The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program, 51310-51363 [2019-20672]

Download as PDF 51310 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 85 and 86 DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration 49 CFR Parts 531 and 533 [NHTSA–2018–0067; EPA–HQ–OAR–2018– 0283; FRL 10000–45–OAR] RIN 2127–AL76; 2060–AU09 The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program Environmental Protection Agency and National Highway Traffic Safety Administration, Department of Transportation. ACTION: Withdrawal of waiver; final rule. AGENCY: On August 24, 2018, the Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) jointly published in the Federal Register a notice of proposed rulemaking entitled, ‘‘The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks.’’ In the NPRM, the agencies proposed new and amended greenhouse gas (GHG) and Corporate Average Fuel Economy (CAFE) standards for model year 2021 to 2026 light duty vehicles. EPA also proposed to withdraw the waiver it had previously provided to California for that State’s GHG and ZEV programs under section 209 of the Clean Air Act. NHTSA also proposed regulatory text implementing its statutory authority to set nationally applicable fuel economy standards that made explicit that those State programs would also be preempted under NHTSA’s authorities. In this action, the agencies finalize the two actions related to the waiver and preemption. Accordingly, in this document: EPA announces its decision to withdraw the waiver; and NHTSA finalizes regulatory text related to preemption. The agencies anticipate issuing a final rule on standards proposed in the NPRM in the near future. DATES: This joint action is effective November 26, 2019. Judicial Review: Pursuant to Clean Air Act section 307(b), any petitions for judicial review of this action must be filed in the United States Court of Appeals for the D.C. Circuit by jbell on DSK3GLQ082PROD with RULES3 SUMMARY: VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 November 26, 2019. Given the inherent relationship between the agencies’ actions, any challenges to NHTSA’s regulation should also be filed in the United States Court of Appeals for the D.C. Circuit. See also Sections III.G and IV.Q of this preamble. ADDRESSES: EPA and NHTSA have established dockets for this action under Docket ID No. EPA–HQ–OAR–2018– 0283 and NHTSA 2018–0067, respectively. All documents in the docket are listed in the http:// www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available in hard copy in EPA’s docket, and electronically in NHTSA’s online docket. Publicly available docket materials can be found either electronically in www.regulations.gov by searching for the dockets using the Docket ID numbers above, or in hard copy at the following locations: EPA: EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave. NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566–1744. NHTSA: Docket Management Facility, M–30, U.S. Department of Transportation (DOT), West Building, Ground Floor, Rm. W12–140, 1200 New Jersey Avenue SE, Washington, DC 20590. The DOT Docket Management Facility is open between 9 a.m. and 5 p.m. Eastern Time, Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: EPA: Christopher Lieske, Office of Transportation and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214– 4584; fax number: (734) 214–4816; email address: lieske.christopher@ epa.gov, or contact the Assessment and Standards Division, email address: otaqpublicweb@epa.gov. NHTSA: James Tamm, Office of Rulemaking, Fuel Economy Division, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590; telephone number: (202) 493–0515. SUPPLEMENTARY INFORMATION: I. Overview II. Preemption Under the Energy Policy and Conservation Act PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 III. EPA’s Withdrawal of Aspects of the January 2013 Waiver of CAA section 209(b) Preemption of the State of California’s Advanced Clean Car Program IV. Regulatory Notices and Analyses I. Overview On August 24, 2018, the Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) (collectively, ‘‘the agencies’’) jointly published in the Federal Register a notice of proposed rulemaking entitled, ‘‘The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021– 2026 Passenger Cars and Light Trucks’’ (the SAFE Vehicles rule).1 In the NPRM, EPA proposed new greenhouse gas (GHG) standards and NHTSA proposed new Corporate Average Fuel Economy (CAFE) standards for model years (MY) 2021 to 2026 light duty vehicles. The agencies also proposed to take two actions, separate from the proposed standards, needed to ensure the existence of one Federal program for light vehicles. First, EPA proposed to withdraw the waiver it had previously provided to California for that State’s GHG program and Zero Emissions Vehicle (ZEV) mandate. Second, NHTSA proposed regulatory text that made explicit that State programs to limit or prohibit tailpipe GHG emissions or establish ZEV mandates are preempted, to carry out its statutory authority to set nationally applicable fuel economy standards and consistent with the express preemption provisions of the Energy Policy and Conservation Act (EPCA). The SAFE Vehicles Rule received several hundred thousand public comments, which discussed in great detail all aspects of the proposal. The nature of the comments received related to the proposed standards and the proposed actions on preemption, though, were considerably different. That is, the vast majority of comments, whether one considers the number of commenters, the number of issues raised by commenters, or the length and level of detail of those comments, focused primarily on the agencies’ proposed standards. In contrast, the comments to the preemption issues, though substantive and thorough, were fewer in number and length, and raised primarily legal issues, rather than the technical or economic issues that were the focus of many comments to the standards. Both the proposed waiver withdrawal and discussion of EPCA 1 83 E:\FR\FM\27SER3.SGM FR 42986. 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 preemption are legal matters that are independent of the technical details of the proposed standards and, as such, took up a relatively small part of the NPRM. Recent actions by the State of California taken after the publication of the NPRM have confirmed the need for final decision from the agencies that States do not have the authority to set GHG standards or establish ZEV mandates. First, on December 12, 2018, California unilaterally amended its ‘‘deemed to comply’’ provision, such that CARB’s GHG standards can be satisfied only by complying with EPA’s standards as those standards were promulgated in 2012.2 More recently, on July 25, 2019, California announced a so-called ‘‘voluntary framework’’ with four automakers, which purported, without analysis of the terms of the existing waiver, California law, or how this ‘‘framework’’ is permissible under Federal law, to allow those automakers to meet reduced standards on a national basis if they promise not to challenge California’s authority to establish GHG standards or the ZEV mandate.3 These two actions, both of which conflict with the maintenance of a harmonized national fuel economy and tailpipe GHG emissions program and the terms of the agreement reached in 2012 and 2013, confirm that the only way to create one actual, durable national program is for GHG and fuel economy standards to be set by the Federal government, as was intended by Congress in including express preemption provisions in both the Clean Air Act (for new motor vehicle emissions standards) and EPCA (for fuel economy).4 In light of the divergence in the type of comments received to the proposal (i.e., between the standards-related proposal and the waiver and 2 See In re: Air Resources Board, Notice of Approval of Regulatory Action, No. 2018–1114–03 (State of California, Office of Administrative Law Dec. 12, 2018), available at https://ww3.arb.ca.gov/ regact/2018/leviii2018/form400dtc.pdf?_ ga=2.183723951.866759811.1568583699– 1441462912.1552677736 (last visited Sept. 15, 2019). 3 See California and Major Automakers Reach Groundbreaking Framework Agreement on Clean Emission Standards, Office of Gov. Gavin Newsome (July 25, 2019), available at https://www.gov.ca.gov/ 2019/07/25/california-and-major-automakersreach-groundbreaking-framework-agreement-onclean-emission-standards/ (last visited Sept. 14, 2019); Terms for Light-Duty Greenhouse Gas Emissions Standards, available at https:// ww2.arb.ca.gov/sites/default/files/2019–07/Auto %20Terms%20Signed.pdf (last visited Sept. 14, 2019). 4 At the time this joint action was signed, California had not submitted or demonstrated any intention to submit an application for a waiver for either its December 2018 amendment to its regulations or its July 2019 ‘‘framework.’’ VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 preemption proposals), and in light of the recent actions taken by California, the agencies have determined it is appropriate to move forward with the two actions related to preemption now, while continuing work on a final rule to establish the CAFE and GHG standards that were within the scope of the NPRM. This decision is appropriate, as agencies have authority to finalize different parts of proposed actions at different times. Further, the agencies previewed this possibility in the NPRM by emphasizing the severability of the standards from the actions being finalized in this document. EPA’s action in this document does not add or amend regulatory text pursuant to the Clean Air Act and, thus, issuing this decision on the waiver and the later rulemaking on the standard makes clear the difference between EPA’s two actions and their independence from one another. NHTSA’s action in this document is not to set standards for particular model years, but rather is an exercise of its authority under 49 U.S.C. 32901 through 32903, necessary to maintain the integrity of the corporate average fuel economy program and compliance regime established by Congress as a nationwide program, and consistent with Congress’ statement of express preemption in 49 U.S.C. 32919. These two general aspects of the SAFE Vehicles Rule are independent of the CAFE and GHG standards for Model Years 2021–2026.5 For that reason, the decision in this document to finalize the waiver and preemption issues does not require the agencies to reopen the comment period for the standards, as it does not have any effect on either agency’s standards. The agencies note that several comments claimed that the comment period of 63 days was inadequate or that the agencies did not hold a sufficient number of public meetings. Although the agencies will address this comment more directly in the forthcoming final rulemaking to establish standards, for purposes of this action, it is clear to the agencies that commenters had adequate time to respond to the issue of the waiver and EPCA preemption. Courts give broad discretion to agencies in determining whether the length of a comment period is reasonable and, in assessing the sufficiency of a comment 5 The agencies note that the South Coast Air Quality Management District commented that EPA should not take an action on the waiver in the same notice as a rule that would change EPA’s GHG standards. See South Coast Air Quality Management District, Docket No. NHTSA–2018– 0067–11813. Although the agencies do not acknowledge the validity of this argument, any such concern is rendered moot by this action. PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 51311 period, look to whether the public had a meaningful opportunity to comment on a proposed action. See, e.g., Rural Cellular Ass’n v. FCC, 588 F.3d 1095, 1101 (D.C. Cir. 2009); Connecticut Light & Power Co. v. Nuclear Regulatory Comm’n, 673 F.2d 525, 534 (D.C. Cir. 1982). There was unquestionably a meaningful opportunity to comment here. The agencies received several hundred thousand comments, which included highly detailed and technical comments on all aspects of the proposal from seemingly all relevant stakeholders, including numerous comments related to EPA’s action on the waiver and NHTSA’s proposal on preemption. The agencies also note that the NPRM was initially issued and made public on August 2, 2018, over three weeks prior to publication in the Federal Register, and received extensive media coverage immediately thereafter, and giving a total of 86 days to review and comment. Furthermore, the agencies held three public hearings during the comment period, including one in Fresno, California on September 24, 2018, where the agencies heard from several hundred commenters in person. II. Preemption Under the Energy Policy and Conservation Act A. NHTSA Is Finalizing Its Preemption Proposal NHTSA is finalizing its proposal concerning preemption of State and local laws and regulations related to fuel economy standards. Congress passed EPCA to help achieve the important national objective of protecting the United States against petroleum price shocks through improvements in fuel efficiency for the light duty vehicle fleet. But Congress did not seek to do so at any cost—instead directing the Secretary of Transportation to balance statutory factors, such as the need of the nation to conserve energy, technological feasibility, and economic practicability, to arrive at stringent, but feasible, standards on a Federal basis. Increasing fuel economy is an expensive undertaking for automakers, the costs of which are necessarily passed on to consumers, thereby discouraging new vehicle purchases and slowing the renewal of the nation’s light duty fleet. That is why fuel economy standards must be set considering other critical factors. This is also why the notion of national applicability and preemption of State or local laws or regulations related to fuel economy standards is so critical. Allowing State or local governments to establish their own fuel economy standards, or standards related to fuel E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 51312 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations economy, would provide for a universe in which automakers are placed in the untenable situation of having to expend resources to comply not only with Federal standards, but also meet separate State requirements. If State or local governments are allowed to require—directly or indirectly— automakers to develop and implement additional technologies to improve fuel economy (or reduce or eliminate tailpipe greenhouse gas emissions for all or a portion of a fleet), the fuel economy-related expenses of automakers increase beyond those considered in establishing federal standards. This would render the critical balancing required by EPCA devoid of meaning. Uniform national fuel economy standards are essential to accomplishing the goals of EPCA. To ensure that the fuel economy standards NHTSA adopts constitute the uniform national requirements that Congress intended, NHTSA must address the extent to which State and local laws and regulations are preempted by EPCA. Furthermore, EPCA states: ‘‘When an average fuel economy standard prescribed under this chapter is in effect, a State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under this chapter.’’ 49 U.S.C. 32919(a). As a limited exception, a State or local government ‘‘may prescribe requirements for fuel economy for automobiles obtained for its own use.’’ 49 U.S.C. 32919(c). In addition, when a Federal fuel economy labeling or information requirement is in effect, pursuant to 49 U.S.C. 32908, a State or local government may adopt or enforce an identical requirement on ‘‘disclosure of fuel economy or fuel operating costs.’’ 49 U.S.C. 32919(b). Absent this limited circumstance, a State or local government cannot even have laws in place that are identical to the Federal standards. NHTSA will first summarize its discussion of preemption in the proposal before turning to discussion of issues raised by the comments. In this final rule, NHTSA fully reaffirms the discussion of preemption set forth in the proposal, which provides additional detail regarding NHTSA’s views.6 In the proposal, NHTSA described its preemption discussions in prior rulemakings, which are consistent with the views on preemption that NHTSA is 6 See 83 FR 42986, 43232–39 (Aug. 24, 2018). VerDate Sep<11>2014 20:16 Sep 26, 2019 Jkt 247001 finalizing in this document.7 NHTSA has asserted preemption of certain State emissions standards under EPCA on multiple occasions since 2002. The United States explained in a 2002 amicus brief that EPCA preempted California’s then-existing zero-emissions vehicle (ZEV) regulations.8 NHTSA continued the discussion of preemption later that year in a notice of proposed rulemaking setting CAFE standards for model year 2005 through 2007 light trucks, and reiterated its position in the 2003 final rule.9 NHTSA’s 2005 notice of proposed rulemaking setting standards for model year 2008 through 2011 light trucks also discussed preemption and the 2006 final rule elaborated on the issue at length, including in a specific discussion finding California’s then-existing tailpipe greenhouse gas emissions regulations were preempted.10 NHTSA’s 2008 proposed rule for model year 2011 through 2015 passenger cars and light trucks also addressed preemption and proposed adding a summary of NHTSA’s position on the issue to the Code of Federal Regulations.11 That proposed rule also addressed recent developments, specifically the Supreme Court’s decision in Massachusetts v. EPA, the enactment of EISA, and two district court decisions finding that State tailpipe greenhouse gas emissions standards were not preempted by 7 Id. at 43232. As NHTSA noted in the proposal, it had not previously directly addressed preemption of California’s ZEV program. Id. at 43233. 8 Brief for the United States as Amicus Curiae in Support of Affirmance, Cent. Valley ChryslerPlymouth Inc., et al, v. Kenny, No. 02–16395 (9th Cir. 2002). 9 68 FR 16868, 16895 (Apr. 7, 2003); 67 FR 77015, 77025 (Dec. 16, 2002). In the notice of proposed rulemaking, NHTSA specifically rejected the argument made by California in litigation that NHTSA had not treated EPCA as preempting State efforts to engage in CAFE-related regulation, explaining that States may not ‘‘issue a regulation that relates to fuel economy and which addresses the same public policy concern as the CAFE statute. Our statute contains a broad preemption provision making clear the need for a uniform, federal system. . . . The fact that NHTSA had not expressly addressed this particular aspect of California’s requirements should not have been interpreted as tacit acceptance.’’ 67 FR 77015, 77025 (Dec. 16, 2002). 10 71 FR 17566, 17654–70 (Apr. 6, 2006); 70 FR 51414, 51457 (Aug. 30, 2005). 11 73 FR 24352, 24478–79 (May 2, 2008). NHTSA finalized only standards for model year 2011 through that rulemaking action, and subsequently began a new rulemaking for model year 2012 and later passenger cars and light trucks. In the final rule for model year 2011, NHTSA stated: ‘‘NHTSA has decided not to include any provisions addressing preemption in the Code of Federal Regulations at this time. The agency will reexamine the issue of preemption in the content of its forthcoming rulemaking to establish Corporate Average Fuel Economy standards for 2012 and later model years.’’ 74 FR 14196, 14200 (Mar. 30, 2009). PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 EPCA.12 NHTSA explained that those developments did not change its view of preemption and it reaffirmed the detailed analysis and conclusions from the 2006 final rule.13 Subsequent CAFE rulemaking documents, prior to the August 2018 proposal, did not discuss EPCA preemption.14 Thus, this final rule is consistent with NHTSA’s longstanding position on EPCA preemption over the course of nearly two decades. In the proposal, NHTSA also described certain developments, including the Supreme Court’s decision in Massachusetts v. EPA, that preceded EPA’s regulation of tailpipe greenhouse gas emissions through joint rulemaking with NHTSA.15 In addition, NHTSA described the Obama Administration’s creation of a framework that was intended to allow a manufacturer to ‘‘meet all standards with a single national fleet.’’ 16 Appeals of the two district court decisions holding that the California regulation and Federal regulation could co-exist were withdrawn as part of the negotiated agreement for the National Program.17 The announcement of the framework was followed by EPA’s decision less than two months later to grant a waiver to California for its own greenhouse gas emissions standards, without taking any substantive position on EPCA preemption.18 The national framework was a negotiated agreement between the Federal government, California, and the automotive industry.19 NHTSA confirms its view, stated in the proposal on preemption, that the agencies’ consideration in 2012 of California’s ‘‘deemed to comply’’ 12 73 FR 24352, 24478 (May 2, 2008). 13 Id. 14 As noted above, in NHTSA’s final rule for model year 2011, it stated that ‘‘[t]he agency will re-examine the issue of preemption in the content of its forthcoming rulemaking to establish Corporate Average Fuel Economy standards for 2012 and later model years.’’ 74 FR 14196, 14200 (Mar. 30, 2009). However, in the NHTSA’s 2009 proposal and 2010 final rule setting standards for model year 2012 through 2016 automobiles, NHTSA stated that is was ‘‘deferring further consideration of the preemption issue.’’ 75 FR 25324, 25546 (May 7, 2010); 74 FR 49454, 49635 (Sept. 28, 2009). 15 83 FR 42986, 43232–33 (Aug. 24, 2018). 16 Id. at 43233; 76 FR 74854, 74863 (Dec. 1, 2011). 17 See 83 FR 42986, 43233 (Aug. 24, 2018); Association of Global Automakers, Docket No. NHTSA–2018–0067–12032. 18 In other words, the National Program included State requirements not nationally applicable. 83 FR 42986, 43233 (Aug. 24, 2018); see also 74 FR 32744, 32783 (July 8, 2009) (‘‘EPA takes no position regarding whether or not California’s GHG standards are preempted under EPCA.’’). 19 After President Obama announced the agreement, NHTSA and EPA subsequently adopted CAFE and greenhouse gas emissions standards through rulemaking. See 75 FR 25324 (May 7, 2010). E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations regulatory provision as obviating NHTSA’s consideration of preemption was erroneous.20 This, too, was part of the negotiated agreement described above.21 Under California’s regulatory provision, California deemed manufacturers to be in compliance with certain of California’s requirements if they complied with EPA’s standards.22 However, EPCA explicitly provides that all State requirements ‘‘related to’’ fuel economy standards, even those that may be identical or equivalent to Federal requirements are preempted by EPCA.23 Moreover, as discussed in additional detail below, California recently changed its regulations so that it has no such ‘‘deemed to comply’’ provision should the forthcoming SAFE final rule adopt any regulatory alternative other than the no action alternative.24 This change sets up a direct conflict between Federal and State requirements, exacerbating the conflict that exists even now. Congress’s intent to provide for uniform national fuel economy standards is frustrated when State and local actors regulate in this area. In the proposal, NHTSA explained that the need for regulatory certainty, along with the clear prospect of disharmony, required it to address preemption.25 NHTSA also explained its desire to seek comments on this important issue from State and local officials, along with other interested members of the public.26 NHTSA in fact received many comments from State and local governments, NGOs, industry, and others concerning preemption.27 This comment process helped ensure that the agency considered all facets of this significant issue before reaching a final determination in this rule. NHTSA also discussed the broad and clear text of EPCA’s express preemption provision.28 As NHTSA explained in the 20 See id.; 77 FR 62624, 62637 (Oct. 15, 2012). 75 FR 25324, 25328 (May 7, 2010). 22 83 FR 42986, 43233 (Aug. 24, 2018). 23 See id. at 43233–34. 24 See 83 FR 42986, 42990 tbl. I–4 (Aug. 24, 2018); Cal. Code Regs. tit. 13, sec. 1961.3(c). California changed its regulation following issuance of NHTSA and EPA’s proposed rule. See State of Cal., Office of Admin. Law, Notice of Approval of Regulatory Action (Dec. 12, 2018), https:// www.arb.ca.gov/regact/2018/leviii2018/ form400dtc.pdf. NHTSA recognized the potential for such a change in the proposal. 83 FR 42986, 43233 n.495 (Aug. 24, 2018). 25 83 FR 42986, 43233 (Aug. 24, 2018). 26 Id. 27 See, e.g., California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Alliance of Automobile Manufacturers, Docket No. NHTSA–2018–0067–12073; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067– 11735. 28 83 FR 42986, 43233–34 (Aug. 24, 2018). jbell on DSK3GLQ082PROD with RULES3 21 See VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 proposal, unlike the Clean Air Act, there is no set of circumstances under EPCA in which it would be appropriate or permissible for NHTSA to waive preemption or allow States or local governments to adopt or enforce identical or equivalent requirements.29 EPCA does not provide NHTSA with any waiver authority whatsoever. To ensure Federal primacy over this area, EPCA broadly preempts all State and local laws ‘‘related to’’ fuel economy standards or average fuel economy standards.30 NHTSA reiterates, consistent with the proposal, that in this rulemaking NHTSA is concluding that State and local requirements that relate to fuel economy standards by directly or substantially affecting corporate average fuel economy levels are preempted.31 NHTSA also described Supreme Court precedent interpreting the meaning of ‘‘related to.’’ 32 In addition to the plain language of the statute, NHTSA applied to EPCA the guidance from Supreme Court case law to consider both the objectives of the statute and the effect of the State laws on the Federal standards.33 As NHTSA explained, the primacy of a single national fuel economy standard, set by the Federal government, was an important objective of Congress in enacting EPCA. In adopting EISA, Congress did not repeal or amend EPCA’s express preemption provision.34 While Congress included in EISA a savings provision preventing EISA from limiting preexisting authority or responsibility conferred by any law, or from authorizing violation of any law,35 the savings clause did not purport to expand either EPA’s or NHTSA’s preexisting authority or responsibility.36 NHTSA recognized that during debate on the floor, some Members of Congress made statements about the savings provision’s impact on California’s ability to set tailpipe greenhouse gas emissions standards.37 NHTSA affirms its view, consistent with Supreme Court precedent, that such legislative history does not alter the plain text of the statute.38 In the end, Congress did not 29 Id. at 43233. U.S.C. 32919(a). 31 83 FR 42986, 43233 (Aug. 24, 2018). 32 Id. 33 Id. at 43233–34. 34 See EISA, Public Law 110–140 (2007). 35 42 U.S.C. 17002. 36 See id. 37 83 FR 42986, 43234 (Aug. 24, 2018). 38 See Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2364 (2019) (‘‘In statutory interpretation disputes, a court’s proper starting point lies in a careful examination of the ordinary meaning and structure of the law itself. Where, as here, that examination yields a clear answer, judges must stop. Even those of us who sometimes consult 30 49 PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 51313 change EPCA’s preemption provision when it adopted EISA, despite clearly having the opportunity to do so.39 Because States lacked preexisting authority to set tailpipe greenhouse gas emissions standards, as a result of EPCA’s preemption provision, EISA’s savings clause did not give them that authority. In the proposal, NHTSA also described in detail the reasons that tailpipe carbon dioxide emissions regulations or prohibitions are ‘‘related to’’ fuel economy standards.40 NHTSA explained that carbon dioxide emissions are a necessary and inevitable byproduct of burning gasoline: The more fuel a vehicle burns or consumes, the more carbon dioxide it emits.41 Based on the physical and mathematically measurable relationship between carbon dioxide emissions and fuel economy, EPCA has always specified that compliance with fuel economy standards is determined through tests and calculation procedures established by EPA.42 Specifically, compliance with fuel economy standards is based almost entirely on carbon dioxide emission rates.43 As NHTSA noted, it is significant that in enacting EPCA, Congress both adopted test procedures reliant on the direct relationship between carbon dioxide emissions and fuel economy, and preempted State and local governments from adopting requirements related to fuel economy standards in the same law.44 NHTSA affirms in this final rule that a State or local requirement limiting tailpipe carbon dioxide emissions from automobiles has the direct and substantial effect of regulating fuel consumption and, thus, is ‘‘related to’’ fuel economy standards. Likewise, since carbon dioxide emissions constitute the overwhelming majority of tailpipe carbon emissions, a State regulation of all tailpipe greenhouse gas emissions from automobiles or prohibiting all tailpipe emissions is also ‘‘related to’’ fuel economy standards and preempted by EPCA. NHTSA is also finalizing its conclusion that EPCA does not preempt all potential State or local regulation of greenhouse gas emissions from vehicles. As NHTSA explained in the proposal, legislative history will never allow it to be used to ‘muddy’ the meaning of ‘clear statutory language.’ ’’) (internal citations omitted). 39 See EISA, Public Law 110–140 (2007); 83 FR 42986, 43234 (Aug. 24, 2018). 40 83 FR 42986, 43234 (Aug. 24, 2018). 41 Id. 42 49 U.S.C. 32904(c). 43 See 83 FR 42986, 43234 (Aug. 24, 2018). 44 Id. E:\FR\FM\27SER3.SGM 27SER3 51314 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations some greenhouse gas emissions from vehicles are not related to fuel economy because they have either no effect on fuel economy, or only an insignificant effect on fuel economy.45 NHTSA provided an example of a requirement with no bearing on fuel economy: a State regulation of vehicular refrigerant leakage.46 NHTSA also explained that State safety requirements that have only an incidental impact on fuel economy, such as a requirement to use child seats, is not preempted because it does not sufficiently relate to fuel economy standards.47 NHTSA also confirms its view that, if preempted requirements are combined with requirements not related to fuel economy, ECPA would void only the preempted portion of the law. In addition, NHTSA and EPA are confirming their determination, in this joint final action, that a Clean Air Act waiver does not waive EPCA preemption. As explained in the proposal, a State or local law or regulation related to automobile fuel economy standards is void ab initio under the preemptive force of EPCA.48 As support, the proposal cited longstanding Supreme Court case law concerning the Supremacy Clause and action in violation of a statutory prohibition.49 In sum, ‘‘[i]t is basic to this constitutional command [in the Supremacy Clause] that all conflicting state provisions be without effect.’’ 50 As explained in the proposal, avoiding preemption under one Federal law has no necessary bearing on another Federal law’s preemptive effect.51 For purposes of the present rule, this conclusion is confirmed by Section 209 of the Clean Air Act, which explicitly states that a waiver of preemption pursuant to that provision of the Clean Air Act only relieves ‘‘application of this section.’’ 52 NHTSA also confirms its view that a Clean Air Act waiver does not ‘‘federalize’’ State or local requirements preempted by EPCA. NHTSA and EPA also explained in the proposal their disagreement with decisions from district courts in California and Vermont that held that EPCA did not preempt State tailpipe greenhouse gas emissions standards.53 45 Id. 46 Id. at 43234–35. at 43235. 47 Id. jbell on DSK3GLQ082PROD with RULES3 48 Id. The agencies particularly disagree with those district courts’ characterization of the ‘‘related to’’ language in EPCA’s preemption provision as narrow, their reliance on California’s application for a Clean Air Act waiver, and the courts’ implied preemption analyses.54 As the proposal explained, these decisions are legally flawed, and NHTSA is not barred from proceeding with its preemption determination here.55 NHTSA also reaffirms its views on implied preemption, as described in the proposal.56 State or local limitations or prohibitions on tailpipe carbon dioxide emissions from automobiles directly conflict with the objectives of EPCA. NHTSA balances statutory factors in setting CAFE standards at ‘‘the maximum feasible average fuel economy level that the Secretary decides the manufacturers can achieve in that model year’’ (49 U.S.C. 32902(a)).57 State requirements, made based on State-specific determinations unbound by the considerations in EPCA, frustrate NHTSA’s statutory role. If one or more States may issue competing or overlapping requirements affecting fuel economy standards, industry must also apply resources and effort at meeting standards applicable only to discrete parts of the country in addition to those spent to comply with the Federal standards. In accordance with EPCA, manufacturers’ ‘‘average fuel economy’’ is calculated based on specific statutory requirements. 49 U.S.C. 32901(a)(5), 32904. Manufacturers earn credits for exceeding average fuel economy standards. 49 U.S.C. 32903. This statutory compliance structure is impeded when States or local governments attempt to set or enforce their own requirements, which necessarily apply to manufacturers at a State or local level. This interferes with the national ‘‘average fuel economy’’ program. The broad preemption provision adopted by Congress in EPCA clearly demonstrates the intention for a single national set of standards that consider, among other things, economic feasibility and consumer choice. Indeed, the entire purpose of a balanced standard is defeated if a State can place its thumb on the scale. Likewise, separate State or local requirements interfere with the compliance regime under EPCA of performance determined based on nationwide fleet averages, 49 Id. 50 Maryland v. Louisiana, 451 U.S. 725, 746 (1981) (citing McCulloch v. Maryland, 4 Wheat. 316, 427 (1819)). 51 83 FR 42986, 43235 (Aug. 24, 2018). 52 42 U.S.C. 7543(b)(1). 53 83 FR 42986, 43232–38 (Aug. 24, 2018); see Green Mountain Chrysler v. Crombie, 508 F. Supp. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 2d 295 (D. Vt. 2007); Cent. Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F. Supp. 2d 1151 (E.D. Cal. 2007), as corrected (Mar. 26, 2008). 54 83 FR 42986, 43232–38 (Aug. 24, 2018). 55 See id. at 43235. 56 See id. at 43237–38. 57 49 U.S.C. 32902(f). PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 which determine manufacturers’ credits or shortfalls. See 49 U.S.C. 32903. NHTSA also finalizes the view, as discussed in the proposal, that ZEV mandates are preempted by EPCA.58 Such laws, which require that a certain number or percentage of vehicles sold or delivered in a State by a manufacturer meet ZEV requirements, directly and substantially affect fuel economy standards by requiring manufacturers to eliminate fossil fuel use in a portion of their fleet. Like State or local tailpipe GHG emissions standards, ZEV mandates require the application of additional efforts and resources beyond those needed to comply with Federal standards. ZEV mandates also directly conflict with the goals of EPCA as they apply irrespective of the Federal statutory factors the Secretary of Transportation (through NHTSA) is required to consider in setting fuel economy standards, including technological feasibility and economic practicability. In the proposal, NHTSA described, as an example, California’s ZEV mandate, which manufacturers must comply with individually for each State adopting California’s mandate.59 This regime of State mandates forces manufacturers to expend scarce resources on specific technology regardless of consumer demand, and regardless of what the Secretary has determined in her judgment to be the appropriate expenditure of resources necessary to comply with fuel economy standards set in accordance with the balancing required by EPCA. NHTSA also confirms its view that the preemption portion of this joint final action is a statement of what Federal law requires and is effective without regard to any particular model year of vehicles and without regard to the details of the fuel economy and greenhouse gas emissions standards the agencies have set previously or set in the future.60 In other words, NHTSA’s regulation concerning EPCA preemption is independent of and severable from the specific standards it ultimately adopts for model year 2021 through 2026 automobiles. Given the need for clarity on this issue, NHTSA has decided to issue this as a separate final rule and will later finalize the standards for model year 2021 through 2026 automobiles. NHTSA’s preemption regulation formalizes its longstanding position on preemption and incorporates that position into the Code of Federal Regulations provisions concerning passenger automobile 58 See id. at 43238–39. 59 Id. 60 See E:\FR\FM\27SER3.SGM id. at 43239. 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations average fuel economy standards at 49 CFR 531.7 and 49 CFR part 531, appendix B, and light truck fuel economy standards at 49 CFR 533.7 and 49 CFR part 533, appendix B. These portions of the regulations are operable without regard to any specific Federal standards and requirements in 49 CFR parts 531 and 533 or other parts of the Code of Federal Regulations. Likewise, NHTSA’s determination that a State or local law or regulation of tailpipe greenhouse gas emissions from automobiles is related to fuel economy standards is severable from NHTSA’s determination that State or local ZEV mandates are related to fuel economy standards. B. Scientific Relationship Between Tailpipe Carbon Dioxide Emissions and Fuel Economy Standards jbell on DSK3GLQ082PROD with RULES3 NHTSA is finalizing its conclusion that State requirements regulating tailpipe carbon dioxide emissions from automobiles are related to fuel economy standards. The relationship between fuel economy standards and regulations that limit or prohibit tailpipe carbon dioxide emissions from automobiles is a matter of science and mathematics. Commenters did not and cannot dispute the direct scientific link between tailpipe carbon dioxide emissions from automobiles and fuel economy. Thus, State and local laws and regulations that regulate such tailpipe emissions are preempted under EPCA. The relationship between carbon dioxide and fuel economy is described in several statements in an appendix to parts 531 and 533 that NHTSA is finalizing in this document. First, ‘‘[a]utomobile fuel economy is directly and substantially related to automobile tailpipe emissions of carbon dioxide.’’ 49 CFR part 531, appx. B, section (a)(1)(A); 49 CFR part 533, appx. B, section (a)(1)(A).61 No commenters disputed or otherwise specifically commented on this statement. Second, ‘‘[c]arbon dioxide is the natural byproduct of automobile fuel consumption.’’ 49 CFR part 531, appx. B, section (a)(1)(B); 49 CFR part 533, appx. B, section (a)(1)(B).62 One comment identified this as a correct statement,63 and another highlighted this fact in noting NHTSA’s longstanding and consistent view on preemption.64 No commenters disagreed with this factual statement. 61 83 FR 42986, 43489 (Aug. 24, 2018). 62 Id. 63 Walter Kreucher, Docket No. NHTSA–2018– 0067–0444. 64 Association of Global Automakers, Docket No. NHTSA–2018–0067–12032. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 Third, ‘‘[t]he most significant and controlling factor in making the measurements necessary to determine the compliance of automobiles with the fuel economy standards in this part [531 and 533] is their rate of tailpipe carbon dioxide emissions.’’ 49 CFR part 531, appx. B, section (a)(1)(C); 49 CFR part 533, appx. B, section (a)(1)(C).65 The Alliance of Automobile Manufacturers similarly stated that the measurements for CAFE compliance involved ‘‘the same tests, vehicles, sales data, and emissions measurements that the EPA uses to measure carbon dioxide and tailpipe GHG emissions.’’ 66 Fiat Chrysler Automobiles (FCA) also reiterated this point from the Alliance’s comments,67 and the Competitive Enterprise Institute highlighted NHTSA’s discussion of compliance measurement in agreeing that fuel economy standards and greenhouse gas emissions standards are inherently related.68 CARB did not dispute this factual statement, but pointed out that carbon dioxide emissions are only one part of the compliance testing regime Congress approved—a fact that NHTSA had already recognized in its proposal.69 As NHTSA explained in the proposal, as specified by EPCA, compliance with the CAFE standards is and has always been based on the rates of emission of carbon dioxide, carbon monoxide, and hydrocarbons from covered vehicles, but primarily on the emission rates of carbon dioxide.70 The role of carbon dioxide is approximately 100 times greater than the combined role of the other two relevant carbon exhaust gases.71 Fourth, ‘‘[a]lmost all technologically feasible reduction of tailpipe emissions of carbon dioxide is achievable through improving fuel economy, thereby reducing both the consumption of fuel and the creation and emission of carbon dioxide.’’ 49 CFR part 531, appx. B, section (a)(1)(D); 49 CFR part 533, appx. B, section (a)(1)(D).72 The South Coast Air Quality Management District (South Coast) commented that NHTSA previously proposed, in 2008, adopting similar regulatory text that used the 65 83 FR 42986, 43489 (Aug. 24, 2018). of Automobile Manufacturers, Docket No. NHTSA–2018–0067–12073. 67 Fiat Chrysler Automobiles (FCA), Docket No. NHTSA–2018–0067–11943. 68 Competitive Enterprise Institute, Docket No. NHTSA–2018–0067–12015. 69 See California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; 83 FR 42986, 43234 (Aug. 24, 2018). 70 See 83 FR 42986, 43234 (Aug. 24, 2018). 71 71 FR 17566, 17655–56 (Apr. 6, 2006); 83 FR 42986, 43234 (Aug. 24, 2018). 72 83 FR 42986, 43489 (Aug. 24, 2018). 66 Alliance PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 51315 word ‘‘most’’ instead of ‘‘almost all.’’ 73 South Coast asserts that the 2008 proposal shows that NHTSA ‘‘strains to exaggerate’’ the overlap between greenhouse gas emissions standards and fuel economy standards.74 NHTSA disagrees. While South Coast points to hybrid electric vehicles and ZEVs, it offers no evidence to refute the fact that almost all technologically feasible reduction of tailpipe emissions of carbon dioxide is achievable through improving the fuel economy levels of the vehicles in question. Fifth, ‘‘as a practical matter, regulating fuel economy controls the amount of tailpipe emissions of carbon dioxide, and regulating the tailpipe emissions of carbon dioxide controls fuel economy.’’ 49 CFR part 531, appx. B, section (a)(1)(E); 49 CFR part 533, appx. B, section (a)(1)(E).75 No commenter disputed this statement. The National Automobile Dealers Association agreed, putting it this way: ‘‘the physics and chemistry involved with fuel economy and GHG emissions standards are such that controlling fuel economy controls GHGs and controlling GHGs controls fuel economy.’’ 76 It is also worth noting that technology cannot reduce the amount of carbon dioxide produced by combusting one gallon of gas. Instead, only technology that reduces the amount of gas needed to drive one mile (fuel economy) will reduce the amount of carbon dioxide generated per mile. These statements in the regulatory appendix concerning the scientific relationship between automobile carbon dioxide emissions and fuel economy provide the foundation for NHTSA’s preemption analysis. Due to this scientific relationship, which no commenter refuted, a regulation of tailpipe carbon dioxide emissions from automobiles that does not explicitly state that it is regulating fuel economy nevertheless has the effect of doing so. The label a State chooses to put on its regulations certainly is not dispositive in a preemption analysis. See, e.g., Nat’l Meat Ass’n. v. Harris, 565 U.S. 452, 464 (2012). One comment, from the Northeast States for Coordinated Air Use Management (NESCAUM), asserted that ‘‘California’s GHG standards do not mention fuel economy or attempt to 73 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 74 Id. 75 83 FR 42986, 43489 (Aug. 24, 2018). 76 National Automobile Dealers Association, Docket No. NHTSA–2018–0067–12064. E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 51316 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations regulate fuel economy.’’ 77 To such comments, the agencies must ask ourselves the age-old question: ‘‘What’s in a name?’’ and conclude ‘‘[t]hat which we call a rose by any other name would smell as sweet.’’ 78 Arguments focused on form, or worse—labels—over substance are not persuasive. Moreover, it is indisputable that EPCA preemption reaches beyond explicit regulations of fuel economy and into regulations ‘‘related to’’ fuel economy. The words ‘‘related to’’ cannot be read out of the statute or narrowed in a way that undermines Congress’s broad preemption intent. It is a matter of undisputed fact that the more fuel a vehicle burns or consumes, the more carbon dioxide it emits. There is a necessary relation between the regulation of one side of this equation and the regulation of the other. In other words, improving fuel economy has two inherently related benefits: Reducing fuel consumption and reducing carbon dioxide emissions. State and local governments cannot evade the preemptive sweep of EPCA by emphasizing only one side of these benefits and downplaying or ignoring the other when describing their regulations. To further illustrate the situation, consider types of regulations for a swimming pool. If the pool has a hose on one side that is filling the pool and a hose on the other side that is draining the pool, you can regulate the water level in the pool by controlling either hose. Limiting the amount of water released by the inflow hose, is not itself a regulation of the outflow hose. But it is nonsensical to say that regulating the pool’s inflow is not related to regulating its outflow. A regulation of either hose necessarily affects the level of water in the same pool. The Supreme Court has recognized preemption should appropriately apply in such contexts. See Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 368, 72 (2008) (looking at effect of regulation to determine it was preempted even though ‘‘it tells shippers what to choose rather than carriers what to do’’ where Federal law preempted State laws ‘‘related to a price, route, or service of any motor carrier . . . with respect to the transportation of property’’); Engine Mfrs. Ass’n. v. South Coast Air Quality Mgmt. Dist., 541 U.S. 246, 255 (2004) (explaining that it ‘‘would make no sense’’ to allow a State regulation to 77 Northeast States for Coordinated Air Use Management (NESCAUM), Docket No. NHTSA– 2018–0067–11691. 78 W. Shakespeare, Romeo & Juliet, II, ii (47–48) (1597). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 evade preemption simply because it addressed the purchase, rather than manufacture, of a federally regulated product). Massachusetts v. EPA, 549 U.S. 497, 532 (2007). Recent developments in California provide good examples of the need for a national standard and the problem C. Importance of One National Standard that Congress sought to address in enacting EPCA’s preemption provision. To ensure uniform national fuel After the agencies published the economy standards, Congress proposal, California amended its determined that it was appropriate to regulations such that manufacturers are preempt States and local governments bound to comply with requirements from adopting or enforcing laws or consistent with the no action alternative regulations related to the Federal for model years 2021 through 2026,80 standards. Effectuating Congress’s goal requires NHTSA to address preemption. regardless of what the Federal standards are ultimately adopted. Moreover, even Preemption is necessary to the as to the existing Federal standard, effectiveness of NHTSA’s existing and California’s regulations are forthcoming fuel economy standards impermissible under EPCA because and regulatory certainty into the future, only a Federal standard can apply specifically, one set of national standards. Congress made clear, through nationally. State or local standards necessarily apply at the State and local the required comprehensive balancing level, and therefore are inherently of factors and underlined by its inconsistent with the nationwide inclusion of an express preemption average standards pursuant to EPCA. provision, that State and local See 49 U.S.C. 32901(a)(5)–(6), (13). requirements impede the national fuel Likewise, State and local compliance economy program. Thus, NHTSA is regimes interfere with the national exercising its authority in this program of credits and shortfalls for document, under 49 U.S.C. 32901 nationwide fleet performance by making through 32903, to promulgate regulations to protect the integrity of the compliance across the country inordinately complicated, inefficient, national program. This confirms the and expensive. See id. 32903. clear preemptive nature of NHTSA’s Despite a widespread shared belief in standards, as stated in 49 U.S.C. 329219 the importance of one national standard, and provides additional clarity on the NHTSA’s proposal on preemption scope of preemption, to carry out received a mix of support and NHTSA’s statutory authority to set opposition in comments. Some nationally applicable standards. A consistent refrain throughout many commenters weighed in on preemption of the comments NHTSA received on its largely only to emphasize the importance of having a national preemption proposal was the need for standard.81 Other commenters that one national standard.79 Preemption supported the substance of the proposal provides for just that uniformity. agreed with NHTSA’s analysis of both Indeed, that was the very purpose for express and implied preemption, as Congress’s including the express well as the conclusion that both State preemption provision in EPCA. laws that limit and State laws that In enacting EPCA’s preemption prohibit carbon dioxide tailpipe provision, Congress explicitly emissions from automobiles, or have the recognized the need to avoid a direct or substantial effect of doing so, patchwork of requirements related to are preempted.82 On the other hand, fuel economy standards, and gave those commenters that opposed the NHTSA the exclusive authority to set substance of the proposal asked NHTSA and enforce fuel economy standards to withdraw and not finalize any with discrete and limited exceptions as regulatory text concerning set forth in 49 U.S.C. 32919. NHTSA’s exclusive authority is exercised through preemption.83 Doing so would ignore the very purpose of EPCA’s fuel joint rulemaking with EPA for the very economy provisions and NHTSA’s reason that tailpipe carbon dioxide statutory obligation under EPCA: To emissions standards are directly and balance statutory factors in order to substantially related to fuel economy standards and apply concurrently to the 80 83 FR 42986, 42990 tbl. I–4 (Aug. 24, 2018). same fleet of vehicles. This joint action 81 See, e.g., Toyota Motor North America, Docket enables the Federal government to No. NHTSA–2018–0067–12150. administer its overlapping obligations 82 See, e.g., Alliance of Automobile while avoiding inconsistency. See Manufacturers, Docket No. NHTSA–2018–0067– 79 See, e.g., Alliance of Automobile Manufacturers, Docket No. NHTSA–2018–0067– 12073; Association of Global Automakers, Docket No. NHTSA–2018–0067–12032. PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 12073; Competitive Enterprise Institute, Docket No. NHTSA–2018–0067–12015. 83 See, e.g., Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations establish standards that are ‘‘the maximum feasible average fuel economy level that the Secretary decides the manufacturers can achieve in that model year.’’ 84 NHTSA disagrees with the comments that ask it to withdraw its proposal and not finalize any regulatory text on preemption. Given the present circumstances, failing to address this issue amounts to ignoring the existence of EPCA’s preemption provision, and allowing for State and local requirements that interfere with NHTSA’s statutory duty to set nationally consistent fuel economy standards. The rule NHTSA is adopting in this document, under its authority to implement a national automobile fuel economy program in 49 U.S.C. 32901 through 32903, will ultimately provide needed certainty concerning preemption into the future. While EPCA’s preemption provision has been in place for decades, the present circumstances demonstrate the need for greater clarity on this issue. NHTSA’s statutory role is to set nationwide standards based on a reasoned balancing of statutory factors. State and local requirements—unbound by these considerations—undermine NHTSA’s ability to set standards applicable across the entire country. NHTSA is obliged to set standards at ‘‘the maximum feasible average fuel economy level that the Secretary decides the manufacturers can achieve in that model year.’’ 49 U.S.C. 32902(a). The regulation NHTSA is finalizing in this document implements that authority in 49 U.S.C. 32902 by clarifying the State requirements that impermissibly interfere with its statutory role to set nationally applicable standards. As explained in the proposal, as a practical matter, State and local actors would generally only set requirements that have the effect of requiring a higher level of average fuel economy (lest their standards lack impact).85 That supposition has now been demonstrated by California’s preemptive action to effectively set higher standards than the Federal standards, should the forthcoming final SAFE rule finalize anything lower than the no action alternative described in the NPRM for model years 2021 through 2026. This state of regulatory inconsistency—and even the potential for such inconsistency—is anathema to the express terms and purposes of EPCA, which does not even permit States to set fuel economy standards identical to those set by NHTSA in 84 49 85 83 U.S.C. 32902(a), (f). FR 42986, 43238 (Aug. 24, 2018). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 accordance with the statutory requirements.86 Even identical standards interfere with the national program by imposing requirements not applicable to nationwide fleets and impose compliance regimes inconsistent with EPCA. See, e.g., 49 U.S.C. 32903 (establishing specific requirements for earning and using credits based on nationwide average fuel economy performance). California’s recent action also demonstrates disregard for NHTSA’s mandate to set standards in no more than 5 model year increments.87 To avoid inconsistent State standards, California’s regulatory change would require NHTSA to adopt the most stringent of nine regulatory alternatives it considered in the proposal.88 NHTSA did not bind itself in any way to that regulatory alternative in its 2012 final rule, and to do so would have been contrary to law.89 Automakers must comply with the Federal fuel economy and GHG emissions requirements, and do so at significant cost. States like California that do not abide by the constraints of Federal law, and instead set inconsistent or even duplicative requirements related to fuel economy standards unjustifiably increase manufacturers’ compliance costs, which must be either passed along to consumers or absorbed by the industry. Clarity on preemption is therefore essential to ensure the industry has the ability to efficiently expend its resources to comply with the nationally applicable standards determined by the Federal government in light of the Federal statutory factors that must be balanced, without the need to separately account for or comply with State or local requirements. While it is of course ideal for States to independently abide by the constraints of Federal law, this does not reflect the current state of affairs. NHTSA’s awareness of laws and regulations already in place, as well as the public comments it received in response to its proposal, confirm the need for additional clarity on the boundaries of EPCA preemption. Wrongly decided decisions by district courts in California and Vermont (appeals of which were abandoned as a condition of the negotiated agreement 86 See 49 U.S.C. 32902(a), 32919(a). id. 32902(a), (b)(3)(B). 88 See Cal. Code Regs. tit. 13, section 1961.3(c); see 83 FR 42986, 42990 tbl. I–4 (Aug. 24, 2018) (listing augural standards as baseline/no action alternative, and eight other alternatives under consideration). 89 See 49 U.S.C. 32902(b)(3)(B); 77 FR 62624, 62627 (Oct. 15, 2012). 87 See PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 51317 prior to the 2012 rulemaking), as well as NHTSA’s own silence on this issue in recent years, are sowing confusion, emphasizing the need for the clarity provided by this final rule affirmatively establishing One National Program.90 D. NHTSA’s Final Rule Provides Clarity and Certainty on EPCA Preemption This final rule provides needed clarity on the scope of EPCA preemption. NHTSA is adopting regulatory text, including a detailed appendix, in addition to discussing this issue in the preamble to the rule, specifically to provide clarity on EPCA’s preemption provision. NHTSA rejects the assertion advanced in one comment that NHTSA did not provide notice and a fair opportunity to comment on its interpretation of EPCA preemption.91 Any such suggestion is negated by the host of commenters that addressed the issue of preemption in response to the proposal. NHTSA proposed codifying its preemption interpretation in parts 531 and 533, and all commenters were explicitly asked to comment on the specific proposed regulatory text as well as on the explanation of NHTSA’s interpretation set out in the preamble to the NPRM. NHTSA also disagrees with a comment from the California Air Resources Board (CARB) that asserted the proposal was not clear on the scope of preemption.92 The regulatory text articulates the boundaries of both express and implied preemption, with appropriate limitation to State or local laws or regulations that: (1) Regulate or prohibit tailpipe carbon dioxide emissions from automobiles, or (2) have the direct or substantial effect of regulating or prohibiting tailpipe carbon 90 As described in the proposal, NHTSA’s views on preemption are longstanding. However, NHTSA has not directly addressed preemption in its most recent CAFE rulemakings. South Coast disputes that NHTSA’s views on preemption are longstanding, pointing to legal and factual developments since. South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. That NHTSA has not opined on developments does not mean that its views have changed. South Coast also points to some wording changes to argue that NHTSA has shifted positions. NHTSA disagrees. It has consistently held the position that State regulation of tailpipe greenhouse gas emissions from automobiles is preempted, and South Coast has not identified any statements to the contrary. In any event, the fact that NHTSA has not addressed EPCA preemption in its most recent rulemakings highlights the need to address the issue without further delay. 91 Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. 92 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067– 11735. E:\FR\FM\27SER3.SGM 27SER3 51318 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations dioxide emissions from automobiles or automobile fuel economy. In the proposal, NHTSA provided examples of laws that would not be preempted.93 CARB did not identify any examples of laws where additional clarity was needed. It should not be difficult for States or local governments to ascertain whether their laws or regulations regulate or prohibit tailpipe carbon dioxide emissions. As NHTSA explained in the proposal and reiterates in this document, both requirements specific to tailpipe carbon dioxide emissions from automobiles and those that address all tailpipe greenhouse gas emissions from automobiles are preempted, given that carbon dioxide emissions constitute the overwhelming majority of those emissions.94 Likewise, ZEV mandates are also preempted.95 NHTSA also does not believe it should be difficult for States or local governments to determine if their laws or regulations have the direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions from automobiles or automobile fuel economy.96 To aid in this effort, in the proposal, NHTSA described requirements that would not be preempted because they have only incidental impact on fuel economy or carbon dioxide emissions.97 The examples NHTSA provided were child seat mandates and laws governing vehicular refrigerant leakage.98 Moreover, contrary to assertions in some comments, NHTSA’s adoption of regulatory text does provide a limiting principle 99 and is not overbroad.100 Congress set the extraordinarily broad boundaries of preemption in EPCA, where it specified that State and local laws ‘‘related to fuel economy 93 83 FR 42986, 43235 (Aug. 24, 2018). at 43234. 95 See id. at 43238–39. 96 South Coast argued that EPCA preemption would not reach possible State and local requirements concerning lease arrangements or requirements for used vehicles. South Coast Air Quality Management District, Docket No. NHTSA– 2018–0067–11813. NHTSA does not agree. EPCA preempts requirements related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under EPCA. If a State requirement falls within this scope, it is preempted. For example, a State could not prohibit dealers from leasing automobiles or selling used automobiles unless they meet a fuel economy standard. 97 83 FR 42986, 43235 (Aug. 24, 2018). 98 Id. 99 Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. 100 Id.; California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. jbell on DSK3GLQ082PROD with RULES3 94 Id. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 standards’’ are preempted. The words ‘‘related to’’ have meaning and cannot be read out of the statute. To the extent that questions of interpretation remain about the scope of preemption, that is a consequence of the statute, and is far from unique—particularly with respect to the ‘‘related to’’ language, which Congress has used in multiple contexts.101 The Supreme Court has opined on the meaning of similar terms. However, NHTSA recognizes the concerns about the appropriate limitations of preemption. Notwithstanding the broad sweep of EPCA preemption, NHTSA intends to assert preemption only over State or local requirements that directly or substantially affect corporate average fuel economy standards. Through its adoption of specific regulatory text in this document, NHTSA is providing guidance on the boundary set by Congress, as well as under principles of implied preemption. Notably, NHTSA has not concluded that implied preemption broadens the scope of preemption established by Congress. As NHTSA recognized in its proposal, some greenhouse gas emissions from automobiles have no relation to fuel economy and therefore may be regulated by States or local governments without running afoul of EPCA preemption. NHTSA provided examples of State or local requirements that are not preempted. It also specifically invited comment on the extent to which State or local requirements can have some incidental impact on fuel economy or carbon dioxide emissions without being related to fuel economy standards, and thus are not preempted. NHTSA did not receive any directly responsive comments regarding this issue, including from State and local government commenters, suggesting that they do not currently have questions about how preemption would apply to their laws or regulations.102 As an additional limiting principle, NHTSA reiterates the statement in its 101 See Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 370–73 (2008); Am. Airlines v. Wolens, 513 U.S. 219, 226–27 (1995); Shaw v. Delta Airlines, Inc., 463 U.S. 85, 97 (1983). 102 Some commenters did assert that California’s greenhouse gas emissions standards or ZEV mandates have only an incidental impact on fuel economy, or that NHTSA was not clear why those requirements have more than an incidental impact on fuel economy. California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Northeast States for Coordinated Air Use Management (NESCAUM), Docket No. NHTSA– 2018–0067–11691; South Coast Air Quality Management District, Docket No. NHTSA–2018– 0067–11813. NHTSA disagrees. It discussed these issues in detail in parts b, f, and g of the preemption discussion of the proposed rule and incorporates those discussions here. 83 FR 42986, 43234, 37–39 (Aug. 24, 2018). PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 proposal that only a portion of a law or regulation would be preempted, where possible. This would be the case if the law or regulation combined multiple severable elements that were allowable and not allowable, such as with a regulation of both vehicular refrigerant leakage and tailpipe carbon dioxide emissions—refrigerant leakage requirements could remain in place while tailpipe carbon dioxide emissions regulations would necessarily be preempted. NHTSA rejects the argument made by certain commenters that the presumption against preemption applies in this context.103 The presumption is not appropriate given EPCA’s express statutory preemption provision. See Puerto Rico v. Franklin Cal. Tax-Free Trust, 136 S. Ct. 1938, 1946 (2016) (explaining that ‘‘because the statute ‘contains an express pre-emption clause,’ we do not invoke any presumption against pre-emption but instead ‘focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ preemptive intent.’ ’’) (quoting Chamber of Commerce of United States of Am. v. Whiting, 563 U.S. 582, 594 (2011)). NHTSA reaffirms the view that EPCA’s express preemption provision is broad and clear. NHTSA’s review and assessment of comments has not changed its view. Some comments noted that the statute specifically preempts laws or regulations related to fuel economy standards.104 They assert that States and local governments are unconstrained by EPCA preemption in regulating future model year vehicles, before they are covered by a fuel economy standard issued by NHTSA. NHTSA disagrees. EPCA preempts State and local laws and regulations that relate to: (1) Fuel economy standards, or (2) average fuel economy standards for automobiles covered by an average fuel economy standard under 49 U.S.C. Chapter 329. Currently, automobiles through model year 2021 are covered by an average fuel economy standard under Chapter 329.105 NHTSA will continue setting standards for future model years, pursuant to the mandate in 49 U.S.C. 32902(a) that ‘‘[a]t least 18 months 103 See California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Center for Biological Diversity et al., Docket No. NHTSA– 2018–0067–12000; South Coast Air Quality Management District, Docket No. NHTSA–2018– 0067–11813. 104 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813; see also Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. 105 See 77 FR 62624, 62637 (Oct. 15, 2012). E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations before the beginning of each model year, the Secretary of Transportation shall prescribe by regulation average fuel economy standards for automobiles manufactured by a manufacturer in that model year.’’ 106 NHTSA prescribes ‘‘average fuel economy standards for at least 1, but not more than 5, model years.’’ 49 U.S.C. 32902(b)(3)(B). State and local requirements that address automobiles beyond model year 2026 are therefore preempted if they relate to ‘‘fuel economy standards’’ that NHTSA is required to establish in the future. To conclude otherwise would be to make the impermissible assumption that NHTSA will not carry out Congress’s command. The regulation NHTSA is finalizing in this document implements that authority in 49 U.S.C. 32902 by making clear that State and local requirements that relate to fuel economy standards for future model year vehicles conflict with NHTSA’s ability to set nationally applicable standards for those vehicles in the future and thus are impliedly preempted. Manufacturers make design decisions well in advance of production, as Congress recognized by adding ‘‘lead time’’ provisions to the statute. State and local requirements for automobiles not yet covered by a NHTSA standard could force manufacturers into plans that are not economically practical or otherwise inconsistent with EPCA’s statutory factors—since States and local governments are not bound by those considerations. By the time future model year vehicles are produced, they will be covered by a NHTSA standard. If States or local governments were permitted to issue regulations related to fuel economy for future model year vehicles, manufacturers would at least act at risk of running afoul of those nonFederal regulations. At least some manufacturers would undoubtedly feel compelled to conform with such nonFederal regulations until the Federal government sets its own standards. Even if non-Federal regulations are not ultimately enforceable as to produced vehicles (since a Federal fuel economy standard will be adopted, in time), they clearly conflict with the congressionally imposed constraint of issuing standards for not more than 5 model years. Such far-reaching regulations are based on predictions about the future that are inevitably less reliable the further in time they reach. Manufacturers are therefore put in an untenable position of either planning towards State and local regulations based on potentially outdated or unrealistic expectations 106 49 U.S.C. 32902(a) (emphasis added). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 about the future, or ignoring them before knowing the Federal standards that will eventually apply and acting at risk of enforcement by non-Federal actors. Moreover, different States could impose different and conflicting fuel economy requirements on manufacturers for future model years, a result directly at odds with the single national standard established by EPCA. Any of these scenarios demonstrates that the position that EPCA preemption does not reach regulation of model year vehicles not currently covered by a NHTSA standard is flawed. State or local requirements related to fuel economy standards for any model year automobiles are preempted. The regulatory text and preamble discussion clearly articulates NHTSA’s views on the meaning of ‘‘related to’’ in EPCA’s express preemption provision, which are confirmed following NHTSA’s review and assessment of comments. As discussed in the proposal, EPCA is not unique in using the phrase ‘‘related to’’ to set the scope of preemption.107 NHTSA described prior Supreme Court case law interpreting this phrase as broad and including such conceptual relationships as having an ‘‘association with’’ or ‘‘connection to.’’ In its comments, South Coast asserted that NHTSA’s discussion was ‘‘legally erroneous’’ because it did not include ‘‘discussion and analysis’’ of a line of Supreme Court cases that began with New York State Conference of Blue Cross v. Travelers Ins. Co., 514 U.S. 645 (1995).108 South Coast’s criticism is unfounded; NHTSA directly recognized the Travelers line of cases which look to the objectives of the statute as a guide to the scope of preemption. See Travelers, 514 U.S. at 656. In the proposal, NHTSA specifically applied this analysis to the CAFE context and cited a 1997 case quoting Travelers.109 The Travelers line of cases supports NHTSA’s position on preemption. As NHTSA explained in the proposal, EPCA’s preemption provision demonstrates that one of Congress’s objectives was to create a single set of national fuel economy standards. The language Congress enacted preempts all State and local laws and regulations that relate to fuel economy standards, and does not exempt even State requirements that are identical to Federal requirements. Moreover, NHTSA’s proposal was not intended as a comprehensive recitation of all case law addressing the use of 107 83 FR 42986, 43233 (Aug. 24, 2018). Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 109 83 FR 42986, 43233 (Aug. 24, 2018). 108 South PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 51319 ‘‘related to’’ in statutory preemption provisions. There are many Supreme Court decisions that support the breadth of that language beyond those specifically cited in the proposal.110 For example, in Rowe, the Court recognized that a State statute that forbid certain retailers from employing a delivery service unless it followed certain delivery procedures was preempted by the Federal Aviation Administration Authorization Act, which preempted States from enacting or enforcing laws ‘‘related to a price, route, or service of any motor carrier.’’ Rowe, 552 U.S. at 368, 71–73. The Court recognized that the State law was directed at shippers rather than carriers, but found that the effect of the requirements impacted carriers. Id. at 372. The Court explained that State laws ‘‘whose ‘effect’ is ‘forbidden’ under federal law are those with a ‘significant impact’ on carrier rates, routes or services.’’ Id. at 375 (emphasis in original). Likewise, here, regulation of tailpipe carbon dioxide emissions has a direct and undeniably substantial effect on fuel economy. However, NHTSA, of course, agrees that ‘‘related to’’ is not unlimited.111 NHTSA specifically discussed the limitations of preemption in its proposal, which only seeks to preempt State or local requirements that directly or substantially affect corporate average fuel economy. NHTSA also provided specific examples of State laws and regulations that would not be preempted, as well as clearly articulating some that are preempted. As discussed above, the regulatory text NHTSA is adopting in this document is appropriately limited and consistent with the scope of preemption established by Congress. With respect to implied preemption, NHTSA agrees with comments that assert it is a fact-driven analysis.112 However, NHTSA disagrees that there was an insufficient factual record for it to evaluate the conflict either at the time of the proposal or now.113 NHTSA is well aware of State regulations of tailpipe greenhouse gas emissions (including carbon dioxide) and ZEV mandates, and described several of these in the proposal. The foundational 110 See, e.g., Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364, 367–72 (2008). 111 As the Supreme Court has stated, ‘‘the breadth of the words ‘related to’ does not mean the sky is the limit.’’ Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260 (2013). 112 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA– 2018–0067–11735. 113 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873. E:\FR\FM\27SER3.SGM 27SER3 51320 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations factual analysis involves the scientific relationship between automobile fuel economy and automobile tailpipe emissions of carbon dioxide. NHTSA discussed this scientific relationship in detail. No commenter contested the scientific and mathematical relationship between them. Contrary to CARB’s contention in its comments, the fact that NHTSA acknowledged that some State requirements that incidentally affect greenhouse gas emissions are not preempted does not demonstrate that there is an insufficient record for finding that other laws do pose a conflict to NHTSA’s statutory role to set nationwide fuel economy standards for automobiles.114 To the contrary, NHTSA carefully considered and acknowledged the limitations of EPCA preemption by discussing a variety of types of laws, and providing specific examples. NHTSA also disagrees with the claim made in some comments that it does not have delegated authority to issue a regulation on this topic, and is not owed deference or weight for its regulation implementing EPCA’s express preemption provision or the conflict resulting from State or local laws or regulations.115 Congress gave the Secretary of Transportation express authorization to prescribe regulations to carry out her duties and powers. 49 U.S.C. 322(a).116 NHTSA has delegated authority to carry out the Secretary’s authority under Chapter 329 of Title 49, which encompasses EPCA’s preemption provision, as well as EISA.117 NHTSA therefore has clear authority to issue this regulation under 49 U.S.C. 32901 through 32903 to effectuate a national automobile fuel economy program unimpeded by prohibited State and local requirements. As explained here, the statute is clear on the question of preemption, and NHTSA must carry it out. See Coventry Health Care of Missouri, Inc. v. Nevils, 137 S. Ct. 1190, 1193 n.3 (2017) (holding that preemption applies and ‘‘the statute alone resolves this dispute’’). However, to the extent there is any ambiguity, NHTSA is the expert agency and its jbell on DSK3GLQ082PROD with RULES3 114 Id. 115 Id.; Center for Biological Diversity et al., Docket No. NHTSA–2018–0067–12000; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA– 2018–0067–11735; South Coast Air Quality Management District, Docket No. NHTSA–2018– 0067–11813. 116 49 U.S.C. 322(a) specifically states: ‘‘The Secretary of Transportation may prescribe regulations to carry out the duties and powers of the Secretary. An officer of the Department of Transportation may prescribe regulations to carry out the duties and powers of the officer.’’ 117 49 CFR 1.95(a), (j). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 regulation adopted in this document is entitled to deference.118 As explained in the proposal, NHTSA is the expert agency given authority to administer the Federal fuel economy program and has expert authority to interpret and apply the requirements of EPCA, including preemption. See Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (‘‘Because the FDA is the federal agency to which Congress has delegated its authority to implement the provisions of the Act, the agency is uniquely qualified to determine whether a particular form of state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,’ Hines v. Davidowitz, 312 U.S. 52, 67, 61 S. Ct. 399, 404, 85 L. Ed. 581 (1941), and, therefore, whether it should be preempted.’’); see also Nat’l Rifle Ass’n v. Reno, 216 F.3d 122 (D.C. Cir. 2000) (rejecting argument that Attorney General lacked authority to issue regulation that she described as clarifying that certain State requirements were not preempted by Federal law). This is particularly true given the scientific nature of the relationship between fuel economy and greenhouse gas emissions. See Geier v. Am. Honda Motor Co., Inc., 529 U.S. 861 (2000) (‘‘Congress has delegated to DOT authority to implement the statute; the subject matter is technical; and the relevant history and background are complex and extensive. The agency is likely to have a thorough understanding of its own regulation and its objectives and is ‘uniquely qualified’ to comprehend the likely impact of state requirements.’’). NHTSA is also finalizing its view that its regulation concerning EPCA preemption is independent and severable from any particular CAFE standards adopted by NHTSA. NHTSA’s implementation of its authority to set nationally applicable fuel economy standards under 49 U.S.C. 32902, by clarifying the scope of preemption, is separate from its decision on the appropriate standards for any given model years. No commenter disagreed that this portion of the proposed rule is severable. The Alliance of Automobile Manufacturers agreed, noting case law stating that whether a regulation is severable depends on the agency’s intent and whether the remainder of the regulation may still function sensibly.119 Both these considerations support severability here. Given the lack of any comments to the contrary, 118 See, e.g., Chevron USA, Inc. v. Nat’l Res. Defense Council, Inc., 467 U.S. 837, 843–45 (1984). 119 Alliance of Automobile Manufacturers, Docket No. NHTSA–2018–0067–12073. PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 NHTSA is finalizing its conclusion that the standards for model year 2021 through 2026 automobiles are independent of and severable from the decision NHTSA is finalizing in this document on EPCA preemption. Moreover, given the need for clarity on preemption, and in order to give effect to existing standards established pursuant to 49 U.S.C. 32902, NHTSA is issuing this final rule now before making a final determination on the standards portion of the proposal. E. Direct and Substantial Relationship Between ZEV Mandates and Fuel Economy Standards NHTSA is also finalizing its conclusion that a State law or regulation that either explicitly prohibits tailpipe carbon dioxide emissions from automobiles or has the direct or substantial effect of doing so is preempted, both pursuant to the express preemption provision in 49 U.S.C. 32919 and implied preemption, as an obstacle to NHTSA’s national program pursuant to 49 U.S.C. 32901–32903. As explained in greater detail in the proposal, carbon dioxide emissions constitute the overwhelming majority of tailpipe carbon emissions.120 The only feasible way of eliminating tailpipe carbon dioxide emissions altogether is to eliminate the use of fossil fuel. Thus, regulations that require a certain number or percentage of a manufacturer’s fleet of vehicles sold in a State to be ZEVs that produce no carbon dioxide tailpipe emissions necessarily affect the fuel economy achieved by the manufacturer’s fleet as well as the manufacturer’s strategy to comply with applicable standards, and are therefore preempted under EPCA. These regulations therefore have just as a direct and substantial impact on corporate average fuel economy as regulations that explicitly eliminate carbon dioxide emissions, and are therefore preempted. NHTSA described types of ZEV mandates in detail in its proposal, including California’s ZEV mandate, which has been adopted by ten other States.121 ZEV mandates force the development and commercial deployment of ZEVs, irrespective of the technological feasibility or economic practicability of doing so. The Alliance of Automobile Manufacturers commented that this interference with NHTSA’s balancing of 120 83 FR 42986, 43234 (Aug. 24, 2018). id. at 43239. At the time of the proposal, nine States had adopted California’s ZEV mandate. Since that time, a tenth State—Colorado—has also done so. https://www.colorado.gov/pacific/cdphe/ aqcc (indicating that ZEV standards were adopted on August 16, 2019). 121 See E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 statutory factors and forced adoption of specific design approaches are grounds for finding ZEV mandates preempted.122 NHTSA agrees. In setting fuel economy standards, among the factors that NHTSA must consider are technological feasibility and economic practicability. 49 U.S.C. 32902(f). NHTSA is also required to set performance-based standards, and not design mandates.123 See 49 U.S.C. 32902(b)(2). These considerations are at odds with ZEV mandates. NHTSA disagrees with comments that expressed the view that ZEV mandates are not related to fuel economy standards because ZEVs emit no criteria pollutants or greenhouse gases.124 Just as a State may not require a specific level of tailpipe carbon dioxide emissions from automobiles, since doing so effectively sets a specific level of fuel economy, a State may not prohibit tailpipe carbon dioxide emissions from automobiles. That is the equivalent of setting a specific emissions level—zero, which also prohibits the use of fossil fuel. In fuel economy terms, that is akin to requiring a vehicle to having the maximum conceivable level of fuel economy. A prohibition on ozone-forming emissions has the same effect, since the only vehicles capable of emitting no ozoneforming emissions are vehicles that do not use fossil fuels. As NHTSA explained, this type of regulation poses a direct conflict with EPCA, particularly as it relates to requiring a percentage of technological fleet penetration— represented by credits or actual vehicles—that an automaker must distribute into a State. ZEV mandates force investment in specific technology (battery electric and fuel cell technology) rather than allowing manufacturers to improve fuel economy by whatever technological path they choose, allowing them to pursue more cost-effective technologies that better reflect consumer demand, as is the case under the CAFE program. ZEV mandates also create an even more fractured regulatory regime. As NHTSA explained in the proposal, 122 Alliance of Automobile Manufacturers, Docket No. NHTSA–2018–0067–12073. 123 South Coast asserts that ZEV mandates are performance based because any vehicle meeting the requirements can be certified as a ZEV. South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. But, it is inherent that the requirements—ZEV means zero-emissions vehicle—dictate a particular design. In any event, for the reasons described above, ZEV mandates are related to fuel economy standards however framed. 124 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 manufacturers must satisfy ZEV mandates in each State individually.125 NHTSA also disagrees with a comment that argued ZEV mandates are not preempted because the definition of fuel economy in EPCA is in reference to gasoline or equivalent fuel.126 EPCA preempts State and local requirements related to fuel economy standards. That ZEV mandates are not themselves expressed as mile-per-gallon standards for fossil-fuel powered vehicles is not dispositive. NHTSA explained the relationship between ZEV mandates and fuel economy standards in detail in the proposal and reiterates that discussion here.127 Many commenters expressed support for ZEV mandates as matter of policy.128 NHTSA does not take issue with those policy objectives to the extent they do not conflict with EPCA or otherwise impermissibly interfere with the Federal regulation of fuel economy. NHTSA notes that States and local governments are able to continue to encourage ZEVs in many different ways, such as through investments in infrastructure and appropriately tailored incentives.129 States and local governments cannot adopt or enforce regulations related to fuel economy standards, which include ZEV mandates, but they are able to pursue their policy preferences, as long as the manner in which they do so does not conflict with Federal law. F. EISA Did Not Narrow or Otherwise Alter EPCA Preemption NHTSA reiterates, as it discussed in the proposal, that EISA did not narrow the express preemption clause in 49 U.S.C. 32919. In fact, EISA did not alter EPCA’s express preemption clause in any way. As a factual matter, Congress neither amended or nor repealed EPCA’s preemption clause with the enactment of EISA. EISA’s savings clause did not amend EPCA. The savings clause, codified at 42 U.S.C. 17002, states: ‘‘Except to the extent expressly provided in this Act or an 125 83 FR 42986, 43239 (Aug. 24, 2018); see Competitive Enterprise Institute, Docket No. NHTSA–2018–0067–12015. 126 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873. 127 See 83 FR 42986, 43238–39 (Aug. 24, 2018). 128 National Coalition for Advanced Transportation (NCAT), Docket No. NHTSA–2018– 0067–11969; Union of Concerned Scientists, Docket No. NHTSA–2018–0067–12039. 129 Certain incentives are preempted by EPCA. See Metro. Taxicab Bd. of Trade v. City of New York, 615 F.3d 152 (2d Cir. 2010) (holding that New York City rule that incentivized hybrid taxis by allowing taxi owners to charge more for the lease of hybrid vehicles were ‘‘based expressly on the fuel economy of a leased vehicle, [and] plainly fall within the scope of the EPCA preemption provision.’’). PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 51321 amendment made by this Act, nothing in this Act or an amendment made by this Act supersedes, limits the authority provided or responsibility conferred by, or authorizes any violation of any provision of law (including a regulation), including any energy or environmental law or regulation.’’ 130 As described in the proposal, EISA’s savings clause does not expand any preexisting authority. Instead, the clause expressly states that it did not impose a new limitation on such authority. By its plain text, EISA also does not authorize any violation of any provision of law. This includes EPCA’s express preemption clause. Thus, activities prohibited by the express preemption clause before EISA, such as State laws related to fuel economy standards, continued to be prohibited after EISA. The text of the savings clause is what controls its meaning, not statements by individual Members of Congress. South Coast claims that NHTSA did not discuss such statements in detail, including statements by Senator Feinstein.131 NHTSA did recognize in the proposal that the Congressional Record contains statements by certain Members of Congress about their individual views, but explained that such statements lack authority. As NHTSA explained in the proposal, such statements cannot expand the scope of the savings clause or clarify it. Individual Members, even those who may have played a lead role in drafting a particular bill, cannot speak for the body of Congress as a whole.132 NHTSA interprets the statutory language based on the words actually adopted by both Houses and signed by the President. NHTSA likewise does not find persuasive the argument that Congress did not enact additional statutory language in EISA preempting California from regulating tailpipe greenhouse gas 130 One commenter pointed out that the proposal did not include the clause before the first comma when it quoted the language of the savings provision. South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. However, NHTSA disagrees with the commenter that the introductory clause has a substantive impact on this issue. That clause states: ‘‘Except to the extent expressly provided in this Act or an amendment made by this Act . . .’’ But, EISA did not expressly authorize States to regulate or prohibit tailpipe greenhouse gas emissions from automobiles. 131 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 132 N.L.R.B. v. SW Gen., Inc., 137 S. Ct. 929, 942– 43 (2017) (‘‘Passing a law often requires compromise, where even the most firm public demands bend to competing interests. What Congress ultimately agrees on is the text that it enacts, not the preferences expressed by certain legislators. . . .[F]loor statements by individual legislators rank among the least illuminating forms of legislative history.’’ (citations omitted)). E:\FR\FM\27SER3.SGM 27SER3 51322 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 emissions from automobiles. A comment from three Senators provides documents related to potential proposals to do so.133 There are many reasons for Congress not to adopt proposals set forward by one interest group or another, including, of course, because they were unnecessary. That is the case here where EPCA’s preemption provision already prevented States from adopting and enforcing requirements related to fuel economy standards. Given the words of the savings clause, NHTSA rejects the argument made by South Coast that the ‘‘EISA saving provision designedly narrows EPCA’s express preemption provision, and Congress intended this result.’’ 134 The savings clause did not amend the preemption provision in EPCA. Moreover, what the savings clause actually says is that it does not limit authority. If a regulation is preempted by EPCA, a State has no authority to enforce it, and EISA did not change that status quo. If Congress wanted to amend the broad and clear express preemption provision in EPCA, it could have and would have done so. It did not. Because NHTSA disagrees that States could permissibly regulate tailpipe greenhouse gas emissions from automobiles prior to EISA, it also disagrees with comments that argue that Congress ‘‘preserved’’ the ability of States to do so through the savings clause (or, alternatively, that efforts to ‘‘revoke’’ such preexisting authority failed).135 NHTSA also disagrees with a comment by South Coast that argues that EISA’s savings provision forecloses implied preemption.136 The specific words that South Coast points to are the opening clause: ‘‘Except to the extent expressly provided in this Act or an amendment made by this Act.’’ This language does not address preemption under EPCA. That introductory clause merely modifies the remainder of the savings provision, which goes on to say that ‘‘nothing in this Act or an amendment made by this Act . . . limits the authority provided . . . or authorizes any violation of any provision of law . . . .’’ This statutory language prevents EISA from limiting preexisting authority or responsibility conferred by any law or from 133 U.S. Senators Tom Carper, Diane Feinstein and Edward J. Markey, Docket No. NHTSA–2018– 0067–11938 134 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 135 Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. 136 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. VerDate Sep<11>2014 20:16 Sep 26, 2019 Jkt 247001 authorizing violation of any law. States and local governments had no preexisting authority or responsibility to set requirements related to fuel economy standards. Such requirements are void ab initio. The savings provision also does not purport to expand preexisting authority or responsibility, nor did Congress amend in any way the broad express preemption provision in EPCA when it enacted EISA. Moreover, implied preemption as applied here is not a limitation based in EISA or the Clean Air Act. Implied preemption is instead based on the Secretary of Transportation’s preexisting responsibility under EPCA to balance statutory factors in setting nationwide fuel economy standards for automobiles. The provision in EISA concerning minimum requirements for Federal government vehicles also does not change NHTSA’s view. Several comments referenced this provision, which states that the EPA ‘‘Administrator shall take into account the most stringent standards for vehicle greenhouse gas emissions applicable to and enforceable against motor vehicle manufacturers for vehicles sold anywhere in the United States’’ in identifying vehicles for the Federal government fleet. 42 U.S.C. 13212(f)(3)(B).137 Commenters argued that the phrase ‘‘the most stringent standards’’ would be superfluous if only EPA were allowed to set standards and, in addition, if EPA had not set any such standards at the time EISA was enacted. On the contrary, this provision is fully consistent with NHTSA’s view of preemption, based on the plain text of EPCA’s express preemption provision. The language in the EISA provision specifically indicates that it applies only to ‘‘the most stringent standards . . . enforceable against motor vehicle manufacturers.’’ 138 This means that EPA could consider only otherwise lawful standards. States and local governments are not permitted to enforce standards preempted by EPCA. 49 U.S.C. 32919(a). However, EPCA does specifically permit a State or local government to ‘‘prescribe requirements for fuel economy for automobiles obtained for its own use.’’ 49 U.S.C. 32919(c). It is logical that the Federal government would consider the requirements for States and local government vehicle fleets in evaluating vehicles for its own Federal government fleet. Such 137 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA– 2018–0067–11735. 138 42 U.S.C. 13212(f)(3)(B) (emphasis added). PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 requirements would be applicable to and could be enforced against manufacturers in contractual procurement relationships with States or local governments. In any event, this provision concerning a limited set of vehicles (Federal government vehicles) is not grounds for undoing the uniform national fuel economy standards applicable to all light vehicles as prescribed by Congress in EPCA. In enacting this provision in EISA, Congress required the EPA Administrator to ‘‘issue guidance identifying the makes and model number of vehicles that are low greenhouse gas emitting vehicles’’ to aid in identifying vehicles for the Federal government’s own fleet. 42 U.S.C. 13212(f)(3)(A). The provision requiring the Administrator to ‘‘take into account the most stringent standards for vehicles greenhouse gas emissions’’ provides a consideration for that guidance. Id. 13212(f)(3)(B). It is not plausible that Congress intended this limited provision concerning guidance on Federal government procurement to disrupt the longstanding express preemption provision in EPCA. Further, to read this procurementrelated provision as somehow showing that Congress intended to allow California to establish laws related to fuel economy standards is unreasonable, as doing so would put California in an unequal setting vis-a-vis other states, and that would not make sense in this context. ‘‘The Act also differentiates between the States, despite our historic tradition that all the States enjoy ‘equal sovereignty.’ ’’ Northwest Austin Municipal Utility District Number One v. Holder, 557 U.S. 193, 203 (2009). A ‘‘departure from the fundamental principal of equal sovereignty requires a showing that a statute’s disparate geographic coverage is sufficiently related to the problem that it targets.’’ Id. Congress rejected any such prospect in the area of fuel economy by adding an unwaivable preemption clause in EPCA. NHTSA does not presume that Congress, when adopting EISA, impliedly discarded the equal application of EPCA to the States without a clear statement of intent to do so and a recitation of the ‘‘extraordinary conditions’’ permitting California special authority related to fuel economy. Id. at 211. ‘‘Congress . . . does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.’’ 139 139 Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 468 (2001). E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 G. Prior Case Law Does Not Preclude Preemption Certain comments opposed to NHTSA’s proposal rely upon the Supreme Court’s decision in Massachusetts v. EPA to argue that regulation of tailpipe emissions is separate and distinct from regulation of fuel economy.140 NHTSA disagrees with attempts to stretch the holding of this decision well beyond the issues addressed by the Court. The Court did not address EPCA preemption in Massachusetts v. EPA, or State regulations pursuant to a Clean Air Act waiver. The Court addressed only EPA’s own statutory obligations, which have no bearing on EPCA preemption. Moreover, as discussed above, NHTSA and EPA conduct joint rulemaking consistent with the Supreme Court’s decision. The Court acknowledged that NHTSA and EPA’s statutory obligations may overlap, but that the agencies may both administer those obligations while avoiding inconsistency.141 NHTSA therefore disagrees with the comment’s assertion that regulations of tailpipe greenhouse gas emissions and fuel economy are truly separate and distinct. The agencies issue joint rules precisely because of the unavoidable scientific relationship between the two. A number of comments also rely on the prior district court decisions in California and Vermont in opposing NHTSA’s proposal on preemption.142 As NHTSA discussed in the proposal, those courts previously concluded that State tailpipe greenhouse gas emissions standards were not preempted by EPCA.143 NHTSA continues to disagree with both of these district court decisions, as described in detail in the proposal.144 This includes the California district court’s erroneous view of the requirement in EPCA for NHTSA to consider ‘‘other standards’’ in setting fuel economy standards.145 In reaching its conclusion, the court misconstrued a separate provision of EPCA that, by its explicit terms, has had no effect for decades. Importantly, neither district court considered NHTSA’s views on 140 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; see Northeast States for Coordinated Air Use Management (NESCAUM), Docket No. NHTSA– 2018–0067–11691. 141 Massachusetts v. EPA, 549 U.S. 497, 532 (2007). 142 Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735; South Coast Air Quality Management District, Docket No. NHTSA– 2018–0067–11813. 143 83 FR 42986, 43235 (Aug. 24, 2018). 144 Id. at 43235–38. 145 Id. at 43236–37. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 preemption in construing the statute NHTSA administers.146 Although the United States filed an amicus brief opposing the Vermont court’s decision in the Second Circuit, that appeal was not decided on the merits due to the automotive industry’s withdrawal of the appeal as a part of a negotiated agreement connected to the national framework. In its brief, the United States specifically raised the district court’s failure to consider NHTSA’s views concerning preemption, let alone give them weight.147 Withdrawal of appeals was expressly part of the agreement to establish the national framework. The Vermont district court also attempted to reconcile EPCA and the Clean Air Act by asserting that a Clean Air Act waiver converts State requirements to ‘‘other motor vehicle standards’’ that NHTSA must consider in setting fuel economy standards. As NHTSA noted in the proposal, even the California district court found that there was no legal foundation for the view that a State regulation pursuant to a Clean Air Act waiver becomes the equivalent of a Federal regulation.148 This is an erroneous finding not based on precedent and is unsupported by applicable law. As described in the proposal, NHTSA also disagrees with the California and Vermont district courts’ implied preemption analyses.149 NHTSA does not believe those courts fully considered the conflict posed by State regulations and, in one case, even went so far as to assert erroneously that NHTSA could simply defer to California in revising its standards.150 Those decisions are not binding on NHTSA. Given NHTSA’s previously stated views on those decisions, arguments that rely on the decisions are not 146 Id. at 43236; Proof Brief for the United States as Amicus Curiae, 07–4342–cv (2d Cir. filed Apr. 16, 2008). 147 See Proof Brief for the United States as Amicus Curiae, 07–4342–cv (2d Cir. filed Apr. 16, 2008). NHTSA also was not a litigant in the district court cases and, therefore, did not have a full opportunity to raise its views. 148 83 FR 42986, 43236 (Aug. 24, 2018). 149 Id. at 43238. 150 Cent. Valley Chrysler-Jeep, Inc., 529 F. Supp. 2d at 1179. NHTSA has a statutory obligation to set standards at ‘‘the maximum feasible average fuel economy level that the Secretary decides the manufacturers can achieve in that model year,’’ in accordance with the statutory considerations. 49 U.S.C. 32902(a), (f). Thus, NHTSA cannot simply defer to a State. For example, the only standards that California would permit to satisfy California requirements for model years 2021 through 2025 are the augural standards. See Cal. Code Regs. tit. 13, § 1961.3(c). If NHTSA finalizes a determination that the augural standards are not ‘‘maximum feasible,’’ as discussed in the proposal, then it would be contrary to law for NHTSA to nevertheless adopt them in deference to California. PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 51323 persuasive. Commenters did not provide any new information or analysis of those district court decisions that caused the agency to change its view on the decisions.151 NHTSA incorporates the prior discussion of those decisions from the proposal here. While NHTSA need not belabor its views again here, it is worth emphasizing, as did commenters, that both district courts ignored NHTSA’s published prior statements on preemption in rendering their decisions.152 Some comments seem to suggest that this failure to address NHTSA’s views represents a substantive rejection of those views.153 NHTSA disagrees. The district courts simply entirely failed to consider the agency’s views; they did not consider and reject them or even find that they were not due any weight. This is among the reasons that NHTSA is formalizing its views in a regulation. As the expert agency charged with administering EPCA, NHTSA is tasked with balancing the four statutory factors in determining the ‘‘maximum feasible average fuel economy standards’’ for each model year.154 In doing so, NHTSA has the unique ability to determine whether State or local regulations would undermine this balancing.155 NHTSA’s views on preemption certainly should be considered by any court evaluating this issue. This is particularly true given that the relationship between fuel economy standards and greenhouse gas emissions is a matter of science. One commenter also erroneously asserts that collateral estoppel will bar the Department of Justice from defending a final rule that asserts State greenhouse gas emissions regulations are preempted by EPCA.156 Nonmutual offensive collateral estoppel does not apply to the United States. United States v. Mendoza, 464 U.S. 154, 162 (1984). Moreover, the Federal government was not even a party to the prior litigation involving EPCA preemption. The assertion that the Department of Justice would be barred from defending this final rule lacks merit. 151 As noted by a commenter, the appeals were dismissed before decision as a practical matter, and despite strong arguments on the merits. Fiat Chrysler Automobiles (FCA), Docket No. NHTSA– 2018–0067–11943. 152 83 FR 42986, 43236 (Aug. 24, 2018). 153 See California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873. 154 49 U.S.C. 32902(f). 155 See id. 156 See South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. E:\FR\FM\27SER3.SGM 27SER3 51324 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 H. A Clean Air Act Waiver and SIP Approvals Do Not Foreclose EPCA Preemption Both agencies are finalizing their tentative conclusion from the proposal that a Clean Air Act waiver does not also foreclose EPCA preemption. EPCA does not provide for a waiver of preemption, either by NHTSA or by another Federal agency. EPA, like NHTSA, does not have the authority to waive EPCA preemption. Therefore, its grant of a Clean Air Act waiver cannot operate to waive EPCA preemption. NHTSA discussed the basis for its view that a Clean Air Act waiver does not ‘‘federalize’’ EPCA-preempted State requirements in detail in its proposal. NHTSA reaffirms that discussion. Several comments recited the district court’s holding in Green Mountain Chrysler that it need not consider EPCA preemption due to the EPA waiver.157 NHTSA discussed in detail in the proposal its reasons for disagreeing with that decision and commenters did not identify any new information that caused NHTSA to change its view. NHTSA agrees with commenters that reject the flawed reasoning of the district court.158 As one commenter explained, the argument that an EPA waiver federalizes State requirements renders the EPCA preemption provision a nullity.159 As the commenter noted, this incorrect interpretation would enable States to even issue explicit fuel economy requirements so long as they were under cover of a waiver from EPA. EPA does not have authority to waive any aspect of EPCA preemption, nor does NHTSA. NHTSA also finalizes its view that preempted standards are void ab initio. No commenters presented information that altered NHTSA’s view, which is based on longstanding Supreme Court case law, as cited by the proposal. NHTSA agrees with South Coast, which suggested in its comments that EPCA does not outweigh the Clean Air Act.160 Likewise, the Clean Air Act does not outweigh EPCA. Just as manufacturers must comply with requirements under both statutes, both statutes apply to State and local 157 See, e.g., California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Class of 85 Regulatory Response Group, Docket No. NHTSA–2018–0067–12070; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067– 11735. 158 See, e.g., American Fuel & Petrochemical Manufacturers, Docket No. NHTSA–2018–0067– 12078. 159 Competitive Enterprise Institute, Docket No. NHTSA–2018–0067–12015. 160 See South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 governments as well. Moreover, EPCA’s preemption provision is fully consistent with the Clean Air Act. EPCA’s preemption provision does not implicitly repeal parts of Section 209(b), contrary to the assertion in one comment.161 States must simply act in accordance with both statutes. Cf. Massachusetts v. EPA, 549 U.S. 497, 532 (2007) (finding no inconsistency between obligations of EPA under Clean Air Act and NHTSA under EPCA). NHTSA has rejected the argument that a Clean Air Act waiver renders EPCA preemption inapplicable, and likewise rejects the even more attenuated argument concerning EPA’s approval of preempted State requirements as a part of a State Implementation Plan (SIP) submission for areas that do not meet National Ambient Air Quality Standards (NAAQS). A State has no authority to adopt or enforce a requirement that falls within the scope of EPCA preemption. 49 U.S.C. 32919(a). This is true even if adopting the unlawfully enacted requirement would assist the State in coming into compliance with the NAAQS. The inclusion of an invalid fuel economy requirement in an air quality SIP does not render the requirement suddenly valid.162 NHTSA therefore disagrees with comments that suggest that EPCA preemption no longer applies simply because an unauthorized requirement is included in a SIP that is subsequently approved.163 It is inappropriate for a State to take action unauthorized and rendered void by one statutory scheme to meet the requirements of a different statutory scheme. Moreover, EPCA preemption applies directly to States and local governments which are obliged to adhere to the constraints of the Supremacy Clause. EPCA explicitly prohibits States and local governments from adopting or enforcing a law or regulation related to fuel economy standards. It is unreasonable for States to expect a Federal agency (EPA) acting under one statutory scheme (the Clean Air Act) to analyze whether the State has adopted preempted regulations in contravention of an entirely separate statute (EPCA) administered by a different Federal agency (NHTSA). In fact, as noted above, historically EPA has declined to 161 Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. 162 SIPs must include ‘‘enforceable emission limitations.’’ 42 U.S.C. 7410(a)(2)(A). An EPCA preempted requirement is not enforceable. 49 U.S.C. 32919(a). 163 See South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 address questions unrelated to CAA section 209, such as preemption analysis, in its waiver decisions. NHTSA strongly disagrees with the assertion that EPA’s approval of a SIP silently acts as an implied waiver of EPCA preemption. This suggestion is particularly hollow given that neither EPA nor NHTSA has the authority to waive EPCA preemption. NHTSA agrees with the general principle that an approved SIP is enforceable as a matter of Federal law.164 However, the case law does not support the argument made by CARB and South Coast’s comments. The case law explains that a SIP approved by EPA creates binding obligations, pursuant to the Clean Air Act.165 There is no indication that Congress intended to permit one agency to legitimize an otherwise EPCA-preempted State provision by ‘‘federalizing’’ it. As an analogy, the IRS requires individuals to report and pay taxes on money earned from illegal activity, such as dealing drugs.166 A drug dealer who complies with Federal tax law is not relieved of the prohibitions on possessing and selling drugs that apply under other Federal laws. Since SIPs are binding on States, the agencies recognize that certain States may need to work with EPA to revise their SIPs in light of this final action.167 As stated in the proposal, EPA may subsequently consider whether to employ the appropriate provisions of the Clean Air Act to identify provisions of States’ SIPs that may need review because they include preempted ZEV mandates or greenhouse gas emissions standards.168 However, this practical consideration is not grounds for ignoring EPCA’s limitations on State action. SIPs are not written in stone. They are subject to revision, including based on changed circumstances. The Clean Air Act allows SIPs to be revised for various reasons, including that part of the plan was approved in error, that the plan is ‘‘substantially inadequate,’’ or that the State is suspending or 164 See California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 165 See, e.g., Safe Air for Everyone v. United States Envt’l Prot. Agency, 488 F.3d 1088, 1091 (9th Cir. 2007). 166 Internal Revenue Service, Publication 525: Taxable and Nontaxable Income 32 (Mar. 8, 2019), https://www.irs.gov/pub/irs-pdf/p525.pdf. 167 EPA explains below that it will consider whether and how to address SIP implications of this action, to the extent that they exist, in separate actions; EPA believes that it is not necessary to resolve those implications in the course of this action. 168 83 FR 42986, 43244 (Aug. 24, 2018). E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations revoking a program included in a plan. 42 U.S.C. 7410(a)(5)(iii), (k)(5)–(6). jbell on DSK3GLQ082PROD with RULES3 I. NHTSA Has Appropriately Considered the Views of States and Local Governments Consistent With Law NHTSA considers the views of all interested stakeholders—including States and local governments—in carrying out its statutory obligation to set nationally applicable fuel economy standards. However, EPCA does not permit States or local governments to act as co-regulators with NHTSA in the process of setting fuel economy standards. Indeed, EPCA precludes them from doing so, with the sole exception of information disclosure requirements identical to Federal requirements, and for requirements for fuel economy for automobiles obtained for a State or local governments’ own use. A number of commenters urged NHTSA to work cooperatively with California, and to negotiate with and reach a compromise with California.169 NHTSA appreciates such comments, and seeks to foster a collaborative regulatory approach to the extent possible. That said, California is not permitted by Federal law to have its own separate laws or regulations relating to fuel economy standards. 49 U.S.C. 32902 makes clear that NHTSA sets nationally applicable fuel economy standards, and NHTSA is implementing its authority to do so through this regulation clarifying the preemptive effect of its standards consistent with the express preemption provision in 49 U.S.C. 32919. The very limited exceptions to preemption set forth in EPCA—covering vehicles for a government’s own use, and for disclosure requirements that are identical to Federal requirements—only confirm the breadth of preemption. See 49 U.S.C. 32919(b)–(c). States or localities cannot adopt or enforce requirements related to fuel economy standards unless they fall into one of these two discrete exceptions. This means requirements related to fuel economy standards for automobiles for use by a State’s citizens, and not merely the State itself, are not permitted. Since States are not permitted to adopt or enforce requirements related to fuel 169 See, e.g., American Honda Motor Company, Inc., Docket No. NHTSA–2018–0067–11818; Sen. T. Carper, United States Senate, Docket No. NHTSA– 2018–0067–11910; Maryland Department of the Environment, Docket No. NHTSA–2018–0067– 12044; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735; Manufacturers of Emission Controls Association, Docket No. NHTSA–2018–0067–11994; North Carolina Department of Environmental Quality, Docket No. NHTSA–2018–0067–12025. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 economy standards for vehicles sold or delivered to the public, Federal law does not allow California (or any other State or local government) to regulate in this area. For California, or any other State or local government, to regulate in this area would require NHTSA to waive EPCA preemption, but commenters did not and cannot identify any statutory authorization for NHTSA to do so and no such authority exists, either expressly or impliedly. The Clean Air Act requires EPA to waive Clean Air Act preemption under a specific section of that statute unless it makes certain findings. But because EPCA does not enable NHTSA to issue a waiver of preemption, it also does not set forth terms upon which a waiver would be appropriate.170 Thus, NHTSA lacks a legal basis for approving of or consenting to State or local requirements related to fuel economy standards. Absent the affirmative authority to approve of or consent to State or locality’s requirements related to fuel economy standards, commenters appear to ask NHTSA to simply to look aside. That is inconsistent with NHTSA’s legal responsibility to set nationally applicable standards. It is also inconsistent with the self-executing nature of EPCA preemption, meaning that State or local requirements related to fuel economy standards are void ab initio. Even if NHTSA wanted to do so, it cannot breathe life into an expressly preempted State law. And doing so would effectively result in NHTSA’s purporting to rewrite a statute, which is beyond the power of a regulatory agency. NHTSA also disagrees that it is appropriate to ignore EPCA preemption as a strategy to avoid litigation over this issue, a strategy strongly suggested by a large number of commenters. NHTSA understands the concerns of such commenters who hope to avoid prolonged litigation.171 However, NHTSA believes that long-term certainty is best achieved by applying the law as written. NHTSA agrees with commenters who acknowledge the disruption to the automotive marketplace that would come if preempted standards remained in place.172 Addressing preemption directly, as NHTSA has done through its 170 EPA also does not have authority to waive EPCA preemption, under the Clean Air Act or otherwise. 171 American Honda Motor Company, Inc., Docket No. NHTSA–2018–0067–11818; Ford Motor Company, Docket No. NHTSA–2018–0067–11928. 172 Fiat Chrysler Automobiles (FCA), Docket No. NHTSA–2018–0067–11943. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 51325 adoption of regulatory text in this document, will ultimately provide the needed regulatory certainty into the future. Those commenters that ask NHTSA to negotiate with California demonstrate the nature of the problem.173 The underlying reason commenters are concerned about the absence of a compromise resolution is because of the conflict that will result if States proceed with regulations that are inconsistent with Federal requirements.174 Such commenters, appropriately, have recognized the disruptive effect of continuing to tolerate multiple regulators in this area. Moreover, as discussed in additional detail below, a negotiated resolution is inconsistent with the APA’s notice and comment rulemaking process. NHTSA has no basis in law to ignore the substantive comments received on its proposal from many stakeholders and instead determine an outcome through negotiation with a regulatory agency in California. NHTSA is a safety agency with different priorities than CARB, with a different set of factors to balance, including safety implications. As discussed above, many comments emphasized a desire for maintaining a National Program. Neither California nor any other State, of course, has the authority to set national standards in any area. If California were to adopt and enforce requirements related to fuel economy standards, there could only be uniform standards applicable throughout the country if California agrees with the standards set by NHTSA or vice versa. But EPCA requires that ‘‘[e]ach standard shall be the maximum feasible average fuel economy level that the Secretary’’—not a regulatory agency in the State of California—‘‘decides that the manufacturers can achieve in that model year.’’ 175 49 U.S.C. 32902(a). 173 See, e.g., American Honda Motor Company, Inc., Docket No. NHTSA–2018–0067–11818; Sen. T. Carper, United States Senate, Docket No. NHTSA– 2018–0067–11910; Manufacturers of Emission Controls Association, Docket No. NHTSA–2018– 0067–11994. 174 See Cal. Code Regs. tit. 13, section 1961.3(c). 175 As NHTSA explained in the proposal, it disagrees with the implication of the district court’s statement in Central Valley that ‘‘NHTSA is empowered to revise its standards’’ to take into account California’s regulations. 83 FR 42986, 43238 (Aug. 24, 2018); see Cent. Valley ChryslerJeep, Inc., 529 F. Supp. 2d at 1179. NHTSA’s duty under EPCA is to balance the statutory factors, not to acquiesce to the views of one State (which by its own assertion is attempting to address Statespecific concerns, including the geography of its population centers). See, e.g., California Air Resources Board (CARB), Docket No. NHTSA– 2018–0067–11873 (stating that California’s ‘‘population continues to live predominantly in basins bounded by mountains, in which air quality is poor’’). E:\FR\FM\27SER3.SGM 27SER3 51326 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 Moreover, a faithful application of EPCA requires more than just avoiding inconsistency. For that reason, it is unavailing that CARB has previously implemented its program purportedly consistent with the Federal government.176 EPCA requires NHTSA to set nationally applicably standards. EPCA does not permit States or local governments to adopt or enforce even identical or equivalent standards.177 EPCA allows for only a single regulator—NHTSA—to set fuel economy standards. Moreover, it is now clear it does not intend to do so for model year 2021 through 2026 vehicles, should the forthcoming final SAFE rule finalize standards other than the no action alternative as described in the NPRM.178 And even consistent programs subject manufacturers to duplicative enforcement regimes, in conflict with EPCA.179 State standards that are identical or equivalent standards to the Federal standards manufacturers nevertheless obligate manufacturers to meet more onerous requirements. That is because States, of course, lack authority to set nationwide requirements. Therefore, manufacturers must meet State standards within each State that has adopted them. Since fuel economy standards are fleetwide average standards, it is more difficult to achieve a standard in a particular State, averaged across a smaller pool of vehicles, than it is to achieve the Federal standard, averaged across the pool of vehicles for all States. In addition, there is no legal basis in EPCA or the APA for California or any other State to receive preferential treatment for their views in this statutory scheme or rulemaking process.180 Nor is California, or any other State, entitled to negotiate the 176 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873. 177 EPCA does allow States or local governments to adopt identical requirements for disclosure of fuel economy or fuel operating costs, but did not allow identical requirements in other areas related to fuel economy. See 49 U.S.C. 32919(b). 178 See Cal. Code Regs. tit. 13, section 1961.3(c). 179 EPCA has an unusual civil penalty provision for violations of fuel economy standards that enables various compliance flexibilities, including use of banked credits, credit plans, credit transfers, and credit trades. See 49 U.S.C. 32912. EPCA also requires specific procedures and findings before the Secretary of Transportation may increase the civil penalty rate applicable to violations of fuel economy standards. 49 U.S.C. 32912(c). State and local enforcement of even identical or equivalent requirements interferes with this enforcement structure. 180 See Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193, 203 (2009) (stating that ‘‘a departure from the fundamental principle of equal sovereignty requires a showing that a statute’s disparate geographic coverage is sufficiently related to the problem that it targets’’). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 appropriate standards with NHTSA. Commenters appear to suggest closeddoor negotiations, and not an alternative rulemaking process (such as negotiated rulemaking), that would ensure procedural fairness.181 NHTSA disagrees that negotiation is the appropriate mechanism to set nationally applicable policy with billions of dollars of impacts. The notice-andcomment rulemaking process used by the agencies is the appropriate mechanism for setting standards under EPCA and the Clean Air Act, with due consideration to the views of all interested parties and transparency. NHTSA certainly would prefer a result that is satisfactory to all interested stakeholders, but it may not set aside its own considered views on the appropriate standards to reach a negotiated resolution, nor may it set aside Congress’s commands in EPCA. While States or local governments may not adopt or enforce requirements related to fuel economy standards, NHTSA, of course, is considering their views in setting appropriate standards. Many State and local governments commented at great length on both the preemption and standard setting portions of NHTSA’s proposal.182 NHTSA has taken their views into account in finalizing this rule, along with those of other commenters. States and local governments have had and will continue to have a say in the adoption of fuel economy standards, consistent with the APA. Indeed, many of the technical comments provided by California and other State and local governments and agencies are being considered to improve the analysis regarding the appropriate standards. In an area with express preemption, this APA process is the appropriate means by which the Federal government 181 One comment noted that prior negotiations were ‘‘closed-door, ‘put nothing in writing, ever’ negotiations.’’ Competitive Enterprise Institute, Docket No. NHTSA–2018–0067–12015; see also Sen. Phil Berger & Rep. Tim Moore, North Carolina General Assembly, Docket No. NHTSA–2018–0067– 11961. 182 See, e.g., California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; Joint Submission from Governors of Texas, et al., Docket No. NHTSA–2018–0067–11935; Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA– 2018–0067–11735; Maryland Department of the Environment, Docket No. NHTSA–2018–0067– 12044; Minnesota Pollution Control Agency (MPCA), the Minnesota Department of Transportation (MnDOT), and the Minnesota Department of Health (MDH), Docket No. NHTSA– 2018–0067–11706; North Carolina Department of Environmental Quality, Docket No. NHTSA–2018– 0067–12025; Pennsylvania Department of Environmental Protection, Docket No. NHTSA– 2018–0067–11956; Washington State Department of Ecology, Docket No. NHTSA–2018–0067–11926. PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 should consider the views of States and local governments. NHTSA also disagrees with the view expressed by some commenters that there is not a direct conflict between State regulation of tailpipe carbon dioxide emissions from automobiles issued pursuant to a Clean Air Act waiver and NHTSA’s ability to set fuel economy standards under EPCA. South Coast argues that when there are inconsistent standards, automakers can avoid a conflict by complying with the more stringent standard.183 NHTSA disagrees that this situation does not pose a conflict. Higher standards than those NHTSA has determined are ‘‘maximum feasible’’ after balancing the statutory factors negates the agency’s judgment in setting national standards, including traffic safety. NHTSA addressed this conflict in detail in the proposal and reiterates that discussion here.184 NHTSA also disagrees that all manufacturers should simply comply with a higher standard than the standards set by the Federal government based on statutory considerations. It may not be technically feasible for manufacturers to comply with higher standards or the higher standards may not be economically practicable. These are factors that NHTSA must carefully assess and balance in setting standards under EPCA, and the notion that a State has the unilateral ability to veto or undermine NHTSA’s determination by setting higher standards directly conflicts with EPCA. South Coast also asserted in its comments that there is no direct conflict between the purpose of EPCA to reduce fuel consumption by increasing fuel economy and the purpose of the Clean Air Act to protect public health from air pollution, including by allowing California to establish motor vehicle standards if it meets the criteria for a waiver.185 While it is true that there need not be a conflict between EPCA and the Clean Air Act, this statement is irrelevant to the determination of whether State standards are preempted by EPCA. NHTSA and EPA conduct joint rulemaking in this area because EPA’s greenhouse gas emissions standards are inherently related to NHTSA’s fuel economy standards. This inherent linkage was recognized by the Supreme Court in Massachusetts v. 183 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 184 See section f of the proposal’s preemption discussion. 83 FR 42986, 43237–38 (Aug. 24, 2018). 185 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations EPA.186 California and other States have, for many years, regulated ozoneforming emissions from vehicles pursuant to a Clean Air Act waiver without posing a conflict with NHTSA’s regulation of fuel economy. It is when States regulate the emission of greenhouse gases, especially carbon dioxide, that the conflict arises because of the direct and substantial relationship between tailpipe emissions of carbon dioxide and fuel economy. Regulation in this area is related to NHTSA’s fuel economy standards and impedes NHTSA’s ability to set nationally applicable fuel economy standards. NHTSA also disagrees with comments that assert it did not properly consider federalism concerns. Specifically, South Coast claimed that NHTSA violated the executive order on federalism, Executive Order 13132, although South Coast acknowledges the Executive Order does not create an enforceable right or benefit.187 Setting aside the Executive Order’s non-justiciability for the moment, NHTSA’s action complies with Executive Order 13132. Contrary to South Coast’s assertion, the executive order recognizes both express preemption and conflict preemption, and it does not bar the application of conflict preemption where a statute contains an express preemption provision.188 The provisions concerning express preemption and conflict preemption are in separate paragraphs, which are not mutually exclusive. See E.O. 13132 section 4(a)–(b). Moreover, the executive order supports NHTSA’s action in construing preemption through rulemaking. See id. The executive order explicitly supports the process NHTSA used here to consider the views of States and local governments, stating that: ‘‘When an agency proposes to act through adjudication or rulemaking to preempt State law, the agency shall provide all affected State and local officials notice and an opportunity for appropriate participation in the proceedings.’’ E.O. 13132 section 4(e). NHTSA cited to Executive Order 13132 in the preemption portion of its proposal,189 jbell on DSK3GLQ082PROD with RULES3 186 See Massachusetts v. EPA, 549 U.S. 497, 532 (2007). 187 E.O. 13132 section 11; South Coast Air Quality Management District, Docket No. NHTSA–2018– 0067–11813. South Coast also states that NHTSA did not mention the Tenth Amendment in its proposal. South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. However, South Coast does not assert that this action violates the Tenth Amendment, which is fully consistent with Federal preemption. See Constitution, Article VI. 188 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 189 83 FR 42986, 43233 n.496 (Aug. 24, 2018). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 and specifically solicited comments from State and local officials, as well as other members of the public. As discussed above, NHTSA has considered the extensive comments from State and local governments. EPCA preemption also does not improperly impinge on the rights of States. Several commenters argued for allowing States to regulate in this area due to asserted benefits of State regulation.190 CARB’s comments went into extensive detail on its history of regulating vehicles.191 It also asserted that there is industry support for its regulation in this area,192 and argued that it has reliance interests in its regulations.193 CARB also argued that NHTSA’s proposal would adversely impact its police power and ability to protect its citizens.194 In addition, it claimed that NHTSA’s proposal would impact its State-imposed mandate for emissions reductions by 2030, given the transportation sector’s contributions to California’s greenhouse gas emissions.195 Notwithstanding these asserted interests of policy, Congress determined that NHTSA should have exclusive authority to set fuel economy standards and that States are not authorized to adopt or enforce regulations related to those standards, with limited exceptions described above. No commenter argued that EPCA’s preemption provision is unconstitutional. Some commenters, however, have argued that special treatment afforded to the California is problematic.196 Just as States have no valid police power to set fuel economy standards directly, neither are they permitted under EPCA and the Supremacy Clause to set standards related to fuel economy standards. States do have input into the Federal fuel economy standards established by NHTSA (as well as EPA’s related greenhouse gas emissions standards) through the notice-and-comment process, and the interests of California’s citizens as well as the citizens of the 190 See, e.g., California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873. 191 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873. 192 Id. 193 Id. 194 Id.; see also Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. 195 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873. 196 E.g., Sen. Phil Berger & Rep. Tim Moore, North Carolina General Assembly, Docket No. NHTSA– 2018–0067–11961; Rep. M. Turzai, Pennsylvania House of Representatives, Docket No. NHTSA– 2018–0067–11839. PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 51327 other 49 States are protected by the standards set by the Federal agencies. NHTSA recognizes that California may have different policy views, as do many interested parties, including both those who expressed views in favor of and in opposition to the proposal. However, Congress gave NHTSA the duty to balance competing considerations. NHTSA also rejects the notion that California has valid reliance interests in regulations that are void ab initio. Indeed, even in the run-up to the 2012 rulemaking, California itself reserved its rights to go in a different direction and recognized that the Federal Government may assert preemption at a later date.197 The extent to which all or part of industry does or does not support California’s ability to regulate in this area is also not a relevant consideration to whether California is legally authorized to do so. NHTSA also notes that industry has expressed a strong preference for one national standard, which is the purpose of EPCA’s preemption provision.198 California has now made clear that it will not accept manufacturers’ compliance with Federal standards, unless the agencies adopt the no action alternative from the proposal.199 EPCA preemption ensures that such State regulations are unenforceable and that one set of national standards (the Federal standards) will control. Not even identical standards are permissible. J. Clarifying Changes to Final Rule Text No commenter offered alternative regulatory text for consideration by the 197 See Letter from M. Nichols, CARB to R. LaHood, DOT & L. Jackson, EPA (July 28, 2011), available at https://www.epa.gov/sites/production/ files/2016-10/documents/carb-commitment-ltr.pdf (last visited Sept. 15, 2019) (making certain commitments for a National Program, conditioned on certain events including EPA’s grant of a waiver of Clean Air Act preemption, vehicle manufacturers not challenging California’s standards on the basis of EPCA preemption, and indicating that ‘‘California reserves all rights to contest final actions taken or not taken by EPA or NHTSA as part of or in response to the mid-term evaluation’’). 198 See Alliance of Automobile Manufacturers, Docket No. NHTSA–2018–0067–12073; American Honda Motor Company, Inc., Docket No. NHTSA– 2018–0067–11818; Association of Global Automakers, Docket No. NHTSA–2018–0067– 12032; Fiat Chrysler Automobiles (FCA), Docket No. NHTSA–2018–0067–11943; Ford Motor Company, Docket No. NHTSA–2018–0067–11928; General Motors LLC, Docket No. NHTSA–2018– 0067–11858; Jaguar Land Rover, Docket No. NHTSA–2018–0067–11916; Mazda Motor Company, Docket No. NHTSA–2018–0067–11727; Mitsubishi Motors RD of America, Inc. (MRDA), Docket No. NHTSA–2018–0067–12056; Subaru, Docket No. NHTSA–2018–0067–12020; Toyota Motor North America, Docket No. NHTSA–2018– 0067–12150; Volkswagen Group of America, Docket No. NHTSA–2017–0069–0583. 199 See Cal. Code Regs. tit. 13, section 1961.3(c). E:\FR\FM\27SER3.SGM 27SER3 51328 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 agency on preemption. Because NHTSA is finalizing its views on preemption, it is adopting the proposed regulatory text, including an appendix. However, based on its review of comments, NHTSA is adopting a few minor, clarifying changes. While not advocating for a change to the regulatory text, comments from South Coast and CARB persuaded us to make changes to ensure consistency with EPCA’s express preemption provision, as was NHTSA’s intention.200 South Coast specifically pointed out that two provisions of the proposed regulatory text (appendix B, sections (a)(3) and (b)(3)) did not include the word ‘‘automobiles.’’ 201 Contrary to South Coast’s suggestion, NHTSA’s intention was not to reach beyond the statutory text. Most of the proposed regulatory text explicitly addressed automobiles. In the two provisions identified by South Coast as omitting that term, NHTSA addressed tailpipe carbon dioxide emissions and fuel economy. In context, these references address automobile emissions and automobile fuel economy. However, for clarity and consistency, NHTSA has added explicit reference to automobiles to these two provisions. CARB also pointed out in its comments that the statute preempts laws or regulations ‘‘related to fuel economy standards,’’ not simply those related to fuel economy.202 While other provisions of the proposed rule used the phrases ‘‘relates to fuel economy standards’’ or ‘‘related to fuel economy standards,’’ the word ‘‘standards’’ was inadvertently omitted from section (a)(3) of the appendix. In the final rule, NHTSA has added that word for clarity. In addition, to ensure consistency throughout the regulatory text and with the preamble discussion, NHTSA is clarifying that a State law or regulations having either a direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions or fuel economy is a law or regulation related to fuel economy. The proposal included this statement in the proposed regulatory text: ‘‘Automobile fuel 200 South Coast and CARB asked NHTSA to withdraw its proposal on preemption, rather than to change the text of the proposed rule. California Air Resources Board (CARB), Docket No. NHTSA– 2018–0067–11873; South Coast Air Quality Management District, Docket No. NHTSA–2018– 0067–11813. NHTSA declines to do so for the reasons discussed in this final rule. 201 South Coast Air Quality Management District, Docket No. NHTSA–2018–0067–11813. 202 California Air Resources Board (CARB), Docket No. NHTSA–2018–0067–11873; see also Joint Submission from the States of California et al. and the Cities of Oakland et al., Docket No. NHTSA–2018–0067–11735. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 economy is directly and substantially related to automobile tailpipe emissions of carbon dioxide.’’ This provides the foundation for NHTSA’s express and implied preemption analysis. NHTSA is therefore clarifying that requirements directly or substantially related to fuel economy are preempted by adding ‘‘or substantially’’ to two places in the regulatory text. This is consistent with the proposal, which explained that requirements with no bearing on fuel economy or those with only an incidental impact on fuel economy are not preempted.203 Requirements with more than an incidental impact, i.e. those requirements that directly or substantially affect fuel economy are related to fuel economy and thus preempted. Therefore, this change in the regulatory text of the final rule provides additional clarity on the scope of preemption. In addition, several references throughout the proposed regulatory text addressed a ‘‘state law or regulation.’’ Consistent with EPCA and the discussion in the notice of proposed rulemaking, NHTSA intended to address laws and regulations of States and their political subdivisions. For clarity, NHTSA revised all references in its regulatory text to cover States and their political subdivisions. Specifically, in the rule NHTSA is finalizing in this document, appendix B, section (a)(3) reads: ‘‘A law or regulation of a State or political subdivision of a State having the direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions from automobiles or automobile fuel economy is a law or regulation related to fuel economy standards and expressly preempted under 49 U.S.C. 32919.’’ 204 Appendix B, section (b)(3) reads: ‘‘A law or regulation of a State or political subdivision of a State having the direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions from automobiles or automobile fuel economy is impliedly preempted under 49 U.S.C. Chapter 329.’’ 205 Finally, NHTSA also added clarifying language to 49 CFR 531.7(b) and 533.7(b) to indicate that the references to ‘‘section 32908’’ are to section 32908 of title 49 of the United States Code. These clarifying changes are consistent with the discussion in the preamble to NHTSA’s proposed rule. 203 83 FR 42986, 43235 (Aug. 24, 2018). It is also consistent with the Supreme Court case law interpreting ‘‘related to’’ in preemption provisions, as discussed both in the proposal and this final rule. See, e.g., Rowe, 552 U.S. at 375. 204 Emphases added. 205 Emphases added. PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 III. EPA’s Withdrawal of Aspects of the January 2013 Waiver of CAA section 209(b) Preemption of the State of California’s Advanced Clean Car Program In this section of this joint action, EPA is finalizing its August 2018 proposal to withdraw aspects of its January 2013 waiver of Clean Air Act (CAA) section 209 preemption of the State of California’s Advanced Clean Car (ACC) program. First, subsection A provides background regarding the ACC program. Second, subsection B finalizes EPA’s proposed determination that it has the authority to reconsider and withdraw previously granted waivers. Third, subsection C finalizes EPA’s proposed determination that, in light of NHTSA’s determinations finalized elsewhere in this joint action regarding the preemptive effect of EPCA on state GHG and ZEV programs, EPA’s January 2013 grant of a waiver of CAA preemption for those provisions of California’s program was invalid, null, and void; that waiver is hereby withdrawn on that basis, effective on the effective date of this joint action. Fourth, subsection D, separate and apart from the determinations in subsection C with regard to the effect of EPCA preemption on the January 2013 waiver, finalizes EPA’s reconsideration of, and its proposed determination that it is appropriate to withdraw, its January 2013 grant of a waiver of CAA preemption for the GHG and ZEV standards in California’s ACC program for model years 2021 through 2025, based on a determination that California ‘‘does not need [those] standards to meet compelling and extraordinary conditions’’ within the meaning of CAA section 209(b)(1)(B). Fifth, subsection E sets forth and specifies the terms of the waiver withdrawal. Sixth, subsection F finalizes EPA’s proposed determination that, separate and apart from the findings and determinations described above, states other than California cannot use CAA section 177 to adopt California’s GHG standards. Seventh and finally, subsection G sets forth EPA’s understanding and intention with regard to severability of, and the appropriate venue for judicial review of, this action. A. Background On January 9, 2013, EPA granted California’s request for a waiver of preemption to enforce its Advanced Clean Car (ACC) program regulations under CAA section 209(b)(1).206 78 FR 206 As in the proposal, this final action uses ‘‘California’’ and ‘‘California Air Resources Board’’ (or ‘‘CARB’’) interchangeably. E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations 2112. On August 24, 2018, EPA proposed to withdraw this waiver of preemption with regard to the GHG and ZEV standards of its Advanced Clean Car (ACC) program for MY 2021–2025. 83 FR 43240. In the SAFE proposal, EPA provided extensive background on the history of CAA section 209 and waivers granted thereunder, as well as on the specific waiver which California sought for the ACC program which is at issue here, in the SAFE proposal.207 83 FR 43240–43242. Since publication of the SAFE proposal, California has clarified its ‘‘deemed to comply’’ provision, under which manufacturers are afforded the option of complying with CARB’s GHG standards by showing that they comply with the applicable federal GHG standards. As amended, CARB’s ‘‘deemed to comply’’ provision now provides that compliance with CARB’s GHG standards can be satisfied only by complying with the federal standards as those standards were promulgated in 2012. In other words, while the content of CARB’s GHG standards has never been identical to the corresponding Federal standards, the ‘‘deemed to comply’’ provision as originally designed, and as it existed when EPA issued the January 2013 waiver, would have shielded automobile manufacturers from having to comply with two conflicting sets of standards unless they chose to do so. After the December 2018 amendment, however, CARB’s regulations now contain within them a mechanism which will automatically impose that state of affairs the moment that the Federal government should exercise its authority to revise its standards. California has further recently announced a ‘‘voluntary agreement’’ with four automobile manufacturers that, among other things, requires the automobile manufacturers to refrain from challenging California’s GHG and ZEV programs. This ‘‘voluntary agreement’’ further provides that California will accept automobile manufacturer compliance with a less stringent standard (and one that extends the phase-in of the GHG standard from 2025 to 2026) than either the California program that was the subject of the 2013 waiver or the Federal standards as promulgated in 2012. Neither California’s amendment of its ‘‘deemed to comply’’ provision, nor its more recent announcement of the new 207 A complete description of the ACC program, as it existed at the time that CARB applied for the 2013 waiver, can be found in CARB’s waiver request, located in the docket for the January 2013 waiver action, Docket No. EPA–HQ–OAR– 2012– 0562. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 ‘‘voluntary agreement,’’ constitute a necessary part of the basis for the waiver withdrawal and other actions that EPA finalizes in this document, and EPA would be taking the same actions that it takes in this document even in their absence. Nevertheless, EPA does not believe it appropriate to ignore these recent actions and announcements on the State’s part, and, as discussed below, believes that they confirm that this action is appropriate.208 On January 9, 2013, EPA granted CARB’s request for a waiver of preemption to enforce its ACC program regulations pursuant to CAA section 209(b). 78 FR 2112. The ACC program comprises regulations for ZEV, tailpipe GHG emissions standards, and lowemission vehicles (LEV) regulations 209 for new passenger cars, light-duty trucks, medium-duty passenger vehicles, and certain heavy-duty vehicles, for MY 2015 through 2025. Thus, in terms of the scope of coverage of the respective state and federal programs, the ACC program is comparable to the combined Federal Tier 3 Motor Vehicle Emissions Standards and the 2017 and later MY Light-duty Vehicle GHG Standards, with an additional mandate to force the development and deployment of noninternal-combustion-engine technology. According to CARB, the ACC program was intended to address California’s near and long-term ozone issues as well as certain specific GHG emission reduction goals.210 78 FR 2114. See also 78 FR 2122, 2130–2131. The ACC 208 EPA does not take any position at this point on what effect California’s December 2018 amendment to its ‘‘deemed to comply’’ provision, or its July 2019 ‘‘framework’’ announcement, may of their own force have had on the continued validity of the January 2013 waiver. EPA may address that issue in a separate, future action. 209 The LEV regulations in question include standards for both GHG and criteria pollutants (including ozone and PM). 210 ‘‘The Advanced Clean Cars program . . . will reduce criteria pollutants . . . and . . . help achieve attainment of air quality standards; The Advanced Clean Cars Program will also reduce greenhouse gases emissions as follows: by 2025, CO2 equivalent emissions will be reduced by 13 million metric tons (MMT) per year, which is 12 percent from base line levels; the reduction increases in 2035 to 31 MMT/year, a 27 percent reduction from baseline levels; by 2050, the proposed regulation would reduce emissions by more than 40 MMT/year, a reduction of 33 percent from baseline levels; and viewed cumulatively over the life of the regulation (2017–2050), the proposed Advanced Clean Cars regulation will reduce by more than 850 MMT CO2-equivalent, which will help achieve the State’s climate change goals to reduce the threat that climate change poses to California’s public health, water resources, agriculture industry, ecology and economy.’’ 78 FR 2114. CARB Resolution 12–11, at 19, (January 26, 2012), available in the docket for the January 2013 waiver action, Document No. EPA–HQ–OAR–2012– 0562, the docket for the ACC program waiver. PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 51329 program regulations impose multiple and varying complex compliance obligations that have simultaneous, and sometimes overlapping, deadlines with each standard. These deadlines began in 2015 and are scheduled to be phased in through 2025. For example, compliance with the GHG requirements began in 2017 and will be phased in through 2025.211 The implementation schedule and the interrelationship of regulatory provisions with each of the three standards together demonstrates that CARB intended that at least the GHG and ZEV standards, if not also the LEV standards, would be implemented as a cohesive program. For example, in its ACC waiver request, CARB stated that the ‘‘ZEV regulation must be considered in conjunction with the proposed LEV III amendments. Vehicles produced as a result of the ZEV regulation are part of a manufacturer’s light-duty fleet and are therefore included when calculating fleet averages for compliance with the LEV III GHG amendments.’’ CARB’s Initial Statement of Reasons at 62–63.212 CARB also noted ‘‘[b]ecause the ZEVs have ultra-low GHG emission levels that are far lower than non-ZEV technology, they are a critical component of automakers’ LEV III GHG standard compliance strategies.’’ Id. CARB further explained that ‘‘the ultra-low GHG ZEV technology is a major component of compliance with the LEV III GHG fleet standards for the overall light duty fleet.’’ Id. CARB’s request also repeatedly touted the GHG emissions benefits of the ACC program. Up until the ACC program waiver request, CARB had relied on the ZEV requirements as a compliance option for reducing criteria pollutants. Specifically, California first included the ZEV requirement as part of its first LEV program, which was then known as LEV I, that mandated a ZEV sales requirement that phased-in starting with the 1998 MY through 2003 MY. EPA issued a waiver of preemption for these regulations on January 13, 1993 (58 FR 4166 (January 13, 1993). Since this initial waiver of preemption, California has amended the ZEV requirements multiple times and EPA has 211 As discussed above, California has further entered into a voluntary agreement with four automobile manufacturers that amongst other things, purports to allow compliance with a less stringent program than either the program that was the subject of the 2013 waiver or the Federal standards promulgated in 2012. See https:// www.gov.ca.gov/2019/07/25/california-and-majorautomakers-reach-groundbreaking-frameworkagreement-on-clean-emission-standards/ (last visited Aug. 30, 2019). 212 Available in the docket for the January 2013 waiver decision, Docket No. EPA–HQ–OAR–2012– 0562. E:\FR\FM\27SER3.SGM 27SER3 51330 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 subsequently granted waivers for those amendments. Notably, however, in the ACC program waiver request, California also included a waiver of preemption request for ZEV amendments that related to 2012 MY through 2017 MY and new requirements for 2018 MY through 2025 MY (78 FR 2118–9). Regarding the ACC program ZEV requirements, CARB’s waiver request noted that there was no criteria emissions benefit in terms of vehicle (tank-to-wheel—TTW) emissions because its LEV III criteria pollutant fleet standard was responsible for those emission reductions.213 CARB further noted that its ZEV regulation was intended to focus primarily on zero emission drive—that is, battery electric (BEVs), plug-in hybrid electric vehicles (PHEVs), and hydrogen fuel cell vehicles (FCVs)—in order to move advanced, low GHG vehicles from demonstration phase to commercialization (78 FR 2122, 2130– 31). Specifically, for 2018 MY through 2025 MY, the ACC program ZEV requirements mandate use of technologies such as BEVs, PHEVs and FCVs, in up to 15% of a manufacturer’s California fleet by MY 2025 (78 FR 2114). Additionally, the ACC program regulations provide various compliance flexibilities allowing for substitution of compliance with one program requirement for another. For instance, manufacturers may opt to over-comply with the GHG fleet standard in order to offset a portion of their ZEV compliance requirement for MY 2018 through 2021. Further, until MY 2018, sales of BEVs (since MY 2018, limited to FCVs) 214 in California count toward a manufacturer’s ZEV credit requirement in CAA section 177 States. This is known as the ‘‘travel provision’’ (78 FR 2120).215 For their part, the GHG 213 ‘‘There is no criteria emissions benefit from including the ZEV proposal in terms of vehicle (tank-to-wheel or TTW) emissions.’’ CARB ACC waiver request at 15 (May 2012), EPA–HQ–OAR– 2012–0562–0004. 214 This kind of ZEV technology continues to present technological challenges and in 2006, for instance, EPA granted California a waiver of its ZEV standards through the 2011MY but due to feasibility challenges declined to grant a waiver for MY 2012 and subsequent model years. See 71 FR 78190; EPA, EPA ZEV Waiver Decision Document, EPA–HQ– OAR–2004–0437 (Dec. 21, 2006). 215 On March 11, 2013, the Association of Global Automakers and Alliance of Automobile Manufacturers filed a petition for reconsideration of the January 2013 waiver grant, requesting that EPA reconsider the decision to grant a waiver for MYs 2018 through 2025 ZEV standards on technological feasibility grounds. Petitioners also asked for consideration of the impact of the travel provision, which they argue raise technological feasibility issues in CAA section 177 States, as part of the agency’s review under the third waiver prong, CAA section 209(b)(1)(C). EPA continues to evaluate the VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 emission regulations include an optional compliance provision that allows manufacturers to demonstrate compliance with CARB’s GHG standards by complying with applicable Federal GHG standards. This is known as the ‘‘deemed to comply’’ provision. Since proposal, California has amended its regulations to provide that the ‘‘deemed to comply’’ provision only applies to the standards originally agreed to by California, the federal government, and automakers in 2012. In other words, automobile manufacturers would not be able to rely on the ‘‘deemed to comply’’ provision for any revision to those 2012 standards. California has further entered into a voluntary agreement with four automobile manufacturers that amongst other things, requires the automobile manufacturers to refrain from challenging California’s GHG and ZEV programs, and provides that California will accept automobile manufacturer compliance with a less stringent standard than either the California program that was the subject of the 2013 waiver or the Federal standards as promulgated in 2012. As explained in the SAFE proposal (83 FR 83 FR 23245–46), up until the 2008 GHG waiver denial, EPA had interpreted CAA section 209(b)(1)(B) as requiring a consideration of California’s need for a separate motor vehicle program designed to address local or regional air pollution problems and not whether the specific standard that is the subject of the waiver request is necessary to meet such conditions (73 FR 12156; March 6, 2008). We also explained that California would typically seek a waiver of particular aspects of its new motor vehicle program up until the ACC program waiver request. We further explained that in the 2008 GHG waiver denial, which was a waiver request for only GHG emissions standards, EPA had determined that its interpretation of CAA section 209(b)(1)(B) as calling for a consideration of California’s need for a separate motor vehicle program was not appropriate for GHG standards because such standards are designed to address global air pollution problems in contrast to local or regional air pollution problems specific to and caused by conditions specific to California (73 FR 12156–60). In the 2008 GHG waiver petition. As explained below, in this action EPA is not taking final action with regard to the proposed determinations under the third waiver prong. Whether and how EPA will respond to the March 2013 petition will be considered in connection with a potential future final action with respect to the proposed third prong determinations set forth in the SAFE proposal. PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 denial, EPA further explained that its previous reviews of California’s waiver request under CAA section 209(b)(1)(B) had usually been cursory and undisputed, as the fundamental factors leading to California’s air pollution problems—geography, local climate conditions (like thermal inversions), significance of the motor vehicle population—had not changed over time and over different local and regional air pollutants. These fundamental factors applied similarly for all of California’s air pollution problems that are local or regional in nature. In the 2008 GHG waiver denial, EPA noted that atmospheric concentrations of GHG are substantially uniform across the globe, based on their long atmospheric life and the resulting mixing in the atmosphere. EPA therefore posited that with regard to atmospheric GHG concentrations and their environmental effects, the California specific causal factors that EPA had considered when reviewing previous waiver applications under CAA section 209(b)(1)(B)—the geography and climate of California, and the large motor vehicle population in California, which were considered the fundamental causes of the air pollution in California—do not have the same relevance to the question at hand. EPA explained that the atmospheric concentration of GHG in California is not affected by the geography and climate of California. The long duration of these gases in the atmosphere means they are well-mixed throughout the global atmosphere, such that their concentrations over California and the U.S. are substantially the same as the global average. The number of motor vehicles in California, while still a notable percentage of the national total and still a notable source of GHG emissions in the State, is not a significant percentage of the global vehicle fleet and bears no closer relation to the levels of GHG in the atmosphere over California than any other comparable source or group of sources of GHG anywhere in the world. Emissions of greenhouse gases from California cars do not generally remain confined within California’s local environment but instead become one part of the global pool of GHG emissions, with this global pool of emissions leading to a relatively homogenous concentration of GHG over the globe. Thus, the emissions of motor vehicles in California do not affect California’s air pollution problem in any way that is different from how emissions from vehicles and other pollution sources all around the U.S. (and, for that matter, the world) do. E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations Similarly, the emissions from California’s cars do not only affect the atmosphere in California but in fact become one part of the global pool of GHG emissions that affect the atmosphere globally and are distributed throughout the world, resulting in basically a uniform global atmospheric concentration. EPA then applied this reasoning to the GHG standards at issue in the 2008 GHG waiver denial. Having limited the meaning of this provision to situations where the air pollution problem was local or regional in nature, EPA found that California’s GHG standards did not meet this criterion. Additionally, in the 2008 GHG waiver denial, EPA also applied an alternative interpretation where EPA would consider effects of the global air pollution problem in California in comparison to the effects on the rest of the country and again addressed the GHG standards separately from the rest of California’s motor vehicle program. Under this alternative interpretation, EPA considered whether impacts of global climate change in California were sufficiently different from impacts on the rest of the country such that California could be considered to need its GHG standards to meet compelling and extraordinary conditions. EPA determined that the waiver should be denied under this alternative interpretation as well. 83 FR 23245–46. In 2009, EPA reversed its previous denial and granted California’s preemption waiver request for its GHG emission standards ‘‘for 2009 and later model years.’’ 74 FR 32744. EPA announced that it was returning to what it styled as the traditional interpretation of CAA section 209(b)(1)(B), under which it would only consider whether California had a ‘‘need for its new motor vehicle emissions program as a whole,’’ id. at 32761. It determined that California did, based on ongoing NAAQS attainment issues. Id. at 32762– 32763. In the alternative, while not adopting either of the 2008 waiver denial’s alternative approaches, EPA also determined that California needed its GHG standards as part of its NAAQS attainment strategy due to the indirect effects of climate change on groundlevel ozone formation, id. at 32763, and that waiver opponents had not met their burden of proof to demonstrate that California climate impacts ‘‘are not sufficiently different’’ to nationwide impacts, id. at 32765. EPA also determined that there were no grounds to deny the waiver under CAA section 209(b)(1)(A) (whether the State’s determination that its standards in the aggregate are at least as protective as VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 federal standards) or CAA section 209(b)(1)(C) (whether ‘‘such state standards’’ and accompanying enforcement procedures are inconsistent with CAA section 202(a)). Id. at 32759, 32780. B. EPA’s Authority To Reconsider and Withdraw a Previously Granted Waiver Under CAA Section 209(b) In this action, EPA finalizes its proposed determination that it has the authority to withdraw a waiver in appropriate circumstances. EPA explains below (in this subsection, III.B) the basis for its conclusions that it has authority to withdraw a waiver in appropriate circumstances, and (in subsections III.C and III.D) that it is appropriate for EPA to exercise that authority at this time.216 Agencies generally have inherent authority to reconsider their prior actions. Nothing in CAA section 209(b) indicates Congressional intent to remove that authority with respect to waivers that it has previously granted. The text, structure, and context of CAA section 209(b) support EPA’s interpretation that it has this authority. And no cognizable reliance interests have accrued sufficient to foreclose EPA’s ability to exercise this authority here. In considering EPA’s authority to withdraw a waiver, it is clear that EPA has authority to review and grant California’s applications for a waiver based on its evaluation of the enumerated criteria in CAA section 209(b). In this action, we affirm the Agency’s proposed view that the absence of explicit language with regard to withdrawal of a waiver does not foreclose agency reconsideration and withdrawal of a waiver. As explained at proposal, California’s ability to obtain a waiver under CAA section 209(b)(1) in the first instance is not unlimited. Specifically, CAA section 216 As a general matter, for purposes of determining if withdrawal is appropriate, EPA may initiate reconsideration sua sponte where CARB amends either a previously waived standard or accompanying enforcement procedure. 47 FR 7306, 7309 (Feb. 18, 1982). See also 43 FR 998 (January 5, 1978) (Grant of reconsideration to address portions of waived California’s motorcycle program that California substantially amended). Additionally, if California acts to amend either a previously waived standard or accompanying enforcement procedure, the amendment may be considered to be within-the-scope of a previously granted waiver provided that it does not undermine California’s determination that its standards, in the aggregate, are as at least as protective of public health and welfare as applicable Federal standards, does not affect its consistency with section 202(a) of the Act, and raises no new issues affecting EPA’s previous waiver decisions. See, e.g., 51 FR 12391 (April 10, 1986) and 65 FR 69673, 69674 (November 20, 2000). PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 51331 209(b)(1) provides that ‘‘no such waiver will be granted’’ if the Administrator finds any of the following: ‘‘(A) [California’s] determination [that its standards in the aggregate will be at least as protective] is arbitrary and capricious, (B) [California] does not need such State standards to meet compelling and extraordinary conditions, or (C) such State standards and accompanying enforcement procedures are not consistent with section [202(a)].’’ CAA section 209(b)(1)(A)–(C), 42 U.S.C. 7543(b)(1)(A)–(C) (emphasis added). CAA Section 209(b)(1) is therefore, premised on EPA review and grant of a waiver prior to California’s enforcement of vehicle and engine standards unless certain enumerated criteria are met. Congress could have simply carved out an exemption from preemption under CAA section 209(b)(1), similar to the exemption it created in CAA section 211(c)(4)(B) for California fuel controls and prohibitions. Under CAA section 211(c)(4)(A), states and political subdivisions are preempted from prescribing or attempting ‘‘to enforce, for purposes of motor vehicle emission control, any control or prohibition, respecting any characteristic or component of a fuel or fuel additive in a motor vehicle or motor vehicle engine’’ if EPA has prescribed a control or prohibition applicable to such characteristic or component of the fuel or fuel additive under CAA section 211(c)(1). EPA may waive preemption for states other than California to prescribe and enforce nonidentical fuel controls or prohibitions subject to certain conditions. Further, waivers are not required where states adopt state fuel controls or prohibitions that are identical to federal controls or for California to adopt fuel controls and prohibitions. CAA sections 211(c)(4)(A)(ii) and 211(c)(4)(B). This stands in stark contrast to CAA section 209(b), which requires EPA to make a judgment about California’s request for a waiver of preemption.217 Notably, CAA section 211(c)(4)(B) also crossreferences CAA section 209(b)(1): ‘‘(B) Any State for which application of section 7543(a) of this title has at any time been waived under section 7543(b) 218 of this title may at any time 217 ‘‘Noteworthy is the fact that under the terms of the Act, EPA approval of California fuel regulations is not required. See Act section 211(c)(4)(B), 42 U.S.C. 7545(c)(4)(B).’’ (Emphasis in original.) Motor Vehicle Mfrs. Ass’n v. NYS Dep. of Envt’l Conservation, 17 F.3d 521, 527 (2d Cir. 1994). 218 CAA section 211(c)(4)(B), 42 U.S.C. 7545(c)(4)(B). This provision does not identify California by name. Rather, it references CAA E:\FR\FM\27SER3.SGM Continued 27SER3 51332 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 prescribe and enforce, for the purpose of motor vehicle emission control, a control or prohibition respecting any fuel or fuel additive.’’ CAA section 211(c)(4)(B). Under the third waiver prong, CAA section 209(b)(1)(C), for example, EPA is to review the consistency of California’s standards with CAA section 202(a), a provision of the Clean Air Act that EPA solely implements.219 CAA Section 202(a) provides in relevant part that standards promulgated under this section ‘‘shall take effect after such period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance within such period.’’ In tying the third waiver prong to CAA section 202(a), Congress gave a clear indication that, in determining whether to grant a waiver request, EPA is to engage in a review that involves a considerable degree of future prediction, due to the expressly future-oriented terms and function of CAA section 202(a).220 In turn, where circumstances section 209(b), which applies on its face to ‘‘any State which has adopted standards (other than crankcase emission standards) for the control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966.’’ California is the only State that meets this requirement. See S. Rep. No. 90–403 at 632 (1967). 219 EPA has explained that California’s standards are not consistent with CAA section 202(a) if there is inadequate lead time to permit the development of technology necessary to meet those requirements, given appropriate consideration to the cost of compliance within that time. California’s accompanying enforcement procedures would also be inconsistent with CAA section 202(a) if the Federal and California test procedures were inconsistent. Legislative history indicates that under CAA section 209(b)(1)(C), EPA is not to grant a waiver if it finds that there is: ‘‘Inadequate time to permit the development of the necessary technology given the cost of compliance within that time period.’’ H. Rep. No. 728, 90th Cong., 1st Sess. 21 (1967); ‘‘That California standards are not consistent with the intent of section 202(a) of the Act, including economic practicability and technological feasibility.’’ S. Rep. No. 403, 90th Cong. 1st Sess. 32 (1967). 220 There is another textual indication that EPA’s grant of a waiver is not limited to a snapshot in time, with the Agency having no authority to ever revisit, reconsider, and, where appropriate, modify or withdraw waivers that it has previously granted. CAA section 209(b) provides authority to waive the preemptive provision of CAA section 209(a). CAA section 209(a) forbids states from ‘‘adop[ting] or attempt[ing] to enforce’’ vehicle emission standards; so states cannot do so without or beyond the scope of a waiver. EPA must presume that ‘‘attempt to enforce’’ is not surplusage; it must mean something, and its potential meanings all suggest some ability on EPA’s part to consider actions on the state’s part separate from the state’s ‘‘adopt[ion]’’ of statutory or regulatory provisions and submission to EPA of a waiver request for those provisions. An ‘‘attempt to enforce’’ could potentially mean either a state’s attempt to de facto control emissions without having de jure codified emissions control requirements, or it could refer to a state’s VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 arise that suggest that such predictions may have been inaccurate, it necessarily follows that EPA has authority to revisit those predictions with regard to rules promulgated under CAA section 202(a), the requirements of that section, and their relation to the California standards at issue in a waiver request, and, on review, withdraw a previously granted waiver where those predictions proved to be inaccurate. Under CAA section 202(a), standards are often technology-forcing and thus involve predictions on the part of EPA with regard to future trends in technological and economic factors. This calls for ‘‘substantial room for deference to the EPA’s expertise in projecting the likely course of development.’’ Natural Resources Defense Council v. EPA (NRDC), 655 F.2d 318, 331 (D.C. Cir. 1981) (upholding EPA’s lead time projections for emerging technologies as reasonable). The D.C. Circuit has recognized that EPA might modify standards ‘‘if the actual future course of technology diverges from expectation.’’ Id. at 329. It cannot be that EPA has the inherent authority to revisit and revise its own determinations under CAA section 202(a), but it lacks authority to revisit those same determinations under CAA section 209(b).221 Thus, the structure of the statute— where State standards may only be granted a waiver under CAA section 209(b) to the extent that they are consistent with CAA section 202(a)— confirms that EPA has inherent authority to reconsider its prior determination that a request for a waiver for California standards met the criteria of CAA section 209(b). This renders untenable the stance taken by some commenters that EPA is somehow precluded from conducting a subsequent review and withdrawing a waiver even when it becomes aware that its initial predictions in this regard have proven inaccurate. enforcement actions under a program that it has already ‘‘adopt[ed].’’ Under either scenario, the prohibition on ‘‘attempt[ing] to enforce’’ envisions state activity outside the scope of what can be determined by EPA from the face of a waiver submission. The prohibited activity is not limited to that which can be subject to a snapshot, onetime-only waiver application, which is further support for the conclusion that EPA has authority to reconsider its action on such applications in light of activity later in time than or outside the authorized scope of a waiver once granted. 221 According to one commenter, ‘‘it would be very odd if § 209(b) waivers were a one-way ratchet that could be granted but never rescinded. . . . For example, it would run contrary to the statutory scheme to require EPA to leave a waiver in place even after the compelling and extraordinary conditions that justified the waiver are fully addressed.’’ Comments of the Alliance of Automobile Manufacturers at 182. EPA agrees. PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 Further, as discussed in the SAFE proposal, the legislative history of CAA section 209(b) confirms that Congress intended EPA’s authority under CAA section 209(b) to include the authority to withdraw a previously granted waiver under appropriate circumstances. 83 FR 43242–43243. See S. Rep. No. 50–403, at 34 (1967) (‘‘Implicit in this provision is the right of the [Administrator] to withdraw the waiver at any time [if] after notice and an opportunity for public hearing he finds that the State of California no longer complies with the conditions of the waiver.’’). Some commenters that oppose the proposed withdrawal of the waiver concede that the agency may review California’s waiver applications under the third waiver prong but then argue that such agency review is a ‘‘narrow one.’’ 222 Under CAA Section 209, they contend, grants California ‘‘maximum authority’’ to set engine and vehicle standards. Commenters’ objection to the instant withdrawal therefore appears to be grounded in some belief that CAA section 209(b) calls for complete deference to California. This view is erroneous. EPA has in fact previously initiated reconsideration under the third waiver prong, CAA section 209(b)(1)(C), in order to ‘‘vacate that portion of the waiver previously granted under section 209(b)’’ in response to CARB’s post waiver modification for previously waived standards. 47 FR 7309. In that reconsideration action, EPA affirmed the grant of a waiver in the absence of ‘‘findings necessary to revoke California’s waiver of Federal preemption for its motorcycle fill-pipe and fuel tank opening regulations.’’ 43 FR 7310. Additionally, EPA has explained that reconsideration will be initiated where leadtime concerns arise after the grant of an initial waiver. ‘‘If California’s leadtime projections later prove to have been overly optimistic, the manufacturer can ask that California reconsider its standard, if they are unsuccessful in securing such relief, the 222 According to several commenters, CAA section 209(b) contains no express delegation of authority to EPA to withdraw a waiver, and in proposing to revoke a previous waiver ‘‘EPA has arrogated to itself power only Congress can exercise.’’ Comments of the Center for Biological Diversity, Conservation Law Foundation, EarthJustice, Environmental Defense Fund, Environmental Law and Policy Center, Natural Resources Defense Council, Public Citizen, Inc., Sierra Club, and Union of Concerned Scientists at 68. One commenter also argued that either EPA lacks authority to revoke a previously granted waiver or that any authority to do so is ‘‘limited.’’ ‘‘The unique text and structure of this section limits EPA’s authority, contrary to EPA’s assertion of open-ended revocation authority in the proposal.’’ Comments of the California Air Resources Board at 340. E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 manufacturers could petition EPA to reconsider the waiver.’’ 49 FR 18895, 18896 n.104. Further, EPA has in the past repeatedly denied portions of several waiver requests.223 EPA has also historically deferred or limited the terms of its grant of aspects of some waiver requests as a means of ensuring consistency with CAA section 202(a).224 It is precisely these kinds of EPA actions that have forestalled withdrawal of any waiver to date—not any lack of authority on EPA’s part to withdraw. None of the commenters, however, provided explanations as to why their apparent view of maximum deference to California is not implicated by EPA’s authority to either deny a waiver request or to modify the terms of a waiver request in the course of granting one. And EPA’s 2009 reversal of its 2008 denial supports, and demonstrates the long-held nature of, its position that EPA has authority to reconsider and reverse its actions on waiver applications.225 At least one commenter argued that this legislative history did not support the position that EPA has authority to withdraw a previously granted waiver because the legislative history relates to the original creation of the waiver provision in the Air Quality Act of 1967, whereas the Clean Air Act Amendments of 1977 revised language in the root text of CAA section 209(b)(1). Specifically, Congress in 1977 amended CAA section 209(b)(1) to establish as a prerequisite for the grant of a waiver that the State determine that its standards ‘‘will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards’’ for EPA to issue a waiver, rather than the original requirement that State standards be ‘‘more stringent’’ than corresponding federal standards.226 EPA disagrees that 223 38 FR 30136 (November 1, 1973) (denial of waiver for MY 1975 HC and CO standards ‘‘because costs of compliance within the lead time remaining is excessive.’’); 43 FR 998 (January 5, 1978) (denial of waiver for MY 1978 test procedures due to insufficient lead time); 40 FR 30311 (July 18, 1975) (denial of waiver due to insufficient lead time for MY 1977). 224 58 FR 4166 (January 13, 1993) (deferring consideration of portions of waiver request); 67 FR 54180, 81 n.1 (August 21, 2002) (granting waiver with certain exceptions). 225 In seeking reconsideration of the March 8, 2008 waiver denial, CARB also noted that ‘‘EPA has the inherent authority to reconsider its previous waiver denial’’ 74 FR 32747. 226 The intent of the 1977 amendment was to accommodate California’s particular concern with NOX, which the State regarded as a more serious threat to public health and welfare than carbon monoxide. California was eager to establish oxides of nitrogen standards considerably more stringent than applicable Federal standards, but technological developments posed the possibility that emission control devices could not be VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 this amendment was either intended to deprive EPA of authority to withdraw a previously granted waiver when the Administrator finds applicable one or more of the three criteria in CAA section 209(b)(1) under which a waiver is inappropriate, or that the amendment can be reasonably construed to have had such effect. There is no indication that the amendment was intended to alter EPA’s authority under the original provision. Nor did the amendment alter the language of the criteria enumerated in CAA section 209(b). In any event, as previously discussed above, EPA has initiated reconsideration for purposes of revoking a waiver since the 1977 CAA amendments. See for example, 47 FR 7306 (Feb. 18, 1982) (Agency reconsideration of grant of waiver for purposes of withdrawal in response to CARB’s post waiver modification for previously waived standards). Some commenters question whether EPA has any authority at all to reconsider a previously granted waiver. It is well-settled, however, that EPA has inherent authority to reconsider, revise, or repeal past decisions to the extent permitted by law. At proposal, EPA explained that, although CAA section 209(b)(1) may not expressly communicate that EPA has authority to reconsider and withdraw a waiver, both the legislative history of the waiver provision and fundamental principles of administrative law establish that EPA necessarily possesses that authority. The authority to reconsider prior agency decisions need not be rooted in any particular ‘‘magic words’’ in statutory text. Subject to certain limitations, administrative agencies possess inherent authority to reconsider their decisions. See ConocoPhillips Co. v. EPA, 612 F.3d 822, 832 (5th Cir. 2010) (‘‘Embedded in an agency’s power to make a decision is its power to reconsider that decision.’’); Dun & Bradstreet Corp. Found. v. U.S. Postal Serv., 946 F.2d 189, 193 (2d Cir. 1991) (‘‘It is widely accepted that an agency may, on its own initiative, reconsider its interim or even its final decisions, regardless of whether the applicable statute and agency regulations expressly constructed to meet both the stringent California oxides of nitrogen standard and the stringent federal carbon monoxide standard. Motor & Equip. Mfrs. Ass’n, Inc. v. EPA, 627 F.2d at 1110 n.32. EPA has explained that the phrase ‘‘in the aggregate’’ was specifically aimed at allowing California to adopt CO standards less stringent than the corresponding federal standards, while at the same time adopting more stringent NOX standards, as part of California’s strategy to address ozone problems. California reasoned that a relaxed CO standard would facilitate the technological feasibility of more stringent NOX standards. 78 FR 43247. PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 51333 provide for such review.’’); Mazaleski v. Treusdell, 562 F.2d 701, 720 (D.C. Cir. 1977) (‘‘[A]n agency has the inherent power to reconsider and change a decision if it does so within a reasonable period of time.’’); Belville Min. Co. v. United States, 999 F.2d 989, 997 (6th Cir. 1993) (‘‘Even where there is no express reconsideration authority for an agency, however, the general rule is that an agency has inherent authority to reconsider its decision, provided that reconsideration occurs within a reasonable time after the first decision.’’). The commenters’ position that EPA does not have any authority to reconsider either a grant or a denial of a waiver founders in light of these principles. As explained in the SAFE proposal, 83 FR 43242–43243, EPA does have that authority, in part because its interpretations of the statutes it administers ‘‘are not carved in stone.’’ Chevron U.S.A. v. NRDC, 467 U.S. 837, 863 (1984). An agency ‘‘must consider varying interpretations and the wisdom of its policy on a continuing basis.’’ Id. at 863–64. Notably, in response to CARB’s request, EPA has previously reconsidered and reversed a previous waiver denial.227 Similarly, in keeping with agency CAA section 209(b)(1) practice, EPA has reconsidered its previous decision to grant a waiver for portions of California’s motorcycle program in response to a petition for reconsideration from the motorcycle industry.228 Other commenters assert that EPA’s proposal to withdraw the waiver is solely based on a change in Presidential administration. There is no basis for this claim. While EPA noted in the SAFE proposal that the agency can review and reconsider a prior decision ‘‘in response to . . . a change in administration,’’ National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967, 981 (2005), we further acknowledged that ‘‘the EPA must also be cognizant where it is changing a prior position and articulate a reasoned basis for the change.’’ FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009). 83 FR 43242–43243, 43248. In keeping with the proposed waiver withdrawal, under the second waiver prong, CAA section 209(b)(1)(B), as discussed below, EPA in this document finalizes a determination that California does not 227 EPA reconsidered the 2008 GHG waiver denial in response to CARB’s request and granted it upon reconsideration. 72 FR 32744 (July 9, 2009). See also 43 FR 998 (January 5, 1978) (Grant of reconsideration to address portions of waived California’s motorcycle program that California substantially amended). 228 43 FR 998 (January 5, 1978). E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 51334 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations need its GHG and ZEV standards to meet compelling and extraordinary conditions, within the meaning of those terms as they are used in the statute, that differs from its determination on the same question made in the course of granting the ACC program waiver. Additionally, the agency, in response to a request by automobile manufacturers, who have consistently expressed reservations over their ability to comply with MY 2022–2025 GHG standards, is reconsidering standards that are the compliance mechanism for CARB’s MY 2022–2025 GHG standards. This is the compliance mechanism that California had provided in response to automobile manufacturers request and support for the waiver of preemption. At proposal, EPA noted that California had given public notice that it was considering amending its ‘‘deemed to comply’’ provision to provide that that provision would be applicable only to vehicles that meet the standards originally agreed to by California, the federal government, and automakers in 2012. See 83 FR 43252 n.589. California finalized that amendment to its regulations after the close of the SAFE comment period, in late 2018. California more recently, in July 2019, announced a ‘‘framework’’ agreement with certain automakers that purported to establish a ‘‘nationwide’’ standards program different from both the 2012 Federal standards and from the California program for which EPA granted the January 2013 waiver. These actions on California’s part, while not proposed as bases for waiver withdrawal in the August 2018 SAFE proposal, as those actions had not yet transpired at the time of proposal, and while not necessary for the finalization of this action, do provide further support for this action (although EPA does not view them as necessary predicates for this action and would be taking this action even in their absence). Thus, contrary to some commenters’ assertions, reconsideration of the grant of the waiver, and EPA’s proposal to withdraw the waiver, was not solely motivated by a change in Presidential administration. The policy, technical, and legal considerations discussed in the proposal and in this final action provide the rationale for EPA’s actions here. It is therefore distinguishable from the instance where, for example, an agency undertook reconsideration subsequent to a change in administration because ‘‘the withdrawn decision was doubtful in light of changing policies.’’ Coteau Properties Co. v. DOI, 53 F.3d 1466, 1479 (8th Cir. 1995). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 Further, as earlier noted, California has now entered into a voluntary agreement with at least four automobile manufacturers that amongst other things, requires the automobile manufacturers to refrain from challenging California’s GHG and ZEV programs, and provides that California will accept automobile manufacturer compliance with a less stringent standard than either the California program that was the subject of the 2013 waiver or the Federal standards as promulgated in 2012.229 This agreement appears to materially depart from the existing grant of waiver for MY 2021– 2025 GHG standards, is in tension with California’s above-mentioned amendment of the ‘‘deemed to comply’’ provision, and raises an additional reason to question whether California ‘‘needs’’ their existing standards within the meaning of CAA section 209(b)(1)(B), given that California has announced it is proceeding to create a new ‘‘voluntary’’ program that would relax the stringency of some aspects of those standards. That is to say, California’s apparent weakening of its program as it was originally submitted for waiver calls into question whether it needs that program. EPA believes that this provides additional support for its conclusion, as set forth in subsections III.B and III.D, both that it has authority to withdraw its grant of the waiver and that California does not in fact need these waived standards to meet ‘‘compelling and extraordinary conditions,’’ CAA section 209(b)(1)(B), if the State is itself already proceeding to allow departures from those waived standards.230 EPA further believes that California cannot claim reliance interests when it is undertaking steps to alter the status quo. In short, the text, structure, and history of CAA section 209(b)(1) support EPA’s authority to withdraw previously granted waivers.231 At the same time, nothing in CAA section 209(b)(1) can reasonably be read to preclude the agency from withdrawing a previously issued waiver under appropriate 229 https://www.gov.ca.gov/2019/07/25/californiaand-major-automakers-reach-groundbreakingframework-agreement-on-clean-emissionstandards/. 230 Again, neither California’s late 2018 amendment to its ‘‘deemed to comply’’ provision, nor its July 2019 announcement of a new ‘‘framework,’’ are necessary bases for the action EPA takes in this document; instead, they provide further support for that action. 231 In 2009, EPA reconsidered the 2008 GHG waiver denial at CARB’s request and granted it upon reconsideration. 74 FR 32744. EPA noted the authority to ‘‘withdraw a waiver in the future if circumstances make such action appropriate.’’ See 74 FR 32780 n.222; see also id. at 32752–32753 n.50 (citing 50 S. Rep. No. 403, at 33–34). PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 circumstances. EPA is not persuaded by commenters’ assertions to the contrary. In this action, EPA affirms the position that the scope of review for California waivers under CAA section 209(b)(1) includes both a pre-grant review and, where appropriate, post-grant review of an approved waiver; that post-grant review may, in appropriate circumstances, result in a withdrawal of a prior waiver. A withdrawal action could be premised on any one of the three findings in CAA section 209(b)(1)(A)–(C) that render a waiver unavailable. EPA also disagrees with some commenters’ assertions that ostensible reliance interests foreclose withdrawal of the waiver for MY 2021–2025 GHG and ZEV standards. According to these commenters, ‘‘California, and the section 177 states that have elected to adopt those standards as their own have incurred reliance interests ultimately flowing from those standards. For instance, California has incurred reliance interests because it is mandated to achieve an aggressive GHG emissions reduction target for 2030.’’ 232 They further state: ‘‘[b]ut EPA provides no justification for applying that change in policy retroactively to upend a five-yearold decision to which substantial reliance interests have attached.’’ (Emphasis in original).233 The federal GHG standards that EPA promulgated in 2012 included a commitment to conduct and complete a Mid-Term Evaluation (MTE) of the GHG standards for MY 2022–2025, given the lengthy phase-in compliance period, EPA projections of control technology availability or feasibility for MY 2021– 2025, and the fact that EPA promulgated those standards in a joint action with NHTSA, where NHTSA was acting under a statute which limited its promulgation of fuel economy standards to periods of five years.234 See NRDC, 232 Comments of CARB at 83. of States of California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maine, Maryland, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington, the Commonwealth of Massachusetts, Pennsylvania and Virginia, the District of Columbia, and the Cities of Los Angeles, New York, Oakland, San Francisco and San Jose at 123; Comments of CARB at 352. 234 40 CFR 86.1818–12(h). 77 FR 62624 (October 15, 2012). EPA notes in this regard that the Supreme Court in Massachusetts v. EPA, in rejecting the position that greenhouse gases are not air pollutants under the general definition of that term in CAA section 302 because, if they were, EPA’s regulations of GHG emissions from the motor vehicle fleet could intrude on DOT’s fuel economy authority, opined that ‘‘[t]he two obligations may overlap, but there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.’’ 549 U.S. 497, 532 (2007). In order for the two agencies to do so, they 233 Comments E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 655 F.2d at 329 (upholding EPA’s lead time projections for emerging technologies as reasonable, noting a longer lead time tends to ‘‘give[ ] the agency greater leeway to modify its standards if the actual future course of technology diverges from expectation.’’). The 2012 rulemaking also established the GHG standards for MY 2021–2025 that are the subject of the ‘‘deemed to comply’’ provision. (i.e., California allowed automobile manufacturers to demonstrate compliance with California’s GHG standards by complying with EPA’s GHG standards). The MTE construct required EPA to issue a Final Determination by April 1, 2018 regarding whether the GHG standards for MY 2022–2025 remained appropriate under CAA section 202(a).235 Specifically, the MTE would, amongst other things, assess the relevant factors pertinent to setting standards under CAA section 202(a), such as the feasibility and practicability of the standards, costs to vehicle manufacturers and consumers, impacts on the automobile industry, emissions impacts, and safety impacts. In comments during the 2012 national GHG rulemaking, automakers supported the MTE, and several expressly predicated their support of the GHG standards for MY 2022–2025 on the MTE.236 In the waiver action, EPA reiterated its commitment to the MTE in light of these considerations.237 In these circumstances, where GHG standards were being set far into the future with an explicit commitment to revisit them, where California agreed to deem compliance with certain federal GHG standards to constitute compliance with California standards, and where all parties were provided ample notice that needed to take account of the fact that DOT’s fueleconomy authority faces temporal constraints that EPA’s emissions authority does not. They did so through the MTE, and the MTE mechanism provided notice to all interested parties that EPA’s 2012 federal standards under CAA section 202(a), and EPA’s January 2013 waiver grounded in part on a finding that the State provisions subject to the waiver were compatible with CAA section 202(a), would be subject to review and possibly revision within a few years of the waiver grant. Under these circumstances, no reliance interests accrued sufficient to foreclose EPA’s authority to reconsider and withdraw the waiver. 235 The MTE process also called for a ‘‘draft Technical Assessment Report’’ (to be prepared no later than November 15, 2017), public comments on that draft report, and public comments on whether the model year 2022–2025 standards are ‘‘appropriate’’ under CAA section 202(a). 236 77 FR at 62636, 62652, 62785. 237 ‘‘EPA is committed to conducting a mid-term evaluation for MYs 2022–2025 in close coordination with NHTSA and CARB given the long-time frame in implementing standards out to MY 2025 and given NHTSA’s obligation to conduct a separate rulemaking in order to establish final standards for vehicles for those years.’’ 78 FR 2137. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 EPA would be revisiting federal standards and, accordingly, the waiver granted for a program that acceded to those standards through the ‘‘deemed to comply’’ provision, neither the State of California nor other parties (such as automakers) have reasonable reliance interests sufficient to foreclose the extension of federal standards to California. Likewise, under CAA section 177, even though States other than California, under certain circumstances and conditions, may ‘‘adopt and enforce’’ standards that are ‘‘identical to the California standards for which EPA has granted a waiver for such model year,’’ given that Title I 238 does not call for NAAQs attainment planning as it relates to GHG standards, those States that may have adopted California’s GHG standards and ZEV standards for certain MYs would also not have any reliance interests as a result of the grant of the ACC program waiver. As previously noted, CAA section 177 States also lack reliance interests sufficient to preclude reconsideration and withdrawal of the waiver both because they were on notice of the commitment to review the federal standards, as discussed above.239 Relatedly, with the revocation of these standards in this action there will be no ‘‘standards identical to the California standards for which a waiver has been granted’’ that any state may adopt and enforce, under CAA section 177(1).240 (States may not ‘‘tak[e] any action that has the effect of creating a car different from those produced to meet either federal or California emission standards, a so-called ‘third vehicle.’ ’’ Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. New York State Dep’t of Envtl. Conservation, 17 F.3d 521, 528 (2d Cir. 1994)). California also did not seek approval for MY 2021–2025 GHG standards in its 2016 SIP approval request. 81 FR 39424, 27–28 (June 16, 2016). As a general matter, ‘‘[w]henever a question concerning administrative, or judicial, reconsideration arises, two opposing policies immediately demand recognition: The desirability of finality, on the one hand, and the public interest 238 Under title I of the Clean Air Act, EPA establishes national ambient air quality standards (NAAQS) to protect public health and welfare, and has established such ambient standards for ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide, lead, and particulate matter. 239 ‘‘This new State authority should not place an undue burden on vehicle manufacturers who will be required, in any event, to produce vehicles meeting the California standards for sale in California.’’ H.R. Conf. Rep. No. 95–294, 95th Cong., 1st Sess. 337 (1977). 240 A State may not ‘‘make attempt[s] to enforce’’ California standards for which EPA has not waived preemption. Motor Vehicle Mfrs. Ass’n v. NYS Dep. of Envtl Conservation, 17 F.3d 521, 534 (2d Cir. 1994). PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 51335 in reaching what, ultimately, appears to be the right result on the other.’’ Civil Aeronautics Bd. v. Delta Air Lines, Inc., 367 U.S. 316, 321–22 (1961). See also ConocoPhillips, 612 F.3d at 832 (5th Cir. 2010) (‘‘Furthermore, reconsideration also must occur within a reasonable time after the decision being reconsidered was made, and notice of the agency’s intent to reconsider must be given to the parties.’’); Belville Min. Co. v. United States, 999 F.2d 989, 997 (6th Cir. 1993) (‘‘Even where there is no express reconsideration authority for an agency, however, the general rule is that an agency has inherent authority to reconsider its decision, provided that reconsideration occurs within a reasonable time after the first decision.’’); Bookman v. United States, 453 F.2d 1263, 1265 (Fed. Cir. 1972) (‘‘[A]bsent contrary legislative intent or other affirmative evidence, this court will sustain the reconsidered decision of an agency, as long as the administrative action is conducted within a short and reasonable time period.’’). For the reasons stated above, there was no ‘‘finality’’ in the federal MY 2021–2025 GHG standards that EPA promulgated in 2012 in the sense required for cognizable reliance to accrue sufficient to foreclose EPA’s exercise of authority to reconsider and, if appropriate, withdraw the waiver. Nor is such ‘‘finality’’ to be found in the January 2013 grant of the waiver for California’s MY 2021–2025 GHG and ZEV standards. As explained at proposal, in granting the waiver for the ACC program GHG and ZEV standards, EPA had evaluated certain compliance flexibilities allowed by California under the third waiver prong, CAA section 209(b)(1)(C) (consistency with CAA section 202(a)). Specifically, EPA evaluated California regulations that included an optional compliance provision (the ‘‘deemed to comply’’ provision) that would allow automobile and engine manufacturers to demonstrate compliance with CARB’s GHG standards for MY 2017–2025 by complying with applicable national or federal GHG standards. 78 FR 2136. During the waiver proceedings, most automobile manufacturers either opposed the grant of the waiver for MY 2021–2025 GHG and ZEV standards as not consistent with CAA section 202(a) 241 or premised their support for 241 78 FR 2132 (manufacturers suggested that EPA should grant California’s waiver request after CARB finalized its regulatory amendments to allow for a national compliance option; manufacturers oppose granting the waiver for the ZEV program past the 2017 MY, asserting that those standards will not be feasible either in California or in the individual E:\FR\FM\27SER3.SGM Continued 27SER3 51336 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 those standards on California’s permitting compliance through the ‘‘deemed to comply’’ provision.242 In comments on the proposed withdrawal, California did not contest this aspect of the waiver proceedings. For example, California in its comments on the SAFE proposal, at page 57, states ‘‘[b]ecause the federal program was expected to achieve GHG emission reductions that are equivalent to the California program, CARB modified its LEV III GHG regulation to continue to allow the ‘deemed to comply’ option beyond model year 2016, by accepting federal compliance with the EPA standards as sufficient to demonstrate compliance with California’s standards for the 2017 through 2025 model years.’’ Additionally, most automobile manufacturers indicated that they would comply with California’s GHG standards through the ‘‘deemed to comply’’ provision. Both California and some automobile manufacturers also alluded to their expectations that standards would be revised in the future in light of technological feasibility and cost considerations surrounding MY 2022–2025 GHG standards.243 244 CAA section 177 States given the status of the infrastructure and the level of consumer demand for ZEVs; dealers suggest that EPA should not grant California a waiver for its ZEV and GHG emission standards past MY 2018 and 2021, respectively, asserting that technical capabilities after that time are uncertain.). 242 ‘‘[T]his national compliance option is integral to the commitment letters the industry and California signed in July 2011 and to the single national GHG/fuel economy program all stakeholders sought to achieve.’’ 78 FR 2138. 243 78 FR 2128. A waiver ‘‘will remain an important backstop in the event the national program is weakened or terminated;’’ manufacturers note that both the federal and the California GHG emission standards provide for a comprehensive mid-term evaluation of the MYs 2022–2025; manufacturers clearly state that ‘‘[a]ny amendments to California’s GHG emission standards made as a result of the mid-term evaluation will require analysis to determine whether the amendments fall within the scope of this waiver, or, if not, whether they qualify for a separate waiver under Section 209(b) of the Clean Air Act.’’ 78 FR 2132. See also, e.g., comments of the National Automobile Dealers Association, n.43. On March 11, 2013, the Association of Global Automakers and Alliance of Automobile Manufacturers filed a petition for reconsideration of the January 2013 waiver grant, requesting that EPA reconsider the decision to grant a waiver for MYs 2018 through 2025 ZEV standards on technological feasibility grounds. Petitioners also asked for consideration of the impact of the travel provision, which they argue raise technological feasibility issues in CAA section 177 States, as part of the agency’s review under the third waiver prong, CAA section 209(b)(1)(C). EPA continues to evaluate the petition. As explained below, in this action EPA is not taking final action with regard to the proposed determinations under the third waiver prong. Whether and how EPA will respond to the March 2013 petition will be considered in connection with a potential future final action with respect to the proposed third prong determinations set forth in the SAFE proposal. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 Regarding whether EPA is foreclosed from reconsidering its January 2013 waver grant due to the passage of time, on January 12, 2017, well in advance of the April 2018 deadline that it had set for itself, EPA completed the Mid-Term Evaluation called for under the 2012 national GHG standards, determining that the MY 2017–2025 GHG standards promulgated in that rulemaking were appropriate. Automobile manufacturers, however, petitioned EPA for reconsideration of that January 2017 determination. In March 2017, EPA granted this petition for reconsideration. 82 FR 14671 (Mar. 22, 2017). In March 2017 California completed its own MidTerm Evaluation review, in which it arrived at different conclusions on technological feasibility and costs for these standards than those that EPA would later reach. Subsequently, in April 2018, consistent with the timing specified in its regulations, EPA revised its finding on the appropriateness of the federal MY 2022–2025 GHG standards, concluding that those standards ‘‘are not appropriate and, therefore, should be revised.’’ 245 This finding provided notice of a reasonable possibility that these federal GHG standards would likely be changing.246 In the April 2018 action, EPA also withdrew the January 2017 finding. 83 FR at 16077. Since then California has challenged this revised finding; that challenge is pending in the United States Court of Appeals for the District of Columbia. California v. EPA, No. 18–1114 (D.C. Cir. argued Sept. 6, 2019). Moreover, California in December 2018 amended the ‘‘deemed to comply’’ provision in its regulations after the publication of the SAFE proposal, and in July 2019 announced a putative nationwide framework for vehicle standards, as discussed above. These procedural aspects of the federal GHG standards and the grant of a waiver for California’s ACC program are indicative of the absence of the possibility of reasonable reliance in the ‘‘finality’’ of the waiver, contrary to commenters’ assertion of reliance interests. For instance, as shown above, the engine and vehicle manufacturers have not only complained about the stringency of MY 2021–2025 GHG and ZEV standards, but also requested reconsideration of both the waiver as it relates to the ZEV standards, and the 2017 Mid-Term Evaluation that addresses the ‘‘deemed to comply’’ provision, which California provided in response to their request. EPA has also initiated joint rulemaking with NHTSA that proposes amended EPA GHG standards and fuel economy standards for MY 2021–2026. See, the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021– 2026 Passenger Cars and Light Trucks. 83 FR 42986 (Aug. 24, 2018). As also previously noted, automobile and engine manufacturers operated under the assumption that both California and national standards would, or at least could, be revised.247 These circumstances are sufficient to put California and others on notice that standards were in flux such that they could not give rise to reasonable reliance interests. Further, CAA section 177 States do not have any reliance interests that are engendered by the withdrawal of the waiver for the MY 2021–2025 GHG and ZEV standards. As previously explained, although CAA section 177 allows States other than California to adopt standards that are promulgated by California and for which a waiver of preemption is granted by EPA pursuant to CAA section 209, CAA section 177 States may do so only subject to certain conditions and circumstances. None of these conditions and circumstances, however, are at issue in this waiver decision, in light of EPA’s determination that CAA section 177 does not apply to states seeking to adopt and enforce CARB’s GHG standards. As also previously noted, with the revocation of these standards in this action, there will be no ‘‘standards identical to the California standards for which a waiver has been granted’’ that any state may adopt and enforce, under CAA section 177(1).248 States may not ‘‘tak[e] any action that has the effect of creating a car different from those produced to meet either federal or California emission standards, a so-called ‘third vehicle.’ ’’ Motor 244 Since the grant of the ACC waiver program, engine and vehicle manufacturers who voiced concerns about the stringency of MY 2021–2025 GHG and ZEV standards during the waiver proceedings have requested both reconsideration of the grant of the waiver for the ZEV standards (which is a compliance mechanism for the GHG standards) and aspects of the national GHG program. 245 Mid-Term Evaluation of Greenhouse Gas Emissions Standards for Model Year 2022–2025 Light-Duty Vehicles: Notice; Withdrawal. 83 FR 16077 (Apr. 13, 2018). 246 82 FR 14671 (Mar. 22, 2017). 247 ‘‘The manufacture of automobiles is a complex matter, requiring decisions to be made far in advance of their actual execution. The ability of those engaged in the manufacture of automobiles to obtain clear and consistent answers concerning emission controls and standards is of considerable importance so as to permit economies in production.’’ S. Rep. No. 403, 90th Cong., at 730 1st Sess. (1967). 248 A State may not ‘‘make attempt[s] to enforce’’ California standards for which EPA has not waived preemption. Motor Vehicle Mfrs. Ass’n v. NYS Dep. of Envtl Conservation, 17 F.3d 521, 534 (2d Cir. 1994). PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations Vehicle Mfrs. Ass’n of U.S., Inc. v. New York State Dep’t of Envt’l Conservation, 17 F.3d 521, 528 (2d Cir. 1994). California’s comments argue that EPA cannot revisit its waiver with respect to the ZEV standards in particular because EPA, in a SIP approval action, approved ZEV provisions into the State’s SIP. Final CARB Detailed Comments, at 351. But in so doing, EPA noted that California’s GHG provisions were not part of California’s SIP submission.249 At the time, EPA explained that ‘‘CARB has expressly excluded from the August 14, 2015 SIP submittal certain sections or subsections of California code that have been authorized or waived by EPA under CAA section 209.’’ 250 Further, in the SAFE proposal, EPA explained that the proposed withdrawal of the waiver for MY 2021–2025 ZEV standards was premised in part on California’s explicit indications that compliance with those standards formed part of the compliance mechanism for MY 2021–2025 GHG standards. For instance, at proposal, we explained ‘‘because the ZEV and GHG standards are closely interrelated, as demonstrated by the description above of their complex, overlapping compliance regimes, EPA is proposing to withdraw the waiver of preemption for ZEV standards under the second and third prongs of section 209(b)(1).’’ 83 FR 43243. California’s responses to the SAFE proposal do not rebut the Agency’s views that the ZEV standards for MY 2021–2025 are inextricably interconnected with the design and purpose of California’s overall GHG reduction strategy.251 According to California, for example, CARB’s GHG standards for the 2017 through 2025 MYs are designed to respond to California’s identified goals of reducing GHG emissions to 80 percent below 1990 levels by 2050 and in the near term 249 81 FR 39424, 27–28 (June 16, 2016). FR 29427–28. ‘‘The excluded provisions pertain to: Greenhouse Gas (GHG) exhaust emission standards 2009 through 2016 Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles, and 2017 and subsequent Model Passenger Cars, LightDuty Trucks, and Medium Duty Vehicles.’’ 251 Analysis in support of comments of the California Air Resources Board on the SAFE proposal, at 342. ‘‘For example, and relevant here, California’s Legislature has established an aggressive GHG emissions reduction target for 2030.’’ ‘‘The ZEV mandate is a crucial part of this strategy; it ‘act[s] as the technology forcing piece of the 2016 Draft TAR program’ which is necessary because ‘the new vehicle fleet [in California] will need to be primarily composed of advanced technology vehicles . . . by 2035’ in order to meet the State’s 2050 GHG goal.’’ Id. at 369–70 (Internal citations omitted). ‘‘This increasing ZEV deployment is critical to achieving the statewide 2030 and 2045 GHG requirements and 2031 South Coast SIP commitments (the 2016 State SIP Strategy identified the need for light-duty vehicles to reduce NOX emissions by over 85 percent by 2031 to meet federal standards).’’ Id. at 373. jbell on DSK3GLQ082PROD with RULES3 250 81 VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 to reduce GHG levels to 1990 levels by 2020;’’ ‘‘In 2009, CARB staff analyzed pathways to meeting California’s longterm 2050 GHG reduction goals in the light duty vehicle subsector and determined that ZEVs would need to comprise nearly 100 percent of new vehicle sales between 2040 and 2050, and commercial markets for ZEVs would need to launch in the 2015 to 2020 time frame.’’ Analysis in support of comments of the California Air Resources Board on the SAFE proposal, pg. 54, 59 & 83. EPA reviewed California’s SIP submission, including ZEV measures, as a matter of NAAQS compliance strategy. But in the 2012– 2013 CAA section 209(b) waiver proceeding, CARB presented its ZEV program to EPA solely as a GHG compliance strategy—indeed, CARB expressly stated that the ZEV program did not confer NAAQS pollutant benefits. ‘‘There is no criteria emissions benefit from including the ZEV proposal in terms of vehicle (tank-to-wheel or TTW) emissions.’’ CARB ACC waiver request at 15, EPA–HQ–OAR– 2012– 0562–0004.252 Similarly, some commenters argued that EPA reconsideration would constitute impermissible retroactive action, citing Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (1988). However, the rulemaking which the Supreme Court held was impermissibly retroactive in that case had been proposed in February 1984 and had purported to establish reimbursement rates effective July 1, 1981. By contrast, here EPA is reconsidering a previous grant of a waiver of preemption for future model years 2021–2025.253 252 CARB in its SAFE proposal comments refers to this as an ‘‘alleged[ ]’’ statement, Final Carb Detailed Comments at 351. The SAFE proposal cited the Waiver Support Document in which CARB made this statement, 83 FR at 43248 n.580. The statement is directly quoted above. California’s comments on the SAFE proposal do not contest that California’s ACC waiver request expressly disclaimed criteria pollutant benefits from the ZEV program, nor do they establish that EPA is foreclosed from revisiting the grant of the waiver in light of the interpretation of 209(b)(1)(B) adopted below. EPA notes in this regard that California’s approach in its ACC waiver request differed from the state’s approach in its waiver request for MY 2011 and subsequent heavy-duty tractor-trailer GHG standards, where California quantified NOX emissions reductions attributed to GHG standards and explained that they would contribute to PM and ozone NAAQS attainment. 79 FR 46256, 46257 n.15, 46261, 46262 n.75 (August 7, 2014). 253 As explained above, to the extent that NHTSA’s final determination that EPCA preempts State GHG and ZEV programs, the implications of that determination for prior EPA waivers of such programs are effective upon the effective date of this joint action. Separate and apart from that analysis, to the extent that EPA is withdrawing the waiver based on its determination that the waiver does not meet the CAA section 209(b)(1)(B) PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 51337 Reconsideration of aspects of a prior adjudication whose effects have not yet ripened is not barred by Bowen’s proscription on retroactive rulemaking—otherwise any reconsideration of agency action would likewise be barred. For all these reasons, EPA concludes it has authority under CAA section 209 to reconsider its prior grant of the ACC waiver and to withdraw the waiver for MY 2021–2025 GHG and ZEV standards, consistent with the SAFE proposal. C. The Effect of Preemption Under the Energy Policy and Conservation Act (EPCA) on EPA’s Previously Granted Waiver Under CAA Section 209(b) With Regard to California’s GHG and ZEV Standards In the SAFE proposal, EPA explained its historical practice of reviewing waiver requests under the prism of CAA section 209. Specifically, EPA has ‘‘historically declined to consider as part of the waiver process whether California standards are constitutional or otherwise legal under other Federal statutes apart from the Clean Air Act.’’ 83 FR 42340. See also Motor & Equip. Mfrs. Ass’n, Inc. v. EPA, 627 F.2d 1095, 1115 (D.C. Cir. 1979) (MEMA I) ‘‘[T]he Administrator operates in a narrowly circumscribed proceeding requiring no broad policy judgments on constitutionally sensitive matters. Nothing in CAA section 209 requires him to consider the constitutional ramifications of the regulations for which California requests a waiver.’’). This historic position was reflected in granting the initial ACC program waiver where EPA explained: ‘‘Evaluation of whether California’s GHG standards are preempted, either explicitly or implicitly, under [the Energy Policy and Conservation Act] EPCA, is not among the criteria listed under section 209(b). EPA may only deny waiver requests based on the criteria in section 209(b), and inconsistency with EPCA is not one of those criteria.’’ 78 FR 2145. But EPA, in the past, has also solicited comments on ‘‘whether the Energy Policy and Conservation Act (EPCA) fuel economy provisions are relevant to EPA’s consideration of the request and to California’s authority to implement its vehicle GHG regulations’’ and in response to comments opted to ‘‘take[ ] no position regarding whether or not California’s GHG standards are preempted under EPCA.’’ 74 FR 32744, 32782–83 (July 8, 2008). criterion, that withdrawal is for model years 2021– 2025, as proposed in the SAFE proposal. E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 51338 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations In the January 2013 waiver, EPA stated: ‘‘Evaluation of whether California’s GHG standards are preempted, either explicitly or implicitly, under EPCA, is not among the criteria listed under section 209(b). EPA may only deny waiver requests based on the criteria in section 209(b), and inconsistency with EPCA is not one of those criteria. In considering California’s request for a waiver, [EPA] therefore [has] not considered whether California’s standards are preempted under EPCA.’’ 78 FR at 2145. EPA believes that this January 2013 statement was inappropriately broad, to the extent it suggested that EPA is categorically forbidden from ever determining that a waiver is inappropriate due to consideration of anything other than the ‘‘criteria’’ or ‘‘prongs’’ at CAA section 209(b)(1)(B)(A)–(C). The statements quoted above, and EPA’s historical practice of disregarding issues of ‘‘[c]onsistency with EPCA’’ in the context of evaluating California’s waiver applications, were made in the context of EPA acting on its own to administer CAA section 209(b) in considering such applications. The context here is different: EPA is undertaking a joint action with NHTSA. In the SAFE proposal, EPA noted that NHTSA had proposed and could well finalize a determination that California’s GHG and ZEV standards are both explicitly and implicitly preempted under EPCA.254 EPA explained that such a determination would present a threshold question as to California’s ability to enforce these standards and proposed to conclude that standards preempted under EPCA cannot be afforded a waiver of preemption under CAA section 209(b). Unlike the Clean Air Act, EPCA does not allow for any waiver of its express preemption provision. EPCA contains no language that can be read to allow States to either prescribe or enforce regulations related to fuel economy standards. Consistent with this view, at SAFE proposal, NHTSA explained that, ‘‘when a State establishes a standard related to fuel economy, it does so in violation of EPCA’s preemption statute(sic) and the standard is therefore void ab initio.’’ 83 FR 43235. At the same time, NHTSA explained that certain other GHG requirements that do not relate to fuel economy, such as regulations addressing leaking refrigerants, would likely not be preempted under EPCA. 83 FR 4324–35. EPA does not intend in future waiver proceedings concerning submissions of 254 49 U.S.C. 32919(a). See 83 FR 43233. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 California programs in other subject areas to consider factors outside the statutory criteria in CAA section 209(b)(1)(A)–(C). But the unique situation in which EPA and NHTSA, coordinating their actions to avoid inconsistency between their administration of their respective statutory tasks, address in a joint administrative action the issues of the preemptive effect of EPCA and its implications for EPA’s waivers, has no readily evident analogue.255 EPA will not dodge this question here. Consistent with the SAFE proposal, NHTSA is finalizing a determination that EPCA preempts State GHG and ZEV standards. EPA agrees with commenters that EPA is not the agency that Congress has tasked with administering and interpreting EPCA. This is especially so because ‘‘[t]he waiver proceeding produces a forum ill-suited to the resolution of constitutional claims.’’ MEMA I, 627 F.2d at 1115. In the SAFE proposal, EPA took the position that it is, at a minimum, reasonable to consider NHTSA’s conclusions about the preemptive effect of EPCA. To the extent that NHTSA has determined that these standards are void ab initio because EPCA preempts standards that relate to fuel economy, that determination presents an independent basis for EPA to consider the validity of the initial grant of a waiver for these standards, separate and apart from EPA’s analysis under the criteria that invalidate a waiver request. In the context of a joint action in which our sister agency is determining, and codifying regulatory text to reflect, that a statute Congress has entrusted it to administer preempts certain State law, EPA will not disregard that conclusion, which would place the United States Government in the untenable position of arguing that one federal agency can resurrect a State provision that, as another federal agency has concluded and codified, Congress has expressly preempted and therefore rendered void ab initio. This conclusion is consistent with the Supreme Court’s holding in Massachusetts v. EPA, 549 U.S. 497 (2007). While this case did not address EPCA preemption, the Supreme Court anticipated that EPA and NHTSA would administer their respective authorities in a consistent manner. (‘‘The two obligations [for NHTSA to set fuel economy standards under EPCA and for EPA to regulate motor vehicle GHG emissions under CAA section 202] may overlap, but there is no reason to think the two agencies cannot both administer 255 See PO 00000 Massachusetts v. EPA. Frm 00030 Fmt 4701 Sfmt 4700 their obligations and yet avoid inconsistency.’’ Id. at 532.) Considering that California cannot enforce standards that are void ab initio, even assuming arguendo that there existed a valid grant of waiver under CAA section 209(b), NHTSA’s determination renders EPA’s prior grant of a waiver for those aspects of California’s regulations that EPCA preempts invalid, null, and void, and, to the extent that administrative action is necessary on EPA’s part to reflect that state of affairs, EPA hereby withdraws that prior grant of a waiver on this basis. EPA’s finding that California’s GHG and ZEV standards are preempted as a result of NHTSA’s finalized determinations, issued in this joint action, with respect to EPCA’s preemptive effect on State GHG and ZEV standards, is effective upon the effective date of this joint action. This finding is separate and apart from findings with respect to EPA’s 2013 waiver for CARB’s Advanced Clean Car Program as it pertains to its 2021 through 2025 MY relating to GHG and ZEV standards and accompanying withdrawal of the waiver, pursuant to CAA section 209(b)(1), as set forth in subsection D below; as a matter of EPA’s administration of CAA section 209(b), without reference to EPCA’s preemptive effect as determined by NHTSA, that withdrawal applies to 2021 through 2025 MY GHG and ZEV standards, as proposed in the SAFE proposal.256 257 256 EPA acknowledges that its action in this document may have implications for certain prior and potential future EPA reviews of and actions on state SIPs that may incorporate certain aspects of California’s state program, either California’s own SIPs or SIPs from states that have adopted one or more aspects of California’s state program pursuant to CAA section 177. EPA will consider whether and how to address those implications, to the extent that they exist, in separate actions. But EPA believes that it is not necessary to resolve those implications in the course of this action because the effects of EPCA preemption, as set forth in subsection III.C, and the proper interpretation and application of CAA section 209(b)(1)(B) to California’s GHG and ZEV program, as set forth in subsection III.D, provide sufficient reason to take this final action and that the potential implications for prior and future SIP actions are not a sufficient basis to alter the rationale for or terms of this final action. The questions of what EPCA means and what its preemptive effect on certain state regulations is, and what CAA section 209(b)(1)(B) means and what its limitations on California’s ability to obtain a waiver for its state programs are, do not depend on whether one or more SIP actions pertaining to NAAQS attainment and maintenance strategies may directly or indirectly be affected by the agencies’ resolution of those questions. 257 In the August 2018 SAFE proposal, EPA solicited comment on whether one or more of the grounds supporting the proposed withdrawal of this waiver would also support withdrawing other waivers that it has previously granted. 83 FR at 43240 n.550. At this time, EPA does not intend to take action with respect to any prior waiver grants other than those specified above. E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations D. Reconsideration of January 2013 Waiver and Determination That It Is Appropriate To Withdraw EPA’s January 2013 Waiver of CAA Section 209 Preemption for California’s GHG and ZEV Standards for Model Years 2021–2025, Pursuant to CAA Section 209(b)(1)(B) jbell on DSK3GLQ082PROD with RULES3 1. Interpretation of CAA Section 209(b)(1)(B) Under CAA section 209(b)(1)(B), EPA cannot grant a waiver request if EPA finds that California ‘‘does not need such State standards to meet compelling and extraordinary conditions.’’ 258 In the August 2018 SAFE Proposal, EPA proposed to determine: (1) That it was reasonable and appropriate to interpret the scope of ‘‘such State standards’’ to authorize a consideration of whether California needs to have its own GHG vehicle emissions program specifically, rather than whether California needs any separate vehicle emissions program at all; and (2) that California did not ‘‘need’’ its own GHG and ZEV programs ‘‘to meet compelling and extraordinary conditions’’ within the meaning of the statute. EPA finalizes those determinations in this document. EPA notes in this regard that regulation of emissions from new motor vehicles and new motor vehicle engines under CAA section 202(a) is triggered by a determination that ‘‘the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines . . . cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.’’ This ‘‘endangerment finding,’’ which triggers EPA’s ability to use the CAA section 202(a) regulatory authority which CAA section 209(a) preempts the states from exercising (subject to the availability of a CAA section 209(b) preemption waiver), links (1) emission of pollutants from sources; to (2) air pollution; and (3) resulting endangerment to health and welfare.259 Congress enacted waiver authority for California under CAA section 209(b) 258 EPA notes that Congress provided no definition of the phrase ‘‘compelling and extraordinary conditions,’’ and that the phrase appears to be entirely unique, not found anywhere else in the United States Code. 259 We therefore, also disagree with CARB’s argument that EPA’s reading of CAA section 209(b)(1)(B) ‘‘ignores the statutory structure— improperly reading Section 209(b) without consideration of the relationship between Sections 202(a), 209(a) and 209(b). Specifically, EPA proposes to read Section 209(b) as excluding GHGs at the same time that it proposes to continue regulating GHGs under Section 202(a) and presumes, albeit implicitly, that Section 209(a) preempts other States from regulating GHGs.’’ CARB comments at 359. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 against the backdrop of traditional, criteria pollutant environmental problems, under which all three links in this chain bear a particularized nexus to specific local California features: (1) Criteria pollutants are emitted from the tailpipes of the California motor vehicle fleet; (2) those emissions of criteria pollutants contribute to air pollution by concentrating locally in elevated ambient levels, which concentration, in turn; (3) results in health and welfare effects (e.g., from ozone) that are extraordinarily aggravated in California as compared to other parts of the country, with this extraordinary situation being attributable to a confluence of California’s peculiar characteristics, e.g., population density, transportation patterns, wind and ocean currents, temperature inversions, and topography. In the case of GHG emissions from motor vehicles, however, this particularized nexus to California’s specific characteristics is missing: (1) The GHG emissions from California cars are no more relevant to the pollution problem at issue (i.e., climate change) as it impacts California than are the GHG emissions from cars being driven in New York, London, Johannesburg, or Tokyo; (2) the resulting air pollution, i.e., elevated concentrations of GHG in the upper atmosphere, is globally mixed; (3) the health and welfare effects of climate change impacts on California are not extraordinary to that state and to its particular characteristics. Although EPA concludes that all three of these aspects are lacking in the case of GHG, EPA further concludes that it is the connection between all the three which is the original motivation for Congress’s creation of the waiver. It is that original motivation that informs the proper understanding of what CAA section 209(b)(1)(B) requires. It is important to note that, while this interpretation of CAA section 209(b)(1)(B) departs in major respects from the interpretation applied in the 2009 waiver denial reversal (74 FR 32744) and the 2013 waiver grant (78 FR 2112), it does not simply constitute a readoption of the interpretation applied in the 2008 waiver denial (73 FR 12156). The 2008 waiver denial applied what it styled as two alternative approaches to determining whether California ‘‘need[ed]’’ its own vehicle GHG emissions program to address global climate change ‘‘to meet compelling and extraordinary conditions’’: One that looked at the causal link between California emissions and elevated GHG concentrations, 73 FR at 12160 (styled as ‘‘the distinct nature of global PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 51339 pollution as it relates to section 209(b)(1)(B)’’), and an ‘‘alternative’’ approach that looked at the magnitude of California climate effects compared to the rest of the nation, 73 FR at 12163– 12164 (‘‘whether the potential impact of climate change resulting from these emissions and concentrations will differ across geographic areas and if so whether the likely effects in California amount to compelling and extraordinary conditions’’). The 2009 waiver denial reversal, and the 2013 waiver grant, in contrast, applied an interpretation which EPA styled as a return to the ‘‘traditional’’ interpretation. Under that approach, EPA determined that California ‘‘needs’’ its own vehicle GHG emissions program ‘‘to meet compelling and extraordinary conditions,’’ a determination that was predicated on what was then EPA’s view that, in the case of such later-adopted programs, satisfaction of the ‘‘need’’ criterion of CAA section 209(b)(1)(B) was effectively automatic, being derivative as it were of the State’s having long ago established a ‘‘need’’ to have some form of its own vehicle emissions program (i.e., its criteria pollutant program for which it had already received many waivers). In conjunction with this, EPA also pointed to the effects of climate change on certain criteria pollutant impacts. See 74 FR at 32746; 78 FR at 2125 et seq. In this action, EPA adopts an interpretation of CAA section 209(b)(1)(B) that it concludes is more in accord with the text, structure, purpose, and legislative history of that provision than were either the position in the 2008 denial (because it does not separate causal issues and effects issues into alternatives) or the position the 2009 and 2013 grants (because it considers application of CAA section 209(b)(1)(B) to California’s need for a GHG/climate program, rather than subordinating that consideration to California’s need for a criteria pollutant program). Under this interpretation, EPA begins by noting that only one state, California, is entitled to apply under CAA section 209(b) for a waiver of the preemptive effect of CAA section 209(a). CAA section 209(a), in turn, provides that (unless a waiver is issued) no state may regulate new motor vehicle or new motor vehicle engine emissions. That authority instead is conferred on EPA under CAA section 202(a), subject to an ‘‘endangerment finding.’’ That finding requires EPA to consider the relationship between [1] sources and their emissions of pollutants; [2] the pollution to which those emissions contribute; and [3] resulting impacts on health and welfare. Congress has E:\FR\FM\27SER3.SGM 27SER3 51340 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 therefore, in the elements of the endangerment finding, laid out the terms of what constitutes a pollution problem to provide the appropriate and requisite predicate for federal regulation. Because CAA section 209(a) expresses Congress’s judgment that vehicle emission pollution problems are presumptively appropriate only for federal regulation, with one state afforded the extraordinary treatment under CAA section 209(b) of being able to apply for a waiver from that preemption, the best, if not the only, reading of the waiver criterion under CAA section 209(b)(1)(B) is that it requires a pollution problem at the local level that corresponds in a state-specific particularized manner to the type of pollution problem that Congress required as the predicate for federal regulation. It is against this backdrop that EPA believes the text of CAA section 209(b)(1)(B) is best interpreted. Informed by the criteria-pollutant context in which California’s pre-1970 program was enacted, the legislative history, and the principle, as discussed elsewhere in this action, that differential treatment of the states by Congress in a geographically disparate way is extraordinary and is justified only by a sufficient link between that differential treatment and particularized local facts, EPA interprets Congress’s command in CAA section 209(b)(1)(B), that it may not grant a preemption waiver for a California state vehicle emissions program if California does not ‘‘need’’ that program ‘‘to meet compelling and extraordinary conditions,’’ to condition the issuance of a waiver on a statespecific pollution problem that maps on to the elements as laid out in CAA section 202(a): [1] Emissions of pollutants; [2] resulting air pollution; [3] health and welfare effects from that resulting air pollution. EPA concludes that the interpretation of CAA section 209(b)(1)(B) it adopts in this document is the best, if not the only, reading of that provision. The Supreme Court’s opinion in UARG, 134 S. Ct. 2427 (2014), instructs that Clean Air Act provisions cannot necessarily rationally be applied identically to GHG as they are to traditional pollutants.260 For the reasons 260 CARB is wrong to suggest in its comments that EPA’s interpretation in this action of CAA section 209(b)(1)(B) is inconsistent with the Supreme Court’s opinion in Massachusetts v. EPA. CARB comments at 360. Massachusetts held that the general, CAA-wide definition of ‘‘air pollutant’’ at CAA section 302(g) encompasses carbon dioxide, and that the text of CAA section 202(a)(1), which provides that EPA shall regulate standards for emissions of ‘‘any air pollutant’’ from new motor vehicles if EPA makes certain predicate findings VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 set forth in this subsection, it is appropriate to consider the application of the second waiver prong, CAA section 209(b)(1)(B), to California’s ‘‘need’’ vel non for its own GHG and ZEV programs, separate and apart from its ‘‘need’’ for its own criteria pollutant program. EPA determines, based on the application of the second waiver prong, that California does not ‘‘need’’ its own GHG and ZEV programs ‘‘to meet compelling and extraordinary conditions,’’ notwithstanding EPA’s historical determinations that California does so ‘‘need’’ its own criteria pollutant programs. Furthermore, the fact that GHG emissions may affect criteria pollutant concentrations (e.g., increases in ambient temperature are conducive to ground-level ozone formation) does not satisfy this requirement for a particularized nexus, because to allow such attenuated effects to fill in the gaps would eliminate the function of requiring such a nexus in the first place and would elide the distinction between national and local pollution problems which EPA discerns as underlying the text, structure, and purpose of the waiver provision. EPA departs in this regard from the position it took in the 2009 reversal of the 2008 waiver denial, 74 FR at 32763, where it determined that ‘‘[t]here is a logical link between the local air pollution problem of ozone (referred to colloquially as ‘‘endangerment findings’’), also encompasses carbon dioxide. 549 U.S. at 528. But CAA section 209, as a whole, in its preemption provision in 209(a), in the waiver provision in 209(b), and most specifically in the second waiver prong under CAA 209(b)(1)(B), does not contain the term ‘‘pollutant,’’ and EPA does not in this document interpret section 209 as simply establishing a distinction between criteria and GHG pollutants. Rather, for the reasons stated in this document, EPA interprets CAA section 209(b), and its extraordinary treatment afforded to one state, as requiring, in its provision in CAA section 209(b)(1)(B) that no waiver shall issue where a state does not need its own standards ‘‘to meet compelling and extraordinary conditions,’’ as requiring a state-specific, particularized nexus between the elements of a pollution problem—i.e., pollutants, pollution, and impacts—as set forth in CAA section 202(a). CARB asserts that ‘‘[t]here is no reason Section 209(b)(1)(B) should be interpreted more narrowly than Section 202(a),’’ CARB comments at 360. One such reason is perfectly evident: They have different text. Another, as discussed in this action, is that CAA 209(b)(1)(B) must be read against the principle that extraordinary treatment afforded one state must be justified by ‘‘extraordinary conditions’’ in that state. Here, CARB misses the mark when it invokes Massachusetts’s observation that ‘‘without regulatory flexibility, changing circumstances and scientific developments would soon render the Clean Air Act obsolete,’’ quoting 549 U.S. at 532. CARB comments at 360. The Supreme Court there was discussing evolution of scientific understanding of what pollutants may pose harm. Nothing in Massachusetts suggests that scientific developments can alter the fundamental relationship between the States among themselves and vis-a`-vis the federal government. PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 and California’s desire to reduce GHGs as one way to address the adverse impact that climate change may have on local ozone conditions.’’ EPA further notes that elsewhere in the 2009 waiver denial reversal, EPA took the position that Massachusetts v. EPA supports the view that, because ‘‘every small reduction is helpful in reducing [climate] concerns. . . . [A] reduction in domestic automobile emissions would slow the pace of global emissions increase no matter what happens with regard to other emissions,’’ and therefore ‘‘opponents [of the waiver] have not met their burden of demonstrating that California’s motor vehicle program, or its GHG standards, does not have a rational relationship to contributing to amelioration of the air pollution problems in California.’’ Id. at 32766 (emphasis added). EPA now departs from this prior position in several important respects. First, to the extent that its 2009 waiver denial reversal was guided by an interpretation of the teachings of Massachusetts under which any reduction in GHG gives warrant for regulatory action (to include EPA’s waiver approvals), that must now be weighed against the Supreme Court’s subsequent 2014 UARG opinion, which stands for the proposition that particular CAA provisions will not necessarily apply identically in the case of GHG emissions as they do to criteria pollutant emissions. Second, to the extent that EPA’s 2009 waiver denial reversal framed the question under CAA section 209(b)(1)(B) as whether there is a ‘‘rational relationship’’ between California’s programs and California’s air pollution problems, that conflated the ‘‘arbitrary and capricious’’ test in CAA section 209(b)(1)(A) with the unique and distinct term ‘‘need[ed] to meet compelling and extraordinary conditions’’ in CAA section 209(b)(1)(B); EPA’s position in this document gives that term a distinct and appropriate meaning and application. Third, whereas the 2009 waiver denial reversal also noted in this passage that ‘‘there is some evidence in the record that proffers a specific level of reduction in temperature resulting from California’s regulations,’’ this action notes elsewhere that the 2012 joint rule record reflected that even standards much more stringent than either the 2012 Federal standards or California’s ACC program would only reduce global temperature by 0.02 degrees Celsius in 2100. As discussed elsewhere in this action, EPA concludes that this does not constitute a showing E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations that California ‘‘needs’’ its standards to ‘‘meet’’ climate change, separate from the question whether climate change and its impacts on California constitute ‘‘compelling and extraordinary conditions’’ within the meaning of the statute. Further, the claim by some commenters that ‘‘incremental progress is progress nonetheless’’ does not meaningfully address the reality that the waiver would result in an indistinguishable change in global temperatures and, based on geographic variability and measurement sensitivity, likely no change in temperatures or physical impacts resulting from anthropogenic climate change in California. EPA proposed to determine that the balance of textual, contextual, structural, and legislative history evidence supports the conclusion that the statute is ambiguous in one particular respect: Whether CAA section 209(b)(1)(B) refers to an individual standard or the California standards as a whole when referring to the Administrator’s review of state standards submitted for a waiver, to determine whether the state ‘‘needs such State standards to meet compelling and extraordinary conditions.’’ We explained that ‘‘such State standards’’ in CAA section 209(b)(1)(B) is ambiguous with respect to the scope of EPA’s analysis. For example, it is unclear whether EPA is meant to evaluate either the standard or standards at issue in the waiver request or all of California’s standards in the aggregate. We also explained that CAA section 209(b)(1)(B) does not specifically employ terms that could only be construed as calling for a standard-by-standard analysis or each individual standard. For example, it does not contain phrases such as ‘‘each State standard’’ or ‘‘the State standard.’’ Nor does the use of the plural term ‘‘standards’’ definitively answer the question of the proper scope of EPA’s analysis, given that the variation in the use of singular and plural form of a word in the same law is often insignificant and a given waiver request typically encompasses multiple ‘‘standards.’’ Thus, we explained that while it is clear that ‘‘such State standards’’ refers at least to all of the standards that are the subject of the particular waiver request before the Administrator, that phrase could reasonably be considered as referring either to the standards in the entire California program, the program for similar vehicles, or the particular standards for which California is VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 requesting a waiver under the pending request.261 We did explain, however, that there are reasons to doubt that ‘‘such State standards’’ is intended to refer to all standards in California’s program, including all standards that it has previously adopted and obtained waivers for, because this would limit EPA’s ability to consider and act on standards that are the subject of particular waiver applications, even where that individualized consideration is reasonable or the only rational approach. Specifically, given that the term ‘‘extraordinary’’ should refer to circumstances that are specific to California, such as thermal inversions resulting from local geography and wind patterns, and primarily responsible for causing the air pollution problems that the standards are designed to address, standards which address pollution problems that lack that type of particularized nexus to California are particularly appropriate candidates for an individualized consideration. EPA affirms this view as it relates to the review of GHG standards, given that GHG emissions from in California cars, and their consequences for California, bear no particular relation to these California-specific circumstances—i.e., global GHG emissions in the aggregate are what present problems for California, not California-specific ones. The waiver under CAA section 209(b) is a waiver of, and is logically 261 California suggests in its comments that EPA is ‘‘logically inconsistent’’ in that it said at proposal, 83 FR at 43246, that the CAA section 209(b)(1)(B) phrase ‘‘such State standards’’ ‘‘refers at least to all of the standards that are the subject of the particular waiver request before the Administrator,’’ while at the same time proposing to reconsider and withdraw the January 2013 grant of a waiver with respect to some, but not all, of the components of the ACC program (i.e., with respect to GHG and ZEV, but not LEV). EPA disagrees that this is inconsistent. The question of how to interpret ‘‘such state standards’’ refers to the determination of what the total set of standards is with regard to which EPA will consider whether California ‘‘needs’’ those standards ‘‘to meet compelling and extraordinary conditions.’’ It is reasonable to assign that total set at the level of the waiver-request package before the Agency, rather than all the state-specific emission standards that California has ever adopted. If the consideration reveals that, within that set, California does not need particular subsets ‘‘to meet compelling and extraordinary conditions’’—here, because the GHG and ZEV programs lack a particularized, Californiaspecific nexus between pollutant, pollution, and impacts, a rationale that does not apply to the LEV program, for which EPA did not propose to withdraw the waiver and is not in this document withdrawing the waiver—that is nothing unusual. And it is consistent with EPA’s prior practice, as discussed in subsection III.B, of only partially granting aspects of, in combination with denial or deferral of action on other aspects of, some previous waivers. The ultimate analysis whether a waiver is appropriate is not limited to a binary, all-or-nothing determination. PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 51341 dependent on and presupposes the existence of, the prohibition under CAA section 209(a), which forbids (absent a waiver) any State to ‘‘adopt or attempt to enforce any standard [singular] relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part.’’ States are forbidden from adopting a standard, singular; California requests waivers seriatim by submitting a standard or package of standards to EPA; it follows that EPA considers those submissions as it receives them, individually, not in the aggregate with all standards for which it has previously granted waivers. Further, reading the phrase ‘‘such State standards’’ as requiring EPA always and only to consider California’s entire program in the aggregate would limit the application of this waiver prong in a way that EPA does not believe Congress intended. We explained that, under the interpretation where EPA is constrained to the aggregate approach, once EPA had determined that California needed its very first set of submitted standards to meet extraordinary and compelling conditions, EPA would never have the discretion to determine that California did not need any subsequent standards for which it sought a successive waiver—unless EPA is authorized to consider a later submission separate from its earlier finding. Moreover, as also explained at proposal, up until the ACC program waiver request, California’s waiver request involved individual standards or particular aspects of California’s new motor vehicle program. For example, only GHG standards were at issue in the 2008 GHG waiver request denial.262 263 Several commenters disagreed with our view of ambiguity and the proposal to construe ‘‘such state standards,’’ in the context of our reconsideration and proposal to withdraw the January 2013 waiver for California’s GHG and ZEV provisions, as applying to those provisions themselves, rather than California’s entire, aggregate program consisting of all California’s motor vehicle emission standards, when considering whether California needs its 262 73 FR 12156 (March 6, 2008). determines in this document that GHG emissions, with regard to the lack of a nexus between their State-specific sources and their Statespecific impacts, and California’s GHG standard program, are sufficiently distinct from criteria pollutants and traditional, criteria pollutant standards, that it is appropriate for EPA to consider whether California needs its own GHG vehicle emissions program. EPA does not determine in this document and does not need to determine today how this determination may affect subsequent reviews of waiver applications with regard to criteria pollutant control programs. 263 EPA E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 51342 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations GHG and ZEV provisions to meet compelling and extraordinary conditions within the meaning of CAA section 209(b)(1)(B). One commenter argued that this reading would require EPA to consider the protectiveness of California’s standards by looking at them in the aggregate while also allowing EPA to consider California’s ‘‘need’’ on an individual, standard-bystandard basis. Commenters also argued that EPA’s historical or traditional interpretation was correct. They argued that EPA could not apply a different interpretation of ‘‘such State standards’’ given that ‘‘such State standards’’ in CAA section 209(b)(1)(B) does not relate back to the singular ‘‘any standard’’ in CAA section 209(a). They cast this reading as ‘‘implausible,’’ given that under the rule of last antecedent ‘‘such’’ should properly refer to standards in (b)(1) and not 209(a). We disagree. As explained earlier above, reading the phrase ‘‘such State standards’’ as requiring EPA always and only to consider California’s entire program in the aggregate would limit the application of this waiver criterion. Specifically, it would mean that once EPA determines that California needed its very first set of submitted standards to meet extraordinary and compelling conditions, EPA would never have the discretion to determine that California did not need any subsequent standards for which it sought a successive waiver—unless EPA is authorized to consider a later submission separate from its earlier finding. Instead, it is reasonable to read CAA section 209(b) as articulating, first, that EPA shall consider the standards in the aggregate to determine if the State’s determination that they are sufficiently protective is arbitrary and capricious (CAA section 209(b)(1)(A)). But, even if this first criterion for denying a waiver is not triggered, nevertheless, such a waiver shall not be granted as to such standards that are not needed to meet compelling and extraordinary conditions, under the second waiver denial criterion (CAA section 209(b)(1)(B)). Commenters’ argument, in effect, inserts the word ‘‘every’’ (or ‘‘all’’) into CAA section 209(b)(1)(B) in between the words ‘‘need’’ and ‘‘such.’’ Additionally, as shown in further detail in section D.2., below, the term ‘‘extraordinary’’ refers to circumstances that are specific to California, such as thermal inversions resulting from local geography and wind patterns, and that are primarily responsible for causing the air pollution problems that the standard under waiver review is designed to address. EPA affirms the view that the VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 term ‘‘extraordinary’’ refers primarily to factors that tend to produce higher levels of pollution: Geographical and climatic conditions (like thermal inversions) that in combination with large numbers and high concentrations of automobiles, create serious air pollution problems in California (73 FR 12156, 12159–60). The text, context, and structure of CAA section 209(b) support EPA’s reasoning that the relevant ‘‘conditions’’ are those conditions present in a particular state and that have a particularized nexus to emissions in that state. The statute calls for an examination of whether the ‘‘State’’ needs such ‘‘state standards’’ in the context of a prohibition in CAA section 209(a) of a ‘‘state or other political subdivision’’ adopting or attempting to enforce alternative standards. It would be inconsistent with the overall structure for a state’s own preferred policy approach to addressing national or global—rather than local and statespecific—‘‘conditions’’ to permit a waiver from a scheme that otherwise establishes a uniform, national policy.264 Notably, pertinent legislative history supports this view of the text and structure of 209(b), insofar as it refers to California’s ‘‘peculiar local conditions’’ and ‘‘unique problems.’’ S. Rep. No. 403, 90th Cong. 1st Sess., at 32 (1967). This legislative history also indicates that California is to demonstrate ‘‘compelling and extraordinary circumstances sufficiently different from the nation as a whole to justify standards on automobile emissions which may, from time to time, need to be more stringent than national standards.’’ Id. EPA views this as evidence of Congressional intent that separate standards in California are to be justified by a showing of circumstances in California that are different from circumstances in the country at large. Additionally, EPA views this legislative history as demonstrating that Congress did not intend for CAA section 209(b)(1)(B) to be based on the need for California to 264 Cf. Ford Motor Co. v. EPA, 606 F.2d 1293, 1301–02 (D.C. Cir. 1979) (‘‘Ford is asking this court to declare that Congress intended to make standards adopted by California for its own particular problems, and never substantively reviewed for stringency or national protectiveness by federal officials, an option which auto manufacturers can choose in the rest of the country as an alternative to compliance with the federal standards which Congress determined are in the best interests of the nation. We find this reading to be wholly implausible.’’). See also id. at 1303 (‘‘It was clearly the intent of the Act that that determination focus on local air quality problems . . . that may differ substantially from those in other parts of the nation.’’). PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 enact separate standards that address pollution problems of a more national or global nature. Relevant legislative history also ‘‘indicates that Congress allowed waivers of preemption for California motor vehicle standards based on the particular effects of local conditions in California on the air pollution problems in California.’’ Congress discussed ‘‘the unique problems faced in California as a result of its climate and topography.’’ H.R. Rep. No. 728, 90th Cong. 1st Sess., at 21 (1967). See also Statement of Cong. Holifield (CA), 113 Cong. Rec. 30942–43 (1967). Congress also noted the large effect of local vehicle pollution on such local problems. See, e.g., Statement of Cong. Bell (CA) 113 Cong. Rec. 30946. As explained at proposal, Congress focus was on California’s ozone problem, which is especially affected by local conditions and local pollution. See Statement of Cong. Smith (CA) 113 Cong. Rec. 30940–41 (1967); Statement of Cong. Holifield (CA), id., at 30942. See also, MEMA I, 627 F.2d at 1109 (noting the discussion of California’s ‘‘peculiar local conditions’’ in the legislative history). In sum and as explained at proposal, conditions that are similar on a global scale are not ‘‘extraordinary,’’ especially where ‘‘extraordinary’’ conditions are a predicate for a local deviation from national standards, under CAA section 209(b). 83 FR 43247. As further explained in section D2., below, GHG is a globally distributed pollutant with environmental effects that are different from emissions of criteria pollutants. For example, GHG emissions from the California vehicle fleet bear no more relation to GHG emissions in California than fleet in other parts of the country. As also explained in the SAFE proposal, EPA believes that the GHG and ZEV standards are standards that would not meaningfully address global air pollution problems posed by GHG emissions, in contrast to local or regional air pollution problem with causal ties to conditions in California. Additionally, the impacts of California vehicles’ GHG emissions on California are mediated through the context of the global mixture of elevated levels of GHG in the upper atmosphere. As also shown below, EPA finds that while potential conditions in California related to global climate change could be substantial, they are not sufficiently different from the potential conditions in the nation as a whole to justify separate state standards under CAA section E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 209(b)(1)(B).265 In this action, EPA is reviewing a waiver for motor vehicle standards designed to address a global air pollution problem and its effects, as compared to a local or regional air pollution problem that has causal ties to conditions in California. EPA must therefore, review California’s GHG standards in light of the fact that GHG emissions impacts are different from criteria pollutants themselves, and California must address their need for them as it relates to conditions in California. In sum, as explained at proposal, under our reading of ‘‘such state standards’’ and ‘‘extraordinary and compelling conditions,’’ EPA will examine California’s need for GHG standards by considering levels of GHG emissions emitted from motor vehicles in California to determine if they are specific to California and contribute primarily to environmental effects that are specific to California. This review, which calls for a showing of a particularized causal link between the standards under review, emissions in California, and conditions in California, is similar to agency review of California’s need for standards designed to address criteria pollutants and is further discussed in section D.2.d, below.266 CARB argues that what it characterizes as EPA’s reading of ‘‘compelling and extraordinary’’ as equivalent to ‘‘unique’’ or ‘‘sufficiently different from’’ the rest of the country ‘‘is inconsistent with Section 209(b)(1)(B), other provisions of the Clean Air Act, and the legislative history.’’ CARB also asserts that EPA ‘‘cites no case’’ to support this reading. At the same time, CARB claims that EPA has either interpreted legislative history incorrectly or relies entirely on legislative history for the 1967 CAA, which does note California’s ‘‘unique problems,’’ instead of legislative history for the 1977 amendments; CARB asserts that the latter legislative history is more relevant, given that the addition of section 177 in the 1977 CAA meant that Congress did not intend that Section 265 See Fourth National Climate Assessment, Chapter 25: Southwest, available at https:// nca2018.globalchange.gov/chapter/25/. See also Intergovernmental Panel on Climate Change (IPCC) Observed Climate Change Impacts Database, available at http://sedac.ipcc- data.org/ddc/ observed_ar5/index.html. 266 California argues in its comments that EPA has inappropriately reduced the scope of waiver ability under CAA section 209(b) to be narrower than the scope of express preemption under CAA section 209(a). EPA disagrees. To the extent that CAA section 209(b)(1)(B), as interpreted and applied here, precludes a waiver for California’s GHG vehicle emissions and ZEV programs, that effect flows from the text and structure of this statutory section. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 209(b)(1)(B) be construed as requiring ‘‘California’s problems to be entirely unique or sufficiently different from those in other States.’’ CARB also contends that EPA is limiting application of CAA section 209(b)(1)(B) to smog, even though EPA has granted waivers for pollutants that do not contribute to smog, such as particulate matter. In addition, CARB maintains that what it characterizes as EPA’s reading ‘‘compelling and extraordinary conditions’’ as restricted to ‘‘local’’ or ‘‘regional’’ pollutants would weaken Congress’s intent that California retain its own regulatory program and continue to lead the nation as a ‘‘laboratory of innovation.’’ CARB further argues that EPA provides no support for this ‘‘geographic distinction,’’ while also casting the reading as ‘‘illusory.’’ According to CARB, both local and global pollution cause compelling and extraordinary conditions, as evidenced by provisions of the CAA that address long-range transport of emissions (beyond the state level). In sum, CARB argues that ‘‘compelling and extraordinary conditions’’ is expansive enough to be read as including GHG emissions and that EPA’s ‘‘exacting and unrealistic’’ reading can only be met by ‘‘a rare air pollution problem.’’ CARB comments at 360–365. EPA disagrees. First, as explained at proposal, the 1977 Amendments revised CAA section 209(b)(1) in only one material aspect. Specifically, California is required to determine that standards it seeks a waiver for will be ‘‘in the aggregate, at least as protective of public health and welfare than applicable Federal standards,’’ rather than the ‘‘more stringent’’ standard under 1967 Clean Air Act. 83 FR 43247 n.579. Second, there is relevant legislative history from the 1977 amendments, which describes EPA’s role in reviewing California’s protectiveness determination, under CAA section 209(b)(1)(A), as whether ‘‘the State acted unreasonably in evaluating the relative risks of various pollutants in light of air quality, topography, photochemistry and climate in that State.’’ This 1977 legislative history further supports a reading requiring a particularized nexus. H. Rep. No. 294, 95th Cong., 1st Sess. 302 (1977), U.S. C.C.A.N. 1977, p. 1381. Third, in support of the proposed reading, EPA cited MEMA I as noting the Senate Committee discussion of California’s ‘‘peculiar local conditions’’ in 1967 legislative history for this provision in upholding the grant of a waiver subsequent to the 1977 CAA amendments. . 627 F.2d at 1109, citing PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 51343 S.Rep. No. 403, 90th Cong., 1st Sess. 33 (1967); see also Ford Motor Co. v. EPA, 606 F.2d 1293,1303 (D.C. Cir. 1979) (‘‘It was clearly the intent of the Act that that determination focus on local air quality problems . . . that may differ substantially from those in other parts of the nation.’’). Fourth, EPA’s reading of CAA section 209(b)(1)(B) has never been and is not limited to ‘‘smog’’-causing pollutants. Here, CARB’s comment glosses over extensive discussion in the SAFE proposal of the phrase ‘‘compelling and extraordinary’’ including, for example, legislative history indicating that California is to demonstrate ‘‘compelling and extraordinary circumstances sufficiently different from the nation as a whole to justify standards on automobile emissions which may, from time to time, need to be more stringent than national standards.’’ 83 FR 23427, citing S. Rep. No. 403, 90th Cong. 1st Sess., at 32 (1967). Fifth, as shown in greater detail in section III.D, the phrase ‘‘compelling and extraordinary conditions’’ qualifies the ‘‘need’’ for California’s standards. And in a statute designed to address public health and welfare, it certainly cannot mean standards that allow a state to be ‘‘a laboratory for innovation’’ in the abstract, without any connection to a need to address pollution problems. Most notably, legislative history explains that CAA section 209(b)(1) was is intended to recognize California’s ‘‘unique problems.’’ For example, in originally adopting the provision, the Senate Committee on Public Works explained that ‘‘California’s unique problems and pioneering efforts justified a waiver of the preemption section to the State of California.’’ S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) (emphasis added); see also 113 Cong. Rec. 30948 (bound ed. Nov. 2,1967), Statement of Representative Harley Staggers, chairman of the House Interstate and Foreign Commerce Committee (explaining that ‘‘overall national interest required administration of controls on motor vehicle emissions, with special recognition given by the Secretary to the unique problems facing California as a result of numerous thermal inversions that occur within that state because of its geography and prevailing wind patterns), ; id. at 30950, Remarks of Rep. Corman (‘‘The uniqueness and the seriousness of California’s problem is evident–more than 90 percent of the smog in our urban area is caused by automobiles, and in the next 15 years the number of automobiles in the state will almost double.’’). Sixth, while it is E:\FR\FM\27SER3.SGM 27SER3 51344 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 true that local and regional pollutants can be transported at greater geographic scales than the state level, the Clean Air Act sets out a comprehensive scheme for addressing air pollution transported to other regions; see, e.g., CAA sections 126 and 110(a)(2)(D)(i). The fact that the Act addresses pollutant transport elsewhere does not expand the scope of the waiver provision. In contrast, in CAA section 209(b), Congress set out a waiver of preemption for California to address automotive pollution that give rise to local and regional air quality problems. Finally, to the extent CARB casts EPA reading as ‘‘exacting and unrealistic,’’ it mischaracterizes CAA section 209(a) and (b), which preempts states from adopting and enforcing standards for new motor vehicles and engines, with CAA section 209(b) allowing for a waiver of the preemption in 209(a) only if certain enumerated conditions are met. It is not ‘‘a rare air pollution problem’’ that satisfies the particularized nexus interpretation of CAA section 209(b)(1)(B) that EPA adopts in this document. Rather, it is the all-too-well understood and longstanding air pollution problem that California continues to face: Aggravated criteria pollution at the state and local level. 2. It Is Appropriate To Apply This Criterion to California’s GHG Standards Separately, Rather Than to California’s Motor Vehicle Program as a Whole Under CAA section 209(b)(1)(B) of the Clean Air Act, the Administrator may not grant a waiver if he finds that the ‘‘State does not need such State standards to meet compelling and extraordinary conditions.’’ EPA proposed to find that CARB does not need its own GHG and ZEV standards to meet compelling and extraordinary conditions in California, on the grounds that ‘‘compelling and extraordinary conditions’’ mean environmental conditions with causes and effects particular or unique to, California whereas GHG emissions present global air pollution problems. Specifically, EPA proposed to determine that the GHG-related standards are designed to address global air pollution and its consequences, in contrast to local or regional air pollution problems with causal ties to conditions in California. EPA also proposed to find that, while effects related to climate change in California could be substantial, they are not sufficiently different from the conditions in the nation as a whole to justify separate State standards under CAA section 209(b)(1)(B). 83 FR 43248– 43250. Lastly, EPA proposed to find that the State’s GHG-related standards would VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 not have a meaningful impact on the potential conditions related to global climate change. Because EPA has traditionally interpreted and applied CAA section 209(b)(1)(B) in a manner that examines whether the conditions that Congress identified (e.g., topography number of vehicles, etc.) 267 still give rise to serious air quality problems in California, and thus a need for California’s own motor vehicle emission control program, EPA concludes that this causal-link test is the appropriate basis on which to evaluate California’s GHG emission standards under the second waiver prong, CAA section 209(b)(1)(B).268 In general, EPA has in the past recognized California’s unique 267 See, e.g., 49 FR 18887, 18890 (May 3, 1984) (waiver decision discussing legislative history of CAA section 209). 268 It is not appropriate for EPA to defer to California and other outside parties when EPA is interpreting its own statute. By contrast, EPA does defer to California’s policy choices when it comes to choosing emissions standards that will best address the serious air quality problems and impacts on public health and welfare in California—to the extent that the State standards at issue will actually address pollution and its consequences that are particular to California. But the question whether the State regulations at issue actually do meet the statutory criterion of being necessary ‘‘to meet compelling and extraordinary conditions’’ in the meaning of the statute, CAA section 209(b)(1)(B), is one which EPA must answer. In this regard, EPA notes that it has previously taken the position that ‘‘the burden of proof [lies] on the party opposing a waiver,’’ and that ‘‘the burden [is] on those who allege, in effect, that EPA’s GHG emission standards are adequate to California’s needs.’’ 78 FR at 2117 (Jan. 2013 waiver grant). EPA notes that this previous discussion is distinguishable from the current context in two key regards. First, EPA was in 2013 analyzing third parties’ opposition to a waiver, rather than conducting its own analysis of whether a previously granted waiver was appropriately granted. Second, EPA’s change in position in this document does not constitute an assertion that ‘‘EPA’s GHG emission standards are [or are not] adequate to California’s needs’’ as a matter of policy. Rather, EPA is adopting an interpretation of CAA section 209(b)(1)(B), specifically its provision that no waiver is appropriate if California does not need standards ‘‘to meet compelling and extraordinary conditions,’’ similar to the interpretation that it adopted in the 2008 waiver denial but abandoned in the 2009 and 2013 waiver grants, and applying that interpretation to determine to withdraw the January 2013 waiver for California’s GHG and ZEV program for model years 2021 through 2025. Under that interpretation, the question is not whether existing federal standards are ‘‘adequate to California’s needs,’’ but whether California’s standards are needed under the meaning of CAA section 209(b)(1)(B), which, as set forth in this document, requires a particularized nexus between California-specific pollutant sources, Californiaspecific pollution contributed to thereby, and California-specific pollutants impacts caused thereby. Furthermore, we took comment on burden of proof in the proposal, see 83 FR at 43244 n.567. EPA believes it is not necessary to resolve that issue in this action as regardless of whether a preponderance of the evidence or clear and compelling evidence standard is applied, the Agency concludes that withdrawal of the waiver is appropriate. PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 underlying conditions and serious air pollution problems when reviewing waiver requests.269 California, and others that oppose the withdrawal of the waiver, assert that the relevant inquiry is merely whether California needs to have some form of a separate State motor vehicle emissions control program to meet compelling and extraordinary conditions, not whether any given standard is needed to meet compelling and extraordinary conditions related to that air pollution problem. On the other hand, several commenters that support a withdrawal of the waiver suggest EPA’s determination should be based on whether California needs greenhouse gas standards in particular to meet compelling and extraordinary conditions, asserting that a proposed set of standards must be linked to compelling and extraordinary conditions. These commenters suggest that the Act requires EPA to look at the particular ‘‘standards’’ at issue, not the entire State program. EPA determines that it in this context it is appropriate to review whether California needs its GHG standards to meet compelling and extraordinary conditions separately from the need for the remainder of California’s new motor vehicle program, which has historically addressed criteria pollutants with a particular causal link to local and regional conditions both in the nature and quantity of emissions and in the particularized local and regional impacts of the pollution to which those emissions contribute. EPA bases this decision on the fact that California’s GHG standards are designed to address global climate change problems that are different from the local pollution conditions and problems that California has addressed previously in its new motor vehicle program. The climate change problems are different in terms of the distribution of the pollutants and the effect of local California factors, including the local effect of motor vehicle emissions as differentiated from other GHG emissions worldwide on the GHG concentrations in California. In 269 See American Trucking Associations, Inc. v. Environmental Protection Agency, 600 F.3d 624, 627 (D.C. Cir. 2010) (‘‘With respect to the statutory language, EPA concluded that ‘compelling and extraordinary conditions’ refers to the factors that tend to cause pollution—the ‘geographical and climate conditions that, when combined with large numbers and high concentrations of automobiles, create serious air pollution problems.’ The expansive and statutory language gives California (and in turn EPA) a good deal of flexibility in assessing California’s regulatory needs. We therefore find no basis to disturb EPA’s reasonable interpretation of the second criterion. See Chevron, USA Inc v. Natural Res. Def. Council, 467 U.S. 837, 842–43.’’) (citation omitted). E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 addition, EPA notes that under its traditional interpretation of CAA section 209(b)(1)(B), where EPA evaluates the need for a separate California new motor vehicle program, conditions such as the nature of the air quality problem may change whereby a particular motor vehicle regulation designed for a specific criteria pollutant is no longer needed to address a serious air quality problem (e.g., the underlying air quality problem no longer exists). Therefore, EPA concludes that it is appropriate to examine the need for GHG standards within California’s mobile source program to ensure that such standard is linked to local conditions that giving rise to the air pollution problem, that the air pollution problem is serious and of a local nature, and that the State standards at issue will meaningfully redress that local problem.270 This waiver decision falls within the context of a few instances of EPA applying the CAA section 209(b)(1)(B) criterion to a California waiver request for a fundamentally global air pollution problem.271 Although EPA’s review of 270 EPA notes in this regard that the position that GHG and climate are no different from criteria pollutants and criteria air pollution in terms of applicability of the CAA section 209(b) waiver regime, and specifically that no particularized nexus between in-state emissions and in-state impacts is necessary in order to meet the CAA section 209(b)(1)(B) ‘‘need[ed] . . . to meet compelling and extraordinary conditions,’’ would effectively read the term ‘‘extraordinary’’ out of the statute, or reduce it to surplusage with the term ‘‘compelling.’’ Whether GHG emissions and attendant climate impacts are, in the colloquial sense, compelling or not is not the relevant question. It is whether they are ‘‘compelling and extraordinary’’ within the reasonably interpreted meaning of that term in its context here. Inasmuch as that term in its context requires a particularized nexus between California emissions, California pollution, and California impacts, they are not. 271 See generally California State Motor Vehicle Pollution Control Standards; Advanced Clean Car Program; Notice of Decision, January 9, 2013 Volume 78, Number 6 pp. 2211—2145; California State Motor Vehicle Pollution Control Standards; Greenhouse Gas Emissions from 2014 and Subsequent Model Year Medium- and Heavy-Duty Engines and Vehicles; Notice of Decision; December 29, 2016 Volume 81, Number 250, pp. 95982– 95987; California State Motor Vehicle Pollution Control Standards; Heavy-Duty Tractor-Trailer Greenhouse Gas Regulations; Notice of Decision; August 7, 2014 Volume 79, Number 152 pp. 46256– 46265; California State Motor Vehicle Pollution Control Standards; Within-the-Scope Determination for Amendments to California’s Motor Vehicle Greenhouse Gas Regulations; Notice of Decision; June 14, 2011 Volume 76, Number 114 pp. 34693– 34700; California State Motor Vehicle Pollution Control Standards; Notice of Decision Granting a Waiver of Clean Air Act Preemption for California’s 2009 and Subsequent Model Year Greenhouse Gas Emission Standards for New Motor Vehicles; July 8, 2009 Volume 74, Number 129 pp. 32744–32784; California State Motor Vehicle Pollution Control Standards; Notice of Decision Denying a Waiver of Clean Air Act Preemption for California’s 2009 and Subsequent Model Year Greenhouse Gas Emission Standards for New Motor Vehicles; March 6, 2008 Volume 73, Number 45 pp. 12156–12169. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 this criterion has typically been cursory due to California needing its motor vehicle emission program due to fundamental factors leading to local and regional air pollution problems that were well established at the time of creation of the waiver provision (as discussed below), it is appropriate in this case to carefully review the purpose of CAA section 209(b)(1)(B) when applying it to the unique circumstance of California’s regulation of greenhouse gases. By doing so, EPA gives meaning to Congress’s decision to include this provision in CAA section 209(b).272 Moreover, because both CAA sections 209(b)(B) and (C) employ the term ‘‘such state standards,’’ it is appropriate for EPA to read the term consistently between prongs (B) and (C). Under CAA section 209(b)(1)(C) EPA conducts review of standards California has submitted to EPA for the grant of a waiver to determine if they are consistent with CAA section 202(a).273 It follows then that EPA must read ‘‘such state standards’’ in CAA section 209(b)(1)(B) as a reference to the same standards in subsection (C).274 a. EPA Practice in Previous Waivers In past waivers that addressed local or regional air pollution, EPA has interpreted CAA section 209(b)(1)(B) as requiring it to consider whether California needs a separate motor vehicle program to meet compelling and extraordinary conditions. Under this approach, EPA does not consider whether the specific standards at issue are needed to meet compelling and extraordinary conditions related to that air pollutant. For example, EPA reviewed this issue in detail with regard 272 See United States v. Menashe, 348 US 528, 538–39 (1955) (courts must give effect to every word, clause, and sentence of a statute). 273 ‘‘Technology exists with which to achieve California’s proposed standards for HC and CO, however, the standards are inconsistent with Section 202(a) of the Clean Air Act because the cost of compliance within the lead time remaining is excessive.’’ 38 FR 30136 (November 1, 1973). See also 40 FR 30311 (July 18, 1975); 43 FR 998, 1001 (Jan. 5, 1978). 274 Under CAA section 177 states may adopt and enforce motor vehicle emissions standards if ‘‘such standards are identical to the California standards for which a waiver has been granted.’’ See, e.g., Motor Vehicle Mfrs. Ass’n v. NYS Dep. of Envt’l Conservation, 17 F.3d 521, 532 (2d Cir. 1994). ‘‘Section 177 refers to ‘standards relating to control of emissions ... for which a waiver has been granted.’ Id. In enacting § 209(b), which establishes California’s preemption exception, Congress uses the same words as it did when it allowed California to set its own ‘standards . . . for the control of emissions,’ provided the EPA approves a waiver application. Id. § 7543(b)(1). Hence, the most logical reading of § 177 is that New York may adopt only those standards that, pursuant to § 209(b), California included in its waiver application to the EPA.’’ (Emphasis in original). PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 51345 to particulate matter in a 1984 waiver decision.275 In that waiver proceeding, California argued that EPA is restricted to considering whether California needs to have its own motor vehicle program to meet compelling and extraordinary conditions, and does not consider whether any given standard is necessary to meet such conditions. Opponents of the waiver in that proceeding argued that EPA was to consider whether California needed these PM standards to meet compelling and extraordinary conditions related to PM air pollution. The Administrator agreed with California that it was appropriate to look at the program as a whole in determining compliance with CAA section 209(b)(1)(B). One justification of the Administrator was that many of the concerns with regard to having separate State standards were based on the manufacturers’ worries about having to meet more than one motor vehicle program in the country, but that once a separate California program was permitted, it should not be a greater administrative hindrance to have to meet further standards in California. The Administrator also justified this decision by noting that the language of the statute referred to ‘‘such state standards,’’ which referred back to the use of the same phrase in the criterion looking at the protectiveness of the standards in the aggregate. He also noted that the phrase referred to standards in the plural, not individual standards. He considered this interpretation to be consistent with the ability of California to have some standards that are less stringent than the federal standards, as long as, under CAA section 209(b)(1)(A), in the aggregate its standards were at least as protective as the federal standards. The Administrator further stated that in the legislative history of CAA section 209, the phrase ‘‘compelling and extraordinary circumstances’’ refers to ‘‘certain general circumstances, unique to California, primarily responsible for causing its air pollution problem,’’ like the numerous thermal inversions caused by its local geography and wind patterns. The Administrator also noted that Congress recognized ‘‘the presence and growth of California’s vehicle population, whose emissions were thought to be responsible for ninety percent of the air pollution in certain parts of California.’’ 276 EPA reasoned that the term compelling and extraordinary conditions ‘‘does not refer to the levels of pollution directly.’’ Instead, the term refers primarily to the 275 See 276 Id. E:\FR\FM\27SER3.SGM 49 FR 18887 (May 3, 1984). at 18890 (emphasis added). 27SER3 jbell on DSK3GLQ082PROD with RULES3 51346 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations confluence of factors that tend to produce higher levels of pollution of the type particular to California: ‘‘geographical and climatic conditions (like thermal inversions) that, when combined with large numbers and high concentrations of automobiles, create serious air pollution problems.’’ The Administrator summarized that the question to be addressed in the second criterion is whether these ‘‘fundamental conditions’’ (i.e., the geographical and climate conditions and large motor vehicle population) that cause air pollution continued to exist, not whether the air pollution levels for PM were ‘‘compelling and extraordinary,’’ nor the extent to which these specific PM standards will address the PM air pollution problem. From this it can be seen that EPA’s interpretation in the context of reviewing standards designed to address local or regional air pollution has looked at the local causes of the air pollution problems: Geographic and climatic conditions that turn local emissions into air pollution problems, such as thermal inversions, combined with a large number of motor vehicles in California emitting in the aggregate large quantities of emissions. Under the interpretation EPA adopts in this document, it is the particularized nexus between the emissions from California vehicles, their contribution to local pollution, and the extraordinary impacts that that pollution has on California due to California’s specific characteristics, that set California apart from other areas when Congress adopted this provision. EPA’s review of this criterion has usually been cursory and not in dispute, as the fundamental factors leading to these traditional criteria air pollution problems—geography, local climate conditions (like thermal inversions), significance of the motor vehicle population—have not changed over time and over different local and regional air pollutants. These fundamental factors have applied similarly for all of California’s air pollution problems that are local or regional in nature. California’s circumstances of geography, climate, and motor vehicle population continue to show that it has compelling and extraordinary conditions leading to such local air pollution problems related to traditional pollutants. California’s motor vehicle program has historically addressed air pollution problems that are generally local or regional in nature. The emission standards have been designed to reduce emissions coming from local vehicles, in circumstances where these local emissions lead to air pollution in VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 California that will affect directly the local population and environment in California. The narrow question in this waiver proceeding is whether this interpretation is appropriate when considering motor vehicle standards designed to address a global air pollution problem and its effects, as compared to a local or regional air pollution problem that has particular causal ties to conditions in California. As EPA observed in the SAFE proposal, the agency has articulated differing interpretations of CAA section 209(b)(1)(B). Historically, EPA has interpreted this provision to require that California needs to have its own separate new motor vehicle program in the aggregate to meet compelling and extraordinary conditions in California, not whether the state needs the specific standards under consideration. In 2008, in contrast, when EPA first considered whether State GHG emission regulations meet the requirements for a CAA section 209(b) waiver, EPA determined that the better reading of CAA section 209(b)(1)(B) would be to consider whether California ‘‘need[s]’’ the particular standards at issue ‘‘to meet compelling and extraordinary conditions,’’ and the agency denied the waiver on these grounds. Then, when EPA reconsidered that denial in 2009, the agency reverted to the interpretation that it had previously applied for criteria pollutants and granted the waiver. EPA concludes that the long and contentious history of this question, and the recent measures that California has taken even during the pendency of this administrative action to amend its State regulations beyond the form in which they were granted the waiver in 2013 and, even more recently, to purport to establish ‘‘voluntary’’ programs creating yet a third program distinct both from that for which CAA preemption was waived in 2013 and the Federal standards promulgated in 2012 and currently under review by the Federal government, confirm that extension of CAA section 209(b) waivers to State GHG and ZEV programs was inappropriate. Such waivers have led to actions by California increasingly at odds with the clear Congressional design and intent that national standards would be set by the federal government with California having an ability to apply for targeted waivers of preemption to address its own particular problems. EPA therefore views this interpretation and application of CAA section 209(b)(1)(B) set forth here as, at minimum, a reasonable one that gives appropriate meaning and effect to this provision and PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 does not second-guess California’s policy judgment notwithstanding assertions to the contrary. b. The Distinct Nature of Global GHG Pollution as It Relates to CAA Section 209(b)(1)(B) The air pollution problem at issue here is elevated atmospheric concentrations of greenhouse gases, and the concern is the impact these concentrations have on global climate change and the effect of global climate change on California. In contrast to local or regional air pollution problems, the atmospheric concentrations of these greenhouse gases are substantially uniform across the globe, based on their long atmospheric life and the resulting mixing in the atmosphere. The factors looked at in the past when considering waiver requests for State standards addressing criteria pollutants—the geography and climate of California, and the large motor vehicle population in California, which were considered the fundamental causes of the air pollution levels found in California—cannot form the basis of a meaningful analysis of the causal link between California vehicles’ GHG emissions and climate effects felt in California. The concentration of greenhouse gases in the upper atmosphere may affect California, but that concentration is not affected in any particular way by the geography and climate of California. The long duration of these gases in the atmosphere means they are well-mixed throughout the global atmosphere, such that their concentrations over California and the U.S. are, for all practical purposes, the same as the global average. The number of motor vehicles in California, while still a notable percentage of the national total and still a notable source of GHG emissions in the State, bears no more relation to the levels of greenhouse gases in the atmosphere over California than any other comparable source or group of sources of greenhouse gases anywhere in the world. Emissions of greenhouses gases from California cars do not generally remain confined within California’s local environment (and, indeed, were they to do so, rather than rise to the upper atmosphere to become well-mixed with other GHG emissions, those locally located emissions would not, by definition, contribute to the ‘‘pollution’’ that is at issue here). Instead, those GHG emissions from vehicles operating in California become one part of the global pool of GHG emissions, with this global pool of emissions leading to a relatively homogenous concentration of greenhouse gases over the globe. Thus, the emissions of motor vehicles in E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations California do not affect California’s air pollution problem in any way different from emissions from vehicles and other pollution sources all around the world. Similarly, the emissions from California’s cars do not just affect the atmosphere in California, but in fact become one part of the global pool of GHG emissions that affect the atmosphere globally and are distributed throughout the world, resulting in basically a uniform global atmospheric concentration. Given the different, and global, nature of the pollution at issue, EPA determines that the conceptual basis underlying the practice of considering California’s motor vehicle program as a whole (in the context of criteria emission regulations) does not meaningfully apply with respect to elevated atmospheric concentrations of GHGs. Therefore, EPA has considered whether it is appropriate to apply this criterion in a different manner for this kind of air pollution problem; that is, a global air pollution problem. As previously explained, the text and relevant legislative history of CAA section 209 also supports EPA’s decision to examine the application of the second waiver denial criterion (CAA section 209(b)(1)(B)) with regard to California’s GHG and ZEV standards specifically in the context of global climate change. It indicates that Congress was moved to allow waivers of preemption for California motor vehicle standards based on the particular effects of local conditions in California on the air pollution problems in California. Congress discussed ‘‘the unique problems faced in California as a result of its climate and topography.’’ H.R. Rep. No. 728, 90th Cong. 1st Sess., at 21 (1967). See also Statement of Cong. Holifield (CA), 113 Cong. Rec. 30942–43 (1967). Congress also noted the large effect of local vehicle pollution on such local problems. See, e.g., Statement of Rep. Bell (CA), 113 Cong. Rec. 30946. In particular, Congress focused on California’s ozone problem, which is especially affected by local conditions and local pollution. See Statement of Rep. Smith (CA), 113 Cong. Rec. 30940– 41 (1967); Statement of Rep. Holifield (CA), id. at 30942. See also Motor & Equip. Mfrs. Ass’n, Inc. v. EPA (MEMA), 627 F. 2d 1095, 1109 (D.C. Cir., 1979) (noting the discussion of California’s ‘‘peculiar local conditions’’ in the legislative history). Congress clearly did not have in view pollution problems of a more national or global nature in justifying this provision.277 Moreover, 277 In reference to another argument made in the 1984 waiver, while the administrative costs of a VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 ‘‘the [Clean Air] Act also differentiates between the states, despite our historic tradition that all the States enjoy equal sovereignty. Distinctions can be justified in some cases. ‘The doctrine of the equality of States . . . does not bar . . . remedies for local evils which have subsequently appeared.’ But a departure from the fundamental principle of equal sovereignty requires a showing that a statute’s disparate geographic coverage is sufficiently related to the problem that it targets.’’ Nw. Austin Mun. Util. Dist. No. One. v. Holder, 557 U.S. 193, 203 (2009) (some citations and internal quotation marks omitted) (quoting South Carolina v. Katzenbach, 383 U.S. 301, 328–29 (1966)) (ellipses and emphasis added by Northwest Austin Court); see also Katzenbach, 383 U.S. at 334 (‘‘exceptional conditions can justify legislative measures not otherwise appropriate’’) (emphasis added); cf. 42 U.S.C. 7543(b)(1)(B) (‘‘No such waiver shall be granted if the Administrator finds that . . . . such State does not need such State standards to meet compelling and extraordinary conditions.’’) (emphasis added). These principles support our conclusion that Congress did not intend the waiver provision in CAA section 209(b) to be applied to California measures that address pollution problems of a national or global nature, as opposed to conditions that are ‘‘extraordinary’’ with respect to California in particular—i.e., those with a particularized nexus to emissions in California and to topographical or other features peculiar to California.’’ c. It Is Appropriate To Apply CAA Section 209(b)(1)(B) Separately to GHG Standards EPA concludes that in the context of reviewing California GHG related standards designed to address global climate change, it is appropriate to apply the second criterion separately for GHG standards. The intent of Congress, in enacting CAA section 209(b) and in particular Congress’s decision to have a separate CAA section 209(b)(1)(B), was to require EPA to specifically review whether California continues to have compelling and extraordinary conditions and the need for State standards to address those conditions. Thus, EPA concludes that it is appropriate to review program may not increase significantly based on the addition of new standards, there is still cost in the implementation of new standards, particularly in terms of changes in design necessitated by the new standards. In any case, this issue does not appear to be relevant to the issue of whether California needs its standards to meet compelling and extraordinary conditions. PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 51347 California’s GHG standards separately from the remainder of the State’s motor vehicle emission control program for purposes of CAA section 209(b)(1)(B). In this context it is appropriate to give meaning to this criterion by looking at whether the emissions from California motor vehicles, as well as the local climate and topography in California, are the fundamental causal factors for the air pollution problem—elevated concentrations of greenhouse gases— apart from the other parts of California’s motor vehicle program, which are intended to remediate different air pollution concerns. The appropriate criteria to apply therefore is whether the emissions of California motor vehicles, as well as California’s local climate and topography, are the fundamental causal factors for the air pollution problem of elevated concentrations of greenhouse gases. d. Relationship of California Motor Vehicles, Climate, and Topography to Elevated Concentrations of Greenhouse Gases in California Under CAA section 209(b)(1)(B), EPA proposed to withdraw the waiver of preemption of the ACC program GHG and ZEV standards for MY 2021–2025 on two alternative grounds. Specifically, (1) California ‘‘does not need’’ these standards ‘‘to meet compelling and extraordinary conditions;’’ and (2) even if California does have compelling and extraordinary conditions in the context of global climate change, California does not ‘‘need’’ these standards because they will not meaningfully address global air pollution problems of the sort associated with GHG emissions. 83 FR 43248. As previously explained, EPA proposed to determine that the balance of textual, contextual, structural, and legislative history evidence provide reasonable support for the conclusion that the statute is ambiguous in one particular respect: Whether section 209(b)(1)(B) refers to an individual standard or the California standards as a whole when referring to the Administrator’s review of state standards submitted for a waiver, to determine whether the state ‘‘needs such State standards to meet compelling and extraordinary conditions,’’ and that the approach of examining the need for GHG-related standards separate from the other, traditional aspects of California’s program is reasonable given, among other factors, the unique nature of the global pollutant. EPA recognizes that Congress’s purpose in establishing the prohibition in CAA section 209(a) and the waiver in CAA section 209(b) was to E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 51348 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations balance the benefit of allowing California significant discretion in deciding how to protect the health and welfare of its population with the burden imposed on the manufacturers of being subject to two separate motor vehicle programs and the overarching policy judgment that uniform national standards are appropriate. S. Rep. No. 403, 90th Cong. 1st Sess., at 32–33 (1967). It is clear that Congress intended this balance to be premised on a situation where California needs the State standards to meet compelling and extraordinary conditions. Thus, if EPA determines that California does not need its State GHG standards to meet compelling and extraordinary conditions, a waiver of preemption for those State standards is not permitted under the statute. Commenters supportive of EPA’s proposal to withdraw the waiver commented that California should not continue to enjoy a waiver for separate State GHG standards because those State standards are not needed to meet compelling and extraordinary conditions because there is no link between California-based motor vehicle GHG emissions and any alleged extraordinary conditions in California. These commenters state that while California spends a great deal of time discussing the effects of climate change in California, California does not link its GHG standards to those effects. They note that GHGs are not localized pollutants that can affect California’s local climate, or that are problematic due to California’s specific topography. Instead, emissions from vehicles in California become mixed with the global emissions of GHG and affect global climate (including California’s climate) in the same way that any GHG from around the world affect global (and California) climate conditions. They claim that Congress authorized EPA to grant a waiver of preemption only in cases where California standards were necessary to address peculiar local air quality problems. They claim that there can be no need for separate California standards if the standards are not aimed at, and do not redress, a Californiaspecific problem. In previous waiver decisions, EPA was asked to waive preemption of standards regulating emissions that were local or regional in effect. Local air pollution problems are affected directly by local conditions in California, largely the emissions from motor vehicles in California in the context of the local climate and topography. As a result, State standards regulating such local motor vehicle emissions will have a direct effect on the concentration of VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 pollutants directly affecting California’s environment. They are effective mechanisms to reduce the levels of local air pollution in California because local conditions are the primary cause of that kind of air pollution problem. In addition, reductions in emissions from motor vehicles that occur elsewhere in the United States will not have the same impact, and often will have no impact, on reducing the levels of local air pollution in California. By contrast, GHGs emitted by California motor vehicles become part of the global pool of GHG emissions that affect concentrations of GHGs on a uniform basis throughout the world. The local climate and topography in California have no significant impact on the long-term atmospheric concentrations of greenhouse gases in California. Greenhouse gas emissions from vehicles or other pollution sources in other parts of the country and the world will have as much effect on California’s environment as emissions from California vehicles. As a result, reducing emissions of GHGs from motor vehicles in California has the same impact or effect on atmospheric concentrations of GHGs as reducing emissions of GHGs from motor vehicles or other sources elsewhere in the U.S., or reducing emissions of GHGs from other sources anywhere in the world. California’s motor vehicle standards for GHG emissions do not affect only California’s concentration of GHGs, but affect such concentrations globally, in ways unrelated to the particular topography in California. Similarly, emissions from other parts of the world affect the global concentrations of GHGs, and therefore concentrations in California, in exactly the same manner as emissions from California’s motor vehicles. Further, as explained in the SAFE proposal, California’s claims that it is uniquely susceptible to certain risks because it is a coastal State does not differentiate California from other coastal States such as Massachusetts, Florida, and Louisiana, much less that conditions in California are any more ‘‘extraordinary’’ as compared to any other coastal States, particularly those coastal States that may possess a greater percentage of low-lying territory than California. Any effects of global climate change (e.g. water supply issues, increases in wildfires, effects on agriculture) could certainly affect California. But those effects would also affect other parts of the United States.278 278 Some commenters made this same point. See, e.g., Fiat Chrysler Automobiles, Docket No. EPA– HQ–OAR–2018–0283–4406 at 89; American Fuel & PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 Many parts of the United States, especially western States, may have issues related to drinking water (e.g., increased salinity) and wildfires, and effects on agriculture; these occurrences are by no means limited to California. These are among the types of climate change effects that EPA considered in the 2009 CAA section 202(a) endangerment finding which is the predicate for its authority to issue national motor vehicle GHG standards. But EPA’s evaluation of whether California’s standards are ‘‘need[ed] to meet compelling and extraordinary conditions’’ is not identical to its prior determination, pursuant to CAA section 202(a) whether GHG emissions from the national motor vehicle fleet contribute to pollution that may reasonably be anticipated to endanger public health or welfare. In order for a waiver request to pass muster under CAA section 209(b)(1)(B), as set forth in this document, a particularized, statespecific nexus must exist between sources of pollutants, resulting pollution, and impacts of that pollution. This is analogous to but distinct from the more abstract or general predicate finding for regulation under CAA section 202(a); if it were not distinct, then California would, under CAA section 209(b)(1)(B), always ‘‘need’’ a waiver for a state-specific program to ‘‘meet’’ any pollution problem that it experienced once EPA had found under CAA section 202(a) that motor vehicle emissions contribute to that pollution problem (without particular reference to that pollution problem’s impact on California). This would effectively nullify the second waiver denial prong, CAA section 209(b)(1)(B).279 California Petrochemical Manufacturers, Docket No. E_A–HQ– OAR–2018–0283–5648 at 34, 36. At least one recent analysis, cited by a number of commenters, has produced estimates of climate change damage that project that with respect to such matters as coastal damage, agricultural yields, energy expenditures, and mortality, California is not worse-positioned in relation to certain other areas of the U.S., and indeed is estimated to be better-positioned, particularly as regards the Southeast region of the country. See S. Hsiang, et al. ‘‘Estimating Economic Damage from Climate Change in the United States,’’ 356 Science 1362 (2017). 279 Cf. Ford, 606 F.2d at 1303 n.68 (affirming EPA’s refusal to allow nationwide sale of cars that meet California standards that, due to the waiver predicate that California’s standards only need be as stringent as federal standards in the aggregate, were not certified as meeting national standards with respect to all pollutants) (‘‘[Appellants] suggest to varying degrees that California is a microcosm of the entire nation and, as such, has no particularized problems the resolution of which would require emission control standards inappropriate to the rest of the country. This may or may not be completely true. The fact remains, however, that Congress expected California to be putting its interests first and there is no guarantee that those interests are congruent with the interests E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 would have it that the 2009 CAA section 202(a) GHG endangerment finding necessarily means California ‘‘needs’’ its own GHG program ‘‘to meet compelling and extraordinary conditions.’’ That does not follow.280 Cf. Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014) (partially reversing the GHG ‘‘Tailoring’’ Rule on grounds that the CAA section 202(a) endangerment finding for GHG emissions from motor vehicles did not compel regulation of all sources of GHG emissions under the Prevention of Significant Deterioration and Title V permit programs). 83 FR 43249. EPA has discussed the reasons for concluding that it is appropriate to consider California’s GHGs standards separately in determining whether the State needs those standards to meet compelling and extraordinary conditions, as compared to looking at its need for a motor vehicle program in general. These reasons also lead to the conclusion that California does not need these GHG standards to meet compelling and extraordinary conditions. The text, structure, and legislative history indicates that Congress’s intent in the second waiver criterion, CAA section 209(b)(1)(B), was to allow California to adopt new motor vehicle standards because of compelling of the nation as a whole.’’). Here, California offers an inverse reflection of appellants’ argument in Ford, but it is no more valid: Because it can marshal a list of climate impacts that it is experiencing, California insists it is entitled to a waiver for a statespecific program to address those impacts. All of California’s problems and corresponding programs, under this logic, are ‘‘particularized.’’ If this were the case, no waiver request could ever be denied under CAA section 209(b)(1)(B), and Congress would much more likely have simply afforded California a blanket and automatic waiver. Congress did not do so, its choice not to do so should be respected and given meaning, and EPA in this document sets forth an interpretation and application of CAA section 209(b)(1)(B) that does so by articulating a required particularized nexus to State-specific facts which is present in the case of California’s criteria vehicle emissions programs but lacking in the case of its GHG and ZEV ones. 280 EPA notes in this regard that, even in the 2009 reversal of the 2008 waiver denial, the Agency was careful to distinguish its consideration of the waiver application from ‘‘the issues pending before EPA under section 202(a) of the Act,’’ i.e., the thenpending endangerment finding. 74 FR at 32765. While EPA maintains the position that the CAA section 202(a) ‘‘endangerment finding’’ inquiry and the CAA section 209(b)(1)(B) inquiry are distinct, EPA notes that the 2009 waiver denial reversal (and the 2008 waiver denial itself) took pains to distinguish the two primarily because the Agency was at that time still considering whether to issue the endangerment finding. As EPA explains in this document, the two provisions are distinct, but the CAA section 202(a) predicate criteria for federal regulation do support the Agency’s position that the CAA section 209(b)(1)(B) waiver prong is best interpreted as calling for a consideration whether the pollution problem at issue has a State-specific, particularized nexus between emissions, pollution, and impacts. VerDate Sep<11>2014 20:16 Sep 26, 2019 Jkt 247001 and extraordinary conditions in California that were causally related to local or regional air pollution levels in California. These factors—including topography and large population of motor vehicles—cause these kinds of local or regional air pollution levels in California and because of this causal link, California’s motor vehicle standards can be effective mechanisms to address these local problems. Reductions outside California would lack that causal link to local or regional air quality conditions inside California. Congress did not indicate any intent to allow California to promulgate local standards to deal with global air pollution like atmospheric concentrations of GHGs. In California’s comments on the SAFE proposal, it asserted that it has a need for reductions in GHG atmospheric concentrations and therefore emissions, but the issue is not whether such reductions are needed as a matter of general policy, but whether Congress intended them to be effectuated on a State-specific basis by California through EPA granting a waiver for the GHG aspects of the State’s new motor vehicle program. This type of pollution seems ill-fitted to Congress’s intent to provide California with a method of handling its local air pollution concentrations and related problems with local emission control measures. EPA determines that standards regulating emissions of global pollutants like greenhouse gases were not part of the compromise envisioned by Congress in passing CAA section 209(b).281 Moreover, even if California does have compelling and extraordinary conditions in the context of global climate change, California does not ‘‘need’’ these standards under CAA section 209(b)(1)(B) because they will not meaningfully address global air pollution problems of the sort associated with GHG emissions. As noted in the SAFE proposal, the most stringent of the regulatory alternatives considered in the 2012 final rule and FRIA (under much more optimistic assumptions about technology effectiveness), which would have required a seven percent average annual fleetwide increase in fuel economy for MYs 2017–2025 compared to MY 2016 standards, was forecast to decrease global temperatures only by 0.02 °C in 2100.282 This conclusion was further 281 Moreover, EPA is mindful that principles of equal sovereignty between the states ordinarily require ‘‘ ‘exceptional conditions’ prevailing in certain parts of the country [to] justif[y] extraordinary legislation otherwise unfamiliar to our federal system.’’ Northwest Austin, 557 U.S. at 211. 282 83 FR 42986, 43216–43217. PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 51349 bolstered by multiple commenters.283 EPA therefore concludes that California’s GHG and ZEV regulations do not fulfil the requirement within CAA section 209(b)(1)(B) that such regulations are ‘‘needed’’ to ‘‘meet’’ the impacts of global climate change in California, even assuming arguendo that those impacts do constitute ‘‘compelling and extraordinary conditions’’ within the meaning of that statutory phrase (although, to be clear, EPA is determining that those impacts do not in fact fall within that phrase’s meaning). Given that Congress enacted CAA section 209(b) to provide California with a unique ability to receive a waiver of preemption, which provides California with authority that it would not otherwise have under CAA section 209, and given the specific language in CAA section 209(b)(2) pointing out the need for extraordinary and compelling conditions as a condition for the waiver, EPA determines that it is not appropriate to waive preemption for California’s standards that regulate GHGs. Atmospheric concentrations of greenhouse gases are an air pollution problem that is global in nature, and this air pollution problem does not bear the same causal link to factors local to California as do local or regional air pollution problems. EPA determines that globally elevated atmospheric concentrations of GHGs and their environmental effects are not the kind of local or regional air pollution problem that fall within the scope of the ‘‘compelling and extraordinary conditions’’ encompassed by the terms of CAA section 209(b)(1)(B). As such, EPA finds that California does not need its 2021 through 2025 MY GHG-related standards to meet compelling and extraordinary conditions.284 283 The George Washington University Regulatory Studies Center, Docket No. EPA–HQ–OAR–2018– 0283–4028; Competitive Enterprise Institute, Docket No. NHTSA–2018–0067–12015. 284 EPA disagrees with comments that suggest that California ‘‘needs’’ its GHG and ZEV programs ‘‘to meet compelling and extraordinary conditions’’ in the meaning of CAA section 209(b)(1)(B) because those programs are intended to reduce criteria pollutants emissions, separate and apart from their status as programs designed to address climate change. To take this position would not be in keeping with historical agency practice in reviewing California’s waiver requests. Specifically, EPA practice is not to scrutinize California’s criteria pollutant emissions reductions projections or air emissions benefits. Rather, EPA’s view has been that these are matters left for California’s judgments, especially given that Title I of the Clean Air Act imposes the obligation of NAAQS attainment planning on states. See, e.g., 36 FR 17458; 78 FR 2134; 79 FR 46256, 46261 (Aug. 7, 2014). EPA’s withdrawal action is premised on CARB’s 2012 ACC program waiver request, which, as previously E:\FR\FM\27SER3.SGM Continued 27SER3 51350 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations e. No Findings Under CAA Section 209(b)(1)(C) Are Finalized at This Time In the SAFE proposal, EPA proposed to determine, as an additional basis for the waiver withdrawal, that California’s ZEV and GHG standards for new MY 2021 through 2025 are not consistent with section 202(a) of the Clean Air Act. That proposed determination was intertwined with the SAFE proposal’s assessment with regard to the technological feasibility of the Federal GHG standards for MY 2021 through 2025 and the proposed revisions thereto. Because EPA and NHTSA are not at this time finalizing that assessment or taking final action on the proposal to revise the Federal standards, and because the finalized determinations under CAA section 209(b)(1)(B) and the discussion of the implications of EPCA preemption with regard to the waiver previously granted with respect to those standards set forth above are each independent and adequate grounds for the waiver withdrawal, EPA at this time is not finalizing any determination with respect to CAA section 209(b)(1)(C). EPA may do so in connection with potential future final action with regard to the Federal standards. jbell on DSK3GLQ082PROD with RULES3 E. Withdrawal of Waiver In this final action, EPA determines that the California Air Resources Board’s (CARB’s) regulations pertaining to greenhouse gases-related (GHG) emission standards for 2021 through 2025 model year (MY) passenger cars, light-duty trucks, and medium-duty vehicles are not needed to meet compelling and extraordinary conditions. EPA concludes that CAA section 209(b) was intended to allow California to promulgate State standards applicable to emissions from new motor vehicles to address pollution problems that are local or regional, and that have a particular nexus to emissions from vehicles in California.285 EPA does not believe CAA section 209(b)(1)(B) was intended to allow California to discussed, only discussed the potential GHG benefits or attributes of CARB’s GHG and ZEV standards program (78 FR 2114, 2130–2131). If EPA does not even scrutinize a California program’s criteria pollutant emission and benefits projections when California applies for a waiver for that program presenting it as a criteria program, then a fortiori commenters’ retrospective attempt to claim criteria benefits to maintain a waiver for programs that were originally presented to EPA in a waiver request that disclaimed any such benefits is not appropriate. 285 As noted in the SAFE proposal, ‘‘Attempting to solve climate change, even in part, through the Section 209 waiver provision is fundamentally different from that section’s original purpose of addressing smog-related air quality problems.’’ 83 FR 42999. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 promulgate State standards for emissions from new motor vehicles designed to address global climate change problems. EPA’s 2013 waiver for CARB’s Advanced Clean Car Program (as it pertains to its 2021 through 2025 MY relating to greenhouse gas emissions and the ZEV mandate) is withdrawn. This is separate and apart from EPA’s determination that it cannot and did not validly grant a waiver with respect to those California State measures which are preempted under NHTSA’s determination in this document that EPCA preempts State GHG and ZEV programs, which, as explained above, is effective on the effective date of this joint action. F. States Cannot Adopt California’s GHG Standards Under CAA Section 177 At proposal, EPA explained that CAA section 177 provides that other States, under certain circumstances and with certain conditions, may ‘‘adopt and enforce’’ standards that are ‘‘identical to the California standards for which a waiver has been granted for [a given] model year.’’ 42 U.S.C. 7507. As a result, EPA proposed to determine that this section does not apply to CARB’s GHG standards given that they are intended to address global air pollution. We also noted that the section is titled ‘‘New motor vehicle emission standards in nonattainment areas’ and that its application is limited to ‘‘any State which has [state implementation] plan provisions approved under this part’’— i.e., under CAA title I part D, which governs ‘‘Plan requirements for nonattainment areas.’’ We received comments in support of and against our proposal. Commenters opposing our interpretation argued that CAA section 177 does not contain any text that could be read as limiting its applicability to certain pollutants only. They also argued that EPA has inappropriately relied on the heading for CAA section 177 to construe a statutory provision as well as arrogated authority to implement an otherwise self-implementing provision. We disagree with these commenters, conclude that the text (including both the title and main text), structural location, and purpose of the provision confirm that it does not apply to GHG standards, and are finalizing this determination as proposed. Under the Clean Air Act, EPA establishes national ambient air quality standards (NAAQS) to protect public health and welfare and has established such ambient standards for the following criteria pollutants: ozone, carbon monoxide, nitrogen dioxide, PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 sulfur dioxide, lead, and particulate matter. As also explained at proposal, areas are only designated nonattainment with respect to criteria pollutants for which EPA has issued a NAAQS, and nonattainment State Implementation Plan (SIPs) are intended to assure that those areas attain the NAAQS. Congress added CAA section 177 in the 1977 Clean Air Act amendments cognizant that states might need to address air pollution within their boundaries similar to California but were otherwise preempted under CAA section 209(a) from setting new motor vehicle and engine standards. See, e.g., H.R. Rep. No. 294, 95th Cong., 1st Sess. 309 (1977), 1977 U.S.C.C.A.N. 1077, 1388 (explaining that the Committee ‘‘was concerned that this preemption (section 209(a) of the Act) now interferes with legitimate police powers of States’’); Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. New York State Dep’t of Envtl. Conservation, 17 F.3d 521, 527 (2d Cir. 1994) (‘‘It was in an effort to assist those states struggling to meet federal pollution standards that Congress, . . . directed in 1977 that other states could promulgate regulations requiring vehicles sold in their state to be in compliance with California’s emission standards or to ‘piggyback’ onto California’s preemption exemption.’’), citing H.R. Rep. No. 294, 95th Cong., 1st Sess. 309–10 (1977); id. at 531 ((‘‘[Section] 177 was inserted into the Act in 1977 so that states attempting to combat their own pollution problems could adopt California’s more stringent emission controls.’’). Relevant legislative history further identifies CAA section 177 as a means of addressing the NAAQS attainment planning requirements of CAA section 172, including the specific SIPs content and approvals criteria for EPA.286 H.R. 286 The version of CAA section 172 adopted in 1977 set forth the general requirements for state plans for nonattainment areas and CAA section 172(b) set forth the ‘‘requisite provisions’’ of those plans. In drafting the provisions that would become CAA section 172(b), Congress explained that they required the Administrator, after notice and opportunity for a public hearing, to approve ‘‘a State plan which meets the following criteria: It must identify all nonattainment areas for each pollutant. Next it must assure attainment of the national ambient air quality standard in those areas as expeditiously as practicable, but not later than December 31, 1982, for all pollutants other than photochemical oxidants. In respect to photochemical oxidants, the standard must be met as expeditiously as practicable, but not later than December 31, 1987. The plan must include a comprehensive, accurate, up-to-date inventory of actual emissions from all sources of pollutants in the area. This inventory must be revised and resubmitted every 2 years to substantiate that reasonable further progress has been achieved as a condition for permitting additional sources of pollution. Finally, the plan must identify and quantify the actual emissions which must be taken E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 Rep. No. 294, 95th Cong., 1st Sess. 213 (1977), 1977 U.S.C.C.A.N 1077, 1292 (‘‘Still another element of flexibility for States that is afforded in this section is the authority for States with nonattainment areas for automotive pollutants (other than California) to adopt and enforce California new-car emission standards if adequate notice is given.’’). Contrary to commenters’ assertions, therefore, the text, placement in Title I, and relevant legislative history are all indicative that CAA section 177 is in fact intended for NAAQS attainment planning and not to address global air pollution. As further explained in section D.2, GHG is a globally distributed pollutant with environmental effects that are different enough from emissions of criteria pollutants. For example, GHG emissions from fleet in California bear no more relation to GHG emissions in California than fleet in other parts of the country. Where states are now adopting standards for intents and purposes far removed from NAAQS attainment planning or more specifically directed at global air pollution, EPA as the agency charged with implementing the Clean Air Act is acting well within that role in setting out an interpretation that aligns with Congressional intent. See Chevron U.S.A. v. NRDC, 467 U.S. 837, 843 (1984) (‘‘The power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.’’). This construct also comports with our reading of CAA section 209(b)(1)(B) as limiting applicability of CAA section 209(b) waiver authority to state programs that address pollutants that affect local or regional air quality and not those into account by the State for purposes of deciding how to achieve reasonable further progress and assure timely attainment. Thus, the plan must consider the following factors among others: The actual emissions increases which will be allowed to result from the construction and operation of major new or modified stationary sources in the area; the actual emissions of such pollutant from unregulated sources, fugitive emissions and other uncontrolled sources; actual emissions of the pollutant from modified and existing indirect sources; actual emissions resulting from extension or elimination of transportation control measures; actual emissions of such pollutant resulting from in-use motor vehicles and emissions of such pollutant resulting from stationary sources to which delayed compliance orders or enforcement orders (pursuant to sec. 121 (pursuant to sec. 121 or sec 113(b)) and compliance date extension (pursuant to sec. 119) have been issued; and actual transported emissions.’’ H.R. Rep. No. 294, 95th Cong., 1st Sess. 212 (1977), 1977 U.S.C.C.A.N. 1077, 1291, 1977 WL 16034 (emphasis added). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 relating to global air pollution like GHGs. G. Severability and Judicial Review EPA intends that its withdrawal of the January 2013 waiver for California’s GHG and ZEV programs on the basis of EPCA preemption, to take effect upon the effective date of this joint action, as set forth in subsection III.C, on the one hand, is separate and severable from its withdrawal of the January 2013 waiver for those programs on the basis of an interpretation and application of CAA section 209(b)(1)(B), beginning in model year 2021, as set forth in subsection III.D, on the other. EPA further intends that its withdrawal of the waiver with regard to California’s GHG program is severable from its withdrawal of the waiver with regard to California’s ZEV program. The basis for this distinction (i.e., that EPA intends that its withdrawal of the waiver for California’s GHG program and for its ZEV program should be severable from one another) is, as follows, twofold: (1) While EPA concludes for the reasons set forth in subsection III.D above that the ZEV program, as subjected to the January 2013 waiver and as presented to EPA by CARB in CARB’s waiver application and supporting documents, is a GHGtargeting program and as such is susceptible to the interpretation and application of CAA 209(b)(1)(B) set forth above, EPA acknowledges that there are aspects to the analysis as it affects the state’s ZEV program that are not applicable with respect to the state’s GHG program; (2) in this final action, NHTSA expresses in section II above its intent that its determination that a State or local law or regulation of tailpipe greenhouse gas emissions from automobiles is related to fuel economy standards is severable from its determination that State or local ZEV mandates are related to fuel economy standards. EPA further intends that its determination with regard to the scope of CAA section 177 as set forth in subsection III.F above be severable from all other aspects of this joint action. Pursuant to CAA section 307(b)(1), judicial review of this final action may be sought only in the United States Court of Appeals for the District of Columbia Circuit. For the reasons explained in this section, this final waiver withdrawal action is nationally applicable for purposes of CAA section 307(b)(1). To the extent a court finds this action to be locally or regionally applicable, for the reasons explained in this section, EPA determines and finds for purposes of CAA section 307(b)(1) that this final waiver withdrawal action is based on a determination of PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 51351 nationwide scope or effect. As also explained at proposal, CAA Section 307(b)(1) of the CAA provides in which Federal courts of appeal petitions of review of final actions by EPA must be filed. This section provides, in part, that petitions for review must be filed in the Court of Appeals for the District of Columbia Circuit if: (i) The Agency action consists of ‘‘nationally applicable regulations promulgated, or final action taken, by the Administrator,’’ or (ii) such action is locally or regionally applicable, but ‘‘such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.’’ Additionally, we proposed to find that any final action resulting from the August 2018 SAFE proposal is based on a determination of ‘‘nationwide scope or effect’’ within the meaning of CAA section 307(b)(1). We explained that the withdrawal, when finalized, would affect persons in California and those manufacturers and/ or owners/operators of new motor vehicles nationwide who must comply with California’s new motor vehicle requirements. For instance, California’s program provides that manufacturers may generate credits in CAA section 177 States as a means to satisfy those manufacturers’ obligations to comply with the mandate that a certain percentage of their vehicles sold in California be ZEV (or be credited as such from sales in CAA section 177 States). In addition, other States have adopted aspects of California’s ACC program; this decision would also affect those States and those persons in such States, which are in multiple EPA regions and federal circuits. This final action is distinguishable from the situation faced by the D.C. Circuit in Dalton Trucking Inc., v. EPA, 808 F.3d 875 (D.C. Cir. 2015), where the Court held that EPA’s action on California’s waiver request with respect to its nonroad engine program was not nationally applicable, and that EPA had not properly made and published a finding that its action was based on a determination of nationwide scope and effect. First, Dalton Trucking noted that no other State had ever adopted California’s nonroad program, id. at 880; that is not the case here. Second, Dalton Trucking noted that the nonroad waiver final action was facially limited to fleets operating in California, id. at 881; the nature of the California program at issue here, with its complex credit system connected with sales in other States, is quite different. Third, Dalton Trucking noted that EPA in the nonroad waiver E:\FR\FM\27SER3.SGM 27SER3 51352 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations final action did not actually make and publish a finding that that final action was based on a determination of nationwide scope and effect, id. Dalton Trucking expressly did not hold, and indeed expressly disclaimed any intent to even suggest, that EPA could not have made and published such a finding in that action. Id. at 882. EPA in this document does so with regard to this final action, for the reasons stated above. For these reasons, this final waiver withdrawal action is nationally applicable for purposes of CAA section 307(b)(1), or, in the alternative, EPA determines and finds for purposes of CAA section 307(b)(1) that this final waiver withdrawal action is based on a determination of nationwide scope or effect. Thus, pursuant to CAA section 307(b), any petitions for review of this final action must be filed in the Court of Appeals for the District of Columbia Circuit within 60 days from the date such final action is published in the Federal Register. jbell on DSK3GLQ082PROD with RULES3 IV. Regulatory Notices and Analyses As it is relevant to many of the following discussions, it is important to clarify at the outset that this action does not finalize or otherwise affect either EPA’s GHG standards or NHTSA’s CAFE standards and, thus, the various impacts associated with those standards have not been considered below. Further, consistent with its past practice, EPA’s withdrawal of the waiver does not add or amend regulatory text and is, therefore, subject to considerably fewer of the below discussions than NHTSA’s final rule establishing regulatory text on preemption. A. Executive Order 12866, Executive Order 13563 Executive Order 12866, ‘‘Regulatory Planning and Review’’ (58 FR 51735, Oct. 4, 1993), as amended by Executive Order 13563, ‘‘Improving Regulation and Regulatory Review’’ (76 FR 3821, Jan. 21, 2011), provides for making determinations whether a regulatory action is ‘‘significant’’ and therefore subject to the Office of Management and Budget (OMB) review and to the requirements of the Executive Order. Under section 3(f) of Executive Order 12866, NHTSA’s final rule has been determined to be a ‘‘significant regulatory action,’’ but not an economically significant action. EPA’s withdrawal on the waiver, however, is not a rule under E.O. 12866, as consistent with the agency’s historical classification of its notices and decisions related to the waiver. However, as part of its commitment to VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 working together with NHTSA to establish a consistent Federal program for fuel economy and GHG emissions, EPA has submitted this action to the OMB for review and any changes made in response to OMB recommendations have been documented in the docket for this action. EPA’s action here, however, is not a rule as defined by Executive Order 12866, consistent with its previous actions on waiver requests, and is therefore exempt from review by the Office of Management and Budget as required for rules and regulations by Executive Order 12866. See, e.g., 78 FR at 2145 (Jan. 9, 2013); 74 FR at 32784 (July 8, 2009); 73 FR at 12169 (Mar. 6, 2008). In determining the economic impact of this action, it is important to be clear that the rule establishing new standards for the Model Years within scope of the NPRM is expected to continue to be economically significant and is, thus, anticipated, to include a full FRIA. Moreover, as EPA’s action is not a rule and not subject to E.O. 12866, its consideration of costs has been limited to the role costs play under section 209. Accordingly, the following discussion only concerns the economic impact associated with NHTSA’s final regulatory text clarifying its views on EPCA preemption. As a general matter, NHTSA has determined that there may be some nonsignificant economic impact arising out of its clarification, particularly some reduction in costs, to this final rule, but the agency has not quantified any such impact in this rulemaking, which has been determined to be ‘‘significant’’ but not ‘‘economically significant’’ under Executive Order 12866. This rulemaking merely clarifies the existing statutory provisions relating to preemption that have been in effect since EPCA was enacted and does not modify any Federal requirement. As such, as in the NPRM, the agency has provided a qualitative discussion of the impacts in response to the comments, which themselves raised qualitative issues. In the NPRM, NHTSA mentioned at a general, qualitative, level that California’s currently existing GHG program and ZEV mandate lead to increased compliance costs, with some greater discussion of potential increases in costs due specifically to the ZEV mandate, which constrains an OEMs ability to meet their CAFE and GHG requirements in the most cost-effective way. The agencies received many comments on the economic analysis as it relates to the CAFE and GHG standards, but only received a small number of comments that specifically PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 dealt with the issue of the economic impact of the regulatory text concerning EPCA preemption. These comments, similar to how the agency addressed the issue in the NPRM, generally made qualitative and general points about the economic impact. Many of the comments that addressed the economic impacts of preemption did so by stating that one important aspect of the ‘‘One National Program’’ established beginning in 2009 was that it would reduce regulatory cost by not allowing for the creation of different Federal and California programs, with different levels of stringency and different compliance regimes. NHTSA agrees with this concern, but this is exactly why Congress provided that any State or local law ‘‘related to’’ fuel economy is preempted. This final rule will provide more certainty on this issue than the prior approach, which would always be subject to California removing itself from the program. This is exactly what has occurred in recent months, as the State has taken action to amend the ‘‘deemed to comply’’ provision and then announced that it entered into an agreement with several automakers to apply a different set of standards on a national basis. Various other commenters noted that the GHG program and ZEV mandate would increase compliance costs. Most of these comments only made general statements to this effect and did not provide specific or detailed information about potential costs. One commenter approvingly noted NHTSA’s citation of a study that found that the ZEV mandate could potentially lead to increased costs, though the author of the cited study also commented that the cited value did not provide a complete picture of the economic effect. The agency agrees that programs such as these are likely to introduce additional costs, which, of course, was a significant part of Congress’s motivation in providing NHTSA with its broad preemptive authority over fuel economy. The agency, though, like commenters, has found calculation of these costs to be challenging, as they constrain the avenues of compliance with the Federal standards without actually altering what must be, ultimately, achieved. With regard to benefits, some commenters believed that California’s GHG program and ZEV mandate could provide additional benefits, but, as with costs, these commenters did not provide detailed information about the benefits of these programs independent of the Federal standards. One commenter argued that a separate State GHG program is unlikely to have any E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations meaningful benefits, because of ‘‘leakage’’ from vehicles in States that adopt the California standards to vehicles in States that do not adopt this standard. Although the comment was in context of supporting the ‘‘One National Program,’’ NHTSA believes that the argument that separate State standards will have little benefit has merit. The existence of State or local laws does not in any way alter an OEM’s obligation under Federal law. For instance, OEMs would likely produce more efficient vehicles for sale in California and the States that have adopted California’s standards, but the increased fuel economy of these vehicles would likely be offset by less efficient vehicles produced for sale in the rest of the U.S., leading to little to no change in either fuel use or GHG emissions at a national level. Some commenters stated that the decision to preempt programs including and similar to the ZEV mandate, to the extent that those programs are related to fuel economy, would have negative benefits related to ozone-forming pollutants, though these commenters did not quantify these concerns. NHTSA notes that, as was discussed in the NPRM, California, in its 2013 waiver request, noted that the ZEV program did not provide for ozone-forming pollutants, acknowledging, ‘‘[t]here is no criteria emissions benefit from including the ZEV proposal in terms of vehicle (tank-to-wheel or TTW) emissions. The LEV III criteria pollutant fleet standard is responsible for those emission reductions in the fleet; the fleet would become cleaner regardless of the ZEV regulation because manufacturers would adjust their compliance response to the standard by making less polluting conventional vehicles.’’ 287 NHTSA continues to believe that preemption of the programs such as the ZEV mandate will not have a significant effect, as California remains free to revise its LEV program to reduce ozone-forming emissions and seek a waiver of Clean Air Act preemption from EPA, as described above, while not violating NHTSA’s preemption authority, and other States and local governments would continue to be allowed to take other actions so long as those are not related to fuel economy and are consistent with any other relevant Federal law. The comments, therefore, reaffirm NHTSA’s preliminary determination that State and Local programs including, and similar to, California’s GHG and ZEV programs are likely to lead to increased compliance costs and highly 287 Docket No. EPA–HQ–OAR–2012–0562, PP. 15–16. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 uncertain, if any, benefits because they constrain the ability of OEMs to meet the Federal standard without in anyway altering their obligations under that standard. Further, the agency’s decision that State or local laws such as the GHG program and ZEV mandate should be preempted is not based on any evaluation of the policy or other merits of either program, but simply the fact that these programs are clearly related to fuel economy. B. DOT Regulatory Policies and Procedures The final rule is also significant within the meaning of the Department of Transportation’s Order 2100.6, ‘‘Policies and Procedures for Rulemakings.’’ Regulatory Policies and Procedures. C. Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs) NHTSA’s final rule is expected to be an E.O. 13771 deregulatory action, but NHTSA has not estimated any quantifiable cost savings. EPA’s withdrawal is not a regulatory action and thus outside the scope of E.O. 13771. D. Congressional Review Act Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this action as not a ‘‘major rule’’, as defined by 5 U.S.C. 804(2). The EPA and NHTSA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. E. Executive Order 13211 (Energy Effects) Executive Order 13211 applies to any rule that: (1) Is determined to be economically significant as defined under E.O. 12866, and is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. If the regulatory action meets either criterion, the agencies must evaluate the adverse energy effects of the proposed rule and explain why the proposed regulation is preferable to other potentially effective and reasonably feasible alternatives considered. NHTSA’s final rule is not subject to E.O. 13211 because it is not economically significant and is not a significant energy action. As discussed in the E.O. 12866 section, NHTSA’s final rule merely clarifies the contours of its existing preemption authority and PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 51353 does not in any way change the existing fuel economy standards. As EPA’s withdrawal is not within the scope of E.O. 12866, it is also not within scope of E.O. 13211. F. Environmental Considerations 1. National Environmental Policy Act The National Environmental Policy Act (NEPA) 288 directs that Federal agencies proposing ‘‘major Federal actions significantly affecting the quality of the human environment’’ must, ‘‘to the fullest extent possible,’’ prepare ‘‘a detailed statement’’ on the environmental impacts of the proposed action (including alternatives to the proposed action).289 Concurrently with the NPRM, NHTSA released a Draft Environmental Impact Statement (Draft EIS) pursuant to NEPA and implementing regulations issued by the Council on Environmental Quality (CEQ), 40 CFR part 1500, and NHTSA, 49 CFR part 520. NHTSA prepared the Draft EIS to analyze and disclose the potential environmental impacts of the proposed CAFE standards and a range of alternatives (largely varying in terms of stringency). NHTSA considered the information contained in the Draft EIS as part of developing its proposal and made the Draft EIS available for public comment. For the final rule on the standards for model year 2021 through 2026 automobiles proposed in the NPRM, NHTSA will simultaneously issue a Final EIS and Record of Decision, pursuant to 49 U.S.C. 304a(b) and U.S. Department of Transportation Guidance on the Use of Combined Final Environmental Impact Statements/ Records of Decision and Errata Sheets in National Environmental Policy Act Reviews (April 25, 2019),290 unless it is determined that statutory criteria or practicability considerations preclude simultaneous issuance. NHTSA has not prepared a separate environmental analysis pursuant to NEPA for this final action on preemption. This final rule provides clarity on the scope of EPCA’s preemption provision. Ultimately, the determination of whether a particular State or local law is preempted under EPCA is not determined based upon its environmental impact but solely whether it is ‘‘related to fuel economy standards or average fuel economy standards.’’ Any preemptive effect 288 42 U.S.C. 4321–4347. U.S.C. 4332. EPA is expressly exempted from the requirements of NEPA for actions under the Clean Air Act. 15 U.S.C. 793(c)(1). 290 https://www.transportation.gov/sites/dot.gov/ files/docs/mission/transportation-policy/ permittingcenter/337371/feis-rod-guidance-final04302019.pdf. 289 42 E:\FR\FM\27SER3.SGM 27SER3 51354 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 resulting from this final action is not the result of the exercise of Agency discretion, but rather reflects the operation and application of the Federal statute. NHTSA does not have authority to waive any aspect of EPCA preemption no matter the potential environmental impacts; rather, preempted standards are void ab initio. Courts have long held that NEPA does not apply to nondiscretionary actions by Federal agencies.291 As NHTSA lacks discretion over EPCA’s preemptive effect, the Agency concludes that NEPA does not apply to this action. It bears noting that this action only concerns the question of preemption; it does not set CAFE standards. Fundamentally, this action is about which sovereign entity (i.e., the Federal government or State governments) can issue standards that relate to fuel economy. EPCA is clear that this authority is restricted to the Federal government. This action provides guidance on the boundary set by Congress, as well as under principles of implied preemption. NHTSA’s regulation concerning EPCA preemption is independent and severable from any particular CAFE standards adopted by NHTSA, and this action, in and of itself, is not expected to have significant environmental impacts on a national scale. As described above, OEMs would likely produce more efficient vehicles for sale in California and the States that have adopted California’s standards, but the increased fuel economy of these vehicles would likely be offset by less efficient vehicles produced for sale in the rest of the U.S., leading to little to no change in either fuel use or GHG emissions at a national level. In fact, as NHTSA has not finalized any action to amend the fuel economy standards that were promulgated in 2012, California’s ‘‘deemed to comply’’ provision remains operative. As OEMs are anticipated to make use of this compliance mechanism, CARB’s GHG standards are functionally identical to Federal standards, and their preemption would not result in additional environmental impacts. Furthermore, as was discussed in the NPRM, California, in its 2013 waiver request, noted that the ZEV program did not provide for ozoneforming pollutants, acknowledging, ‘‘[t]here is no criteria emissions benefit from including the ZEV proposal in terms of vehicle (tank-to-wheel or TTW) 291 See, e.g., Department of Transp. v. Public Citizen, 541 U.S. 752 (2004); Milo Cmty. Hosp. v. Weinberger, 525 F.2d 144 (1st Cir. 1975); State of South Dakota v. Andrus, 614 F.2d 1190 (8th Cir. 1980); Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267 F.3d 1144 (D.C. Cir. 2001); Sierra Club v. Babbitt, 65 F.3d 1502 (9th Cir. 1995). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 emissions. The LEV III criteria pollutant fleet standard is responsible for those emission reductions in the fleet; the fleet would become cleaner regardless of the ZEV regulation because manufacturers would adjust their compliance response to the standard by making less polluting conventional vehicles.’’ 292 Ultimately NHTSA will address potential environmental impacts of fuel economy standards in its forthcoming Final EIS that will accompany the final rule on the standards for model year 2021 through 2026 automobiles proposed in the NPRM. This action, however, does not result in significant environmental impacts to the quality of the human environment. NHTSA intends to fully respond to all substantive comments received on the Draft EIS in the forthcoming Final EIS, consistent with CEQ regulations. NHTSA received numerous public comments on the Draft EIS that related to the revocation of California’s waiver and EPCA preemption. The following summarizes and briefly addresses those comments. Multiple commenters called NHTSA’s DEIS inadequate because it did not analyze an alternative that would keep the California waiver and regulations (as well as similar regulations adopted in the District of Columbia and other States pursuant to section 177 of the CAA) in place.293 On the other hand, one commenter noted its support for the proposition that NHTSA is not obligated under NEPA to consider a scenario that it believes Federal law does not permit.294 As described above, NHTSA concludes that NEPA does not apply to this final rule regarding preemption. Based on this conclusion, it is immaterial whether NHTSA analyzed an alternative that would keep the California waiver and regulations in place. NHTSA lacks the discretion and authority to select such an alternative as a State or local law or regulation related to automobile fuel economy standards is 292 Docket No. EPA–HQ–OAR–2012–0562, Pp. 15–16. California’s LEV III criteria pollution standard would not be preempted under this action. 293 Center for Biological Diversity, Earthjustice, Environmental Law and Policy Center, Natural Resources Defense Council, Public Citizen, Inc., Safe Climate Campaign, Sierra Club, Southern Environmental Law Center, and Union of Concerned Scientists, Docket No. NHTSA–2017– 0069–0550; South Coast Air Quality Management District, Docket Nos. NHTSA–2017–0069–0532 and NHTSA–2017–0069–0497; Blanca Luevanos, Docket No. NHTSA–2017–0069–0508; National Coalition for Advanced Transportation, Docket No. NHTSA– 2017–0069–0597; California Office of the Attorney General et al., Docket No. NHTSA–2017–0069– 0625. 294 Alliance of Automobile Manufacturers, Docket No. NHTSA–2017–0069–0588. PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 void ab initio under the preemptive force of EPCA. One commenter criticized NHTSA for failing to consider the criteria pollutant impacts of alternatives that keep the waiver in place and that account for California’s specific electricity grid.295 That commenter also criticized NHTSA for not fully accounting for the impacts to NOX emissions in the South Coast Air Basin as a result of revoking the waiver.296 Another commenter noted that the nine areas NHTSA identified as suffering from ‘‘serious’’ or ‘‘extreme’’ nonattainment conditions for ozone and PM2.5 are located in California, even though the agencies proposed to revoke or declare preempted the State’s Clean Air Act waiver for GHG emissions and the State’s ZEV mandate.297 One commenter wrote that NHTSA should consider and discuss the local impacts that preempting the ZEV mandate would have on localities where ZEV sales are currently concentrated and where they will likely concentrate in the future, and particularly in California and the other States that have adopted the ZEV mandate pursuant to section 177 of the CAA.298 While these comments are more specific about identifying potential environmental impacts, these impacts simply do not bear on the question of whether or how preemption applies. Preemption relies solely on whether the State or local law or regulation is ‘‘related to fuel economy standards or average fuel economy standards.’’ Therefore, NHTSA is not obligated to analyze or consider these environmental impacts as part of this final rule. One commenter noted that if California’s waiver is revoked, the State would be unable to address pollution issues through adoption of California’s or its own standards, making it difficult to attain or maintain compliance with the Clean Air Act.299 Another State alleged that it depends on the criteria pollutant and air toxic emission reduction co-benefits of the State’s use of section 177 motor vehicle emissions standards as a control strategy in its State Implementation Plan to meet its 295 South Coast Air Quality Management District, Docket No. NHTSA–2017–0069–0497. 296 South Coast Air Quality Management District, Docket No. NHTSA–2017–0069–0497. 297 Center for Biological Diversity, Earthjustice, Environmental Law and Policy Center, Natural Resources Defense Council, Public Citizen, Inc., Safe Climate Campaign, Sierra Club, Southern Environmental Law Center, and Union of Concerned Scientists, Docket No. NHTSA–2017– 0069–0550. 298 New York State Department of Environmental Conservation, NHTSA–2017–0069–0608. 299 Boulder County Public Health, Docket No. NHTSA–2017–0069–0499. E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 SIP.300 NHTSA disagrees with the underlying premise of the comments. States and local governments are able to continue to encourage ZEVs in many different ways, such as through investments in infrastructure and appropriately tailored incentives. States and local governments cannot adopt or enforce regulations related to fuel economy standards, which include ZEV mandates, but they are able to address pollutants regulated by the Clean Air Act in numerous ways that are not preempted by Federal law. Moreover, as noted above, this action does not impact in any way the Federal standards in place for greenhouse gas emissions from automobiles and fuel economy standards. Since California and other section 177 States have ‘‘deemed’’ compliance with the Federal standards to be compliance with the State standards, this action does not have significant environmental impacts to the quality of the human environment. Any impacts associated with potential changes to Federal standards are not a result of this action and are purely speculative until the agencies finalize a change. 2. Clean Air Act Conformity Requirements as Applied to NHTSA’s Action The Clean Air Act (42 U.S.C. 7401 et seq.) is the primary Federal legislation that addresses air quality. Under the authority of the Clean Air Act and subsequent amendments, EPA has established NAAQS for six criteria pollutants, which are relatively commonplace pollutants that can accumulate in the atmosphere as a result of human activity. The air quality of a geographic region is usually assessed by comparing the levels of criteria air pollutants found in the ambient air to the levels established by the NAAQS (taking into account, as well, the other elements of a NAAQS: Averaging time, form, and indicator). These ambient concentrations of each criteria pollutant are compared to the levels, averaging time, and form specified by the NAAQS in order to assess whether the region’s air quality is in attainment with the NAAQS. When the measured concentrations of a criteria pollutant within a geographic area are below those permitted by the NAAQS, EPA designates the region as an attainment area for that pollutant, while areas where concentrations of criteria pollutants exceed Federal standards (or nearby areas that contribute to such concentrations) are 300 Oregon Department of Environmental Quality, Docket No. NHTSA–2017–0069–0526. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 designated as nonattainment areas. Former nonattainment areas that come into compliance with the NAAQS and are redesignated as attainment are known as maintenance areas. When EPA revises a NAAQS, each State is required to develop and implement a State Implementation Plan (SIP) to address how it plans to attain and maintain the new standard. Each State with a nonattainment area is also required to submit a SIP documenting how the region will reach attainment levels within time periods specified in the Clean Air Act. For maintenance areas, the SIP must document how the State intends to maintain compliance with the NAAQS. No Federal agency may ‘‘engage in, support in any way or provide financial assistance for, license or permit, or approve’’ any activity in a nonattainment or maintenance area that does not ‘‘conform’’ to a SIP or Federal Implementation Plan after EPA has approved or promulgated it.301 Further, no Federal agency may ‘‘approve, accept or fund’’ any transportation plan, program, or project developed pursuant to title 23 or chapter 53 of title 49, U.S.C., in a nonattainment or maintenance area unless the plan, program, or project has been found to ‘‘conform’’ to any applicable implementation plan in effect.302 The purpose of these conformity requirements is to ensure that Federally sponsored or conducted activities do not interfere with meeting the emissions targets in SIPs, do not cause or contribute to new violations of the NAAQS, and do not impede the ability of a State to attain or maintain the NAAQS or delay any interim milestones. EPA has issued two sets of regulations to implement the conformity requirements: (1) The Transportation Conformity Rule 303 applies to transportation plans, programs, and projects that are developed, funded, or approved under title 23 or chapter 53 of title 49, U.S.C. (2) The General Conformity Rule 304 applies to all other federal actions not covered under transportation conformity. The General Conformity Rule establishes emissions thresholds, or de minimis levels, for use in evaluating the conformity of an action that results in emissions increases.305 If the net increases of direct and indirect emissions are lower 301 42 U.S.C. 7506(c)(1) and (5). U.S.C. 7506(c)(2) and (5). 303 40 CFR part 51, subpart T, and part 93, subpart A. 304 40 CFR part 93, subpart B. 305 40 CFR 93.153(b). 302 42 PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 51355 than these thresholds, then the project is presumed to conform and no further conformity evaluation is required. If the net increases of direct and indirect emissions exceed any of these thresholds, and the action is not otherwise exempt,306 then a conformity determination is required. The conformity determination can entail air quality modeling studies, consultation with EPA and state air quality agencies, and commitments to revise the SIP or to implement measures to mitigate air quality impacts. This action is not developed, funded, or approved under title 23 or chapter 53 of title 49, U.S.C. Accordingly, this action is not subject to transportation conformity. Under the General Conformity Rule, a conformity determination is required when a Federal action would result in total direct and indirect emissions of a criteria pollutant or precursor originating in nonattainment or maintenance areas equaling or exceeding the rates specified in 40 CFR 93.153(b)(1) and (2), and the action is not otherwise exempt. As explained below, NHTSA’s action results in neither direct nor indirect emissions as defined in 40 CFR 93.152. The General Conformity Rule defines direct emissions as ‘‘those emissions of a criteria pollutant or its precursors that are caused or initiated by the Federal action and originate in a nonattainment or maintenance area and occur at the same time and place as the action and are reasonably foreseeable.’’ 307 NHTSA’s action is to promulgate regulatory text and a detailed appendix, in addition to discussing the issue in this preamble to the rule, specifically to provide clarity on EPCA’s preemption provision in order to give already established standards meaning, and thus is specifically exempt from general conformity requirements.308 Moreover, this action would cause no direct emissions consistent with the meaning of the General Conformity Rule.309 Any changes in emissions that could occur as a result of preemption would happen well after and in a different place from the promulgation of this rule. Furthermore, any such changes in emissions—especially those occurring in specific nonattainment or maintenance areas—are not reasonably foreseeable. Any such changes are 306 40 CFR 93.153(c). CFR 93.152. 308 40 CFR 93.153(c)(2)(iii). 309 Department of Transp. v. Public Citizen, 541 U.S. 752, 772 (2004) (‘‘[T]he emissions from the Mexican trucks are not ‘direct’ because they will not occur at the same time or at the same place as the promulgation of the regulations.’’). 307 40 E:\FR\FM\27SER3.SGM 27SER3 jbell on DSK3GLQ082PROD with RULES3 51356 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations unlikely because this action does not impact in any way the Federal standards in place for criteria pollutant emissions from automobiles. Further, this action does not impact the Federal standards in place for greenhouse gas emissions from automobiles or fuel economy standards. Since California and other section 177 States have ‘‘deemed’’ compliance with the Federal standards to be compliance with the State standards, it is not clear that this action (as it pertains to the State’s greenhouse gas emissions standards) would result in changes to the anticipated fleet of vehicles in those States and therefore to criteria pollutant emissions. Any impacts associated with potential changes to Federal standards are not a result of this action and are purely speculative until the agencies finalize a change. Additionally, we note California’s statement in its 2013 waiver request that ‘‘[t]here is no criteria emissions benefit from including the ZEV proposal in terms of vehicle (tankto-wheel or TTW) emissions. The LEV III criteria pollutant fleet standard is responsible for those emission reductions in the fleet . . . .’’ 310 As discussed previously, this action clarifies that criteria pollutant standards are not preempted unless they have a direct or substantial relationship to fuel economy standards. California’s LEV III criteria pollution standard would not be preempted under this approach. Indirect emissions under the General Conformity Rule are ‘‘those emissions of a criteria pollutant or its precursors: (1) That are caused or initiated by the Federal action and originate in the same nonattainment or maintenance area but occur at a different time or place as the action; (2) That are reasonably foreseeable; (3) That the agency can practically control; and (4) For which the agency has continuing program responsibility.’’ 311 Each element of the definition must be met to qualify as indirect emissions. NHTSA finds that neither of the first two criteria are satisfied for the same reasons as presented regarding direct emissions. Furthermore, NHTSA cannot practically control, nor does it have continuing program responsibility for, any emissions that could occur as a result of preemption. ‘‘[E]ven if a Federal licensing, rulemaking, or other approving action is a required initial step for a subsequent activity that causes emissions, such initial steps do not mean that a Federal agency can practically control any resulting 310 Docket No. EPA–HQ–OAR–2012–0562, pp. 15–16. 311 40 CFR 93.152. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 emissions.’’ 312 With regard to preemption, NHTSA lacks the discretion and authority to keep the California waiver and regulations in place, as a State or local law or regulation related to automobile fuel economy standards is void ab initio under the preemptive force of EPCA. NHTSA cannot be considered to practically control or have continuing program responsibility for emissions that could result from preemption when that result is required by Federal statute.313 NHTSA also does not have continuing program responsibility for emissions that occur in California and other section 177 States, are regulated by the Clean Air Act, and for which the States and local governments can continue to address in numerous ways that do not conflict with Federal law. For the foregoing reasons, this action does not cause direct or indirect emissions under the General Conformity Rule, and a general conformity determination is not required. NHTSA will address any responsibilities under the General Conformity Rule as it pertains to potential changes to the fuel economy standards in the forthcoming final rule for that action. 3. Endangered Species Act Under Section 7(a)(2) of the Endangered Species Act (ESA), Federal agencies must ensure that actions they authorize, fund, or carry out are ‘‘not likely to jeopardize the continued existence’’ of any Federally listed threatened or endangered species or result in the destruction or adverse modification of the designated critical habitat of these species. 16 U.S.C. 1536(a)(2). If a Federal agency determines that an agency action may affect a listed species or designated critical habitat, it must initiate consultation with the appropriate Service—the U.S. Fish and Wildlife Service (FWS) of the Department of the Interior (DOI) and/or the National Oceanic and Atmospheric Administration’s National Marine Fisheries Service of the Department of Commerce (together, ‘‘the Services’’), depending on the species involved—in order to ensure that the action is not likely to jeopardize the species or destroy or adversely modify designated critical habitat. See 50 CFR 402.14. Under this standard, the Federal agency taking action evaluates the possible effects of its action and determines whether to initiate consultation. See 51 FR 19926, 19949 (June 3, 1986). 312 40 CFR 93.152. Public Citizen, 541 U.S. at 772–3. 313 See PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 Pursuant to Section 7(a)(2) of the ESA, the agencies have reviewed this action and have considered applicable ESA regulations, case law, and guidance to determine what, if any, obligations the agencies have under the ESA. The agencies have considered issues related to emissions of CO2 and other GHGs and issues related to non-GHG emissions. Based on this assessment, the agencies have determined that their actions (withdrawal of California’s waiver and the final rule regarding preemption) do not require consultation under Section 7(a)(2) of the ESA. a. The Agencies Lack Discretionary Authority NHTSA’s final rule adopts regulatory text (including a detailed appendix) regarding EPCA’s preemption provision, in addition to discussing the issue in this preamble to the rule, specifically to provide needed clarity on that provision. The new regulatory text provides for why any law or regulation of a State or a political subdivision of a State regulating or prohibiting tailpipe carbon dioxide emissions from automobiles is expressly and impliedly preempted by EPCA. Any preemptive effect resulting from this final action is not the result of the exercise of Agency discretion, but rather reflects the operation and application of the Federal statute. NHTSA does not have authority to waive any aspect of EPCA preemption no matter the potential impacts; rather, preempted standards are void ab initio. EPA’s action is to withdraw the waiver it had previously provided in January 2013 to California for that State’s GHG and ZEV programs under section 209 of the Clean Air Act. This action is being undertaken on two separate and independent grounds. First, EPA has determined EPCA preemption renders its prior grant of a waiver for those aspects of California’s regulations that EPCA preempts invalid, null, and void, thereby necessitating withdrawal of the waiver. Second, EPA concludes that CAA section 209(b)(1)(B), which provides that EPA shall not issue a waiver if California does not ‘‘need’’ separate state standards ‘‘to meet compelling and extraordinary conditions,’’ was not intended to allow California to promulgate State standards for emissions from new motor vehicles designed to address global climate change problems. Therefore, California does not meet the necessary criteria to receive a waiver for these aspects of its program. Similar to NHTSA, these decisions are not discretionary, but rather reflect EPA’s conclusion that EPCA preemption and the requirements E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations of the Clean Air Act prohibit the granting of a waiver to California. The Supreme Court has held that Section 7(a)(2) of the ESA and its implementing regulations apply only to actions in which there is discretionary Federal authority.314 In National Association of Home Builders, EPA considered the requirement of Section 402(b) of the Clean Water Act that EPA transfer certain permitting powers to State authorities upon an application and a showing that nine specified criteria had been met. The Court concluded that the ESA did not operate as a ‘‘tenth criterion.’’ 315 According to the Court: ‘‘While the EPA may exercise some judgment in determining whether a State has demonstrated that it has the authority to carry out [the] enumerated statutory criteria, the statute clearly does not grant it the discretion to add another entirely separate prerequisite to that list. Nothing in the text of [the statute] authorizes the EPA to consider the protection of threatened or endangered species as an end in itself when evaluating a transfer application.’’ 316 The agencies believe this holding applies to the instant action as well. As this action results from nondiscretionary authorities, the Section 7(a)(2) implementing regulations expressly exclude them from coverage. Neither ECPA nor the Clean Air Act include the protection of threatened or endangered species as a consideration for the application of preemption (which operates by statute) or the prohibition on the granting of a waiver (under the enumerated statutory criterion in CAA section 209(b)(1)(B)). Although there is some judgment in considering the application of EPCA and the CAA, neither action involves the type of discretion that would require a Section 7(a)(2) consultation by the agencies with the Services. b. Any Effects Resulting From the Agencies’ Actions Are too Attenuated for Consultation To Be Required In addition, the agencies have considered the potential effects of this action to listed threatened or endangered species or designated critical habitat of these species and concludes that any such effects are too jbell on DSK3GLQ082PROD with RULES3 314 National Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 673 (2007) (‘‘Applying Chevron, we defer to the Agency’s reasonable interpretation of ESA [section] 7(a)(2) as applying only to ‘actions in which there is discretionary Federal involvement or control.’ ’’ (quoting 50 CFR 402.03)). 315 National Ass’n of Home Builders, 551 U.S. at 649. 316 Id. at 671. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 attenuated to require Section 7(a)(2) consultation. The agencies base this conclusion both on the language of the Section 7(a)(2) implementing regulations and on the long history of actions and guidance provided by DOI. The Section 7(a)(2) implementing regulations require consultation if a Federal agency determines its action ‘‘may affect’’ listed species or critical habitat.317 The Services’ current regulations define ‘‘effects of the action’’ in relevant part as ‘‘the direct and indirect effects of an action on the species or critical habitat, together with the effects of other activities that are interrelated or interdependent with that action, that will be added to the environmental baseline.’’ 318 Further, they define indirect effects as ‘‘those that are caused by the proposed action and are later in time, but still are reasonably certain to occur.’’ 319 The Services’ recently published final rule revising the definition of ‘‘effects of the action’’ to be ‘‘all consequences to listed species or critical habitat that are caused by the proposed action, including the consequences of other activities that are caused by the proposed action. A consequence is caused by the proposed action if it would not occur but for the proposed action and it is reasonably certain to occur.’’ 320 In the preamble to the final rule, the Services emphasized that the ‘‘but for’’ test and ‘‘reasonably certain to occur’’ are not new or heightened standards.321 In this context, ‘‘‘but for’ causation means that the consequence in question would not occur if the proposed action did not go forward . . . . In other words, if the agency fails to take the proposed action and the activity would still occur, there is no ‘but for’ causation. In that event, the activity would not be considered an effect of the action under consultation.’’ 322 As the Services do not consider these to be changes in their 317 50 CFR 402.14(a). The Departments of the Interior and Commerce recently issued a final rule revising the regulations governing the ESA Section 7 consultation process. 84 FR 44966 (Aug. 27, 2019). The new regulations take effect on September 26, 2019. As discussed in the text above, the agencies do not believe that the change in regulations has any effect on the agencies’ analysis here. 318 50 CFR 402.02. 319 Id. 320 50 CFR 402.02, as amended by 84 FR 44976, 45016 (Aug. 27, 2019) (effective Sept. 26, 2019). 321 84 FR at 44977 (‘‘As discussed in the proposed rule, the Services have applied the ‘but for’ test to determine causation for decades. That is, we have looked at the consequences of an action and used the causation standard of ‘but for’ plus an element of foreseeability (i.e., reasonably certain to occur) to determine whether the consequence was caused by the action under consultation.’’). 322 Id. PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 51357 longstanding application of the ESA, these interpretations apply equally under the existing regulations (which are effective through September 25, 2019) and the new regulations (which are effective beginning September 26, 2019). Any potential effects of this action to threatened or endangered species or designated critical habitat would be a result of changes to GHG or criteria air pollutant emissions. In the next section, the agencies discuss why this action is not anticipated to result in changes to GHG or criteria air pollutant emissions. However, even if such changes to emissions were to occur, the agencies do not believe resulting impacts to listed species or critical habitat satisfy the ‘‘but for’’ test or are ‘‘reasonably certain to occur.’’ GHG emissions are relevant to Section 7(a)(2) consultation because of the potential impacts of climate change on listed species or critical habitat. For example, one comment to the NPRM documented the potential impacts of climate change on federally protected species and included a five-page table of species listed during 2006 to 2015 for which the commenters claim climate change was a listing factor.323 However, the agencies believe this comment inappropriately attributes the entire issue of climate change, including all GHG emissions no matter which sector generated them, to NHTSA and EPA’s actions.324 In fact, the commenter demonstrates the very issue with doing so: There is no ‘‘but for’’ causation associated with EPA’s revocation of California’s waiver and NHTSA’s final rule on preemption, as the impacts of climate change will occur regardless of this action. Furthermore, even if this action results in changes to GHG emissions, such changes would be extremely small compared to global GHG emissions. There is no scientific evidence that sufficiently ‘‘connects the dots’’ between those changes in emissions and any particular impact to a listed species or critical habitat; thus, any impacts are not ‘‘reasonably certain to occur.’’ States (such as California) and local governments may also continue to encourage ZEVs in numerous ways that do not conflict with 323 Center for Biological Diversity, Sierra Club, and Public Citizen, Inc., Docket No. NHTSA–2018– 0067–12378. 324 See, e.g., 78 FR 11766, 11785 (Feb. 20, 2013) (‘‘Without the requirement of a causal connection between the action under consultation and effects to species, literally every agency action that contributes GHG emissions to the atmosphere would arguably result in consultation with respect to every listed species that may be affected by climate change.’’). E:\FR\FM\27SER3.SGM 27SER3 51358 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations jbell on DSK3GLQ082PROD with RULES3 Federal law, which may also prevent any alleged impact from these actions. Similarly, with regard to criteria air pollutants, States are still subject to the Clean Air Act, which requires limitations on emissions of those pollutants. Furthermore, since California and other Section 177 States have ‘‘deemed’’ compliance with the Federal standards to be compliance with the State standards, it is not clear that this action would result in changes to emissions. Any impacts associated with potential changes to Federal standards are not a result of this action and are purely speculative until the agencies finalize a change. We again note California’s statement in its 2013 waiver request that ‘‘[t]here is no criteria emissions benefit from including the ZEV proposal in terms of vehicle (tankto-wheel or TTW) emissions. The LEV III criteria pollutant fleet standard is responsible for those emission reductions in the fleet . . . .’’ 325 As discussed previously, this action clarifies that criteria pollutant standards are not preempted unless they have a direct or substantial relationship to fuel economy standards. California’s LEV III criteria pollution standard would not be preempted under this approach, and that program’s benefits are anticipated to remain in place. The agencies have also considered the long history of actions and guidance provided by DOI. To that point, the agencies incorporate by reference Appendix G of the MY 2012–2016 CAFE standards EIS.326 That analysis relied on the significant legal and technical analysis undertaken by FWS and DOI. Specifically, NHTSA looked at the history of the Polar Bear Special Rule and several guidance memoranda provided by FWS and the U.S. Geological Survey. Ultimately, FWS concluded that a causal link could not be made between GHG emissions associated with a proposed Federal action and specific effects on listed species; therefore, no Section 7(a)(2) consultation would be required. Subsequent to the publication of that Appendix, a court vacated the Polar Bear Special Rule on NEPA grounds, though it upheld the ESA analysis as having a rational basis.327 FWS subsequently issued a revised Final 325 Docket No. EPA–HQ–OAR–2012–0562, pp. 15–16. 326 Available on NHTSA’s Corporate Average Fuel Economy website https://one.nhtsa.gov/Laws-&Regulations/CAFE-%E2%80%93-Fuel-Economy/ Final-EIS-for-CAFE-Passenger-Cars-and-LightTrucks,-Model-Years-2012%E2%80%932016. 327 In re: Polar Bear Endangered Species Act Listing and Section 4(D) Rule Litigation, 818 F. Supp. 2d 214 (D.D.C. Oct. 17, 2011). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 Special Rule for the Polar Bear.328 In that final rule, FWS provided that for ESA section 7, the determination of whether consultation is triggered is narrow and focused on the discrete effect of the proposed agency action. FWS wrote, ‘‘[T]he consultation requirement is triggered only if there is a causal connection between the proposed action and a discernible effect to the species or critical habitat that is reasonably certain to occur. One must be able to ‘connect the dots’ between an effect of a proposed action and an impact to the species and there must be a reasonable certainty that the effect will occur.’’ 329 The statement in the revised Final Special Rule is consistent with the prior guidance published by FWS and remains valid today.330 Ultimately, EPA and NHTSA are not able to make a causal link for purposes of Section 7(a)(2) that would ‘‘connect the dots’’ between this action, vehicle emissions from motor vehicles affected by this action, climate change, and particular impacts to listed species or critical habitats. Therefore, no Section 7(a)(2) consultation is required. c. The Agencies’ Actions Would Have No Effect on Listed Species and Designated Critical Habitat In addition to the foregoing a Section 7(a)(2) consultation is not required because this action will have no effect on a listed species or designated critical habitat. This notification and final rule only address the issues of California’s waiver and preemption; they do not set CAFE standards. Fundamentally, this action is about which sovereign entity (i.e., the Federal government or State governments) can issue standards that relate to fuel economy. EPCA is clear that this authority is restricted to the Federal government. This action provides clarity on the boundary set by Congress, as well as under principles of implied preemption. As previously described, absent this action, OEMs would likely produce more efficient vehicles for sale in California and the States that have adopted California’s standards, but the increased fuel economy of these vehicles would likely be offset by less efficient vehicles produced for sale in the rest of the U.S., leading to little to no change in either fuel use or GHG emissions at a national level. Further, as EPA and NHTSA have not finalized any 328 78 FR 11766 (Feb. 20, 2013). FR at 11784–11785. 330 See DOI Solicitor’s Opinion No. M–37017, ‘‘Guidance on the Applicability of the Endangered Species Act Consultation Requirements to Proposed Actions Involving the Emissions of Greenhouse Gases’’ (Oct. 3, 2008). 329 78 PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 action to amend the Federal GHG and fuel economy standards that were promulgated in 2012, California’s ‘‘deemed to comply’’ provision remains operative. As OEMs are anticipated to make use of this compliance mechanism, CARB’s GHG standards are functionally identical to Federal standards, and their preemption would not result in additional environmental impacts. Any impacts associated with potential changes to Federal standards are not a result of this action and are purely speculative until the agencies finalize a change. Finally, we again note California’s 2013 waiver request statement that there is no criteria emissions benefit associated with the ZEV program because the LEV III criteria pollution standard is responsible for those emissions reductions. This action clarifies that criteria pollutant standards are not preempted unless they have a direct or substantial relationship to fuel economy standards. California’s LEV III criteria pollution standard would not be preempted under this approach. Therefore, those benefits are anticipated to remain in place. For the foregoing reasons, automobile emissions are not anticipated to change as a result of this action. Even if they do, any change would be so minimal as to be unlikely to pose any effects on a listed species or critical habitat. Because any effect on a listed species or critical habitat is not reasonably certain to occur, the agencies conclude that there will be no effect on listed species or critical habitat under the Section (7)(a)(2) implementing regulations, and no Section 7(a)(2) consultation is required for this action. 4. National Historic Preservation Act (NHPA) The NHPA (54 U.S.C. 300101 et seq.) sets forth government policy and procedures regarding ‘‘historic properties’’—that is, districts, sites, buildings, structures, and objects included on or eligible for the National Register of Historic Places. Section 106 of the NHPA requires federal agencies to ‘‘take into account’’ the effects of their actions on historic properties.331 The agencies conclude that the NHPA is not applicable to this action because a rule regarding the preemption of State laws and a decision to revoke California’s waiver are not the type of activities that have the potential to cause effects on historic properties. This conclusion is supported by the lack of discretion over 331 Section 106 is now codified at 54 U.S.C. 306108. Implementing regulations for the Section 106 process are located at 36 CFR part 800. E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations preemption and the underlying justification for the withdrawal of the waiver to California, the fact that any causal relationship between effects on historic properties as a result of emissions from the sale and operation of motor vehicles in California and section 177 States and this action are too attenuated, and the conclusion that impacts are not reasonably foreseeable.332 jbell on DSK3GLQ082PROD with RULES3 5. Fish and Wildlife Conservation Act (FWCA) The FWCA (16 U.S.C. 2901 et seq.) provides financial and technical assistance to States for the development, revision, and implementation of conservation plans and programs for nongame fish and wildlife. In addition, the Act encourages all Federal departments and agencies to utilize their statutory and administrative authorities to conserve and to promote conservation of nongame fish and wildlife and their habitats. The agencies conclude that the FWCA is not applicable to this action because it does not involve the conservation of nongame fish and wildlife and their habitats. 6. Coastal Zone Management Act (CZMA) The Coastal Zone Management Act (16 U.S.C. 1451 et seq.) provides for the preservation, protection, development, and (where possible) restoration and enhancement of the nation’s coastal zone resources. Under the statute, States are provided with funds and technical assistance in developing coastal zone management programs. Each participating State must submit its program to the Secretary of Commerce for approval. Once the program has been approved, any activity of a Federal agency, either within or outside of the coastal zone, that affects any land or water use or natural resource of the coastal zone must be carried out in a manner that is consistent, to the maximum extent practicable, with the enforceable policies of the State’s program.333 The agencies conclude that the CZMA is not applicable to this action because it does not involve an activity within, or outside of, the nation’s coastal zones that affects any land or water use or natural resource of the coastal zone. This conclusion is supported by the lack of discretion over preemption and the underlying justification for the withdrawal of the waiver to California, 332 See the discussions regarding NEPA, Clean Air Act Conformity, and the ESA. 333 16 U.S.C. 1456(c)(1)(A). VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 the fact that any causal relationship between effects on coastal zones as a result of emissions from the sale and operation of motor vehicles in California and section 177 States and this action are too attenuated, and the conclusion that impacts are not reasonably foreseeable.334 7. Floodplain Management (Executive Order 11988 and DOT Order 5650.2) These Orders require Federal agencies to avoid the long- and short-term adverse impacts associated with the occupancy and modification of floodplains, and to restore and preserve the natural and beneficial values served by floodplains. Executive Order 11988 also directs agencies to minimize the impact of floods on human safety, health and welfare, and to restore and preserve the natural and beneficial values served by floodplains through evaluating the potential effects of any actions the agency may take in a floodplain and ensuring that its program planning and budget requests reflect consideration of flood hazards and floodplain management. DOT Order 5650.2 sets forth DOT policies and procedures for implementing Executive Order 11988. The DOT Order requires that the agency determine if a proposed action is within the limits of a base floodplain, meaning it is encroaching on the floodplain, and whether this encroachment is significant. If significant, the agency is required to conduct further analysis of the proposed action and any practicable alternatives. If a practicable alternative avoids floodplain encroachment, then the agency is required to implement it. In this action, the agencies are not occupying, modifying and/or encroaching on floodplains. The agencies, therefore, conclude that the Orders are not applicable to this action. 8. Preservation of the Nation’s Wetlands (Executive Order 11990 and DOT Order 5660.1a) These Orders require Federal agencies to avoid, to the extent possible, undertaking or providing assistance for new construction located in wetlands unless the agency head finds that there is no practicable alternative to such construction and that the proposed action includes all practicable measures to minimize harms to wetlands that may result from such use. Executive Order 11990 also directs agencies to take action to minimize the destruction, loss or degradation of wetlands in ‘‘conducting Federal activities and 334 See the discussions regarding NEPA, Clean Air Act Conformity, and the ESA. PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 51359 programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities.’’ DOT Order 5660.1a sets forth DOT policy for interpreting Executive Order 11990 and requires that transportation projects ‘‘located in or having an impact on wetlands’’ should be conducted to assure protection of the Nation’s wetlands. If a project does have a significant impact on wetlands, an EIS must be prepared. In this action, the agencies are not undertaking or providing assistance for new construction located in wetlands and conclude that these Orders do not apply to this action. 9. Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle Protection Act (BGEPA), Executive Order 13186 The MBTA (16 U.S.C. 703–712) provides for the protection of certain migratory birds by making it illegal for anyone to ‘‘pursue, hunt, take, capture, kill, attempt to take, capture, or kill, possess, offer for sale, sell, offer to barter, barter, offer to purchase, purchase, deliver for shipment, ship, export, import, cause to be shipped, exported, or imported, deliver for transportation, transport or cause to be transported, carry or cause to be carried, or receive for shipment, transportation, carriage, or export’’ any migratory bird covered under the statute.335 The BGEPA (16 U.S.C. 668–668d) makes it illegal to ‘‘take, possess, sell, purchase, barter, offer to sell, purchase or barter, transport, export or import’’ any bald or golden eagles.336 Executive Order 13186, ‘‘Responsibilities of Federal Agencies to Protect Migratory Birds,’’ helps to further the purposes of the MBTA by requiring a Federal agency to develop a Memorandum of Understanding (MOU) with the Fish and Wildlife Service when it is taking an action that has (or is likely to have) a measurable negative impact on migratory bird populations. The agencies conclude that the MBTA, BGEPA, and Executive Order 13186 do not apply to this action because there is no disturbance, take, measurable negative impact, or other covered activity involving migratory birds or bald or golden eagles involved in this rulemaking. This conclusion is supported by the lack of discretion over preemption and the reasons underlying justification for the withdrawal of the waiver to California, the fact that any causal relationship between effects on migratory birds or bald or golden eagles as a result of emissions from the sale 335 16 336 16 E:\FR\FM\27SER3.SGM U.S.C. 703(a). U.S.C. 668(a). 27SER3 51360 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations and operation of motor vehicles in California and section 177 States and this action are too attenuated, and the conclusion that impacts are not reasonably foreseeable.337 jbell on DSK3GLQ082PROD with RULES3 10. Department of Transportation Act (Section 4(f)) Section 4(f) of the Department of Transportation Act of 1966 (49 U.S.C. 303), as amended, is designed to preserve publicly owned park and recreation lands, waterfowl and wildlife refuges, and historic sites. Specifically, Section 4(f) provides that DOT agencies cannot approve a transportation program or project that requires the use of any publicly owned land from a public park, recreation area, or wildlife or waterfowl refuge of national, State, or local significance, or any land from a historic site of national, State, or local significance, unless a determination is made that: (1) There is no feasible and prudent alternative to the use of land, and (2) The program or project includes all possible planning to minimize harm to the property resulting from the use. These requirements may be satisfied if the transportation use of a Section 4(f) property results in a de minimis impact on the area. NHTSA concludes that Section 4(f) is not applicable to its final rule here because this rulemaking is not an approval of a transportation program or project that requires the use of any publicly owned land. 11. Executive Order 12898: ‘‘Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations’’ Executive Order (E.O.) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. The agencies have determined that this action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not change existing Federal standards. This conclusion is supported by the lack of discretion over 337 See the discussions regarding NEPA, Clean Air Act Conformity, and the ESA. VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 preemption and the underlying justification for the withdrawal of the waiver to California, the fact that any causal relationship between effects on minority or low-income populations as a result of emissions from the sale and operation of motor vehicles in California and section 177 States and this action are too attenuated, and the conclusion that impacts are not reasonably foreseeable.338 12. Executive Order 13045: ‘‘Protection of Children From Environmental Health Risks and Safety Risks’’ This action is not subject to E.O. 13045 (62 FR 19885, April 23, 1997) because it is not an economically significant regulatory action as defined by E.O. 12866, and the agencies have no reason to believe that the environmental health or safety risks related to this action may have a disproportionate effect on children because it does not change existing Federal standards. This conclusion is supported by the lack of discretion over preemption and the underlying justification for the withdrawal of the waiver to California, the fact that any causal relationship between effects on children as a result of emissions from the sale and operation of motor vehicles in California and section 177 States and this action are too attenuated, and the conclusion that impacts are not reasonably foreseeable.339 G. Regulatory Flexibility Act Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a notice of proposed rulemaking or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small governmental jurisdictions). No regulatory flexibility analysis is required if the head of an agency certifies the proposal will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a proposal will not have a significant economic impact on a substantial number of small entities. 338 See the discussions regarding NEPA, the Clean Air Act Conformity, and the ESA. 339 See the discussions regarding NEPA, the Clean Air Act Conformity, and the ESA. PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 This joint action only concern the question of preemption; the joint action does not set CAFE or emissions standards themselves. Further, as the California waiver withdrawal is not a rulemaking, it is not subject to the RFA. Accordingly, only NHTSA’s final rule establishing regulatory text related to preemption is at issue in this action. NHTSA has considered the impacts of this document under the Regulatory Flexibility Act and certifies that this rule would not have a significant economic impact on a substantial number of small entities. One commenter, Workhorse Group, Inc. (Workforce), in comments echoed by a trade association, argued that it was a small business and would be affected the preemption provisions because it would no longer be able to earn and sell credits under the ZEV mandates established by California and the other 177 States. This argument is not persuasive, as the preemption regulation has no direct effect on Workforce or any other similar entity because it does not regulate any private entity, but instead clarifies the agency’s views on what State or local laws are preempted. Thus, any effect on Workhorse or any other similar entities is, at most, indirect. Any effect is even further attenuated by the fact that small entities such as Workhorse are not even subject to a ZEV mandate, but choose to participate in the program voluntarily. Additionally, in keeping with previous waiver actions, EPA’s action is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 601(2). Therefore, EPA has not prepared a supporting regulatory flexibility analysis addressing the impact of this action on small business entities. See 78 FR at 2145 (Jan. 9, 2013); 74 FR at 32784 (July 8, 2009); 73 FR at 12169 (Mar. 6, 2008). H. Executive Order 13132 (Federalism) Executive Order 13132 requires federal agencies to develop an accountable process to ensure ‘‘meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.’’ The Order defines the term ‘‘Policies that have federalism implications’’ to include regulations that have ‘‘substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.’’ Under the Order, agencies may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, unless the Federal government E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or the agencies consult with State and local officials early in the process of developing the proposed regulation. The agencies complied with Order’s requirements and discuss their response to comments in the above sections. I. Executive Order 12988 (Civil Justice Reform) Pursuant to Executive Order 12988, ‘‘Civil Justice Reform,’’ 340 NHTSA has determined that this final rule does not have any retroactive effect. J. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments) This final rule does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This rule will be implemented at the Federal level. Thus, Executive Order 13175 does not apply to this rule. Two commenters raised issues associated with this Executive Order. Issues raised in these comments related to the standards will be addressed that forthcoming rulemaking. One commenter, in an apparent reference to the preemption actions being finalized in this document, argued that the NPRM would weaken tribal abilities to set GHG standards. This is incorrect: The finalization of the EPCA preemption provisions merely clarifies the law that any law or regulation of a State or political subdivision of a State ‘‘related to’’ fuel economy is preempted, while EPA’s decision in this document only affects a State, not a Tribal government. jbell on DSK3GLQ082PROD with RULES3 K. Unfunded Mandates Reform Act Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires Federal agencies to prepare a written assessment of the costs, benefits, and other effects of a proposed or final rule that includes a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million in any one year (adjusted for inflation with base year of 1995). Adjusting this amount by the implicit gross domestic product price deflator for 2016 results in $148 million (111.416/75.324 = 1.48).341 This final rule will not result in the expenditure by State, local, or Tribal governments, in 340 61 FR 4729 (Feb. 7, 1996). of Economic Analysis, National Income and Product Accounts (NIPA), Table 1.1.9 Implicit Price Deflators for Gross Domestic Product. https://bea.gov/iTable/index_nipa.cfm. 341 Bureau VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 51361 the aggregate, or by the private sector of more than $148 million annually. be discussed in the final rule that will establish CAFE and GHG standards. L. Regulation Identifier Number The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda. P. Privacy Act M. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) requires NHTSA and EPA to evaluate and use existing voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicable law (e.g., the statutory provisions regarding NHTSA’s vehicle safety authority, or EPA’s testing authority) or otherwise impractical.342 As this action does not affect the CAFE or GHG standards, it is not subject to the NTTAA. NHTSA and EPA undertake this joint action under their respective authorities pursuant to the Energy Policy and Conservation Act and the Clean Air Act, mindful of the Supreme Court’s statement in Massachusetts v. EPA, 549 U.S. 497, 532 (2007), that ‘‘there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.’’ Pursuant to Clean Air Act section 307(b), any petitions for judicial review of this action must be filed in the United States Court of Appeals for the D.C. Circuit by November 26, 2019. Given the inherent relationship between the agencies’ actions, any challenges to NHTSA’s regulation should also be filed in the United States Court of Appeals for the D.C. Circuit. N. Department of Energy Review 49 U.S.C. 32902(j)(2) requires that ‘‘Before taking final action on a standard or an exemption from a standard under this section, the Secretary of Transportation shall notify the Secretary of Energy and provide the Secretary of Energy a reasonable time to comment.’’ As this action does not establish a standard or provide an exemption, it is not subject to this requirement. However, NHTSA has submitted this action to OMB for interagency review and, thus, the Department of Energy has been afforded the opportunity to review. O. Paperwork Reduction Act The Paperwork Reduction Act (PRA) of 1995, Public Law 104–13,343 gives the Office of Management and Budget (OMB) authority to regulate matters regarding the collection, management, storage, and dissemination of certain information by and for the Federal government. It seeks to reduce the total amount of paperwork handled by the government and the public. The PRA requires Federal agencies to place a notice in the Federal Register seeking public comment on the proposed collection of information. This action includes no information collections. The information collections associated with the CAFE and GHG programs will 342 15 U.S.C. 272. at 44 U.S.C. 3501 et seq. 343 Codified PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 In accordance with 5 U.S.C. 553(c), the agencies solicited comments from the public to better inform the rulemaking process. These comments are posted, without edit, to www.regulations.gov, as described in DOT’s system of records notice, DOT/ ALL–14 FDMS, accessible through www.transportation.gov/privacy. Q. Judicial Review List of Subjects in 49 CFR Parts 531 and 533 Fuel economy. Regulatory Text In consideration of the foregoing, under the authority of 49 U.S.C. 322, 32901, 32902, and 32903, and delegation of authority at 49 CFR 1.95, NHTSA amends 49 CFR chapter V as follows: PART 531—PASSENGER AUTOMOBILE AVERAGE FUEL ECONOMY STANDARDS 1. The authority citation for part 531 continues to read as follows: ■ Authority: 49 U.S.C. 32902, delegation of authority at 49 CFR 1.50. ■ 2. Add § 531.7 to read as follows: § 531.7 Preemption. (a) General. When an average fuel economy standard prescribed under this chapter is in effect, a State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under this chapter. E:\FR\FM\27SER3.SGM 27SER3 51362 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations (b) Requirements must be identical. When a requirement under section 32908 of title 49 of the United States Code is in effect, a State or a political subdivision of a State may adopt or enforce a law or regulation on disclosure of fuel economy or fuel operating costs for an automobile covered by section 32908 only if the law or regulation is identical to that requirement. (c) State and political subdivision automobiles. A State or a political subdivision of a State may prescribe requirements for fuel economy for automobiles obtained for its own use. Appendix to Part 531 [Designated as Appendix A to Part 531 and Amended] 3. Designate the appendix to part 531 as appendix A to part 531 and in newly designated appendix A, remove all references to ‘‘Appendix’’ and add in their place ‘‘Appendix A.’’ ■ 4. Add appendix B to part 531 to read as follows: ■ (1) A law or regulation of a State or a political subdivision of a State regulating tailpipe carbon dioxide emissions from automobiles, particularly a law or regulation that is not attribute-based and does not separately regulate passenger cars and light trucks, conflicts with: (A) The fuel economy standards in this part; (B) The judgments made by the agency in establishing those standards; and (C) The achievement of the objectives of the statute (49 U.S.C. Chapter 329) under which those standards were established, including objectives relating to reducing fuel consumption in a manner and to the extent consistent with manufacturer flexibility, consumer choice, and automobile safety. (2) Any law or regulation of a State or a political subdivision of a State regulating or prohibiting tailpipe carbon dioxide emissions from automobiles is impliedly preempted under 49 U.S.C. Chapter 329. (3) A law or regulation of a State or a political subdivision of a State having the direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions from automobiles or automobile fuel economy is impliedly preempted under 49 U.S.C. Chapter 329. jbell on DSK3GLQ082PROD with RULES3 Appendix B to Part 531—Preemption (a) Express Preemption: (1) To the extent that any law or regulation of a State or a political subdivision of a State regulates or prohibits tailpipe carbon dioxide emissions from automobiles, such a law or regulation relates to average fuel economy standards within the meaning of 49 U.S.C. 32919. (A) Automobile fuel economy is directly and substantially related to automobile tailpipe emissions of carbon dioxide; (B) Carbon dioxide is the natural byproduct of automobile fuel consumption; (C) The most significant and controlling factor in making the measurements necessary to determine the compliance of automobiles with the fuel economy standards in this part is their rate of tailpipe carbon dioxide emissions; (D) Almost all technologically feasible reduction of tailpipe emissions of carbon dioxide is achievable through improving fuel economy, thereby reducing both the consumption of fuel and the creation and emission of carbon dioxide; (E) Accordingly, as a practical matter, regulating fuel economy controls the amount of tailpipe emissions of carbon dioxide, and regulating the tailpipe emissions of carbon dioxide controls fuel economy. (2) As a law or regulation related to fuel economy standards, any law or regulation of a State or a political subdivision of a State regulating or prohibiting tailpipe carbon dioxide emissions from automobiles is expressly preempted under 49 U.S.C. 32919. (3) A law or regulation of a State or a political subdivision of a State having the direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions from automobiles or automobile fuel economy is a law or regulation related to fuel economy standards and expressly preempted under 49 U.S.C. 32919. (b) Implied Preemption: VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 PART 533—LIGHT TRUCK FUEL ECONOMY STANDARDS 5. The authority citation for part 533 continues to read as follows: ■ Authority: 49 U.S.C. 32902; delegation of authority at 49 CFR 1.50. ■ 6. Add § 533.7 to read as follows: § 533.7 Preemption. (a) General. When an average fuel economy standard prescribed under this chapter is in effect, a State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under this chapter. (b) Requirements must be identical. When a requirement under section 32908 of title 49 of the United States Code is in effect, a State or a political subdivision of a State may adopt or enforce a law or regulation on disclosure of fuel economy or fuel operating costs for an automobile covered by section 32908 only if the law or regulation is identical to that requirement. (c) State and political subdivision automobiles. A State or a political subdivision of a State may prescribe requirements for fuel economy for automobiles obtained for its own use. Appendix to Part 533 [Designated as Appendix A to Part 533 and Amended] 7. Designate appendix to part 533 as appendix A to part 533 and in newly redesignated appendix A, remove all ■ PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 references to ‘‘Appendix’’ and add in their place ‘‘Appendix A’’. ■ 8. Add appendix B to part 533 to read as follows: Appendix B to Part 533—Preemption (a) Express Preemption: (1) To the extent that any law or regulation of a State or a political subdivision of a State regulates or prohibits tailpipe carbon dioxide emissions from automobiles, such a law or regulation relates to average fuel economy standards within the meaning of 49 U.S.C. 32919. (A) Automobile fuel economy is directly and substantially related to automobile tailpipe emissions of carbon dioxide; (B) Carbon dioxide is the natural byproduct of automobile fuel consumption; (C) The most significant and controlling factor in making the measurements necessary to determine the compliance of automobiles with the fuel economy standards in this part is their rate of tailpipe carbon dioxide emissions; (D) Almost all technologically feasible reduction of tailpipe emissions of carbon dioxide is achievable through improving fuel economy, thereby reducing both the consumption of fuel and the creation and emission of carbon dioxide; (E) Accordingly, as a practical matter, regulating fuel economy controls the amount of tailpipe emissions of carbon dioxide, and regulating the tailpipe emissions of carbon dioxide controls fuel economy. (2) As a law or regulation of a State or a political subdivision of a State related to fuel economy standards, any state law or regulation regulating or prohibiting tailpipe carbon dioxide emissions from automobiles is expressly preempted under 49 U.S.C. 32919. (3) A law or regulation of a State or a political subdivision of a State having the direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions from automobiles or automobile fuel economy is a law or regulation related to fuel economy standards and expressly preempted under 49 U.S.C. 32919. (b) Implied Preemption: (1) A law or regulation of a State or a political subdivision of a State regulating tailpipe carbon dioxide emissions from automobiles, particularly a law or regulation that is not attribute-based and does not separately regulate passenger cars and light trucks, conflicts with: (A) The fuel economy standards in this part; (B) The judgments made by the agency in establishing those standards; and (C) The achievement of the objectives of the statute (49 U.S.C. Chapter 329) under which those standards were established, including objectives relating to reducing fuel consumption in a manner and to the extent consistent with manufacturer flexibility, consumer choice, and automobile safety. (2) Any law or regulation of a State or a political subdivision of a State regulating or prohibiting tailpipe carbon dioxide emissions from automobiles is impliedly preempted under 49 U.S.C. Chapter 329. E:\FR\FM\27SER3.SGM 27SER3 Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations (3) A law or regulation of a State or a political subdivision of a State having the direct or substantial effect of regulating or prohibiting tailpipe carbon dioxide emissions from automobiles or automobile fuel economy is impliedly preempted under 49 U.S.C. Chapter 329. Issued on September 19, 2019 in Washington, DC, under authority delegated in 49 CFR 1.95 and 501.4 51363 Dated: September 19, 2019. James C. Owens, Acting Administrator, National Highway Traffic Safety Administration. Dated: September 19, 2019. Andrew R. Wheeler, Administrator, Environmental Protection Agency. [FR Doc. 2019–20672 Filed 9–26–19; 8:45 am] jbell on DSK3GLQ082PROD with RULES3 BILLING CODE 4910–59–P VerDate Sep<11>2014 19:24 Sep 26, 2019 Jkt 247001 PO 00000 Frm 00055 Fmt 4701 Sfmt 9990 E:\FR\FM\27SER3.SGM 27SER3

Agencies

[Federal Register Volume 84, Number 188 (Friday, September 27, 2019)]
[Rules and Regulations]
[Pages 51310-51363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20672]



[[Page 51309]]

Vol. 84

Friday,

No. 188

September 27, 2019

Part III





Environmental Protection Agency





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40 CFR Parts 85 and 86





Department of Transportation





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National Highway Traffic Safety Administration





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49 CFR Parts 531 and 533





The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One 
National Program; Final Rule

Federal Register / Vol. 84 , No. 188 / Friday, September 27, 2019 / 
Rules and Regulations

[[Page 51310]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85 and 86

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 531 and 533

[NHTSA-2018-0067; EPA-HQ-OAR-2018-0283; FRL 10000-45-OAR]
RIN 2127-AL76; 2060-AU09


The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part 
One: One National Program

AGENCY: Environmental Protection Agency and National Highway Traffic 
Safety Administration, Department of Transportation.

ACTION: Withdrawal of waiver; final rule.

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SUMMARY: On August 24, 2018, the Environmental Protection Agency (EPA) 
and the Department of Transportation's National Highway Traffic Safety 
Administration (NHTSA) jointly published in the Federal Register a 
notice of proposed rulemaking entitled, ``The Safer Affordable Fuel-
Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars 
and Light Trucks.'' In the NPRM, the agencies proposed new and amended 
greenhouse gas (GHG) and Corporate Average Fuel Economy (CAFE) 
standards for model year 2021 to 2026 light duty vehicles. EPA also 
proposed to withdraw the waiver it had previously provided to 
California for that State's GHG and ZEV programs under section 209 of 
the Clean Air Act. NHTSA also proposed regulatory text implementing its 
statutory authority to set nationally applicable fuel economy standards 
that made explicit that those State programs would also be preempted 
under NHTSA's authorities. In this action, the agencies finalize the 
two actions related to the waiver and preemption. Accordingly, in this 
document: EPA announces its decision to withdraw the waiver; and NHTSA 
finalizes regulatory text related to preemption. The agencies 
anticipate issuing a final rule on standards proposed in the NPRM in 
the near future.

DATES: This joint action is effective November 26, 2019.
    Judicial Review: Pursuant to Clean Air Act section 307(b), any 
petitions for judicial review of this action must be filed in the 
United States Court of Appeals for the D.C. Circuit by November 26, 
2019. Given the inherent relationship between the agencies' actions, 
any challenges to NHTSA's regulation should also be filed in the United 
States Court of Appeals for the D.C. Circuit. See also Sections III.G 
and IV.Q of this preamble.

ADDRESSES: EPA and NHTSA have established dockets for this action under 
Docket ID No. EPA-HQ-OAR-2018-0283 and NHTSA 2018-0067, respectively. 
All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., confidential business 
information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, will 
be publicly available in hard copy in EPA's docket, and electronically 
in NHTSA's online docket. Publicly available docket materials can be 
found either electronically in www.regulations.gov by searching for the 
dockets using the Docket ID numbers above, or in hard copy at the 
following locations: EPA: EPA Docket Center, EPA/DC, EPA West, Room 
3334, 1301 Constitution Ave. NW, Washington, DC. The Public Reading 
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, 
excluding legal holidays. The telephone number for the Public Reading 
Room is (202) 566-1744. NHTSA: Docket Management Facility, M-30, U.S. 
Department of Transportation (DOT), West Building, Ground Floor, Rm. 
W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590. The DOT 
Docket Management Facility is open between 9 a.m. and 5 p.m. Eastern 
Time, Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: 
    EPA: Christopher Lieske, Office of Transportation and Air Quality, 
Assessment and Standards Division, Environmental Protection Agency, 
2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 
214-4584; fax number: (734) 214-4816; email address: 
[email protected], or contact the Assessment and Standards 
Division, email address: [email protected].
    NHTSA: James Tamm, Office of Rulemaking, Fuel Economy Division, 
National Highway Traffic Safety Administration, 1200 New Jersey Avenue 
SE, Washington, DC 20590; telephone number: (202) 493-0515.

SUPPLEMENTARY INFORMATION:

I. Overview
II. Preemption Under the Energy Policy and Conservation Act
III. EPA's Withdrawal of Aspects of the January 2013 Waiver of CAA 
section 209(b) Preemption of the State of California's Advanced 
Clean Car Program
IV. Regulatory Notices and Analyses

I. Overview

    On August 24, 2018, the Environmental Protection Agency (EPA) and 
the Department of Transportation's National Highway Traffic Safety 
Administration (NHTSA) (collectively, ``the agencies'') jointly 
published in the Federal Register a notice of proposed rulemaking 
entitled, ``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule 
for Model Years 2021-2026 Passenger Cars and Light Trucks'' (the SAFE 
Vehicles rule).\1\ In the NPRM, EPA proposed new greenhouse gas (GHG) 
standards and NHTSA proposed new Corporate Average Fuel Economy (CAFE) 
standards for model years (MY) 2021 to 2026 light duty vehicles. The 
agencies also proposed to take two actions, separate from the proposed 
standards, needed to ensure the existence of one Federal program for 
light vehicles. First, EPA proposed to withdraw the waiver it had 
previously provided to California for that State's GHG program and Zero 
Emissions Vehicle (ZEV) mandate. Second, NHTSA proposed regulatory text 
that made explicit that State programs to limit or prohibit tailpipe 
GHG emissions or establish ZEV mandates are preempted, to carry out its 
statutory authority to set nationally applicable fuel economy standards 
and consistent with the express preemption provisions of the Energy 
Policy and Conservation Act (EPCA).
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    \1\ 83 FR 42986.
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    The SAFE Vehicles Rule received several hundred thousand public 
comments, which discussed in great detail all aspects of the proposal. 
The nature of the comments received related to the proposed standards 
and the proposed actions on preemption, though, were considerably 
different. That is, the vast majority of comments, whether one 
considers the number of commenters, the number of issues raised by 
commenters, or the length and level of detail of those comments, 
focused primarily on the agencies' proposed standards. In contrast, the 
comments to the preemption issues, though substantive and thorough, 
were fewer in number and length, and raised primarily legal issues, 
rather than the technical or economic issues that were the focus of 
many comments to the standards. Both the proposed waiver withdrawal and 
discussion of EPCA

[[Page 51311]]

preemption are legal matters that are independent of the technical 
details of the proposed standards and, as such, took up a relatively 
small part of the NPRM.
    Recent actions by the State of California taken after the 
publication of the NPRM have confirmed the need for final decision from 
the agencies that States do not have the authority to set GHG standards 
or establish ZEV mandates. First, on December 12, 2018, California 
unilaterally amended its ``deemed to comply'' provision, such that 
CARB's GHG standards can be satisfied only by complying with EPA's 
standards as those standards were promulgated in 2012.\2\ More 
recently, on July 25, 2019, California announced a so-called 
``voluntary framework'' with four automakers, which purported, without 
analysis of the terms of the existing waiver, California law, or how 
this ``framework'' is permissible under Federal law, to allow those 
automakers to meet reduced standards on a national basis if they 
promise not to challenge California's authority to establish GHG 
standards or the ZEV mandate.\3\ These two actions, both of which 
conflict with the maintenance of a harmonized national fuel economy and 
tailpipe GHG emissions program and the terms of the agreement reached 
in 2012 and 2013, confirm that the only way to create one actual, 
durable national program is for GHG and fuel economy standards to be 
set by the Federal government, as was intended by Congress in including 
express preemption provisions in both the Clean Air Act (for new motor 
vehicle emissions standards) and EPCA (for fuel economy).\4\
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    \2\ See In re: Air Resources Board, Notice of Approval of 
Regulatory Action, No. 2018-1114-03 (State of California, Office of 
Administrative Law Dec. 12, 2018), available at https://ww3.arb.ca.gov/regact/2018/leviii2018/form400dtc.pdf?_ga=2.183723951.866759811.1568583699-1441462912.1552677736 (last visited Sept. 15, 2019).
    \3\ See California and Major Automakers Reach Groundbreaking 
Framework Agreement on Clean Emission Standards, Office of Gov. 
Gavin Newsome (July 25, 2019), available at https://www.gov.ca.gov/2019/07/25/california-and-major-automakers-reach-groundbreaking-framework-agreement-on-clean-emission-standards/ (last visited Sept. 
14, 2019); Terms for Light-Duty Greenhouse Gas Emissions Standards, 
available at https://ww2.arb.ca.gov/sites/default/files/2019-07/Auto%20Terms%20Signed.pdf (last visited Sept. 14, 2019).
    \4\ At the time this joint action was signed, California had not 
submitted or demonstrated any intention to submit an application for 
a waiver for either its December 2018 amendment to its regulations 
or its July 2019 ``framework.''
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    In light of the divergence in the type of comments received to the 
proposal (i.e., between the standards-related proposal and the waiver 
and preemption proposals), and in light of the recent actions taken by 
California, the agencies have determined it is appropriate to move 
forward with the two actions related to preemption now, while 
continuing work on a final rule to establish the CAFE and GHG standards 
that were within the scope of the NPRM. This decision is appropriate, 
as agencies have authority to finalize different parts of proposed 
actions at different times. Further, the agencies previewed this 
possibility in the NPRM by emphasizing the severability of the 
standards from the actions being finalized in this document. EPA's 
action in this document does not add or amend regulatory text pursuant 
to the Clean Air Act and, thus, issuing this decision on the waiver and 
the later rulemaking on the standard makes clear the difference between 
EPA's two actions and their independence from one another. NHTSA's 
action in this document is not to set standards for particular model 
years, but rather is an exercise of its authority under 49 U.S.C. 32901 
through 32903, necessary to maintain the integrity of the corporate 
average fuel economy program and compliance regime established by 
Congress as a nationwide program, and consistent with Congress' 
statement of express preemption in 49 U.S.C. 32919. These two general 
aspects of the SAFE Vehicles Rule are independent of the CAFE and GHG 
standards for Model Years 2021-2026.\5\ For that reason, the decision 
in this document to finalize the waiver and preemption issues does not 
require the agencies to reopen the comment period for the standards, as 
it does not have any effect on either agency's standards.
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    \5\ The agencies note that the South Coast Air Quality 
Management District commented that EPA should not take an action on 
the waiver in the same notice as a rule that would change EPA's GHG 
standards. See South Coast Air Quality Management District, Docket 
No. NHTSA-2018-0067-11813. Although the agencies do not acknowledge 
the validity of this argument, any such concern is rendered moot by 
this action.
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    The agencies note that several comments claimed that the comment 
period of 63 days was inadequate or that the agencies did not hold a 
sufficient number of public meetings. Although the agencies will 
address this comment more directly in the forthcoming final rulemaking 
to establish standards, for purposes of this action, it is clear to the 
agencies that commenters had adequate time to respond to the issue of 
the waiver and EPCA preemption. Courts give broad discretion to 
agencies in determining whether the length of a comment period is 
reasonable and, in assessing the sufficiency of a comment period, look 
to whether the public had a meaningful opportunity to comment on a 
proposed action. See, e.g., Rural Cellular Ass'n v. FCC, 588 F.3d 1095, 
1101 (D.C. Cir. 2009); Connecticut Light & Power Co. v. Nuclear 
Regulatory Comm'n, 673 F.2d 525, 534 (D.C. Cir. 1982). There was 
unquestionably a meaningful opportunity to comment here. The agencies 
received several hundred thousand comments, which included highly 
detailed and technical comments on all aspects of the proposal from 
seemingly all relevant stakeholders, including numerous comments 
related to EPA's action on the waiver and NHTSA's proposal on 
preemption. The agencies also note that the NPRM was initially issued 
and made public on August 2, 2018, over three weeks prior to 
publication in the Federal Register, and received extensive media 
coverage immediately thereafter, and giving a total of 86 days to 
review and comment. Furthermore, the agencies held three public 
hearings during the comment period, including one in Fresno, California 
on September 24, 2018, where the agencies heard from several hundred 
commenters in person.

II. Preemption Under the Energy Policy and Conservation Act

A. NHTSA Is Finalizing Its Preemption Proposal

    NHTSA is finalizing its proposal concerning preemption of State and 
local laws and regulations related to fuel economy standards. Congress 
passed EPCA to help achieve the important national objective of 
protecting the United States against petroleum price shocks through 
improvements in fuel efficiency for the light duty vehicle fleet. But 
Congress did not seek to do so at any cost--instead directing the 
Secretary of Transportation to balance statutory factors, such as the 
need of the nation to conserve energy, technological feasibility, and 
economic practicability, to arrive at stringent, but feasible, 
standards on a Federal basis.
    Increasing fuel economy is an expensive undertaking for automakers, 
the costs of which are necessarily passed on to consumers, thereby 
discouraging new vehicle purchases and slowing the renewal of the 
nation's light duty fleet. That is why fuel economy standards must be 
set considering other critical factors.
    This is also why the notion of national applicability and 
preemption of State or local laws or regulations related to fuel 
economy standards is so critical. Allowing State or local governments 
to establish their own fuel economy standards, or standards related to 
fuel

[[Page 51312]]

economy, would provide for a universe in which automakers are placed in 
the untenable situation of having to expend resources to comply not 
only with Federal standards, but also meet separate State requirements. 
If State or local governments are allowed to require--directly or 
indirectly--automakers to develop and implement additional technologies 
to improve fuel economy (or reduce or eliminate tailpipe greenhouse gas 
emissions for all or a portion of a fleet), the fuel economy-related 
expenses of automakers increase beyond those considered in establishing 
federal standards. This would render the critical balancing required by 
EPCA devoid of meaning.
    Uniform national fuel economy standards are essential to 
accomplishing the goals of EPCA. To ensure that the fuel economy 
standards NHTSA adopts constitute the uniform national requirements 
that Congress intended, NHTSA must address the extent to which State 
and local laws and regulations are preempted by EPCA.
    Furthermore, EPCA states: ``When an average fuel economy standard 
prescribed under this chapter is in effect, a State or a political 
subdivision of a State may not adopt or enforce a law or regulation 
related to fuel economy standards or average fuel economy standards for 
automobiles covered by an average fuel economy standard under this 
chapter.'' 49 U.S.C. 32919(a). As a limited exception, a State or local 
government ``may prescribe requirements for fuel economy for 
automobiles obtained for its own use.'' 49 U.S.C. 32919(c). In 
addition, when a Federal fuel economy labeling or information 
requirement is in effect, pursuant to 49 U.S.C. 32908, a State or local 
government may adopt or enforce an identical requirement on 
``disclosure of fuel economy or fuel operating costs.'' 49 U.S.C. 
32919(b). Absent this limited circumstance, a State or local government 
cannot even have laws in place that are identical to the Federal 
standards.
    NHTSA will first summarize its discussion of preemption in the 
proposal before turning to discussion of issues raised by the comments. 
In this final rule, NHTSA fully reaffirms the discussion of preemption 
set forth in the proposal, which provides additional detail regarding 
NHTSA's views.\6\
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    \6\ See 83 FR 42986, 43232-39 (Aug. 24, 2018).
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    In the proposal, NHTSA described its preemption discussions in 
prior rulemakings, which are consistent with the views on preemption 
that NHTSA is finalizing in this document.\7\ NHTSA has asserted 
preemption of certain State emissions standards under EPCA on multiple 
occasions since 2002. The United States explained in a 2002 amicus 
brief that EPCA preempted California's then-existing zero-emissions 
vehicle (ZEV) regulations.\8\ NHTSA continued the discussion of 
preemption later that year in a notice of proposed rulemaking setting 
CAFE standards for model year 2005 through 2007 light trucks, and 
reiterated its position in the 2003 final rule.\9\ NHTSA's 2005 notice 
of proposed rulemaking setting standards for model year 2008 through 
2011 light trucks also discussed preemption and the 2006 final rule 
elaborated on the issue at length, including in a specific discussion 
finding California's then-existing tailpipe greenhouse gas emissions 
regulations were preempted.\10\ NHTSA's 2008 proposed rule for model 
year 2011 through 2015 passenger cars and light trucks also addressed 
preemption and proposed adding a summary of NHTSA's position on the 
issue to the Code of Federal Regulations.\11\ That proposed rule also 
addressed recent developments, specifically the Supreme Court's 
decision in Massachusetts v. EPA, the enactment of EISA, and two 
district court decisions finding that State tailpipe greenhouse gas 
emissions standards were not preempted by EPCA.\12\ NHTSA explained 
that those developments did not change its view of preemption and it 
reaffirmed the detailed analysis and conclusions from the 2006 final 
rule.\13\ Subsequent CAFE rulemaking documents, prior to the August 
2018 proposal, did not discuss EPCA preemption.\14\ Thus, this final 
rule is consistent with NHTSA's longstanding position on EPCA 
preemption over the course of nearly two decades.
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    \7\ Id. at 43232. As NHTSA noted in the proposal, it had not 
previously directly addressed preemption of California's ZEV 
program. Id. at 43233.
    \8\ Brief for the United States as Amicus Curiae in Support of 
Affirmance, Cent. Valley Chrysler-Plymouth Inc., et al, v. Kenny, 
No. 02-16395 (9th Cir. 2002).
    \9\ 68 FR 16868, 16895 (Apr. 7, 2003); 67 FR 77015, 77025 (Dec. 
16, 2002). In the notice of proposed rulemaking, NHTSA specifically 
rejected the argument made by California in litigation that NHTSA 
had not treated EPCA as preempting State efforts to engage in CAFE-
related regulation, explaining that States may not ``issue a 
regulation that relates to fuel economy and which addresses the same 
public policy concern as the CAFE statute. Our statute contains a 
broad preemption provision making clear the need for a uniform, 
federal system. . . . The fact that NHTSA had not expressly 
addressed this particular aspect of California's requirements should 
not have been interpreted as tacit acceptance.'' 67 FR 77015, 77025 
(Dec. 16, 2002).
    \10\ 71 FR 17566, 17654-70 (Apr. 6, 2006); 70 FR 51414, 51457 
(Aug. 30, 2005).
    \11\ 73 FR 24352, 24478-79 (May 2, 2008). NHTSA finalized only 
standards for model year 2011 through that rulemaking action, and 
subsequently began a new rulemaking for model year 2012 and later 
passenger cars and light trucks. In the final rule for model year 
2011, NHTSA stated: ``NHTSA has decided not to include any 
provisions addressing preemption in the Code of Federal Regulations 
at this time. The agency will re-examine the issue of preemption in 
the content of its forthcoming rulemaking to establish Corporate 
Average Fuel Economy standards for 2012 and later model years.'' 74 
FR 14196, 14200 (Mar. 30, 2009).
    \12\ 73 FR 24352, 24478 (May 2, 2008).
    \13\ Id.
    \14\ As noted above, in NHTSA's final rule for model year 2011, 
it stated that ``[t]he agency will re-examine the issue of 
preemption in the content of its forthcoming rulemaking to establish 
Corporate Average Fuel Economy standards for 2012 and later model 
years.'' 74 FR 14196, 14200 (Mar. 30, 2009). However, in the NHTSA's 
2009 proposal and 2010 final rule setting standards for model year 
2012 through 2016 automobiles, NHTSA stated that is was ``deferring 
further consideration of the preemption issue.'' 75 FR 25324, 25546 
(May 7, 2010); 74 FR 49454, 49635 (Sept. 28, 2009).
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    In the proposal, NHTSA also described certain developments, 
including the Supreme Court's decision in Massachusetts v. EPA, that 
preceded EPA's regulation of tailpipe greenhouse gas emissions through 
joint rulemaking with NHTSA.\15\ In addition, NHTSA described the Obama 
Administration's creation of a framework that was intended to allow a 
manufacturer to ``meet all standards with a single national fleet.'' 
\16\ Appeals of the two district court decisions holding that the 
California regulation and Federal regulation could co-exist were 
withdrawn as part of the negotiated agreement for the National 
Program.\17\ The announcement of the framework was followed by EPA's 
decision less than two months later to grant a waiver to California for 
its own greenhouse gas emissions standards, without taking any 
substantive position on EPCA preemption.\18\ The national framework was 
a negotiated agreement between the Federal government, California, and 
the automotive industry.\19\
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    \15\ 83 FR 42986, 43232-33 (Aug. 24, 2018).
    \16\ Id. at 43233; 76 FR 74854, 74863 (Dec. 1, 2011).
    \17\ See 83 FR 42986, 43233 (Aug. 24, 2018); Association of 
Global Automakers, Docket No. NHTSA-2018-0067-12032.
    \18\ In other words, the National Program included State 
requirements not nationally applicable. 83 FR 42986, 43233 (Aug. 24, 
2018); see also 74 FR 32744, 32783 (July 8, 2009) (``EPA takes no 
position regarding whether or not California's GHG standards are 
preempted under EPCA.'').
    \19\ After President Obama announced the agreement, NHTSA and 
EPA subsequently adopted CAFE and greenhouse gas emissions standards 
through rulemaking. See 75 FR 25324 (May 7, 2010).
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    NHTSA confirms its view, stated in the proposal on preemption, that 
the agencies' consideration in 2012 of California's ``deemed to 
comply''

[[Page 51313]]

regulatory provision as obviating NHTSA's consideration of preemption 
was erroneous.\20\ This, too, was part of the negotiated agreement 
described above.\21\ Under California's regulatory provision, 
California deemed manufacturers to be in compliance with certain of 
California's requirements if they complied with EPA's standards.\22\ 
However, EPCA explicitly provides that all State requirements ``related 
to'' fuel economy standards, even those that may be identical or 
equivalent to Federal requirements are preempted by EPCA.\23\ Moreover, 
as discussed in additional detail below, California recently changed 
its regulations so that it has no such ``deemed to comply'' provision 
should the forthcoming SAFE final rule adopt any regulatory alternative 
other than the no action alternative.\24\ This change sets up a direct 
conflict between Federal and State requirements, exacerbating the 
conflict that exists even now.
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    \20\ See id.; 77 FR 62624, 62637 (Oct. 15, 2012).
    \21\ See 75 FR 25324, 25328 (May 7, 2010).
    \22\ 83 FR 42986, 43233 (Aug. 24, 2018).
    \23\ See id. at 43233-34.
    \24\ See 83 FR 42986, 42990 tbl. I-4 (Aug. 24, 2018); Cal. Code 
Regs. tit. 13, sec. 1961.3(c). California changed its regulation 
following issuance of NHTSA and EPA's proposed rule. See State of 
Cal., Office of Admin. Law, Notice of Approval of Regulatory Action 
(Dec. 12, 2018), https://www.arb.ca.gov/regact/2018/leviii2018/form400dtc.pdf. NHTSA recognized the potential for such a change in 
the proposal. 83 FR 42986, 43233 n.495 (Aug. 24, 2018).
---------------------------------------------------------------------------

    Congress's intent to provide for uniform national fuel economy 
standards is frustrated when State and local actors regulate in this 
area. In the proposal, NHTSA explained that the need for regulatory 
certainty, along with the clear prospect of disharmony, required it to 
address preemption.\25\ NHTSA also explained its desire to seek 
comments on this important issue from State and local officials, along 
with other interested members of the public.\26\ NHTSA in fact received 
many comments from State and local governments, NGOs, industry, and 
others concerning preemption.\27\ This comment process helped ensure 
that the agency considered all facets of this significant issue before 
reaching a final determination in this rule.
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    \25\ 83 FR 42986, 43233 (Aug. 24, 2018).
    \26\ Id.
    \27\ See, e.g., California Air Resources Board (CARB), Docket 
No. NHTSA-2018-0067-11873; Alliance of Automobile Manufacturers, 
Docket No. NHTSA-2018-0067-12073; Joint Submission from the States 
of California et al. and the Cities of Oakland et al., Docket No. 
NHTSA-2018-0067-11735.
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    NHTSA also discussed the broad and clear text of EPCA's express 
preemption provision.\28\ As NHTSA explained in the proposal, unlike 
the Clean Air Act, there is no set of circumstances under EPCA in which 
it would be appropriate or permissible for NHTSA to waive preemption or 
allow States or local governments to adopt or enforce identical or 
equivalent requirements.\29\ EPCA does not provide NHTSA with any 
waiver authority whatsoever. To ensure Federal primacy over this area, 
EPCA broadly preempts all State and local laws ``related to'' fuel 
economy standards or average fuel economy standards.\30\ NHTSA 
reiterates, consistent with the proposal, that in this rulemaking NHTSA 
is concluding that State and local requirements that relate to fuel 
economy standards by directly or substantially affecting corporate 
average fuel economy levels are preempted.\31\
---------------------------------------------------------------------------

    \28\ 83 FR 42986, 43233-34 (Aug. 24, 2018).
    \29\ Id. at 43233.
    \30\ 49 U.S.C. 32919(a).
    \31\ 83 FR 42986, 43233 (Aug. 24, 2018).
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    NHTSA also described Supreme Court precedent interpreting the 
meaning of ``related to.'' \32\ In addition to the plain language of 
the statute, NHTSA applied to EPCA the guidance from Supreme Court case 
law to consider both the objectives of the statute and the effect of 
the State laws on the Federal standards.\33\ As NHTSA explained, the 
primacy of a single national fuel economy standard, set by the Federal 
government, was an important objective of Congress in enacting EPCA.
---------------------------------------------------------------------------

    \32\ Id.
    \33\ Id. at 43233-34.
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    In adopting EISA, Congress did not repeal or amend EPCA's express 
preemption provision.\34\ While Congress included in EISA a savings 
provision preventing EISA from limiting preexisting authority or 
responsibility conferred by any law, or from authorizing violation of 
any law,\35\ the savings clause did not purport to expand either EPA's 
or NHTSA's preexisting authority or responsibility.\36\ NHTSA 
recognized that during debate on the floor, some Members of Congress 
made statements about the savings provision's impact on California's 
ability to set tailpipe greenhouse gas emissions standards.\37\ NHTSA 
affirms its view, consistent with Supreme Court precedent, that such 
legislative history does not alter the plain text of the statute.\38\ 
In the end, Congress did not change EPCA's preemption provision when it 
adopted EISA, despite clearly having the opportunity to do so.\39\ 
Because States lacked preexisting authority to set tailpipe greenhouse 
gas emissions standards, as a result of EPCA's preemption provision, 
EISA's savings clause did not give them that authority.
---------------------------------------------------------------------------

    \34\ See EISA, Public Law 110-140 (2007).
    \35\ 42 U.S.C. 17002.
    \36\ See id.
    \37\ 83 FR 42986, 43234 (Aug. 24, 2018).
    \38\ See Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 
2356, 2364 (2019) (``In statutory interpretation disputes, a court's 
proper starting point lies in a careful examination of the ordinary 
meaning and structure of the law itself. Where, as here, that 
examination yields a clear answer, judges must stop. Even those of 
us who sometimes consult legislative history will never allow it to 
be used to `muddy' the meaning of `clear statutory language.' '') 
(internal citations omitted).
    \39\ See EISA, Public Law 110-140 (2007); 83 FR 42986, 43234 
(Aug. 24, 2018).
---------------------------------------------------------------------------

    In the proposal, NHTSA also described in detail the reasons that 
tailpipe carbon dioxide emissions regulations or prohibitions are 
``related to'' fuel economy standards.\40\ NHTSA explained that carbon 
dioxide emissions are a necessary and inevitable byproduct of burning 
gasoline: The more fuel a vehicle burns or consumes, the more carbon 
dioxide it emits.\41\ Based on the physical and mathematically 
measurable relationship between carbon dioxide emissions and fuel 
economy, EPCA has always specified that compliance with fuel economy 
standards is determined through tests and calculation procedures 
established by EPA.\42\ Specifically, compliance with fuel economy 
standards is based almost entirely on carbon dioxide emission 
rates.\43\ As NHTSA noted, it is significant that in enacting EPCA, 
Congress both adopted test procedures reliant on the direct 
relationship between carbon dioxide emissions and fuel economy, and 
preempted State and local governments from adopting requirements 
related to fuel economy standards in the same law.\44\
---------------------------------------------------------------------------

    \40\ 83 FR 42986, 43234 (Aug. 24, 2018).
    \41\ Id.
    \42\ 49 U.S.C. 32904(c).
    \43\ See 83 FR 42986, 43234 (Aug. 24, 2018).
    \44\ Id.
---------------------------------------------------------------------------

    NHTSA affirms in this final rule that a State or local requirement 
limiting tailpipe carbon dioxide emissions from automobiles has the 
direct and substantial effect of regulating fuel consumption and, thus, 
is ``related to'' fuel economy standards. Likewise, since carbon 
dioxide emissions constitute the overwhelming majority of tailpipe 
carbon emissions, a State regulation of all tailpipe greenhouse gas 
emissions from automobiles or prohibiting all tailpipe emissions is 
also ``related to'' fuel economy standards and preempted by EPCA.
    NHTSA is also finalizing its conclusion that EPCA does not preempt 
all potential State or local regulation of greenhouse gas emissions 
from vehicles. As NHTSA explained in the proposal,

[[Page 51314]]

some greenhouse gas emissions from vehicles are not related to fuel 
economy because they have either no effect on fuel economy, or only an 
insignificant effect on fuel economy.\45\ NHTSA provided an example of 
a requirement with no bearing on fuel economy: a State regulation of 
vehicular refrigerant leakage.\46\ NHTSA also explained that State 
safety requirements that have only an incidental impact on fuel 
economy, such as a requirement to use child seats, is not preempted 
because it does not sufficiently relate to fuel economy standards.\47\ 
NHTSA also confirms its view that, if preempted requirements are 
combined with requirements not related to fuel economy, ECPA would void 
only the preempted portion of the law.
---------------------------------------------------------------------------

    \45\ Id. at 43234-35.
    \46\ Id. at 43235.
    \47\ Id.
---------------------------------------------------------------------------

    In addition, NHTSA and EPA are confirming their determination, in 
this joint final action, that a Clean Air Act waiver does not waive 
EPCA preemption. As explained in the proposal, a State or local law or 
regulation related to automobile fuel economy standards is void ab 
initio under the preemptive force of EPCA.\48\ As support, the proposal 
cited longstanding Supreme Court case law concerning the Supremacy 
Clause and action in violation of a statutory prohibition.\49\ In sum, 
``[i]t is basic to this constitutional command [in the Supremacy 
Clause] that all conflicting state provisions be without effect.'' \50\
---------------------------------------------------------------------------

    \48\ Id.
    \49\ Id.
    \50\ Maryland v. Louisiana, 451 U.S. 725, 746 (1981) (citing 
McCulloch v. Maryland, 4 Wheat. 316,
    427 (1819)).
---------------------------------------------------------------------------

    As explained in the proposal, avoiding preemption under one Federal 
law has no necessary bearing on another Federal law's preemptive 
effect.\51\ For purposes of the present rule, this conclusion is 
confirmed by Section 209 of the Clean Air Act, which explicitly states 
that a waiver of preemption pursuant to that provision of the Clean Air 
Act only relieves ``application of this section.'' \52\ NHTSA also 
confirms its view that a Clean Air Act waiver does not ``federalize'' 
State or local requirements preempted by EPCA.
---------------------------------------------------------------------------

    \51\ 83 FR 42986, 43235 (Aug. 24, 2018).
    \52\ 42 U.S.C. 7543(b)(1).
---------------------------------------------------------------------------

    NHTSA and EPA also explained in the proposal their disagreement 
with decisions from district courts in California and Vermont that held 
that EPCA did not preempt State tailpipe greenhouse gas emissions 
standards.\53\ The agencies particularly disagree with those district 
courts' characterization of the ``related to'' language in EPCA's 
preemption provision as narrow, their reliance on California's 
application for a Clean Air Act waiver, and the courts' implied 
preemption analyses.\54\ As the proposal explained, these decisions are 
legally flawed, and NHTSA is not barred from proceeding with its 
preemption determination here.\55\
---------------------------------------------------------------------------

    \53\ 83 FR 42986, 43232-38 (Aug. 24, 2018); see Green Mountain 
Chrysler v. Crombie, 508 F. Supp. 2d 295 (D. Vt. 2007); Cent. Valley 
Chrysler-Jeep, Inc. v. Goldstene, 529 F. Supp. 2d 1151 (E.D. Cal. 
2007), as corrected (Mar. 26, 2008).
    \54\ 83 FR 42986, 43232-38 (Aug. 24, 2018).
    \55\ See id. at 43235.
---------------------------------------------------------------------------

    NHTSA also reaffirms its views on implied preemption, as described 
in the proposal.\56\ State or local limitations or prohibitions on 
tailpipe carbon dioxide emissions from automobiles directly conflict 
with the objectives of EPCA. NHTSA balances statutory factors in 
setting CAFE standards at ``the maximum feasible average fuel economy 
level that the Secretary decides the manufacturers can achieve in that 
model year'' (49 U.S.C. 32902(a)).\57\ State requirements, made based 
on State-specific determinations unbound by the considerations in EPCA, 
frustrate NHTSA's statutory role. If one or more States may issue 
competing or overlapping requirements affecting fuel economy standards, 
industry must also apply resources and effort at meeting standards 
applicable only to discrete parts of the country in addition to those 
spent to comply with the Federal standards. In accordance with EPCA, 
manufacturers' ``average fuel economy'' is calculated based on specific 
statutory requirements. 49 U.S.C. 32901(a)(5), 32904. Manufacturers 
earn credits for exceeding average fuel economy standards. 49 U.S.C. 
32903. This statutory compliance structure is impeded when States or 
local governments attempt to set or enforce their own requirements, 
which necessarily apply to manufacturers at a State or local level. 
This interferes with the national ``average fuel economy'' program. The 
broad preemption provision adopted by Congress in EPCA clearly 
demonstrates the intention for a single national set of standards that 
consider, among other things, economic feasibility and consumer choice. 
Indeed, the entire purpose of a balanced standard is defeated if a 
State can place its thumb on the scale. Likewise, separate State or 
local requirements interfere with the compliance regime under EPCA of 
performance determined based on nationwide fleet averages, which 
determine manufacturers' credits or shortfalls. See 49 U.S.C. 32903.
---------------------------------------------------------------------------

    \56\ See id. at 43237-38.
    \57\ 49 U.S.C. 32902(f).
---------------------------------------------------------------------------

    NHTSA also finalizes the view, as discussed in the proposal, that 
ZEV mandates are preempted by EPCA.\58\ Such laws, which require that a 
certain number or percentage of vehicles sold or delivered in a State 
by a manufacturer meet ZEV requirements, directly and substantially 
affect fuel economy standards by requiring manufacturers to eliminate 
fossil fuel use in a portion of their fleet. Like State or local 
tailpipe GHG emissions standards, ZEV mandates require the application 
of additional efforts and resources beyond those needed to comply with 
Federal standards. ZEV mandates also directly conflict with the goals 
of EPCA as they apply irrespective of the Federal statutory factors the 
Secretary of Transportation (through NHTSA) is required to consider in 
setting fuel economy standards, including technological feasibility and 
economic practicability. In the proposal, NHTSA described, as an 
example, California's ZEV mandate, which manufacturers must comply with 
individually for each State adopting California's mandate.\59\ This 
regime of State mandates forces manufacturers to expend scarce 
resources on specific technology regardless of consumer demand, and 
regardless of what the Secretary has determined in her judgment to be 
the appropriate expenditure of resources necessary to comply with fuel 
economy standards set in accordance with the balancing required by 
EPCA.
---------------------------------------------------------------------------

    \58\ See id. at 43238-39.
    \59\ Id.
---------------------------------------------------------------------------

    NHTSA also confirms its view that the preemption portion of this 
joint final action is a statement of what Federal law requires and is 
effective without regard to any particular model year of vehicles and 
without regard to the details of the fuel economy and greenhouse gas 
emissions standards the agencies have set previously or set in the 
future.\60\ In other words, NHTSA's regulation concerning EPCA 
preemption is independent of and severable from the specific standards 
it ultimately adopts for model year 2021 through 2026 automobiles. 
Given the need for clarity on this issue, NHTSA has decided to issue 
this as a separate final rule and will later finalize the standards for 
model year 2021 through 2026 automobiles. NHTSA's preemption regulation 
formalizes its longstanding position on preemption and incorporates 
that position into the Code of Federal Regulations provisions 
concerning passenger automobile

[[Page 51315]]

average fuel economy standards at 49 CFR 531.7 and 49 CFR part 531, 
appendix B, and light truck fuel economy standards at 49 CFR 533.7 and 
49 CFR part 533, appendix B. These portions of the regulations are 
operable without regard to any specific Federal standards and 
requirements in 49 CFR parts 531 and 533 or other parts of the Code of 
Federal Regulations. Likewise, NHTSA's determination that a State or 
local law or regulation of tailpipe greenhouse gas emissions from 
automobiles is related to fuel economy standards is severable from 
NHTSA's determination that State or local ZEV mandates are related to 
fuel economy standards.
---------------------------------------------------------------------------

    \60\ See id. at 43239.
---------------------------------------------------------------------------

B. Scientific Relationship Between Tailpipe Carbon Dioxide Emissions 
and Fuel Economy Standards

    NHTSA is finalizing its conclusion that State requirements 
regulating tailpipe carbon dioxide emissions from automobiles are 
related to fuel economy standards. The relationship between fuel 
economy standards and regulations that limit or prohibit tailpipe 
carbon dioxide emissions from automobiles is a matter of science and 
mathematics. Commenters did not and cannot dispute the direct 
scientific link between tailpipe carbon dioxide emissions from 
automobiles and fuel economy. Thus, State and local laws and 
regulations that regulate such tailpipe emissions are preempted under 
EPCA.
    The relationship between carbon dioxide and fuel economy is 
described in several statements in an appendix to parts 531 and 533 
that NHTSA is finalizing in this document.
    First, ``[a]utomobile fuel economy is directly and substantially 
related to automobile tailpipe emissions of carbon dioxide.'' 49 CFR 
part 531, appx. B, section (a)(1)(A); 49 CFR part 533, appx. B, section 
(a)(1)(A).\61\ No commenters disputed or otherwise specifically 
commented on this statement.
---------------------------------------------------------------------------

    \61\ 83 FR 42986, 43489 (Aug. 24, 2018).
---------------------------------------------------------------------------

    Second, ``[c]arbon dioxide is the natural byproduct of automobile 
fuel consumption.'' 49 CFR part 531, appx. B, section (a)(1)(B); 49 CFR 
part 533, appx. B, section (a)(1)(B).\62\ One comment identified this 
as a correct statement,\63\ and another highlighted this fact in noting 
NHTSA's longstanding and consistent view on preemption.\64\ No 
commenters disagreed with this factual statement.
---------------------------------------------------------------------------

    \62\ Id.
    \63\ Walter Kreucher, Docket No. NHTSA-2018-0067-0444.
    \64\ Association of Global Automakers, Docket No. NHTSA-2018-
0067-12032.
---------------------------------------------------------------------------

    Third, ``[t]he most significant and controlling factor in making 
the measurements necessary to determine the compliance of automobiles 
with the fuel economy standards in this part [531 and 533] is their 
rate of tailpipe carbon dioxide emissions.'' 49 CFR part 531, appx. B, 
section (a)(1)(C); 49 CFR part 533, appx. B, section (a)(1)(C).\65\ The 
Alliance of Automobile Manufacturers similarly stated that the 
measurements for CAFE compliance involved ``the same tests, vehicles, 
sales data, and emissions measurements that the EPA uses to measure 
carbon dioxide and tailpipe GHG emissions.'' \66\ Fiat Chrysler 
Automobiles (FCA) also reiterated this point from the Alliance's 
comments,\67\ and the Competitive Enterprise Institute highlighted 
NHTSA's discussion of compliance measurement in agreeing that fuel 
economy standards and greenhouse gas emissions standards are inherently 
related.\68\ CARB did not dispute this factual statement, but pointed 
out that carbon dioxide emissions are only one part of the compliance 
testing regime Congress approved--a fact that NHTSA had already 
recognized in its proposal.\69\ As NHTSA explained in the proposal, as 
specified by EPCA, compliance with the CAFE standards is and has always 
been based on the rates of emission of carbon dioxide, carbon monoxide, 
and hydrocarbons from covered vehicles, but primarily on the emission 
rates of carbon dioxide.\70\ The role of carbon dioxide is 
approximately 100 times greater than the combined role of the other two 
relevant carbon exhaust gases.\71\
---------------------------------------------------------------------------

    \65\ 83 FR 42986, 43489 (Aug. 24, 2018).
    \66\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2018-0067-12073.
    \67\ Fiat Chrysler Automobiles (FCA), Docket No. NHTSA-2018-
0067-11943.
    \68\ Competitive Enterprise Institute, Docket No. NHTSA-2018-
0067-12015.
    \69\ See California Air Resources Board (CARB), Docket No. 
NHTSA-2018-0067-11873; 83 FR 42986, 43234 (Aug. 24, 2018).
    \70\ See 83 FR 42986, 43234 (Aug. 24, 2018).
    \71\ 71 FR 17566, 17655-56 (Apr. 6, 2006); 83 FR 42986, 43234 
(Aug. 24, 2018).
---------------------------------------------------------------------------

    Fourth, ``[a]lmost all technologically feasible reduction of 
tailpipe emissions of carbon dioxide is achievable through improving 
fuel economy, thereby reducing both the consumption of fuel and the 
creation and emission of carbon dioxide.'' 49 CFR part 531, appx. B, 
section (a)(1)(D); 49 CFR part 533, appx. B, section (a)(1)(D).\72\ The 
South Coast Air Quality Management District (South Coast) commented 
that NHTSA previously proposed, in 2008, adopting similar regulatory 
text that used the word ``most'' instead of ``almost all.'' \73\ South 
Coast asserts that the 2008 proposal shows that NHTSA ``strains to 
exaggerate'' the overlap between greenhouse gas emissions standards and 
fuel economy standards.\74\ NHTSA disagrees. While South Coast points 
to hybrid electric vehicles and ZEVs, it offers no evidence to refute 
the fact that almost all technologically feasible reduction of tailpipe 
emissions of carbon dioxide is achievable through improving the fuel 
economy levels of the vehicles in question.
---------------------------------------------------------------------------

    \72\ 83 FR 42986, 43489 (Aug. 24, 2018).
    \73\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
    \74\ Id.
---------------------------------------------------------------------------

    Fifth, ``as a practical matter, regulating fuel economy controls 
the amount of tailpipe emissions of carbon dioxide, and regulating the 
tailpipe emissions of carbon dioxide controls fuel economy.'' 49 CFR 
part 531, appx. B, section (a)(1)(E); 49 CFR part 533, appx. B, section 
(a)(1)(E).\75\ No commenter disputed this statement. The National 
Automobile Dealers Association agreed, putting it this way: ``the 
physics and chemistry involved with fuel economy and GHG emissions 
standards are such that controlling fuel economy controls GHGs and 
controlling GHGs controls fuel economy.'' \76\ It is also worth noting 
that technology cannot reduce the amount of carbon dioxide produced by 
combusting one gallon of gas. Instead, only technology that reduces the 
amount of gas needed to drive one mile (fuel economy) will reduce the 
amount of carbon dioxide generated per mile.
---------------------------------------------------------------------------

    \75\ 83 FR 42986, 43489 (Aug. 24, 2018).
    \76\ National Automobile Dealers Association, Docket No. NHTSA-
2018-0067-12064.
---------------------------------------------------------------------------

    These statements in the regulatory appendix concerning the 
scientific relationship between automobile carbon dioxide emissions and 
fuel economy provide the foundation for NHTSA's preemption analysis. 
Due to this scientific relationship, which no commenter refuted, a 
regulation of tailpipe carbon dioxide emissions from automobiles that 
does not explicitly state that it is regulating fuel economy 
nevertheless has the effect of doing so. The label a State chooses to 
put on its regulations certainly is not dispositive in a preemption 
analysis. See, e.g., Nat'l Meat Ass'n. v. Harris, 565 U.S. 452, 464 
(2012). One comment, from the Northeast States for Coordinated Air Use 
Management (NESCAUM), asserted that ``California's GHG standards do not 
mention fuel economy or attempt to

[[Page 51316]]

regulate fuel economy.'' \77\ To such comments, the agencies must ask 
ourselves the age-old question: ``What's in a name?'' and conclude 
``[t]hat which we call a rose by any other name would smell as sweet.'' 
\78\ Arguments focused on form, or worse--labels--over substance are 
not persuasive. Moreover, it is indisputable that EPCA preemption 
reaches beyond explicit regulations of fuel economy and into 
regulations ``related to'' fuel economy. The words ``related to'' 
cannot be read out of the statute or narrowed in a way that undermines 
Congress's broad preemption intent.
---------------------------------------------------------------------------

    \77\ Northeast States for Coordinated Air Use Management 
(NESCAUM), Docket No. NHTSA-2018-0067-11691.
    \78\ W. Shakespeare, Romeo & Juliet, II, ii (47-48) (1597).
---------------------------------------------------------------------------

    It is a matter of undisputed fact that the more fuel a vehicle 
burns or consumes, the more carbon dioxide it emits. There is a 
necessary relation between the regulation of one side of this equation 
and the regulation of the other. In other words, improving fuel economy 
has two inherently related benefits: Reducing fuel consumption and 
reducing carbon dioxide emissions. State and local governments cannot 
evade the preemptive sweep of EPCA by emphasizing only one side of 
these benefits and downplaying or ignoring the other when describing 
their regulations.
    To further illustrate the situation, consider types of regulations 
for a swimming pool. If the pool has a hose on one side that is filling 
the pool and a hose on the other side that is draining the pool, you 
can regulate the water level in the pool by controlling either hose. 
Limiting the amount of water released by the inflow hose, is not itself 
a regulation of the outflow hose. But it is nonsensical to say that 
regulating the pool's inflow is not related to regulating its outflow. 
A regulation of either hose necessarily affects the level of water in 
the same pool. The Supreme Court has recognized preemption should 
appropriately apply in such contexts. See Rowe v. N.H. Motor Transp. 
Ass'n, 552 U.S. 364, 368, 72 (2008) (looking at effect of regulation to 
determine it was preempted even though ``it tells shippers what to 
choose rather than carriers what to do'' where Federal law preempted 
State laws ``related to a price, route, or service of any motor carrier 
. . . with respect to the transportation of property''); Engine Mfrs. 
Ass'n. v. South Coast Air Quality Mgmt. Dist., 541 U.S. 246, 255 (2004) 
(explaining that it ``would make no sense'' to allow a State regulation 
to evade preemption simply because it addressed the purchase, rather 
than manufacture, of a federally regulated product).

C. Importance of One National Standard

    To ensure uniform national fuel economy standards, Congress 
determined that it was appropriate to preempt States and local 
governments from adopting or enforcing laws or regulations related to 
the Federal standards. Effectuating Congress's goal requires NHTSA to 
address preemption. Preemption is necessary to the effectiveness of 
NHTSA's existing and forthcoming fuel economy standards and regulatory 
certainty into the future, specifically, one set of national standards. 
Congress made clear, through the required comprehensive balancing of 
factors and underlined by its inclusion of an express preemption 
provision, that State and local requirements impede the national fuel 
economy program. Thus, NHTSA is exercising its authority in this 
document, under 49 U.S.C. 32901 through 32903, to promulgate 
regulations to protect the integrity of the national program. This 
confirms the clear preemptive nature of NHTSA's standards, as stated in 
49 U.S.C. 329219 and provides additional clarity on the scope of 
preemption, to carry out NHTSA's statutory authority to set nationally 
applicable standards.
    A consistent refrain throughout many of the comments NHTSA received 
on its preemption proposal was the need for one national standard.\79\ 
Preemption provides for just that uniformity. Indeed, that was the very 
purpose for Congress's including the express preemption provision in 
EPCA.
---------------------------------------------------------------------------

    \79\ See, e.g., Alliance of Automobile Manufacturers, Docket No. 
NHTSA-2018-0067-12073; Association of Global Automakers, Docket No. 
NHTSA-2018-0067-12032.
---------------------------------------------------------------------------

    In enacting EPCA's preemption provision, Congress explicitly 
recognized the need to avoid a patchwork of requirements related to 
fuel economy standards, and gave NHTSA the exclusive authority to set 
and enforce fuel economy standards with discrete and limited exceptions 
as set forth in 49 U.S.C. 32919. NHTSA's exclusive authority is 
exercised through joint rulemaking with EPA for the very reason that 
tailpipe carbon dioxide emissions standards are directly and 
substantially related to fuel economy standards and apply concurrently 
to the same fleet of vehicles. This joint action enables the Federal 
government to administer its overlapping obligations while avoiding 
inconsistency. See Massachusetts v. EPA, 549 U.S. 497, 532 (2007).
    Recent developments in California provide good examples of the need 
for a national standard and the problem that Congress sought to address 
in enacting EPCA's preemption provision. After the agencies published 
the proposal, California amended its regulations such that 
manufacturers are bound to comply with requirements consistent with the 
no action alternative for model years 2021 through 2026,\80\ regardless 
of what the Federal standards are ultimately adopted. Moreover, even as 
to the existing Federal standard, California's regulations are 
impermissible under EPCA because only a Federal standard can apply 
nationally. State or local standards necessarily apply at the State and 
local level, and therefore are inherently inconsistent with the 
nationwide average standards pursuant to EPCA. See 49 U.S.C. 
32901(a)(5)-(6), (13). Likewise, State and local compliance regimes 
interfere with the national program of credits and shortfalls for 
nationwide fleet performance by making compliance across the country 
inordinately complicated, inefficient, and expensive. See id. 32903.
---------------------------------------------------------------------------

    \80\ 83 FR 42986, 42990 tbl. I-4 (Aug. 24, 2018).
---------------------------------------------------------------------------

    Despite a widespread shared belief in the importance of one 
national standard, NHTSA's proposal on preemption received a mix of 
support and opposition in comments. Some commenters weighed in on 
preemption largely only to emphasize the importance of having a 
national standard.\81\ Other commenters that supported the substance of 
the proposal agreed with NHTSA's analysis of both express and implied 
preemption, as well as the conclusion that both State laws that limit 
and State laws that prohibit carbon dioxide tailpipe emissions from 
automobiles, or have the direct or substantial effect of doing so, are 
preempted.\82\ On the other hand, those commenters that opposed the 
substance of the proposal asked NHTSA to withdraw and not finalize any 
regulatory text concerning preemption.\83\ Doing so would ignore the 
very purpose of EPCA's fuel economy provisions and NHTSA's statutory 
obligation under EPCA: To balance statutory factors in order to

[[Page 51317]]

establish standards that are ``the maximum feasible average fuel 
economy level that the Secretary decides the manufacturers can achieve 
in that model year.'' \84\ NHTSA disagrees with the comments that ask 
it to withdraw its proposal and not finalize any regulatory text on 
preemption. Given the present circumstances, failing to address this 
issue amounts to ignoring the existence of EPCA's preemption provision, 
and allowing for State and local requirements that interfere with 
NHTSA's statutory duty to set nationally consistent fuel economy 
standards.
---------------------------------------------------------------------------

    \81\ See, e.g., Toyota Motor North America, Docket No. NHTSA-
2018-0067-12150.
    \82\ See, e.g., Alliance of Automobile Manufacturers, Docket No. 
NHTSA-2018-0067-12073; Competitive Enterprise Institute, Docket No. 
NHTSA-2018-0067-12015.
    \83\ See, e.g., Joint Submission from the States of California 
et al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
    \84\ 49 U.S.C. 32902(a), (f).
---------------------------------------------------------------------------

    The rule NHTSA is adopting in this document, under its authority to 
implement a national automobile fuel economy program in 49 U.S.C. 32901 
through 32903, will ultimately provide needed certainty concerning 
preemption into the future. While EPCA's preemption provision has been 
in place for decades, the present circumstances demonstrate the need 
for greater clarity on this issue.
    NHTSA's statutory role is to set nationwide standards based on a 
reasoned balancing of statutory factors. State and local requirements--
unbound by these considerations--undermine NHTSA's ability to set 
standards applicable across the entire country. NHTSA is obliged to set 
standards at ``the maximum feasible average fuel economy level that the 
Secretary decides the manufacturers can achieve in that model year.'' 
49 U.S.C. 32902(a). The regulation NHTSA is finalizing in this document 
implements that authority in 49 U.S.C. 32902 by clarifying the State 
requirements that impermissibly interfere with its statutory role to 
set nationally applicable standards. As explained in the proposal, as a 
practical matter, State and local actors would generally only set 
requirements that have the effect of requiring a higher level of 
average fuel economy (lest their standards lack impact).\85\ That 
supposition has now been demonstrated by California's preemptive action 
to effectively set higher standards than the Federal standards, should 
the forthcoming final SAFE rule finalize anything lower than the no 
action alternative described in the NPRM for model years 2021 through 
2026. This state of regulatory inconsistency--and even the potential 
for such inconsistency--is anathema to the express terms and purposes 
of EPCA, which does not even permit States to set fuel economy 
standards identical to those set by NHTSA in accordance with the 
statutory requirements.\86\ Even identical standards interfere with the 
national program by imposing requirements not applicable to nationwide 
fleets and impose compliance regimes inconsistent with EPCA. See, e.g., 
49 U.S.C. 32903 (establishing specific requirements for earning and 
using credits based on nationwide average fuel economy performance).
---------------------------------------------------------------------------

    \85\ 83 FR 42986, 43238 (Aug. 24, 2018).
    \86\ See 49 U.S.C. 32902(a), 32919(a).
---------------------------------------------------------------------------

    California's recent action also demonstrates disregard for NHTSA's 
mandate to set standards in no more than 5 model year increments.\87\ 
To avoid inconsistent State standards, California's regulatory change 
would require NHTSA to adopt the most stringent of nine regulatory 
alternatives it considered in the proposal.\88\ NHTSA did not bind 
itself in any way to that regulatory alternative in its 2012 final 
rule, and to do so would have been contrary to law.\89\
---------------------------------------------------------------------------

    \87\ See id. 32902(a), (b)(3)(B).
    \88\ See Cal. Code Regs. tit. 13, section 1961.3(c); see 83 FR 
42986, 42990 tbl. I-4 (Aug. 24, 2018) (listing augural standards as 
baseline/no action alternative, and eight other alternatives under 
consideration).
    \89\ See 49 U.S.C. 32902(b)(3)(B); 77 FR 62624, 62627 (Oct. 15, 
2012).
---------------------------------------------------------------------------

    Automakers must comply with the Federal fuel economy and GHG 
emissions requirements, and do so at significant cost. States like 
California that do not abide by the constraints of Federal law, and 
instead set inconsistent or even duplicative requirements related to 
fuel economy standards unjustifiably increase manufacturers' compliance 
costs, which must be either passed along to consumers or absorbed by 
the industry. Clarity on preemption is therefore essential to ensure 
the industry has the ability to efficiently expend its resources to 
comply with the nationally applicable standards determined by the 
Federal government in light of the Federal statutory factors that must 
be balanced, without the need to separately account for or comply with 
State or local requirements.
    While it is of course ideal for States to independently abide by 
the constraints of Federal law, this does not reflect the current state 
of affairs. NHTSA's awareness of laws and regulations already in place, 
as well as the public comments it received in response to its proposal, 
confirm the need for additional clarity on the boundaries of EPCA 
preemption. Wrongly decided decisions by district courts in California 
and Vermont (appeals of which were abandoned as a condition of the 
negotiated agreement prior to the 2012 rulemaking), as well as NHTSA's 
own silence on this issue in recent years, are sowing confusion, 
emphasizing the need for the clarity provided by this final rule 
affirmatively establishing One National Program.\90\
---------------------------------------------------------------------------

    \90\ As described in the proposal, NHTSA's views on preemption 
are longstanding. However, NHTSA has not directly addressed 
preemption in its most recent CAFE rulemakings. South Coast disputes 
that NHTSA's views on preemption are longstanding, pointing to legal 
and factual developments since. South Coast Air Quality Management 
District, Docket No. NHTSA-2018-0067-11813. That NHTSA has not 
opined on developments does not mean that its views have changed. 
South Coast also points to some wording changes to argue that NHTSA 
has shifted positions. NHTSA disagrees. It has consistently held the 
position that State regulation of tailpipe greenhouse gas emissions 
from automobiles is preempted, and South Coast has not identified 
any statements to the contrary. In any event, the fact that NHTSA 
has not addressed EPCA preemption in its most recent rulemakings 
highlights the need to address the issue without further delay.
---------------------------------------------------------------------------

D. NHTSA's Final Rule Provides Clarity and Certainty on EPCA Preemption

    This final rule provides needed clarity on the scope of EPCA 
preemption. NHTSA is adopting regulatory text, including a detailed 
appendix, in addition to discussing this issue in the preamble to the 
rule, specifically to provide clarity on EPCA's preemption provision.
    NHTSA rejects the assertion advanced in one comment that NHTSA did 
not provide notice and a fair opportunity to comment on its 
interpretation of EPCA preemption.\91\ Any such suggestion is negated 
by the host of commenters that addressed the issue of preemption in 
response to the proposal. NHTSA proposed codifying its preemption 
interpretation in parts 531 and 533, and all commenters were explicitly 
asked to comment on the specific proposed regulatory text as well as on 
the explanation of NHTSA's interpretation set out in the preamble to 
the NPRM.
---------------------------------------------------------------------------

    \91\ Joint Submission from the States of California et al. and 
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
---------------------------------------------------------------------------

    NHTSA also disagrees with a comment from the California Air 
Resources Board (CARB) that asserted the proposal was not clear on the 
scope of preemption.\92\ The regulatory text articulates the boundaries 
of both express and implied preemption, with appropriate limitation to 
State or local laws or regulations that: (1) Regulate or prohibit 
tailpipe carbon dioxide emissions from automobiles, or (2) have the 
direct or substantial effect of regulating or prohibiting tailpipe 
carbon

[[Page 51318]]

dioxide emissions from automobiles or automobile fuel economy. In the 
proposal, NHTSA provided examples of laws that would not be 
preempted.\93\ CARB did not identify any examples of laws where 
additional clarity was needed.
---------------------------------------------------------------------------

    \92\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; Joint Submission from the States of California et 
al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
    \93\ 83 FR 42986, 43235 (Aug. 24, 2018).
---------------------------------------------------------------------------

    It should not be difficult for States or local governments to 
ascertain whether their laws or regulations regulate or prohibit 
tailpipe carbon dioxide emissions. As NHTSA explained in the proposal 
and reiterates in this document, both requirements specific to tailpipe 
carbon dioxide emissions from automobiles and those that address all 
tailpipe greenhouse gas emissions from automobiles are preempted, given 
that carbon dioxide emissions constitute the overwhelming majority of 
those emissions.\94\ Likewise, ZEV mandates are also preempted.\95\
---------------------------------------------------------------------------

    \94\ Id. at 43234.
    \95\ See id. at 43238-39.
---------------------------------------------------------------------------

    NHTSA also does not believe it should be difficult for States or 
local governments to determine if their laws or regulations have the 
direct or substantial effect of regulating or prohibiting tailpipe 
carbon dioxide emissions from automobiles or automobile fuel 
economy.\96\ To aid in this effort, in the proposal, NHTSA described 
requirements that would not be preempted because they have only 
incidental impact on fuel economy or carbon dioxide emissions.\97\ The 
examples NHTSA provided were child seat mandates and laws governing 
vehicular refrigerant leakage.\98\
---------------------------------------------------------------------------

    \96\ South Coast argued that EPCA preemption would not reach 
possible State and local requirements concerning lease arrangements 
or requirements for used vehicles. South Coast Air Quality 
Management District, Docket No. NHTSA-2018-0067-11813. NHTSA does 
not agree. EPCA preempts requirements related to fuel economy 
standards or average fuel economy standards for automobiles covered 
by an average fuel economy standard under EPCA. If a State 
requirement falls within this scope, it is preempted. For example, a 
State could not prohibit dealers from leasing automobiles or selling 
used automobiles unless they meet a fuel economy standard.
    \97\ 83 FR 42986, 43235 (Aug. 24, 2018).
    \98\ Id.
---------------------------------------------------------------------------

    Moreover, contrary to assertions in some comments, NHTSA's adoption 
of regulatory text does provide a limiting principle \99\ and is not 
overbroad.\100\ Congress set the extraordinarily broad boundaries of 
preemption in EPCA, where it specified that State and local laws 
``related to fuel economy standards'' are preempted. The words 
``related to'' have meaning and cannot be read out of the statute. To 
the extent that questions of interpretation remain about the scope of 
preemption, that is a consequence of the statute, and is far from 
unique--particularly with respect to the ``related to'' language, which 
Congress has used in multiple contexts.\101\ The Supreme Court has 
opined on the meaning of similar terms. However, NHTSA recognizes the 
concerns about the appropriate limitations of preemption. 
Notwithstanding the broad sweep of EPCA preemption, NHTSA intends to 
assert preemption only over State or local requirements that directly 
or substantially affect corporate average fuel economy standards.
---------------------------------------------------------------------------

    \99\ Joint Submission from the States of California et al. and 
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
    \100\ Id.; California Air Resources Board (CARB), Docket No. 
NHTSA-2018-0067-11873; South Coast Air Quality Management District, 
Docket No. NHTSA-2018-0067-11813.
    \101\ See Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 370-73 
(2008); Am. Airlines v. Wolens, 513 U.S. 219, 226-27 (1995); Shaw v. 
Delta Airlines, Inc., 463 U.S. 85, 97 (1983).
---------------------------------------------------------------------------

    Through its adoption of specific regulatory text in this document, 
NHTSA is providing guidance on the boundary set by Congress, as well as 
under principles of implied preemption. Notably, NHTSA has not 
concluded that implied preemption broadens the scope of preemption 
established by Congress. As NHTSA recognized in its proposal, some 
greenhouse gas emissions from automobiles have no relation to fuel 
economy and therefore may be regulated by States or local governments 
without running afoul of EPCA preemption. NHTSA provided examples of 
State or local requirements that are not preempted. It also 
specifically invited comment on the extent to which State or local 
requirements can have some incidental impact on fuel economy or carbon 
dioxide emissions without being related to fuel economy standards, and 
thus are not preempted. NHTSA did not receive any directly responsive 
comments regarding this issue, including from State and local 
government commenters, suggesting that they do not currently have 
questions about how preemption would apply to their laws or 
regulations.\102\
---------------------------------------------------------------------------

    \102\ Some commenters did assert that California's greenhouse 
gas emissions standards or ZEV mandates have only an incidental 
impact on fuel economy, or that NHTSA was not clear why those 
requirements have more than an incidental impact on fuel economy. 
California Air Resources Board (CARB), Docket No. NHTSA-2018-0067-
11873; Northeast States for Coordinated Air Use Management 
(NESCAUM), Docket No. NHTSA-2018-0067-11691; South Coast Air Quality 
Management District, Docket No. NHTSA-2018-0067-11813. NHTSA 
disagrees. It discussed these issues in detail in parts b, f, and g 
of the preemption discussion of the proposed rule and incorporates 
those discussions here. 83 FR 42986, 43234, 37-39 (Aug. 24, 2018).
---------------------------------------------------------------------------

    As an additional limiting principle, NHTSA reiterates the statement 
in its proposal that only a portion of a law or regulation would be 
preempted, where possible. This would be the case if the law or 
regulation combined multiple severable elements that were allowable and 
not allowable, such as with a regulation of both vehicular refrigerant 
leakage and tailpipe carbon dioxide emissions--refrigerant leakage 
requirements could remain in place while tailpipe carbon dioxide 
emissions regulations would necessarily be preempted.
    NHTSA rejects the argument made by certain commenters that the 
presumption against preemption applies in this context.\103\ The 
presumption is not appropriate given EPCA's express statutory 
preemption provision. See Puerto Rico v. Franklin Cal. Tax-Free Trust, 
136 S. Ct. 1938, 1946 (2016) (explaining that ``because the statute 
`contains an express pre-emption clause,' we do not invoke any 
presumption against pre-emption but instead `focus on the plain wording 
of the clause, which necessarily contains the best evidence of 
Congress' pre-emptive intent.' '') (quoting Chamber of Commerce of 
United States of Am. v. Whiting, 563 U.S. 582, 594 (2011)).
---------------------------------------------------------------------------

    \103\ See California Air Resources Board (CARB), Docket No. 
NHTSA-2018-0067-11873; Center for Biological Diversity et al., 
Docket No. NHTSA-2018-0067-12000; South Coast Air Quality Management 
District, Docket No. NHTSA-2018-0067-11813.
---------------------------------------------------------------------------

    NHTSA reaffirms the view that EPCA's express preemption provision 
is broad and clear. NHTSA's review and assessment of comments has not 
changed its view. Some comments noted that the statute specifically 
preempts laws or regulations related to fuel economy standards.\104\ 
They assert that States and local governments are unconstrained by EPCA 
preemption in regulating future model year vehicles, before they are 
covered by a fuel economy standard issued by NHTSA. NHTSA disagrees.
---------------------------------------------------------------------------

    \104\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813; see also Joint Submission from the States of 
California et al. and the Cities of Oakland et al., Docket No. 
NHTSA-2018-0067-11735.
---------------------------------------------------------------------------

    EPCA preempts State and local laws and regulations that relate to: 
(1) Fuel economy standards, or (2) average fuel economy standards for 
automobiles covered by an average fuel economy standard under 49 U.S.C. 
Chapter 329. Currently, automobiles through model year 2021 are covered 
by an average fuel economy standard under Chapter 329.\105\ NHTSA will 
continue setting standards for future model years, pursuant to the 
mandate in 49 U.S.C. 32902(a) that ``[a]t least 18 months

[[Page 51319]]

before the beginning of each model year, the Secretary of 
Transportation shall prescribe by regulation average fuel economy 
standards for automobiles manufactured by a manufacturer in that model 
year.'' \106\ NHTSA prescribes ``average fuel economy standards for at 
least 1, but not more than 5, model years.'' 49 U.S.C. 32902(b)(3)(B). 
State and local requirements that address automobiles beyond model year 
2026 are therefore preempted if they relate to ``fuel economy 
standards'' that NHTSA is required to establish in the future. To 
conclude otherwise would be to make the impermissible assumption that 
NHTSA will not carry out Congress's command.
---------------------------------------------------------------------------

    \105\ See 77 FR 62624, 62637 (Oct. 15, 2012).
    \106\ 49 U.S.C. 32902(a) (emphasis added).
---------------------------------------------------------------------------

    The regulation NHTSA is finalizing in this document implements that 
authority in 49 U.S.C. 32902 by making clear that State and local 
requirements that relate to fuel economy standards for future model 
year vehicles conflict with NHTSA's ability to set nationally 
applicable standards for those vehicles in the future and thus are 
impliedly preempted. Manufacturers make design decisions well in 
advance of production, as Congress recognized by adding ``lead time'' 
provisions to the statute. State and local requirements for automobiles 
not yet covered by a NHTSA standard could force manufacturers into 
plans that are not economically practical or otherwise inconsistent 
with EPCA's statutory factors--since States and local governments are 
not bound by those considerations. By the time future model year 
vehicles are produced, they will be covered by a NHTSA standard. If 
States or local governments were permitted to issue regulations related 
to fuel economy for future model year vehicles, manufacturers would at 
least act at risk of running afoul of those non-Federal regulations. At 
least some manufacturers would undoubtedly feel compelled to conform 
with such non-Federal regulations until the Federal government sets its 
own standards. Even if non-Federal regulations are not ultimately 
enforceable as to produced vehicles (since a Federal fuel economy 
standard will be adopted, in time), they clearly conflict with the 
congressionally imposed constraint of issuing standards for not more 
than 5 model years. Such far-reaching regulations are based on 
predictions about the future that are inevitably less reliable the 
further in time they reach. Manufacturers are therefore put in an 
untenable position of either planning towards State and local 
regulations based on potentially outdated or unrealistic expectations 
about the future, or ignoring them before knowing the Federal standards 
that will eventually apply and acting at risk of enforcement by non-
Federal actors. Moreover, different States could impose different and 
conflicting fuel economy requirements on manufacturers for future model 
years, a result directly at odds with the single national standard 
established by EPCA. Any of these scenarios demonstrates that the 
position that EPCA preemption does not reach regulation of model year 
vehicles not currently covered by a NHTSA standard is flawed. State or 
local requirements related to fuel economy standards for any model year 
automobiles are preempted.
    The regulatory text and preamble discussion clearly articulates 
NHTSA's views on the meaning of ``related to'' in EPCA's express 
preemption provision, which are confirmed following NHTSA's review and 
assessment of comments. As discussed in the proposal, EPCA is not 
unique in using the phrase ``related to'' to set the scope of 
preemption.\107\ NHTSA described prior Supreme Court case law 
interpreting this phrase as broad and including such conceptual 
relationships as having an ``association with'' or ``connection to.'' 
In its comments, South Coast asserted that NHTSA's discussion was 
``legally erroneous'' because it did not include ``discussion and 
analysis'' of a line of Supreme Court cases that began with New York 
State Conference of Blue Cross v. Travelers Ins. Co., 514 U.S. 645 
(1995).\108\ South Coast's criticism is unfounded; NHTSA directly 
recognized the Travelers line of cases which look to the objectives of 
the statute as a guide to the scope of preemption. See Travelers, 514 
U.S. at 656. In the proposal, NHTSA specifically applied this analysis 
to the CAFE context and cited a 1997 case quoting Travelers.\109\ The 
Travelers line of cases supports NHTSA's position on preemption. As 
NHTSA explained in the proposal, EPCA's preemption provision 
demonstrates that one of Congress's objectives was to create a single 
set of national fuel economy standards. The language Congress enacted 
preempts all State and local laws and regulations that relate to fuel 
economy standards, and does not exempt even State requirements that are 
identical to Federal requirements. Moreover, NHTSA's proposal was not 
intended as a comprehensive recitation of all case law addressing the 
use of ``related to'' in statutory preemption provisions. There are 
many Supreme Court decisions that support the breadth of that language 
beyond those specifically cited in the proposal.\110\ For example, in 
Rowe, the Court recognized that a State statute that forbid certain 
retailers from employing a delivery service unless it followed certain 
delivery procedures was preempted by the Federal Aviation 
Administration Authorization Act, which preempted States from enacting 
or enforcing laws ``related to a price, route, or service of any motor 
carrier.'' Rowe, 552 U.S. at 368, 71-73. The Court recognized that the 
State law was directed at shippers rather than carriers, but found that 
the effect of the requirements impacted carriers. Id. at 372. The Court 
explained that State laws ``whose `effect' is `forbidden' under federal 
law are those with a `significant impact' on carrier rates, routes or 
services.'' Id. at 375 (emphasis in original). Likewise, here, 
regulation of tailpipe carbon dioxide emissions has a direct and 
undeniably substantial effect on fuel economy.
---------------------------------------------------------------------------

    \107\ 83 FR 42986, 43233 (Aug. 24, 2018).
    \108\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
    \109\ 83 FR 42986, 43233 (Aug. 24, 2018).
    \110\ See, e.g., Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 
367-72 (2008).
---------------------------------------------------------------------------

    However, NHTSA, of course, agrees that ``related to'' is not 
unlimited.\111\ NHTSA specifically discussed the limitations of 
preemption in its proposal, which only seeks to preempt State or local 
requirements that directly or substantially affect corporate average 
fuel economy. NHTSA also provided specific examples of State laws and 
regulations that would not be preempted, as well as clearly 
articulating some that are preempted. As discussed above, the 
regulatory text NHTSA is adopting in this document is appropriately 
limited and consistent with the scope of preemption established by 
Congress.
---------------------------------------------------------------------------

    \111\ As the Supreme Court has stated, ``the breadth of the 
words `related to' does not mean the sky is the limit.'' Dan's City 
Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260 (2013).
---------------------------------------------------------------------------

    With respect to implied preemption, NHTSA agrees with comments that 
assert it is a fact-driven analysis.\112\ However, NHTSA disagrees that 
there was an insufficient factual record for it to evaluate the 
conflict either at the time of the proposal or now.\113\ NHTSA is well 
aware of State regulations of tailpipe greenhouse gas emissions 
(including carbon dioxide) and ZEV mandates, and described several of 
these in the proposal. The foundational

[[Page 51320]]

factual analysis involves the scientific relationship between 
automobile fuel economy and automobile tailpipe emissions of carbon 
dioxide. NHTSA discussed this scientific relationship in detail. No 
commenter contested the scientific and mathematical relationship 
between them.
---------------------------------------------------------------------------

    \112\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; Joint Submission from the States of California et 
al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
    \113\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
---------------------------------------------------------------------------

    Contrary to CARB's contention in its comments, the fact that NHTSA 
acknowledged that some State requirements that incidentally affect 
greenhouse gas emissions are not preempted does not demonstrate that 
there is an insufficient record for finding that other laws do pose a 
conflict to NHTSA's statutory role to set nationwide fuel economy 
standards for automobiles.\114\ To the contrary, NHTSA carefully 
considered and acknowledged the limitations of EPCA preemption by 
discussing a variety of types of laws, and providing specific examples.
---------------------------------------------------------------------------

    \114\ Id.
---------------------------------------------------------------------------

    NHTSA also disagrees with the claim made in some comments that it 
does not have delegated authority to issue a regulation on this topic, 
and is not owed deference or weight for its regulation implementing 
EPCA's express preemption provision or the conflict resulting from 
State or local laws or regulations.\115\ Congress gave the Secretary of 
Transportation express authorization to prescribe regulations to carry 
out her duties and powers. 49 U.S.C. 322(a).\116\ NHTSA has delegated 
authority to carry out the Secretary's authority under Chapter 329 of 
Title 49, which encompasses EPCA's preemption provision, as well as 
EISA.\117\ NHTSA therefore has clear authority to issue this regulation 
under 49 U.S.C. 32901 through 32903 to effectuate a national automobile 
fuel economy program unimpeded by prohibited State and local 
requirements. As explained here, the statute is clear on the question 
of preemption, and NHTSA must carry it out. See Coventry Health Care of 
Missouri, Inc. v. Nevils, 137 S. Ct. 1190, 1193 n.3 (2017) (holding 
that preemption applies and ``the statute alone resolves this 
dispute''). However, to the extent there is any ambiguity, NHTSA is the 
expert agency and its regulation adopted in this document is entitled 
to deference.\118\ As explained in the proposal, NHTSA is the expert 
agency given authority to administer the Federal fuel economy program 
and has expert authority to interpret and apply the requirements of 
EPCA, including preemption. See Medtronic, Inc. v. Lohr, 518 U.S. 470 
(1996) (``Because the FDA is the federal agency to which Congress has 
delegated its authority to implement the provisions of the Act, the 
agency is uniquely qualified to determine whether a particular form of 
state law `stands as an obstacle to the accomplishment and execution of 
the full purposes and objectives of Congress,' Hines v. Davidowitz, 312 
U.S. 52, 67, 61 S. Ct. 399, 404, 85 L. Ed. 581 (1941), and, therefore, 
whether it should be pre-empted.''); see also Nat'l Rifle Ass'n v. 
Reno, 216 F.3d 122 (D.C. Cir. 2000) (rejecting argument that Attorney 
General lacked authority to issue regulation that she described as 
clarifying that certain State requirements were not preempted by 
Federal law). This is particularly true given the scientific nature of 
the relationship between fuel economy and greenhouse gas emissions. See 
Geier v. Am. Honda Motor Co., Inc., 529 U.S. 861 (2000) (``Congress has 
delegated to DOT authority to implement the statute; the subject matter 
is technical; and the relevant history and background are complex and 
extensive. The agency is likely to have a thorough understanding of its 
own regulation and its objectives and is `uniquely qualified' to 
comprehend the likely impact of state requirements.'').
---------------------------------------------------------------------------

    \115\ Id.; Center for Biological Diversity et al., Docket No. 
NHTSA-2018-0067-12000; Joint Submission from the States of 
California et al. and the Cities of Oakland et al., Docket No. 
NHTSA-2018-0067-11735; South Coast Air Quality Management District, 
Docket No. NHTSA-2018-0067-11813.
    \116\ 49 U.S.C. 322(a) specifically states: ``The Secretary of 
Transportation may prescribe regulations to carry out the duties and 
powers of the Secretary. An officer of the Department of 
Transportation may prescribe regulations to carry out the duties and 
powers of the officer.''
    \117\ 49 CFR 1.95(a), (j).
    \118\ See, e.g., Chevron USA, Inc. v. Nat'l Res. Defense 
Council, Inc., 467 U.S. 837, 843-45 (1984).
---------------------------------------------------------------------------

    NHTSA is also finalizing its view that its regulation concerning 
EPCA preemption is independent and severable from any particular CAFE 
standards adopted by NHTSA. NHTSA's implementation of its authority to 
set nationally applicable fuel economy standards under 49 U.S.C. 32902, 
by clarifying the scope of preemption, is separate from its decision on 
the appropriate standards for any given model years. No commenter 
disagreed that this portion of the proposed rule is severable. The 
Alliance of Automobile Manufacturers agreed, noting case law stating 
that whether a regulation is severable depends on the agency's intent 
and whether the remainder of the regulation may still function 
sensibly.\119\ Both these considerations support severability here. 
Given the lack of any comments to the contrary, NHTSA is finalizing its 
conclusion that the standards for model year 2021 through 2026 
automobiles are independent of and severable from the decision NHTSA is 
finalizing in this document on EPCA preemption. Moreover, given the 
need for clarity on preemption, and in order to give effect to existing 
standards established pursuant to 49 U.S.C. 32902, NHTSA is issuing 
this final rule now before making a final determination on the 
standards portion of the proposal.
---------------------------------------------------------------------------

    \119\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2018-0067-12073.
---------------------------------------------------------------------------

E. Direct and Substantial Relationship Between ZEV Mandates and Fuel 
Economy Standards

    NHTSA is also finalizing its conclusion that a State law or 
regulation that either explicitly prohibits tailpipe carbon dioxide 
emissions from automobiles or has the direct or substantial effect of 
doing so is preempted, both pursuant to the express preemption 
provision in 49 U.S.C. 32919 and implied preemption, as an obstacle to 
NHTSA's national program pursuant to 49 U.S.C. 32901-32903.
    As explained in greater detail in the proposal, carbon dioxide 
emissions constitute the overwhelming majority of tailpipe carbon 
emissions.\120\ The only feasible way of eliminating tailpipe carbon 
dioxide emissions altogether is to eliminate the use of fossil fuel. 
Thus, regulations that require a certain number or percentage of a 
manufacturer's fleet of vehicles sold in a State to be ZEVs that 
produce no carbon dioxide tailpipe emissions necessarily affect the 
fuel economy achieved by the manufacturer's fleet as well as the 
manufacturer's strategy to comply with applicable standards, and are 
therefore preempted under EPCA. These regulations therefore have just 
as a direct and substantial impact on corporate average fuel economy as 
regulations that explicitly eliminate carbon dioxide emissions, and are 
therefore preempted. NHTSA described types of ZEV mandates in detail in 
its proposal, including California's ZEV mandate, which has been 
adopted by ten other States.\121\
---------------------------------------------------------------------------

    \120\ 83 FR 42986, 43234 (Aug. 24, 2018).
    \121\ See id. at 43239. At the time of the proposal, nine States 
had adopted California's ZEV mandate. Since that time, a tenth 
State--Colorado--has also done so. https://www.colorado.gov/pacific/cdphe/aqcc (indicating that ZEV standards were adopted on August 16, 
2019).
---------------------------------------------------------------------------

    ZEV mandates force the development and commercial deployment of 
ZEVs, irrespective of the technological feasibility or economic 
practicability of doing so. The Alliance of Automobile Manufacturers 
commented that this interference with NHTSA's balancing of

[[Page 51321]]

statutory factors and forced adoption of specific design approaches are 
grounds for finding ZEV mandates preempted.\122\ NHTSA agrees.
---------------------------------------------------------------------------

    \122\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2018-0067-12073.
---------------------------------------------------------------------------

    In setting fuel economy standards, among the factors that NHTSA 
must consider are technological feasibility and economic 
practicability. 49 U.S.C. 32902(f). NHTSA is also required to set 
performance-based standards, and not design mandates.\123\ See 49 
U.S.C. 32902(b)(2). These considerations are at odds with ZEV mandates.
---------------------------------------------------------------------------

    \123\ South Coast asserts that ZEV mandates are performance 
based because any vehicle meeting the requirements can be certified 
as a ZEV. South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813. But, it is inherent that the requirements--
ZEV means zero-emissions vehicle--dictate a particular design. In 
any event, for the reasons described above, ZEV mandates are related 
to fuel economy standards however framed.
---------------------------------------------------------------------------

    NHTSA disagrees with comments that expressed the view that ZEV 
mandates are not related to fuel economy standards because ZEVs emit no 
criteria pollutants or greenhouse gases.\124\ Just as a State may not 
require a specific level of tailpipe carbon dioxide emissions from 
automobiles, since doing so effectively sets a specific level of fuel 
economy, a State may not prohibit tailpipe carbon dioxide emissions 
from automobiles. That is the equivalent of setting a specific 
emissions level--zero, which also prohibits the use of fossil fuel. In 
fuel economy terms, that is akin to requiring a vehicle to having the 
maximum conceivable level of fuel economy. A prohibition on ozone-
forming emissions has the same effect, since the only vehicles capable 
of emitting no ozone-forming emissions are vehicles that do not use 
fossil fuels. As NHTSA explained, this type of regulation poses a 
direct conflict with EPCA, particularly as it relates to requiring a 
percentage of technological fleet penetration--represented by credits 
or actual vehicles--that an automaker must distribute into a State. ZEV 
mandates force investment in specific technology (battery electric and 
fuel cell technology) rather than allowing manufacturers to improve 
fuel economy by whatever technological path they choose, allowing them 
to pursue more cost-effective technologies that better reflect consumer 
demand, as is the case under the CAFE program. ZEV mandates also create 
an even more fractured regulatory regime. As NHTSA explained in the 
proposal, manufacturers must satisfy ZEV mandates in each State 
individually.\125\
---------------------------------------------------------------------------

    \124\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
    \125\ 83 FR 42986, 43239 (Aug. 24, 2018); see Competitive 
Enterprise Institute, Docket No. NHTSA-2018-0067-12015.
---------------------------------------------------------------------------

    NHTSA also disagrees with a comment that argued ZEV mandates are 
not preempted because the definition of fuel economy in EPCA is in 
reference to gasoline or equivalent fuel.\126\ EPCA preempts State and 
local requirements related to fuel economy standards. That ZEV mandates 
are not themselves expressed as mile-per-gallon standards for fossil-
fuel powered vehicles is not dispositive. NHTSA explained the 
relationship between ZEV mandates and fuel economy standards in detail 
in the proposal and reiterates that discussion here.\127\
---------------------------------------------------------------------------

    \126\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
    \127\ See 83 FR 42986, 43238-39 (Aug. 24, 2018).
---------------------------------------------------------------------------

    Many commenters expressed support for ZEV mandates as matter of 
policy.\128\ NHTSA does not take issue with those policy objectives to 
the extent they do not conflict with EPCA or otherwise impermissibly 
interfere with the Federal regulation of fuel economy. NHTSA notes that 
States and local governments are able to continue to encourage ZEVs in 
many different ways, such as through investments in infrastructure and 
appropriately tailored incentives.\129\ States and local governments 
cannot adopt or enforce regulations related to fuel economy standards, 
which include ZEV mandates, but they are able to pursue their policy 
preferences, as long as the manner in which they do so does not 
conflict with Federal law.
---------------------------------------------------------------------------

    \128\ National Coalition for Advanced Transportation (NCAT), 
Docket No. NHTSA-2018-0067-11969; Union of Concerned Scientists, 
Docket No. NHTSA-2018-0067-12039.
    \129\ Certain incentives are preempted by EPCA. See Metro. 
Taxicab Bd. of Trade v. City of New York, 615 F.3d 152 (2d Cir. 
2010) (holding that New York City rule that incentivized hybrid 
taxis by allowing taxi owners to charge more for the lease of hybrid 
vehicles were ``based expressly on the fuel economy of a leased 
vehicle, [and] plainly fall within the scope of the EPCA preemption 
provision.'').
---------------------------------------------------------------------------

F. EISA Did Not Narrow or Otherwise Alter EPCA Preemption

    NHTSA reiterates, as it discussed in the proposal, that EISA did 
not narrow the express preemption clause in 49 U.S.C. 32919. In fact, 
EISA did not alter EPCA's express preemption clause in any way. As a 
factual matter, Congress neither amended or nor repealed EPCA's 
preemption clause with the enactment of EISA. EISA's savings clause did 
not amend EPCA. The savings clause, codified at 42 U.S.C. 17002, 
states: ``Except to the extent expressly provided in this Act or an 
amendment made by this Act, nothing in this Act or an amendment made by 
this Act supersedes, limits the authority provided or responsibility 
conferred by, or authorizes any violation of any provision of law 
(including a regulation), including any energy or environmental law or 
regulation.'' \130\
---------------------------------------------------------------------------

    \130\ One commenter pointed out that the proposal did not 
include the clause before the first comma when it quoted the 
language of the savings provision. South Coast Air Quality 
Management District, Docket No. NHTSA-2018-0067-11813. However, 
NHTSA disagrees with the commenter that the introductory clause has 
a substantive impact on this issue. That clause states: ``Except to 
the extent expressly provided in this Act or an amendment made by 
this Act . . .'' But, EISA did not expressly authorize States to 
regulate or prohibit tailpipe greenhouse gas emissions from 
automobiles.
---------------------------------------------------------------------------

    As described in the proposal, EISA's savings clause does not expand 
any pre-existing authority. Instead, the clause expressly states that 
it did not impose a new limitation on such authority. By its plain 
text, EISA also does not authorize any violation of any provision of 
law. This includes EPCA's express preemption clause. Thus, activities 
prohibited by the express preemption clause before EISA, such as State 
laws related to fuel economy standards, continued to be prohibited 
after EISA.
    The text of the savings clause is what controls its meaning, not 
statements by individual Members of Congress. South Coast claims that 
NHTSA did not discuss such statements in detail, including statements 
by Senator Feinstein.\131\ NHTSA did recognize in the proposal that the 
Congressional Record contains statements by certain Members of Congress 
about their individual views, but explained that such statements lack 
authority. As NHTSA explained in the proposal, such statements cannot 
expand the scope of the savings clause or clarify it. Individual 
Members, even those who may have played a lead role in drafting a 
particular bill, cannot speak for the body of Congress as a whole.\132\ 
NHTSA interprets the statutory language based on the words actually 
adopted by both Houses and signed by the President.
---------------------------------------------------------------------------

    \131\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
    \132\ N.L.R.B. v. SW Gen., Inc., 137 S. Ct. 929, 942-43 (2017) 
(``Passing a law often requires compromise, where even the most firm 
public demands bend to competing interests. What Congress ultimately 
agrees on is the text that it enacts, not the preferences expressed 
by certain legislators. . . .[F]loor statements by individual 
legislators rank among the least illuminating forms of legislative 
history.'' (citations omitted)).
---------------------------------------------------------------------------

    NHTSA likewise does not find persuasive the argument that Congress 
did not enact additional statutory language in EISA preempting 
California from regulating tailpipe greenhouse gas

[[Page 51322]]

emissions from automobiles. A comment from three Senators provides 
documents related to potential proposals to do so.\133\ There are many 
reasons for Congress not to adopt proposals set forward by one interest 
group or another, including, of course, because they were unnecessary. 
That is the case here where EPCA's preemption provision already 
prevented States from adopting and enforcing requirements related to 
fuel economy standards.
---------------------------------------------------------------------------

    \133\ U.S. Senators Tom Carper, Diane Feinstein and Edward J. 
Markey, Docket No. NHTSA-2018-0067-11938
---------------------------------------------------------------------------

    Given the words of the savings clause, NHTSA rejects the argument 
made by South Coast that the ``EISA saving provision designedly narrows 
EPCA's express preemption provision, and Congress intended this 
result.'' \134\ The savings clause did not amend the preemption 
provision in EPCA. Moreover, what the savings clause actually says is 
that it does not limit authority. If a regulation is preempted by EPCA, 
a State has no authority to enforce it, and EISA did not change that 
status quo. If Congress wanted to amend the broad and clear express 
preemption provision in EPCA, it could have and would have done so. It 
did not.
---------------------------------------------------------------------------

    \134\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
---------------------------------------------------------------------------

    Because NHTSA disagrees that States could permissibly regulate 
tailpipe greenhouse gas emissions from automobiles prior to EISA, it 
also disagrees with comments that argue that Congress ``preserved'' the 
ability of States to do so through the savings clause (or, 
alternatively, that efforts to ``revoke'' such preexisting authority 
failed).\135\
---------------------------------------------------------------------------

    \135\ Joint Submission from the States of California et al. and 
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
---------------------------------------------------------------------------

    NHTSA also disagrees with a comment by South Coast that argues that 
EISA's savings provision forecloses implied preemption.\136\ The 
specific words that South Coast points to are the opening clause: 
``Except to the extent expressly provided in this Act or an amendment 
made by this Act.'' This language does not address preemption under 
EPCA. That introductory clause merely modifies the remainder of the 
savings provision, which goes on to say that ``nothing in this Act or 
an amendment made by this Act . . . limits the authority provided . . . 
or authorizes any violation of any provision of law . . . .'' This 
statutory language prevents EISA from limiting preexisting authority or 
responsibility conferred by any law or from authorizing violation of 
any law. States and local governments had no preexisting authority or 
responsibility to set requirements related to fuel economy standards. 
Such requirements are void ab initio. The savings provision also does 
not purport to expand pre-existing authority or responsibility, nor did 
Congress amend in any way the broad express preemption provision in 
EPCA when it enacted EISA. Moreover, implied preemption as applied here 
is not a limitation based in EISA or the Clean Air Act. Implied 
preemption is instead based on the Secretary of Transportation's 
preexisting responsibility under EPCA to balance statutory factors in 
setting nationwide fuel economy standards for automobiles.
---------------------------------------------------------------------------

    \136\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
---------------------------------------------------------------------------

    The provision in EISA concerning minimum requirements for Federal 
government vehicles also does not change NHTSA's view. Several comments 
referenced this provision, which states that the EPA ``Administrator 
shall take into account the most stringent standards for vehicle 
greenhouse gas emissions applicable to and enforceable against motor 
vehicle manufacturers for vehicles sold anywhere in the United States'' 
in identifying vehicles for the Federal government fleet. 42 U.S.C. 
13212(f)(3)(B).\137\ Commenters argued that the phrase ``the most 
stringent standards'' would be superfluous if only EPA were allowed to 
set standards and, in addition, if EPA had not set any such standards 
at the time EISA was enacted. On the contrary, this provision is fully 
consistent with NHTSA's view of preemption, based on the plain text of 
EPCA's express preemption provision. The language in the EISA provision 
specifically indicates that it applies only to ``the most stringent 
standards . . . enforceable against motor vehicle manufacturers.'' 
\138\ This means that EPA could consider only otherwise lawful 
standards. States and local governments are not permitted to enforce 
standards preempted by EPCA. 49 U.S.C. 32919(a).
---------------------------------------------------------------------------

    \137\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; Joint Submission from the States of California et 
al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
    \138\ 42 U.S.C. 13212(f)(3)(B) (emphasis added).
---------------------------------------------------------------------------

    However, EPCA does specifically permit a State or local government 
to ``prescribe requirements for fuel economy for automobiles obtained 
for its own use.'' 49 U.S.C. 32919(c). It is logical that the Federal 
government would consider the requirements for States and local 
government vehicle fleets in evaluating vehicles for its own Federal 
government fleet. Such requirements would be applicable to and could be 
enforced against manufacturers in contractual procurement relationships 
with States or local governments. In any event, this provision 
concerning a limited set of vehicles (Federal government vehicles) is 
not grounds for undoing the uniform national fuel economy standards 
applicable to all light vehicles as prescribed by Congress in EPCA.
    In enacting this provision in EISA, Congress required the EPA 
Administrator to ``issue guidance identifying the makes and model 
number of vehicles that are low greenhouse gas emitting vehicles'' to 
aid in identifying vehicles for the Federal government's own fleet. 42 
U.S.C. 13212(f)(3)(A). The provision requiring the Administrator to 
``take into account the most stringent standards for vehicles 
greenhouse gas emissions'' provides a consideration for that guidance. 
Id. 13212(f)(3)(B). It is not plausible that Congress intended this 
limited provision concerning guidance on Federal government procurement 
to disrupt the longstanding express preemption provision in EPCA.
    Further, to read this procurement-related provision as somehow 
showing that Congress intended to allow California to establish laws 
related to fuel economy standards is unreasonable, as doing so would 
put California in an unequal setting vis-a-vis other states, and that 
would not make sense in this context. ``The Act also differentiates 
between the States, despite our historic tradition that all the States 
enjoy `equal sovereignty.' '' Northwest Austin Municipal Utility 
District Number One v. Holder, 557 U.S. 193, 203 (2009). A ``departure 
from the fundamental principal of equal sovereignty requires a showing 
that a statute's disparate geographic coverage is sufficiently related 
to the problem that it targets.'' Id. Congress rejected any such 
prospect in the area of fuel economy by adding an unwaivable preemption 
clause in EPCA. NHTSA does not presume that Congress, when adopting 
EISA, impliedly discarded the equal application of EPCA to the States 
without a clear statement of intent to do so and a recitation of the 
``extraordinary conditions'' permitting California special authority 
related to fuel economy. Id. at 211. ``Congress . . . does not alter 
the fundamental details of a regulatory scheme in vague terms or 
ancillary provisions--it does not, one might say, hide elephants in 
mouseholes.'' \139\
---------------------------------------------------------------------------

    \139\ Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 468 (2001).

---------------------------------------------------------------------------

[[Page 51323]]

G. Prior Case Law Does Not Preclude Preemption

    Certain comments opposed to NHTSA's proposal rely upon the Supreme 
Court's decision in Massachusetts v. EPA to argue that regulation of 
tailpipe emissions is separate and distinct from regulation of fuel 
economy.\140\ NHTSA disagrees with attempts to stretch the holding of 
this decision well beyond the issues addressed by the Court. The Court 
did not address EPCA preemption in Massachusetts v. EPA, or State 
regulations pursuant to a Clean Air Act waiver. The Court addressed 
only EPA's own statutory obligations, which have no bearing on EPCA 
preemption.
---------------------------------------------------------------------------

    \140\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; see Northeast States for Coordinated Air Use 
Management (NESCAUM), Docket No. NHTSA-2018-0067-11691.
---------------------------------------------------------------------------

    Moreover, as discussed above, NHTSA and EPA conduct joint 
rulemaking consistent with the Supreme Court's decision. The Court 
acknowledged that NHTSA and EPA's statutory obligations may overlap, 
but that the agencies may both administer those obligations while 
avoiding inconsistency.\141\ NHTSA therefore disagrees with the 
comment's assertion that regulations of tailpipe greenhouse gas 
emissions and fuel economy are truly separate and distinct. The 
agencies issue joint rules precisely because of the unavoidable 
scientific relationship between the two.
---------------------------------------------------------------------------

    \141\ Massachusetts v. EPA, 549 U.S. 497, 532 (2007).
---------------------------------------------------------------------------

    A number of comments also rely on the prior district court 
decisions in California and Vermont in opposing NHTSA's proposal on 
preemption.\142\ As NHTSA discussed in the proposal, those courts 
previously concluded that State tailpipe greenhouse gas emissions 
standards were not preempted by EPCA.\143\ NHTSA continues to disagree 
with both of these district court decisions, as described in detail in 
the proposal.\144\ This includes the California district court's 
erroneous view of the requirement in EPCA for NHTSA to consider ``other 
standards'' in setting fuel economy standards.\145\ In reaching its 
conclusion, the court misconstrued a separate provision of EPCA that, 
by its explicit terms, has had no effect for decades. Importantly, 
neither district court considered NHTSA's views on preemption in 
construing the statute NHTSA administers.\146\ Although the United 
States filed an amicus brief opposing the Vermont court's decision in 
the Second Circuit, that appeal was not decided on the merits due to 
the automotive industry's withdrawal of the appeal as a part of a 
negotiated agreement connected to the national framework. In its brief, 
the United States specifically raised the district court's failure to 
consider NHTSA's views concerning preemption, let alone give them 
weight.\147\ Withdrawal of appeals was expressly part of the agreement 
to establish the national framework.
---------------------------------------------------------------------------

    \142\ Joint Submission from the States of California et al. and 
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735; 
South Coast Air Quality Management District, Docket No. NHTSA-2018-
0067-11813.
    \143\ 83 FR 42986, 43235 (Aug. 24, 2018).
    \144\ Id. at 43235-38.
    \145\ Id. at 43236-37.
    \146\ Id. at 43236; Proof Brief for the United States as Amicus 
Curiae, 07-4342-cv (2d Cir. filed Apr. 16, 2008).
    \147\ See Proof Brief for the United States as Amicus Curiae, 
07-4342-cv (2d Cir. filed Apr. 16, 2008). NHTSA also was not a 
litigant in the district court cases and, therefore, did not have a 
full opportunity to raise its views.
---------------------------------------------------------------------------

    The Vermont district court also attempted to reconcile EPCA and the 
Clean Air Act by asserting that a Clean Air Act waiver converts State 
requirements to ``other motor vehicle standards'' that NHTSA must 
consider in setting fuel economy standards. As NHTSA noted in the 
proposal, even the California district court found that there was no 
legal foundation for the view that a State regulation pursuant to a 
Clean Air Act waiver becomes the equivalent of a Federal 
regulation.\148\ This is an erroneous finding not based on precedent 
and is unsupported by applicable law.
---------------------------------------------------------------------------

    \148\ 83 FR 42986, 43236 (Aug. 24, 2018).
---------------------------------------------------------------------------

    As described in the proposal, NHTSA also disagrees with the 
California and Vermont district courts' implied preemption 
analyses.\149\ NHTSA does not believe those courts fully considered the 
conflict posed by State regulations and, in one case, even went so far 
as to assert erroneously that NHTSA could simply defer to California in 
revising its standards.\150\ Those decisions are not binding on NHTSA.
---------------------------------------------------------------------------

    \149\ Id. at 43238.
    \150\ Cent. Valley Chrysler-Jeep, Inc., 529 F. Supp. 2d at 1179. 
NHTSA has a statutory obligation to set standards at ``the maximum 
feasible average fuel economy level that the Secretary decides the 
manufacturers can achieve in that model year,'' in accordance with 
the statutory considerations. 49 U.S.C. 32902(a), (f). Thus, NHTSA 
cannot simply defer to a State. For example, the only standards that 
California would permit to satisfy California requirements for model 
years 2021 through 2025 are the augural standards. See Cal. Code 
Regs. tit. 13, Sec.  1961.3(c). If NHTSA finalizes a determination 
that the augural standards are not ``maximum feasible,'' as 
discussed in the proposal, then it would be contrary to law for 
NHTSA to nevertheless adopt them in deference to California.
---------------------------------------------------------------------------

    Given NHTSA's previously stated views on those decisions, arguments 
that rely on the decisions are not persuasive. Commenters did not 
provide any new information or analysis of those district court 
decisions that caused the agency to change its view on the 
decisions.\151\ NHTSA incorporates the prior discussion of those 
decisions from the proposal here.
---------------------------------------------------------------------------

    \151\ As noted by a commenter, the appeals were dismissed before 
decision as a practical matter, and despite strong arguments on the 
merits. Fiat Chrysler Automobiles (FCA), Docket No. NHTSA-2018-0067-
11943.
---------------------------------------------------------------------------

    While NHTSA need not belabor its views again here, it is worth 
emphasizing, as did commenters, that both district courts ignored 
NHTSA's published prior statements on preemption in rendering their 
decisions.\152\ Some comments seem to suggest that this failure to 
address NHTSA's views represents a substantive rejection of those 
views.\153\ NHTSA disagrees. The district courts simply entirely failed 
to consider the agency's views; they did not consider and reject them 
or even find that they were not due any weight. This is among the 
reasons that NHTSA is formalizing its views in a regulation. As the 
expert agency charged with administering EPCA, NHTSA is tasked with 
balancing the four statutory factors in determining the ``maximum 
feasible average fuel economy standards'' for each model year.\154\ In 
doing so, NHTSA has the unique ability to determine whether State or 
local regulations would undermine this balancing.\155\ NHTSA's views on 
preemption certainly should be considered by any court evaluating this 
issue. This is particularly true given that the relationship between 
fuel economy standards and greenhouse gas emissions is a matter of 
science.
---------------------------------------------------------------------------

    \152\ 83 FR 42986, 43236 (Aug. 24, 2018).
    \153\ See California Air Resources Board (CARB), Docket No. 
NHTSA-2018-0067-11873.
    \154\ 49 U.S.C. 32902(f).
    \155\ See id.
---------------------------------------------------------------------------

    One commenter also erroneously asserts that collateral estoppel 
will bar the Department of Justice from defending a final rule that 
asserts State greenhouse gas emissions regulations are preempted by 
EPCA.\156\ Nonmutual offensive collateral estoppel does not apply to 
the United States. United States v. Mendoza, 464 U.S. 154, 162 (1984). 
Moreover, the Federal government was not even a party to the prior 
litigation involving EPCA preemption. The assertion that the Department 
of Justice would be barred from defending this final rule lacks merit.
---------------------------------------------------------------------------

    \156\ See South Coast Air Quality Management District, Docket 
No. NHTSA-2018-0067-11813.

---------------------------------------------------------------------------

[[Page 51324]]

H. A Clean Air Act Waiver and SIP Approvals Do Not Foreclose EPCA 
Preemption

    Both agencies are finalizing their tentative conclusion from the 
proposal that a Clean Air Act waiver does not also foreclose EPCA 
preemption. EPCA does not provide for a waiver of preemption, either by 
NHTSA or by another Federal agency. EPA, like NHTSA, does not have the 
authority to waive EPCA preemption. Therefore, its grant of a Clean Air 
Act waiver cannot operate to waive EPCA preemption. NHTSA discussed the 
basis for its view that a Clean Air Act waiver does not ``federalize'' 
EPCA-preempted State requirements in detail in its proposal. NHTSA 
reaffirms that discussion.
    Several comments recited the district court's holding in Green 
Mountain Chrysler that it need not consider EPCA preemption due to the 
EPA waiver.\157\ NHTSA discussed in detail in the proposal its reasons 
for disagreeing with that decision and commenters did not identify any 
new information that caused NHTSA to change its view. NHTSA agrees with 
commenters that reject the flawed reasoning of the district court.\158\ 
As one commenter explained, the argument that an EPA waiver federalizes 
State requirements renders the EPCA preemption provision a 
nullity.\159\ As the commenter noted, this incorrect interpretation 
would enable States to even issue explicit fuel economy requirements so 
long as they were under cover of a waiver from EPA. EPA does not have 
authority to waive any aspect of EPCA preemption, nor does NHTSA.
---------------------------------------------------------------------------

    \157\ See, e.g., California Air Resources Board (CARB), Docket 
No. NHTSA-2018-0067-11873; Class of 85 Regulatory Response Group, 
Docket No. NHTSA-2018-0067-12070; Joint Submission from the States 
of California et al. and the Cities of Oakland et al., Docket No. 
NHTSA-2018-0067-11735.
    \158\ See, e.g., American Fuel & Petrochemical Manufacturers, 
Docket No. NHTSA-2018-0067-12078.
    \159\ Competitive Enterprise Institute, Docket No. NHTSA-2018-
0067-12015.
---------------------------------------------------------------------------

    NHTSA also finalizes its view that preempted standards are void ab 
initio. No commenters presented information that altered NHTSA's view, 
which is based on longstanding Supreme Court case law, as cited by the 
proposal.
    NHTSA agrees with South Coast, which suggested in its comments that 
EPCA does not outweigh the Clean Air Act.\160\ Likewise, the Clean Air 
Act does not outweigh EPCA. Just as manufacturers must comply with 
requirements under both statutes, both statutes apply to State and 
local governments as well. Moreover, EPCA's preemption provision is 
fully consistent with the Clean Air Act. EPCA's preemption provision 
does not implicitly repeal parts of Section 209(b), contrary to the 
assertion in one comment.\161\ States must simply act in accordance 
with both statutes. Cf. Massachusetts v. EPA, 549 U.S. 497, 532 (2007) 
(finding no inconsistency between obligations of EPA under Clean Air 
Act and NHTSA under EPCA).
---------------------------------------------------------------------------

    \160\ See South Coast Air Quality Management District, Docket 
No. NHTSA-2018-0067-11813.
    \161\ Joint Submission from the States of California et al. and 
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
---------------------------------------------------------------------------

    NHTSA has rejected the argument that a Clean Air Act waiver renders 
EPCA preemption inapplicable, and likewise rejects the even more 
attenuated argument concerning EPA's approval of preempted State 
requirements as a part of a State Implementation Plan (SIP) submission 
for areas that do not meet National Ambient Air Quality Standards 
(NAAQS). A State has no authority to adopt or enforce a requirement 
that falls within the scope of EPCA preemption. 49 U.S.C. 32919(a). 
This is true even if adopting the unlawfully enacted requirement would 
assist the State in coming into compliance with the NAAQS. The 
inclusion of an invalid fuel economy requirement in an air quality SIP 
does not render the requirement suddenly valid.\162\ NHTSA therefore 
disagrees with comments that suggest that EPCA preemption no longer 
applies simply because an unauthorized requirement is included in a SIP 
that is subsequently approved.\163\ It is inappropriate for a State to 
take action unauthorized and rendered void by one statutory scheme to 
meet the requirements of a different statutory scheme.
---------------------------------------------------------------------------

    \162\ SIPs must include ``enforceable emission limitations.'' 42 
U.S.C. 7410(a)(2)(A). An EPCA preempted requirement is not 
enforceable. 49 U.S.C. 32919(a).
    \163\ See South Coast Air Quality Management District, Docket 
No. NHTSA-2018-0067-11813.
---------------------------------------------------------------------------

    Moreover, EPCA preemption applies directly to States and local 
governments which are obliged to adhere to the constraints of the 
Supremacy Clause. EPCA explicitly prohibits States and local 
governments from adopting or enforcing a law or regulation related to 
fuel economy standards. It is unreasonable for States to expect a 
Federal agency (EPA) acting under one statutory scheme (the Clean Air 
Act) to analyze whether the State has adopted preempted regulations in 
contravention of an entirely separate statute (EPCA) administered by a 
different Federal agency (NHTSA). In fact, as noted above, historically 
EPA has declined to address questions unrelated to CAA section 209, 
such as preemption analysis, in its waiver decisions. NHTSA strongly 
disagrees with the assertion that EPA's approval of a SIP silently acts 
as an implied waiver of EPCA preemption. This suggestion is 
particularly hollow given that neither EPA nor NHTSA has the authority 
to waive EPCA preemption.
    NHTSA agrees with the general principle that an approved SIP is 
enforceable as a matter of Federal law.\164\ However, the case law does 
not support the argument made by CARB and South Coast's comments. The 
case law explains that a SIP approved by EPA creates binding 
obligations, pursuant to the Clean Air Act.\165\ There is no indication 
that Congress intended to permit one agency to legitimize an otherwise 
EPCA-preempted State provision by ``federalizing'' it. As an analogy, 
the IRS requires individuals to report and pay taxes on money earned 
from illegal activity, such as dealing drugs.\166\ A drug dealer who 
complies with Federal tax law is not relieved of the prohibitions on 
possessing and selling drugs that apply under other Federal laws.
---------------------------------------------------------------------------

    \164\ See California Air Resources Board (CARB), Docket No. 
NHTSA-2018-0067-11873; South Coast Air Quality Management District, 
Docket No. NHTSA-2018-0067-11813.
    \165\ See, e.g., Safe Air for Everyone v. United States Envt'l 
Prot. Agency, 488 F.3d 1088, 1091 (9th Cir. 2007).
    \166\ Internal Revenue Service, Publication 525: Taxable and 
Nontaxable Income 32 (Mar. 8, 2019), https://www.irs.gov/pub/irs-pdf/p525.pdf.
---------------------------------------------------------------------------

    Since SIPs are binding on States, the agencies recognize that 
certain States may need to work with EPA to revise their SIPs in light 
of this final action.\167\ As stated in the proposal, EPA may 
subsequently consider whether to employ the appropriate provisions of 
the Clean Air Act to identify provisions of States' SIPs that may need 
review because they include preempted ZEV mandates or greenhouse gas 
emissions standards.\168\ However, this practical consideration is not 
grounds for ignoring EPCA's limitations on State action. SIPs are not 
written in stone. They are subject to revision, including based on 
changed circumstances. The Clean Air Act allows SIPs to be revised for 
various reasons, including that part of the plan was approved in error, 
that the plan is ``substantially inadequate,'' or that the State is 
suspending or

[[Page 51325]]

revoking a program included in a plan. 42 U.S.C. 7410(a)(5)(iii), 
(k)(5)-(6).
---------------------------------------------------------------------------

    \167\ EPA explains below that it will consider whether and how 
to address SIP implications of this action, to the extent that they 
exist, in separate actions; EPA believes that it is not necessary to 
resolve those implications in the course of this action.
    \168\ 83 FR 42986, 43244 (Aug. 24, 2018).
---------------------------------------------------------------------------

I. NHTSA Has Appropriately Considered the Views of States and Local 
Governments Consistent With Law

    NHTSA considers the views of all interested stakeholders--including 
States and local governments--in carrying out its statutory obligation 
to set nationally applicable fuel economy standards. However, EPCA does 
not permit States or local governments to act as co-regulators with 
NHTSA in the process of setting fuel economy standards. Indeed, EPCA 
precludes them from doing so, with the sole exception of information 
disclosure requirements identical to Federal requirements, and for 
requirements for fuel economy for automobiles obtained for a State or 
local governments' own use. A number of commenters urged NHTSA to work 
cooperatively with California, and to negotiate with and reach a 
compromise with California.\169\ NHTSA appreciates such comments, and 
seeks to foster a collaborative regulatory approach to the extent 
possible. That said, California is not permitted by Federal law to have 
its own separate laws or regulations relating to fuel economy 
standards. 49 U.S.C. 32902 makes clear that NHTSA sets nationally 
applicable fuel economy standards, and NHTSA is implementing its 
authority to do so through this regulation clarifying the preemptive 
effect of its standards consistent with the express preemption 
provision in 49 U.S.C. 32919.
---------------------------------------------------------------------------

    \169\ See, e.g., American Honda Motor Company, Inc., Docket No. 
NHTSA-2018-0067-11818; Sen. T. Carper, United States Senate, Docket 
No. NHTSA-2018-0067-11910; Maryland Department of the Environment, 
Docket No. NHTSA-2018-0067-12044; Joint Submission from the States 
of California et al. and the Cities of Oakland et al., Docket No. 
NHTSA-2018-0067-11735; Manufacturers of Emission Controls 
Association, Docket No. NHTSA-2018-0067-11994; North Carolina 
Department of Environmental Quality, Docket No. NHTSA-2018-0067-
12025.
---------------------------------------------------------------------------

    The very limited exceptions to preemption set forth in EPCA--
covering vehicles for a government's own use, and for disclosure 
requirements that are identical to Federal requirements--only confirm 
the breadth of preemption. See 49 U.S.C. 32919(b)-(c). States or 
localities cannot adopt or enforce requirements related to fuel economy 
standards unless they fall into one of these two discrete exceptions. 
This means requirements related to fuel economy standards for 
automobiles for use by a State's citizens, and not merely the State 
itself, are not permitted. Since States are not permitted to adopt or 
enforce requirements related to fuel economy standards for vehicles 
sold or delivered to the public, Federal law does not allow California 
(or any other State or local government) to regulate in this area.
    For California, or any other State or local government, to regulate 
in this area would require NHTSA to waive EPCA preemption, but 
commenters did not and cannot identify any statutory authorization for 
NHTSA to do so and no such authority exists, either expressly or 
impliedly. The Clean Air Act requires EPA to waive Clean Air Act 
preemption under a specific section of that statute unless it makes 
certain findings. But because EPCA does not enable NHTSA to issue a 
waiver of preemption, it also does not set forth terms upon which a 
waiver would be appropriate.\170\ Thus, NHTSA lacks a legal basis for 
approving of or consenting to State or local requirements related to 
fuel economy standards.
---------------------------------------------------------------------------

    \170\ EPA also does not have authority to waive EPCA preemption, 
under the Clean Air Act or otherwise.
---------------------------------------------------------------------------

    Absent the affirmative authority to approve of or consent to State 
or locality's requirements related to fuel economy standards, 
commenters appear to ask NHTSA to simply to look aside. That is 
inconsistent with NHTSA's legal responsibility to set nationally 
applicable standards. It is also inconsistent with the self-executing 
nature of EPCA preemption, meaning that State or local requirements 
related to fuel economy standards are void ab initio. Even if NHTSA 
wanted to do so, it cannot breathe life into an expressly preempted 
State law. And doing so would effectively result in NHTSA's purporting 
to rewrite a statute, which is beyond the power of a regulatory agency.
    NHTSA also disagrees that it is appropriate to ignore EPCA 
preemption as a strategy to avoid litigation over this issue, a 
strategy strongly suggested by a large number of commenters. NHTSA 
understands the concerns of such commenters who hope to avoid prolonged 
litigation.\171\ However, NHTSA believes that long-term certainty is 
best achieved by applying the law as written. NHTSA agrees with 
commenters who acknowledge the disruption to the automotive marketplace 
that would come if preempted standards remained in place.\172\ 
Addressing preemption directly, as NHTSA has done through its adoption 
of regulatory text in this document, will ultimately provide the needed 
regulatory certainty into the future.
---------------------------------------------------------------------------

    \171\ American Honda Motor Company, Inc., Docket No. NHTSA-2018-
0067-11818; Ford Motor Company, Docket No. NHTSA-2018-0067-11928.
    \172\ Fiat Chrysler Automobiles (FCA), Docket No. NHTSA-2018-
0067-11943.
---------------------------------------------------------------------------

    Those commenters that ask NHTSA to negotiate with California 
demonstrate the nature of the problem.\173\ The underlying reason 
commenters are concerned about the absence of a compromise resolution 
is because of the conflict that will result if States proceed with 
regulations that are inconsistent with Federal requirements.\174\ Such 
commenters, appropriately, have recognized the disruptive effect of 
continuing to tolerate multiple regulators in this area. Moreover, as 
discussed in additional detail below, a negotiated resolution is 
inconsistent with the APA's notice and comment rulemaking process. 
NHTSA has no basis in law to ignore the substantive comments received 
on its proposal from many stakeholders and instead determine an outcome 
through negotiation with a regulatory agency in California. NHTSA is a 
safety agency with different priorities than CARB, with a different set 
of factors to balance, including safety implications.
---------------------------------------------------------------------------

    \173\ See, e.g., American Honda Motor Company, Inc., Docket No. 
NHTSA-2018-0067-11818; Sen. T. Carper, United States Senate, Docket 
No. NHTSA-2018-0067-11910; Manufacturers of Emission Controls 
Association, Docket No. NHTSA-2018-0067-11994.
    \174\ See Cal. Code Regs. tit. 13, section 1961.3(c).
---------------------------------------------------------------------------

    As discussed above, many comments emphasized a desire for 
maintaining a National Program. Neither California nor any other State, 
of course, has the authority to set national standards in any area. If 
California were to adopt and enforce requirements related to fuel 
economy standards, there could only be uniform standards applicable 
throughout the country if California agrees with the standards set by 
NHTSA or vice versa. But EPCA requires that ``[e]ach standard shall be 
the maximum feasible average fuel economy level that the Secretary''--
not a regulatory agency in the State of California--``decides that the 
manufacturers can achieve in that model year.'' \175\ 49 U.S.C. 
32902(a).
---------------------------------------------------------------------------

    \175\ As NHTSA explained in the proposal, it disagrees with the 
implication of the district court's statement in Central Valley that 
``NHTSA is empowered to revise its standards'' to take into account 
California's regulations. 83 FR 42986, 43238 (Aug. 24, 2018); see 
Cent. Valley Chrysler-Jeep, Inc., 529 F. Supp. 2d at 1179. NHTSA's 
duty under EPCA is to balance the statutory factors, not to 
acquiesce to the views of one State (which by its own assertion is 
attempting to address State-specific concerns, including the 
geography of its population centers). See, e.g., California Air 
Resources Board (CARB), Docket No. NHTSA-2018-0067-11873 (stating 
that California's ``population continues to live predominantly in 
basins bounded by mountains, in which air quality is poor'').

---------------------------------------------------------------------------

[[Page 51326]]

    Moreover, a faithful application of EPCA requires more than just 
avoiding inconsistency. For that reason, it is unavailing that CARB has 
previously implemented its program purportedly consistent with the 
Federal government.\176\ EPCA requires NHTSA to set nationally 
applicably standards. EPCA does not permit States or local governments 
to adopt or enforce even identical or equivalent standards.\177\ EPCA 
allows for only a single regulator--NHTSA--to set fuel economy 
standards. Moreover, it is now clear it does not intend to do so for 
model year 2021 through 2026 vehicles, should the forthcoming final 
SAFE rule finalize standards other than the no action alternative as 
described in the NPRM.\178\ And even consistent programs subject 
manufacturers to duplicative enforcement regimes, in conflict with 
EPCA.\179\ State standards that are identical or equivalent standards 
to the Federal standards manufacturers nevertheless obligate 
manufacturers to meet more onerous requirements. That is because 
States, of course, lack authority to set nationwide requirements. 
Therefore, manufacturers must meet State standards within each State 
that has adopted them. Since fuel economy standards are fleetwide 
average standards, it is more difficult to achieve a standard in a 
particular State, averaged across a smaller pool of vehicles, than it 
is to achieve the Federal standard, averaged across the pool of 
vehicles for all States.
---------------------------------------------------------------------------

    \176\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
    \177\ EPCA does allow States or local governments to adopt 
identical requirements for disclosure of fuel economy or fuel 
operating costs, but did not allow identical requirements in other 
areas related to fuel economy. See 49 U.S.C. 32919(b).
    \178\ See Cal. Code Regs. tit. 13, section 1961.3(c).
    \179\ EPCA has an unusual civil penalty provision for violations 
of fuel economy standards that enables various compliance 
flexibilities, including use of banked credits, credit plans, credit 
transfers, and credit trades. See 49 U.S.C. 32912. EPCA also 
requires specific procedures and findings before the Secretary of 
Transportation may increase the civil penalty rate applicable to 
violations of fuel economy standards. 49 U.S.C. 32912(c). State and 
local enforcement of even identical or equivalent requirements 
interferes with this enforcement structure.
---------------------------------------------------------------------------

    In addition, there is no legal basis in EPCA or the APA for 
California or any other State to receive preferential treatment for 
their views in this statutory scheme or rulemaking process.\180\ Nor is 
California, or any other State, entitled to negotiate the appropriate 
standards with NHTSA. Commenters appear to suggest closed-door 
negotiations, and not an alternative rulemaking process (such as 
negotiated rulemaking), that would ensure procedural fairness.\181\ 
NHTSA disagrees that negotiation is the appropriate mechanism to set 
nationally applicable policy with billions of dollars of impacts. The 
notice-and-comment rulemaking process used by the agencies is the 
appropriate mechanism for setting standards under EPCA and the Clean 
Air Act, with due consideration to the views of all interested parties 
and transparency. NHTSA certainly would prefer a result that is 
satisfactory to all interested stakeholders, but it may not set aside 
its own considered views on the appropriate standards to reach a 
negotiated resolution, nor may it set aside Congress's commands in 
EPCA.
---------------------------------------------------------------------------

    \180\ See Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 
U.S. 193, 203 (2009) (stating that ``a departure from the 
fundamental principle of equal sovereignty requires a showing that a 
statute's disparate geographic coverage is sufficiently related to 
the problem that it targets'').
    \181\ One comment noted that prior negotiations were ``closed-
door, `put nothing in writing, ever' negotiations.'' Competitive 
Enterprise Institute, Docket No. NHTSA-2018-0067-12015; see also 
Sen. Phil Berger & Rep. Tim Moore, North Carolina General Assembly, 
Docket No. NHTSA-2018-0067-11961.
---------------------------------------------------------------------------

    While States or local governments may not adopt or enforce 
requirements related to fuel economy standards, NHTSA, of course, is 
considering their views in setting appropriate standards. Many State 
and local governments commented at great length on both the preemption 
and standard setting portions of NHTSA's proposal.\182\ NHTSA has taken 
their views into account in finalizing this rule, along with those of 
other commenters. States and local governments have had and will 
continue to have a say in the adoption of fuel economy standards, 
consistent with the APA. Indeed, many of the technical comments 
provided by California and other State and local governments and 
agencies are being considered to improve the analysis regarding the 
appropriate standards. In an area with express preemption, this APA 
process is the appropriate means by which the Federal government should 
consider the views of States and local governments.
---------------------------------------------------------------------------

    \182\ See, e.g., California Air Resources Board (CARB), Docket 
No. NHTSA-2018-0067-11873; Joint Submission from Governors of Texas, 
et al., Docket No. NHTSA-2018-0067-11935; Joint Submission from the 
States of California et al. and the Cities of Oakland et al., Docket 
No. NHTSA-2018-0067-11735; Maryland Department of the Environment, 
Docket No. NHTSA-2018-0067-12044; Minnesota Pollution Control Agency 
(MPCA), the Minnesota Department of Transportation (MnDOT), and the 
Minnesota Department of Health (MDH), Docket No. NHTSA-2018-0067-
11706; North Carolina Department of Environmental Quality, Docket 
No. NHTSA-2018-0067-12025; Pennsylvania Department of Environmental 
Protection, Docket No. NHTSA-2018-0067-11956; Washington State 
Department of Ecology, Docket No. NHTSA-2018-0067-11926.
---------------------------------------------------------------------------

    NHTSA also disagrees with the view expressed by some commenters 
that there is not a direct conflict between State regulation of 
tailpipe carbon dioxide emissions from automobiles issued pursuant to a 
Clean Air Act waiver and NHTSA's ability to set fuel economy standards 
under EPCA. South Coast argues that when there are inconsistent 
standards, automakers can avoid a conflict by complying with the more 
stringent standard.\183\
---------------------------------------------------------------------------

    \183\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
---------------------------------------------------------------------------

    NHTSA disagrees that this situation does not pose a conflict. 
Higher standards than those NHTSA has determined are ``maximum 
feasible'' after balancing the statutory factors negates the agency's 
judgment in setting national standards, including traffic safety. NHTSA 
addressed this conflict in detail in the proposal and reiterates that 
discussion here.\184\ NHTSA also disagrees that all manufacturers 
should simply comply with a higher standard than the standards set by 
the Federal government based on statutory considerations. It may not be 
technically feasible for manufacturers to comply with higher standards 
or the higher standards may not be economically practicable. These are 
factors that NHTSA must carefully assess and balance in setting 
standards under EPCA, and the notion that a State has the unilateral 
ability to veto or undermine NHTSA's determination by setting higher 
standards directly conflicts with EPCA.
---------------------------------------------------------------------------

    \184\ See section f of the proposal's preemption discussion. 83 
FR 42986, 43237-38 (Aug. 24, 2018).
---------------------------------------------------------------------------

    South Coast also asserted in its comments that there is no direct 
conflict between the purpose of EPCA to reduce fuel consumption by 
increasing fuel economy and the purpose of the Clean Air Act to protect 
public health from air pollution, including by allowing California to 
establish motor vehicle standards if it meets the criteria for a 
waiver.\185\ While it is true that there need not be a conflict between 
EPCA and the Clean Air Act, this statement is irrelevant to the 
determination of whether State standards are preempted by EPCA. NHTSA 
and EPA conduct joint rulemaking in this area because EPA's greenhouse 
gas emissions standards are inherently related to NHTSA's fuel economy 
standards. This inherent linkage was recognized by the Supreme Court in 
Massachusetts v.

[[Page 51327]]

EPA.\186\ California and other States have, for many years, regulated 
ozone-forming emissions from vehicles pursuant to a Clean Air Act 
waiver without posing a conflict with NHTSA's regulation of fuel 
economy. It is when States regulate the emission of greenhouse gases, 
especially carbon dioxide, that the conflict arises because of the 
direct and substantial relationship between tailpipe emissions of 
carbon dioxide and fuel economy. Regulation in this area is related to 
NHTSA's fuel economy standards and impedes NHTSA's ability to set 
nationally applicable fuel economy standards.
---------------------------------------------------------------------------

    \185\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
    \186\ See Massachusetts v. EPA, 549 U.S. 497, 532 (2007).
---------------------------------------------------------------------------

    NHTSA also disagrees with comments that assert it did not properly 
consider federalism concerns. Specifically, South Coast claimed that 
NHTSA violated the executive order on federalism, Executive Order 
13132, although South Coast acknowledges the Executive Order does not 
create an enforceable right or benefit.\187\ Setting aside the 
Executive Order's non-justiciability for the moment, NHTSA's action 
complies with Executive Order 13132. Contrary to South Coast's 
assertion, the executive order recognizes both express preemption and 
conflict preemption, and it does not bar the application of conflict 
preemption where a statute contains an express preemption 
provision.\188\ The provisions concerning express preemption and 
conflict preemption are in separate paragraphs, which are not mutually 
exclusive. See E.O. 13132 section 4(a)-(b).
---------------------------------------------------------------------------

    \187\ E.O. 13132 section 11; South Coast Air Quality Management 
District, Docket No. NHTSA-2018-0067-11813. South Coast also states 
that NHTSA did not mention the Tenth Amendment in its proposal. 
South Coast Air Quality Management District, Docket No. NHTSA-2018-
0067-11813. However, South Coast does not assert that this action 
violates the Tenth Amendment, which is fully consistent with Federal 
preemption. See Constitution, Article VI.
    \188\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
---------------------------------------------------------------------------

    Moreover, the executive order supports NHTSA's action in construing 
preemption through rulemaking. See id. The executive order explicitly 
supports the process NHTSA used here to consider the views of States 
and local governments, stating that: ``When an agency proposes to act 
through adjudication or rulemaking to preempt State law, the agency 
shall provide all affected State and local officials notice and an 
opportunity for appropriate participation in the proceedings.'' E.O. 
13132 section 4(e). NHTSA cited to Executive Order 13132 in the 
preemption portion of its proposal,\189\ and specifically solicited 
comments from State and local officials, as well as other members of 
the public. As discussed above, NHTSA has considered the extensive 
comments from State and local governments.
---------------------------------------------------------------------------

    \189\ 83 FR 42986, 43233 n.496 (Aug. 24, 2018).
---------------------------------------------------------------------------

    EPCA preemption also does not improperly impinge on the rights of 
States. Several commenters argued for allowing States to regulate in 
this area due to asserted benefits of State regulation.\190\ CARB's 
comments went into extensive detail on its history of regulating 
vehicles.\191\ It also asserted that there is industry support for its 
regulation in this area,\192\ and argued that it has reliance interests 
in its regulations.\193\ CARB also argued that NHTSA's proposal would 
adversely impact its police power and ability to protect its 
citizens.\194\ In addition, it claimed that NHTSA's proposal would 
impact its State-imposed mandate for emissions reductions by 2030, 
given the transportation sector's contributions to California's 
greenhouse gas emissions.\195\
---------------------------------------------------------------------------

    \190\ See, e.g., California Air Resources Board (CARB), Docket 
No. NHTSA-2018-0067-11873.
    \191\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
    \192\ Id.
    \193\ Id.
    \194\ Id.; see also Joint Submission from the States of 
California et al. and the Cities of Oakland et al., Docket No. 
NHTSA-2018-0067-11735.
    \195\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
---------------------------------------------------------------------------

    Notwithstanding these asserted interests of policy, Congress 
determined that NHTSA should have exclusive authority to set fuel 
economy standards and that States are not authorized to adopt or 
enforce regulations related to those standards, with limited exceptions 
described above. No commenter argued that EPCA's preemption provision 
is unconstitutional. Some commenters, however, have argued that special 
treatment afforded to the California is problematic.\196\ Just as 
States have no valid police power to set fuel economy standards 
directly, neither are they permitted under EPCA and the Supremacy 
Clause to set standards related to fuel economy standards. States do 
have input into the Federal fuel economy standards established by NHTSA 
(as well as EPA's related greenhouse gas emissions standards) through 
the notice-and-comment process, and the interests of California's 
citizens as well as the citizens of the other 49 States are protected 
by the standards set by the Federal agencies.
---------------------------------------------------------------------------

    \196\ E.g., Sen. Phil Berger & Rep. Tim Moore, North Carolina 
General Assembly, Docket No. NHTSA-2018-0067-11961; Rep. M. Turzai, 
Pennsylvania House of Representatives, Docket No. NHTSA-2018-0067-
11839.
---------------------------------------------------------------------------

    NHTSA recognizes that California may have different policy views, 
as do many interested parties, including both those who expressed views 
in favor of and in opposition to the proposal. However, Congress gave 
NHTSA the duty to balance competing considerations. NHTSA also rejects 
the notion that California has valid reliance interests in regulations 
that are void ab initio. Indeed, even in the run-up to the 2012 
rulemaking, California itself reserved its rights to go in a different 
direction and recognized that the Federal Government may assert 
preemption at a later date.\197\ The extent to which all or part of 
industry does or does not support California's ability to regulate in 
this area is also not a relevant consideration to whether California is 
legally authorized to do so. NHTSA also notes that industry has 
expressed a strong preference for one national standard, which is the 
purpose of EPCA's preemption provision.\198\ California has now made 
clear that it will not accept manufacturers' compliance with Federal 
standards, unless the agencies adopt the no action alternative from the 
proposal.\199\ EPCA preemption ensures that such State regulations are 
unenforceable and that one set of national standards (the Federal 
standards) will control. Not even identical standards are permissible.
---------------------------------------------------------------------------

    \197\ See Letter from M. Nichols, CARB to R. LaHood, DOT & L. 
Jackson, EPA (July 28, 2011), available at https://www.epa.gov/sites/production/files/2016-10/documents/carb-commitment-ltr.pdf 
(last visited Sept. 15, 2019) (making certain commitments for a 
National Program, conditioned on certain events including EPA's 
grant of a waiver of Clean Air Act preemption, vehicle manufacturers 
not challenging California's standards on the basis of EPCA 
preemption, and indicating that ``California reserves all rights to 
contest final actions taken or not taken by EPA or NHTSA as part of 
or in response to the mid-term evaluation'').
    \198\ See Alliance of Automobile Manufacturers, Docket No. 
NHTSA-2018-0067-12073; American Honda Motor Company, Inc., Docket 
No. NHTSA-2018-0067-11818; Association of Global Automakers, Docket 
No. NHTSA-2018-0067-12032; Fiat Chrysler Automobiles (FCA), Docket 
No. NHTSA-2018-0067-11943; Ford Motor Company, Docket No. NHTSA-
2018-0067-11928; General Motors LLC, Docket No. NHTSA-2018-0067-
11858; Jaguar Land Rover, Docket No. NHTSA-2018-0067-11916; Mazda 
Motor Company, Docket No. NHTSA-2018-0067-11727; Mitsubishi Motors 
RD of America, Inc. (MRDA), Docket No. NHTSA-2018-0067-12056; 
Subaru, Docket No. NHTSA-2018-0067-12020; Toyota Motor North 
America, Docket No. NHTSA-2018-0067-12150; Volkswagen Group of 
America, Docket No. NHTSA-2017-0069-0583.
    \199\ See Cal. Code Regs. tit. 13, section 1961.3(c).
---------------------------------------------------------------------------

J. Clarifying Changes to Final Rule Text

    No commenter offered alternative regulatory text for consideration 
by the

[[Page 51328]]

agency on preemption. Because NHTSA is finalizing its views on 
preemption, it is adopting the proposed regulatory text, including an 
appendix. However, based on its review of comments, NHTSA is adopting a 
few minor, clarifying changes.
    While not advocating for a change to the regulatory text, comments 
from South Coast and CARB persuaded us to make changes to ensure 
consistency with EPCA's express preemption provision, as was NHTSA's 
intention.\200\ South Coast specifically pointed out that two 
provisions of the proposed regulatory text (appendix B, sections (a)(3) 
and (b)(3)) did not include the word ``automobiles.'' \201\ Contrary to 
South Coast's suggestion, NHTSA's intention was not to reach beyond the 
statutory text. Most of the proposed regulatory text explicitly 
addressed automobiles. In the two provisions identified by South Coast 
as omitting that term, NHTSA addressed tailpipe carbon dioxide 
emissions and fuel economy. In context, these references address 
automobile emissions and automobile fuel economy. However, for clarity 
and consistency, NHTSA has added explicit reference to automobiles to 
these two provisions.
---------------------------------------------------------------------------

    \200\ South Coast and CARB asked NHTSA to withdraw its proposal 
on preemption, rather than to change the text of the proposed rule. 
California Air Resources Board (CARB), Docket No. NHTSA-2018-0067-
11873; South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813. NHTSA declines to do so for the reasons 
discussed in this final rule.
    \201\ South Coast Air Quality Management District, Docket No. 
NHTSA-2018-0067-11813.
---------------------------------------------------------------------------

    CARB also pointed out in its comments that the statute preempts 
laws or regulations ``related to fuel economy standards,'' not simply 
those related to fuel economy.\202\ While other provisions of the 
proposed rule used the phrases ``relates to fuel economy standards'' or 
``related to fuel economy standards,'' the word ``standards'' was 
inadvertently omitted from section (a)(3) of the appendix. In the final 
rule, NHTSA has added that word for clarity.
---------------------------------------------------------------------------

    \202\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; see also Joint Submission from the States of 
California et al. and the Cities of Oakland et al., Docket No. 
NHTSA-2018-0067-11735.
---------------------------------------------------------------------------

    In addition, to ensure consistency throughout the regulatory text 
and with the preamble discussion, NHTSA is clarifying that a State law 
or regulations having either a direct or substantial effect of 
regulating or prohibiting tailpipe carbon dioxide emissions or fuel 
economy is a law or regulation related to fuel economy. The proposal 
included this statement in the proposed regulatory text: ``Automobile 
fuel economy is directly and substantially related to automobile 
tailpipe emissions of carbon dioxide.'' This provides the foundation 
for NHTSA's express and implied preemption analysis. NHTSA is therefore 
clarifying that requirements directly or substantially related to fuel 
economy are preempted by adding ``or substantially'' to two places in 
the regulatory text. This is consistent with the proposal, which 
explained that requirements with no bearing on fuel economy or those 
with only an incidental impact on fuel economy are not preempted.\203\ 
Requirements with more than an incidental impact, i.e. those 
requirements that directly or substantially affect fuel economy are 
related to fuel economy and thus preempted. Therefore, this change in 
the regulatory text of the final rule provides additional clarity on 
the scope of preemption.
---------------------------------------------------------------------------

    \203\ 83 FR 42986, 43235 (Aug. 24, 2018). It is also consistent 
with the Supreme Court case law interpreting ``related to'' in 
preemption provisions, as discussed both in the proposal and this 
final rule. See, e.g., Rowe, 552 U.S. at 375.
---------------------------------------------------------------------------

    In addition, several references throughout the proposed regulatory 
text addressed a ``state law or regulation.'' Consistent with EPCA and 
the discussion in the notice of proposed rulemaking, NHTSA intended to 
address laws and regulations of States and their political 
subdivisions. For clarity, NHTSA revised all references in its 
regulatory text to cover States and their political subdivisions.
    Specifically, in the rule NHTSA is finalizing in this document, 
appendix B, section (a)(3) reads: ``A law or regulation of a State or 
political subdivision of a State having the direct or substantial 
effect of regulating or prohibiting tailpipe carbon dioxide emissions 
from automobiles or automobile fuel economy is a law or regulation 
related to fuel economy standards and expressly preempted under 49 
U.S.C. 32919.'' \204\ Appendix B, section (b)(3) reads: ``A law or 
regulation of a State or political subdivision of a State having the 
direct or substantial effect of regulating or prohibiting tailpipe 
carbon dioxide emissions from automobiles or automobile fuel economy is 
impliedly preempted under 49 U.S.C. Chapter 329.'' \205\
---------------------------------------------------------------------------

    \204\ Emphases added.
    \205\ Emphases added.
---------------------------------------------------------------------------

    Finally, NHTSA also added clarifying language to 49 CFR 531.7(b) 
and 533.7(b) to indicate that the references to ``section 32908'' are 
to section 32908 of title 49 of the United States Code.
    These clarifying changes are consistent with the discussion in the 
preamble to NHTSA's proposed rule.

III. EPA's Withdrawal of Aspects of the January 2013 Waiver of CAA 
section 209(b) Preemption of the State of California's Advanced Clean 
Car Program

    In this section of this joint action, EPA is finalizing its August 
2018 proposal to withdraw aspects of its January 2013 waiver of Clean 
Air Act (CAA) section 209 preemption of the State of California's 
Advanced Clean Car (ACC) program. First, subsection A provides 
background regarding the ACC program. Second, subsection B finalizes 
EPA's proposed determination that it has the authority to reconsider 
and withdraw previously granted waivers. Third, subsection C finalizes 
EPA's proposed determination that, in light of NHTSA's determinations 
finalized elsewhere in this joint action regarding the preemptive 
effect of EPCA on state GHG and ZEV programs, EPA's January 2013 grant 
of a waiver of CAA preemption for those provisions of California's 
program was invalid, null, and void; that waiver is hereby withdrawn on 
that basis, effective on the effective date of this joint action. 
Fourth, subsection D, separate and apart from the determinations in 
subsection C with regard to the effect of EPCA preemption on the 
January 2013 waiver, finalizes EPA's reconsideration of, and its 
proposed determination that it is appropriate to withdraw, its January 
2013 grant of a waiver of CAA preemption for the GHG and ZEV standards 
in California's ACC program for model years 2021 through 2025, based on 
a determination that California ``does not need [those] standards to 
meet compelling and extraordinary conditions'' within the meaning of 
CAA section 209(b)(1)(B). Fifth, subsection E sets forth and specifies 
the terms of the waiver withdrawal. Sixth, subsection F finalizes EPA's 
proposed determination that, separate and apart from the findings and 
determinations described above, states other than California cannot use 
CAA section 177 to adopt California's GHG standards. Seventh and 
finally, subsection G sets forth EPA's understanding and intention with 
regard to severability of, and the appropriate venue for judicial 
review of, this action.

A. Background

    On January 9, 2013, EPA granted California's request for a waiver 
of preemption to enforce its Advanced Clean Car (ACC) program 
regulations under CAA section 209(b)(1).\206\ 78 FR

[[Page 51329]]

2112. On August 24, 2018, EPA proposed to withdraw this waiver of 
preemption with regard to the GHG and ZEV standards of its Advanced 
Clean Car (ACC) program for MY 2021-2025. 83 FR 43240. In the SAFE 
proposal, EPA provided extensive background on the history of CAA 
section 209 and waivers granted thereunder, as well as on the specific 
waiver which California sought for the ACC program which is at issue 
here, in the SAFE proposal.\207\ 83 FR 43240-43242.
---------------------------------------------------------------------------

    \206\ As in the proposal, this final action uses ``California'' 
and ``California Air Resources Board'' (or ``CARB'') 
interchangeably.
    \207\ A complete description of the ACC program, as it existed 
at the time that CARB applied for the 2013 waiver, can be found in 
CARB's waiver request, located in the docket for the January 2013 
waiver action, Docket No. EPA-HQ-OAR- 2012-0562.
---------------------------------------------------------------------------

    Since publication of the SAFE proposal, California has clarified 
its ``deemed to comply'' provision, under which manufacturers are 
afforded the option of complying with CARB's GHG standards by showing 
that they comply with the applicable federal GHG standards. As amended, 
CARB's ``deemed to comply'' provision now provides that compliance with 
CARB's GHG standards can be satisfied only by complying with the 
federal standards as those standards were promulgated in 2012. In other 
words, while the content of CARB's GHG standards has never been 
identical to the corresponding Federal standards, the ``deemed to 
comply'' provision as originally designed, and as it existed when EPA 
issued the January 2013 waiver, would have shielded automobile 
manufacturers from having to comply with two conflicting sets of 
standards unless they chose to do so. After the December 2018 
amendment, however, CARB's regulations now contain within them a 
mechanism which will automatically impose that state of affairs the 
moment that the Federal government should exercise its authority to 
revise its standards. California has further recently announced a 
``voluntary agreement'' with four automobile manufacturers that, among 
other things, requires the automobile manufacturers to refrain from 
challenging California's GHG and ZEV programs. This ``voluntary 
agreement'' further provides that California will accept automobile 
manufacturer compliance with a less stringent standard (and one that 
extends the phase-in of the GHG standard from 2025 to 2026) than either 
the California program that was the subject of the 2013 waiver or the 
Federal standards as promulgated in 2012. Neither California's 
amendment of its ``deemed to comply'' provision, nor its more recent 
announcement of the new ``voluntary agreement,'' constitute a necessary 
part of the basis for the waiver withdrawal and other actions that EPA 
finalizes in this document, and EPA would be taking the same actions 
that it takes in this document even in their absence. Nevertheless, EPA 
does not believe it appropriate to ignore these recent actions and 
announcements on the State's part, and, as discussed below, believes 
that they confirm that this action is appropriate.\208\
---------------------------------------------------------------------------

    \208\ EPA does not take any position at this point on what 
effect California's December 2018 amendment to its ``deemed to 
comply'' provision, or its July 2019 ``framework'' announcement, may 
of their own force have had on the continued validity of the January 
2013 waiver. EPA may address that issue in a separate, future 
action.
---------------------------------------------------------------------------

    On January 9, 2013, EPA granted CARB's request for a waiver of 
preemption to enforce its ACC program regulations pursuant to CAA 
section 209(b). 78 FR 2112. The ACC program comprises regulations for 
ZEV, tailpipe GHG emissions standards, and low-emission vehicles (LEV) 
regulations \209\ for new passenger cars, light-duty trucks, medium-
duty passenger vehicles, and certain heavy-duty vehicles, for MY 2015 
through 2025. Thus, in terms of the scope of coverage of the respective 
state and federal programs, the ACC program is comparable to the 
combined Federal Tier 3 Motor Vehicle Emissions Standards and the 2017 
and later MY Light-duty Vehicle GHG Standards, with an additional 
mandate to force the development and deployment of non-internal-
combustion-engine technology. According to CARB, the ACC program was 
intended to address California's near and long-term ozone issues as 
well as certain specific GHG emission reduction goals.\210\ 78 FR 2114. 
See also 78 FR 2122, 2130-2131. The ACC program regulations impose 
multiple and varying complex compliance obligations that have 
simultaneous, and sometimes overlapping, deadlines with each standard. 
These deadlines began in 2015 and are scheduled to be phased in through 
2025. For example, compliance with the GHG requirements began in 2017 
and will be phased in through 2025.\211\ The implementation schedule 
and the interrelationship of regulatory provisions with each of the 
three standards together demonstrates that CARB intended that at least 
the GHG and ZEV standards, if not also the LEV standards, would be 
implemented as a cohesive program. For example, in its ACC waiver 
request, CARB stated that the ``ZEV regulation must be considered in 
conjunction with the proposed LEV III amendments. Vehicles produced as 
a result of the ZEV regulation are part of a manufacturer's light-duty 
fleet and are therefore included when calculating fleet averages for 
compliance with the LEV III GHG amendments.'' CARB's Initial Statement 
of Reasons at 62-63.\212\ CARB also noted ``[b]ecause the ZEVs have 
ultra-low GHG emission levels that are far lower than non-ZEV 
technology, they are a critical component of automakers' LEV III GHG 
standard compliance strategies.'' Id. CARB further explained that ``the 
ultra-low GHG ZEV technology is a major component of compliance with 
the LEV III GHG fleet standards for the overall light duty fleet.'' Id. 
CARB's request also repeatedly touted the GHG emissions benefits of the 
ACC program. Up until the ACC program waiver request, CARB had relied 
on the ZEV requirements as a compliance option for reducing criteria 
pollutants. Specifically, California first included the ZEV requirement 
as part of its first LEV program, which was then known as LEV I, that 
mandated a ZEV sales requirement that phased-in starting with the 1998 
MY through 2003 MY. EPA issued a waiver of preemption for these 
regulations on January 13, 1993 (58 FR 4166 (January 13, 1993). Since 
this initial waiver of preemption, California has amended the ZEV 
requirements multiple times and EPA has

[[Page 51330]]

subsequently granted waivers for those amendments. Notably, however, in 
the ACC program waiver request, California also included a waiver of 
preemption request for ZEV amendments that related to 2012 MY through 
2017 MY and new requirements for 2018 MY through 2025 MY (78 FR 2118-
9). Regarding the ACC program ZEV requirements, CARB's waiver request 
noted that there was no criteria emissions benefit in terms of vehicle 
(tank-to-wheel--TTW) emissions because its LEV III criteria pollutant 
fleet standard was responsible for those emission reductions.\213\ CARB 
further noted that its ZEV regulation was intended to focus primarily 
on zero emission drive--that is, battery electric (BEVs), plug-in 
hybrid electric vehicles (PHEVs), and hydrogen fuel cell vehicles 
(FCVs)--in order to move advanced, low GHG vehicles from demonstration 
phase to commercialization (78 FR 2122, 2130- 31). Specifically, for 
2018 MY through 2025 MY, the ACC program ZEV requirements mandate use 
of technologies such as BEVs, PHEVs and FCVs, in up to 15% of a 
manufacturer's California fleet by MY 2025 (78 FR 2114). Additionally, 
the ACC program regulations provide various compliance flexibilities 
allowing for substitution of compliance with one program requirement 
for another. For instance, manufacturers may opt to over-comply with 
the GHG fleet standard in order to offset a portion of their ZEV 
compliance requirement for MY 2018 through 2021. Further, until MY 
2018, sales of BEVs (since MY 2018, limited to FCVs) \214\ in 
California count toward a manufacturer's ZEV credit requirement in CAA 
section 177 States. This is known as the ``travel provision'' (78 FR 
2120).\215\ For their part, the GHG emission regulations include an 
optional compliance provision that allows manufacturers to demonstrate 
compliance with CARB's GHG standards by complying with applicable 
Federal GHG standards. This is known as the ``deemed to comply'' 
provision. Since proposal, California has amended its regulations to 
provide that the ``deemed to comply'' provision only applies to the 
standards originally agreed to by California, the federal government, 
and automakers in 2012. In other words, automobile manufacturers would 
not be able to rely on the ``deemed to comply'' provision for any 
revision to those 2012 standards. California has further entered into a 
voluntary agreement with four automobile manufacturers that amongst 
other things, requires the automobile manufacturers to refrain from 
challenging California's GHG and ZEV programs, and provides that 
California will accept automobile manufacturer compliance with a less 
stringent standard than either the California program that was the 
subject of the 2013 waiver or the Federal standards as promulgated in 
2012.
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    \209\ The LEV regulations in question include standards for both 
GHG and criteria pollutants (including ozone and PM).
    \210\ ``The Advanced Clean Cars program . . . will reduce 
criteria pollutants . . . and . . . help achieve attainment of air 
quality standards; The Advanced Clean Cars Program will also reduce 
greenhouse gases emissions as follows: by 2025, CO2 equivalent 
emissions will be reduced by 13 million metric tons (MMT) per year, 
which is 12 percent from base line levels; the reduction increases 
in 2035 to 31 MMT/year, a 27 percent reduction from baseline levels; 
by 2050, the proposed regulation would reduce emissions by more than 
40 MMT/year, a reduction of 33 percent from baseline levels; and 
viewed cumulatively over the life of the regulation (2017-2050), the 
proposed Advanced Clean Cars regulation will reduce by more than 850 
MMT CO2-equivalent, which will help achieve the State's climate 
change goals to reduce the threat that climate change poses to 
California's public health, water resources, agriculture industry, 
ecology and economy.'' 78 FR 2114. CARB Resolution 12-11, at 19, 
(January 26, 2012), available in the docket for the January 2013 
waiver action, Document No. EPA-HQ-OAR-2012- 0562, the docket for 
the ACC program waiver.
    \211\ As discussed above, California has further entered into a 
voluntary agreement with four automobile manufacturers that amongst 
other things, purports to allow compliance with a less stringent 
program than either the program that was the subject of the 2013 
waiver or the Federal standards promulgated in 2012. See https://www.gov.ca.gov/2019/07/25/california-and-major-automakers-reach-groundbreaking-framework-agreement-on-clean-emission-standards/ 
(last visited Aug. 30, 2019).
    \212\ Available in the docket for the January 2013 waiver 
decision, Docket No. EPA-HQ-OAR-2012- 0562.
    \213\ ``There is no criteria emissions benefit from including 
the ZEV proposal in terms of vehicle (tank-to-wheel or TTW) 
emissions.'' CARB ACC waiver request at 15 (May 2012), EPA-HQ-OAR- 
2012-0562-0004.
    \214\ This kind of ZEV technology continues to present 
technological challenges and in 2006, for instance, EPA granted 
California a waiver of its ZEV standards through the 2011MY but due 
to feasibility challenges declined to grant a waiver for MY 2012 and 
subsequent model years. See 71 FR 78190; EPA, EPA ZEV Waiver 
Decision Document, EPA-HQ-OAR-2004-0437 (Dec. 21, 2006).
    \215\ On March 11, 2013, the Association of Global Automakers 
and Alliance of Automobile Manufacturers filed a petition for 
reconsideration of the January 2013 waiver grant, requesting that 
EPA reconsider the decision to grant a waiver for MYs 2018 through 
2025 ZEV standards on technological feasibility grounds. Petitioners 
also asked for consideration of the impact of the travel provision, 
which they argue raise technological feasibility issues in CAA 
section 177 States, as part of the agency's review under the third 
waiver prong, CAA section 209(b)(1)(C). EPA continues to evaluate 
the petition. As explained below, in this action EPA is not taking 
final action with regard to the proposed determinations under the 
third waiver prong. Whether and how EPA will respond to the March 
2013 petition will be considered in connection with a potential 
future final action with respect to the proposed third prong 
determinations set forth in the SAFE proposal.
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    As explained in the SAFE proposal (83 FR 83 FR 23245-46), up until 
the 2008 GHG waiver denial, EPA had interpreted CAA section 
209(b)(1)(B) as requiring a consideration of California's need for a 
separate motor vehicle program designed to address local or regional 
air pollution problems and not whether the specific standard that is 
the subject of the waiver request is necessary to meet such conditions 
(73 FR 12156; March 6, 2008). We also explained that California would 
typically seek a waiver of particular aspects of its new motor vehicle 
program up until the ACC program waiver request. We further explained 
that in the 2008 GHG waiver denial, which was a waiver request for only 
GHG emissions standards, EPA had determined that its interpretation of 
CAA section 209(b)(1)(B) as calling for a consideration of California's 
need for a separate motor vehicle program was not appropriate for GHG 
standards because such standards are designed to address global air 
pollution problems in contrast to local or regional air pollution 
problems specific to and caused by conditions specific to California 
(73 FR 12156-60). In the 2008 GHG waiver denial, EPA further explained 
that its previous reviews of California's waiver request under CAA 
section 209(b)(1)(B) had usually been cursory and undisputed, as the 
fundamental factors leading to California's air pollution problems--
geography, local climate conditions (like thermal inversions), 
significance of the motor vehicle population--had not changed over time 
and over different local and regional air pollutants. These fundamental 
factors applied similarly for all of California's air pollution 
problems that are local or regional in nature. In the 2008 GHG waiver 
denial, EPA noted that atmospheric concentrations of GHG are 
substantially uniform across the globe, based on their long atmospheric 
life and the resulting mixing in the atmosphere. EPA therefore posited 
that with regard to atmospheric GHG concentrations and their 
environmental effects, the California specific causal factors that EPA 
had considered when reviewing previous waiver applications under CAA 
section 209(b)(1)(B)--the geography and climate of California, and the 
large motor vehicle population in California, which were considered the 
fundamental causes of the air pollution in California--do not have the 
same relevance to the question at hand. EPA explained that the 
atmospheric concentration of GHG in California is not affected by the 
geography and climate of California. The long duration of these gases 
in the atmosphere means they are well-mixed throughout the global 
atmosphere, such that their concentrations over California and the U.S. 
are substantially the same as the global average. The number of motor 
vehicles in California, while still a notable percentage of the 
national total and still a notable source of GHG emissions in the 
State, is not a significant percentage of the global vehicle fleet and 
bears no closer relation to the levels of GHG in the atmosphere over 
California than any other comparable source or group of sources of GHG 
anywhere in the world. Emissions of greenhouse gases from California 
cars do not generally remain confined within California's local 
environment but instead become one part of the global pool of GHG 
emissions, with this global pool of emissions leading to a relatively 
homogenous concentration of GHG over the globe. Thus, the emissions of 
motor vehicles in California do not affect California's air pollution 
problem in any way that is different from how emissions from vehicles 
and other pollution sources all around the U.S. (and, for that matter, 
the world) do.

[[Page 51331]]

Similarly, the emissions from California's cars do not only affect the 
atmosphere in California but in fact become one part of the global pool 
of GHG emissions that affect the atmosphere globally and are 
distributed throughout the world, resulting in basically a uniform 
global atmospheric concentration. EPA then applied this reasoning to 
the GHG standards at issue in the 2008 GHG waiver denial. Having 
limited the meaning of this provision to situations where the air 
pollution problem was local or regional in nature, EPA found that 
California's GHG standards did not meet this criterion. Additionally, 
in the 2008 GHG waiver denial, EPA also applied an alternative 
interpretation where EPA would consider effects of the global air 
pollution problem in California in comparison to the effects on the 
rest of the country and again addressed the GHG standards separately 
from the rest of California's motor vehicle program. Under this 
alternative interpretation, EPA considered whether impacts of global 
climate change in California were sufficiently different from impacts 
on the rest of the country such that California could be considered to 
need its GHG standards to meet compelling and extraordinary conditions. 
EPA determined that the waiver should be denied under this alternative 
interpretation as well. 83 FR 23245-46.
    In 2009, EPA reversed its previous denial and granted California's 
preemption waiver request for its GHG emission standards ``for 2009 and 
later model years.'' 74 FR 32744. EPA announced that it was returning 
to what it styled as the traditional interpretation of CAA section 
209(b)(1)(B), under which it would only consider whether California had 
a ``need for its new motor vehicle emissions program as a whole,'' id. 
at 32761. It determined that California did, based on ongoing NAAQS 
attainment issues. Id. at 32762-32763. In the alternative, while not 
adopting either of the 2008 waiver denial's alternative approaches, EPA 
also determined that California needed its GHG standards as part of its 
NAAQS attainment strategy due to the indirect effects of climate change 
on ground-level ozone formation, id. at 32763, and that waiver 
opponents had not met their burden of proof to demonstrate that 
California climate impacts ``are not sufficiently different'' to 
nationwide impacts, id. at 32765. EPA also determined that there were 
no grounds to deny the waiver under CAA section 209(b)(1)(A) (whether 
the State's determination that its standards in the aggregate are at 
least as protective as federal standards) or CAA section 209(b)(1)(C) 
(whether ``such state standards'' and accompanying enforcement 
procedures are inconsistent with CAA section 202(a)). Id. at 32759, 
32780.

B. EPA's Authority To Reconsider and Withdraw a Previously Granted 
Waiver Under CAA Section 209(b)

    In this action, EPA finalizes its proposed determination that it 
has the authority to withdraw a waiver in appropriate circumstances. 
EPA explains below (in this subsection, III.B) the basis for its 
conclusions that it has authority to withdraw a waiver in appropriate 
circumstances, and (in subsections III.C and III.D) that it is 
appropriate for EPA to exercise that authority at this time.\216\
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    \216\ As a general matter, for purposes of determining if 
withdrawal is appropriate, EPA may initiate reconsideration sua 
sponte where CARB amends either a previously waived standard or 
accompanying enforcement procedure. 47 FR 7306, 7309 (Feb. 18, 
1982). See also 43 FR 998 (January 5, 1978) (Grant of 
reconsideration to address portions of waived California's 
motorcycle program that California substantially amended). 
Additionally, if California acts to amend either a previously waived 
standard or accompanying enforcement procedure, the amendment may be 
considered to be within-the-scope of a previously granted waiver 
provided that it does not undermine California's determination that 
its standards, in the aggregate, are as at least as protective of 
public health and welfare as applicable Federal standards, does not 
affect its consistency with section 202(a) of the Act, and raises no 
new issues affecting EPA's previous waiver decisions. See, e.g., 51 
FR 12391 (April 10, 1986) and 65 FR 69673, 69674 (November 20, 
2000).
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    Agencies generally have inherent authority to reconsider their 
prior actions. Nothing in CAA section 209(b) indicates Congressional 
intent to remove that authority with respect to waivers that it has 
previously granted. The text, structure, and context of CAA section 
209(b) support EPA's interpretation that it has this authority. And no 
cognizable reliance interests have accrued sufficient to foreclose 
EPA's ability to exercise this authority here.
    In considering EPA's authority to withdraw a waiver, it is clear 
that EPA has authority to review and grant California's applications 
for a waiver based on its evaluation of the enumerated criteria in CAA 
section 209(b). In this action, we affirm the Agency's proposed view 
that the absence of explicit language with regard to withdrawal of a 
waiver does not foreclose agency reconsideration and withdrawal of a 
waiver.
    As explained at proposal, California's ability to obtain a waiver 
under CAA section 209(b)(1) in the first instance is not unlimited. 
Specifically, CAA section 209(b)(1) provides that ``no such waiver will 
be granted'' if the Administrator finds any of the following: ``(A) 
[California's] determination [that its standards in the aggregate will 
be at least as protective] is arbitrary and capricious, (B) 
[California] does not need such State standards to meet compelling and 
extraordinary conditions, or (C) such State standards and accompanying 
enforcement procedures are not consistent with section [202(a)].'' CAA 
section 209(b)(1)(A)-(C), 42 U.S.C. 7543(b)(1)(A)-(C) (emphasis added). 
CAA Section 209(b)(1) is therefore, premised on EPA review and grant of 
a waiver prior to California's enforcement of vehicle and engine 
standards unless certain enumerated criteria are met.
    Congress could have simply carved out an exemption from preemption 
under CAA section 209(b)(1), similar to the exemption it created in CAA 
section 211(c)(4)(B) for California fuel controls and prohibitions. 
Under CAA section 211(c)(4)(A), states and political subdivisions are 
preempted from prescribing or attempting ``to enforce, for purposes of 
motor vehicle emission control, any control or prohibition, respecting 
any characteristic or component of a fuel or fuel additive in a motor 
vehicle or motor vehicle engine'' if EPA has prescribed a control or 
prohibition applicable to such characteristic or component of the fuel 
or fuel additive under CAA section 211(c)(1). EPA may waive preemption 
for states other than California to prescribe and enforce nonidentical 
fuel controls or prohibitions subject to certain conditions. Further, 
waivers are not required where states adopt state fuel controls or 
prohibitions that are identical to federal controls or for California 
to adopt fuel controls and prohibitions. CAA sections 211(c)(4)(A)(ii) 
and 211(c)(4)(B). This stands in stark contrast to CAA section 209(b), 
which requires EPA to make a judgment about California's request for a 
waiver of preemption.\217\ Notably, CAA section 211(c)(4)(B) also 
cross-references CAA section 209(b)(1): ``(B) Any State for which 
application of section 7543(a) of this title has at any time been 
waived under section 7543(b) \218\ of this title may at any time

[[Page 51332]]

prescribe and enforce, for the purpose of motor vehicle emission 
control, a control or prohibition respecting any fuel or fuel 
additive.'' CAA section 211(c)(4)(B).
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    \217\ ``Noteworthy is the fact that under the terms of the Act, 
EPA approval of California fuel regulations is not required. See Act 
section 211(c)(4)(B), 42 U.S.C. 7545(c)(4)(B).'' (Emphasis in 
original.) Motor Vehicle Mfrs. Ass'n v. NYS Dep. of Envt'l 
Conservation, 17 F.3d 521, 527 (2d Cir. 1994).
    \218\ CAA section 211(c)(4)(B), 42 U.S.C. 7545(c)(4)(B). This 
provision does not identify California by name. Rather, it 
references CAA section 209(b), which applies on its face to ``any 
State which has adopted standards (other than crankcase emission 
standards) for the control of emissions from new motor vehicles or 
new motor vehicle engines prior to March 30, 1966.'' California is 
the only State that meets this requirement. See S. Rep. No. 90-403 
at 632 (1967).
---------------------------------------------------------------------------

    Under the third waiver prong, CAA section 209(b)(1)(C), for 
example, EPA is to review the consistency of California's standards 
with CAA section 202(a), a provision of the Clean Air Act that EPA 
solely implements.\219\ CAA Section 202(a) provides in relevant part 
that standards promulgated under this section ``shall take effect after 
such period as the Administrator finds necessary to permit the 
development and application of the requisite technology, giving 
appropriate consideration to the cost of compliance within such 
period.''
---------------------------------------------------------------------------

    \219\ EPA has explained that California's standards are not 
consistent with CAA section 202(a) if there is inadequate lead time 
to permit the development of technology necessary to meet those 
requirements, given appropriate consideration to the cost of 
compliance within that time. California's accompanying enforcement 
procedures would also be inconsistent with CAA section 202(a) if the 
Federal and California test procedures were inconsistent. 
Legislative history indicates that under CAA section 209(b)(1)(C), 
EPA is not to grant a waiver if it finds that there is: ``Inadequate 
time to permit the development of the necessary technology given the 
cost of compliance within that time period.'' H. Rep. No. 728, 90th 
Cong., 1st Sess. 21 (1967); ``That California standards are not 
consistent with the intent of section 202(a) of the Act, including 
economic practicability and technological feasibility.'' S. Rep. No. 
403, 90th Cong. 1st Sess. 32 (1967).
---------------------------------------------------------------------------

    In tying the third waiver prong to CAA section 202(a), Congress 
gave a clear indication that, in determining whether to grant a waiver 
request, EPA is to engage in a review that involves a considerable 
degree of future prediction, due to the expressly future-oriented terms 
and function of CAA section 202(a).\220\ In turn, where circumstances 
arise that suggest that such predictions may have been inaccurate, it 
necessarily follows that EPA has authority to revisit those predictions 
with regard to rules promulgated under CAA section 202(a), the 
requirements of that section, and their relation to the California 
standards at issue in a waiver request, and, on review, withdraw a 
previously granted waiver where those predictions proved to be 
inaccurate.
---------------------------------------------------------------------------

    \220\ There is another textual indication that EPA's grant of a 
waiver is not limited to a snapshot in time, with the Agency having 
no authority to ever revisit, reconsider, and, where appropriate, 
modify or withdraw waivers that it has previously granted. CAA 
section 209(b) provides authority to waive the preemptive provision 
of CAA section 209(a). CAA section 209(a) forbids states from 
``adop[ting] or attempt[ing] to enforce'' vehicle emission 
standards; so states cannot do so without or beyond the scope of a 
waiver. EPA must presume that ``attempt to enforce'' is not 
surplusage; it must mean something, and its potential meanings all 
suggest some ability on EPA's part to consider actions on the 
state's part separate from the state's ``adopt[ion]'' of statutory 
or regulatory provisions and submission to EPA of a waiver request 
for those provisions. An ``attempt to enforce'' could potentially 
mean either a state's attempt to de facto control emissions without 
having de jure codified emissions control requirements, or it could 
refer to a state's enforcement actions under a program that it has 
already ``adopt[ed].'' Under either scenario, the prohibition on 
``attempt[ing] to enforce'' envisions state activity outside the 
scope of what can be determined by EPA from the face of a waiver 
submission. The prohibited activity is not limited to that which can 
be subject to a snapshot, one-time-only waiver application, which is 
further support for the conclusion that EPA has authority to 
reconsider its action on such applications in light of activity 
later in time than or outside the authorized scope of a waiver once 
granted.
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    Under CAA section 202(a), standards are often technology-forcing 
and thus involve predictions on the part of EPA with regard to future 
trends in technological and economic factors. This calls for 
``substantial room for deference to the EPA's expertise in projecting 
the likely course of development.'' Natural Resources Defense Council 
v. EPA (NRDC), 655 F.2d 318, 331 (D.C. Cir. 1981) (upholding EPA's lead 
time projections for emerging technologies as reasonable). The D.C. 
Circuit has recognized that EPA might modify standards ``if the actual 
future course of technology diverges from expectation.'' Id. at 329. It 
cannot be that EPA has the inherent authority to revisit and revise its 
own determinations under CAA section 202(a), but it lacks authority to 
revisit those same determinations under CAA section 209(b).\221\
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    \221\ According to one commenter, ``it would be very odd if 
Sec.  209(b) waivers were a one-way ratchet that could be granted 
but never rescinded. . . . For example, it would run contrary to the 
statutory scheme to require EPA to leave a waiver in place even 
after the compelling and extraordinary conditions that justified the 
waiver are fully addressed.'' Comments of the Alliance of Automobile 
Manufacturers at 182. EPA agrees.
---------------------------------------------------------------------------

    Thus, the structure of the statute--where State standards may only 
be granted a waiver under CAA section 209(b) to the extent that they 
are consistent with CAA section 202(a)--confirms that EPA has inherent 
authority to reconsider its prior determination that a request for a 
waiver for California standards met the criteria of CAA section 209(b). 
This renders untenable the stance taken by some commenters that EPA is 
somehow precluded from conducting a subsequent review and withdrawing a 
waiver even when it becomes aware that its initial predictions in this 
regard have proven inaccurate.
    Further, as discussed in the SAFE proposal, the legislative history 
of CAA section 209(b) confirms that Congress intended EPA's authority 
under CAA section 209(b) to include the authority to withdraw a 
previously granted waiver under appropriate circumstances. 83 FR 43242-
43243. See S. Rep. No. 50-403, at 34 (1967) (``Implicit in this 
provision is the right of the [Administrator] to withdraw the waiver at 
any time [if] after notice and an opportunity for public hearing he 
finds that the State of California no longer complies with the 
conditions of the waiver.'').
    Some commenters that oppose the proposed withdrawal of the waiver 
concede that the agency may review California's waiver applications 
under the third waiver prong but then argue that such agency review is 
a ``narrow one.'' \222\ Under CAA Section 209, they contend, grants 
California ``maximum authority'' to set engine and vehicle standards. 
Commenters' objection to the instant withdrawal therefore appears to be 
grounded in some belief that CAA section 209(b) calls for complete 
deference to California. This view is erroneous. EPA has in fact 
previously initiated reconsideration under the third waiver prong, CAA 
section 209(b)(1)(C), in order to ``vacate that portion of the waiver 
previously granted under section 209(b)'' in response to CARB's post 
waiver modification for previously waived standards. 47 FR 7309. In 
that reconsideration action, EPA affirmed the grant of a waiver in the 
absence of ``findings necessary to revoke California's waiver of 
Federal preemption for its motorcycle fill-pipe and fuel tank opening 
regulations.'' 43 FR 7310. Additionally, EPA has explained that 
reconsideration will be initiated where leadtime concerns arise after 
the grant of an initial waiver. ``If California's leadtime projections 
later prove to have been overly optimistic, the manufacturer can ask 
that California reconsider its standard, if they are unsuccessful in 
securing such relief, the

[[Page 51333]]

manufacturers could petition EPA to reconsider the waiver.'' 49 FR 
18895, 18896 n.104. Further, EPA has in the past repeatedly denied 
portions of several waiver requests.\223\ EPA has also historically 
deferred or limited the terms of its grant of aspects of some waiver 
requests as a means of ensuring consistency with CAA section 
202(a).\224\ It is precisely these kinds of EPA actions that have 
forestalled withdrawal of any waiver to date--not any lack of authority 
on EPA's part to withdraw. None of the commenters, however, provided 
explanations as to why their apparent view of maximum deference to 
California is not implicated by EPA's authority to either deny a waiver 
request or to modify the terms of a waiver request in the course of 
granting one. And EPA's 2009 reversal of its 2008 denial supports, and 
demonstrates the long-held nature of, its position that EPA has 
authority to reconsider and reverse its actions on waiver 
applications.\225\
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    \222\ According to several commenters, CAA section 209(b) 
contains no express delegation of authority to EPA to withdraw a 
waiver, and in proposing to revoke a previous waiver ``EPA has 
arrogated to itself power only Congress can exercise.'' Comments of 
the Center for Biological Diversity, Conservation Law Foundation, 
EarthJustice, Environmental Defense Fund, Environmental Law and 
Policy Center, Natural Resources Defense Council, Public Citizen, 
Inc., Sierra Club, and Union of Concerned Scientists at 68. One 
commenter also argued that either EPA lacks authority to revoke a 
previously granted waiver or that any authority to do so is 
``limited.'' ``The unique text and structure of this section limits 
EPA's authority, contrary to EPA's assertion of open-ended 
revocation authority in the proposal.'' Comments of the California 
Air Resources Board at 340.
    \223\ 38 FR 30136 (November 1, 1973) (denial of waiver for MY 
1975 HC and CO standards ``because costs of compliance within the 
lead time remaining is excessive.''); 43 FR 998 (January 5, 1978) 
(denial of waiver for MY 1978 test procedures due to insufficient 
lead time); 40 FR 30311 (July 18, 1975) (denial of waiver due to 
insufficient lead time for MY 1977).
    \224\ 58 FR 4166 (January 13, 1993) (deferring consideration of 
portions of waiver request); 67 FR 54180, 81 n.1 (August 21, 2002) 
(granting waiver with certain exceptions).
    \225\ In seeking reconsideration of the March 8, 2008 waiver 
denial, CARB also noted that ``EPA has the inherent authority to 
reconsider its previous waiver denial'' 74 FR 32747.
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    At least one commenter argued that this legislative history did not 
support the position that EPA has authority to withdraw a previously 
granted waiver because the legislative history relates to the original 
creation of the waiver provision in the Air Quality Act of 1967, 
whereas the Clean Air Act Amendments of 1977 revised language in the 
root text of CAA section 209(b)(1). Specifically, Congress in 1977 
amended CAA section 209(b)(1) to establish as a prerequisite for the 
grant of a waiver that the State determine that its standards ``will 
be, in the aggregate, at least as protective of public health and 
welfare as applicable Federal standards'' for EPA to issue a waiver, 
rather than the original requirement that State standards be ``more 
stringent'' than corresponding federal standards.\226\ EPA disagrees 
that this amendment was either intended to deprive EPA of authority to 
withdraw a previously granted waiver when the Administrator finds 
applicable one or more of the three criteria in CAA section 209(b)(1) 
under which a waiver is inappropriate, or that the amendment can be 
reasonably construed to have had such effect. There is no indication 
that the amendment was intended to alter EPA's authority under the 
original provision. Nor did the amendment alter the language of the 
criteria enumerated in CAA section 209(b). In any event, as previously 
discussed above, EPA has initiated reconsideration for purposes of 
revoking a waiver since the 1977 CAA amendments. See for example, 47 FR 
7306 (Feb. 18, 1982) (Agency reconsideration of grant of waiver for 
purposes of withdrawal in response to CARB's post waiver modification 
for previously waived standards).
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    \226\ The intent of the 1977 amendment was to accommodate 
California's particular concern with NOX, which the State 
regarded as a more serious threat to public health and welfare than 
carbon monoxide. California was eager to establish oxides of 
nitrogen standards considerably more stringent than applicable 
Federal standards, but technological developments posed the 
possibility that emission control devices could not be constructed 
to meet both the stringent California oxides of nitrogen standard 
and the stringent federal carbon monoxide standard. Motor & Equip. 
Mfrs. Ass'n, Inc. v. EPA, 627 F.2d at 1110 n.32. EPA has explained 
that the phrase ``in the aggregate'' was specifically aimed at 
allowing California to adopt CO standards less stringent than the 
corresponding federal standards, while at the same time adopting 
more stringent NOX standards, as part of California's 
strategy to address ozone problems. California reasoned that a 
relaxed CO standard would facilitate the technological feasibility 
of more stringent NOX standards. 78 FR 43247.
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    Some commenters question whether EPA has any authority at all to 
reconsider a previously granted waiver. It is well-settled, however, 
that EPA has inherent authority to reconsider, revise, or repeal past 
decisions to the extent permitted by law. At proposal, EPA explained 
that, although CAA section 209(b)(1) may not expressly communicate that 
EPA has authority to reconsider and withdraw a waiver, both the 
legislative history of the waiver provision and fundamental principles 
of administrative law establish that EPA necessarily possesses that 
authority. The authority to reconsider prior agency decisions need not 
be rooted in any particular ``magic words'' in statutory text. Subject 
to certain limitations, administrative agencies possess inherent 
authority to reconsider their decisions. See ConocoPhillips Co. v. EPA, 
612 F.3d 822, 832 (5th Cir. 2010) (``Embedded in an agency's power to 
make a decision is its power to reconsider that decision.''); Dun & 
Bradstreet Corp. Found. v. U.S. Postal Serv., 946 F.2d 189, 193 (2d 
Cir. 1991) (``It is widely accepted that an agency may, on its own 
initiative, reconsider its interim or even its final decisions, 
regardless of whether the applicable statute and agency regulations 
expressly provide for such review.''); Mazaleski v. Treusdell, 562 F.2d 
701, 720 (D.C. Cir. 1977) (``[A]n agency has the inherent power to 
reconsider and change a decision if it does so within a reasonable 
period of time.''); Belville Min. Co. v. United States, 999 F.2d 989, 
997 (6th Cir. 1993) (``Even where there is no express reconsideration 
authority for an agency, however, the general rule is that an agency 
has inherent authority to reconsider its decision, provided that 
reconsideration occurs within a reasonable time after the first 
decision.'').
    The commenters' position that EPA does not have any authority to 
reconsider either a grant or a denial of a waiver founders in light of 
these principles. As explained in the SAFE proposal, 83 FR 43242-43243, 
EPA does have that authority, in part because its interpretations of 
the statutes it administers ``are not carved in stone.'' Chevron U.S.A. 
v. NRDC, 467 U.S. 837, 863 (1984). An agency ``must consider varying 
interpretations and the wisdom of its policy on a continuing basis.'' 
Id. at 863-64. Notably, in response to CARB's request, EPA has 
previously reconsidered and reversed a previous waiver denial.\227\ 
Similarly, in keeping with agency CAA section 209(b)(1) practice, EPA 
has reconsidered its previous decision to grant a waiver for portions 
of California's motorcycle program in response to a petition for 
reconsideration from the motorcycle industry.\228\
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    \227\ EPA reconsidered the 2008 GHG waiver denial in response to 
CARB's request and granted it upon reconsideration. 72 FR 32744 
(July 9, 2009). See also 43 FR 998 (January 5, 1978) (Grant of 
reconsideration to address portions of waived California's 
motorcycle program that California substantially amended).
    \228\ 43 FR 998 (January 5, 1978).
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    Other commenters assert that EPA's proposal to withdraw the waiver 
is solely based on a change in Presidential administration. There is no 
basis for this claim. While EPA noted in the SAFE proposal that the 
agency can review and reconsider a prior decision ``in response to . . 
. a change in administration,'' National Cable & Telecommunications 
Ass'n v. Brand X Internet Services, 545 U.S. 967, 981 (2005), we 
further acknowledged that ``the EPA must also be cognizant where it is 
changing a prior position and articulate a reasoned basis for the 
change.'' FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 
(2009). 83 FR 43242-43243, 43248. In keeping with the proposed waiver 
withdrawal, under the second waiver prong, CAA section 209(b)(1)(B), as 
discussed below, EPA in this document finalizes a determination that 
California does not

[[Page 51334]]

need its GHG and ZEV standards to meet compelling and extraordinary 
conditions, within the meaning of those terms as they are used in the 
statute, that differs from its determination on the same question made 
in the course of granting the ACC program waiver. Additionally, the 
agency, in response to a request by automobile manufacturers, who have 
consistently expressed reservations over their ability to comply with 
MY 2022-2025 GHG standards, is reconsidering standards that are the 
compliance mechanism for CARB's MY 2022-2025 GHG standards. This is the 
compliance mechanism that California had provided in response to 
automobile manufacturers request and support for the waiver of 
preemption.
    At proposal, EPA noted that California had given public notice that 
it was considering amending its ``deemed to comply'' provision to 
provide that that provision would be applicable only to vehicles that 
meet the standards originally agreed to by California, the federal 
government, and automakers in 2012. See 83 FR 43252 n.589. California 
finalized that amendment to its regulations after the close of the SAFE 
comment period, in late 2018. California more recently, in July 2019, 
announced a ``framework'' agreement with certain automakers that 
purported to establish a ``nationwide'' standards program different 
from both the 2012 Federal standards and from the California program 
for which EPA granted the January 2013 waiver. These actions on 
California's part, while not proposed as bases for waiver withdrawal in 
the August 2018 SAFE proposal, as those actions had not yet transpired 
at the time of proposal, and while not necessary for the finalization 
of this action, do provide further support for this action (although 
EPA does not view them as necessary predicates for this action and 
would be taking this action even in their absence).
    Thus, contrary to some commenters' assertions, reconsideration of 
the grant of the waiver, and EPA's proposal to withdraw the waiver, was 
not solely motivated by a change in Presidential administration. The 
policy, technical, and legal considerations discussed in the proposal 
and in this final action provide the rationale for EPA's actions here. 
It is therefore distinguishable from the instance where, for example, 
an agency undertook reconsideration subsequent to a change in 
administration because ``the withdrawn decision was doubtful in light 
of changing policies.'' Coteau Properties Co. v. DOI, 53 F.3d 1466, 
1479 (8th Cir. 1995).
    Further, as earlier noted, California has now entered into a 
voluntary agreement with at least four automobile manufacturers that 
amongst other things, requires the automobile manufacturers to refrain 
from challenging California's GHG and ZEV programs, and provides that 
California will accept automobile manufacturer compliance with a less 
stringent standard than either the California program that was the 
subject of the 2013 waiver or the Federal standards as promulgated in 
2012.\229\ This agreement appears to materially depart from the 
existing grant of waiver for MY 2021-2025 GHG standards, is in tension 
with California's above-mentioned amendment of the ``deemed to comply'' 
provision, and raises an additional reason to question whether 
California ``needs'' their existing standards within the meaning of CAA 
section 209(b)(1)(B), given that California has announced it is 
proceeding to create a new ``voluntary'' program that would relax the 
stringency of some aspects of those standards. That is to say, 
California's apparent weakening of its program as it was originally 
submitted for waiver calls into question whether it needs that program. 
EPA believes that this provides additional support for its conclusion, 
as set forth in subsections III.B and III.D, both that it has authority 
to withdraw its grant of the waiver and that California does not in 
fact need these waived standards to meet ``compelling and extraordinary 
conditions,'' CAA section 209(b)(1)(B), if the State is itself already 
proceeding to allow departures from those waived standards.\230\ EPA 
further believes that California cannot claim reliance interests when 
it is undertaking steps to alter the status quo.
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    \229\ https://www.gov.ca.gov/2019/07/25/california-and-major-automakers-reach-groundbreaking-framework-agreement-on-clean-emission-standards/.
    \230\ Again, neither California's late 2018 amendment to its 
``deemed to comply'' provision, nor its July 2019 announcement of a 
new ``framework,'' are necessary bases for the action EPA takes in 
this document; instead, they provide further support for that 
action.
---------------------------------------------------------------------------

    In short, the text, structure, and history of CAA section 209(b)(1) 
support EPA's authority to withdraw previously granted waivers.\231\ At 
the same time, nothing in CAA section 209(b)(1) can reasonably be read 
to preclude the agency from withdrawing a previously issued waiver 
under appropriate circumstances. EPA is not persuaded by commenters' 
assertions to the contrary. In this action, EPA affirms the position 
that the scope of review for California waivers under CAA section 
209(b)(1) includes both a pre-grant review and, where appropriate, 
post-grant review of an approved waiver; that post-grant review may, in 
appropriate circumstances, result in a withdrawal of a prior waiver. A 
withdrawal action could be premised on any one of the three findings in 
CAA section 209(b)(1)(A)-(C) that render a waiver unavailable.
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    \231\ In 2009, EPA reconsidered the 2008 GHG waiver denial at 
CARB's request and granted it upon reconsideration. 74 FR 32744. EPA 
noted the authority to ``withdraw a waiver in the future if 
circumstances make such action appropriate.'' See 74 FR 32780 n.222; 
see also id. at 32752-32753 n.50 (citing 50 S. Rep. No. 403, at 33-
34).
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    EPA also disagrees with some commenters' assertions that ostensible 
reliance interests foreclose withdrawal of the waiver for MY 2021-2025 
GHG and ZEV standards. According to these commenters, ``California, and 
the section 177 states that have elected to adopt those standards as 
their own have incurred reliance interests ultimately flowing from 
those standards. For instance, California has incurred reliance 
interests because it is mandated to achieve an aggressive GHG emissions 
reduction target for 2030.'' \232\ They further state: ``[b]ut EPA 
provides no justification for applying that change in policy 
retroactively to upend a five-year-old decision to which substantial 
reliance interests have attached.'' (Emphasis in original).\233\
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    \232\ Comments of CARB at 83.
    \233\ Comments of States of California, Connecticut, Delaware, 
Hawaii, Iowa, Illinois, Maine, Maryland, Minnesota, New Jersey, New 
Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and 
Washington, the Commonwealth of Massachusetts, Pennsylvania and 
Virginia, the District of Columbia, and the Cities of Los Angeles, 
New York, Oakland, San Francisco and San Jose at 123; Comments of 
CARB at 352.
---------------------------------------------------------------------------

    The federal GHG standards that EPA promulgated in 2012 included a 
commitment to conduct and complete a Mid-Term Evaluation (MTE) of the 
GHG standards for MY 2022-2025, given the lengthy phase-in compliance 
period, EPA projections of control technology availability or 
feasibility for MY 2021-2025, and the fact that EPA promulgated those 
standards in a joint action with NHTSA, where NHTSA was acting under a 
statute which limited its promulgation of fuel economy standards to 
periods of five years.\234\ See NRDC,

[[Page 51335]]

655 F.2d at 329 (upholding EPA's lead time projections for emerging 
technologies as reasonable, noting a longer lead time tends to ``give[ 
] the agency greater leeway to modify its standards if the actual 
future course of technology diverges from expectation.''). The 2012 
rulemaking also established the GHG standards for MY 2021-2025 that are 
the subject of the ``deemed to comply'' provision. (i.e., California 
allowed automobile manufacturers to demonstrate compliance with 
California's GHG standards by complying with EPA's GHG standards). The 
MTE construct required EPA to issue a Final Determination by April 1, 
2018 regarding whether the GHG standards for MY 2022-2025 remained 
appropriate under CAA section 202(a).\235\ Specifically, the MTE would, 
amongst other things, assess the relevant factors pertinent to setting 
standards under CAA section 202(a), such as the feasibility and 
practicability of the standards, costs to vehicle manufacturers and 
consumers, impacts on the automobile industry, emissions impacts, and 
safety impacts. In comments during the 2012 national GHG rulemaking, 
automakers supported the MTE, and several expressly predicated their 
support of the GHG standards for MY 2022-2025 on the MTE.\236\ In the 
waiver action, EPA reiterated its commitment to the MTE in light of 
these considerations.\237\
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    \234\ 40 CFR 86.1818-12(h). 77 FR 62624 (October 15, 2012). EPA 
notes in this regard that the Supreme Court in Massachusetts v. EPA, 
in rejecting the position that greenhouse gases are not air 
pollutants under the general definition of that term in CAA section 
302 because, if they were, EPA's regulations of GHG emissions from 
the motor vehicle fleet could intrude on DOT's fuel economy 
authority, opined that ``[t]he two obligations may overlap, but 
there is no reason to think the two agencies cannot both administer 
their obligations and yet avoid inconsistency.'' 549 U.S. 497, 532 
(2007). In order for the two agencies to do so, they needed to take 
account of the fact that DOT's fuel-economy authority faces temporal 
constraints that EPA's emissions authority does not. They did so 
through the MTE, and the MTE mechanism provided notice to all 
interested parties that EPA's 2012 federal standards under CAA 
section 202(a), and EPA's January 2013 waiver grounded in part on a 
finding that the State provisions subject to the waiver were 
compatible with CAA section 202(a), would be subject to review and 
possibly revision within a few years of the waiver grant. Under 
these circumstances, no reliance interests accrued sufficient to 
foreclose EPA's authority to reconsider and withdraw the waiver.
    \235\ The MTE process also called for a ``draft Technical 
Assessment Report'' (to be prepared no later than November 15, 
2017), public comments on that draft report, and public comments on 
whether the model year 2022-2025 standards are ``appropriate'' under 
CAA section 202(a).
    \236\ 77 FR at 62636, 62652, 62785.
    \237\ ``EPA is committed to conducting a mid-term evaluation for 
MYs 2022-2025 in close coordination with NHTSA and CARB given the 
long-time frame in implementing standards out to MY 2025 and given 
NHTSA's obligation to conduct a separate rulemaking in order to 
establish final standards for vehicles for those years.'' 78 FR 
2137.
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    In these circumstances, where GHG standards were being set far into 
the future with an explicit commitment to revisit them, where 
California agreed to deem compliance with certain federal GHG standards 
to constitute compliance with California standards, and where all 
parties were provided ample notice that EPA would be revisiting federal 
standards and, accordingly, the waiver granted for a program that 
acceded to those standards through the ``deemed to comply'' provision, 
neither the State of California nor other parties (such as automakers) 
have reasonable reliance interests sufficient to foreclose the 
extension of federal standards to California. Likewise, under CAA 
section 177, even though States other than California, under certain 
circumstances and conditions, may ``adopt and enforce'' standards that 
are ``identical to the California standards for which EPA has granted a 
waiver for such model year,'' given that Title I \238\ does not call 
for NAAQs attainment planning as it relates to GHG standards, those 
States that may have adopted California's GHG standards and ZEV 
standards for certain MYs would also not have any reliance interests as 
a result of the grant of the ACC program waiver. As previously noted, 
CAA section 177 States also lack reliance interests sufficient to 
preclude reconsideration and withdrawal of the waiver both because they 
were on notice of the commitment to review the federal standards, as 
discussed above.\239\ Relatedly, with the revocation of these standards 
in this action there will be no ``standards identical to the California 
standards for which a waiver has been granted'' that any state may 
adopt and enforce, under CAA section 177(1).\240\ (States may not 
``tak[e] any action that has the effect of creating a car different 
from those produced to meet either federal or California emission 
standards, a so-called `third vehicle.' '' Motor Vehicle Mfrs. Ass'n of 
U.S., Inc. v. New York State Dep't of Envtl. Conservation, 17 F.3d 521, 
528 (2d Cir. 1994)). California also did not seek approval for MY 2021-
2025 GHG standards in its 2016 SIP approval request. 81 FR 39424, 27-28 
(June 16, 2016).
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    \238\ Under title I of the Clean Air Act, EPA establishes 
national ambient air quality standards (NAAQS) to protect public 
health and welfare, and has established such ambient standards for 
ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide, lead, and 
particulate matter.
    \239\ ``This new State authority should not place an undue 
burden on vehicle manufacturers who will be required, in any event, 
to produce vehicles meeting the California standards for sale in 
California.'' H.R. Conf. Rep. No. 95-294, 95th Cong., 1st Sess. 337 
(1977).
    \240\ A State may not ``make attempt[s] to enforce'' California 
standards for which EPA has not waived preemption. Motor Vehicle 
Mfrs. Ass'n v. NYS Dep. of Envtl Conservation, 17 F.3d 521, 534 (2d 
Cir. 1994).
---------------------------------------------------------------------------

    As a general matter, ``[w]henever a question concerning 
administrative, or judicial, reconsideration arises, two opposing 
policies immediately demand recognition: The desirability of finality, 
on the one hand, and the public interest in reaching what, ultimately, 
appears to be the right result on the other.'' Civil Aeronautics Bd. v. 
Delta Air Lines, Inc., 367 U.S. 316, 321-22 (1961). See also 
ConocoPhillips, 612 F.3d at 832 (5th Cir. 2010) (``Furthermore, 
reconsideration also must occur within a reasonable time after the 
decision being reconsidered was made, and notice of the agency's intent 
to reconsider must be given to the parties.''); Belville Min. Co. v. 
United States, 999 F.2d 989, 997 (6th Cir. 1993) (``Even where there is 
no express reconsideration authority for an agency, however, the 
general rule is that an agency has inherent authority to reconsider its 
decision, provided that reconsideration occurs within a reasonable time 
after the first decision.''); Bookman v. United States, 453 F.2d 1263, 
1265 (Fed. Cir. 1972) (``[A]bsent contrary legislative intent or other 
affirmative evidence, this court will sustain the reconsidered decision 
of an agency, as long as the administrative action is conducted within 
a short and reasonable time period.'').
    For the reasons stated above, there was no ``finality'' in the 
federal MY 2021-2025 GHG standards that EPA promulgated in 2012 in the 
sense required for cognizable reliance to accrue sufficient to 
foreclose EPA's exercise of authority to reconsider and, if 
appropriate, withdraw the waiver. Nor is such ``finality'' to be found 
in the January 2013 grant of the waiver for California's MY 2021-2025 
GHG and ZEV standards. As explained at proposal, in granting the waiver 
for the ACC program GHG and ZEV standards, EPA had evaluated certain 
compliance flexibilities allowed by California under the third waiver 
prong, CAA section 209(b)(1)(C) (consistency with CAA section 202(a)). 
Specifically, EPA evaluated California regulations that included an 
optional compliance provision (the ``deemed to comply'' provision) that 
would allow automobile and engine manufacturers to demonstrate 
compliance with CARB's GHG standards for MY 2017-2025 by complying with 
applicable national or federal GHG standards. 78 FR 2136. During the 
waiver proceedings, most automobile manufacturers either opposed the 
grant of the waiver for MY 2021-2025 GHG and ZEV standards as not 
consistent with CAA section 202(a) \241\ or premised their support for

[[Page 51336]]

those standards on California's permitting compliance through the 
``deemed to comply'' provision.\242\ In comments on the proposed 
withdrawal, California did not contest this aspect of the waiver 
proceedings. For example, California in its comments on the SAFE 
proposal, at page 57, states ``[b]ecause the federal program was 
expected to achieve GHG emission reductions that are equivalent to the 
California program, CARB modified its LEV III GHG regulation to 
continue to allow the `deemed to comply' option beyond model year 2016, 
by accepting federal compliance with the EPA standards as sufficient to 
demonstrate compliance with California's standards for the 2017 through 
2025 model years.'' Additionally, most automobile manufacturers 
indicated that they would comply with California's GHG standards 
through the ``deemed to comply'' provision. Both California and some 
automobile manufacturers also alluded to their expectations that 
standards would be revised in the future in light of technological 
feasibility and cost considerations surrounding MY 2022-2025 GHG 
standards.243 244
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    \241\ 78 FR 2132 (manufacturers suggested that EPA should grant 
California's waiver request after CARB finalized its regulatory 
amendments to allow for a national compliance option; manufacturers 
oppose granting the waiver for the ZEV program past the 2017 MY, 
asserting that those standards will not be feasible either in 
California or in the individual CAA section 177 States given the 
status of the infrastructure and the level of consumer demand for 
ZEVs; dealers suggest that EPA should not grant California a waiver 
for its ZEV and GHG emission standards past MY 2018 and 2021, 
respectively, asserting that technical capabilities after that time 
are uncertain.).
    \242\ ``[T]his national compliance option is integral to the 
commitment letters the industry and California signed in July 2011 
and to the single national GHG/fuel economy program all stakeholders 
sought to achieve.'' 78 FR 2138.
    \243\ 78 FR 2128. A waiver ``will remain an important backstop 
in the event the national program is weakened or terminated;'' 
manufacturers note that both the federal and the California GHG 
emission standards provide for a comprehensive mid-term evaluation 
of the MYs 2022-2025; manufacturers clearly state that ``[a]ny 
amendments to California's GHG emission standards made as a result 
of the mid-term evaluation will require analysis to determine 
whether the amendments fall within the scope of this waiver, or, if 
not, whether they qualify for a separate waiver under Section 209(b) 
of the Clean Air Act.'' 78 FR 2132. See also, e.g., comments of the 
National Automobile Dealers Association, n.43. On March 11, 2013, 
the Association of Global Automakers and Alliance of Automobile 
Manufacturers filed a petition for reconsideration of the January 
2013 waiver grant, requesting that EPA reconsider the decision to 
grant a waiver for MYs 2018 through 2025 ZEV standards on 
technological feasibility grounds. Petitioners also asked for 
consideration of the impact of the travel provision, which they 
argue raise technological feasibility issues in CAA section 177 
States, as part of the agency's review under the third waiver prong, 
CAA section 209(b)(1)(C). EPA continues to evaluate the petition. As 
explained below, in this action EPA is not taking final action with 
regard to the proposed determinations under the third waiver prong. 
Whether and how EPA will respond to the March 2013 petition will be 
considered in connection with a potential future final action with 
respect to the proposed third prong determinations set forth in the 
SAFE proposal.
    \244\ Since the grant of the ACC waiver program, engine and 
vehicle manufacturers who voiced concerns about the stringency of MY 
2021-2025 GHG and ZEV standards during the waiver proceedings have 
requested both reconsideration of the grant of the waiver for the 
ZEV standards (which is a compliance mechanism for the GHG 
standards) and aspects of the national GHG program.
---------------------------------------------------------------------------

    Regarding whether EPA is foreclosed from reconsidering its January 
2013 waver grant due to the passage of time, on January 12, 2017, well 
in advance of the April 2018 deadline that it had set for itself, EPA 
completed the Mid-Term Evaluation called for under the 2012 national 
GHG standards, determining that the MY 2017-2025 GHG standards 
promulgated in that rulemaking were appropriate. Automobile 
manufacturers, however, petitioned EPA for reconsideration of that 
January 2017 determination. In March 2017, EPA granted this petition 
for reconsideration. 82 FR 14671 (Mar. 22, 2017). In March 2017 
California completed its own Mid-Term Evaluation review, in which it 
arrived at different conclusions on technological feasibility and costs 
for these standards than those that EPA would later reach. 
Subsequently, in April 2018, consistent with the timing specified in 
its regulations, EPA revised its finding on the appropriateness of the 
federal MY 2022-2025 GHG standards, concluding that those standards 
``are not appropriate and, therefore, should be revised.'' \245\ This 
finding provided notice of a reasonable possibility that these federal 
GHG standards would likely be changing.\246\ In the April 2018 action, 
EPA also withdrew the January 2017 finding. 83 FR at 16077. Since then 
California has challenged this revised finding; that challenge is 
pending in the United States Court of Appeals for the District of 
Columbia. California v. EPA, No. 18-1114 (D.C. Cir. argued Sept. 6, 
2019). Moreover, California in December 2018 amended the ``deemed to 
comply'' provision in its regulations after the publication of the SAFE 
proposal, and in July 2019 announced a putative nationwide framework 
for vehicle standards, as discussed above.
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    \245\ Mid-Term Evaluation of Greenhouse Gas Emissions Standards 
for Model Year 2022-2025 Light-Duty Vehicles: Notice; Withdrawal. 83 
FR 16077 (Apr. 13, 2018).
    \246\ 82 FR 14671 (Mar. 22, 2017).
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    These procedural aspects of the federal GHG standards and the grant 
of a waiver for California's ACC program are indicative of the absence 
of the possibility of reasonable reliance in the ``finality'' of the 
waiver, contrary to commenters' assertion of reliance interests. For 
instance, as shown above, the engine and vehicle manufacturers have not 
only complained about the stringency of MY 2021-2025 GHG and ZEV 
standards, but also requested reconsideration of both the waiver as it 
relates to the ZEV standards, and the 2017 Mid-Term Evaluation that 
addresses the ``deemed to comply'' provision, which California provided 
in response to their request. EPA has also initiated joint rulemaking 
with NHTSA that proposes amended EPA GHG standards and fuel economy 
standards for MY 2021-2026. See, the Safer Affordable Fuel-Efficient 
(SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light 
Trucks. 83 FR 42986 (Aug. 24, 2018). As also previously noted, 
automobile and engine manufacturers operated under the assumption that 
both California and national standards would, or at least could, be 
revised.\247\ These circumstances are sufficient to put California and 
others on notice that standards were in flux such that they could not 
give rise to reasonable reliance interests. Further, CAA section 177 
States do not have any reliance interests that are engendered by the 
withdrawal of the waiver for the MY 2021-2025 GHG and ZEV standards. As 
previously explained, although CAA section 177 allows States other than 
California to adopt standards that are promulgated by California and 
for which a waiver of preemption is granted by EPA pursuant to CAA 
section 209, CAA section 177 States may do so only subject to certain 
conditions and circumstances. None of these conditions and 
circumstances, however, are at issue in this waiver decision, in light 
of EPA's determination that CAA section 177 does not apply to states 
seeking to adopt and enforce CARB's GHG standards. As also previously 
noted, with the revocation of these standards in this action, there 
will be no ``standards identical to the California standards for which 
a waiver has been granted'' that any state may adopt and enforce, under 
CAA section 177(1).\248\ States may not ``tak[e] any action that has 
the effect of creating a car different from those produced to meet 
either federal or California emission standards, a so-called `third 
vehicle.' '' Motor

[[Page 51337]]

Vehicle Mfrs. Ass'n of U.S., Inc. v. New York State Dep't of Envt'l 
Conservation, 17 F.3d 521, 528 (2d Cir. 1994).
---------------------------------------------------------------------------

    \247\ ``The manufacture of automobiles is a complex matter, 
requiring decisions to be made far in advance of their actual 
execution. The ability of those engaged in the manufacture of 
automobiles to obtain clear and consistent answers concerning 
emission controls and standards is of considerable importance so as 
to permit economies in production.'' S. Rep. No. 403, 90th Cong., at 
730 1st Sess. (1967).
    \248\ A State may not ``make attempt[s] to enforce'' California 
standards for which EPA has not waived preemption. Motor Vehicle 
Mfrs. Ass'n v. NYS Dep. of Envtl Conservation, 17 F.3d 521, 534 (2d 
Cir. 1994).
---------------------------------------------------------------------------

    California's comments argue that EPA cannot revisit its waiver with 
respect to the ZEV standards in particular because EPA, in a SIP 
approval action, approved ZEV provisions into the State's SIP. Final 
CARB Detailed Comments, at 351. But in so doing, EPA noted that 
California's GHG provisions were not part of California's SIP 
submission.\249\ At the time, EPA explained that ``CARB has expressly 
excluded from the August 14, 2015 SIP submittal certain sections or 
subsections of California code that have been authorized or waived by 
EPA under CAA section 209.'' \250\ Further, in the SAFE proposal, EPA 
explained that the proposed withdrawal of the waiver for MY 2021-2025 
ZEV standards was premised in part on California's explicit indications 
that compliance with those standards formed part of the compliance 
mechanism for MY 2021-2025 GHG standards. For instance, at proposal, we 
explained ``because the ZEV and GHG standards are closely interrelated, 
as demonstrated by the description above of their complex, overlapping 
compliance regimes, EPA is proposing to withdraw the waiver of 
preemption for ZEV standards under the second and third prongs of 
section 209(b)(1).'' 83 FR 43243. California's responses to the SAFE 
proposal do not rebut the Agency's views that the ZEV standards for MY 
2021-2025 are inextricably interconnected with the design and purpose 
of California's overall GHG reduction strategy.\251\ According to 
California, for example, CARB's GHG standards for the 2017 through 2025 
MYs are designed to respond to California's identified goals of 
reducing GHG emissions to 80 percent below 1990 levels by 2050 and in 
the near term to reduce GHG levels to 1990 levels by 2020;'' ``In 2009, 
CARB staff analyzed pathways to meeting California's long-term 2050 GHG 
reduction goals in the light duty vehicle subsector and determined that 
ZEVs would need to comprise nearly 100 percent of new vehicle sales 
between 2040 and 2050, and commercial markets for ZEVs would need to 
launch in the 2015 to 2020 time frame.'' Analysis in support of 
comments of the California Air Resources Board on the SAFE proposal, 
pg. 54, 59 & 83. EPA reviewed California's SIP submission, including 
ZEV measures, as a matter of NAAQS compliance strategy. But in the 
2012-2013 CAA section 209(b) waiver proceeding, CARB presented its ZEV 
program to EPA solely as a GHG compliance strategy--indeed, CARB 
expressly stated that the ZEV program did not confer NAAQS pollutant 
benefits. ``There is no criteria emissions benefit from including the 
ZEV proposal in terms of vehicle (tank-to-wheel or TTW) emissions.'' 
CARB ACC waiver request at 15, EPA-HQ-OAR- 2012-0562-0004.\252\
---------------------------------------------------------------------------

    \249\ 81 FR 39424, 27-28 (June 16, 2016).
    \250\ 81 FR 29427-28. ``The excluded provisions pertain to: 
Greenhouse Gas (GHG) exhaust emission standards 2009 through 2016 
Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles, 
and 2017 and subsequent Model Passenger Cars, Light-Duty Trucks, and 
Medium Duty Vehicles.''
    \251\ Analysis in support of comments of the California Air 
Resources Board on the SAFE proposal, at 342. ``For example, and 
relevant here, California's Legislature has established an 
aggressive GHG emissions reduction target for 2030.'' ``The ZEV 
mandate is a crucial part of this strategy; it `act[s] as the 
technology forcing piece of the 2016 Draft TAR program' which is 
necessary because `the new vehicle fleet [in California] will need 
to be primarily composed of advanced technology vehicles . . . by 
2035' in order to meet the State's 2050 GHG goal.'' Id. at 369-70 
(Internal citations omitted). ``This increasing ZEV deployment is 
critical to achieving the statewide 2030 and 2045 GHG requirements 
and 2031 South Coast SIP commitments (the 2016 State SIP Strategy 
identified the need for light-duty vehicles to reduce NOX 
emissions by over 85 percent by 2031 to meet federal standards).'' 
Id. at 373.
    \252\ CARB in its SAFE proposal comments refers to this as an 
``alleged[ ]'' statement, Final Carb Detailed Comments at 351. The 
SAFE proposal cited the Waiver Support Document in which CARB made 
this statement, 83 FR at 43248 n.580. The statement is directly 
quoted above. California's comments on the SAFE proposal do not 
contest that California's ACC waiver request expressly disclaimed 
criteria pollutant benefits from the ZEV program, nor do they 
establish that EPA is foreclosed from revisiting the grant of the 
waiver in light of the interpretation of 209(b)(1)(B) adopted below. 
EPA notes in this regard that California's approach in its ACC 
waiver request differed from the state's approach in its waiver 
request for MY 2011 and subsequent heavy-duty tractor-trailer GHG 
standards, where California quantified NOX emissions 
reductions attributed to GHG standards and explained that they would 
contribute to PM and ozone NAAQS attainment. 79 FR 46256, 46257 
n.15, 46261, 46262 n.75 (August 7, 2014).
---------------------------------------------------------------------------

    Similarly, some commenters argued that EPA reconsideration would 
constitute impermissible retroactive action, citing Bowen v. Georgetown 
Univ. Hosp., 488 U.S. 204 (1988). However, the rulemaking which the 
Supreme Court held was impermissibly retroactive in that case had been 
proposed in February 1984 and had purported to establish reimbursement 
rates effective July 1, 1981. By contrast, here EPA is reconsidering a 
previous grant of a waiver of preemption for future model years 2021-
2025.\253\ Reconsideration of aspects of a prior adjudication whose 
effects have not yet ripened is not barred by Bowen's proscription on 
retroactive rulemaking--otherwise any reconsideration of agency action 
would likewise be barred.
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    \253\ As explained above, to the extent that NHTSA's final 
determination that EPCA preempts State GHG and ZEV programs, the 
implications of that determination for prior EPA waivers of such 
programs are effective upon the effective date of this joint action. 
Separate and apart from that analysis, to the extent that EPA is 
withdrawing the waiver based on its determination that the waiver 
does not meet the CAA section 209(b)(1)(B) criterion, that 
withdrawal is for model years 2021-2025, as proposed in the SAFE 
proposal.
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    For all these reasons, EPA concludes it has authority under CAA 
section 209 to reconsider its prior grant of the ACC waiver and to 
withdraw the waiver for MY 2021-2025 GHG and ZEV standards, consistent 
with the SAFE proposal.

C. The Effect of Preemption Under the Energy Policy and Conservation 
Act (EPCA) on EPA's Previously Granted Waiver Under CAA Section 209(b) 
With Regard to California's GHG and ZEV Standards

    In the SAFE proposal, EPA explained its historical practice of 
reviewing waiver requests under the prism of CAA section 209. 
Specifically, EPA has ``historically declined to consider as part of 
the waiver process whether California standards are constitutional or 
otherwise legal under other Federal statutes apart from the Clean Air 
Act.'' 83 FR 42340. See also Motor & Equip. Mfrs. Ass'n, Inc. v. EPA, 
627 F.2d 1095, 1115 (D.C. Cir. 1979) (MEMA I) ``[T]he Administrator 
operates in a narrowly circumscribed proceeding requiring no broad 
policy judgments on constitutionally sensitive matters. Nothing in CAA 
section 209 requires him to consider the constitutional ramifications 
of the regulations for which California requests a waiver.''). This 
historic position was reflected in granting the initial ACC program 
waiver where EPA explained: ``Evaluation of whether California's GHG 
standards are preempted, either explicitly or implicitly, under [the 
Energy Policy and Conservation Act] EPCA, is not among the criteria 
listed under section 209(b). EPA may only deny waiver requests based on 
the criteria in section 209(b), and inconsistency with EPCA is not one 
of those criteria.'' 78 FR 2145. But EPA, in the past, has also 
solicited comments on ``whether the Energy Policy and Conservation Act 
(EPCA) fuel economy provisions are relevant to EPA's consideration of 
the request and to California's authority to implement its vehicle GHG 
regulations'' and in response to comments opted to ``take[ ] no 
position regarding whether or not California's GHG standards are 
preempted under EPCA.'' 74 FR 32744, 32782-83 (July 8, 2008).

[[Page 51338]]

    In the January 2013 waiver, EPA stated: ``Evaluation of whether 
California's GHG standards are preempted, either explicitly or 
implicitly, under EPCA, is not among the criteria listed under section 
209(b). EPA may only deny waiver requests based on the criteria in 
section 209(b), and inconsistency with EPCA is not one of those 
criteria. In considering California's request for a waiver, [EPA] 
therefore [has] not considered whether California's standards are 
preempted under EPCA.'' 78 FR at 2145.
    EPA believes that this January 2013 statement was inappropriately 
broad, to the extent it suggested that EPA is categorically forbidden 
from ever determining that a waiver is inappropriate due to 
consideration of anything other than the ``criteria'' or ``prongs'' at 
CAA section 209(b)(1)(B)(A)-(C). The statements quoted above, and EPA's 
historical practice of disregarding issues of ``[c]onsistency with 
EPCA'' in the context of evaluating California's waiver applications, 
were made in the context of EPA acting on its own to administer CAA 
section 209(b) in considering such applications. The context here is 
different: EPA is undertaking a joint action with NHTSA. In the SAFE 
proposal, EPA noted that NHTSA had proposed and could well finalize a 
determination that California's GHG and ZEV standards are both 
explicitly and implicitly preempted under EPCA.\254\ EPA explained that 
such a determination would present a threshold question as to 
California's ability to enforce these standards and proposed to 
conclude that standards preempted under EPCA cannot be afforded a 
waiver of preemption under CAA section 209(b). Unlike the Clean Air 
Act, EPCA does not allow for any waiver of its express preemption 
provision. EPCA contains no language that can be read to allow States 
to either prescribe or enforce regulations related to fuel economy 
standards. Consistent with this view, at SAFE proposal, NHTSA explained 
that, ``when a State establishes a standard related to fuel economy, it 
does so in violation of EPCA's preemption statute(sic) and the standard 
is therefore void ab initio.'' 83 FR 43235. At the same time, NHTSA 
explained that certain other GHG requirements that do not relate to 
fuel economy, such as regulations addressing leaking refrigerants, 
would likely not be preempted under EPCA. 83 FR 4324-35.
---------------------------------------------------------------------------

    \254\ 49 U.S.C. 32919(a). See 83 FR 43233.
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    EPA does not intend in future waiver proceedings concerning 
submissions of California programs in other subject areas to consider 
factors outside the statutory criteria in CAA section 209(b)(1)(A)-(C). 
But the unique situation in which EPA and NHTSA, coordinating their 
actions to avoid inconsistency between their administration of their 
respective statutory tasks, address in a joint administrative action 
the issues of the preemptive effect of EPCA and its implications for 
EPA's waivers, has no readily evident analogue.\255\ EPA will not dodge 
this question here.
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    \255\ See Massachusetts v. EPA.
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    Consistent with the SAFE proposal, NHTSA is finalizing a 
determination that EPCA preempts State GHG and ZEV standards. EPA 
agrees with commenters that EPA is not the agency that Congress has 
tasked with administering and interpreting EPCA. This is especially so 
because ``[t]he waiver proceeding produces a forum ill-suited to the 
resolution of constitutional claims.'' MEMA I, 627 F.2d at 1115. In the 
SAFE proposal, EPA took the position that it is, at a minimum, 
reasonable to consider NHTSA's conclusions about the preemptive effect 
of EPCA. To the extent that NHTSA has determined that these standards 
are void ab initio because EPCA preempts standards that relate to fuel 
economy, that determination presents an independent basis for EPA to 
consider the validity of the initial grant of a waiver for these 
standards, separate and apart from EPA's analysis under the criteria 
that invalidate a waiver request. In the context of a joint action in 
which our sister agency is determining, and codifying regulatory text 
to reflect, that a statute Congress has entrusted it to administer 
preempts certain State law, EPA will not disregard that conclusion, 
which would place the United States Government in the untenable 
position of arguing that one federal agency can resurrect a State 
provision that, as another federal agency has concluded and codified, 
Congress has expressly preempted and therefore rendered void ab initio.
    This conclusion is consistent with the Supreme Court's holding in 
Massachusetts v. EPA, 549 U.S. 497 (2007). While this case did not 
address EPCA preemption, the Supreme Court anticipated that EPA and 
NHTSA would administer their respective authorities in a consistent 
manner. (``The two obligations [for NHTSA to set fuel economy standards 
under EPCA and for EPA to regulate motor vehicle GHG emissions under 
CAA section 202] may overlap, but there is no reason to think the two 
agencies cannot both administer their obligations and yet avoid 
inconsistency.'' Id. at 532.) Considering that California cannot 
enforce standards that are void ab initio, even assuming arguendo that 
there existed a valid grant of waiver under CAA section 209(b), NHTSA's 
determination renders EPA's prior grant of a waiver for those aspects 
of California's regulations that EPCA preempts invalid, null, and void, 
and, to the extent that administrative action is necessary on EPA's 
part to reflect that state of affairs, EPA hereby withdraws that prior 
grant of a waiver on this basis.
    EPA's finding that California's GHG and ZEV standards are preempted 
as a result of NHTSA's finalized determinations, issued in this joint 
action, with respect to EPCA's preemptive effect on State GHG and ZEV 
standards, is effective upon the effective date of this joint action. 
This finding is separate and apart from findings with respect to EPA's 
2013 waiver for CARB's Advanced Clean Car Program as it pertains to its 
2021 through 2025 MY relating to GHG and ZEV standards and accompanying 
withdrawal of the waiver, pursuant to CAA section 209(b)(1), as set 
forth in subsection D below; as a matter of EPA's administration of CAA 
section 209(b), without reference to EPCA's preemptive effect as 
determined by NHTSA, that withdrawal applies to 2021 through 2025 MY 
GHG and ZEV standards, as proposed in the SAFE 
proposal.256 257
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    \256\ EPA acknowledges that its action in this document may have 
implications for certain prior and potential future EPA reviews of 
and actions on state SIPs that may incorporate certain aspects of 
California's state program, either California's own SIPs or SIPs 
from states that have adopted one or more aspects of California's 
state program pursuant to CAA section 177. EPA will consider whether 
and how to address those implications, to the extent that they 
exist, in separate actions. But EPA believes that it is not 
necessary to resolve those implications in the course of this action 
because the effects of EPCA preemption, as set forth in subsection 
III.C, and the proper interpretation and application of CAA section 
209(b)(1)(B) to California's GHG and ZEV program, as set forth in 
subsection III.D, provide sufficient reason to take this final 
action and that the potential implications for prior and future SIP 
actions are not a sufficient basis to alter the rationale for or 
terms of this final action. The questions of what EPCA means and 
what its preemptive effect on certain state regulations is, and what 
CAA section 209(b)(1)(B) means and what its limitations on 
California's ability to obtain a waiver for its state programs are, 
do not depend on whether one or more SIP actions pertaining to NAAQS 
attainment and maintenance strategies may directly or indirectly be 
affected by the agencies' resolution of those questions.
    \257\ In the August 2018 SAFE proposal, EPA solicited comment on 
whether one or more of the grounds supporting the proposed 
withdrawal of this waiver would also support withdrawing other 
waivers that it has previously granted. 83 FR at 43240 n.550. At 
this time, EPA does not intend to take action with respect to any 
prior waiver grants other than those specified above.

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[[Page 51339]]

D. Reconsideration of January 2013 Waiver and Determination That It Is 
Appropriate To Withdraw EPA's January 2013 Waiver of CAA Section 209 
Preemption for California's GHG and ZEV Standards for Model Years 2021-
2025, Pursuant to CAA Section 209(b)(1)(B)

1. Interpretation of CAA Section 209(b)(1)(B)
    Under CAA section 209(b)(1)(B), EPA cannot grant a waiver request 
if EPA finds that California ``does not need such State standards to 
meet compelling and extraordinary conditions.'' \258\ In the August 
2018 SAFE Proposal, EPA proposed to determine: (1) That it was 
reasonable and appropriate to interpret the scope of ``such State 
standards'' to authorize a consideration of whether California needs to 
have its own GHG vehicle emissions program specifically, rather than 
whether California needs any separate vehicle emissions program at all; 
and (2) that California did not ``need'' its own GHG and ZEV programs 
``to meet compelling and extraordinary conditions'' within the meaning 
of the statute. EPA finalizes those determinations in this document.
---------------------------------------------------------------------------

    \258\ EPA notes that Congress provided no definition of the 
phrase ``compelling and extraordinary conditions,'' and that the 
phrase appears to be entirely unique, not found anywhere else in the 
United States Code.
---------------------------------------------------------------------------

    EPA notes in this regard that regulation of emissions from new 
motor vehicles and new motor vehicle engines under CAA section 202(a) 
is triggered by a determination that ``the emission of any air 
pollutant from any class or classes of new motor vehicles or new motor 
vehicle engines . . . cause, or contribute to, air pollution which may 
reasonably be anticipated to endanger public health or welfare.'' This 
``endangerment finding,'' which triggers EPA's ability to use the CAA 
section 202(a) regulatory authority which CAA section 209(a) preempts 
the states from exercising (subject to the availability of a CAA 
section 209(b) preemption waiver), links (1) emission of pollutants 
from sources; to (2) air pollution; and (3) resulting endangerment to 
health and welfare.\259\
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    \259\ We therefore, also disagree with CARB's argument that 
EPA's reading of CAA section 209(b)(1)(B) ``ignores the statutory 
structure--improperly reading Section 209(b) without consideration 
of the relationship between Sections 202(a), 209(a) and 209(b). 
Specifically, EPA proposes to read Section 209(b) as excluding GHGs 
at the same time that it proposes to continue regulating GHGs under 
Section 202(a) and presumes, albeit implicitly, that Section 209(a) 
preempts other States from regulating GHGs.'' CARB comments at 359.
---------------------------------------------------------------------------

    Congress enacted waiver authority for California under CAA section 
209(b) against the backdrop of traditional, criteria pollutant 
environmental problems, under which all three links in this chain bear 
a particularized nexus to specific local California features: (1) 
Criteria pollutants are emitted from the tailpipes of the California 
motor vehicle fleet; (2) those emissions of criteria pollutants 
contribute to air pollution by concentrating locally in elevated 
ambient levels, which concentration, in turn; (3) results in health and 
welfare effects (e.g., from ozone) that are extraordinarily aggravated 
in California as compared to other parts of the country, with this 
extraordinary situation being attributable to a confluence of 
California's peculiar characteristics, e.g., population density, 
transportation patterns, wind and ocean currents, temperature 
inversions, and topography. In the case of GHG emissions from motor 
vehicles, however, this particularized nexus to California's specific 
characteristics is missing: (1) The GHG emissions from California cars 
are no more relevant to the pollution problem at issue (i.e., climate 
change) as it impacts California than are the GHG emissions from cars 
being driven in New York, London, Johannesburg, or Tokyo; (2) the 
resulting air pollution, i.e., elevated concentrations of GHG in the 
upper atmosphere, is globally mixed; (3) the health and welfare effects 
of climate change impacts on California are not extraordinary to that 
state and to its particular characteristics. Although EPA concludes 
that all three of these aspects are lacking in the case of GHG, EPA 
further concludes that it is the connection between all the three which 
is the original motivation for Congress's creation of the waiver. It is 
that original motivation that informs the proper understanding of what 
CAA section 209(b)(1)(B) requires.
    It is important to note that, while this interpretation of CAA 
section 209(b)(1)(B) departs in major respects from the interpretation 
applied in the 2009 waiver denial reversal (74 FR 32744) and the 2013 
waiver grant (78 FR 2112), it does not simply constitute a re-adoption 
of the interpretation applied in the 2008 waiver denial (73 FR 12156). 
The 2008 waiver denial applied what it styled as two alternative 
approaches to determining whether California ``need[ed]'' its own 
vehicle GHG emissions program to address global climate change ``to 
meet compelling and extraordinary conditions'': One that looked at the 
causal link between California emissions and elevated GHG 
concentrations, 73 FR at 12160 (styled as ``the distinct nature of 
global pollution as it relates to section 209(b)(1)(B)''), and an 
``alternative'' approach that looked at the magnitude of California 
climate effects compared to the rest of the nation, 73 FR at 12163-
12164 (``whether the potential impact of climate change resulting from 
these emissions and concentrations will differ across geographic areas 
and if so whether the likely effects in California amount to compelling 
and extraordinary conditions''). The 2009 waiver denial reversal, and 
the 2013 waiver grant, in contrast, applied an interpretation which EPA 
styled as a return to the ``traditional'' interpretation. Under that 
approach, EPA determined that California ``needs'' its own vehicle GHG 
emissions program ``to meet compelling and extraordinary conditions,'' 
a determination that was predicated on what was then EPA's view that, 
in the case of such later-adopted programs, satisfaction of the 
``need'' criterion of CAA section 209(b)(1)(B) was effectively 
automatic, being derivative as it were of the State's having long ago 
established a ``need'' to have some form of its own vehicle emissions 
program (i.e., its criteria pollutant program for which it had already 
received many waivers). In conjunction with this, EPA also pointed to 
the effects of climate change on certain criteria pollutant impacts. 
See 74 FR at 32746; 78 FR at 2125 et seq.
    In this action, EPA adopts an interpretation of CAA section 
209(b)(1)(B) that it concludes is more in accord with the text, 
structure, purpose, and legislative history of that provision than were 
either the position in the 2008 denial (because it does not separate 
causal issues and effects issues into alternatives) or the position the 
2009 and 2013 grants (because it considers application of CAA section 
209(b)(1)(B) to California's need for a GHG/climate program, rather 
than subordinating that consideration to California's need for a 
criteria pollutant program). Under this interpretation, EPA begins by 
noting that only one state, California, is entitled to apply under CAA 
section 209(b) for a waiver of the preemptive effect of CAA section 
209(a). CAA section 209(a), in turn, provides that (unless a waiver is 
issued) no state may regulate new motor vehicle or new motor vehicle 
engine emissions. That authority instead is conferred on EPA under CAA 
section 202(a), subject to an ``endangerment finding.'' That finding 
requires EPA to consider the relationship between [1] sources and their 
emissions of pollutants; [2] the pollution to which those emissions 
contribute; and [3] resulting impacts on health and welfare. Congress 
has

[[Page 51340]]

therefore, in the elements of the endangerment finding, laid out the 
terms of what constitutes a pollution problem to provide the 
appropriate and requisite predicate for federal regulation. Because CAA 
section 209(a) expresses Congress's judgment that vehicle emission 
pollution problems are presumptively appropriate only for federal 
regulation, with one state afforded the extraordinary treatment under 
CAA section 209(b) of being able to apply for a waiver from that 
preemption, the best, if not the only, reading of the waiver criterion 
under CAA section 209(b)(1)(B) is that it requires a pollution problem 
at the local level that corresponds in a state-specific particularized 
manner to the type of pollution problem that Congress required as the 
predicate for federal regulation.
    It is against this backdrop that EPA believes the text of CAA 
section 209(b)(1)(B) is best interpreted. Informed by the criteria-
pollutant context in which California's pre-1970 program was enacted, 
the legislative history, and the principle, as discussed elsewhere in 
this action, that differential treatment of the states by Congress in a 
geographically disparate way is extraordinary and is justified only by 
a sufficient link between that differential treatment and 
particularized local facts, EPA interprets Congress's command in CAA 
section 209(b)(1)(B), that it may not grant a preemption waiver for a 
California state vehicle emissions program if California does not 
``need'' that program ``to meet compelling and extraordinary 
conditions,'' to condition the issuance of a waiver on a state-specific 
pollution problem that maps on to the elements as laid out in CAA 
section 202(a): [1] Emissions of pollutants; [2] resulting air 
pollution; [3] health and welfare effects from that resulting air 
pollution. EPA concludes that the interpretation of CAA section 
209(b)(1)(B) it adopts in this document is the best, if not the only, 
reading of that provision.
    The Supreme Court's opinion in UARG, 134 S. Ct. 2427 (2014), 
instructs that Clean Air Act provisions cannot necessarily rationally 
be applied identically to GHG as they are to traditional 
pollutants.\260\ For the reasons set forth in this subsection, it is 
appropriate to consider the application of the second waiver prong, CAA 
section 209(b)(1)(B), to California's ``need'' vel non for its own GHG 
and ZEV programs, separate and apart from its ``need'' for its own 
criteria pollutant program. EPA determines, based on the application of 
the second waiver prong, that California does not ``need'' its own GHG 
and ZEV programs ``to meet compelling and extraordinary conditions,'' 
notwithstanding EPA's historical determinations that California does so 
``need'' its own criteria pollutant programs.
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    \260\ CARB is wrong to suggest in its comments that EPA's 
interpretation in this action of CAA section 209(b)(1)(B) is 
inconsistent with the Supreme Court's opinion in Massachusetts v. 
EPA. CARB comments at 360. Massachusetts held that the general, CAA-
wide definition of ``air pollutant'' at CAA section 302(g) 
encompasses carbon dioxide, and that the text of CAA section 
202(a)(1), which provides that EPA shall regulate standards for 
emissions of ``any air pollutant'' from new motor vehicles if EPA 
makes certain predicate findings (referred to colloquially as 
``endangerment findings''), also encompasses carbon dioxide. 549 
U.S. at 528. But CAA section 209, as a whole, in its preemption 
provision in 209(a), in the waiver provision in 209(b), and most 
specifically in the second waiver prong under CAA 209(b)(1)(B), does 
not contain the term ``pollutant,'' and EPA does not in this 
document interpret section 209 as simply establishing a distinction 
between criteria and GHG pollutants. Rather, for the reasons stated 
in this document, EPA interprets CAA section 209(b), and its 
extraordinary treatment afforded to one state, as requiring, in its 
provision in CAA section 209(b)(1)(B) that no waiver shall issue 
where a state does not need its own standards ``to meet compelling 
and extraordinary conditions,'' as requiring a state-specific, 
particularized nexus between the elements of a pollution problem--
i.e., pollutants, pollution, and impacts--as set forth in CAA 
section 202(a). CARB asserts that ``[t]here is no reason Section 
209(b)(1)(B) should be interpreted more narrowly than Section 
202(a),'' CARB comments at 360. One such reason is perfectly 
evident: They have different text. Another, as discussed in this 
action, is that CAA 209(b)(1)(B) must be read against the principle 
that extraordinary treatment afforded one state must be justified by 
``extraordinary conditions'' in that state. Here, CARB misses the 
mark when it invokes Massachusetts's observation that ``without 
regulatory flexibility, changing circumstances and scientific 
developments would soon render the Clean Air Act obsolete,'' quoting 
549 U.S. at 532. CARB comments at 360. The Supreme Court there was 
discussing evolution of scientific understanding of what pollutants 
may pose harm. Nothing in Massachusetts suggests that scientific 
developments can alter the fundamental relationship between the 
States among themselves and vis-[agrave]-vis the federal government.
---------------------------------------------------------------------------

    Furthermore, the fact that GHG emissions may affect criteria 
pollutant concentrations (e.g., increases in ambient temperature are 
conducive to ground-level ozone formation) does not satisfy this 
requirement for a particularized nexus, because to allow such 
attenuated effects to fill in the gaps would eliminate the function of 
requiring such a nexus in the first place and would elide the 
distinction between national and local pollution problems which EPA 
discerns as underlying the text, structure, and purpose of the waiver 
provision. EPA departs in this regard from the position it took in the 
2009 reversal of the 2008 waiver denial, 74 FR at 32763, where it 
determined that ``[t]here is a logical link between the local air 
pollution problem of ozone and California's desire to reduce GHGs as 
one way to address the adverse impact that climate change may have on 
local ozone conditions.''
    EPA further notes that elsewhere in the 2009 waiver denial 
reversal, EPA took the position that Massachusetts v. EPA supports the 
view that, because ``every small reduction is helpful in reducing 
[climate] concerns. . . . [A] reduction in domestic automobile 
emissions would slow the pace of global emissions increase no matter 
what happens with regard to other emissions,'' and therefore 
``opponents [of the waiver] have not met their burden of demonstrating 
that California's motor vehicle program, or its GHG standards, does not 
have a rational relationship to contributing to amelioration of the air 
pollution problems in California.'' Id. at 32766 (emphasis added). EPA 
now departs from this prior position in several important respects.
    First, to the extent that its 2009 waiver denial reversal was 
guided by an interpretation of the teachings of Massachusetts under 
which any reduction in GHG gives warrant for regulatory action (to 
include EPA's waiver approvals), that must now be weighed against the 
Supreme Court's subsequent 2014 UARG opinion, which stands for the 
proposition that particular CAA provisions will not necessarily apply 
identically in the case of GHG emissions as they do to criteria 
pollutant emissions.
    Second, to the extent that EPA's 2009 waiver denial reversal framed 
the question under CAA section 209(b)(1)(B) as whether there is a 
``rational relationship'' between California's programs and 
California's air pollution problems, that conflated the ``arbitrary and 
capricious'' test in CAA section 209(b)(1)(A) with the unique and 
distinct term ``need[ed] to meet compelling and extraordinary 
conditions'' in CAA section 209(b)(1)(B); EPA's position in this 
document gives that term a distinct and appropriate meaning and 
application.
    Third, whereas the 2009 waiver denial reversal also noted in this 
passage that ``there is some evidence in the record that proffers a 
specific level of reduction in temperature resulting from California's 
regulations,'' this action notes elsewhere that the 2012 joint rule 
record reflected that even standards much more stringent than either 
the 2012 Federal standards or California's ACC program would only 
reduce global temperature by 0.02 degrees Celsius in 2100. As discussed 
elsewhere in this action, EPA concludes that this does not constitute a 
showing

[[Page 51341]]

that California ``needs'' its standards to ``meet'' climate change, 
separate from the question whether climate change and its impacts on 
California constitute ``compelling and extraordinary conditions'' 
within the meaning of the statute. Further, the claim by some 
commenters that ``incremental progress is progress nonetheless'' does 
not meaningfully address the reality that the waiver would result in an 
indistinguishable change in global temperatures and, based on 
geographic variability and measurement sensitivity, likely no change in 
temperatures or physical impacts resulting from anthropogenic climate 
change in California.
    EPA proposed to determine that the balance of textual, contextual, 
structural, and legislative history evidence supports the conclusion 
that the statute is ambiguous in one particular respect: Whether CAA 
section 209(b)(1)(B) refers to an individual standard or the California 
standards as a whole when referring to the Administrator's review of 
state standards submitted for a waiver, to determine whether the state 
``needs such State standards to meet compelling and extraordinary 
conditions.'' We explained that ``such State standards'' in CAA section 
209(b)(1)(B) is ambiguous with respect to the scope of EPA's analysis. 
For example, it is unclear whether EPA is meant to evaluate either the 
standard or standards at issue in the waiver request or all of 
California's standards in the aggregate. We also explained that CAA 
section 209(b)(1)(B) does not specifically employ terms that could only 
be construed as calling for a standard-by-standard analysis or each 
individual standard. For example, it does not contain phrases such as 
``each State standard'' or ``the State standard.'' Nor does the use of 
the plural term ``standards'' definitively answer the question of the 
proper scope of EPA's analysis, given that the variation in the use of 
singular and plural form of a word in the same law is often 
insignificant and a given waiver request typically encompasses multiple 
``standards.'' Thus, we explained that while it is clear that ``such 
State standards'' refers at least to all of the standards that are the 
subject of the particular waiver request before the Administrator, that 
phrase could reasonably be considered as referring either to the 
standards in the entire California program, the program for similar 
vehicles, or the particular standards for which California is 
requesting a waiver under the pending request.\261\
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    \261\ California suggests in its comments that EPA is 
``logically inconsistent'' in that it said at proposal, 83 FR at 
43246, that the CAA section 209(b)(1)(B) phrase ``such State 
standards'' ``refers at least to all of the standards that are the 
subject of the particular waiver request before the Administrator,'' 
while at the same time proposing to reconsider and withdraw the 
January 2013 grant of a waiver with respect to some, but not all, of 
the components of the ACC program (i.e., with respect to GHG and 
ZEV, but not LEV). EPA disagrees that this is inconsistent. The 
question of how to interpret ``such state standards'' refers to the 
determination of what the total set of standards is with regard to 
which EPA will consider whether California ``needs'' those standards 
``to meet compelling and extraordinary conditions.'' It is 
reasonable to assign that total set at the level of the waiver-
request package before the Agency, rather than all the state-
specific emission standards that California has ever adopted. If the 
consideration reveals that, within that set, California does not 
need particular subsets ``to meet compelling and extraordinary 
conditions''--here, because the GHG and ZEV programs lack a 
particularized, California-specific nexus between pollutant, 
pollution, and impacts, a rationale that does not apply to the LEV 
program, for which EPA did not propose to withdraw the waiver and is 
not in this document withdrawing the waiver--that is nothing 
unusual. And it is consistent with EPA's prior practice, as 
discussed in subsection III.B, of only partially granting aspects 
of, in combination with denial or deferral of action on other 
aspects of, some previous waivers. The ultimate analysis whether a 
waiver is appropriate is not limited to a binary, all-or-nothing 
determination.
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    We did explain, however, that there are reasons to doubt that 
``such State standards'' is intended to refer to all standards in 
California's program, including all standards that it has previously 
adopted and obtained waivers for, because this would limit EPA's 
ability to consider and act on standards that are the subject of 
particular waiver applications, even where that individualized 
consideration is reasonable or the only rational approach. 
Specifically, given that the term ``extraordinary'' should refer to 
circumstances that are specific to California, such as thermal 
inversions resulting from local geography and wind patterns, and 
primarily responsible for causing the air pollution problems that the 
standards are designed to address, standards which address pollution 
problems that lack that type of particularized nexus to California are 
particularly appropriate candidates for an individualized 
consideration. EPA affirms this view as it relates to the review of GHG 
standards, given that GHG emissions from in California cars, and their 
consequences for California, bear no particular relation to these 
California-specific circumstances--i.e., global GHG emissions in the 
aggregate are what present problems for California, not California-
specific ones.
    The waiver under CAA section 209(b) is a waiver of, and is 
logically dependent on and presupposes the existence of, the 
prohibition under CAA section 209(a), which forbids (absent a waiver) 
any State to ``adopt or attempt to enforce any standard [singular] 
relating to the control of emissions from new motor vehicles or new 
motor vehicle engines subject to this part.'' States are forbidden from 
adopting a standard, singular; California requests waivers seriatim by 
submitting a standard or package of standards to EPA; it follows that 
EPA considers those submissions as it receives them, individually, not 
in the aggregate with all standards for which it has previously granted 
waivers. Further, reading the phrase ``such State standards'' as 
requiring EPA always and only to consider California's entire program 
in the aggregate would limit the application of this waiver prong in a 
way that EPA does not believe Congress intended. We explained that, 
under the interpretation where EPA is constrained to the aggregate 
approach, once EPA had determined that California needed its very first 
set of submitted standards to meet extraordinary and compelling 
conditions, EPA would never have the discretion to determine that 
California did not need any subsequent standards for which it sought a 
successive waiver--unless EPA is authorized to consider a later 
submission separate from its earlier finding. Moreover, as also 
explained at proposal, up until the ACC program waiver request, 
California's waiver request involved individual standards or particular 
aspects of California's new motor vehicle program. For example, only 
GHG standards were at issue in the 2008 GHG waiver request 
denial.262 263
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    \262\ 73 FR 12156 (March 6, 2008).
    \263\ EPA determines in this document that GHG emissions, with 
regard to the lack of a nexus between their State-specific sources 
and their State-specific impacts, and California's GHG standard 
program, are sufficiently distinct from criteria pollutants and 
traditional, criteria pollutant standards, that it is appropriate 
for EPA to consider whether California needs its own GHG vehicle 
emissions program. EPA does not determine in this document and does 
not need to determine today how this determination may affect 
subsequent reviews of waiver applications with regard to criteria 
pollutant control programs.
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    Several commenters disagreed with our view of ambiguity and the 
proposal to construe ``such state standards,'' in the context of our 
reconsideration and proposal to withdraw the January 2013 waiver for 
California's GHG and ZEV provisions, as applying to those provisions 
themselves, rather than California's entire, aggregate program 
consisting of all California's motor vehicle emission standards, when 
considering whether California needs its

[[Page 51342]]

GHG and ZEV provisions to meet compelling and extraordinary conditions 
within the meaning of CAA section 209(b)(1)(B). One commenter argued 
that this reading would require EPA to consider the protectiveness of 
California's standards by looking at them in the aggregate while also 
allowing EPA to consider California's ``need'' on an individual, 
standard-by-standard basis. Commenters also argued that EPA's 
historical or traditional interpretation was correct. They argued that 
EPA could not apply a different interpretation of ``such State 
standards'' given that ``such State standards'' in CAA section 
209(b)(1)(B) does not relate back to the singular ``any standard'' in 
CAA section 209(a). They cast this reading as ``implausible,'' given 
that under the rule of last antecedent ``such'' should properly refer 
to standards in (b)(1) and not 209(a). We disagree. As explained 
earlier above, reading the phrase ``such State standards'' as requiring 
EPA always and only to consider California's entire program in the 
aggregate would limit the application of this waiver criterion. 
Specifically, it would mean that once EPA determines that California 
needed its very first set of submitted standards to meet extraordinary 
and compelling conditions, EPA would never have the discretion to 
determine that California did not need any subsequent standards for 
which it sought a successive waiver--unless EPA is authorized to 
consider a later submission separate from its earlier finding. Instead, 
it is reasonable to read CAA section 209(b) as articulating, first, 
that EPA shall consider the standards in the aggregate to determine if 
the State's determination that they are sufficiently protective is 
arbitrary and capricious (CAA section 209(b)(1)(A)). But, even if this 
first criterion for denying a waiver is not triggered, nevertheless, 
such a waiver shall not be granted as to such standards that are not 
needed to meet compelling and extraordinary conditions, under the 
second waiver denial criterion (CAA section 209(b)(1)(B)). Commenters' 
argument, in effect, inserts the word ``every'' (or ``all'') into CAA 
section 209(b)(1)(B) in between the words ``need'' and ``such.''
    Additionally, as shown in further detail in section D.2., below, 
the term ``extraordinary'' refers to circumstances that are specific to 
California, such as thermal inversions resulting from local geography 
and wind patterns, and that are primarily responsible for causing the 
air pollution problems that the standard under waiver review is 
designed to address. EPA affirms the view that the term 
``extraordinary'' refers primarily to factors that tend to produce 
higher levels of pollution: Geographical and climatic conditions (like 
thermal inversions) that in combination with large numbers and high 
concentrations of automobiles, create serious air pollution problems in 
California (73 FR 12156, 12159-60).
    The text, context, and structure of CAA section 209(b) support 
EPA's reasoning that the relevant ``conditions'' are those conditions 
present in a particular state and that have a particularized nexus to 
emissions in that state. The statute calls for an examination of 
whether the ``State'' needs such ``state standards'' in the context of 
a prohibition in CAA section 209(a) of a ``state or other political 
subdivision'' adopting or attempting to enforce alternative standards. 
It would be inconsistent with the overall structure for a state's own 
preferred policy approach to addressing national or global--rather than 
local and state-specific--``conditions'' to permit a waiver from a 
scheme that otherwise establishes a uniform, national policy.\264\
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    \264\ Cf. Ford Motor Co. v. EPA, 606 F.2d 1293, 1301-02 (D.C. 
Cir. 1979) (``Ford is asking this court to declare that Congress 
intended to make standards adopted by California for its own 
particular problems, and never substantively reviewed for stringency 
or national protectiveness by federal officials, an option which 
auto manufacturers can choose in the rest of the country as an 
alternative to compliance with the federal standards which Congress 
determined are in the best interests of the nation. We find this 
reading to be wholly implausible.''). See also id. at 1303 (``It was 
clearly the intent of the Act that that determination focus on local 
air quality problems . . . that may differ substantially from those 
in other parts of the nation.'').
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    Notably, pertinent legislative history supports this view of the 
text and structure of 209(b), insofar as it refers to California's 
``peculiar local conditions'' and ``unique problems.'' S. Rep. No. 403, 
90th Cong. 1st Sess., at 32 (1967). This legislative history also 
indicates that California is to demonstrate ``compelling and 
extraordinary circumstances sufficiently different from the nation as a 
whole to justify standards on automobile emissions which may, from time 
to time, need to be more stringent than national standards.'' Id. EPA 
views this as evidence of Congressional intent that separate standards 
in California are to be justified by a showing of circumstances in 
California that are different from circumstances in the country at 
large. Additionally, EPA views this legislative history as 
demonstrating that Congress did not intend for CAA section 209(b)(1)(B) 
to be based on the need for California to enact separate standards that 
address pollution problems of a more national or global nature. 
Relevant legislative history also ``indicates that Congress allowed 
waivers of preemption for California motor vehicle standards based on 
the particular effects of local conditions in California on the air 
pollution problems in California.'' Congress discussed ``the unique 
problems faced in California as a result of its climate and 
topography.'' H.R. Rep. No. 728, 90th Cong. 1st Sess., at 21 (1967). 
See also Statement of Cong. Holifield (CA), 113 Cong. Rec. 30942-43 
(1967). Congress also noted the large effect of local vehicle pollution 
on such local problems. See, e.g., Statement of Cong. Bell (CA) 113 
Cong. Rec. 30946. As explained at proposal, Congress focus was on 
California's ozone problem, which is especially affected by local 
conditions and local pollution. See Statement of Cong. Smith (CA) 113 
Cong. Rec. 30940-41 (1967); Statement of Cong. Holifield (CA), id., at 
30942. See also, MEMA I, 627 F.2d at 1109 (noting the discussion of 
California's ``peculiar local conditions'' in the legislative history). 
In sum and as explained at proposal, conditions that are similar on a 
global scale are not ``extraordinary,'' especially where 
``extraordinary'' conditions are a predicate for a local deviation from 
national standards, under CAA section 209(b). 83 FR 43247.
    As further explained in section D2., below, GHG is a globally 
distributed pollutant with environmental effects that are different 
from emissions of criteria pollutants. For example, GHG emissions from 
the California vehicle fleet bear no more relation to GHG emissions in 
California than fleet in other parts of the country. As also explained 
in the SAFE proposal, EPA believes that the GHG and ZEV standards are 
standards that would not meaningfully address global air pollution 
problems posed by GHG emissions, in contrast to local or regional air 
pollution problem with causal ties to conditions in California. 
Additionally, the impacts of California vehicles' GHG emissions on 
California are mediated through the context of the global mixture of 
elevated levels of GHG in the upper atmosphere. As also shown below, 
EPA finds that while potential conditions in California related to 
global climate change could be substantial, they are not sufficiently 
different from the potential conditions in the nation as a whole to 
justify separate state standards under CAA section

[[Page 51343]]

209(b)(1)(B).\265\ In this action, EPA is reviewing a waiver for motor 
vehicle standards designed to address a global air pollution problem 
and its effects, as compared to a local or regional air pollution 
problem that has causal ties to conditions in California. EPA must 
therefore, review California's GHG standards in light of the fact that 
GHG emissions impacts are different from criteria pollutants 
themselves, and California must address their need for them as it 
relates to conditions in California. In sum, as explained at proposal, 
under our reading of ``such state standards'' and ``extraordinary and 
compelling conditions,'' EPA will examine California's need for GHG 
standards by considering levels of GHG emissions emitted from motor 
vehicles in California to determine if they are specific to California 
and contribute primarily to environmental effects that are specific to 
California. This review, which calls for a showing of a particularized 
causal link between the standards under review, emissions in 
California, and conditions in California, is similar to agency review 
of California's need for standards designed to address criteria 
pollutants and is further discussed in section D.2.d, below.\266\
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    \265\ See Fourth National Climate Assessment, Chapter 25: 
Southwest, available at https://nca2018.globalchange.gov/chapter/25/. See also Intergovernmental Panel on Climate Change (IPCC) 
Observed Climate Change Impacts Database, available at http://sedac.ipcc- data.org/ddc/observed_ar5/index.html.
    \266\ California argues in its comments that EPA has 
inappropriately reduced the scope of waiver ability under CAA 
section 209(b) to be narrower than the scope of express preemption 
under CAA section 209(a). EPA disagrees. To the extent that CAA 
section 209(b)(1)(B), as interpreted and applied here, precludes a 
waiver for California's GHG vehicle emissions and ZEV programs, that 
effect flows from the text and structure of this statutory section.
---------------------------------------------------------------------------

    CARB argues that what it characterizes as EPA's reading of 
``compelling and extraordinary'' as equivalent to ``unique'' or 
``sufficiently different from'' the rest of the country ``is 
inconsistent with Section 209(b)(1)(B), other provisions of the Clean 
Air Act, and the legislative history.'' CARB also asserts that EPA 
``cites no case'' to support this reading. At the same time, CARB 
claims that EPA has either interpreted legislative history incorrectly 
or relies entirely on legislative history for the 1967 CAA, which does 
note California's ``unique problems,'' instead of legislative history 
for the 1977 amendments; CARB asserts that the latter legislative 
history is more relevant, given that the addition of section 177 in the 
1977 CAA meant that Congress did not intend that Section 209(b)(1)(B) 
be construed as requiring ``California's problems to be entirely unique 
or sufficiently different from those in other States.'' CARB also 
contends that EPA is limiting application of CAA section 209(b)(1)(B) 
to smog, even though EPA has granted waivers for pollutants that do not 
contribute to smog, such as particulate matter. In addition, CARB 
maintains that what it characterizes as EPA's reading ``compelling and 
extraordinary conditions'' as restricted to ``local'' or ``regional'' 
pollutants would weaken Congress's intent that California retain its 
own regulatory program and continue to lead the nation as a 
``laboratory of innovation.'' CARB further argues that EPA provides no 
support for this ``geographic distinction,'' while also casting the 
reading as ``illusory.'' According to CARB, both local and global 
pollution cause compelling and extraordinary conditions, as evidenced 
by provisions of the CAA that address long-range transport of emissions 
(beyond the state level). In sum, CARB argues that ``compelling and 
extraordinary conditions'' is expansive enough to be read as including 
GHG emissions and that EPA's ``exacting and unrealistic'' reading can 
only be met by ``a rare air pollution problem.'' CARB comments at 360-
365.
    EPA disagrees. First, as explained at proposal, the 1977 Amendments 
revised CAA section 209(b)(1) in only one material aspect. 
Specifically, California is required to determine that standards it 
seeks a waiver for will be ``in the aggregate, at least as protective 
of public health and welfare than applicable Federal standards,'' 
rather than the ``more stringent'' standard under 1967 Clean Air Act. 
83 FR 43247 n.579. Second, there is relevant legislative history from 
the 1977 amendments, which describes EPA's role in reviewing 
California's protectiveness determination, under CAA section 
209(b)(1)(A), as whether ``the State acted unreasonably in evaluating 
the relative risks of various pollutants in light of air quality, 
topography, photochemistry and climate in that State.'' This 1977 
legislative history further supports a reading requiring a 
particularized nexus. H. Rep. No. 294, 95th Cong., 1st Sess. 302 
(1977), U.S. C.C.A.N. 1977, p. 1381. Third, in support of the proposed 
reading, EPA cited MEMA I as noting the Senate Committee discussion of 
California's ``peculiar local conditions'' in 1967 legislative history 
for this provision in upholding the grant of a waiver subsequent to the 
1977 CAA amendments. . 627 F.2d at 1109, citing S.Rep. No. 403, 90th 
Cong., 1st Sess. 33 (1967); see also Ford Motor Co. v. EPA, 606 F.2d 
1293,1303 (D.C. Cir. 1979) (``It was clearly the intent of the Act that 
that determination focus on local air quality problems . . . that may 
differ substantially from those in other parts of the nation.''). 
Fourth, EPA's reading of CAA section 209(b)(1)(B) has never been and is 
not limited to ``smog''-causing pollutants. Here, CARB's comment 
glosses over extensive discussion in the SAFE proposal of the phrase 
``compelling and extraordinary'' including, for example, legislative 
history indicating that California is to demonstrate ``compelling and 
extraordinary circumstances sufficiently different from the nation as a 
whole to justify standards on automobile emissions which may, from time 
to time, need to be more stringent than national standards.'' 83 FR 
23427, citing S. Rep. No. 403, 90th Cong. 1st Sess., at 32 (1967). 
Fifth, as shown in greater detail in section III.D, the phrase 
``compelling and extraordinary conditions'' qualifies the ``need'' for 
California's standards. And in a statute designed to address public 
health and welfare, it certainly cannot mean standards that allow a 
state to be ``a laboratory for innovation'' in the abstract, without 
any connection to a need to address pollution problems. Most notably, 
legislative history explains that CAA section 209(b)(1) was is intended 
to recognize California's ``unique problems.'' For example, in 
originally adopting the provision, the Senate Committee on Public Works 
explained that ``California's unique problems and pioneering efforts 
justified a waiver of the preemption section to the State of 
California.'' S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) 
(emphasis added); see also 113 Cong. Rec. 30948 (bound ed. Nov. 
2,1967), Statement of Representative Harley Staggers, chairman of the 
House Interstate and Foreign Commerce Committee (explaining that 
``overall national interest required administration of controls on 
motor vehicle emissions, with special recognition given by the 
Secretary to the unique problems facing California as a result of 
numerous thermal inversions that occur within that state because of its 
geography and prevailing wind patterns), ; id. at 30950, Remarks of 
Rep. Corman (``The uniqueness and the seriousness of California's 
problem is evident-more than 90 percent of the smog in our urban area 
is caused by automobiles, and in the next 15 years the number of 
automobiles in the state will almost double.''). Sixth, while it is

[[Page 51344]]

true that local and regional pollutants can be transported at greater 
geographic scales than the state level, the Clean Air Act sets out a 
comprehensive scheme for addressing air pollution transported to other 
regions; see, e.g., CAA sections 126 and 110(a)(2)(D)(i). The fact that 
the Act addresses pollutant transport elsewhere does not expand the 
scope of the waiver provision. In contrast, in CAA section 209(b), 
Congress set out a waiver of preemption for California to address 
automotive pollution that give rise to local and regional air quality 
problems. Finally, to the extent CARB casts EPA reading as ``exacting 
and unrealistic,'' it mischaracterizes CAA section 209(a) and (b), 
which preempts states from adopting and enforcing standards for new 
motor vehicles and engines, with CAA section 209(b) allowing for a 
waiver of the preemption in 209(a) only if certain enumerated 
conditions are met. It is not ``a rare air pollution problem'' that 
satisfies the particularized nexus interpretation of CAA section 
209(b)(1)(B) that EPA adopts in this document. Rather, it is the all-
too-well understood and longstanding air pollution problem that 
California continues to face: Aggravated criteria pollution at the 
state and local level.
2. It Is Appropriate To Apply This Criterion to California's GHG 
Standards Separately, Rather Than to California's Motor Vehicle Program 
as a Whole
    Under CAA section 209(b)(1)(B) of the Clean Air Act, the 
Administrator may not grant a waiver if he finds that the ``State does 
not need such State standards to meet compelling and extraordinary 
conditions.'' EPA proposed to find that CARB does not need its own GHG 
and ZEV standards to meet compelling and extraordinary conditions in 
California, on the grounds that ``compelling and extraordinary 
conditions'' mean environmental conditions with causes and effects 
particular or unique to, California whereas GHG emissions present 
global air pollution problems. Specifically, EPA proposed to determine 
that the GHG-related standards are designed to address global air 
pollution and its consequences, in contrast to local or regional air 
pollution problems with causal ties to conditions in California. EPA 
also proposed to find that, while effects related to climate change in 
California could be substantial, they are not sufficiently different 
from the conditions in the nation as a whole to justify separate State 
standards under CAA section 209(b)(1)(B). 83 FR 43248-43250. Lastly, 
EPA proposed to find that the State's GHG-related standards would not 
have a meaningful impact on the potential conditions related to global 
climate change. Because EPA has traditionally interpreted and applied 
CAA section 209(b)(1)(B) in a manner that examines whether the 
conditions that Congress identified (e.g., topography number of 
vehicles, etc.) \267\ still give rise to serious air quality problems 
in California, and thus a need for California's own motor vehicle 
emission control program, EPA concludes that this causal-link test is 
the appropriate basis on which to evaluate California's GHG emission 
standards under the second waiver prong, CAA section 209(b)(1)(B).\268\
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    \267\ See, e.g., 49 FR 18887, 18890 (May 3, 1984) (waiver 
decision discussing legislative history of CAA section 209).
    \268\ It is not appropriate for EPA to defer to California and 
other outside parties when EPA is interpreting its own statute. By 
contrast, EPA does defer to California's policy choices when it 
comes to choosing emissions standards that will best address the 
serious air quality problems and impacts on public health and 
welfare in California--to the extent that the State standards at 
issue will actually address pollution and its consequences that are 
particular to California. But the question whether the State 
regulations at issue actually do meet the statutory criterion of 
being necessary ``to meet compelling and extraordinary conditions'' 
in the meaning of the statute, CAA section 209(b)(1)(B), is one 
which EPA must answer. In this regard, EPA notes that it has 
previously taken the position that ``the burden of proof [lies] on 
the party opposing a waiver,'' and that ``the burden [is] on those 
who allege, in effect, that EPA's GHG emission standards are 
adequate to California's needs.'' 78 FR at 2117 (Jan. 2013 waiver 
grant). EPA notes that this previous discussion is distinguishable 
from the current context in two key regards. First, EPA was in 2013 
analyzing third parties' opposition to a waiver, rather than 
conducting its own analysis of whether a previously granted waiver 
was appropriately granted. Second, EPA's change in position in this 
document does not constitute an assertion that ``EPA's GHG emission 
standards are [or are not] adequate to California's needs'' as a 
matter of policy. Rather, EPA is adopting an interpretation of CAA 
section 209(b)(1)(B), specifically its provision that no waiver is 
appropriate if California does not need standards ``to meet 
compelling and extraordinary conditions,'' similar to the 
interpretation that it adopted in the 2008 waiver denial but 
abandoned in the 2009 and 2013 waiver grants, and applying that 
interpretation to determine to withdraw the January 2013 waiver for 
California's GHG and ZEV program for model years 2021 through 2025. 
Under that interpretation, the question is not whether existing 
federal standards are ``adequate to California's needs,'' but 
whether California's standards are needed under the meaning of CAA 
section 209(b)(1)(B), which, as set forth in this document, requires 
a particularized nexus between California-specific pollutant 
sources, California-specific pollution contributed to thereby, and 
California-specific pollutants impacts caused thereby. Furthermore, 
we took comment on burden of proof in the proposal, see 83 FR at 
43244 n.567. EPA believes it is not necessary to resolve that issue 
in this action as regardless of whether a preponderance of the 
evidence or clear and compelling evidence standard is applied, the 
Agency concludes that withdrawal of the waiver is appropriate.
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    In general, EPA has in the past recognized California's unique 
underlying conditions and serious air pollution problems when reviewing 
waiver requests.\269\ California, and others that oppose the withdrawal 
of the waiver, assert that the relevant inquiry is merely whether 
California needs to have some form of a separate State motor vehicle 
emissions control program to meet compelling and extraordinary 
conditions, not whether any given standard is needed to meet compelling 
and extraordinary conditions related to that air pollution problem. On 
the other hand, several commenters that support a withdrawal of the 
waiver suggest EPA's determination should be based on whether 
California needs greenhouse gas standards in particular to meet 
compelling and extraordinary conditions, asserting that a proposed set 
of standards must be linked to compelling and extraordinary conditions. 
These commenters suggest that the Act requires EPA to look at the 
particular ``standards'' at issue, not the entire State program.
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    \269\ See American Trucking Associations, Inc. v. Environmental 
Protection Agency, 600 F.3d 624, 627 (D.C. Cir. 2010) (``With 
respect to the statutory language, EPA concluded that `compelling 
and extraordinary conditions' refers to the factors that tend to 
cause pollution--the `geographical and climate conditions that, when 
combined with large numbers and high concentrations of automobiles, 
create serious air pollution problems.' The expansive and statutory 
language gives California (and in turn EPA) a good deal of 
flexibility in assessing California's regulatory needs. We therefore 
find no basis to disturb EPA's reasonable interpretation of the 
second criterion. See Chevron, USA Inc v. Natural Res. Def. Council, 
467 U.S. 837, 842-43.'') (citation omitted).
---------------------------------------------------------------------------

    EPA determines that it in this context it is appropriate to review 
whether California needs its GHG standards to meet compelling and 
extraordinary conditions separately from the need for the remainder of 
California's new motor vehicle program, which has historically 
addressed criteria pollutants with a particular causal link to local 
and regional conditions both in the nature and quantity of emissions 
and in the particularized local and regional impacts of the pollution 
to which those emissions contribute. EPA bases this decision on the 
fact that California's GHG standards are designed to address global 
climate change problems that are different from the local pollution 
conditions and problems that California has addressed previously in its 
new motor vehicle program. The climate change problems are different in 
terms of the distribution of the pollutants and the effect of local 
California factors, including the local effect of motor vehicle 
emissions as differentiated from other GHG emissions worldwide on the 
GHG concentrations in California. In

[[Page 51345]]

addition, EPA notes that under its traditional interpretation of CAA 
section 209(b)(1)(B), where EPA evaluates the need for a separate 
California new motor vehicle program, conditions such as the nature of 
the air quality problem may change whereby a particular motor vehicle 
regulation designed for a specific criteria pollutant is no longer 
needed to address a serious air quality problem (e.g., the underlying 
air quality problem no longer exists). Therefore, EPA concludes that it 
is appropriate to examine the need for GHG standards within 
California's mobile source program to ensure that such standard is 
linked to local conditions that giving rise to the air pollution 
problem, that the air pollution problem is serious and of a local 
nature, and that the State standards at issue will meaningfully redress 
that local problem.\270\
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    \270\ EPA notes in this regard that the position that GHG and 
climate are no different from criteria pollutants and criteria air 
pollution in terms of applicability of the CAA section 209(b) waiver 
regime, and specifically that no particularized nexus between in-
state emissions and in-state impacts is necessary in order to meet 
the CAA section 209(b)(1)(B) ``need[ed] . . . to meet compelling and 
extraordinary conditions,'' would effectively read the term 
``extraordinary'' out of the statute, or reduce it to surplusage 
with the term ``compelling.'' Whether GHG emissions and attendant 
climate impacts are, in the colloquial sense, compelling or not is 
not the relevant question. It is whether they are ``compelling and 
extraordinary'' within the reasonably interpreted meaning of that 
term in its context here. Inasmuch as that term in its context 
requires a particularized nexus between California emissions, 
California pollution, and California impacts, they are not.
---------------------------------------------------------------------------

    This waiver decision falls within the context of a few instances of 
EPA applying the CAA section 209(b)(1)(B) criterion to a California 
waiver request for a fundamentally global air pollution problem.\271\ 
Although EPA's review of this criterion has typically been cursory due 
to California needing its motor vehicle emission program due to 
fundamental factors leading to local and regional air pollution 
problems that were well established at the time of creation of the 
waiver provision (as discussed below), it is appropriate in this case 
to carefully review the purpose of CAA section 209(b)(1)(B) when 
applying it to the unique circumstance of California's regulation of 
greenhouse gases. By doing so, EPA gives meaning to Congress's decision 
to include this provision in CAA section 209(b).\272\
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    \271\ See generally California State Motor Vehicle Pollution 
Control Standards; Advanced Clean Car Program; Notice of Decision, 
January 9, 2013 Volume 78, Number 6 pp. 2211--2145; California State 
Motor Vehicle Pollution Control Standards; Greenhouse Gas Emissions 
from 2014 and Subsequent Model Year Medium- and Heavy-Duty Engines 
and Vehicles; Notice of Decision; December 29, 2016 Volume 81, 
Number 250, pp. 95982-95987; California State Motor Vehicle 
Pollution Control Standards; Heavy-Duty Tractor-Trailer Greenhouse 
Gas Regulations; Notice of Decision; August 7, 2014 Volume 79, 
Number 152 pp. 46256-46265; California State Motor Vehicle Pollution 
Control Standards; Within-the-Scope Determination for Amendments to 
California's Motor Vehicle Greenhouse Gas Regulations; Notice of 
Decision; June 14, 2011 Volume 76, Number 114 pp. 34693-34700; 
California State Motor Vehicle Pollution Control Standards; Notice 
of Decision Granting a Waiver of Clean Air Act Preemption for 
California's 2009 and Subsequent Model Year Greenhouse Gas Emission 
Standards for New Motor Vehicles; July 8, 2009 Volume 74, Number 129 
pp. 32744-32784; California State Motor Vehicle Pollution Control 
Standards; Notice of Decision Denying a Waiver of Clean Air Act 
Preemption for California's 2009 and Subsequent Model Year 
Greenhouse Gas Emission Standards for New Motor Vehicles; March 6, 
2008 Volume 73, Number 45 pp. 12156-12169.
    \272\ See United States v. Menashe, 348 US 528, 538-39 (1955) 
(courts must give effect to every word, clause, and sentence of a 
statute).
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    Moreover, because both CAA sections 209(b)(B) and (C) employ the 
term ``such state standards,'' it is appropriate for EPA to read the 
term consistently between prongs (B) and (C). Under CAA section 
209(b)(1)(C) EPA conducts review of standards California has submitted 
to EPA for the grant of a waiver to determine if they are consistent 
with CAA section 202(a).\273\ It follows then that EPA must read ``such 
state standards'' in CAA section 209(b)(1)(B) as a reference to the 
same standards in subsection (C).\274\
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    \273\ ``Technology exists with which to achieve California's 
proposed standards for HC and CO, however, the standards are 
inconsistent with Section 202(a) of the Clean Air Act because the 
cost of compliance within the lead time remaining is excessive.'' 38 
FR 30136 (November 1, 1973). See also 40 FR 30311 (July 18, 1975); 
43 FR 998, 1001 (Jan. 5, 1978).
    \274\ Under CAA section 177 states may adopt and enforce motor 
vehicle emissions standards if ``such standards are identical to the 
California standards for which a waiver has been granted.'' See, 
e.g., Motor Vehicle Mfrs. Ass'n v. NYS Dep. of Envt'l Conservation, 
17 F.3d 521, 532 (2d Cir. 1994). ``Section 177 refers to `standards 
relating to control of emissions ... for which a waiver has been 
granted.' Id. In enacting Sec.  209(b), which establishes 
California's preemption exception, Congress uses the same words as 
it did when it allowed California to set its own `standards . . . 
for the control of emissions,' provided the EPA approves a waiver 
application. Id. Sec.  7543(b)(1). Hence, the most logical reading 
of Sec.  177 is that New York may adopt only those standards that, 
pursuant to Sec.  209(b), California included in its waiver 
application to the EPA.'' (Emphasis in original).
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a. EPA Practice in Previous Waivers
    In past waivers that addressed local or regional air pollution, EPA 
has interpreted CAA section 209(b)(1)(B) as requiring it to consider 
whether California needs a separate motor vehicle program to meet 
compelling and extraordinary conditions. Under this approach, EPA does 
not consider whether the specific standards at issue are needed to meet 
compelling and extraordinary conditions related to that air pollutant. 
For example, EPA reviewed this issue in detail with regard to 
particulate matter in a 1984 waiver decision.\275\ In that waiver 
proceeding, California argued that EPA is restricted to considering 
whether California needs to have its own motor vehicle program to meet 
compelling and extraordinary conditions, and does not consider whether 
any given standard is necessary to meet such conditions. Opponents of 
the waiver in that proceeding argued that EPA was to consider whether 
California needed these PM standards to meet compelling and 
extraordinary conditions related to PM air pollution.
---------------------------------------------------------------------------

    \275\ See 49 FR 18887 (May 3, 1984).
---------------------------------------------------------------------------

    The Administrator agreed with California that it was appropriate to 
look at the program as a whole in determining compliance with CAA 
section 209(b)(1)(B). One justification of the Administrator was that 
many of the concerns with regard to having separate State standards 
were based on the manufacturers' worries about having to meet more than 
one motor vehicle program in the country, but that once a separate 
California program was permitted, it should not be a greater 
administrative hindrance to have to meet further standards in 
California. The Administrator also justified this decision by noting 
that the language of the statute referred to ``such state standards,'' 
which referred back to the use of the same phrase in the criterion 
looking at the protectiveness of the standards in the aggregate. He 
also noted that the phrase referred to standards in the plural, not 
individual standards. He considered this interpretation to be 
consistent with the ability of California to have some standards that 
are less stringent than the federal standards, as long as, under CAA 
section 209(b)(1)(A), in the aggregate its standards were at least as 
protective as the federal standards.
    The Administrator further stated that in the legislative history of 
CAA section 209, the phrase ``compelling and extraordinary 
circumstances'' refers to ``certain general circumstances, unique to 
California, primarily responsible for causing its air pollution 
problem,'' like the numerous thermal inversions caused by its local 
geography and wind patterns. The Administrator also noted that Congress 
recognized ``the presence and growth of California's vehicle 
population, whose emissions were thought to be responsible for ninety 
percent of the air pollution in certain parts of California.'' \276\ 
EPA reasoned that the term compelling and extraordinary conditions 
``does not refer to the levels of pollution directly.'' Instead, the 
term refers primarily to the

[[Page 51346]]

confluence of factors that tend to produce higher levels of pollution 
of the type particular to California: ``geographical and climatic 
conditions (like thermal inversions) that, when combined with large 
numbers and high concentrations of automobiles, create serious air 
pollution problems.''
---------------------------------------------------------------------------

    \276\ Id. at 18890 (emphasis added).
---------------------------------------------------------------------------

    The Administrator summarized that the question to be addressed in 
the second criterion is whether these ``fundamental conditions'' (i.e., 
the geographical and climate conditions and large motor vehicle 
population) that cause air pollution continued to exist, not whether 
the air pollution levels for PM were ``compelling and extraordinary,'' 
nor the extent to which these specific PM standards will address the PM 
air pollution problem.
    From this it can be seen that EPA's interpretation in the context 
of reviewing standards designed to address local or regional air 
pollution has looked at the local causes of the air pollution problems: 
Geographic and climatic conditions that turn local emissions into air 
pollution problems, such as thermal inversions, combined with a large 
number of motor vehicles in California emitting in the aggregate large 
quantities of emissions. Under the interpretation EPA adopts in this 
document, it is the particularized nexus between the emissions from 
California vehicles, their contribution to local pollution, and the 
extraordinary impacts that that pollution has on California due to 
California's specific characteristics, that set California apart from 
other areas when Congress adopted this provision.
    EPA's review of this criterion has usually been cursory and not in 
dispute, as the fundamental factors leading to these traditional 
criteria air pollution problems--geography, local climate conditions 
(like thermal inversions), significance of the motor vehicle 
population--have not changed over time and over different local and 
regional air pollutants. These fundamental factors have applied 
similarly for all of California's air pollution problems that are local 
or regional in nature. California's circumstances of geography, 
climate, and motor vehicle population continue to show that it has 
compelling and extraordinary conditions leading to such local air 
pollution problems related to traditional pollutants.
    California's motor vehicle program has historically addressed air 
pollution problems that are generally local or regional in nature. The 
emission standards have been designed to reduce emissions coming from 
local vehicles, in circumstances where these local emissions lead to 
air pollution in California that will affect directly the local 
population and environment in California. The narrow question in this 
waiver proceeding is whether this interpretation is appropriate when 
considering motor vehicle standards designed to address a global air 
pollution problem and its effects, as compared to a local or regional 
air pollution problem that has particular causal ties to conditions in 
California.
    As EPA observed in the SAFE proposal, the agency has articulated 
differing interpretations of CAA section 209(b)(1)(B). Historically, 
EPA has interpreted this provision to require that California needs to 
have its own separate new motor vehicle program in the aggregate to 
meet compelling and extraordinary conditions in California, not whether 
the state needs the specific standards under consideration. In 2008, in 
contrast, when EPA first considered whether State GHG emission 
regulations meet the requirements for a CAA section 209(b) waiver, EPA 
determined that the better reading of CAA section 209(b)(1)(B) would be 
to consider whether California ``need[s]'' the particular standards at 
issue ``to meet compelling and extraordinary conditions,'' and the 
agency denied the waiver on these grounds. Then, when EPA reconsidered 
that denial in 2009, the agency reverted to the interpretation that it 
had previously applied for criteria pollutants and granted the waiver.
    EPA concludes that the long and contentious history of this 
question, and the recent measures that California has taken even during 
the pendency of this administrative action to amend its State 
regulations beyond the form in which they were granted the waiver in 
2013 and, even more recently, to purport to establish ``voluntary'' 
programs creating yet a third program distinct both from that for which 
CAA preemption was waived in 2013 and the Federal standards promulgated 
in 2012 and currently under review by the Federal government, confirm 
that extension of CAA section 209(b) waivers to State GHG and ZEV 
programs was inappropriate. Such waivers have led to actions by 
California increasingly at odds with the clear Congressional design and 
intent that national standards would be set by the federal government 
with California having an ability to apply for targeted waivers of 
preemption to address its own particular problems. EPA therefore views 
this interpretation and application of CAA section 209(b)(1)(B) set 
forth here as, at minimum, a reasonable one that gives appropriate 
meaning and effect to this provision and does not second-guess 
California's policy judgment notwithstanding assertions to the 
contrary.
b. The Distinct Nature of Global GHG Pollution as It Relates to CAA 
Section 209(b)(1)(B)
    The air pollution problem at issue here is elevated atmospheric 
concentrations of greenhouse gases, and the concern is the impact these 
concentrations have on global climate change and the effect of global 
climate change on California. In contrast to local or regional air 
pollution problems, the atmospheric concentrations of these greenhouse 
gases are substantially uniform across the globe, based on their long 
atmospheric life and the resulting mixing in the atmosphere. The 
factors looked at in the past when considering waiver requests for 
State standards addressing criteria pollutants--the geography and 
climate of California, and the large motor vehicle population in 
California, which were considered the fundamental causes of the air 
pollution levels found in California--cannot form the basis of a 
meaningful analysis of the causal link between California vehicles' GHG 
emissions and climate effects felt in California. The concentration of 
greenhouse gases in the upper atmosphere may affect California, but 
that concentration is not affected in any particular way by the 
geography and climate of California. The long duration of these gases 
in the atmosphere means they are well-mixed throughout the global 
atmosphere, such that their concentrations over California and the U.S. 
are, for all practical purposes, the same as the global average. The 
number of motor vehicles in California, while still a notable 
percentage of the national total and still a notable source of GHG 
emissions in the State, bears no more relation to the levels of 
greenhouse gases in the atmosphere over California than any other 
comparable source or group of sources of greenhouse gases anywhere in 
the world. Emissions of greenhouses gases from California cars do not 
generally remain confined within California's local environment (and, 
indeed, were they to do so, rather than rise to the upper atmosphere to 
become well-mixed with other GHG emissions, those locally located 
emissions would not, by definition, contribute to the ``pollution'' 
that is at issue here). Instead, those GHG emissions from vehicles 
operating in California become one part of the global pool of GHG 
emissions, with this global pool of emissions leading to a relatively 
homogenous concentration of greenhouse gases over the globe. Thus, the 
emissions of motor vehicles in

[[Page 51347]]

California do not affect California's air pollution problem in any way 
different from emissions from vehicles and other pollution sources all 
around the world. Similarly, the emissions from California's cars do 
not just affect the atmosphere in California, but in fact become one 
part of the global pool of GHG emissions that affect the atmosphere 
globally and are distributed throughout the world, resulting in 
basically a uniform global atmospheric concentration.
    Given the different, and global, nature of the pollution at issue, 
EPA determines that the conceptual basis underlying the practice of 
considering California's motor vehicle program as a whole (in the 
context of criteria emission regulations) does not meaningfully apply 
with respect to elevated atmospheric concentrations of GHGs. Therefore, 
EPA has considered whether it is appropriate to apply this criterion in 
a different manner for this kind of air pollution problem; that is, a 
global air pollution problem.
    As previously explained, the text and relevant legislative history 
of CAA section 209 also supports EPA's decision to examine the 
application of the second waiver denial criterion (CAA section 
209(b)(1)(B)) with regard to California's GHG and ZEV standards 
specifically in the context of global climate change. It indicates that 
Congress was moved to allow waivers of preemption for California motor 
vehicle standards based on the particular effects of local conditions 
in California on the air pollution problems in California. Congress 
discussed ``the unique problems faced in California as a result of its 
climate and topography.'' H.R. Rep. No. 728, 90th Cong. 1st Sess., at 
21 (1967). See also Statement of Cong. Holifield (CA), 113 Cong. Rec. 
30942-43 (1967). Congress also noted the large effect of local vehicle 
pollution on such local problems. See, e.g., Statement of Rep. Bell 
(CA), 113 Cong. Rec. 30946. In particular, Congress focused on 
California's ozone problem, which is especially affected by local 
conditions and local pollution. See Statement of Rep. Smith (CA), 113 
Cong. Rec. 30940-41 (1967); Statement of Rep. Holifield (CA), id. at 
30942. See also Motor & Equip. Mfrs. Ass'n, Inc. v. EPA (MEMA), 627 F. 
2d 1095, 1109 (D.C. Cir., 1979) (noting the discussion of California's 
``peculiar local conditions'' in the legislative history). Congress 
clearly did not have in view pollution problems of a more national or 
global nature in justifying this provision.\277\ Moreover, ``the [Clean 
Air] Act also differentiates between the states, despite our historic 
tradition that all the States enjoy equal sovereignty. Distinctions can 
be justified in some cases. `The doctrine of the equality of States . . 
. does not bar . . . remedies for local evils which have subsequently 
appeared.' But a departure from the fundamental principle of equal 
sovereignty requires a showing that a statute's disparate geographic 
coverage is sufficiently related to the problem that it targets.'' Nw. 
Austin Mun. Util. Dist. No. One. v. Holder, 557 U.S. 193, 203 (2009) 
(some citations and internal quotation marks omitted) (quoting South 
Carolina v. Katzenbach, 383 U.S. 301, 328-29 (1966)) (ellipses and 
emphasis added by Northwest Austin Court); see also Katzenbach, 383 
U.S. at 334 (``exceptional conditions can justify legislative measures 
not otherwise appropriate'') (emphasis added); cf. 42 U.S.C. 
7543(b)(1)(B) (``No such waiver shall be granted if the Administrator 
finds that . . . . such State does not need such State standards to 
meet compelling and extraordinary conditions.'') (emphasis added). 
These principles support our conclusion that Congress did not intend 
the waiver provision in CAA section 209(b) to be applied to California 
measures that address pollution problems of a national or global 
nature, as opposed to conditions that are ``extraordinary'' with 
respect to California in particular--i.e., those with a particularized 
nexus to emissions in California and to topographical or other features 
peculiar to California.''
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    \277\ In reference to another argument made in the 1984 waiver, 
while the administrative costs of a program may not increase 
significantly based on the addition of new standards, there is still 
cost in the implementation of new standards, particularly in terms 
of changes in design necessitated by the new standards. In any case, 
this issue does not appear to be relevant to the issue of whether 
California needs its standards to meet compelling and extraordinary 
conditions.
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c. It Is Appropriate To Apply CAA Section 209(b)(1)(B) Separately to 
GHG Standards
    EPA concludes that in the context of reviewing California GHG 
related standards designed to address global climate change, it is 
appropriate to apply the second criterion separately for GHG standards.
    The intent of Congress, in enacting CAA section 209(b) and in 
particular Congress's decision to have a separate CAA section 
209(b)(1)(B), was to require EPA to specifically review whether 
California continues to have compelling and extraordinary conditions 
and the need for State standards to address those conditions. Thus, EPA 
concludes that it is appropriate to review California's GHG standards 
separately from the remainder of the State's motor vehicle emission 
control program for purposes of CAA section 209(b)(1)(B).
    In this context it is appropriate to give meaning to this criterion 
by looking at whether the emissions from California motor vehicles, as 
well as the local climate and topography in California, are the 
fundamental causal factors for the air pollution problem--elevated 
concentrations of greenhouse gases--apart from the other parts of 
California's motor vehicle program, which are intended to remediate 
different air pollution concerns.
    The appropriate criteria to apply therefore is whether the 
emissions of California motor vehicles, as well as California's local 
climate and topography, are the fundamental causal factors for the air 
pollution problem of elevated concentrations of greenhouse gases.
d. Relationship of California Motor Vehicles, Climate, and Topography 
to Elevated Concentrations of Greenhouse Gases in California
    Under CAA section 209(b)(1)(B), EPA proposed to withdraw the waiver 
of preemption of the ACC program GHG and ZEV standards for MY 2021-2025 
on two alternative grounds. Specifically, (1) California ``does not 
need'' these standards ``to meet compelling and extraordinary 
conditions;'' and (2) even if California does have compelling and 
extraordinary conditions in the context of global climate change, 
California does not ``need'' these standards because they will not 
meaningfully address global air pollution problems of the sort 
associated with GHG emissions. 83 FR 43248.
    As previously explained, EPA proposed to determine that the balance 
of textual, contextual, structural, and legislative history evidence 
provide reasonable support for the conclusion that the statute is 
ambiguous in one particular respect: Whether section 209(b)(1)(B) 
refers to an individual standard or the California standards as a whole 
when referring to the Administrator's review of state standards 
submitted for a waiver, to determine whether the state ``needs such 
State standards to meet compelling and extraordinary conditions,'' and 
that the approach of examining the need for GHG-related standards 
separate from the other, traditional aspects of California's program is 
reasonable given, among other factors, the unique nature of the global 
pollutant. EPA recognizes that Congress's purpose in establishing the 
prohibition in CAA section 209(a) and the waiver in CAA section 209(b) 
was to

[[Page 51348]]

balance the benefit of allowing California significant discretion in 
deciding how to protect the health and welfare of its population with 
the burden imposed on the manufacturers of being subject to two 
separate motor vehicle programs and the overarching policy judgment 
that uniform national standards are appropriate. S. Rep. No. 403, 90th 
Cong. 1st Sess., at 32-33 (1967). It is clear that Congress intended 
this balance to be premised on a situation where California needs the 
State standards to meet compelling and extraordinary conditions. Thus, 
if EPA determines that California does not need its State GHG standards 
to meet compelling and extraordinary conditions, a waiver of preemption 
for those State standards is not permitted under the statute.
    Commenters supportive of EPA's proposal to withdraw the waiver 
commented that California should not continue to enjoy a waiver for 
separate State GHG standards because those State standards are not 
needed to meet compelling and extraordinary conditions because there is 
no link between California-based motor vehicle GHG emissions and any 
alleged extraordinary conditions in California. These commenters state 
that while California spends a great deal of time discussing the 
effects of climate change in California, California does not link its 
GHG standards to those effects. They note that GHGs are not localized 
pollutants that can affect California's local climate, or that are 
problematic due to California's specific topography. Instead, emissions 
from vehicles in California become mixed with the global emissions of 
GHG and affect global climate (including California's climate) in the 
same way that any GHG from around the world affect global (and 
California) climate conditions. They claim that Congress authorized EPA 
to grant a waiver of preemption only in cases where California 
standards were necessary to address peculiar local air quality 
problems. They claim that there can be no need for separate California 
standards if the standards are not aimed at, and do not redress, a 
California-specific problem.
    In previous waiver decisions, EPA was asked to waive preemption of 
standards regulating emissions that were local or regional in effect. 
Local air pollution problems are affected directly by local conditions 
in California, largely the emissions from motor vehicles in California 
in the context of the local climate and topography. As a result, State 
standards regulating such local motor vehicle emissions will have a 
direct effect on the concentration of pollutants directly affecting 
California's environment. They are effective mechanisms to reduce the 
levels of local air pollution in California because local conditions 
are the primary cause of that kind of air pollution problem. In 
addition, reductions in emissions from motor vehicles that occur 
elsewhere in the United States will not have the same impact, and often 
will have no impact, on reducing the levels of local air pollution in 
California.
    By contrast, GHGs emitted by California motor vehicles become part 
of the global pool of GHG emissions that affect concentrations of GHGs 
on a uniform basis throughout the world. The local climate and 
topography in California have no significant impact on the long-term 
atmospheric concentrations of greenhouse gases in California. 
Greenhouse gas emissions from vehicles or other pollution sources in 
other parts of the country and the world will have as much effect on 
California's environment as emissions from California vehicles. As a 
result, reducing emissions of GHGs from motor vehicles in California 
has the same impact or effect on atmospheric concentrations of GHGs as 
reducing emissions of GHGs from motor vehicles or other sources 
elsewhere in the U.S., or reducing emissions of GHGs from other sources 
anywhere in the world. California's motor vehicle standards for GHG 
emissions do not affect only California's concentration of GHGs, but 
affect such concentrations globally, in ways unrelated to the 
particular topography in California. Similarly, emissions from other 
parts of the world affect the global concentrations of GHGs, and 
therefore concentrations in California, in exactly the same manner as 
emissions from California's motor vehicles.
    Further, as explained in the SAFE proposal, California's claims 
that it is uniquely susceptible to certain risks because it is a 
coastal State does not differentiate California from other coastal 
States such as Massachusetts, Florida, and Louisiana, much less that 
conditions in California are any more ``extraordinary'' as compared to 
any other coastal States, particularly those coastal States that may 
possess a greater percentage of low-lying territory than California. 
Any effects of global climate change (e.g. water supply issues, 
increases in wildfires, effects on agriculture) could certainly affect 
California. But those effects would also affect other parts of the 
United States.\278\ Many parts of the United States, especially western 
States, may have issues related to drinking water (e.g., increased 
salinity) and wildfires, and effects on agriculture; these occurrences 
are by no means limited to California. These are among the types of 
climate change effects that EPA considered in the 2009 CAA section 
202(a) endangerment finding which is the predicate for its authority to 
issue national motor vehicle GHG standards. But EPA's evaluation of 
whether California's standards are ``need[ed] to meet compelling and 
extraordinary conditions'' is not identical to its prior determination, 
pursuant to CAA section 202(a) whether GHG emissions from the national 
motor vehicle fleet contribute to pollution that may reasonably be 
anticipated to endanger public health or welfare. In order for a waiver 
request to pass muster under CAA section 209(b)(1)(B), as set forth in 
this document, a particularized, state-specific nexus must exist 
between sources of pollutants, resulting pollution, and impacts of that 
pollution. This is analogous to but distinct from the more abstract or 
general predicate finding for regulation under CAA section 202(a); if 
it were not distinct, then California would, under CAA section 
209(b)(1)(B), always ``need'' a waiver for a state-specific program to 
``meet'' any pollution problem that it experienced once EPA had found 
under CAA section 202(a) that motor vehicle emissions contribute to 
that pollution problem (without particular reference to that pollution 
problem's impact on California). This would effectively nullify the 
second waiver denial prong, CAA section 209(b)(1)(B).\279\ California

[[Page 51349]]

would have it that the 2009 CAA section 202(a) GHG endangerment finding 
necessarily means California ``needs'' its own GHG program ``to meet 
compelling and extraordinary conditions.'' That does not follow.\280\ 
Cf. Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014) 
(partially reversing the GHG ``Tailoring'' Rule on grounds that the CAA 
section 202(a) endangerment finding for GHG emissions from motor 
vehicles did not compel regulation of all sources of GHG emissions 
under the Prevention of Significant Deterioration and Title V permit 
programs). 83 FR 43249.
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    \278\ Some commenters made this same point. See, e.g., Fiat 
Chrysler Automobiles, Docket No. EPA-HQ-OAR-2018-0283-4406 at 89; 
American Fuel & Petrochemical Manufacturers, Docket No. E_A-HQ-OAR-
2018-0283-5648 at 34, 36. At least one recent analysis, cited by a 
number of commenters, has produced estimates of climate change 
damage that project that with respect to such matters as coastal 
damage, agricultural yields, energy expenditures, and mortality, 
California is not worse-positioned in relation to certain other 
areas of the U.S., and indeed is estimated to be better-positioned, 
particularly as regards the Southeast region of the country. See S. 
Hsiang, et al. ``Estimating Economic Damage from Climate Change in 
the United States,'' 356 Science 1362 (2017).
    \279\ Cf. Ford, 606 F.2d at 1303 n.68 (affirming EPA's refusal 
to allow nationwide sale of cars that meet California standards 
that, due to the waiver predicate that California's standards only 
need be as stringent as federal standards in the aggregate, were not 
certified as meeting national standards with respect to all 
pollutants) (``[Appellants] suggest to varying degrees that 
California is a microcosm of the entire nation and, as such, has no 
particularized problems the resolution of which would require 
emission control standards inappropriate to the rest of the country. 
This may or may not be completely true. The fact remains, however, 
that Congress expected California to be putting its interests first 
and there is no guarantee that those interests are congruent with 
the interests of the nation as a whole.''). Here, California offers 
an inverse reflection of appellants' argument in Ford, but it is no 
more valid: Because it can marshal a list of climate impacts that it 
is experiencing, California insists it is entitled to a waiver for a 
state-specific program to address those impacts. All of California's 
problems and corresponding programs, under this logic, are 
``particularized.'' If this were the case, no waiver request could 
ever be denied under CAA section 209(b)(1)(B), and Congress would 
much more likely have simply afforded California a blanket and 
automatic waiver. Congress did not do so, its choice not to do so 
should be respected and given meaning, and EPA in this document sets 
forth an interpretation and application of CAA section 209(b)(1)(B) 
that does so by articulating a required particularized nexus to 
State-specific facts which is present in the case of California's 
criteria vehicle emissions programs but lacking in the case of its 
GHG and ZEV ones.
    \280\ EPA notes in this regard that, even in the 2009 reversal 
of the 2008 waiver denial, the Agency was careful to distinguish its 
consideration of the waiver application from ``the issues pending 
before EPA under section 202(a) of the Act,'' i.e., the then-pending 
endangerment finding. 74 FR at 32765. While EPA maintains the 
position that the CAA section 202(a) ``endangerment finding'' 
inquiry and the CAA section 209(b)(1)(B) inquiry are distinct, EPA 
notes that the 2009 waiver denial reversal (and the 2008 waiver 
denial itself) took pains to distinguish the two primarily because 
the Agency was at that time still considering whether to issue the 
endangerment finding. As EPA explains in this document, the two 
provisions are distinct, but the CAA section 202(a) predicate 
criteria for federal regulation do support the Agency's position 
that the CAA section 209(b)(1)(B) waiver prong is best interpreted 
as calling for a consideration whether the pollution problem at 
issue has a State-specific, particularized nexus between emissions, 
pollution, and impacts.
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    EPA has discussed the reasons for concluding that it is appropriate 
to consider California's GHGs standards separately in determining 
whether the State needs those standards to meet compelling and 
extraordinary conditions, as compared to looking at its need for a 
motor vehicle program in general. These reasons also lead to the 
conclusion that California does not need these GHG standards to meet 
compelling and extraordinary conditions. The text, structure, and 
legislative history indicates that Congress's intent in the second 
waiver criterion, CAA section 209(b)(1)(B), was to allow California to 
adopt new motor vehicle standards because of compelling and 
extraordinary conditions in California that were causally related to 
local or regional air pollution levels in California. These factors--
including topography and large population of motor vehicles--cause 
these kinds of local or regional air pollution levels in California and 
because of this causal link, California's motor vehicle standards can 
be effective mechanisms to address these local problems. Reductions 
outside California would lack that causal link to local or regional air 
quality conditions inside California.
    Congress did not indicate any intent to allow California to 
promulgate local standards to deal with global air pollution like 
atmospheric concentrations of GHGs. In California's comments on the 
SAFE proposal, it asserted that it has a need for reductions in GHG 
atmospheric concentrations and therefore emissions, but the issue is 
not whether such reductions are needed as a matter of general policy, 
but whether Congress intended them to be effectuated on a State-
specific basis by California through EPA granting a waiver for the GHG 
aspects of the State's new motor vehicle program. This type of 
pollution seems ill-fitted to Congress's intent to provide California 
with a method of handling its local air pollution concentrations and 
related problems with local emission control measures. EPA determines 
that standards regulating emissions of global pollutants like 
greenhouse gases were not part of the compromise envisioned by Congress 
in passing CAA section 209(b).\281\ Moreover, even if California does 
have compelling and extraordinary conditions in the context of global 
climate change, California does not ``need'' these standards under CAA 
section 209(b)(1)(B) because they will not meaningfully address global 
air pollution problems of the sort associated with GHG emissions. As 
noted in the SAFE proposal, the most stringent of the regulatory 
alternatives considered in the 2012 final rule and FRIA (under much 
more optimistic assumptions about technology effectiveness), which 
would have required a seven percent average annual fleetwide increase 
in fuel economy for MYs 2017-2025 compared to MY 2016 standards, was 
forecast to decrease global temperatures only by 0.02 [deg]C in 
2100.\282\ This conclusion was further bolstered by multiple 
commenters.\283\ EPA therefore concludes that California's GHG and ZEV 
regulations do not fulfil the requirement within CAA section 
209(b)(1)(B) that such regulations are ``needed'' to ``meet'' the 
impacts of global climate change in California, even assuming arguendo 
that those impacts do constitute ``compelling and extraordinary 
conditions'' within the meaning of that statutory phrase (although, to 
be clear, EPA is determining that those impacts do not in fact fall 
within that phrase's meaning). Given that Congress enacted CAA section 
209(b) to provide California with a unique ability to receive a waiver 
of preemption, which provides California with authority that it would 
not otherwise have under CAA section 209, and given the specific 
language in CAA section 209(b)(2) pointing out the need for 
extraordinary and compelling conditions as a condition for the waiver, 
EPA determines that it is not appropriate to waive preemption for 
California's standards that regulate GHGs. Atmospheric concentrations 
of greenhouse gases are an air pollution problem that is global in 
nature, and this air pollution problem does not bear the same causal 
link to factors local to California as do local or regional air 
pollution problems. EPA determines that globally elevated atmospheric 
concentrations of GHGs and their environmental effects are not the kind 
of local or regional air pollution problem that fall within the scope 
of the ``compelling and extraordinary conditions'' encompassed by the 
terms of CAA section 209(b)(1)(B). As such, EPA finds that California 
does not need its 2021 through 2025 MY GHG-related standards to meet 
compelling and extraordinary conditions.\284\
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    \281\ Moreover, EPA is mindful that principles of equal 
sovereignty between the states ordinarily require `` `exceptional 
conditions' prevailing in certain parts of the country [to] 
justif[y] extraordinary legislation otherwise unfamiliar to our 
federal system.'' Northwest Austin, 557 U.S. at 211.
    \282\ 83 FR 42986, 43216-43217.
    \283\ The George Washington University Regulatory Studies 
Center, Docket No. EPA-HQ-OAR-2018-0283-4028; Competitive Enterprise 
Institute, Docket No. NHTSA-2018-0067-12015.
    \284\ EPA disagrees with comments that suggest that California 
``needs'' its GHG and ZEV programs ``to meet compelling and 
extraordinary conditions'' in the meaning of CAA section 
209(b)(1)(B) because those programs are intended to reduce criteria 
pollutants emissions, separate and apart from their status as 
programs designed to address climate change. To take this position 
would not be in keeping with historical agency practice in reviewing 
California's waiver requests. Specifically, EPA practice is not to 
scrutinize California's criteria pollutant emissions reductions 
projections or air emissions benefits. Rather, EPA's view has been 
that these are matters left for California's judgments, especially 
given that Title I of the Clean Air Act imposes the obligation of 
NAAQS attainment planning on states. See, e.g., 36 FR 17458; 78 FR 
2134; 79 FR 46256, 46261 (Aug. 7, 2014). EPA's withdrawal action is 
premised on CARB's 2012 ACC program waiver request, which, as 
previously discussed, only discussed the potential GHG benefits or 
attributes of CARB's GHG and ZEV standards program (78 FR 2114, 
2130-2131). If EPA does not even scrutinize a California program's 
criteria pollutant emission and benefits projections when California 
applies for a waiver for that program presenting it as a criteria 
program, then a fortiori commenters' retrospective attempt to claim 
criteria benefits to maintain a waiver for programs that were 
originally presented to EPA in a waiver request that disclaimed any 
such benefits is not appropriate.

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[[Page 51350]]

e. No Findings Under CAA Section 209(b)(1)(C) Are Finalized at This 
Time
    In the SAFE proposal, EPA proposed to determine, as an additional 
basis for the waiver withdrawal, that California's ZEV and GHG 
standards for new MY 2021 through 2025 are not consistent with section 
202(a) of the Clean Air Act. That proposed determination was 
intertwined with the SAFE proposal's assessment with regard to the 
technological feasibility of the Federal GHG standards for MY 2021 
through 2025 and the proposed revisions thereto. Because EPA and NHTSA 
are not at this time finalizing that assessment or taking final action 
on the proposal to revise the Federal standards, and because the 
finalized determinations under CAA section 209(b)(1)(B) and the 
discussion of the implications of EPCA preemption with regard to the 
waiver previously granted with respect to those standards set forth 
above are each independent and adequate grounds for the waiver 
withdrawal, EPA at this time is not finalizing any determination with 
respect to CAA section 209(b)(1)(C). EPA may do so in connection with 
potential future final action with regard to the Federal standards.

E. Withdrawal of Waiver

    In this final action, EPA determines that the California Air 
Resources Board's (CARB's) regulations pertaining to greenhouse gases-
related (GHG) emission standards for 2021 through 2025 model year (MY) 
passenger cars, light-duty trucks, and medium-duty vehicles are not 
needed to meet compelling and extraordinary conditions. EPA concludes 
that CAA section 209(b) was intended to allow California to promulgate 
State standards applicable to emissions from new motor vehicles to 
address pollution problems that are local or regional, and that have a 
particular nexus to emissions from vehicles in California.\285\ EPA 
does not believe CAA section 209(b)(1)(B) was intended to allow 
California to promulgate State standards for emissions from new motor 
vehicles designed to address global climate change problems.
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    \285\ As noted in the SAFE proposal, ``Attempting to solve 
climate change, even in part, through the Section 209 waiver 
provision is fundamentally different from that section's original 
purpose of addressing smog-related air quality problems.'' 83 FR 
42999.
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    EPA's 2013 waiver for CARB's Advanced Clean Car Program (as it 
pertains to its 2021 through 2025 MY relating to greenhouse gas 
emissions and the ZEV mandate) is withdrawn. This is separate and apart 
from EPA's determination that it cannot and did not validly grant a 
waiver with respect to those California State measures which are 
preempted under NHTSA's determination in this document that EPCA 
preempts State GHG and ZEV programs, which, as explained above, is 
effective on the effective date of this joint action.

F. States Cannot Adopt California's GHG Standards Under CAA Section 177

    At proposal, EPA explained that CAA section 177 provides that other 
States, under certain circumstances and with certain conditions, may 
``adopt and enforce'' standards that are ``identical to the California 
standards for which a waiver has been granted for [a given] model 
year.'' 42 U.S.C. 7507. As a result, EPA proposed to determine that 
this section does not apply to CARB's GHG standards given that they are 
intended to address global air pollution. We also noted that the 
section is titled ``New motor vehicle emission standards in 
nonattainment areas' and that its application is limited to ``any State 
which has [state implementation] plan provisions approved under this 
part''--i.e., under CAA title I part D, which governs ``Plan 
requirements for nonattainment areas.''
    We received comments in support of and against our proposal. 
Commenters opposing our interpretation argued that CAA section 177 does 
not contain any text that could be read as limiting its applicability 
to certain pollutants only. They also argued that EPA has 
inappropriately relied on the heading for CAA section 177 to construe a 
statutory provision as well as arrogated authority to implement an 
otherwise self-implementing provision. We disagree with these 
commenters, conclude that the text (including both the title and main 
text), structural location, and purpose of the provision confirm that 
it does not apply to GHG standards, and are finalizing this 
determination as proposed.
    Under the Clean Air Act, EPA establishes national ambient air 
quality standards (NAAQS) to protect public health and welfare and has 
established such ambient standards for the following criteria 
pollutants: ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide, 
lead, and particulate matter. As also explained at proposal, areas are 
only designated nonattainment with respect to criteria pollutants for 
which EPA has issued a NAAQS, and nonattainment State Implementation 
Plan (SIPs) are intended to assure that those areas attain the NAAQS.
    Congress added CAA section 177 in the 1977 Clean Air Act amendments 
cognizant that states might need to address air pollution within their 
boundaries similar to California but were otherwise preempted under CAA 
section 209(a) from setting new motor vehicle and engine standards. 
See, e.g., H.R. Rep. No. 294, 95th Cong., 1st Sess. 309 (1977), 1977 
U.S.C.C.A.N. 1077, 1388 (explaining that the Committee ``was concerned 
that this preemption (section 209(a) of the Act) now interferes with 
legitimate police powers of States''); Motor Vehicle Mfrs. Ass'n of 
U.S., Inc. v. New York State Dep't of Envtl. Conservation, 17 F.3d 521, 
527 (2d Cir. 1994) (``It was in an effort to assist those states 
struggling to meet federal pollution standards that Congress, . . . 
directed in 1977 that other states could promulgate regulations 
requiring vehicles sold in their state to be in compliance with 
California's emission standards or to `piggyback' onto California's 
preemption exemption.''), citing H.R. Rep. No. 294, 95th Cong., 1st 
Sess. 309-10 (1977); id. at 531 ((``[Section] 177 was inserted into the 
Act in 1977 so that states attempting to combat their own pollution 
problems could adopt California's more stringent emission controls.''). 
Relevant legislative history further identifies CAA section 177 as a 
means of addressing the NAAQS attainment planning requirements of CAA 
section 172, including the specific SIPs content and approvals criteria 
for EPA.\286\ H.R.

[[Page 51351]]

Rep. No. 294, 95th Cong., 1st Sess. 213 (1977), 1977 U.S.C.C.A.N 1077, 
1292 (``Still another element of flexibility for States that is 
afforded in this section is the authority for States with nonattainment 
areas for automotive pollutants (other than California) to adopt and 
enforce California new-car emission standards if adequate notice is 
given.'').
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    \286\ The version of CAA section 172 adopted in 1977 set forth 
the general requirements for state plans for nonattainment areas and 
CAA section 172(b) set forth the ``requisite provisions'' of those 
plans. In drafting the provisions that would become CAA section 
172(b), Congress explained that they required the Administrator, 
after notice and opportunity for a public hearing, to approve ``a 
State plan which meets the following criteria: It must identify all 
nonattainment areas for each pollutant. Next it must assure 
attainment of the national ambient air quality standard in those 
areas as expeditiously as practicable, but not later than December 
31, 1982, for all pollutants other than photochemical oxidants. In 
respect to photochemical oxidants, the standard must be met as 
expeditiously as practicable, but not later than December 31, 1987. 
The plan must include a comprehensive, accurate, up-to-date 
inventory of actual emissions from all sources of pollutants in the 
area. This inventory must be revised and resubmitted every 2 years 
to substantiate that reasonable further progress has been achieved 
as a condition for permitting additional sources of pollution. 
Finally, the plan must identify and quantify the actual emissions 
which must be taken into account by the State for purposes of 
deciding how to achieve reasonable further progress and assure 
timely attainment. Thus, the plan must consider the following 
factors among others: The actual emissions increases which will be 
allowed to result from the construction and operation of major new 
or modified stationary sources in the area; the actual emissions of 
such pollutant from unregulated sources, fugitive emissions and 
other uncontrolled sources; actual emissions of the pollutant from 
modified and existing indirect sources; actual emissions resulting 
from extension or elimination of transportation control measures; 
actual emissions of such pollutant resulting from in-use motor 
vehicles and emissions of such pollutant resulting from stationary 
sources to which delayed compliance orders or enforcement orders 
(pursuant to sec. 121 (pursuant to sec. 121 or sec 113(b)) and 
compliance date extension (pursuant to sec. 119) have been issued; 
and actual transported emissions.'' H.R. Rep. No. 294, 95th Cong., 
1st Sess. 212 (1977), 1977 U.S.C.C.A.N. 1077, 1291, 1977 WL 16034 
(emphasis added).
---------------------------------------------------------------------------

    Contrary to commenters' assertions, therefore, the text, placement 
in Title I, and relevant legislative history are all indicative that 
CAA section 177 is in fact intended for NAAQS attainment planning and 
not to address global air pollution. As further explained in section 
D.2, GHG is a globally distributed pollutant with environmental effects 
that are different enough from emissions of criteria pollutants. For 
example, GHG emissions from fleet in California bear no more relation 
to GHG emissions in California than fleet in other parts of the 
country. Where states are now adopting standards for intents and 
purposes far removed from NAAQS attainment planning or more 
specifically directed at global air pollution, EPA as the agency 
charged with implementing the Clean Air Act is acting well within that 
role in setting out an interpretation that aligns with Congressional 
intent. See Chevron U.S.A. v. NRDC, 467 U.S. 837, 843 (1984) (``The 
power of an administrative agency to administer a congressionally 
created . . . program necessarily requires the formulation of policy 
and the making of rules to fill any gap left, implicitly or explicitly, 
by Congress.''). This construct also comports with our reading of CAA 
section 209(b)(1)(B) as limiting applicability of CAA section 209(b) 
waiver authority to state programs that address pollutants that affect 
local or regional air quality and not those relating to global air 
pollution like GHGs.

G. Severability and Judicial Review

    EPA intends that its withdrawal of the January 2013 waiver for 
California's GHG and ZEV programs on the basis of EPCA preemption, to 
take effect upon the effective date of this joint action, as set forth 
in subsection III.C, on the one hand, is separate and severable from 
its withdrawal of the January 2013 waiver for those programs on the 
basis of an interpretation and application of CAA section 209(b)(1)(B), 
beginning in model year 2021, as set forth in subsection III.D, on the 
other. EPA further intends that its withdrawal of the waiver with 
regard to California's GHG program is severable from its withdrawal of 
the waiver with regard to California's ZEV program. The basis for this 
distinction (i.e., that EPA intends that its withdrawal of the waiver 
for California's GHG program and for its ZEV program should be 
severable from one another) is, as follows, twofold: (1) While EPA 
concludes for the reasons set forth in subsection III.D above that the 
ZEV program, as subjected to the January 2013 waiver and as presented 
to EPA by CARB in CARB's waiver application and supporting documents, 
is a GHG-targeting program and as such is susceptible to the 
interpretation and application of CAA 209(b)(1)(B) set forth above, EPA 
acknowledges that there are aspects to the analysis as it affects the 
state's ZEV program that are not applicable with respect to the state's 
GHG program; (2) in this final action, NHTSA expresses in section II 
above its intent that its determination that a State or local law or 
regulation of tailpipe greenhouse gas emissions from automobiles is 
related to fuel economy standards is severable from its determination 
that State or local ZEV mandates are related to fuel economy standards. 
EPA further intends that its determination with regard to the scope of 
CAA section 177 as set forth in subsection III.F above be severable 
from all other aspects of this joint action.
    Pursuant to CAA section 307(b)(1), judicial review of this final 
action may be sought only in the United States Court of Appeals for the 
District of Columbia Circuit. For the reasons explained in this 
section, this final waiver withdrawal action is nationally applicable 
for purposes of CAA section 307(b)(1). To the extent a court finds this 
action to be locally or regionally applicable, for the reasons 
explained in this section, EPA determines and finds for purposes of CAA 
section 307(b)(1) that this final waiver withdrawal action is based on 
a determination of nationwide scope or effect. As also explained at 
proposal, CAA Section 307(b)(1) of the CAA provides in which Federal 
courts of appeal petitions of review of final actions by EPA must be 
filed. This section provides, in part, that petitions for review must 
be filed in the Court of Appeals for the District of Columbia Circuit 
if: (i) The Agency action consists of ``nationally applicable 
regulations promulgated, or final action taken, by the Administrator,'' 
or (ii) such action is locally or regionally applicable, but ``such 
action is based on a determination of nationwide scope or effect and if 
in taking such action the Administrator finds and publishes that such 
action is based on such a determination.'' Additionally, we proposed to 
find that any final action resulting from the August 2018 SAFE proposal 
is based on a determination of ``nationwide scope or effect'' within 
the meaning of CAA section 307(b)(1). We explained that the withdrawal, 
when finalized, would affect persons in California and those 
manufacturers and/or owners/operators of new motor vehicles nationwide 
who must comply with California's new motor vehicle requirements. For 
instance, California's program provides that manufacturers may generate 
credits in CAA section 177 States as a means to satisfy those 
manufacturers' obligations to comply with the mandate that a certain 
percentage of their vehicles sold in California be ZEV (or be credited 
as such from sales in CAA section 177 States). In addition, other 
States have adopted aspects of California's ACC program; this decision 
would also affect those States and those persons in such States, which 
are in multiple EPA regions and federal circuits.
    This final action is distinguishable from the situation faced by 
the D.C. Circuit in Dalton Trucking Inc., v. EPA, 808 F.3d 875 (D.C. 
Cir. 2015), where the Court held that EPA's action on California's 
waiver request with respect to its nonroad engine program was not 
nationally applicable, and that EPA had not properly made and published 
a finding that its action was based on a determination of nationwide 
scope and effect. First, Dalton Trucking noted that no other State had 
ever adopted California's nonroad program, id. at 880; that is not the 
case here. Second, Dalton Trucking noted that the nonroad waiver final 
action was facially limited to fleets operating in California, id. at 
881; the nature of the California program at issue here, with its 
complex credit system connected with sales in other States, is quite 
different. Third, Dalton Trucking noted that EPA in the nonroad waiver

[[Page 51352]]

final action did not actually make and publish a finding that that 
final action was based on a determination of nationwide scope and 
effect, id. Dalton Trucking expressly did not hold, and indeed 
expressly disclaimed any intent to even suggest, that EPA could not 
have made and published such a finding in that action. Id. at 882. EPA 
in this document does so with regard to this final action, for the 
reasons stated above. For these reasons, this final waiver withdrawal 
action is nationally applicable for purposes of CAA section 307(b)(1), 
or, in the alternative, EPA determines and finds for purposes of CAA 
section 307(b)(1) that this final waiver withdrawal action is based on 
a determination of nationwide scope or effect. Thus, pursuant to CAA 
section 307(b), any petitions for review of this final action must be 
filed in the Court of Appeals for the District of Columbia Circuit 
within 60 days from the date such final action is published in the 
Federal Register.

IV. Regulatory Notices and Analyses

    As it is relevant to many of the following discussions, it is 
important to clarify at the outset that this action does not finalize 
or otherwise affect either EPA's GHG standards or NHTSA's CAFE 
standards and, thus, the various impacts associated with those 
standards have not been considered below. Further, consistent with its 
past practice, EPA's withdrawal of the waiver does not add or amend 
regulatory text and is, therefore, subject to considerably fewer of the 
below discussions than NHTSA's final rule establishing regulatory text 
on preemption.

A. Executive Order 12866, Executive Order 13563

    Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 
51735, Oct. 4, 1993), as amended by Executive Order 13563, ``Improving 
Regulation and Regulatory Review'' (76 FR 3821, Jan. 21, 2011), 
provides for making determinations whether a regulatory action is 
``significant'' and therefore subject to the Office of Management and 
Budget (OMB) review and to the requirements of the Executive Order.
    Under section 3(f) of Executive Order 12866, NHTSA's final rule has 
been determined to be a ``significant regulatory action,'' but not an 
economically significant action. EPA's withdrawal on the waiver, 
however, is not a rule under E.O. 12866, as consistent with the 
agency's historical classification of its notices and decisions related 
to the waiver. However, as part of its commitment to working together 
with NHTSA to establish a consistent Federal program for fuel economy 
and GHG emissions, EPA has submitted this action to the OMB for review 
and any changes made in response to OMB recommendations have been 
documented in the docket for this action. EPA's action here, however, 
is not a rule as defined by Executive Order 12866, consistent with its 
previous actions on waiver requests, and is therefore exempt from 
review by the Office of Management and Budget as required for rules and 
regulations by Executive Order 12866. See, e.g., 78 FR at 2145 (Jan. 9, 
2013); 74 FR at 32784 (July 8, 2009); 73 FR at 12169 (Mar. 6, 2008).
    In determining the economic impact of this action, it is important 
to be clear that the rule establishing new standards for the Model 
Years within scope of the NPRM is expected to continue to be 
economically significant and is, thus, anticipated, to include a full 
FRIA. Moreover, as EPA's action is not a rule and not subject to E.O. 
12866, its consideration of costs has been limited to the role costs 
play under section 209. Accordingly, the following discussion only 
concerns the economic impact associated with NHTSA's final regulatory 
text clarifying its views on EPCA preemption.
    As a general matter, NHTSA has determined that there may be some 
nonsignificant economic impact arising out of its clarification, 
particularly some reduction in costs, to this final rule, but the 
agency has not quantified any such impact in this rulemaking, which has 
been determined to be ``significant'' but not ``economically 
significant'' under Executive Order 12866. This rulemaking merely 
clarifies the existing statutory provisions relating to preemption that 
have been in effect since EPCA was enacted and does not modify any 
Federal requirement. As such, as in the NPRM, the agency has provided a 
qualitative discussion of the impacts in response to the comments, 
which themselves raised qualitative issues.
    In the NPRM, NHTSA mentioned at a general, qualitative, level that 
California's currently existing GHG program and ZEV mandate lead to 
increased compliance costs, with some greater discussion of potential 
increases in costs due specifically to the ZEV mandate, which 
constrains an OEMs ability to meet their CAFE and GHG requirements in 
the most cost-effective way.
    The agencies received many comments on the economic analysis as it 
relates to the CAFE and GHG standards, but only received a small number 
of comments that specifically dealt with the issue of the economic 
impact of the regulatory text concerning EPCA preemption. These 
comments, similar to how the agency addressed the issue in the NPRM, 
generally made qualitative and general points about the economic 
impact.
    Many of the comments that addressed the economic impacts of 
preemption did so by stating that one important aspect of the ``One 
National Program'' established beginning in 2009 was that it would 
reduce regulatory cost by not allowing for the creation of different 
Federal and California programs, with different levels of stringency 
and different compliance regimes. NHTSA agrees with this concern, but 
this is exactly why Congress provided that any State or local law 
``related to'' fuel economy is preempted. This final rule will provide 
more certainty on this issue than the prior approach, which would 
always be subject to California removing itself from the program. This 
is exactly what has occurred in recent months, as the State has taken 
action to amend the ``deemed to comply'' provision and then announced 
that it entered into an agreement with several automakers to apply a 
different set of standards on a national basis.
    Various other commenters noted that the GHG program and ZEV mandate 
would increase compliance costs. Most of these comments only made 
general statements to this effect and did not provide specific or 
detailed information about potential costs. One commenter approvingly 
noted NHTSA's citation of a study that found that the ZEV mandate could 
potentially lead to increased costs, though the author of the cited 
study also commented that the cited value did not provide a complete 
picture of the economic effect. The agency agrees that programs such as 
these are likely to introduce additional costs, which, of course, was a 
significant part of Congress's motivation in providing NHTSA with its 
broad preemptive authority over fuel economy. The agency, though, like 
commenters, has found calculation of these costs to be challenging, as 
they constrain the avenues of compliance with the Federal standards 
without actually altering what must be, ultimately, achieved.
    With regard to benefits, some commenters believed that California's 
GHG program and ZEV mandate could provide additional benefits, but, as 
with costs, these commenters did not provide detailed information about 
the benefits of these programs independent of the Federal standards. 
One commenter argued that a separate State GHG program is unlikely to 
have any

[[Page 51353]]

meaningful benefits, because of ``leakage'' from vehicles in States 
that adopt the California standards to vehicles in States that do not 
adopt this standard. Although the comment was in context of supporting 
the ``One National Program,'' NHTSA believes that the argument that 
separate State standards will have little benefit has merit. The 
existence of State or local laws does not in any way alter an OEM's 
obligation under Federal law. For instance, OEMs would likely produce 
more efficient vehicles for sale in California and the States that have 
adopted California's standards, but the increased fuel economy of these 
vehicles would likely be offset by less efficient vehicles produced for 
sale in the rest of the U.S., leading to little to no change in either 
fuel use or GHG emissions at a national level. Some commenters stated 
that the decision to preempt programs including and similar to the ZEV 
mandate, to the extent that those programs are related to fuel economy, 
would have negative benefits related to ozone-forming pollutants, 
though these commenters did not quantify these concerns. NHTSA notes 
that, as was discussed in the NPRM, California, in its 2013 waiver 
request, noted that the ZEV program did not provide for ozone-forming 
pollutants, acknowledging, ``[t]here is no criteria emissions benefit 
from including the ZEV proposal in terms of vehicle (tank-to-wheel or 
TTW) emissions. The LEV III criteria pollutant fleet standard is 
responsible for those emission reductions in the fleet; the fleet would 
become cleaner regardless of the ZEV regulation because manufacturers 
would adjust their compliance response to the standard by making less 
polluting conventional vehicles.'' \287\ NHTSA continues to believe 
that preemption of the programs such as the ZEV mandate will not have a 
significant effect, as California remains free to revise its LEV 
program to reduce ozone-forming emissions and seek a waiver of Clean 
Air Act preemption from EPA, as described above, while not violating 
NHTSA's preemption authority, and other States and local governments 
would continue to be allowed to take other actions so long as those are 
not related to fuel economy and are consistent with any other relevant 
Federal law.
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    \287\ Docket No. EPA-HQ-OAR-2012-0562, PP. 15-16.
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    The comments, therefore, reaffirm NHTSA's preliminary determination 
that State and Local programs including, and similar to, California's 
GHG and ZEV programs are likely to lead to increased compliance costs 
and highly uncertain, if any, benefits because they constrain the 
ability of OEMs to meet the Federal standard without in anyway altering 
their obligations under that standard. Further, the agency's decision 
that State or local laws such as the GHG program and ZEV mandate should 
be preempted is not based on any evaluation of the policy or other 
merits of either program, but simply the fact that these programs are 
clearly related to fuel economy.

B. DOT Regulatory Policies and Procedures

    The final rule is also significant within the meaning of the 
Department of Transportation's Order 2100.6, ``Policies and Procedures 
for Rulemakings.'' Regulatory Policies and Procedures.

C. Executive Order 13771 (Reducing Regulation and Controlling 
Regulatory Costs)

    NHTSA's final rule is expected to be an E.O. 13771 deregulatory 
action, but NHTSA has not estimated any quantifiable cost savings. 
EPA's withdrawal is not a regulatory action and thus outside the scope 
of E.O. 13771.

D. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this action 
as not a ``major rule'', as defined by 5 U.S.C. 804(2). The EPA and 
NHTSA will submit a rule report to each House of the Congress and to 
the Comptroller General of the United States.

E. Executive Order 13211 (Energy Effects)

    Executive Order 13211 applies to any rule that: (1) Is determined 
to be economically significant as defined under E.O. 12866, and is 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy; or (2) that is designated by the 
Administrator of the Office of Information and Regulatory Affairs as a 
significant energy action. If the regulatory action meets either 
criterion, the agencies must evaluate the adverse energy effects of the 
proposed rule and explain why the proposed regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered. NHTSA's final rule is not subject to E.O. 13211 because it 
is not economically significant and is not a significant energy action. 
As discussed in the E.O. 12866 section, NHTSA's final rule merely 
clarifies the contours of its existing preemption authority and does 
not in any way change the existing fuel economy standards. As EPA's 
withdrawal is not within the scope of E.O. 12866, it is also not within 
scope of E.O. 13211.

F. Environmental Considerations

1. National Environmental Policy Act
    The National Environmental Policy Act (NEPA) \288\ directs that 
Federal agencies proposing ``major Federal actions significantly 
affecting the quality of the human environment'' must, ``to the fullest 
extent possible,'' prepare ``a detailed statement'' on the 
environmental impacts of the proposed action (including alternatives to 
the proposed action).\289\ Concurrently with the NPRM, NHTSA released a 
Draft Environmental Impact Statement (Draft EIS) pursuant to NEPA and 
implementing regulations issued by the Council on Environmental Quality 
(CEQ), 40 CFR part 1500, and NHTSA, 49 CFR part 520. NHTSA prepared the 
Draft EIS to analyze and disclose the potential environmental impacts 
of the proposed CAFE standards and a range of alternatives (largely 
varying in terms of stringency). NHTSA considered the information 
contained in the Draft EIS as part of developing its proposal and made 
the Draft EIS available for public comment. For the final rule on the 
standards for model year 2021 through 2026 automobiles proposed in the 
NPRM, NHTSA will simultaneously issue a Final EIS and Record of 
Decision, pursuant to 49 U.S.C. 304a(b) and U.S. Department of 
Transportation Guidance on the Use of Combined Final Environmental 
Impact Statements/Records of Decision and Errata Sheets in National 
Environmental Policy Act Reviews (April 25, 2019),\290\ unless it is 
determined that statutory criteria or practicability considerations 
preclude simultaneous issuance.
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    \288\ 42 U.S.C. 4321-4347.
    \289\ 42 U.S.C. 4332. EPA is expressly exempted from the 
requirements of NEPA for actions under the Clean Air Act. 15 U.S.C. 
793(c)(1).
    \290\ https://www.transportation.gov/sites/dot.gov/files/docs/mission/transportation-policy/permittingcenter/337371/feis-rod-guidance-final-04302019.pdf.
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    NHTSA has not prepared a separate environmental analysis pursuant 
to NEPA for this final action on preemption. This final rule provides 
clarity on the scope of EPCA's preemption provision. Ultimately, the 
determination of whether a particular State or local law is preempted 
under EPCA is not determined based upon its environmental impact but 
solely whether it is ``related to fuel economy standards or average 
fuel economy standards.'' Any preemptive effect

[[Page 51354]]

resulting from this final action is not the result of the exercise of 
Agency discretion, but rather reflects the operation and application of 
the Federal statute. NHTSA does not have authority to waive any aspect 
of EPCA preemption no matter the potential environmental impacts; 
rather, preempted standards are void ab initio. Courts have long held 
that NEPA does not apply to nondiscretionary actions by Federal 
agencies.\291\ As NHTSA lacks discretion over EPCA's preemptive effect, 
the Agency concludes that NEPA does not apply to this action.
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    \291\ See, e.g., Department of Transp. v. Public Citizen, 541 
U.S. 752 (2004); Milo Cmty. Hosp. v. Weinberger, 525 F.2d 144 (1st 
Cir. 1975); State of South Dakota v. Andrus, 614 F.2d 1190 (8th Cir. 
1980); Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267 
F.3d 1144 (D.C. Cir. 2001); Sierra Club v. Babbitt, 65 F.3d 1502 
(9th Cir. 1995).
---------------------------------------------------------------------------

    It bears noting that this action only concerns the question of 
preemption; it does not set CAFE standards. Fundamentally, this action 
is about which sovereign entity (i.e., the Federal government or State 
governments) can issue standards that relate to fuel economy. EPCA is 
clear that this authority is restricted to the Federal government. This 
action provides guidance on the boundary set by Congress, as well as 
under principles of implied preemption. NHTSA's regulation concerning 
EPCA preemption is independent and severable from any particular CAFE 
standards adopted by NHTSA, and this action, in and of itself, is not 
expected to have significant environmental impacts on a national scale. 
As described above, OEMs would likely produce more efficient vehicles 
for sale in California and the States that have adopted California's 
standards, but the increased fuel economy of these vehicles would 
likely be offset by less efficient vehicles produced for sale in the 
rest of the U.S., leading to little to no change in either fuel use or 
GHG emissions at a national level. In fact, as NHTSA has not finalized 
any action to amend the fuel economy standards that were promulgated in 
2012, California's ``deemed to comply'' provision remains operative. As 
OEMs are anticipated to make use of this compliance mechanism, CARB's 
GHG standards are functionally identical to Federal standards, and 
their preemption would not result in additional environmental impacts. 
Furthermore, as was discussed in the NPRM, California, in its 2013 
waiver request, noted that the ZEV program did not provide for ozone-
forming pollutants, acknowledging, ``[t]here is no criteria emissions 
benefit from including the ZEV proposal in terms of vehicle (tank-to-
wheel or TTW) emissions. The LEV III criteria pollutant fleet standard 
is responsible for those emission reductions in the fleet; the fleet 
would become cleaner regardless of the ZEV regulation because 
manufacturers would adjust their compliance response to the standard by 
making less polluting conventional vehicles.'' \292\ Ultimately NHTSA 
will address potential environmental impacts of fuel economy standards 
in its forthcoming Final EIS that will accompany the final rule on the 
standards for model year 2021 through 2026 automobiles proposed in the 
NPRM. This action, however, does not result in significant 
environmental impacts to the quality of the human environment.
---------------------------------------------------------------------------

    \292\ Docket No. EPA-HQ-OAR-2012-0562, Pp. 15-16. California's 
LEV III criteria pollution standard would not be preempted under 
this action.
---------------------------------------------------------------------------

    NHTSA intends to fully respond to all substantive comments received 
on the Draft EIS in the forthcoming Final EIS, consistent with CEQ 
regulations. NHTSA received numerous public comments on the Draft EIS 
that related to the revocation of California's waiver and EPCA 
preemption. The following summarizes and briefly addresses those 
comments.
    Multiple commenters called NHTSA's DEIS inadequate because it did 
not analyze an alternative that would keep the California waiver and 
regulations (as well as similar regulations adopted in the District of 
Columbia and other States pursuant to section 177 of the CAA) in 
place.\293\ On the other hand, one commenter noted its support for the 
proposition that NHTSA is not obligated under NEPA to consider a 
scenario that it believes Federal law does not permit.\294\ As 
described above, NHTSA concludes that NEPA does not apply to this final 
rule regarding preemption. Based on this conclusion, it is immaterial 
whether NHTSA analyzed an alternative that would keep the California 
waiver and regulations in place. NHTSA lacks the discretion and 
authority to select such an alternative as a State or local law or 
regulation related to automobile fuel economy standards is void ab 
initio under the preemptive force of EPCA.
---------------------------------------------------------------------------

    \293\ Center for Biological Diversity, Earthjustice, 
Environmental Law and Policy Center, Natural Resources Defense 
Council, Public Citizen, Inc., Safe Climate Campaign, Sierra Club, 
Southern Environmental Law Center, and Union of Concerned 
Scientists, Docket No. NHTSA-2017-0069-0550; South Coast Air Quality 
Management District, Docket Nos. NHTSA-2017-0069-0532 and NHTSA-
2017-0069-0497; Blanca Luevanos, Docket No. NHTSA-2017-0069-0508; 
National Coalition for Advanced Transportation, Docket No. NHTSA-
2017-0069-0597; California Office of the Attorney General et al., 
Docket No. NHTSA-2017-0069-0625.
    \294\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2017-0069-0588.
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    One commenter criticized NHTSA for failing to consider the criteria 
pollutant impacts of alternatives that keep the waiver in place and 
that account for California's specific electricity grid.\295\ That 
commenter also criticized NHTSA for not fully accounting for the 
impacts to NOX emissions in the South Coast Air Basin as a 
result of revoking the waiver.\296\ Another commenter noted that the 
nine areas NHTSA identified as suffering from ``serious'' or 
``extreme'' nonattainment conditions for ozone and PM2.5 are 
located in California, even though the agencies proposed to revoke or 
declare preempted the State's Clean Air Act waiver for GHG emissions 
and the State's ZEV mandate.\297\ One commenter wrote that NHTSA should 
consider and discuss the local impacts that preempting the ZEV mandate 
would have on localities where ZEV sales are currently concentrated and 
where they will likely concentrate in the future, and particularly in 
California and the other States that have adopted the ZEV mandate 
pursuant to section 177 of the CAA.\298\ While these comments are more 
specific about identifying potential environmental impacts, these 
impacts simply do not bear on the question of whether or how preemption 
applies. Preemption relies solely on whether the State or local law or 
regulation is ``related to fuel economy standards or average fuel 
economy standards.'' Therefore, NHTSA is not obligated to analyze or 
consider these environmental impacts as part of this final rule.
---------------------------------------------------------------------------

    \295\ South Coast Air Quality Management District, Docket No. 
NHTSA-2017-0069-0497.
    \296\ South Coast Air Quality Management District, Docket No. 
NHTSA-2017-0069-0497.
    \297\ Center for Biological Diversity, Earthjustice, 
Environmental Law and Policy Center, Natural Resources Defense 
Council, Public Citizen, Inc., Safe Climate Campaign, Sierra Club, 
Southern Environmental Law Center, and Union of Concerned 
Scientists, Docket No. NHTSA-2017-0069-0550.
    \298\ New York State Department of Environmental Conservation, 
NHTSA-2017-0069-0608.
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    One commenter noted that if California's waiver is revoked, the 
State would be unable to address pollution issues through adoption of 
California's or its own standards, making it difficult to attain or 
maintain compliance with the Clean Air Act.\299\ Another State alleged 
that it depends on the criteria pollutant and air toxic emission 
reduction co-benefits of the State's use of section 177 motor vehicle 
emissions standards as a control strategy in its State Implementation 
Plan to meet its

[[Page 51355]]

SIP.\300\ NHTSA disagrees with the underlying premise of the comments. 
States and local governments are able to continue to encourage ZEVs in 
many different ways, such as through investments in infrastructure and 
appropriately tailored incentives. States and local governments cannot 
adopt or enforce regulations related to fuel economy standards, which 
include ZEV mandates, but they are able to address pollutants regulated 
by the Clean Air Act in numerous ways that are not preempted by Federal 
law. Moreover, as noted above, this action does not impact in any way 
the Federal standards in place for greenhouse gas emissions from 
automobiles and fuel economy standards. Since California and other 
section 177 States have ``deemed'' compliance with the Federal 
standards to be compliance with the State standards, this action does 
not have significant environmental impacts to the quality of the human 
environment. Any impacts associated with potential changes to Federal 
standards are not a result of this action and are purely speculative 
until the agencies finalize a change.
---------------------------------------------------------------------------

    \299\ Boulder County Public Health, Docket No. NHTSA-2017-0069-
0499.
    \300\ Oregon Department of Environmental Quality, Docket No. 
NHTSA-2017-0069-0526.
---------------------------------------------------------------------------

2. Clean Air Act Conformity Requirements as Applied to NHTSA's Action
    The Clean Air Act (42 U.S.C. 7401 et seq.) is the primary Federal 
legislation that addresses air quality. Under the authority of the 
Clean Air Act and subsequent amendments, EPA has established NAAQS for 
six criteria pollutants, which are relatively commonplace pollutants 
that can accumulate in the atmosphere as a result of human activity. 
The air quality of a geographic region is usually assessed by comparing 
the levels of criteria air pollutants found in the ambient air to the 
levels established by the NAAQS (taking into account, as well, the 
other elements of a NAAQS: Averaging time, form, and indicator). These 
ambient concentrations of each criteria pollutant are compared to the 
levels, averaging time, and form specified by the NAAQS in order to 
assess whether the region's air quality is in attainment with the 
NAAQS. When the measured concentrations of a criteria pollutant within 
a geographic area are below those permitted by the NAAQS, EPA 
designates the region as an attainment area for that pollutant, while 
areas where concentrations of criteria pollutants exceed Federal 
standards (or nearby areas that contribute to such concentrations) are 
designated as nonattainment areas. Former nonattainment areas that come 
into compliance with the NAAQS and are redesignated as attainment are 
known as maintenance areas. When EPA revises a NAAQS, each State is 
required to develop and implement a State Implementation Plan (SIP) to 
address how it plans to attain and maintain the new standard. Each 
State with a nonattainment area is also required to submit a SIP 
documenting how the region will reach attainment levels within time 
periods specified in the Clean Air Act. For maintenance areas, the SIP 
must document how the State intends to maintain compliance with the 
NAAQS.
    No Federal agency may ``engage in, support in any way or provide 
financial assistance for, license or permit, or approve'' any activity 
in a nonattainment or maintenance area that does not ``conform'' to a 
SIP or Federal Implementation Plan after EPA has approved or 
promulgated it.\301\ Further, no Federal agency may ``approve, accept 
or fund'' any transportation plan, program, or project developed 
pursuant to title 23 or chapter 53 of title 49, U.S.C., in a 
nonattainment or maintenance area unless the plan, program, or project 
has been found to ``conform'' to any applicable implementation plan in 
effect.\302\ The purpose of these conformity requirements is to ensure 
that Federally sponsored or conducted activities do not interfere with 
meeting the emissions targets in SIPs, do not cause or contribute to 
new violations of the NAAQS, and do not impede the ability of a State 
to attain or maintain the NAAQS or delay any interim milestones. EPA 
has issued two sets of regulations to implement the conformity 
requirements:
---------------------------------------------------------------------------

    \301\ 42 U.S.C. 7506(c)(1) and (5).
    \302\ 42 U.S.C. 7506(c)(2) and (5).
---------------------------------------------------------------------------

    (1) The Transportation Conformity Rule \303\ applies to 
transportation plans, programs, and projects that are developed, 
funded, or approved under title 23 or chapter 53 of title 49, U.S.C.
---------------------------------------------------------------------------

    \303\ 40 CFR part 51, subpart T, and part 93, subpart A.
---------------------------------------------------------------------------

    (2) The General Conformity Rule \304\[thinsp]applies to all other 
federal actions not covered under transportation conformity. The 
General Conformity Rule establishes emissions thresholds, or de minimis 
levels, for use in evaluating the conformity of an action that results 
in emissions increases.\305\ If the net increases of direct and 
indirect emissions are lower than these thresholds, then the project is 
presumed to conform and no further conformity evaluation is required. 
If the net increases of direct and indirect emissions exceed any of 
these thresholds, and the action is not otherwise exempt,\306\ then a 
conformity determination is required. The conformity determination can 
entail air quality modeling studies, consultation with EPA and state 
air quality agencies, and commitments to revise the SIP or to implement 
measures to mitigate air quality impacts.
---------------------------------------------------------------------------

    \304\ 40 CFR part 93, subpart B.
    \305\ 40 CFR 93.153(b).
    \306\ 40 CFR 93.153(c).
---------------------------------------------------------------------------

    This action is not developed, funded, or approved under title 23 or 
chapter 53 of title 49, U.S.C. Accordingly, this action is not subject 
to transportation conformity. Under the General Conformity Rule, a 
conformity determination is required when a Federal action would result 
in total direct and indirect emissions of a criteria pollutant or 
precursor originating in nonattainment or maintenance areas equaling or 
exceeding the rates specified in 40 CFR 93.153(b)(1) and (2), and the 
action is not otherwise exempt. As explained below, NHTSA's action 
results in neither direct nor indirect emissions as defined in 40 CFR 
93.152.
    The General Conformity Rule defines direct emissions as ``those 
emissions of a criteria pollutant or its precursors that are caused or 
initiated by the Federal action and originate in a nonattainment or 
maintenance area and occur at the same time and place as the action and 
are reasonably foreseeable.'' \307\ NHTSA's action is to promulgate 
regulatory text and a detailed appendix, in addition to discussing the 
issue in this preamble to the rule, specifically to provide clarity on 
EPCA's preemption provision in order to give already established 
standards meaning, and thus is specifically exempt from general 
conformity requirements.\308\ Moreover, this action would cause no 
direct emissions consistent with the meaning of the General Conformity 
Rule.\309\ Any changes in emissions that could occur as a result of 
preemption would happen well after and in a different place from the 
promulgation of this rule. Furthermore, any such changes in emissions--
especially those occurring in specific nonattainment or maintenance 
areas--are not reasonably foreseeable. Any such changes are

[[Page 51356]]

unlikely because this action does not impact in any way the Federal 
standards in place for criteria pollutant emissions from automobiles. 
Further, this action does not impact the Federal standards in place for 
greenhouse gas emissions from automobiles or fuel economy standards. 
Since California and other section 177 States have ``deemed'' 
compliance with the Federal standards to be compliance with the State 
standards, it is not clear that this action (as it pertains to the 
State's greenhouse gas emissions standards) would result in changes to 
the anticipated fleet of vehicles in those States and therefore to 
criteria pollutant emissions. Any impacts associated with potential 
changes to Federal standards are not a result of this action and are 
purely speculative until the agencies finalize a change. Additionally, 
we note California's statement in its 2013 waiver request that 
``[t]here is no criteria emissions benefit from including the ZEV 
proposal in terms of vehicle (tank-to-wheel or TTW) emissions. The LEV 
III criteria pollutant fleet standard is responsible for those emission 
reductions in the fleet . . . .'' \310\ As discussed previously, this 
action clarifies that criteria pollutant standards are not preempted 
unless they have a direct or substantial relationship to fuel economy 
standards. California's LEV III criteria pollution standard would not 
be preempted under this approach.
---------------------------------------------------------------------------

    \307\ 40 CFR 93.152.
    \308\ 40 CFR 93.153(c)(2)(iii).
    \309\ Department of Transp. v. Public Citizen, 541 U.S. 752, 772 
(2004) (``[T]he emissions from the Mexican trucks are not `direct' 
because they will not occur at the same time or at the same place as 
the promulgation of the regulations.'').
    \310\ Docket No. EPA-HQ-OAR-2012-0562, pp. 15-16.
---------------------------------------------------------------------------

    Indirect emissions under the General Conformity Rule are ``those 
emissions of a criteria pollutant or its precursors: (1) That are 
caused or initiated by the Federal action and originate in the same 
nonattainment or maintenance area but occur at a different time or 
place as the action; (2) That are reasonably foreseeable; (3) That the 
agency can practically control; and (4) For which the agency has 
continuing program responsibility.'' \311\ Each element of the 
definition must be met to qualify as indirect emissions. NHTSA finds 
that neither of the first two criteria are satisfied for the same 
reasons as presented regarding direct emissions.
---------------------------------------------------------------------------

    \311\ 40 CFR 93.152.
---------------------------------------------------------------------------

    Furthermore, NHTSA cannot practically control, nor does it have 
continuing program responsibility for, any emissions that could occur 
as a result of preemption. ``[E]ven if a Federal licensing, rulemaking, 
or other approving action is a required initial step for a subsequent 
activity that causes emissions, such initial steps do not mean that a 
Federal agency can practically control any resulting emissions.'' \312\ 
With regard to preemption, NHTSA lacks the discretion and authority to 
keep the California waiver and regulations in place, as a State or 
local law or regulation related to automobile fuel economy standards is 
void ab initio under the preemptive force of EPCA. NHTSA cannot be 
considered to practically control or have continuing program 
responsibility for emissions that could result from preemption when 
that result is required by Federal statute.\313\ NHTSA also does not 
have continuing program responsibility for emissions that occur in 
California and other section 177 States, are regulated by the Clean Air 
Act, and for which the States and local governments can continue to 
address in numerous ways that do not conflict with Federal law.
---------------------------------------------------------------------------

    \312\ 40 CFR 93.152.
    \313\ See Public Citizen, 541 U.S. at 772-3.
---------------------------------------------------------------------------

    For the foregoing reasons, this action does not cause direct or 
indirect emissions under the General Conformity Rule, and a general 
conformity determination is not required. NHTSA will address any 
responsibilities under the General Conformity Rule as it pertains to 
potential changes to the fuel economy standards in the forthcoming 
final rule for that action.
3. Endangered Species Act
    Under Section 7(a)(2) of the Endangered Species Act (ESA), Federal 
agencies must ensure that actions they authorize, fund, or carry out 
are ``not likely to jeopardize the continued existence'' of any 
Federally listed threatened or endangered species or result in the 
destruction or adverse modification of the designated critical habitat 
of these species. 16 U.S.C. 1536(a)(2). If a Federal agency determines 
that an agency action may affect a listed species or designated 
critical habitat, it must initiate consultation with the appropriate 
Service--the U.S. Fish and Wildlife Service (FWS) of the Department of 
the Interior (DOI) and/or the National Oceanic and Atmospheric 
Administration's National Marine Fisheries Service of the Department of 
Commerce (together, ``the Services''), depending on the species 
involved--in order to ensure that the action is not likely to 
jeopardize the species or destroy or adversely modify designated 
critical habitat. See 50 CFR 402.14. Under this standard, the Federal 
agency taking action evaluates the possible effects of its action and 
determines whether to initiate consultation. See 51 FR 19926, 19949 
(June 3, 1986).
    Pursuant to Section 7(a)(2) of the ESA, the agencies have reviewed 
this action and have considered applicable ESA regulations, case law, 
and guidance to determine what, if any, obligations the agencies have 
under the ESA. The agencies have considered issues related to emissions 
of CO2 and other GHGs and issues related to non-GHG 
emissions. Based on this assessment, the agencies have determined that 
their actions (withdrawal of California's waiver and the final rule 
regarding preemption) do not require consultation under Section 7(a)(2) 
of the ESA.
a. The Agencies Lack Discretionary Authority
    NHTSA's final rule adopts regulatory text (including a detailed 
appendix) regarding EPCA's preemption provision, in addition to 
discussing the issue in this preamble to the rule, specifically to 
provide needed clarity on that provision. The new regulatory text 
provides for why any law or regulation of a State or a political 
subdivision of a State regulating or prohibiting tailpipe carbon 
dioxide emissions from automobiles is expressly and impliedly preempted 
by EPCA. Any preemptive effect resulting from this final action is not 
the result of the exercise of Agency discretion, but rather reflects 
the operation and application of the Federal statute. NHTSA does not 
have authority to waive any aspect of EPCA preemption no matter the 
potential impacts; rather, preempted standards are void ab initio.
    EPA's action is to withdraw the waiver it had previously provided 
in January 2013 to California for that State's GHG and ZEV programs 
under section 209 of the Clean Air Act. This action is being undertaken 
on two separate and independent grounds. First, EPA has determined EPCA 
preemption renders its prior grant of a waiver for those aspects of 
California's regulations that EPCA preempts invalid, null, and void, 
thereby necessitating withdrawal of the waiver. Second, EPA concludes 
that CAA section 209(b)(1)(B), which provides that EPA shall not issue 
a waiver if California does not ``need'' separate state standards ``to 
meet compelling and extraordinary conditions,'' was not intended to 
allow California to promulgate State standards for emissions from new 
motor vehicles designed to address global climate change problems. 
Therefore, California does not meet the necessary criteria to receive a 
waiver for these aspects of its program. Similar to NHTSA, these 
decisions are not discretionary, but rather reflect EPA's conclusion 
that EPCA preemption and the requirements

[[Page 51357]]

of the Clean Air Act prohibit the granting of a waiver to California.
    The Supreme Court has held that Section 7(a)(2) of the ESA and its 
implementing regulations apply only to actions in which there is 
discretionary Federal authority.\314\ In National Association of Home 
Builders, EPA considered the requirement of Section 402(b) of the Clean 
Water Act that EPA transfer certain permitting powers to State 
authorities upon an application and a showing that nine specified 
criteria had been met. The Court concluded that the ESA did not operate 
as a ``tenth criterion.'' \315\ According to the Court: ``While the EPA 
may exercise some judgment in determining whether a State has 
demonstrated that it has the authority to carry out [the] enumerated 
statutory criteria, the statute clearly does not grant it the 
discretion to add another entirely separate prerequisite to that list. 
Nothing in the text of [the statute] authorizes the EPA to consider the 
protection of threatened or endangered species as an end in itself when 
evaluating a transfer application.'' \316\
---------------------------------------------------------------------------

    \314\ National Ass'n of Home Builders v. Defenders of Wildlife, 
551 U.S. 644, 673 (2007) (``Applying Chevron, we defer to the 
Agency's reasonable interpretation of ESA [section] 7(a)(2) as 
applying only to `actions in which there is discretionary Federal 
involvement or control.' '' (quoting 50 CFR 402.03)).
    \315\ National Ass'n of Home Builders, 551 U.S. at 649.
    \316\ Id. at 671.
---------------------------------------------------------------------------

    The agencies believe this holding applies to the instant action as 
well. As this action results from nondiscretionary authorities, the 
Section 7(a)(2) implementing regulations expressly exclude them from 
coverage. Neither ECPA nor the Clean Air Act include the protection of 
threatened or endangered species as a consideration for the application 
of preemption (which operates by statute) or the prohibition on the 
granting of a waiver (under the enumerated statutory criterion in CAA 
section 209(b)(1)(B)). Although there is some judgment in considering 
the application of EPCA and the CAA, neither action involves the type 
of discretion that would require a Section 7(a)(2) consultation by the 
agencies with the Services.
b. Any Effects Resulting From the Agencies' Actions Are too Attenuated 
for Consultation To Be Required
    In addition, the agencies have considered the potential effects of 
this action to listed threatened or endangered species or designated 
critical habitat of these species and concludes that any such effects 
are too attenuated to require Section 7(a)(2) consultation. The 
agencies base this conclusion both on the language of the Section 
7(a)(2) implementing regulations and on the long history of actions and 
guidance provided by DOI.
    The Section 7(a)(2) implementing regulations require consultation 
if a Federal agency determines its action ``may affect'' listed species 
or critical habitat.\317\ The Services' current regulations define 
``effects of the action'' in relevant part as ``the direct and indirect 
effects of an action on the species or critical habitat, together with 
the effects of other activities that are interrelated or interdependent 
with that action, that will be added to the environmental baseline.'' 
\318\ Further, they define indirect effects as ``those that are caused 
by the proposed action and are later in time, but still are reasonably 
certain to occur.'' \319\
---------------------------------------------------------------------------

    \317\ 50 CFR 402.14(a). The Departments of the Interior and 
Commerce recently issued a final rule revising the regulations 
governing the ESA Section 7 consultation process. 84 FR 44966 (Aug. 
27, 2019). The new regulations take effect on September 26, 2019. As 
discussed in the text above, the agencies do not believe that the 
change in regulations has any effect on the agencies' analysis here.
    \318\ 50 CFR 402.02.
    \319\ Id.
---------------------------------------------------------------------------

    The Services' recently published final rule revising the definition 
of ``effects of the action'' to be ``all consequences to listed species 
or critical habitat that are caused by the proposed action, including 
the consequences of other activities that are caused by the proposed 
action. A consequence is caused by the proposed action if it would not 
occur but for the proposed action and it is reasonably certain to 
occur.'' \320\ In the preamble to the final rule, the Services 
emphasized that the ``but for'' test and ``reasonably certain to 
occur'' are not new or heightened standards.\321\ In this context, 
```but for' causation means that the consequence in question would not 
occur if the proposed action did not go forward . . . . In other words, 
if the agency fails to take the proposed action and the activity would 
still occur, there is no `but for' causation. In that event, the 
activity would not be considered an effect of the action under 
consultation.'' \322\ As the Services do not consider these to be 
changes in their longstanding application of the ESA, these 
interpretations apply equally under the existing regulations (which are 
effective through September 25, 2019) and the new regulations (which 
are effective beginning September 26, 2019).
---------------------------------------------------------------------------

    \320\ 50 CFR 402.02, as amended by 84 FR 44976, 45016 (Aug. 27, 
2019) (effective Sept. 26, 2019).
    \321\ 84 FR at 44977 (``As discussed in the proposed rule, the 
Services have applied the `but for' test to determine causation for 
decades. That is, we have looked at the consequences of an action 
and used the causation standard of `but for' plus an element of 
foreseeability (i.e., reasonably certain to occur) to determine 
whether the consequence was caused by the action under 
consultation.'').
    \322\ Id.
---------------------------------------------------------------------------

    Any potential effects of this action to threatened or endangered 
species or designated critical habitat would be a result of changes to 
GHG or criteria air pollutant emissions. In the next section, the 
agencies discuss why this action is not anticipated to result in 
changes to GHG or criteria air pollutant emissions. However, even if 
such changes to emissions were to occur, the agencies do not believe 
resulting impacts to listed species or critical habitat satisfy the 
``but for'' test or are ``reasonably certain to occur.''
    GHG emissions are relevant to Section 7(a)(2) consultation because 
of the potential impacts of climate change on listed species or 
critical habitat. For example, one comment to the NPRM documented the 
potential impacts of climate change on federally protected species and 
included a five-page table of species listed during 2006 to 2015 for 
which the commenters claim climate change was a listing factor.\323\ 
However, the agencies believe this comment inappropriately attributes 
the entire issue of climate change, including all GHG emissions no 
matter which sector generated them, to NHTSA and EPA's actions.\324\ In 
fact, the commenter demonstrates the very issue with doing so: There is 
no ``but for'' causation associated with EPA's revocation of 
California's waiver and NHTSA's final rule on preemption, as the 
impacts of climate change will occur regardless of this action. 
Furthermore, even if this action results in changes to GHG emissions, 
such changes would be extremely small compared to global GHG emissions. 
There is no scientific evidence that sufficiently ``connects the dots'' 
between those changes in emissions and any particular impact to a 
listed species or critical habitat; thus, any impacts are not 
``reasonably certain to occur.'' States (such as California) and local 
governments may also continue to encourage ZEVs in numerous ways that 
do not conflict with

[[Page 51358]]

Federal law, which may also prevent any alleged impact from these 
actions.
---------------------------------------------------------------------------

    \323\ Center for Biological Diversity, Sierra Club, and Public 
Citizen, Inc., Docket No. NHTSA-2018-0067-12378.
    \324\ See, e.g., 78 FR 11766, 11785 (Feb. 20, 2013) (``Without 
the requirement of a causal connection between the action under 
consultation and effects to species, literally every agency action 
that contributes GHG emissions to the atmosphere would arguably 
result in consultation with respect to every listed species that may 
be affected by climate change.'').
---------------------------------------------------------------------------

    Similarly, with regard to criteria air pollutants, States are still 
subject to the Clean Air Act, which requires limitations on emissions 
of those pollutants. Furthermore, since California and other Section 
177 States have ``deemed'' compliance with the Federal standards to be 
compliance with the State standards, it is not clear that this action 
would result in changes to emissions. Any impacts associated with 
potential changes to Federal standards are not a result of this action 
and are purely speculative until the agencies finalize a change. We 
again note California's statement in its 2013 waiver request that 
``[t]here is no criteria emissions benefit from including the ZEV 
proposal in terms of vehicle (tank-to-wheel or TTW) emissions. The LEV 
III criteria pollutant fleet standard is responsible for those emission 
reductions in the fleet . . . .'' \325\ As discussed previously, this 
action clarifies that criteria pollutant standards are not preempted 
unless they have a direct or substantial relationship to fuel economy 
standards. California's LEV III criteria pollution standard would not 
be preempted under this approach, and that program's benefits are 
anticipated to remain in place.
---------------------------------------------------------------------------

    \325\ Docket No. EPA-HQ-OAR-2012-0562, pp. 15-16.
---------------------------------------------------------------------------

    The agencies have also considered the long history of actions and 
guidance provided by DOI. To that point, the agencies incorporate by 
reference Appendix G of the MY 2012-2016 CAFE standards EIS.\326\ That 
analysis relied on the significant legal and technical analysis 
undertaken by FWS and DOI. Specifically, NHTSA looked at the history of 
the Polar Bear Special Rule and several guidance memoranda provided by 
FWS and the U.S. Geological Survey. Ultimately, FWS concluded that a 
causal link could not be made between GHG emissions associated with a 
proposed Federal action and specific effects on listed species; 
therefore, no Section 7(a)(2) consultation would be required.
---------------------------------------------------------------------------

    \326\ Available on NHTSA's Corporate Average Fuel Economy 
website https://one.nhtsa.gov/Laws-&-Regulations/CAFE-%E2%80%93-Fuel-Economy/Final-EIS-for-CAFE-Passenger-Cars-and-Light-Trucks,-Model-Years-2012%E2%80%932016.
---------------------------------------------------------------------------

    Subsequent to the publication of that Appendix, a court vacated the 
Polar Bear Special Rule on NEPA grounds, though it upheld the ESA 
analysis as having a rational basis.\327\ FWS subsequently issued a 
revised Final Special Rule for the Polar Bear.\328\ In that final rule, 
FWS provided that for ESA section 7, the determination of whether 
consultation is triggered is narrow and focused on the discrete effect 
of the proposed agency action. FWS wrote, ``[T]he consultation 
requirement is triggered only if there is a causal connection between 
the proposed action and a discernible effect to the species or critical 
habitat that is reasonably certain to occur. One must be able to 
`connect the dots' between an effect of a proposed action and an impact 
to the species and there must be a reasonable certainty that the effect 
will occur.'' \329\ The statement in the revised Final Special Rule is 
consistent with the prior guidance published by FWS and remains valid 
today.\330\ Ultimately, EPA and NHTSA are not able to make a causal 
link for purposes of Section 7(a)(2) that would ``connect the dots'' 
between this action, vehicle emissions from motor vehicles affected by 
this action, climate change, and particular impacts to listed species 
or critical habitats. Therefore, no Section 7(a)(2) consultation is 
required.
---------------------------------------------------------------------------

    \327\ In re: Polar Bear Endangered Species Act Listing and 
Section 4(D) Rule Litigation, 818 F. Supp. 2d 214 (D.D.C. Oct. 17, 
2011).
    \328\ 78 FR 11766 (Feb. 20, 2013).
    \329\ 78 FR at 11784-11785.
    \330\ See DOI Solicitor's Opinion No. M-37017, ``Guidance on the 
Applicability of the Endangered Species Act Consultation 
Requirements to Proposed Actions Involving the Emissions of 
Greenhouse Gases'' (Oct. 3, 2008).
---------------------------------------------------------------------------

c. The Agencies' Actions Would Have No Effect on Listed Species and 
Designated Critical Habitat
    In addition to the foregoing a Section 7(a)(2) consultation is not 
required because this action will have no effect on a listed species or 
designated critical habitat. This notification and final rule only 
address the issues of California's waiver and preemption; they do not 
set CAFE standards. Fundamentally, this action is about which sovereign 
entity (i.e., the Federal government or State governments) can issue 
standards that relate to fuel economy. EPCA is clear that this 
authority is restricted to the Federal government. This action provides 
clarity on the boundary set by Congress, as well as under principles of 
implied preemption.
    As previously described, absent this action, OEMs would likely 
produce more efficient vehicles for sale in California and the States 
that have adopted California's standards, but the increased fuel 
economy of these vehicles would likely be offset by less efficient 
vehicles produced for sale in the rest of the U.S., leading to little 
to no change in either fuel use or GHG emissions at a national level. 
Further, as EPA and NHTSA have not finalized any action to amend the 
Federal GHG and fuel economy standards that were promulgated in 2012, 
California's ``deemed to comply'' provision remains operative. As OEMs 
are anticipated to make use of this compliance mechanism, CARB's GHG 
standards are functionally identical to Federal standards, and their 
preemption would not result in additional environmental impacts. Any 
impacts associated with potential changes to Federal standards are not 
a result of this action and are purely speculative until the agencies 
finalize a change.
    Finally, we again note California's 2013 waiver request statement 
that there is no criteria emissions benefit associated with the ZEV 
program because the LEV III criteria pollution standard is responsible 
for those emissions reductions. This action clarifies that criteria 
pollutant standards are not preempted unless they have a direct or 
substantial relationship to fuel economy standards. California's LEV 
III criteria pollution standard would not be preempted under this 
approach. Therefore, those benefits are anticipated to remain in place.
    For the foregoing reasons, automobile emissions are not anticipated 
to change as a result of this action. Even if they do, any change would 
be so minimal as to be unlikely to pose any effects on a listed species 
or critical habitat. Because any effect on a listed species or critical 
habitat is not reasonably certain to occur, the agencies conclude that 
there will be no effect on listed species or critical habitat under the 
Section (7)(a)(2) implementing regulations, and no Section 7(a)(2) 
consultation is required for this action.
4. National Historic Preservation Act (NHPA)
    The NHPA (54 U.S.C. 300101 et seq.) sets forth government policy 
and procedures regarding ``historic properties''--that is, districts, 
sites, buildings, structures, and objects included on or eligible for 
the National Register of Historic Places. Section 106 of the NHPA 
requires federal agencies to ``take into account'' the effects of their 
actions on historic properties.\331\ The agencies conclude that the 
NHPA is not applicable to this action because a rule regarding the 
preemption of State laws and a decision to revoke California's waiver 
are not the type of activities that have the potential to cause effects 
on historic properties. This conclusion is supported by the lack of 
discretion over

[[Page 51359]]

preemption and the underlying justification for the withdrawal of the 
waiver to California, the fact that any causal relationship between 
effects on historic properties as a result of emissions from the sale 
and operation of motor vehicles in California and section 177 States 
and this action are too attenuated, and the conclusion that impacts are 
not reasonably foreseeable.\332\
---------------------------------------------------------------------------

    \331\ Section 106 is now codified at 54 U.S.C. 306108. 
Implementing regulations for the Section 106 process are located at 
36 CFR part 800.
    \332\ See the discussions regarding NEPA, Clean Air Act 
Conformity, and the ESA.
---------------------------------------------------------------------------

5. Fish and Wildlife Conservation Act (FWCA)
    The FWCA (16 U.S.C. 2901 et seq.) provides financial and technical 
assistance to States for the development, revision, and implementation 
of conservation plans and programs for nongame fish and wildlife. In 
addition, the Act encourages all Federal departments and agencies to 
utilize their statutory and administrative authorities to conserve and 
to promote conservation of nongame fish and wildlife and their 
habitats. The agencies conclude that the FWCA is not applicable to this 
action because it does not involve the conservation of nongame fish and 
wildlife and their habitats.
6. Coastal Zone Management Act (CZMA)
    The Coastal Zone Management Act (16 U.S.C. 1451 et seq.) provides 
for the preservation, protection, development, and (where possible) 
restoration and enhancement of the nation's coastal zone resources. 
Under the statute, States are provided with funds and technical 
assistance in developing coastal zone management programs. Each 
participating State must submit its program to the Secretary of 
Commerce for approval. Once the program has been approved, any activity 
of a Federal agency, either within or outside of the coastal zone, that 
affects any land or water use or natural resource of the coastal zone 
must be carried out in a manner that is consistent, to the maximum 
extent practicable, with the enforceable policies of the State's 
program.\333\
---------------------------------------------------------------------------

    \333\ 16 U.S.C. 1456(c)(1)(A).
---------------------------------------------------------------------------

    The agencies conclude that the CZMA is not applicable to this 
action because it does not involve an activity within, or outside of, 
the nation's coastal zones that affects any land or water use or 
natural resource of the coastal zone. This conclusion is supported by 
the lack of discretion over preemption and the underlying justification 
for the withdrawal of the waiver to California, the fact that any 
causal relationship between effects on coastal zones as a result of 
emissions from the sale and operation of motor vehicles in California 
and section 177 States and this action are too attenuated, and the 
conclusion that impacts are not reasonably foreseeable.\334\
---------------------------------------------------------------------------

    \334\ See the discussions regarding NEPA, Clean Air Act 
Conformity, and the ESA.
---------------------------------------------------------------------------

7. Floodplain Management (Executive Order 11988 and DOT Order 5650.2)
    These Orders require Federal agencies to avoid the long- and short-
term adverse impacts associated with the occupancy and modification of 
floodplains, and to restore and preserve the natural and beneficial 
values served by floodplains. Executive Order 11988 also directs 
agencies to minimize the impact of floods on human safety, health and 
welfare, and to restore and preserve the natural and beneficial values 
served by floodplains through evaluating the potential effects of any 
actions the agency may take in a floodplain and ensuring that its 
program planning and budget requests reflect consideration of flood 
hazards and floodplain management. DOT Order 5650.2 sets forth DOT 
policies and procedures for implementing Executive Order 11988. The DOT 
Order requires that the agency determine if a proposed action is within 
the limits of a base floodplain, meaning it is encroaching on the 
floodplain, and whether this encroachment is significant. If 
significant, the agency is required to conduct further analysis of the 
proposed action and any practicable alternatives. If a practicable 
alternative avoids floodplain encroachment, then the agency is required 
to implement it.
    In this action, the agencies are not occupying, modifying and/or 
encroaching on floodplains. The agencies, therefore, conclude that the 
Orders are not applicable to this action.
8. Preservation of the Nation's Wetlands (Executive Order 11990 and DOT 
Order 5660.1a)
    These Orders require Federal agencies to avoid, to the extent 
possible, undertaking or providing assistance for new construction 
located in wetlands unless the agency head finds that there is no 
practicable alternative to such construction and that the proposed 
action includes all practicable measures to minimize harms to wetlands 
that may result from such use. Executive Order 11990 also directs 
agencies to take action to minimize the destruction, loss or 
degradation of wetlands in ``conducting Federal activities and programs 
affecting land use, including but not limited to water and related land 
resources planning, regulating, and licensing activities.'' DOT Order 
5660.1a sets forth DOT policy for interpreting Executive Order 11990 
and requires that transportation projects ``located in or having an 
impact on wetlands'' should be conducted to assure protection of the 
Nation's wetlands. If a project does have a significant impact on 
wetlands, an EIS must be prepared.
    In this action, the agencies are not undertaking or providing 
assistance for new construction located in wetlands and conclude that 
these Orders do not apply to this action.
9. Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle Protection 
Act (BGEPA), Executive Order 13186
    The MBTA (16 U.S.C. 703-712) provides for the protection of certain 
migratory birds by making it illegal for anyone to ``pursue, hunt, 
take, capture, kill, attempt to take, capture, or kill, possess, offer 
for sale, sell, offer to barter, barter, offer to purchase, purchase, 
deliver for shipment, ship, export, import, cause to be shipped, 
exported, or imported, deliver for transportation, transport or cause 
to be transported, carry or cause to be carried, or receive for 
shipment, transportation, carriage, or export'' any migratory bird 
covered under the statute.\335\
---------------------------------------------------------------------------

    \335\ 16 U.S.C. 703(a).
---------------------------------------------------------------------------

    The BGEPA (16 U.S.C. 668-668d) makes it illegal to ``take, possess, 
sell, purchase, barter, offer to sell, purchase or barter, transport, 
export or import'' any bald or golden eagles.\336\ Executive Order 
13186, ``Responsibilities of Federal Agencies to Protect Migratory 
Birds,'' helps to further the purposes of the MBTA by requiring a 
Federal agency to develop a Memorandum of Understanding (MOU) with the 
Fish and Wildlife Service when it is taking an action that has (or is 
likely to have) a measurable negative impact on migratory bird 
populations.
---------------------------------------------------------------------------

    \336\ 16 U.S.C. 668(a).
---------------------------------------------------------------------------

    The agencies conclude that the MBTA, BGEPA, and Executive Order 
13186 do not apply to this action because there is no disturbance, 
take, measurable negative impact, or other covered activity involving 
migratory birds or bald or golden eagles involved in this rulemaking. 
This conclusion is supported by the lack of discretion over preemption 
and the reasons underlying justification for the withdrawal of the 
waiver to California, the fact that any causal relationship between 
effects on migratory birds or bald or golden eagles as a result of 
emissions from the sale

[[Page 51360]]

and operation of motor vehicles in California and section 177 States 
and this action are too attenuated, and the conclusion that impacts are 
not reasonably foreseeable.\337\
---------------------------------------------------------------------------

    \337\ See the discussions regarding NEPA, Clean Air Act 
Conformity, and the ESA.
---------------------------------------------------------------------------

10. Department of Transportation Act (Section 4(f))
    Section 4(f) of the Department of Transportation Act of 1966 (49 
U.S.C. 303), as amended, is designed to preserve publicly owned park 
and recreation lands, waterfowl and wildlife refuges, and historic 
sites. Specifically, Section 4(f) provides that DOT agencies cannot 
approve a transportation program or project that requires the use of 
any publicly owned land from a public park, recreation area, or 
wildlife or waterfowl refuge of national, State, or local significance, 
or any land from a historic site of national, State, or local 
significance, unless a determination is made that:
    (1) There is no feasible and prudent alternative to the use of 
land, and
    (2) The program or project includes all possible planning to 
minimize harm to the property resulting from the use.
    These requirements may be satisfied if the transportation use of a 
Section 4(f) property results in a de minimis impact on the area.
    NHTSA concludes that Section 4(f) is not applicable to its final 
rule here because this rulemaking is not an approval of a 
transportation program or project that requires the use of any publicly 
owned land.
11. Executive Order 12898: ``Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations''
    Executive Order (E.O.) 12898 (59 FR 7629 (Feb. 16, 1994)) 
establishes Federal executive policy on environmental justice. Its main 
provision directs Federal agencies, to the greatest extent practicable 
and permitted by law, to make environmental justice part of their 
mission by identifying and addressing, as appropriate, 
disproportionately high and adverse human health or environmental 
effects of their programs, policies, and activities on minority 
populations and low-income populations in the United States.
    The agencies have determined that this action will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
change existing Federal standards. This conclusion is supported by the 
lack of discretion over preemption and the underlying justification for 
the withdrawal of the waiver to California, the fact that any causal 
relationship between effects on minority or low-income populations as a 
result of emissions from the sale and operation of motor vehicles in 
California and section 177 States and this action are too attenuated, 
and the conclusion that impacts are not reasonably foreseeable.\338\
---------------------------------------------------------------------------

    \338\ See the discussions regarding NEPA, the Clean Air Act 
Conformity, and the ESA.
---------------------------------------------------------------------------

12. Executive Order 13045: ``Protection of Children From Environmental 
Health Risks and Safety Risks''
    This action is not subject to E.O. 13045 (62 FR 19885, April 23, 
1997) because it is not an economically significant regulatory action 
as defined by E.O. 12866, and the agencies have no reason to believe 
that the environmental health or safety risks related to this action 
may have a disproportionate effect on children because it does not 
change existing Federal standards. This conclusion is supported by the 
lack of discretion over preemption and the underlying justification for 
the withdrawal of the waiver to California, the fact that any causal 
relationship between effects on children as a result of emissions from 
the sale and operation of motor vehicles in California and section 177 
States and this action are too attenuated, and the conclusion that 
impacts are not reasonably foreseeable.\339\
---------------------------------------------------------------------------

    \339\ See the discussions regarding NEPA, the Clean Air Act 
Conformity, and the ESA.
---------------------------------------------------------------------------

G. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq., 
as amended by the Small Business Regulatory Enforcement Fairness Act 
(SBREFA) of 1996), whenever an agency is required to publish a notice 
of proposed rulemaking or final rule, it must prepare and make 
available for public comment a regulatory flexibility analysis that 
describes the effect of the rule on small entities (i.e., small 
businesses, small organizations, and small governmental jurisdictions). 
No regulatory flexibility analysis is required if the head of an agency 
certifies the proposal will not have a significant economic impact on a 
substantial number of small entities. SBREFA amended the Regulatory 
Flexibility Act to require Federal agencies to provide a statement of 
the factual basis for certifying that a proposal will not have a 
significant economic impact on a substantial number of small entities.
    This joint action only concern the question of preemption; the 
joint action does not set CAFE or emissions standards themselves. 
Further, as the California waiver withdrawal is not a rulemaking, it is 
not subject to the RFA. Accordingly, only NHTSA's final rule 
establishing regulatory text related to preemption is at issue in this 
action. NHTSA has considered the impacts of this document under the 
Regulatory Flexibility Act and certifies that this rule would not have 
a significant economic impact on a substantial number of small 
entities. One commenter, Workhorse Group, Inc. (Workforce), in comments 
echoed by a trade association, argued that it was a small business and 
would be affected the preemption provisions because it would no longer 
be able to earn and sell credits under the ZEV mandates established by 
California and the other 177 States. This argument is not persuasive, 
as the preemption regulation has no direct effect on Workforce or any 
other similar entity because it does not regulate any private entity, 
but instead clarifies the agency's views on what State or local laws 
are preempted. Thus, any effect on Workhorse or any other similar 
entities is, at most, indirect. Any effect is even further attenuated 
by the fact that small entities such as Workhorse are not even subject 
to a ZEV mandate, but choose to participate in the program voluntarily.
    Additionally, in keeping with previous waiver actions, EPA's action 
is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 
601(2). Therefore, EPA has not prepared a supporting regulatory 
flexibility analysis addressing the impact of this action on small 
business entities. See 78 FR at 2145 (Jan. 9, 2013); 74 FR at 32784 
(July 8, 2009); 73 FR at 12169 (Mar. 6, 2008).

H. Executive Order 13132 (Federalism)

    Executive Order 13132 requires federal agencies to develop an 
accountable process to ensure ``meaningful and timely input by State 
and local officials in the development of regulatory policies that have 
federalism implications.'' The Order defines the term ``Policies that 
have federalism implications'' to include regulations that have 
``substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.'' Under 
the Order, agencies may not issue a regulation that has federalism 
implications, that imposes substantial direct compliance costs, unless 
the Federal government

[[Page 51361]]

provides the funds necessary to pay the direct compliance costs 
incurred by State and local governments, or the agencies consult with 
State and local officials early in the process of developing the 
proposed regulation. The agencies complied with Order's requirements 
and discuss their response to comments in the above sections.

I. Executive Order 12988 (Civil Justice Reform)

    Pursuant to Executive Order 12988, ``Civil Justice Reform,'' \340\ 
NHTSA has determined that this final rule does not have any retroactive 
effect.
---------------------------------------------------------------------------

    \340\ 61 FR 4729 (Feb. 7, 1996).
---------------------------------------------------------------------------

J. Executive Order 13175 (Consultation and Coordination With Indian 
Tribal Governments)

    This final rule does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This rule will 
be implemented at the Federal level. Thus, Executive Order 13175 does 
not apply to this rule. Two commenters raised issues associated with 
this Executive Order. Issues raised in these comments related to the 
standards will be addressed that forthcoming rulemaking. One commenter, 
in an apparent reference to the preemption actions being finalized in 
this document, argued that the NPRM would weaken tribal abilities to 
set GHG standards. This is incorrect: The finalization of the EPCA 
preemption provisions merely clarifies the law that any law or 
regulation of a State or political subdivision of a State ``related 
to'' fuel economy is preempted, while EPA's decision in this document 
only affects a State, not a Tribal government.

K. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires Federal agencies to prepare a written assessment of the costs, 
benefits, and other effects of a proposed or final rule that includes a 
Federal mandate likely to result in the expenditure by State, local, or 
tribal governments, in the aggregate, or by the private sector, of more 
than $100 million in any one year (adjusted for inflation with base 
year of 1995). Adjusting this amount by the implicit gross domestic 
product price deflator for 2016 results in $148 million (111.416/75.324 
= 1.48).\341\ This final rule will not result in the expenditure by 
State, local, or Tribal governments, in the aggregate, or by the 
private sector of more than $148 million annually.
---------------------------------------------------------------------------

    \341\ Bureau of Economic Analysis, National Income and Product 
Accounts (NIPA), Table 1.1.9 Implicit Price Deflators for Gross 
Domestic Product. https://bea.gov/iTable/index_nipa.cfm.
---------------------------------------------------------------------------

L. Regulation Identifier Number

    The Department of Transportation assigns a regulation identifier 
number (RIN) to each regulatory action listed in the Unified Agenda of 
Federal Regulations. The Regulatory Information Service Center 
publishes the Unified Agenda in April and October of each year. You may 
use the RIN contained in the heading at the beginning of this document 
to find this action in the Unified Agenda.

M. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act (NTTAA) requires NHTSA and EPA to evaluate and use existing 
voluntary consensus standards in its regulatory activities unless doing 
so would be inconsistent with applicable law (e.g., the statutory 
provisions regarding NHTSA's vehicle safety authority, or EPA's testing 
authority) or otherwise impractical.\342\ As this action does not 
affect the CAFE or GHG standards, it is not subject to the NTTAA.
---------------------------------------------------------------------------

    \342\ 15 U.S.C. 272.
---------------------------------------------------------------------------

N. Department of Energy Review

    49 U.S.C. 32902(j)(2) requires that ``Before taking final action on 
a standard or an exemption from a standard under this section, the 
Secretary of Transportation shall notify the Secretary of Energy and 
provide the Secretary of Energy a reasonable time to comment.'' As this 
action does not establish a standard or provide an exemption, it is not 
subject to this requirement. However, NHTSA has submitted this action 
to OMB for interagency review and, thus, the Department of Energy has 
been afforded the opportunity to review.

O. Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) of 1995, Public Law 104-13,\343\ 
gives the Office of Management and Budget (OMB) authority to regulate 
matters regarding the collection, management, storage, and 
dissemination of certain information by and for the Federal government. 
It seeks to reduce the total amount of paperwork handled by the 
government and the public. The PRA requires Federal agencies to place a 
notice in the Federal Register seeking public comment on the proposed 
collection of information. This action includes no information 
collections. The information collections associated with the CAFE and 
GHG programs will be discussed in the final rule that will establish 
CAFE and GHG standards.
---------------------------------------------------------------------------

    \343\ Codified at 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

P. Privacy Act

    In accordance with 5 U.S.C. 553(c), the agencies solicited comments 
from the public to better inform the rulemaking process. These comments 
are posted, without edit, to www.regulations.gov, as described in DOT's 
system of records notice, DOT/ALL-14 FDMS, accessible through 
www.transportation.gov/privacy.

Q. Judicial Review

    NHTSA and EPA undertake this joint action under their respective 
authorities pursuant to the Energy Policy and Conservation Act and the 
Clean Air Act, mindful of the Supreme Court's statement in 
Massachusetts v. EPA, 549 U.S. 497, 532 (2007), that ``there is no 
reason to think the two agencies cannot both administer their 
obligations and yet avoid inconsistency.'' Pursuant to Clean Air Act 
section 307(b), any petitions for judicial review of this action must 
be filed in the United States Court of Appeals for the D.C. Circuit by 
November 26, 2019. Given the inherent relationship between the 
agencies' actions, any challenges to NHTSA's regulation should also be 
filed in the United States Court of Appeals for the D.C. Circuit.

List of Subjects in 49 CFR Parts 531 and 533

    Fuel economy.

Regulatory Text

    In consideration of the foregoing, under the authority of 49 U.S.C. 
322, 32901, 32902, and 32903, and delegation of authority at 49 CFR 
1.95, NHTSA amends 49 CFR chapter V as follows:

PART 531--PASSENGER AUTOMOBILE AVERAGE FUEL ECONOMY STANDARDS

0
1. The authority citation for part 531 continues to read as follows:

    Authority:  49 U.S.C. 32902, delegation of authority at 49 CFR 
1.50.


0
2. Add Sec.  531.7 to read as follows:


Sec.  531.7  Preemption.

    (a) General. When an average fuel economy standard prescribed under 
this chapter is in effect, a State or a political subdivision of a 
State may not adopt or enforce a law or regulation related to fuel 
economy standards or average fuel economy standards for automobiles 
covered by an average fuel economy standard under this chapter.

[[Page 51362]]

    (b) Requirements must be identical. When a requirement under 
section 32908 of title 49 of the United States Code is in effect, a 
State or a political subdivision of a State may adopt or enforce a law 
or regulation on disclosure of fuel economy or fuel operating costs for 
an automobile covered by section 32908 only if the law or regulation is 
identical to that requirement.
    (c) State and political subdivision automobiles. A State or a 
political subdivision of a State may prescribe requirements for fuel 
economy for automobiles obtained for its own use.

Appendix to Part 531 [Designated as Appendix A to Part 531 and Amended]

0
3. Designate the appendix to part 531 as appendix A to part 531 and in 
newly designated appendix A, remove all references to ``Appendix'' and 
add in their place ``Appendix A.''

0
4. Add appendix B to part 531 to read as follows:

Appendix B to Part 531--Preemption

    (a) Express Preemption:
    (1) To the extent that any law or regulation of a State or a 
political subdivision of a State regulates or prohibits tailpipe 
carbon dioxide emissions from automobiles, such a law or regulation 
relates to average fuel economy standards within the meaning of 49 
U.S.C. 32919.
    (A) Automobile fuel economy is directly and substantially 
related to automobile tailpipe emissions of carbon dioxide;
    (B) Carbon dioxide is the natural by-product of automobile fuel 
consumption;
    (C) The most significant and controlling factor in making the 
measurements necessary to determine the compliance of automobiles 
with the fuel economy standards in this part is their rate of 
tailpipe carbon dioxide emissions;
    (D) Almost all technologically feasible reduction of tailpipe 
emissions of carbon dioxide is achievable through improving fuel 
economy, thereby reducing both the consumption of fuel and the 
creation and emission of carbon dioxide;
    (E) Accordingly, as a practical matter, regulating fuel economy 
controls the amount of tailpipe emissions of carbon dioxide, and 
regulating the tailpipe emissions of carbon dioxide controls fuel 
economy.
    (2) As a law or regulation related to fuel economy standards, 
any law or regulation of a State or a political subdivision of a 
State regulating or prohibiting tailpipe carbon dioxide emissions 
from automobiles is expressly preempted under 49 U.S.C. 32919.
    (3) A law or regulation of a State or a political subdivision of 
a State having the direct or substantial effect of regulating or 
prohibiting tailpipe carbon dioxide emissions from automobiles or 
automobile fuel economy is a law or regulation related to fuel 
economy standards and expressly preempted under 49 U.S.C. 32919.
    (b) Implied Preemption:
    (1) A law or regulation of a State or a political subdivision of 
a State regulating tailpipe carbon dioxide emissions from 
automobiles, particularly a law or regulation that is not attribute-
based and does not separately regulate passenger cars and light 
trucks, conflicts with:
    (A) The fuel economy standards in this part;
    (B) The judgments made by the agency in establishing those 
standards; and
    (C) The achievement of the objectives of the statute (49 U.S.C. 
Chapter 329) under which those standards were established, including 
objectives relating to reducing fuel consumption in a manner and to 
the extent consistent with manufacturer flexibility, consumer 
choice, and automobile safety.
    (2) Any law or regulation of a State or a political subdivision 
of a State regulating or prohibiting tailpipe carbon dioxide 
emissions from automobiles is impliedly preempted under 49 U.S.C. 
Chapter 329.
    (3) A law or regulation of a State or a political subdivision of 
a State having the direct or substantial effect of regulating or 
prohibiting tailpipe carbon dioxide emissions from automobiles or 
automobile fuel economy is impliedly preempted under 49 U.S.C. 
Chapter 329.

PART 533--LIGHT TRUCK FUEL ECONOMY STANDARDS

0
5. The authority citation for part 533 continues to read as follows:

    Authority:  49 U.S.C. 32902; delegation of authority at 49 CFR 
1.50.


0
6. Add Sec.  533.7 to read as follows:


Sec.  533.7  Preemption.

    (a) General. When an average fuel economy standard prescribed under 
this chapter is in effect, a State or a political subdivision of a 
State may not adopt or enforce a law or regulation related to fuel 
economy standards or average fuel economy standards for automobiles 
covered by an average fuel economy standard under this chapter.
    (b) Requirements must be identical. When a requirement under 
section 32908 of title 49 of the United States Code is in effect, a 
State or a political subdivision of a State may adopt or enforce a law 
or regulation on disclosure of fuel economy or fuel operating costs for 
an automobile covered by section 32908 only if the law or regulation is 
identical to that requirement.
    (c) State and political subdivision automobiles. A State or a 
political subdivision of a State may prescribe requirements for fuel 
economy for automobiles obtained for its own use.

Appendix to Part 533 [Designated as Appendix A to Part 533 and Amended]

0
7. Designate appendix to part 533 as appendix A to part 533 and in 
newly redesignated appendix A, remove all references to ``Appendix'' 
and add in their place ``Appendix A''.

0
8. Add appendix B to part 533 to read as follows:

Appendix B to Part 533--Preemption

    (a) Express Preemption:
    (1) To the extent that any law or regulation of a State or a 
political subdivision of a State regulates or prohibits tailpipe 
carbon dioxide emissions from automobiles, such a law or regulation 
relates to average fuel economy standards within the meaning of 49 
U.S.C. 32919.
    (A) Automobile fuel economy is directly and substantially 
related to automobile tailpipe emissions of carbon dioxide;
    (B) Carbon dioxide is the natural by-product of automobile fuel 
consumption;
    (C) The most significant and controlling factor in making the 
measurements necessary to determine the compliance of automobiles 
with the fuel economy standards in this part is their rate of 
tailpipe carbon dioxide emissions;
    (D) Almost all technologically feasible reduction of tailpipe 
emissions of carbon dioxide is achievable through improving fuel 
economy, thereby reducing both the consumption of fuel and the 
creation and emission of carbon dioxide;
    (E) Accordingly, as a practical matter, regulating fuel economy 
controls the amount of tailpipe emissions of carbon dioxide, and 
regulating the tailpipe emissions of carbon dioxide controls fuel 
economy.
    (2) As a law or regulation of a State or a political subdivision 
of a State related to fuel economy standards, any state law or 
regulation regulating or prohibiting tailpipe carbon dioxide 
emissions from automobiles is expressly preempted under 49 U.S.C. 
32919.
    (3) A law or regulation of a State or a political subdivision of 
a State having the direct or substantial effect of regulating or 
prohibiting tailpipe carbon dioxide emissions from automobiles or 
automobile fuel economy is a law or regulation related to fuel 
economy standards and expressly preempted under 49 U.S.C. 32919.
    (b) Implied Preemption:
    (1) A law or regulation of a State or a political subdivision of 
a State regulating tailpipe carbon dioxide emissions from 
automobiles, particularly a law or regulation that is not attribute-
based and does not separately regulate passenger cars and light 
trucks, conflicts with:
    (A) The fuel economy standards in this part;
    (B) The judgments made by the agency in establishing those 
standards; and
    (C) The achievement of the objectives of the statute (49 U.S.C. 
Chapter 329) under which those standards were established, including 
objectives relating to reducing fuel consumption in a manner and to 
the extent consistent with manufacturer flexibility, consumer 
choice, and automobile safety.
    (2) Any law or regulation of a State or a political subdivision 
of a State regulating or prohibiting tailpipe carbon dioxide 
emissions from automobiles is impliedly preempted under 49 U.S.C. 
Chapter 329.

[[Page 51363]]

    (3) A law or regulation of a State or a political subdivision of 
a State having the direct or substantial effect of regulating or 
prohibiting tailpipe carbon dioxide emissions from automobiles or 
automobile fuel economy is impliedly preempted under 49 U.S.C. 
Chapter 329.

    Issued on September 19, 2019 in Washington, DC, under authority 
delegated in 49 CFR 1.95 and 501.4
    Dated: September 19, 2019.
James C. Owens,
Acting Administrator, National Highway Traffic Safety Administration.
    Dated: September 19, 2019.
Andrew R. Wheeler,
Administrator, Environmental Protection Agency.
[FR Doc. 2019-20672 Filed 9-26-19; 8:45 am]
 BILLING CODE 4910-59-P