The Honorable John D. Dingell Chairman
| Decision Date | 28 October 1993 |
| Docket Number | B-234590.5 |
| Parties | The Honorable John D. Dingell Chairman, Subcommittee on Oversight and Investigations Committee on Energy and Commerce House of Representatives |
| Court | Comptroller General of the United States |
MISCELLANEOUS TOPICS Environment/Energy/Natural Resources Environmental protection Vehicle emission inspection Rulemaking Because Environmental Protection Agency (EPA) did not implement changes to its cross-border policy on sale of California vehicles, rulemaking is not required by the Administrative Procedure Act (APA). If EPA changes its long-held policy rulemaking is required because the policy changes do not constitute non-binding statements of agency policy nor do they qualify as interpretative rules. MISCELLANEOUS TOPICS Environment/Energy/Natural Resources Environmental protection Vehicle emission inspection Rulemaking We are not aware of any basis, in the Administrative Procedure Act (APA) or otherwise, to conclude that a petition for rulemaking limits an agency's discretion to take action related to issues covered by the petition. The APA requires only that an agency respond to a rulemaking petition.
Dear Mr. Chairman:
This responds to your letter of June 7, 1993, in which you requested our views on the legality of the Environmental Protection Agency's (EPA) actions concerning the cross-border sales of vehicles certified to meet California standards, but not federal Clean Air Act standards. You question whether: (1) EPA was required to issue a rule to announce its policy on cross-border sales; and (2) whether EPA acted properly in taking action on a matter that is covered by a rulemaking petition, before acting on the petition.
As explained in the enclosure, with respect to the first issue we believe that, because EPA did not implement its policy change, it was not required by the Administrative Procedure Act to conduct a rulemaking. However, a rulemaking is required if EPA plans to go forward and implement this change. With respect to the second issue, we are not aware of any basis to conclude that a petition for rulemaking limits an agency's discretion to take any actions related to the issues covered by the petition.
We hope that the foregoing is helpful. In accordance with our usual procedures, this opinion will be available to the public 30 days from its date.
Under the Clean Air Act, states are generally prohibited from adopting or attempting to enforce their own motor vehicle emission standards. California, however, is exempt from this prohibition if it receives a waiver of federal preemption from EPA for any standard or accompanying enforcement procedure the state adopts.
Until 1977, EPA would grant a waiver of federal preemption only if the California standards were in every respect at least as stringent as the federal standards. Thus, California cars also complied with federal standards.
In 1977, Congress added section 177 to the Clean Air Act. Section 177 allows a waiver for California standards that are, in the aggregate, as strict as, or stricter than federal ones, even if some particular standards are less strict. Thus, under section 177, California cars do not necessarily comply with all federal requirements. Section 177 also allows other states to adopt and enforce California standards in lieu of the federal standard.
New York State adopted the California standards for 1993 and later model year vehicles that belong to engine families which began production on or after November 22, 1992. However, the New York State legislature passed a bill in early April to nullify the California emission standards program for 1993-94 model years for that state, unless either of two events occurred prior to May 1, 1993: (1) the state's motor vehicle officials, after consultation with EPA, made a written finding that EPA rules will not prevent cross-border sales or (2) EPA finds that the standards are necessary for the state to meet federal air quality requirements.[1]
In an April 27, 1993, letter to the Administrator of EPA, the Commissioner of the New York Department of Motor Vehicles requested that EPA provide New York a statement of EPA-s policy on cross-border sales. The Commissioner expressed concern that EPA had changed its policy from "place of sale" to "place of use." The Commissioner stated that New York supported continuation of the "place of sale" policy, which would allow New York dealers to sell California vehicles to residents of other states as long as the sale occurs in New York.
EPA responded the following day. In its April 28, 1993, letter EPA notified the Commissioner that EPA had reviewed the situation and modified its policy on the sale of California cars. EPA stated that its place of sale policy, with an expansion to include contiguous states, will remain in effect for 1993 and 1994 model cars.
EPA-s place of sale policy originated in a 1978 waiver of federal preemption for a package of California standards--some of which were more lenient than federal ones. In granting California's application for a waiver, the Acting Administrator stated that the California vehicles could only be "introduced into commerce for sale in the State of California and possibly in States which have adopted California standards pursuant to section 177 of the Act." 43 Fed. Reg. 25729, 25735 (June 14, 1978). The Administrator denied petitions to reconsider the Acting Administrator's decision on grounds that the revised act left EPA without discretion to permit nationwide sale of California cars. The United States Court of Appeals for the District of Columbia Circuit upheld the Administrator's determination. Ford Motor Company v. Environmental Protection Agency, 606 F.2d 1293 (D.C. Cir. 1979).
EPA-s policy was further explained in two letters. The first letter was in response to Ford Motor Company's request for clarification of EPA-s limitation on the sale of California vehicles outside of California. EPA stated that:
Letter from Charles N. Freed, Director, Mobile Source Enforcement Division, EPA to Helen O. Petrauskas, Esq., Office of General Counsel, Ford Motor Company, dated August 24, 1979. In this letter, EPA, in effect, expanded its place of sale policy to also include a place of use policy. California cars may be sold in states other than California as long as the car will principally be used, titled, or registered in California.
The second letter responded to a request from the California Air Resources Board (CARB) that EPA allow California dealers to sell California-certified vehicles to 49-state residents, so long as the sale takes place in California. EPA-s response quoted its letter to Ford Motor Company and advised CARB that:
Letter from Benjamin R. Jackson, Deputy Assistant Administrator for Mobile Source and Noise Enforcement, EPA to Gary Rubenstein Deputy Executive Officer, CARB, dated March 5, 1980 (emphasis in original).
Under EPA-s place of sale policy, manufacturers and dealers could sell California vehicles to anyone, regardless of where the ultimate purchaser lived or intended to use the vehicle provided the sale took place in California (or starting in model year 1993, New York). As explained in the letter to Ford, EPA-s policy also included a place of use condition allowing California vehicles to be purchased outside of California (or New York) if the vehicle will be titled registered, or principally used in California (or New York). Manufacturers and dealers could not, however, sell California vehicles outside of California (or New York), unless the ultimate purchaser principally used, titled, or registered the vehicle in California (or New York). In the Ford Motor Company case, supra, Ford unsuccessfully challenged the limitation imposed on selling California vehicles outside California.
According to an EPA Fact Sheet, for the 1994 model year, EPA began to implement an intended, or place of, use only policy. This policy would allow the sale of California vehicles anywhere as long as the vehicle was sold to an ultimate purchaser who intended to principally use, title, or register the vehicle in California or New York. This policy was more limited than the place of sale policy because California and New York dealers could not continue to sell vehicles to purchasers from other states without regard to where they intended to use the cars. According to the Fact Sheet, the place of use policy permitted manufacturers to ship California vehicles to states other than New York and California but would require their sale only to individuals who intended to principally use them in California or New York. The Fact Sheet explains that this policy was designed to allow dealers in contiguous states to continue cross- border sales.
EPA never fully implemented this policy. According to July 21 1993,...
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