Corporate Average Fuel Economy (CAFE) Preemption (2021)
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The Corporate Average Fuel Economy (CAFE) Preemption rule is a significant rule issued by the National Highway Traffic Safety Administration (NHTSA) and U.S. Department of Transportation (DOT) effective January 28, 2022, that repealed in full the “The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program" (SAFE I rule, finalizing NHTSA's Notice of Proposed Rulemaking entitled “Corporate Average Fuel Economy Preemption."[1]
Timeline
The following timeline details key rulemaking activity:
- February 14, 2022: Deadline to submit petitions for reconsideration of final rule.[1]
- January 28, 2022: Rule takes effect.[1]
- December 29, 2021: Final rule repealing the SAFE I Rule is published.[1]
- May 12, 2021: A notice of proposed rulemaking titled "Corporate Average Fuel Economy Preemption" was published, proposing to repeal the SAFE I Rule.[1]
- September 27, 2019: "The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program" (SAFE I Rule) was published by NHTSA. [1]
Background
The National Highway Traffic Safety Administration (NHTSA), under the direction of the Trump administration, published in 2019 "The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program" (SAFE I Rule), which preempted states from regulating greenhouse gas emissions from new vehicles and from imposing zero emission vehicle sales mandates. Under the Biden administration in 2021, NHTSA issued a Notice of Proposed Rulemaking titled "Corporate Average Fuel Economy Preemption" to repeal the provisions of the SAFE I rule, which is finalized by this rule.
Summary of the rule
The following is a summary of the rule from the rule's entry in the Federal Register:
| “ | This document finalizes NHTSA's proposal to repeal in full “The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program,” published September 27, 2019 (SAFE I Rule), in which NHTSA codified regulatory text and made additional pronouncements regarding the preemption of state and local laws related to fuel economy standards. NHTSA originally proposed to repeal the SAFE I Rule in a Notice of Proposed Rulemaking entitled “Corporate Average Fuel Economy Preemption,” which was published on May 12, 2021. After evaluating all public comments submitted for this Proposal, the Agency is finalizing the Proposal. As such, the Agency is repealing all regulatory text and appendices promulgated in the SAFE I Rule. In doing so, the Agency underscores that any positions announced in preambulatory statements of prior NHTSA rulemakings, including in the SAFE I Rule, which purported to define the scope of preemption under the Energy Policy and Conservation Act (EPCA), do not reflect the Agency's reconsidered understanding of its proper role in matters of EPCA preemption. Through this final rule, NHTSA makes clear that no prior regulations or positions of the Agency reflect ongoing NHTSA views on the scope of preemption of states or local jurisdictions under EPCA.[2] | ” |
Summary of provisions
The following is a summary of the provisions from the rule's entry in the Federal Register:[1]
| “ | On May 12, 2021, NHTSA published in the Federal Register a Notice of Proposed Rulemaking (NPRM or Proposal) entitled “Corporate Average Fuel Economy (CAFE) Preemption,” which set forth the proposal that NHTSA is finalizing today. As explained in the Proposal, this NPRM considered a repeal of NHTSA's portion of a joint agency action completed by NHTSA and the Environmental Protection Agency (EPA) in 2019, “The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program” (SAFE I Rule or Rule). In the SAFE I Rule, NHTSA and EPA finalized a joint agency action relating to the state regulation of greenhouse gas (GHG) emissions from motor vehicles and state mandates for zero emission vehicles (ZEVs). In that action, NHTSA codified regulatory text and appendices, which expressly declared that certain types of state regulation were preempted due to a perceived irreconcilable conflict with the Agency's fuel economy standards. In addition, the Agency published further statements in the preambles of the SAFE I rulemaking, which described various types of state regulations as preempted. As part of the SAFE I action, EPA also withdrew portions of a waiver that EPA had previously extended to the California Air Resources Board (CARB) under Section 209 of the Clean Air Act to regulate new motor vehicle emissions through GHG standards and a ZEV mandate.
On January 20, 2021, President Biden signed Executive Order 13990, “Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis,” which, among other actions, directed DOT, NHTSA, and EPA to immediately review and consider suspending, revising, or rescinding their respective portions of the SAFE I Rule. NHTSA's resulting comprehensive assessment of the SAFE I Rule identified potential problems relating to both the legal authority claimed by NHTSA for the rulemaking and the degree to which the categorical prohibitions announced by the Agency failed to appropriately account for the substantial and often nuanced state interests in the measures purportedly preempted by the SAFE I Rule. As a result of these considerations, NHTSA published the NPRM, to propose a repeal of the SAFE I Rule and to solicit public comment on the Agency's concerns about the legality and prudence of the rulemaking. On April 28, 2021, EPA outlined its own review of the EPA aspects of the SAFE I joint agency action, publishing a Notice of Opportunity for Public Hearing and Comment that proposed a reconsideration of EPA's withdrawal of California's waiver under the Clean Air Act. Both agencies have expressly recognized that their respective reconsideration proposals are separate, independent proceedings. In the CAFE Preemption NPRM, NHTSA proposed to repeal the SAFE I Rule for several independent reasons. First, the Agency repeatedly expressed substantial doubts regarding the legal validity of the Rule. As the NPRM explained, NHTSA became concerned about whether the Agency possesses the authority to define the scope of EPCA through rulemaking. Accordingly, NHTSA proposed to repeal and withdraw the codified regulations and appendices, as well as any associated interpretations or views on EPCA preemption contained in the SAFE I Rule, including in the regulatory text of Sections 531.7, 533.7, and appendices B to Parts 531 and 533. In the Proposal, NHTSA recognized that the statutory preemption provision in EPCA, Section 32919, was self-executing. In this respect, Section 32919 is able to preempt state or local laws directly, without the need for a DOT or NHTSA regulation that further implements either EPCA preemption or this particular statutory provision. As such, the statutory provision is both standalone and fails to articulate any role for the Agency in further dictating a preemptive scope. Accordingly, the NPRM proposed that Section 32919 and EPCA were more appropriately read as indicating that Congress did not intend to empower NHTSA to define preemption in this manner. As a result, NHTSA's Proposal expressed concern that in the SAFE I Rule, the Agency acted outside of its delegated authority by publishing regulations and pronouncements that sought to do just such a thing. Accordingly, the NPRM proposed to repeal the SAFE I Rule. In addition, the Proposal also articulated a separate basis for repealing the entirety of the SAFE I Rule, which rested upon the inappropriateness of such a sweeping pronouncement of preemption. Even if EPCA had imbued NHTSA with power to dictate preemption through regulations, the expansive manner in which this authority was wielded in the SAFE I rulemaking failed to appropriately account for a variety of important considerations. These include legally relevant factors, such as the substantial federalism interests of states and local jurisdictions who had long relied on programs to address environmental hazards in their local communities or comply with other federal air pollution requirements. In addition, the categorical and generally applicable scope of the SAFE I Rule also precluded consideration of other fact-specific attributes of particular programs, many of which represent diverse characteristics that bear upon the application of EPCA preemption and the accuracy of any ensuing preemption analysis. Many of these factors—some of which were not even discussed in the SAFE I rulemaking—strongly suggest that a more considered and circumscribed dispensation of any preemption authority would more narrowly tailor any preemptive pronouncements to better account for the diverse, nuanced, and relied upon federalism interests of the preempted state governments and their constituents. As described further below, these concerns were raised and expressed by a significant number of public comments, especially from those local jurisdictions most affected by the rulemaking. These jurisdictions described numerous unique considerations regarding their programs that the SAFE I Rule's absolute proclamation of preemption did not fully contemplate. These considerations reflected the Agency's similar concerns in the NPRM, which proposed to repeal the SAFE I Rule in its entirety in order to establish a “clean slate,” that restores NHTSA's longstanding practice of undertaking a more careful and particularized role in the EPCA preemption discourse. Finally, even apart from the lack of rulemaking authority and the overly broad manner of the SAFE I Rule's prohibitions, the NPRM also proposed a repeal of the SAFE I Rule in order to remove the regulation that overcomplicated or potentially confused an otherwise direct application of Section 32919's statutory standards. In connection with a proposed repeal of the regulatory text from the SAFE I Rule, the NPRM also proposed to clarify that, to the extent prior statements from rulemaking preambles (from the SAFE I Rule or otherwise) discussed aspects of EPCA preemption or could be read as interpretative views on the subject, those statements should not be read as continuing views of the Agency. While this clarification was not legally necessary, NHTSA still considered it worthwhile because the inconsistent nature of many of the Agency's prior statements on EPCA preemption and the oftentimes imperative language utilized in such statements—especially during the SAFE I rulemaking—risked a confusing landscape in which regulated entities and the public were unsure of the precise legal effect of Agency statements that purported to control EPCA's preemptive reach. Moreover, NHTSA felt that many of those statements, particularly in the preambles of the SAFE I Rule, contained sweeping and definitive language on preemption, which left no room for nuance or further deliberation about particular programs, and obscured the Agency's ongoing internal consideration of whether EPCA actually enacted a narrower scope of preemption than claimed in the rulemaking. In light of these considerations, the NPRM proposed to expressly disclaim any of these prior statements to make clear they no longer accurately reflected the Agency's position on the issue.[2] |
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Significant impact
- See also: Significant regulatory action
Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.
Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]
The text of the Corporate Average Fuel Economy (CAFE) Preemption rule states that OMB deemed this rule significant, but not economically significant:
| “ | NHTSA has considered the impact of this rulemaking action under Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies and procedures. Only one commenter raised any of these issues during the comment process. This commenter argued that the Proposal conflicted with Executive Order 12866 because the NPRM “failed to evaluate whether the action is a significant regulatory action.” However, this comment is not correct, as this rulemaking document has been considered a “significant regulatory action” under Executive Order 12866, but has not been designated as “economically significant,” as it would not directly reinstate any state programs or otherwise affect the self-executing statutory preemption framework in 49 U.S.C. 32919.[2] | ” |
Text of the rule
The full text of the rule is available below:[1]
See also
External links
Footnotes
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