oversight

National Highway Traffic Safety Administration: Light Truck Average Fuel Economy Standard, Model Year 1999

Published by the Government Accountability Office on 1997-04-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Office of the General Counsel




      B-276677



      April 18, 1997

      The Honorable John McCain
      Chairman
      The Honorable Ernest F. Hollings
      Ranking Minority Member
      Committee on Commerce, Science, and Transportation
      United States Senate

      The Honorable Bud Shuster
      Chairman
      The Honorable James L. Oberstar
      Ranking Minority Member
      Committee on Transportation and Infrastructure
      House of Representatives

      Subject:   Department of Transportation, National Highway Traffic Safety
                 Administration: Light Truck Average Fuel Economy Standard,
                 Model Year 1999

      Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on
      a major rule promulgated by the Department of Transportation, National Highway
      Traffic Safety Administration (NHTSA), entitled "Light Truck Average Fuel Economy
      Standard, Model Year 1999" (RIN: 2127-AG64). We received the rule on April 3,
      1997. It was published in the Federal Register as a final rule on April 3, 1997.
      62 Fed. Reg. 15859.

      Section 32902(a) of title 49, United States Code, requires the Secretary of
      Transportation to prescribe by regulation, at least 18 months in advance of each
      model year, average fuel economy standards (known as "Corporate Average Fuel
      Economy" or "CAFE" standards) for non-passenger automobiles manufactured in
      that model year. Under subsections 32902(a) and (f), the standard is to be the
      maximum feasible average fuel economy level that the Secretary decides
      manufacturers can achieve in that model year taking into consideration



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technological feasibility, economic practicability, the effect of other government
motor vehicle standards on fuel economy, and the need of the United States to
conserve energy.

The light truck CAFE standard for model year 1998 was established at 20.7 miles
per gallon (mpg). During the development of the CAFE standard for model year
1999, the Department of Transportation and Related Agencies Appropriations Act,
1997, Pub. L. 104-205 (Sept. 30, 1996), 110 Stat. 2951, was enacted. Section 323 of
the Appropriations Act, 110 Stat. 2972, provides:

         "None of the funds in this Act shall be available to prepare,
         propose, or promulgate any regulations pursuant to title V
         of the Motor Vehicle Information and Cost Savings Act
         (49 U.S.C. 32901, et seq.) prescribing corporate average fuel
         economy standards for automobiles, as defined in such title,
         in any model year that differs from standards promulgated for
         such automobiles prior to the enactment of this section."

NHTSA interprets section 323 of the Appropriations Act as requiring it to prescribe
the same light truck CAFE standard for model year 1999 that applies to model year
1998. Accordingly, the rule continues the 20.7 mpg standard for 1999.

This action is consistent with NHTSA's action in 1996 when it established the 1998
model year standard as the same as the 1997 model year standard, 20.7 mpg, based
on similar language in its 1996 Appropriation Act. As we pointed out in our report
on the rule promulgating the 1998 standard (B-271810.2, May 7, 1996), NHTSA did
not follow many of the steps that ordinarily would apply to the rulemaking, based
on its interpretation of the above language that the agency had no discretion over
the standard.

Enclosed is our assessment of NHTSA's compliance with the procedural steps
required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.
Our review indicates that NHTSA did not comply with many of the applicable
requirements because of the above-noted language. We note that Congress took no
action regarding the procedural shortcomings involved in the promulgation of the
1998 standard and continued the same statutory language in the Department's
Appropriation Act for 1997.

If you have any questions about this report, please contact James Vickers, Assistant
General Counsel, at (202) 512-8210. The official responsible for GAO evaluation




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work relating to the Department of Transportation, National Highway Traffic Safety
Administration is John Anderson, Director of Transportation Issues. Mr. Anderson
can be reached at (202) 512-2834.




Robert P. Murphy
General Counsel

Enclosure

cc: Nancy E. McFadden
    General Counsel
    U.S. Department of Transportation




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                                                                         ENCLOSURE

       ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
                                ISSUED BY
                THE DEPARTMENT OF TRANSPORTATION,
          NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION
                                ENTITLED
           "LIGHT TRUCK AVERAGE FUEL ECONOMY STANDARD,
                           MODEL YEAR 1999"
                            (RIN: 2127-AG64)

(i) Cost-benefit analysis

NHTSA did not conduct a cost-benefit analysis of the final rule because it contends
it has no discretion regarding the issuance of the standard. NHTSA notes that all
past fuel economy rules have had economic impacts in excess of $100 million per
year.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,
607 and 609

NHTSA did not perform an Initial or Final Regulatory Impact Analysis because the
lack of discretion precludes any action other than the one taken in the final rule.
NHTSA points out that based on past analysis, few, if any, light truck manufacturers
would be classified as a "small business" under the Regulatory Flexibility Act.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform
Act of 1995, 2 U.S.C. §§ 1532-1535

While the final rule appears to constitute a federal mandate resulting in aggregate
annual private sector expenditures of $100 million or more and therefore be subject
to section 202 and 205 of the act, NHTSA took no action under the Unfunded
Mandates Reform Act of 1995 based on its lack of discretion in the issuance of the
standard.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

NHTSA did not issue a Notice of Proposed Rulemaking or solicit comments on the
final rule since it contends it cannot expend any funds to set the 1999 standard at
any level other than the 1998 model year standard. Therefore, the soliciting of
comments would be superfluous.



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Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520

The final rule does not contain any new information collections which are subject
to review by the Office of Management and Budget under the Paperwork Reduction
Act.

Statutory authorization for the rule

Section 32902(a) of title 49, United States Code, states that the Secretary of
Transportation shall prescribe by regulation corporate average fuel economy
standards for light trucks for each model year.

Executive Order No. 12866

The final rule was determined to be "economically significant" within the meaning of
Executive Order No. 12866. It was reviewed by the Office of Information and
Regulatory Affairs, OMB, and approved on March 28, 1997, as complying with the
requirements of the order.

Other statutes and executive orders

NHTSA did not conduct an evaluation of the environmental impact of the final rule
under the National Environmental Policy Act nor an analysis of the Federalism
implications under Executive Order No. 12612. NHTSA determined these were not
required since Congress has precluded any action other than the one contained in
the final rule.




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