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Federal Register / Vol. 86, No. 159 / Friday, August 20, 2021 / Proposed Rules
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The Attorneys General of California, New York, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Jersey, Oregon, Pennsylvania, Rhode Island, Washington, and Vermont; 26
American Council for an EnergyEfficient Economy, Center for Auto Safety, Center for Biological Diversity, Consumer Federation of America, Consumer Reports, The Ecology Center Michigan, Environmental Law and Policy Center, Interfaith Power & Light, Sierra Club, Union of Concerned Scientists; 27
Natural Resources Defense Council and Sierra Club; 28
The Institute for Policy Integrity at New York University School of Law; 29
Tesla; 30
The Alliance for Automotive Innovation; 31
The National Automobile Dealers Association NADA; 32 and An anonymous individual.33
Most of the comments opposed the interim final rule, raising serious procedural, legal, and substantive concerns. In general, these comments argued that NHTSA did not have the authority to delay the application of the inflation increase beyond Model Year 2019 and that, regardless, NHTSA
would have to do so through notice-andcomment, not by an interim final rule that was effective immediately without prior notice and without the opportunity to comment in advance. In supporting these arguments, the commenters relied, in part, upon the two earlier decisions by the Second Circuit.
Most of these comments also challenged the interim final rule as arbitrary and capricious on multiple grounds. For example, the comments discussed that applying the increased rate before Model Year 2022 would not be retroactive because the increased rate was originally applied in 2016 when it was still prospective, and NHTSAs subsequent actions, which were all stricken down by the Second Circuit, did not change that fact. In these commenters view, manufacturers have been on notice of the increase well before Model Year 2019, and any reliance to the contrary was undue.
any additional information, NHTSA cannot reasonably address or respond to this commenters concern.
26 NHTSA202100010017.
27 NHTSA202100010015.
28 NHTSA202100010013.
29 NHTSA202100010011.
30 NHTSA202100010012.
31 NHTSA202100010014.
32 NHTSA202100010016.
33 NHTSA202100010019.

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These comments argued that this was particularly true given the rulings from the Second Circuit litigation, in which many of these commenters and the Alliance were involved, with the Alliance being an intervening party. The comments further argued that delaying the application of the increased rate would affect future compliance because manufacturers may be incentivized to hold credits for model years when the higher rate will apply. The comments also argued that the interim final rule improperly analyzed the economic effects of the COVID19 pandemic, for example, by not accounting for any positive economic data and disregarding that some of the relevant conduct occurred before the pandemic.
These comments also argued that the interim final rule violated the National Environmental Policy Act of 1969
NEPA. Lastly, in response to NHTSAs request for comment about whether the adjustment should be delayed further until Model Year 2023, these comments opposed any additional delay. Some of these comments also expressed concern with the short ten-day comment period provided by the interim final ruleand only after the rule was already effective without any opportunity to comment beforehand.
Two comments supported the interim final rule. The Alliance reiterated the reasoning set forth in its petition, which NHTSA granted in the interim final rule. According to the Alliance, the interim final rule was consistent with NHTSAs December 2016 rule;
appropriately accounted for the industrys production and design processes, including the unforeseen challenges of the COVID19 public health emergency; and fairly implemented the Second Circuits decision. The Alliance also noted that Model Year 2022 vehicles could have begun being produced as early as January 2, 2021about two weeks before the interim final rule was publishedbut it believes NHTSA was reasonable to make the inflation adjustment applicable beginning in Model Year 2022, declining to request a further delay in the adjustment to Model Year 2023. NADA supported the Alliances comment, adding that increased CAFE civil penalties before Model Year 2022 would lead to higher vehicle prices for consumers or manufacturer shifts in available offerings, without any associated environmental or safety benefits.
F. Supplemental Request for Public Comment On January 20, 2021, the President issued Executive Order 13990, entitled
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Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis. E.O. 13990
directs the heads of all agencies to immediately review all existing regulations, orders, guidance documents, policies, and any other similar agency actions promulgated, issued, or adopted between January 20, 2017 and January 20, 2021, that are or may be inconsistent with, or present obstacles to, the policy set forth in E.O.
13990: A policy to listen to the science;
to improve public health and protect our environment; to ensure access to clean air and water; to limit exposure to dangerous chemicals and pesticides; to hold polluters accountable, including those who disproportionately harm communities of color and low-income communities; to reduce greenhouse gas emissions; to bolster resilience to the impacts of climate change; to restore and expand our national treasures and monuments; and to prioritize both environmental justice and the creation of the well-paying union jobs necessary to deliver on these goals. 34 The Secretary of Transportation expressly identified the January 14, 2021 CAFE
civil penalties interim final rule as one to be reviewed pursuant to E.O. 13990.35
In accord with E.O. 13990 and the Secretarys determination, and in light of the significant concerns raised by the commenters, NHTSA is reviewing and reconsidering the January 14, 2021
interim final rule. Specifically, NHTSA
is considering withdrawing the interim final rule and reverting to the December 2016 final rule that would apply the inflation adjustment beginning with Model Year 2019the rule that the Second Circuit has said twice is now in force. 36 The vast majority of comments submitted to date support returning to the December 2016 final rule. Upon further consideration, automakers were aware as of December 2016 that the inflation adjustment would apply beginning with Model Year 2019. It was not until Model Year 2019
was already nearly complete that the agency issued a final rule changing that, which the Second Circuit subsequently determined was legally invalid. The Alliance participated in that litigation as 34 86

FR 7037, 7037 Jan. 25, 2021.
from the Acting General Counsel of DOT to the Chief Counsel and Acting Deputy Administrator of NHTSA and Special Advisor, Implementation of Executive Order 13990, entitled Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis
Feb. 22, 2021. https www.transportation.gov/
sites/dot.gov/files/2021-02/Memo-to-NHTSA.pdf.
36 Nat. Res. Def. Council v. Natl Highway Traffic Safety Admin., 894 F.3d 95, 116 2d Cir. 2018; New York v. Natl Highway Traffic Safety Admin., 974
F.3d 87, 101 2d Cir. 2020.
35 Memorandum
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