38248 Federal Register / Vol. 68, No. 124 / Friday, June 27, 2003 / Proposed Rules

FOR FURTHER INFORMATION CONTACT: hearing is scheduled, notice of the date, SUMMARY: The Alcohol and Tobacco Tax Concerning the proposed regulations, time, and place for the hearing will be and Trade Bureau proposes to establish Martin Huck, (202) 622–7750; published in the Federal Register. the ‘‘McMinnville’’ viticultural area in concerning submissions of comments Yamhill County, Oregon, within the Drafting Information and/or requests for a public hearing, existing Willamette Valley viticultural Treena Garrett, (202) 622–7180 (not toll- The principal author of these area. The proposed viticultural area free numbers). regulations is Martin Huck, Office of would include only the land at and SUPPLEMENTARY INFORMATION: Associate Chief Counsel (Corporate). between the elevations of 200 feet and However, other personnel from the IRS 800 feet within the described Background and Explanation of and Treasury Department participated boundaries. We propose to amend the Provisions in their development. regulations to include this area, and we Temporary regulations in the Rules List of Subjects in 26 CFR Part 1 invite comments on this proposal, and Regulations section of this issue of especially from those whose brand the Federal Register amend the Income Income taxes, Reporting and names may be affected by this proposal. recordkeeping requirements. Tax Regulations (26 CFR part 1) relating DATE: We must receive written to section 382. The temporary Proposed Amendments to the comments by August 26, 2003. regulations provide rules for Regulations determining whether a loss corporation ADDRESSES: You may send comments to Accordingly, 26 CFR part 1 is any of the following addresses— has an ownership change where a • qualified trust described in section amended as follows: Chief, Regulations and Procedures 401(a) distributes an ownership interest Division, Alcohol and Tobacco Tax and in an entity. The text of those PART 1—INCOME TAXES Trade Bureau, P.O. Box 50221, Washington, DC 20091–0221 (Attn: regulations also serves as the text of Paragraph 1. The authority citation Notice No. 12); these proposed regulations. The for part 1 is amended by adding an entry • preamble to the temporary regulations 202–927–8525 (facsimile); in numerical order to read in part as • explains the amendments and these [email protected] (e-mail); or follows: • proposed regulations. http://www.ttb.gov (An online Authority: 26 U.S.C. 7805 * * * comment form is posted with this Special Analyses Section 1.382–10 is also issued under Notice on our Web site). It has been determined that this notice 26 U.S.C. 382(m). * * * You may view copies of this notice of proposed rulemaking is not a Par. 2. Section 1.382–1 is amended by and any comments received at http:// significant regulatory action as defined revising the entry for § 1.382–10 to read www.ttb.gov/alcohol/rules/index.htm or in Executive Order 12866. Therefore, a as follows: by appointment at the ATF Reference regulatory assessment is not required. It Library, 650 Massachusetts Avenue, is hereby certified that these proposed § 1.382–10 Special rules for determining NW., Washington, DC 20226; phone time and manner of acquisition of an 202–927–7890. regulations will not have a significant interest in a loss corporation (temporary). economic impact on a substantial See the Public Participation section of number of small entities. This Par. 3. Section 1.382–10 is added to this Notice for specific instructions and certification is based on the fact that the read as follows: requirements, as well as information on regulations provide relief to qualifying § 1.382–10 Special rules for determining how to request a public hearing. loss corporations that might be affected time and manner of acquisition of an FOR FURTHER INFORMATION CONTACT: by an unintended consequence of the interest in a loss corporation (temporary). Jennifer Berry, Alcohol and Tobacco operation of the statute. Therefore, a [The text of proposed § 1.382–10 is Tax and Trade Bureau, Regulations and Regulatory Flexibility Analysis under the same as the text of § 1.382–10T Procedures Division, P.O. Box 18152, the Regulatory Flexibility Act (5 U.S.C. published elsewhere in this issue of the Roanoke, VA 24014; telephone 540– chapter 6) is not required. Nevertheless, Federal Register]. 344–9333. the IRS and Treasury request comments SUPPLEMENTARY INFORMATION: from small entities that believe they Robert E. Wenzel, might be adversely affected by these Deputy Commissioner of Internal Revenue. Background on Viticultural Areas [FR Doc. 03–16230 Filed 6–26–03; 8:45 am] regulations. Pursuant to section 7805(f) What Is TTB’s Authority To Establish a of the Code, this notice of proposed BILLING CODE 4830–01–P Viticultural Area? rulemaking will be submitted to the Chief Counsel for Advocacy of the Small The Federal Alcohol Administration Business Administration for comment DEPARTMENT OF THE TREASURY Act (FAA Act) at 27 U.S.C. 205(e) on their impact. requires that alcohol beverage labels Alcohol and Tobacco Tax and Trade provide the consumer with adequate Comments and Requests for a Public Bureau information regarding a product’s Hearing identity, while prohibiting the use of Before these proposed regulations are 27 CFR Part 9 deceptive information on such labels. adopted as final regulations, The FAA Act also authorizes the [Notice No. 12] consideration will be given to any Secretary of the Treasury to issue written comments (a signed original and RIN 1512–AC78 regulations to carry out its provisions. eight (8) copies) or electronic comments Regulations in 27 CFR Part 4, Labeling that are submitted timely to the IRS. All Proposed McMinnville Viticultural Area and Advertising of Wine, allow the comments will be available for public (2002R–217P) establishment of definitive viticultural inspection and copying. A public AGENCY: Alcohol and Tobacco Tax and areas and the use of their names as hearing may be scheduled if requested Trade Bureau (TTB), Treasury. appellations of origin on wine labels in writing by any person that timely and in wine advertisements. Title 27 ACTION: Notice of proposed rulemaking. submits written comments. If a public CFR Part 9, American Viticultural

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Areas, contains the list of approved requirements listed in 27 CFR Chamber of Commerce; the other two viticultural areas. 4.25a(e)(3). are from travel sites: If the wine is not eligible for the • ‘‘Nestled in the heart of Oregon’s What Is the Definition of a Viticultural appellation, you must change the brand beautiful wine country, McMinnville is Area? name and obtain approval of a new Oregon at its best.’’ (See http:// Title 27 CFR 4.25a(e)(1) defines an label. Different rules apply if the brand www.mcminnville.org/welcome.html.) American viticultural area as a name in question is on a label approved • ‘‘Before gaining its glamorous delimited grape-growing region prior to July 7, 1986. See 27 CFR 4.39(i) reputation as a wine-producing center, distinguishable by geographic features for details. Additionally, if you use the McMinnville was known as the home of whose boundaries have been delineated viticultural area name on a wine label Linfield College * * *.’’ (See http:// in subpart C of part 9. The in a context other than appellation of www.ohwy.com/or/m/mcminnvi.htm.) • establishment of viticultural areas origin, the general prohibitions against ‘‘McMinnville is known for its allows the identification of regions misleading representation in part 4 of picturesque vineyards that dot the where a given quality, reputation, or the regulations apply. foothills. Located in Yamhill County, other characteristics of the wine is the oldest county in Oregon, essentially attributable to its geographic McMinnville Petition McMinnville is often compared to the origin. We believe that the Mr. Kevin Byrd, of Youngberg Hill wine regions of France and Germany.’’ establishment of viticultural areas Vineyards, McMinnville, Oregon, has (See http://www.el.com/to/ allows wineries to describe more petitioned TTB for the establishment of mcminnville/). accurately the origin of their wines to a viticultural area to be called In addition, the petitioner notes that consumers and helps consumers ‘‘McMinnville.’’ The proposed McMinnville is the home of the identify the wines they purchase. viticultural area is located International Pinot Noir Celebration, Establishment of a viticultural area is approximately 40 miles southwest of held every July since 1987 at the neither an approval nor endorsement by Portland, Oregon, just west of the city of Linfield College campus. TTB of the wine produced there. McMinnville and north of the village of What Boundary Evidence Has Been Sheridan in Yamhill County. The What Is Required To Establish a Provided? proposed area is also entirely within the Viticultural Area? existing Willamette Valley viticultural The boundaries for the proposed Section 4.25(e)(2) outlines the area described in 27 CFR 9.90. McMinnville viticultural area are based procedure for proposing an American According to the petitioner, there are 14 primarily on elevation. The proposed viticultural area. Any interested person wineries and 523 acres planted to vines boundaries encompass Gopher Valley, may petition TTB to establish a grape within the proposed McMinnville Dupee Valley, Muddy Valley, and the growing region as a viticultural area. viticultural area. surrounding hills, all geographically The petition must include: part of the eastern foothills of the Coast • Evidence that the proposed What Name Evidence Has Been Range. However, within the boundaries viticultural area is locally and/or Provided? described in the proposed regulation nationally known by the name specified The proposed viticultural area is section of this notice, only land at and in the petition; named for the city of McMinnville, the between 200 and 800 feet of elevation is • Historical or current evidence that county seat of Yamhill County, which is included in the proposed viticultural the boundaries of the proposed located at the northeastern border of the area. According to the petitioner, those viticultural area are as specified in the proposed viticultural area. Mr. Byrd elevations are distinctive in their soils petition; states that the proposed area is and climate when compared to other • Evidence relating to geographical considered part of greater McMinnville parts of the Willamette Valley. The features, including growing conditions, and notes that most of the wineries petitioner states that below the 200 foot such as climate, soil, elevation, physical within the proposed boundaries have elevation line the Willamette silt-based features, etc., that distinguish the McMinnville addresses. He provided soils create growing conditions proposed area from surrounding areas; historical information on the name substantially different from those in the • A description of the specific ‘‘McMinnville’’ from ‘‘Oregon proposed area. The greater depth, water boundaries of the proposed viticultural Geographic Names’’ by Lewis L. holding capacity, and fertility of these area, based on features reflected on McArthur (Oregon Historical Society, lower elevation soils extends the maps approved by the United States 1982). Mr. McArthur stated: vegetative period of the vine and delays Geological Survey (USGS); and ripening of vineyards planted at those • A copy or copies of the appropriate McMinnville was named by William T. elevations. The soils of the proposed Newby, who was born in McMinnville, USGS-approved map(s) with the Warren County, Tennessee, in 1820, and area are described in greater detail in boundaries prominently marked. came to Oregon in 1843. He settled near the the following section. present site of McMinnville early in 1844, In addition, the petitioner asserts that What Impact Will This Have on Current elevation greatly affects the Labels? and in 1853 built a grist mill and founded the town. In 1854 he started a store. He was microclimate of the proposed If this proposed viticultural area is county assessor in 1848 and state senator in viticultural area. He notes that established, bottlers who use brand 1870. McMinville post office was established elevations below 200 feet are more names like ‘‘McMinnville’’ may be on May 29, 1855, with Elbrige G. Edson prone to frost when compared to the affected. If you fall in this category, you postmaster. The name was later changed to higher elevations. On the other hand, must ensure that your existing products the present spelling. elevations above 800 feet experience far are eligible to use the name of the According to the petitioner, fewer degree growing days than lower viticultural area as an appellation of McMinnville is known to consumers as elevations, which prevents the reliable origin. For a wine to be eligible, at least a wine producing area. To demonstrate ripening of wine grapes. 85 percent of the grapes in the wine this, he submitted several quotes from The petitioner’s proposal is unusual must have been grown within the Internet sites. The first quote is from the in that the proposed boundaries viticultural area and meet the other Web site of the Greater McMinnville encompass land that will not be part of

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the proposed viticultural area. Land much cooler temperatures and greater petitioner asserts that significant below 200 feet and above 800 feet will rainfall. variations in these component materials be excluded due to soil and climate can result in grapes with unique flavor Soils and Geology differences with land between those and development characteristics. elevations. A precedent does exist for According to the petitioner, the soils Boundary Description such a viticultural area. Within the and geology of the proposed boundaries of the Mendocino Ridge McMinnville viticultural area are See the narrative boundary viticultural area, only land at and above different from those in surrounding description of the petitioned viticultural the 1200 foot elevation line is included areas, thus providing distinctive area in the proposed regulation in the viticultural area (See 27 CFR growing conditions for the area’s grapes. published near the end of this notice. 9.158 and T.D. ATF–392 at 62 FR 55512, To demonstrate the soil differences, the Public Participation October 27, 1997). However, because of petitioner submitted soil survey maps the unusual nature of such boundaries, published by the Soil Conservation Comments Sought Service of the U.S. Department of TTB is particularly interested in public We request comments from anyone comments on the proposed Agriculture. The soils of the interested. Please support your McMinnville boundaries. Specifically, McMinnville area are characterized by comments with specific information does the evidence regarding elevation several types of shallow (less than 40 about the proposed area’s name, support the exclusion of some of the inches deep) silty clay and clay loams growing conditions, or boundaries. Due land lying within the proposed area’s that exhibit low total available moisture. to the unusual nature of the proposed outer boundaries? These soils, primarily Yamhill, Nekia, Peavine, Willakenzie, and Hazelair, all boundaries, we are particularly What Evidence of Distinctive have a typical depth to base materials of interested in comments regarding the Geographical Features Has Been between 20 and 40 inches, while the proposed area’s elevation limitations. Provided? average total available moisture for All comments must include your name The petitioner asserts that the these soils ranges from 4.8 to 6.3 inches. and mailing address, reference this geographic and climatic features of the To the west and northwest of the notice number, and be legible and proposed McMinnville viticultural area proposed area, the petition notes, the written in language acceptable for distinguish it from surrounding areas of soils transition to those of the Olyic and public disclosure. the Willamette Valley. Hembre associations. While these soils Although we do not acknowledge are also shallow silty clay and clay receipt, we will consider your Temperature and Precipitation loams, they tend to be acidic. To the comments if we receive them on or According to the petitioner, the north of the area (within the proposed before the closing date. We will proposed viticultural area’s location just Yamhill-Carlton viticultural area), a consider comments received after the east of the Coast Range and northeast of greater percentage of the soils are of the closing date if we can. We regard all the Van Duzer Corridor greatly affects Woodburn-Willamette association. comments as originals. its growing season temperatures and These soils are of greater depth (60 Confidentiality precipitation. He submitted temperature inches) and have a higher total available and precipitation data from the Oregon moisture (12 to 13 inches). The We do not recognize any submitted Climate Service comparing McMinnville Woodburn-Willamette soils also material as confidential. All comments with two other sites in the western predominate to the south and southwest are part of the public record and subject Willamette Valley—Dallas, Oregon, to of the proposed area. to disclosure. Do not enclose in your the south of McMinnville, and Scoggins The petitioner states that the most comments any material you consider Dam, Oregon, to the north. This data distinctive geological feature within the confidential or inappropriate for shows that McMinnville is, on average, proposed area is the Nestucca disclosure. warmer and drier than Dallas and Formation, a 2000-foot thick bedrock Submitting Comments Scoggins Dam. McMinnville averaged formation that extends west from the 2178 degree growing days above 50 city of McMinnville to the slopes of the You may submit written comments in degrees during the growing season for Coast Range. This formation contains any of four ways: the years 1971–2000, with average marine sandstone and mudstone with • By mail: You may send written yearly precipitation of 41.66 inches. intrusions of marine basalts. These comments to TTB at the address listed Dallas, for the same period, averaged intrusions differentiate the formation in the ADDRESSES section. 2116 degree growing days above 50 from the pure basaltic parent materials • By facsimile: You may submit degrees, with precipitation of 49.13 found under the Red Hills and comments by facsimile transmission to inches. Scoggins Dam, for the period, Chehalem Mountains and the pure 202–927–8525. Faxed comments must— averaged 1974 degree growing days marine sedimentary materials of the (1) Be on 8.5 by 11 inch paper; above 50 degrees, with precipitation of Yamhill Formation found on the valley (2) Contain a legible, written 50.68 inches. floor. signature; and The petitioner explains that cooler Because of these marine basalts, the (3) Be five or less pages long. This and wetter conditions south of petition notes that the ground water limitation assures electronic access to McMinnville are due to the Van Duzer composition of the McMinnville area is our equipment. We will not accept Corridor, a pass through Oregon’s Coast significantly different from that in areas faxed comments that exceed five pages. Range. Cool, wet marine air flows to the east. According to data obtained • By e-mail: You may e-mail inland through this pass, causing cooler, from Oregon State University’s Drinking comments to [email protected]. Comments wetter growing conditions in areas east Water Program, it contains greater transmitted by electronic-mail must— of the pass. North and west of dissolved sodium (66 mg/L vs. 16 mg/ (1) Contain your e-mail address; McMinnville, at Scoggins Dam for L), less dissolved potassium (.9 mg/L vs. (2) Reference this notice number on example, the petition states that the 3.8 mg/L), and greater dissolved boron the subject line; and land makes a rapid transition to the (230 ug/L vs. 20 ug/L) than the ground (3) Be legible when printed on 8.5 by slopes of the Coast Range, which has water east of McMinnville. The 11 inch paper.

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• By online form: We provide a Drafting Information intersection with the 800-foot contour comment form with the online copy of The principal author of this document line in section 18, T.4.S., R.5.W, on the this notice on our Web site at http:// is Jennifer Berry, Regulations and Muddy Valley map; www.ttb.gov/alcohol/rules/index.htm. Procedures Division, Alcohol and (5) Starting on the west bank of Gill You may also write to the Tobacco Tax and Trade Bureau. Creek, follow the meandering 800-foot Administrator before the comment contour line in a westerly direction, closing date to ask for a public hearing. List of Subjects in 27 CFR Part 9 crossing Gopher Valley Road in section The Administrator reserves the right to Wine. 14, T.4.S., R.6.W. on the Stony determine, in light of all circumstances, Mountain map, and continue to follow whether a public hearing will be held. Authority and Issuance the 800-foot contour line as it meanders back and forth four times between the Disclosure For the reasons discussed in the preamble, we propose to amend Title Stony Mountain map and the Muddy You may view copies of the petition, 27, Code of Federal Regulations, Part 9, Valley map in section 24, T.4.S., R.6.W.; the proposed regulation, the appropriate American Viticultural Areas, as follows: (6) Continue to follow the meandering maps, and any comments received by 800-foot contour line in a southwesterly appointment at the ATF Reference PART 9—AMERICAN VITICULTURAL direction, crossing Rock Creek Road in Library, 650 Massachusetts Avenue, AREAS section 27, T.4.S., R.6.W. on the Stony NW., Washington, DC 20226. You may Mountain map, to the 800-foot contour 1. The authority citation for part 9 also obtain copies at 20 cents per 8.5 x line’s intersection with Rock Creek Road continues to read as follows: 11-inch page. Contact the ATF Librarian in section 46, T.5.S, R.6.W., on the at the above address or telephone 202– Authority: 27 U.S.C. 205. Stony Mountain map; 927–7890 to schedule an appointment 2. Subpart C is amended by adding (7) Then follow Rock Creek Road or to request copies of comments. § 9.ll to read as follows: south to its intersection with the For your convenience, we will post Salmon River Highway on the Sheridan this notice and the comments received Subpart C—Approved American map; on the TTB Web site. All posted Viticultural Areas (8) Follow the Salmon River Highway comments will show the names of east through the village of Sheridan and commenters but not street addresses, § 9.ll McMinnville. then northeast through the Ballston telephone numbers, or e-mail addresses. (a) Name. The name of the viticultural map, to its intersection with Oldsville We may also omit voluminous area described in this section is Road on the Muddy Valley map; attachments or material that we ‘‘McMinnville’’. (9) Follow Oldsville Road northeast to consider unsuitable for posting. In all (b) Approved Maps. The appropriate its intersection with McCabe Chapel cases, the full comment will be available maps for determining the boundaries of Road (unnamed on the map); in the ATF Reference Library. To access the McMinnville viticultural area are (10) Follow McCabe Chapel Road the online copy of this notice and any five United States Geological Survey west then north to its intersection with posted comments, see this notice (USGS) topographic maps, scale Masonville Road; number at http://www.ttb.gov/alcohol/ 1:24,000: (11) Follow Masonville Road east to rules/index.htm. (1) McMinnville, OR, 1957, its intersection with Old Sheridan Road photorevised 1970; on the McMinnville map; Regulatory Analyses and Notices (2) Muddy Valley, OR, 1979; (12) Follow Old Sheridan Road (3) Stony Mountain, OR, 1979; Paperwork Reduction Act northeast to its intersection with (4) Sheridan, OR, 1956, photorevised Peavine Road; We propose no requirement to collect 1970; and (13) Follow Peavine Road northwest information. Therefore, the provisions (5) Ballston, OR, 1956, photorevised for approximately 800 feet to its of the Paperwork Reduction Act of 1995, 1970. intersection with Hill Road; and 44 U.S.C. 3507, and its implementing (c) Boundary. The McMinnville (14) Follow Hill Road north to its regulations, 5 CFR part 1320, do not viticultural area is located in Yamhill intersection with Baker Creek Road and apply. County, Oregon, and is entirely within the beginning point. the Willamette Valley viticultural area Regulatory Flexibility Act (27 CFR 9.90). Within the boundary Signed: June 19, 2003. We certify that this proposed description that follows, the John J. Manfreda, regulation, if adopted, will not have a McMinnville viticultural area Acting Administrator. significant economic impact on a encompasses only that land at and [FR Doc. 03–16325 Filed 6–26–03; 8:45 am] substantial number of small entities. between the 200 foot and 800 foot BILLING CODE 4810–13–P This proposed regulation imposes no elevation lines. new reporting, recordkeeping, or other (1) From the point of beginning on the administrative requirement. Any benefit McMinnville, OR map in section 18, DEPARTMENT OF THE TREASURY derived from the use of a viticultural T.4.S, R.4.W, at the intersection of Baker area name is the result of a proprietor’s Creek Road and Hill Road, follow Baker Alcohol and Tobacco Tax and Trade efforts and consumer acceptance of Creek Road west to its intersection with Bureau wines from that area. Therefore, no Power Plant Hill Road (known locally as 27 CFR Part 9 regulatory flexibility analysis is Power House Hill Road) on the Muddy required. Valley map; [Notice No. 11] (2) Then proceed southwest on Power Executive Order 12866 RIN 1512–AC81 Plant Hill Road to its intersection with This proposed rule is not a significant Peavine Road; Proposed Columbia Gorge Viticultural regulatory action as defined by (3) Follow Peavine Road northwest to Area (2002R–103P) Executive Order 12866, 58 FR 51735. its intersection with Gill Creek; Therefore, it requires no regulatory (4) Follow Gill Creek in a AGENCY: Alcohol and Tobacco Tax and assessment. southwesterly direction to its Trade Bureau (TTB), Treasury.

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