SUPPLEMENTARY INFORMATION:

In accordance with 5 U.S.C. 553(b)(4), a summary of this rule may be found at www.regulations.gov/​docket/​TTB-2026-0006.

Background on Viticultural Areas

TTB Authority

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 provisions pursuant to section 1111(d) of the Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d). In addition, the Secretary has delegated certain administrative and enforcement authorities to TTB through Treasury Order 120-01.

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.

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 having distinguishing features as described in part 9 of the regulations and, once approved, a name and a delineated boundary codified 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.

Requirements

Section 4.25(e)(2) of the TTB regulations (27 CFR 4.25(e)(2)) outlines the procedure for proposing an AVA and allows any interested party to petition TTB to establish a grape-growing region as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) ( printed page 52599) prescribes standards for petitions to establish or modify 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 that affect 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 boundary;
• 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;
• If the proposed AVA is to be established within, or overlapping, an existing AVA, an explanation that both identifies the attributes of the proposed AVA that are consistent with the existing AVA and explains how the proposed AVA is sufficiently distinct from the existing AVA and therefore appropriate for separate recognition; and
• A detailed narrative description of the proposed AVA boundary based on USGS map markings.

Petition To Establish the Rancho Santa Fe AVA

TTB received a petition on behalf of the Rancho Santa Fe Vinters & Growers Association, proposing to establish the 15,827-acre “Rancho Santa Fe” AVA. The proposed AVA is located in San Diego County, California, and is entirely within the existing South Coast AVA (27 CFR 9.104). Within the proposed AVA, there are approximately 30 commercial vineyards. The distinguishing features of the proposed Rancho Santa Fe AVA are its climate and soils. The petition also notes that eucalyptus groves and zoning laws affect viticulture in the proposed AVA and help distinguish it from surrounding regions.

Proposed Rancho Santa Fe AVA

Name Evidence

The proposed Rancho Santa Fe AVA takes its name from the community of Rancho Santa Fe, which is located within the proposed AVA. According to the petition, the community received its name in 1906, when the Santa Fe Railway purchased all the lands within the former San Dieguito Land Grant to grow timber for railway ties. Although the timber production plan ultimately failed, the railway turned the land into a subdivision called Rancho Santa Fe and encouraged growing fruits, vegetables, and flowers that could be shipped to East Coast markets via the railroad. After the Santa Fe Railway gave up its control of the land, the Santa Fe Covenant was formed to ensure the orderly development of the community and the “retention of the ranch's character.” Today, the Santa Fe Covenant still controls development within the community.

The petition included other examples of the use of the “Rancho Santa Fe” name to describe the proposed AVA. For example, the Rancho Santa Fe Branch of the San Diego County Library, the Rancho Santa Fe Fire Protection District, the Rancho Santa Fe Elementary School, and the Rancho Santa Fe Middle School all serve people within the proposed AVA. Two charitable organizations within the proposed AVA are the Rancho Santa Fe Foundation and the Rancho Santa Fe Women's Fund. Businesses within the proposed AVA include the Rancho Santa Fe Golf Club and the Inn at Rancho Santa Fe.

Boundary Evidence

The proposed Rancho Santa Fe AVA is located in coastal San Diego County, California, approximately 25 miles north of downtown San Diego. According to the petition, the Pacific Ocean essentially forms the western boundary. The petitioners, however, chose to use Interstate 5 as the western boundary instead, because the small strip of land between the highway and the ocean is highly urbanized with little or no room for commercial viticulture. The proposed northern boundary primarily follows Escondido Creek to separate the proposed AVA from the city of Encinitas, which is highly urbanized and unsuitable for commercial viticulture. The proposed eastern boundary follows the San Dieguito River and a series of roads to separate the proposed AVA from regions with higher elevations and rising temperatures. The eastern boundary also approximates the eastern extent of the 92067 postal code, which is the postal code for the town of Rancho Santa Fe. The proposed southern boundary also follows the San Dieguito River Valley and separates the proposed AVA from the highly urbanized city of San Diego.

Distinguishing Features

According to the petition, the distinguishing features of the proposed Rancho Santa Fe AVA are its climate and soils. Additional aspects related to the effects of local by-laws and the presence of eucalyptus trees on viticulture are also discussed.

Climate

The petition states that the proposed Rancho Santa Fe AVA has a mild, consistent climate, with mild year-round temperatures and a balance of sunshine and coastal cloud coverage. The petition includes information on the annual average maximum and minimum temperatures, average annual growing degree day ^[1] (GDD) accumulations, average annual precipitation amounts, cloud cover and fog, and wind speeds for the proposed AVA and surrounding regions.^[2] The information is set forth in the following tables and was gathered from data collected by the Western Weather Group, Inc., from 2018 to 2020. Because the region to the west of the proposed AVA consists largely of highly urbanized land and the Pacific Ocean, climate data were not provided for that region.

( printed page 52600)

According to the petition, temperatures generally increase as the distance from the Pacific Ocean increases, even within the proposed Rancho Santa Fe AVA. Table 1 demonstrates this trend, as average annual maximum temperatures within the proposed AVA, which has direct access to cooling ocean breezes via the San Dieguito River valley, are lower than those of the more inland regions to the east. Average annual maximum temperatures are also higher to the south of the proposed AVA. The petition states that temperatures within the proposed Rancho Santa Fe are suitable for growing a variety of grapes, including pinot noir in the cooler western portion and sangiovese and cabernet sauvignon in the eastern portion.

According to the petition, GDD accumulations are a reliable method for predicting crop development, with higher GDD accumulations suggesting a better growing time for grapes. Table 2 shows that the proposed Rancho Santa Fe generally has fewer GDD accumulations than the surrounding regions. The petition suggests the lower GDD accumulations are a result of temperatures moderated by cool ocean breezes and morning marine fog. Although the GDD accumulations are lower than those of the surrounding regions, the petition notes that grape growers in the proposed AVA do not experience any detrimental effects and are able to successfully grow at least 13 different grape varietals, including both white and red varietals.

Table 3 shows that the proposed AVA receives less rainfall annually than any of the surrounding regions, except for the region to the south, which has similar or slightly lower annual rainfall amounts. Due to the low annual rainfall amounts, all vineyards within the proposed AVA use drip irrigation. According to the petition, the proposed AVA typically receives the most rainfall between November and April, when grapevines are likely to be either dormant or not yet fruiting. The petition notes that low rainfall amounts during the growing season benefits vineyard owners by decreasing the number of bloom disruptions, ripening disruptions, and berry splitting events.

( printed page 52601)

The petition states that in spring and early summer, the proposed Rancho Santa Fe AVA experiences low coastal clouds due to the up-welling of cold seawater in the Pacific Ocean. By September, the presence of low clouds and fog decreases. As a result, the petition states that the clouds protect grapevines from the summer heat in late mornings. Table 4 shows that in general, the proposed AVA annually experiences more days with fog and low clouds than in each of the surrounding regions.

The petition states that the proposed Rancho Santa Fe AVA has generally mild winds that typically blow from the west during the summer and keep temperatures moderate. Although Table 5 shows that wind speeds in the proposed AVA are lower than in most of the surrounding regions, the mild winds still help temper the humidity levels, which are higher within the proposed AVA than in the surrounding regions. As a result, the risk of fungus and mildew growth on grapevines is lower than it would be without the wind.

Soils

According to the petition, the soils of the proposed Rancho Santa Fe AVA belong to 31 different soil series. However, only around one-fifth of the soil series within the entire established South Coast AVA are also found within the proposed AVA, suggesting that although a large number of soil series are present within the proposed Rancho Santa Fe AVA, the soils have a limited range. In fact, the Huerhuero soil series, which is the primary soil series in the proposed AVA, covers 21.6 percent of the proposed AVA, but less than 2 percent of the entire South Coast AVA. Other major soil series within the proposed AVA include Altamont, Corralitos, San Miguel, Tujunga, Olivenhain, Carlsbad, Chino, Auld, and Grangeville.

The petition describes the soils of the proposed Rancho Santa Fe AVA as having the highest levels of soil organic carbon at a depth of 0-39.4 inches of any of the established AVAs within the South Coast AVA. The proposed AVA's mean level is 5,033 grams per square meter (g/m² ). By contrast, the established Temecula Valley AVA (27 CFR 9.50), located north of the proposed AVA, has a mean level of 2,604 g/m² . The established Ramona Valley (27 CFR 9.191) and San Pasqual Valley (27 CFR 9.25) AVAs, both located east of the proposed AVA, have mean levels of 2,369 and 4,328 g/m² , respectively. The petition states that soil organic carbon is related to soil fertility and also increases plant vigor and promotes accumulation of sugar and the formation of aromatics in grapes. Furthermore, high soil fertility promotes larger grapevine canopies, clusters, and berries, which requires vineyard owners to adopt vine management practices that will reduce the canopy cover and number of clusters in order to enhance flavor concentration in the remaining berries.

Soils within the proposed Rancho Santa Fe AVA are primarily loamy (44 percent of total soils), along with clay (14 percent) and sandy soils (20 percent). The petitions states that filtering topsoils, such as loam and sand, combined with water-holding soils such as clay lead to deep root growth and promote strong, drought-resistant vines.

Additional Supporting Aspects

Along with the natural features of climate and soil, the proposed Rancho Santa Fe AVA petition mentions two additional aspects that affect viticulture in the area and are different from the surrounding regions. The first is the Rancho Santa Fe community development bylaws that require a minimum of two acres for residential lots. According to the petition, the large residential lots create a semi-rural setting that enables “boutique” commercial vineyards in a region that is otherwise highly urbanized.

The second feature is the number of eucalyptus groves within the proposed Rancho Santa Fe AVA. Eucalyptus trees are not native to North America. Between 1906 and 1914, the Santa Fe Railway, which owned the land that comprises the proposed AVA, planted 3.5 million eucalyptus trees in the region with the intent of providing lumber for railroad ties. Although eucalyptus wood eventually proved unsuitable for railroad ties, many groves still exist within the proposed AVA. The petition notes that most vineyards within the proposed AVA are planted in proximity to these groves, and the eucalyptus trees affect the wines made from local grapes. The petition cites research conducted by the Australian Wine Research Institute that found that 1,8-cineole, an aromatic compound produced by eucalyptus leaves, can be absorbed by grape skins and produce a “eucalypt,” “fresh,” or “minty” ( printed page 52602) characteristic in the wine.^[4] As a result, vineyards planted near eucalyptus groves, such as those in the proposed Rancho Santa Fe AVA, can produce wines that have distinct flavor and aroma profiles that do not occur naturally in other wines.

Comparison of the Proposed Rancho Santa Fe AVA to the Existing South Coast AVA

The South Coast AVA was established by T.D. ATF-218, which published in the Federal Register on November 21, 1985 (50 FR 48083). T.D. ATF-218 describes the primary feature of the South Coast AVA as the “substantial coastal influence” on the climate. The proposed Rancho Santa Fe AVA shares the marine-influenced climate of the larger South Coast AVA. For example, the proposed AVA typically has a high number of days with coastal fog each year, along with moderate annual maximum and minimum temperatures. However, due to its much smaller size, the proposed AVA is more uniform in its other distinguishing features than the large, multi-county South Coast AVA. For example, Huerhuero soils, which are the most common soils in the proposed AVA, cover 21.6 percent of the proposed AVA, but only cover 1.5 percent of the overall South Coast AVA. Similarly, Cieneba soils, which are the most common soils in the South Coast AVA, cover 11.4 percent of the established AVA but less than one percent of the proposed Rancho Santa Fe AVA.

TTB Determination

TTB concludes that the petition to establish the 15,827-acre “Rancho Santa Fe” AVA merits consideration and public comment, as invited in this document.

Boundary Description

See the narrative boundary descriptions of the petitioned-for AVA in the proposed regulatory text published at the end of this document.

Maps

The petitioner provided the required maps, and they are listed below in the proposed regulatory text. You may also view the proposed Rancho Santa Fe AVA boundary on the AVA Map Explorer on the TTB website, at www.ttb.gov/​regulated-commodities/​beverage-alcohol/​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 or with a brand name that includes 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 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 27 CFR 4.39(i)(2) for details.

If TTB establishes this proposed AVA, its name, “Rancho Santa Fe,” 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 “Rancho Santa Fe” 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 viticultural area's name, “Rancho Santa Fe.” The approval of the proposed Rancho Santa Fe AVA would not affect any existing AVA, and any bottlers using “South Coast” as an appellation of origin or in a brand name for wines made from grapes grown within the Rancho Santa Fe AVA would not be affected by the establishment of this new AVA. If approved, the establishment of the proposed Rancho Santa Fe AVA would allow vintners to use “Rancho Santa Fe”, “South Coast”, or both AVA names as appellations of origin for wines made from grapes grown within the proposed AVA, if the wines meet the eligibility requirements for the appellation.

Public Participation

Comments Invited

TTB invites comments from interested members of the public on whether TTB should establish the proposed Rancho Santa Fe AVA. TTB is interested in receiving comments on the sufficiency and accuracy of the name, boundary, topography, and other required information submitted in support of the AVA petition. In addition, because the proposed Rancho Santa Fe AVA would be within the existing South Coast AVA, TTB is interested in comments on whether the evidence submitted in the petition regarding the distinguishing features of the proposed AVA sufficiently differentiates it from the existing AVA. TTB is also interested in comments on whether the geographic features of the proposed AVA are so distinguishable from the South Coast AVA that the proposed Rancho Santa Fe AVA should not be part of the established AVA. Please provide any available specific information in support of your comments.

Because of the potential impact of the establishment of the proposed Rancho Santa Fe AVA on wine labels that include the term “Rancho Santa Fe” 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 area names 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.

Submitting Comments

You may submit comments on this proposal as an individual or on behalf of a business or other organization via the Regulations.gov website or via postal mail, as described in the ADDRESSES section of this document. Your comment must reference Notice No. 244 and must be submitted or postmarked by the closing date shown in the DATES section of this document. You may upload or include attachments with your comment. You also may request a public hearing on this proposal. The TTB Administrator reserves the right to determine whether to hold a public hearing.

Confidentiality and Disclosure of Comments

All submitted comments and attachments are part of the rulemaking record and are subject to public disclosure. Do not enclose any material in your comments that you consider confidential or that is inappropriate for disclosure. TTB will post, and you may ( printed page 52603) view, copies of this document, the related petition and selected supporting materials, and any comments TTB receives about this proposal within the related Regulations.gov docket. In general, TTB will post comments as submitted, and it will not redact any identifying or contact information from the body of a comment or attachment. Please contact TTB's Regulations and Rulings Division by email using the web form available at www.ttb.gov/​contact-rrd, or by telephone at 202-453-2265, if you have any questions about commenting on this proposal or to request copies of this document, the related petition and its supporting materials, or any comments received.

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, as amended. Therefore, it requires no regulatory assessment.

Proposed Regulatory Amendment

For the reasons discussed in the preamble, we propose to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows:

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

Authority: 27 U.S.C. 205.

2. Add § 9.__ to read as follows:

91 FR 52598