EPA: New Motor Vehicles and New Motor Vehicle Engines Air Pollution Control--Voluntary Standards for Light-Duty Vehicles

Published by the Government Accountability Office on 1997-06-20.

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


      June 20, 1997

      The Honorable John H. Chafee
      The Honorable Max Baucus
      Ranking Minority Member
      Committee on Environment and Public Works
      United States Senate

      The Honorable Thomas J. Bliley, Jr.
      The Honorable John D. Dingell
      Ranking Minority Member
      Committee on Commerce
      House of Representatives

      Subject:   Environmental Protection Agency: New Motor Vehicles and New Motor
                 Vehicle Engines Air Pollution Control: Voluntary Standards for Light-Duty
                 Vehicles; Final Rule

      Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on
      a major rule promulgated by the Environmental Protection Agency (EPA), entitled
      "New Motor Vehicles and New Motor Vehicle Engines Air Pollution Control:
      Voluntary Standards for Light-Duty Vehicles; Final Rule" (RIN: 2060-AF75). We
      received the rule on May 14, 1997. It was published in the Federal Register as a
      final rule on June 6, 1997. 62 Fed. Reg. 31192.

      The rule provides the main regulatory framework for the National Low Emission
      Vehicle program and creates the means whereby automobile and light-duty truck
      manufacturers can volunteer to comply with tailpipe standards that are more strict
      than EPA can mandate at this time. The rule is the result of the Ozone Transport
      Commission (OTC) recommendation that EPA mandate a low emission vehicle
      program based on the California program. The OTC consists of the Governor (or

designee) of each state in the Ozone Transport Region (OTR),1 the EPA Administrator
(or designee), the Regional EPA Administrator (or designee), and an air pollution
control official representing each state. Without a national program, each of the OTC
states would adopt a state-by-state program, mostly based on the California program,
unless a state could show it could meet the Clean Air Act requirements by some other
means. The remaining 37 states would be subject to the requirements of the current
Clean Air Act standards at least until model year 2004.

According to EPA, these regulations and other actions taken by EPA substantially
harmonize federal and California motor vehicle standards, and once a manufacturer
opts into the program, enforcement would be the same as any other federal motor
vehicle pollution control program. The quid pro quo for manufacturers opting into
the program and subjecting themselves to the mandates of the regulation is regulatory
stability and the need to meet only one set of nationwide standards to which vehicles
can be designed, manufactured, and tested. Although the rule is made effective on
August 5, 1997, because it is voluntary it cannot be implemented until the OTC and
the manufacturers reach final agreement on certain remaining issues.

Enclosed is our assessment of the EPA'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 the EPA complied with the applicable requirements.

If you have any questions about this report, please contact Alan Zuckerman, Assistant
General Counsel, at (202) 512-4586. The official responsible for GAO evaluation work
relating to the Environmental Protection Agency is Peter Guerrero, Director,
Environmental Protection Issues. Mr. Guerrero can be reached at (202) 512-6111.

Sincerely yours,

Robert P. Murphy
General Counsel


cc: Thomas E. Kelly
    Director, Office of Regulatory
     Management and Information
    Environmental Protection Agency

The OTR is made up of northeastern states: Maine, Vermont, New Hampshire,
Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania,
Delaware, Maryland, the northern portion of Virginia, and the District of Columbia.

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       ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
                                ISSUED BY
                             (RIN: 2060-AF75)

(i) Cost-benefit analysis

The EPA included an analysis of the costs and benefits of a national low emission
vehicle program with its submission to this Office. That analysis shows an annual
estimated cost (vehicle price increases) of the national program for states other
than California of $950 million, as opposed to the $350 million annual cost for the
OTC program alone. Although the national program and the OTC program would
appear to achieve the same pollution reduction in the OTR, it would do so at a
lower per vehicle cost ($76 per vehicle) based on national sales volumes as opposed
to the $84 per vehicle cost for the sales volumes in the OTR. Because the EPA has
no authority to change the current Clean Air Act standards before model year 2004,
implementation of the voluntary program will result in substantially reduced
exhaust pollutants nationwide earlier than could otherwise be achieved because of
the more stringent standards of this rule. The benefits of these reductions do not
appear to have been monetized in the analysis.

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

EPA has concluded that it was not necessary to prepare a regulatory flexibility
analysis because the rule only affects motor vehicle manufacturers, a group that is
not comprised of a substantial number of small businesses.

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

Although the rule qualifies as a covered rule within the meaning of the Unfunded
Mandates Reform Act (Act), it appears not to qualify as either a federal inter-
governmental mandate or a federal private sector mandate because it results
in "a duty arising from participation in a voluntary Federal program"
(Section 421(5)(a)(i)(II) and (7)(A)(ii) of the Congressional Budget and
Impoundment Control Act of 1974 as added by Pub. L. 104-4 § 101(a)(2) (1995)).

As a consequence, EPA did not prepare the statements required by the Act. EPA
did, however, prepare a regulatory impact analysis which it furnished to this Office.

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

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

The rule was promulgated using the notice and comment procedures of 5 U.S.C.
§ 553. A notice of proposed rulemaking was published on October 10, 1995,
60 Fed. Reg. 52734, and comments were requested. The preamble states that
numerous comments were received and a widely attended public hearing was held
on November 1, 1995. EPA avers that it fully considered all of the timely received
public comments and its responses to significant comments are either contained in
the preamble or included in the public docket.

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

The rule contains information collection requirements which are subject to the
Paperwork Reduction Act. EPA submitted the information collection request to
OMB, which has not yet approved it.

Statutory authorization for the rule

The agency cites the Clean Air Act, 42 U.S.C. §§ 7521-7525, 7541, 7542, and 7601.

Executive Order No. 12866

The EPA submitted the rule to OMB for review under Executive Order 12866 as a
"significant regulatory action." The agency reports that any changes made in
response to OMB suggestions or recommendations will be documented in the public

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