Ocean and 32 miles west of downtown Los Angeles. We designate viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase. We invite comments on this proposed addition to our regulations.

DATES:

We must receive written comments on or before March 13, 2006.

ADDRESSES:

You may send comments to any of the following addresses:

• Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, Attn: Notice No. 55, P.O. Box 14412, Washington, DC 20044-4412.
• 202-927-8525 (facsimile).
• nprm@ttb.gov (e-mail).
• http://www.ttb.gov/alcohol/rules/index.htm. An online comment form is posted with this notice on our Web site.
• http://www.regulations.gov (Federal e-rulemaking portal; follow instructions for submitting comments).

You may view copies of this notice, the petition, the appropriate maps, and any comments we receive about this notice by appointment at the TTB Information Resource Center, 1310 G Street, NW., Washington, DC 20220. To make an appointment, call 202-927-2400. You may also access copies of the notice and comments online at http://www.ttb.gov/alcohol/rules/index.htm.

See the Public Participation section of this notice for specific instructions and requirements for submitting comments, and for information on how to request a public hearing.

FOR FURTHER INFORMATION CONTACT:

N.A. Sutton, 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 consumers with adequate information regarding product identity and prohibits the use of misleading information on those labels. The FAA Act also authorizes the Secretary of the Treasury to issue regulations to carry out its provisions. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers these regulations.

Part 4 of the TTB regulations (27 CFR part 4) allows the establishment of definitive viticultural areas and the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) contains the list of approved viticultural areas.

Definition

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region distinguishable by geographical features, the boundaries of which have been recognized and defined in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to its 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—

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

Saddle Rock-Malibu Petition

Lisa A. Semler and Derek Baugh of Semler Malibu Estate Vineyards in Malibu, California, submitted a petition for the establishment of the Saddle Rock-Malibu viticultural area. Located in western Los Angeles County, California, the proposed viticultural area covers approximately 2,090 acres in the Santa Monica Mountains, approximately 32 miles west of downtown Los Angeles and 5 miles inland from the Pacific Ocean. The proposed area lies between 1,700 and 2,236 feet in elevation and has 70 acres of vineyards located between 1,800 and 2,000 feet in elevation.

The primary distinguishing viticultural features of the proposed Saddle Rock-Malibu viticultural area include its high elevation and its location and orientation within the Santa Monica Mountains, which limit its exposure to the cooling Pacific marine inversion layer, according to the petition. As a result, the proposed area receives more solar radiation and is warmer than neighboring areas with more marine influence during the growing season.

The information submitted in support of the petition is summarized below.

Name Evidence

The name of the proposed Saddle Rock-Malibu viticultural area combines the name of a high, prominent rock formation within the proposed area, Saddle Rock, with the name of the surrounding region of western Los Angeles County, Malibu. According to the petition, the “Saddle Rock-Malibu” name provides an accurate geographical description of the proposed viticultural area.

Located in the Santa Monica Mountains near the center of the proposed area, Saddle Rock is a prominent saddle-shaped rock formation that rises 2,000 feet above sea level. Saddle Rock is identified on the USGS Point Dume, California, quadrangle map in section 12, T1S/R19W. Saddle Rock Ranch is located within the proposed viticultural area, and the Saddle Rock Pictograph Site, located on the ranch between Saddle Rock and Mitten Rock, is a National Historic Landmark. The pictographs found at the Saddle Rock site are characteristic of the Chumash Indian art style, according to the National Park Service's National Historic Landmark Web site, which also notes that Saddle and Mitten Rocks served as landmarks for prehistoric and early historic travelers (see http://www.cr.nps.gov/nhl/DOE_dedesignations/saddlerock.htm ).

The Malibu region, which the petition describes as encompassing western Los Angeles County from the ridge line of the Santa Monica Mountains in the north to the Pacific Ocean in the south and from Topanga Canyon in the east to the Ventura County line in the west, surrounds the Saddle Rock area. The Malibu region is shown on the July 2001 American Automobile Association map titled, “Coast & Valley Bay Area to Southern California,” in section G-12. The USGS Geographic Names Information System (GNIS) lists 30 Malibu name uses within Los Angeles County, including streams, beaches, lakes, a reservoir, parks, towns, buildings, and an airport.

TTB's predecessor agency, the Bureau of Alcohol, Tobacco and Firearms (ATF), established the Malibu-Newton Canyon viticultural area (27 CFR 9.152) in T.D. ATF-375, published in the Federal Register (61 FR 29952) on June 13, 1996. T.D. ATF-375 explained that the “Malibu” name originated with the Chumash Indians as “Mala I Boo.” The 1805 Topanga Malibu Sequit land grant of 13,315 acres, also referred to as Rancho Malibu, includes the modern day “Malibu” spelling. In the 1930s, with the construction of the Pacific Coast Highway, the petition states that the Malibu region developed into the nationally known community it is today.

Boundary Evidence

The modern history of the proposed Saddle Rock-Malibu viticultural area dates to the era of Spanish colonial land grants, and the proposed area lies between the historic Topanga Malibu Sequit land grant to the south and the El Conejo land grant to the north. Originally know as “El Malibu,” the petition states that the ranch surrounding the Saddle Rock formation was, by the 1930s, known as Saddle Rock Ranch. Wine grape production within the proposed Saddle Rock-Malibu viticultural area began in 1997, according to the petition, and as of February 2005 the area had 70 vineyard acres in commercial production.

Roughly centered on the Saddle Rock formation, the proposed Saddle Rock-Malibu viticultural area encompasses a suspended valley within the higher elevations of the Santa Monica Mountains. Beginning at Decker Road, the northern boundary of the proposed area follows a portion of the southern boundary of the El Conejo land grant, and then follows the 1,700-foot contour line southeasterly to Mulholland Highway. Steep mountain terrain lies to the east and south of the proposed Saddle Rock-Malibu area, while the Malibu Country Club lies to its west. The petition uses trails, unimproved roads, and secondary roads to delineate the eastern, southern, and western portions of the proposed boundary, according to the written boundary description and USGS Point Dume map provided with the petition.

Distinguishing Features

The proposed Saddle Rock-Malibu viticultural area's high elevations, north-facing slope orientation, and geographical location in the Santa Monica Mountains all combine to create a microclimate with limited marine influence, according to the petition. As compared to surrounding areas with more marine influence, the proposed area receives more growing season sunshine and has warmer temperatures. The proposed area's microclimate, the petition continues, creates a distinctive and unique mountainous grape-growing region.

Topography

The proposed Saddle Rock-Malibu viticultural area, according to the petition, is a geographically suspended valley located largely on the leeward side of the crest of the Santa Monica Mountains. From the mountains' crest, elevations drop about 2,000 feet to the Pacific Ocean in the south and, in the north, about 1,000 feet to the Conejo Valley floor. Within the proposed viticultural area, elevations range from a low of 1,700 feet along much of the boundary line to a 2,236-foot peak along its northeast border, as shown on the Point Dume map. Intermittent streams flow from the higher elevations downward towards the Pacific Ocean or towards larger streams in the Conejo Valley to the north. Several secondary highways, light-duty roads, and a number of unimproved roads and jeep trails criss-cross the proposed Saddle Rock area, as shown on the Point Dume USGS map.

Climate

The unique microclimate of the proposed Saddle Rock-Malibu viticultural area is its most distinguishing viticultural feature, according to the petition, which included a climate report prepared by Fox Weather of Fortuna, California. While the larger Malibu regional climate is typical of southern California with mild, rainy winters and warm, dry summers, the petition states that the proposed Saddle Rock-Malibu viticultural area is climatically affected by its geographical location in the Santa Monica Mountains.

The Pacific Ocean, about 5 miles south of the proposed viticultural area, provides an intrusive marine influence that permeates the Santa Monica Mountains area incrementally, based on elevation, time of year, and other factors, according to Fox Weather. In this region of Los Angeles County, this cool, moist, marine influence funnels northward from the ocean, through the low gaps in the mountain range, reaching various elevations at different times in the growing season. The proposed Saddle Rock-Malibu viticultural area's high elevations, its location on the leeward side of the mountain crest, and its north-facing mountain slopes are significant factors in limiting the extent of the cooling marine influence received within the proposed area, according to the submitted Fox Weather data.

Summers in the Malibu region are hot and dry at the higher elevations above the marine influence and are cooler and less sunny in the lower coastal areas and beaches, according to Fox Weather. A comparison of growing season heat accumulation as measured by degree days shows that the proposed Saddle Rock-Malibu viticultural area, at 4,200 degree days, is somewhat warmer than the near-by Malibu-Newton Canyon viticultural area, which accumulates 4,000 to 4,100 degree days of heat during the growing season. Further inland, toward the San Fernando Valley, temperatures are warmer during the day and cooler at night than along the crest of the Santa Monica Mountains. (A measurement of heat accumulation during the growing season, one degree day accumulates for each degree Fahrenheit that a day's average temperature is above 50 degrees, which is the minimum temperature required for grapevine growth. See “General Viticulture,” by Albert J. Winkler, University of California Press, 1974.)

The temperature and growing condition differences between the proposed Saddle Rock-Malibu area and the established Malibu-Newton Canyon area result from the prevailing wind flows of summer (south through west-northwest directions), according to the submitted Fox Weather data. Located on the leeward side of the Santa Monica Mountains crest, the proposed Saddle Rock-Malibu area receives more sunshine and has higher daytime temperatures than the Malibu-Newton Canyon area, which is located just southeast of the Saddle Rock area on the windward side of the mountain crest and is, therefore, more strongly influenced by the cooling Pacific marine air. Also, the warm, down slope wind that affects the Saddle Rock-Malibu area is less evident in the Malibu-Newton Canyon area.

Soils

Predominant soils of the proposed Saddle Rock-Malibu area include Cropley clay, Gilroy clay loam and rocky clay loam, and Hambright loam, clay loam and rocky clay loam, according to Robert Roche of Roche Vineyard Consulting in his June 5, 2004, letter to the petitioners.

The U.S. Department of Agriculture's Soil Conservation Service (now the Natural Resources Conservation Service) publication, “Soils of the Malibu Area California” (October 1967), states at pages 65 and 66 that Cropley clay is well drained with slow permeability. Cropley clay occupies nearly level to moderately sloping alluvial fans, and bedrock is found more than 5 feet below the surface. According to the 1967 “Soils of the Malibu Area California” publication, Gilroy clays are well drained with slow permeability. They occupy gently rolling to steep upland areas, and bedrock is generally found between 2 feet and 31/3 feet below the surface. Hambright clay loams, described on pages 72 and 73 of the 1967 Malibu area soil publication, are well drained with moderate permeability. They occupy moderately steep to very steep upland areas, and bedrock is found from 2/3 foot to 11/2 feet below the surface.

A comparison of the soils of the proposed Saddle Rock-Malibu viticultural area to those in the existing Malibu-Newton Canyon viticultural area shows distinct soil differences.

The Hambright rocky clay loam and Gilroy clay loam series dominate the proposed Saddle Rock-Malibu area's northeast region, according to Robert Roche of Roche Vineyard Consulting. He explains that although these two series are found throughout California, they contrast to the igneous rock found in the eastern area immediately beyond the proposed Saddle Rock-Malibu viticultural area boundary line. Mr. Roche compares the Malibu-Newton Canyon viticultural area to the proposed Saddle Rock-Malibu viticultural area by describing the Saddle Rock-Malibu area's soils as “deeper with more clay content overall, leading to more water holding capacity.” He explains that the “soil series and descriptions are different enough” between the two areas to conclude that “wine characteristics would be significantly different.” The northeast corner of the proposed Saddle Rock-Malibu area, the petition states, has the most evident differences in soil as compared to the region immediately beyond the boundary line.

The petition, however, emphasizes that soil differences of the proposed Saddle Rock-Malibu area play a lesser role than the climate and physical geography in defining the distinctiveness of the proposed viticultural area.

Boundary Description

See the narrative boundary description of the petitioned-for viticultural area in the proposed regulatory text published at the end of this notice.

Maps

The petitioner provided the required map, and we identify it below in the proposed regulatory text.

Impact on Current Wine Labels

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. If we establish this proposed viticultural area, its name, “Saddle Rock-Malibu,” will be recognized as a name of viticultural significance. Consequently, wine bottlers using “Saddle Rock-Malibu” in a brand name, including a trademark, or in another label reference as to the origin of the wine, will have to ensure that the product is eligible to use the viticultural area's name as an appellation of origin. On the other hand, we do not believe that any single part of the proposed viticultural area name standing alone, such as “Saddle Rock” or “Malibu” would have viticultural significance if the new area is established. Accordingly, the proposed part 9 regulatory text set forth in this document specifies only the full “Saddle Rock-Malibu” name as a term of viticultural significance for purposes of part 4 of the TTB regulations.

For a wine to be eligible to use as an appellation of origin the name of a viticultural area specified in part 9 of the TTB regulations, at least 85 percent of the grapes used to make the wine must have been grown within the area represented by that name, and the wine must meet the other conditions listed in 27 CFR 4.25(a)(3). If the wine is not eligible to use the viticultural area name as an appellation of origin and that name appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the viticultural area name appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Accordingly, if a new label or a previously approved label uses the name “Saddle Rock-Malibu” for a wine that does not meet the 85 percent standard, the new label will not be approved, and the previously approved label will be subject to revocation, upon the effective date of the approval of the Saddle Rock-Malibu viticultural area.

Different rules apply if a wine has a brand name containing a viticultural area name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

Public Participation

Comments Invited

We invite comments from interested members of the public on whether we should establish the proposed viticultural area. We are also interested in receiving comments on the sufficiency and accuracy of the name, climatic, boundary, 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 Saddle Rock-Malibu viticultural area on brand labels that include the words “Saddle Rock-Malibu” as discussed above under Impact on Current Wine Labels, we are particularly interested in comments regarding whether there will be a conflict between the proposed area name and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any negative economic impact that approval of the proposed viticultural area will have on an existing viticultural enterprise. We are also interested in receiving suggestions for ways to avoid any conflicts, for example, by adopting a modified or different name for the viticultural area.

Although TTB believes that only the full name “Saddle Rock-Malibu” should be considered to have viticultural significance upon establishment of the proposed new viticultural area, we also invite comments from those who believe that “Saddle Rock” or “Malibu” standing alone would have viticultural significance upon establishment of the area. Comments in this regard should include documentation or other information supporting the conclusion that use of “Saddle Rock” or “Malibu” on a wine label could cause consumers and vintners to attribute to the wine in question the quality, reputation, or other characteristic of wine made from grapes grown in the proposed Saddle Rock-Malibu viticultural area.

Submitting Comments

Please submit your comments by the closing date shown above in this notice. Your comments must include this notice number and your name and mailing address. Your comments must be legible and written in language acceptable for public disclosure. We do not acknowledge receipt of comments, and we consider all comments as originals. You may submit comments in one of five ways:

• Mail: You may send written comments to TTB at the address listed in the ADDRESSES section.
• Facsimile: You may submit comments by facsimile transmission to 202-927-8525. Faxed comments must—

(1) Be on 8.5 by 11-inch paper;

(2) Contain a legible, written signature; and

(3) Be no more than five pages long. This limitation assures electronic access to our equipment. We will not accept faxed comments that exceed five pages.

• E-mail: You may e-mail comments to nprm@ttb.gov. Comments transmitted by electronic mail must—

(1) Contain your e-mail address;

(2) Reference this notice number on the subject line; and

(3) Be legible when printed on 8.5 by 11-inch paper.

• Online form: We provide a comment form with the online copy of this notice on our Web site at http://www.ttb.gov/alcohol/rules/index.htm. Select the “Send comments via e-mail” link under this notice number.
• Federal e-rulemaking portal: To submit comments to us via the Federal e-rulemaking portal, visit http://www.regulations.gov and follow the instructions for submitting comments.

You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine, in light of all circumstances, whether to hold a public hearing.

Confidentiality

All submitted material is part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider confidential or inappropriate for public disclosure.

Public Disclosure

You may view copies of this notice, the petition, the appropriate maps, and any comments we receive by appointment at the TTB Information Resource Center at 1310 G Street, NW., Washington, DC 20220. You may also obtain copies at 20 cents per 8.5- x 11-inch page. Contact our information specialist at the above address or by telephone at 202-927-2400 to schedule an appointment or to request copies of comments.

For your convenience, we will post this notice and any comments we receive on this proposal on the TTB Web site. We may omit voluminous attachments or material that we consider unsuitable for posting. In all cases, the full comment will be available in the TTB Information Resource Center. To access the online copy of this notice and the posted comments, visit http://www.ttb.gov/alcohol/rules/index.htm. Select the “View Comments” link under this notice number to view the posted comments.

Regulatory Flexibility Act

We certify that this proposed regulation, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

Executive Order 12866

This proposed rule is not a significant regulatory action as defined by Executive Order 12866, 58 FR 51735. Therefore, it requires no regulatory assessment.

Drafting Information

N.A. Sutton of the Regulations and Rulings Division drafted this notice.

List of Subjects in 27 CFR Part 9

• Wine

Proposed Regulatory Amendment

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

PART 9—AMERICAN VITICULTURAL AREAS

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

Authority: 27 U.S.C. 205.

Subpart C—Approved American Viticultural Areas

2. Amend subpart C by adding § 9._ to read as follows: