[Federal Register Volume 76, Number 114 (Tuesday, June 14, 2011)]
[Notices]
[Pages 34693-34700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14686]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9318-7]


California State Motor Vehicle Pollution Control Standards; 
Within-the-Scope Determination for Amendments to California's Motor 
Vehicle Greenhouse Gas Regulations; Notice of Decision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Within-the-Scope Determination.

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SUMMARY: EPA confirms that amendments promulgated by the California Air 
Resources Board (``CARB'') are within the scope of an existing waiver 
of preemption issued by EPA for California's motor vehicle greenhouse 
gas emissions program. EPA also finds, in the alternative, that 
California's standards, as amended, meet the requirements for a new 
waiver of preemption.

DATES: Petitions for review must be filed by August 15, 2011.

ADDRESSES: EPA has established a docket for this action under Docket ID 
EPA-HQ-OAR-2010-0653. All documents relied upon in making this 
decision, including those submitted to EPA by CARB, and public 
comments, are contained in the public docket. Publicly available docket 
materials are available either electronically through 
www.regulations.gov or in hard copy at the Air and Radiation Docket in 
the EPA Headquarters Library, EPA West Building, Room 3334, located at 
1301 Constitution Avenue, NW., Washington, DC. The Public Reading Room 
is open to the public on all Federal government working days from 8:30 
a.m. to 4:30 p.m.; generally, it is open Monday through Friday, 
excluding holidays. The telephone number for the Reading Room is (202) 
566-1744. The Air and Radiation Docket and Information Center's Web 
site is http://www.epa.gov/oar/docket.html. The electronic mail (e-
mail) address for the Air and Radiation Docket is: [email protected], the telephone number is (202) 566-1742, and the fax 
number is (202) 566-9744. An electronic version of the public docket is 
available through the Federal government's electronic public docket and 
comment system. You may access EPA dockets at http://www.regulations.gov. After opening the http://www.regulations.gov Web 
site, enter EPA HQ-OAR-2010-0653 in the ``Enter Keyword or ID'' fill-in 
box to view documents in the record of CARB's passenger vehicle GHG 
amendments within-the-scope waiver request. Although a part of the 
official docket, the public docket does not include Confidential 
Business Information (``CBI'') or other information whose disclosure is 
restricted by statute.
    EPA's Office of Transportation and Air Quality (``OTAQ'') maintains 
a Web page that contains many historical documents regarding 
California's greenhouse gas waiver request, including those associated 
with this within-the-scope confirmation request; the page is accessible 
at http://www.epa.gov/otaq/climate/ca-waiver.htm. OTAQ also maintains a 
Web page that contains general information on its review of California 
waiver requests. Included on that page are links to prior waiver 
Federal Register notices, some of which are cited in today's notice; 
the page can be accessed at http://www.epa.gov/otaq/cafr.htm.

FOR FURTHER INFORMATION CONTACT: Kristien G. Knapp, Attorney-Advisor, 
Compliance and Innovative Strategies Division, Office of Transportation 
and Air Quality, U.S. Environmental Protection Agency, 1200 
Pennsylvania Avenue (6405J), NW., Washington, DC 20460. Telephone: 
(202) 343-9949. Fax: (202) 343-2800. E-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. Chronology

    On December 21, 2005, the California Air Resources Board (``CARB'') 
submitted a request to EPA, seeking a waiver of preemption under 
section 209(b) of the Clean Air Act for California's motor vehicle 
greenhouse gas (``GHG'') regulations.\1\ EPA initially denied that 
request, and published that denial in a Federal Register notice on 
March 6, 2008.\2\ CARB subsequently submitted a request that EPA 
reconsider that waiver denial on January 21, 2009. EPA took action on 
that request for reconsideration by reopening its public process.\3\ 
The agency held a public hearing to hear oral testimony and received 
thousands of written comments from a wide variety of interested 
persons. EPA's decision on reconsideration--granting California's 
waiver request--was issued on June 30, 2009, and published in the 
Federal Register on July 8, 2009.\4\
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    \1\ See 72 FR 21260 (Apr. 30, 2007).
    \2\ 73 FR 12156 (March 6, 2008).
    \3\ 74 FR 7040 (February 12, 2009).
    \4\ 74 FR 32744 (July 8, 2009). The Chamber of Commerce of the 
United States and the National Automobile Dealers Association 
(``NADA'') sought review of EPA's July 8, 2009 waiver decision in 
the United States Court of Appeals for the District of Columbia 
Circuit (No. 09-1237). On April 29, 2011, the Court dismissed the 
petition for review for lack of jurisdiction.
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B. CARB's Motor Vehicle Greenhouse Gas Amendments

    Since EPA's grant of a waiver of preemption for California's 
greenhouse gas emission regulations, CARB has promulgated two sets of 
amendments, which are at issue here. Both sets of amendments are 
intended to ease manufacturer compliance burdens. CARB's Board adopted 
the first set of amendments in September 2009. The September 2009 
amendments, known as the ``Section 177 State `Pooling' Amendments,'' 
include provisions intended to streamline manufacturers' obligations 
by: (1) Providing manufacturers with the option of pooling vehicle 
sales across California and in states that have adopted California's 
greenhouse gas standards starting with model years 2009 through 
2011,\5\ and (2) revising certification requirements to accept data 
from the Federal Corporate Average Fuel Economy (``CAFE'') program.\6\ 
CARB's Board adopted the second set of amendments in February 2010. The 
February 2010 amendments are known as the ``2012-2016 Model Year 
National Program Amendments''; they provide that compliance with EPA's 
greenhouse gas standards will be deemed compliance with the California

[[Page 34694]]

standards during the 2012 through 2016 model years.\7\
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    \5\ California Code of Regulations, Title 13 1961.1(a)(1)(A)(i).
    \6\ California Code of Regulations, Title 13 1961(a)(1)(B).
    \7\ California Code of Regulations, Title 13 
1961.1(a)(1)(A)(ii). The National Program and EPA's greenhouse gas 
standards referred to in California's regulation can be found at 75 
FR 25323 (May 7, 2010).
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C. EPA's Review of California's Greenhouse Gas Within-the-Scope Request

    By letter dated June 28, 2010, CARB submitted a request to EPA 
seeking confirmation that these two sets of amendments are within the 
scope of the waiver of preemption issued by EPA under section 209(b) of 
the Clean Air Act on June 30, 2009. EPA announced its receipt of 
California's within-the-scope confirmation request in a Federal 
Register notice on January 31, 2011.\8\ In that notice, EPA offered an 
opportunity for public hearing and comment on CARB's request.
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    \8\ 76 FR 5368 (January 31, 2011).
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    Although CARB's request regarding its ``Section 177 State `Pooling' 
Amendments'' and its ``2012-2016 Model Year National Program 
Amendments'' was submitted as a within-the-scope request, EPA invited 
comment on several issues. Within the context of a within-the-scope 
analysis, EPA invited comment on whether California's standards: (1) 
Undermine California's previous determination that its standards, in 
the aggregate, are at least as protective of public health and welfare 
as comparable Federal standards; (2) affect the consistency of 
California's requirements with section 202(a) of the Act; and (3) raise 
any other new issues affecting EPA's previous waiver determinations. 
EPA also requested comment on issues relevant to a full waiver 
analysis, in the event that EPA determined that California's standards 
should not be considered within the scope of CARB's previous waivers, 
and should instead be subjected to a full waiver analysis. 
Specifically, EPA sought comment on: (a) Whether CARB's determination 
that its standards, in the aggregate, are at least as protective of 
public health and welfare as applicable Federal standards is arbitrary 
and capricious; (b) whether California needs separate standards to meet 
compelling and extraordinary conditions; and (c) whether California's 
standards and accompanying enforcement procedures are consistent with 
section 202(a) of the Act.
    No party requested an opportunity for a hearing to present oral 
testimony, and EPA received only three written comments. One of the 
comments is not responsive or relevant to the issues EPA sought comment 
on; a second comment requests that EPA vacate the underlying waiver; 
and the third comment supports CARB's amendments, and encourages EPA to 
confirm that the amendments are within the scope of CARB's greenhouse 
gas waiver. The written comments are from a private citizen,\9\ the 
National Automobile Dealers Association (``NADA''),\10\ and the 
Association of Global Automakers (``Global Automakers''), 
respectively.\11\ The private citizen's comment is not responsive to 
the issues under EPA's consideration as described in EPA's January 31, 
2011 Federal Register notice.\12\ NADA comments that California's 
amendments effectively eliminate any need for California's greenhouse 
gas standards, and therefore EPA should vacate the underlying waiver. 
NADA did not offer any comment specifically on whether California's 
amendments meet the within-the-scope criteria, and it did not 
explicitly offer substantive comments on any of those criteria. NADA 
did comment on whether California's regulations met the second 
criterion of a full waiver, concerning whether California needs State 
standards to meet compelling and extraordinary conditions. NADA also 
requests that EPA delay taking action on CARB's within-the-scope 
request until the litigation related to the underlying waiver has been 
completed. Global Automakers comments that it ``unreservedly supports'' 
California's amendments, and encourages EPA to confirm that the 
amendments are within the scope of the previously issued greenhouse gas 
waiver.\13\ As noted below, Global Automakers offered specific comments 
on all of the issues described for public comment in EPA's January 31, 
2011 Federal Register notice.
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    \9\ Comments of Joyce Dillard, EPA-HQ-OAR-2010-0653-0004 (March 
17, 2011).
    \10\ Comments of NADA, EPA-HQ-OAR-2010-0653-0005 (March 17, 
2011).
    \11\ Comments of the Association of Global Automakers (``Global 
Automakers''), EPA-HQ-OAR-2010-0653-0003 (March 17, 2011).
    \12\ This comment generally appears to express concern for 
public health and welfare. Because this comment is not responsive to 
the issues before EPA or to EPA's request for comments, EPA is not 
responding to this comment.
    \13\ Comments of Global Automakers, EPA-HQ-OAR-2011-0653-003.
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D. Clean Air Act Waivers of Preemption

    Section 209(a) of the Clean Air Act preempts states and local 
governments from setting emission standards for new motor vehicles and 
engines. It provides:

    No State or any political subdivision thereof shall adopt or 
attempt to enforce any standard relating to the control of emissions 
from new motor vehicles or new motor vehicle engines subject to this 
part. No state shall require certification, inspection or any other 
approval relating to the control of emissions from any new motor 
vehicle or new motor vehicle engine as condition precedent to the 
initial retail sale, titling (if any), or registration of such motor 
vehicle, motor vehicle engine, or equipment.

Through operation of section 209(b) of the Act, California is able to 
seek and receive a waiver of section 209(a)'s preemption. Section 
209(b)(1) requires a waiver to be granted for any State that had 
adopted standards (other than crankcase emission standards) for the 
control of emissions from new motor vehicles or new motor vehicle 
engines prior to March 30, 1966,\14\ if the State determines that its 
standards will be, in the aggregate, at least as protective of public 
health and welfare as applicable Federal standards (this is known as 
California's ``protectiveness determination''). However, no waiver is 
to be granted if EPA finds that: (A) California's above-noted 
``protectiveness determination'' is arbitrary and capricious; \15\ (B) 
California does not need such State standards to meet compelling and 
extraordinary conditions; \16\ or (C) California's standards and 
accompanying enforcement procedures are not consistent with section 
202(a) of the Act.\17\ Regarding consistency with section 202(a), EPA 
reviews California's standards for technological feasibility and 
evaluates testing and enforcement procedures to determine whether they 
would be inconsistent with Federal test procedures (e.g., if 
manufacturers would be unable to meet both California and Federal test 
requirements using the same test vehicle).\18\
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    \14\ Because California was the only state to have adopted 
standards prior to 1966, it is the only state that is qualified to 
seek and receive a waiver. See S.Rep. No. 90-403 at 632 (1967).
    \15\ CAA section 209(b)(1)(A).
    \16\ CAA section 209(b)(1)(B).
    \17\ CAA section 209(b)(1)(C).
    \18\ See, e.g., 74 FR at 32767 (July 8, 2009); see also MEMA I, 
627 F.2d at 1126.
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    If California amends regulations that were previously granted a 
waiver of preemption, EPA can confirm that the amended regulations are 
within the scope of the previously granted waiver if three conditions 
are met. These conditions are discussed below.

E. Burden of Proof

    In Motor and Equip. Mfrs Assoc. v. EPA, 627 F.2d 1095 (DC Cir. 
1979) (``MEMA I''), the U.S. Court of Appeals stated that the 
Administrator's role in a section 209 proceeding is to:

consider all evidence that passes the threshold test of materiality 
and * * *

[[Page 34695]]

thereafter assess such material evidence against a standard of proof 
to determine whether the parties favoring a denial of the waiver 
have shown that the factual circumstances exist in which Congress 
intended a denial of the waiver.\19\

    \19\ MEMA I, 627 F.2d at 1122.

    The court in MEMA I considered the standards of proof under section 
209 for the two findings related to granting a waiver for an 
``accompanying enforcement procedure'' (as opposed to the standards 
themselves): (1) Protectiveness in the aggregate and (2) consistency 
with section 202(a) findings. The court instructed that ``the standard 
of proof must take account of the nature of the risk of error involved 
in any given decision, and it therefore varies with the finding 
involved. We need not decide how this standard operates in every waiver 
decision.'' \20\
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    \20\ Id.
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    The court upheld the Administrator's position that, to deny a 
waiver, there must be ``clear and compelling evidence'' to show that 
proposed procedures undermine the protectiveness of California's 
standards.\21\ The court noted that this standard of proof also accords 
with the congressional intent to provide California with the broadest 
possible discretion in setting regulations it finds protective of the 
public health and welfare.\22\
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    \21\ Id.
    \22\ Id.
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    With respect to the consistency finding, the court did not 
articulate a standard of proof applicable to all proceedings, but found 
that the opponents of the waiver were unable to meet their burden of 
proof even if the standard were a mere preponderance of the evidence. 
Although MEMA I did not explicitly consider the standards of proof 
under section 209 concerning a waiver request for ``standards,'' as 
compared to accompanying enforcement procedures, there is nothing in 
the opinion to suggest that the court's analysis would not apply with 
equal force to such determinations. EPA's past waiver decisions have 
consistently made clear that: ``[E]ven in the two areas concededly 
reserved for Federal judgment by this legislation--the existence of 
`compelling and extraordinary' conditions and whether the standards are 
technologically feasible--Congress intended that the standards of EPA 
review of the State decision to be a narrow one.'' \23\
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    \23\ See, e.g., 40 FR 21102-103 (May 28, 1975).
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    Opponents of the waiver bear the burden of showing that the 
criteria for a denial of California's waiver request have been met. As 
found in MEMA I, this obligation rests firmly with opponents of the 
waiver in a section 209 proceeding:

[t]he language of the statute and it's legislative history indicate 
that California's regulations, and California's determinations that 
they must comply with the statute, when presented to the 
Administrator are presumed to satisfy the waiver requirements and 
that the burden of proving otherwise is on whoever attacks them. 
California must present its regulations and findings at the hearing 
and thereafter the parties opposing the waiver request bear the 
burden of persuading the Administrator that the waiver request 
should be denied.\24\
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    \24\ MEMA I, 627 F.2d at 1121.

    The Administrator's burden, on the other hand, is to make a 
reasonable evaluation of the information in the record in coming to the 
waiver decision. As the court in MEMA I stated: ``here, too, if the 
Administrator ignores evidence demonstrating that the waiver should not 
be granted, or if he seeks to overcome that evidence with unsupported 
assumptions of his own, he runs the risk of having his waiver decision 
set aside as `arbitrary and capricious.' '' \25\ Therefore, the 
Administrator's burden is to act ``reasonably.'' \26\
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    \25\ Id. at 1126.
    \26\ Id. at 1126.
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II. Discussion

A. Within-the-Scope Analysis

    EPA sought comment on a range of issues, including those applicable 
to a within-the-scope analysis as well as those applicable to a full 
waiver analysis. Even though EPA sought comment on whether California's 
amendments should be subjected to a full waiver analysis, no party 
expressed the opinion that California's amendments require such an 
analysis. Global Automakers, the only commenter to address this 
threshold issue of which criteria to apply, stated the amendments at 
issue qualify for a within-the-scope determination. Global Automakers 
points out that California's greenhouse gas amendments do not increase 
the stringency of any emission standard, or add any new pollutant or 
other emission standard to California's existing greenhouse gas 
regulations. Therefore, we have evaluated CARB's request by application 
of our traditional within-the-scope analysis.
    EPA can confirm that amended regulations are within the scope of a 
previously granted waiver of preemption if three conditions are met. 
First, the amended regulations must not undermine California's 
determination that its standards, in the aggregate, are at least as 
protective of public health and welfare as applicable Federal 
standards. Second, the amended regulations must not undermine our 
previous determination with respect to consistency with section 202(a) 
of the Act. Third, the amended regulations must not raise any new 
issues affecting EPA's prior waiver determinations. CARB, in its 
Resolution 09-53 (September 25, 2009),\27\ and Resolution 10-15 
(February 25, 2010),\28\ expressly stated that its greenhouse gas 
amendments meet each of these criteria.
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    \27\ CARB Resolution 09-53, EPA-HQ-OAR-2010-0653-0002.7 
(September 24, 2009).
    \28\ CARB Resolution 10-15, EPA-HQ-OAR-2010-0653-0002.17 
(February 25, 2010).
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1. California's Protectiveness Determination
    When granting a waiver of preemption for California's greenhouse 
gas emission standards, EPA found that opponents of the waiver had not 
met their burden to demonstrate that California's protectiveness 
determination was arbitrary and capricious. The protectiveness 
determination at issue in EPA's previous greenhouse gas waiver 
proceeding was primarily based upon a comparison of California's 
greenhouse gas emission standards to then non-existent Federal 
greenhouse gas emission standards.\29\ In the July 30, 2009 decision, 
EPA noted that ``[i]f federal greenhouse gas standards are promulgated 
in the future, and if such standards bring this determination into 
question, then EPA can revisit this decision at that time.'' We also 
noted that ``EPA would then determine whether these changes are within-
the-scope of its prior waiver or if a new, full waiver determination 
would need to be made, as would be required if California decided to 
increase the stringency of its greenhouse gas standards.'' \30\
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    \29\ See 74 FR 332744, 32749-32759. EPA also examined then 
existing CAFE standards promulgated by the NHTSA. EPA found that 
such standards are not ``applicable federal standards,'' and even if 
they were considered as such, opponents of the waiver had not 
demonstrated that CARB's protectiveness determination was arbitrary 
and capricious. EPA also examined whether CARB's protectiveness 
determination was arbitrary and capricious based on the real world 
in-use effects of the GHG standards, and found that opponents of the 
waiver had not met their burden of proof.
    \30\ 74 FR 32752-32753 (July 8, 2009).
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    California's greenhouse gas amendments, as described above, do not 
increase the numerical stringency of its greenhouse gas emission 
standards or change the California fleet average greenhouse gas 
emission limits. In addition, although EPA has

[[Page 34696]]

subsequently promulgated its own emission limits for greenhouse gases, 
those limits do not begin until the 2012 model year, in contrast to 
CARB's standards, which began in the 2009 model year. As such, if EPA 
were to undertake a comparison of California-to-Federal greenhouse gas 
emission standards, that analysis would compare three years of existing 
California standards against three years of non-existent Federal 
standards. Thus, EPA agrees with CARB that California's greenhouse gas 
amendments do not undermine California's previous protectiveness 
determination with regard to the 2009 through 2011 model years.
    In its June 28, 2010 Letter requesting a within-the scope 
determination, CARB points out that it made an additional finding that 
its standards are in the aggregate at least as protective of public 
health and welfare as comparable Federal greenhouse gas emission 
standards, and that California's amendments do not undermine the 
emission reductions from the previously waived California standards.
    The comment from Global Automakers states that California's 
amendments do not cause California's greenhouse gas standards to be 
less protective than the Federal standards. Global Automakers asserts 
that the ``deem to comply'' prong of California's amendments render 
emission benefits to be equally protective as between the California 
and Federal programs.
    In its comments, NADA notes that CARB stated that the national 
program ``will achieve equal or better GHG emission reduction benefits 
from MY 2012-16 light-duty vehicles compared to those sold in 
California and states that have adopted California's Pavley standards 
as provided in Section 177 of the Clean Air Act.'' NADA believes that 
CARB's statement leads to the conclusion that ``vacating the waiver * * 
* likewise will result in no adverse environmental effects * * *.'' 
However, such a conclusion does not logically follow from the statement 
CARB made. CARB's statement was in reference to the fact that the 
national program affects vehicles in all 50 states, whereas the pre-
existing California program only affected vehicles in California and 
section 177 states; it was not a statement with regard to the emission 
reduction benefits of the California standards themselves in California 
and the section 177 states. In reviewing the California standards 
themselves, CARB found that the national program greenhouse gas 
standards from 2012 to 2015 were slightly less stringent than 
comparable California standards, and were equivalent to California 
standards in 2016. CARB also found that emission reductions in 
California and the section 177 states might be reduced slightly if 
manufacturers meet California regulations by demonstrating compliance 
with Federal standards, rather than meeting the pre-existing California 
standards.\31\ NADA does not take issue with this finding. Thus, at the 
very least, compliance with California's greenhouse gas standards under 
the revised regulations will result in the same, if not more, emission 
reductions than would occur in the absence of the California standards. 
NADA provides no evidence that CARB's standards are less protective 
than the applicable Federal standards. As such, NADA fails to present 
any evidence or make any showing that the amendments undermine 
California's previous determination that its standards, in the 
aggregate, are at least as protective of public health and welfare as 
applicable Federal standards.
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    \31\ California Air Resources Board, Staff Report: Initial 
Statement of Reasons for Rulemaking (January 7, 2010), at page 7, 
EPA-HQ-OAR-2010-0653-0002.6.
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    After evaluating the materials submitted by CARB, as well as the 
public comments from Global Automakers and NADA on this issue, EPA 
confirms that California's greenhouse gas amendments do not undermine 
California's previous determination that its standards, in the 
aggregate, are at least as protective of public health and welfare as 
applicable Federal standards.
2. Consistency With Section 202(a) of the Clean Air Act
    EPA has stated in the past that California standards and 
accompanying test procedures would be inconsistent with section 202(a) 
of the Clean Air Act if: (1) There is inadequate lead time to permit 
the development of technology necessary to meet those requirements, 
giving appropriate consideration to cost of compliance within the lead 
time provided, or (2) the Federal and California test procedures impose 
inconsistent certification requirements.\32\ CARB states that the 
amendments do not undermine our previous determination with respect to 
consistency with section 202(a) because California's standards have 
remained the same and the amendments were intended to provide 
flexibility and reduce the costs of compliance with the 
regulations.\33\ EPA received one public comment on this issue, from 
Global Automakers. Global Automakers believes that California's 
amendments ``do not cause California's requirements to be inconsistent 
with Section 202(a) of the Act.'' \34\ Global Automakers further states 
that harmonizing the California program with EPA's Federal program 
renders California's regulations to be ``more consistent'' with the 
Clean Air Act.
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    \32\ See, e.g., 75 FR 8056 (February 23, 2010) and 70 FR 22034 
(April 28, 2005).
    \33\ CARB, Request that Amendments to California's New Passenger 
Motor Vehicle Greenhouse Gas Regulations Be Found Within the Scope 
of the Existing Waiver of Clean Air Act Preemption, EPA-HQ-OAR-2010-
0653-0002, (June 28, 2010), at page 4.
    \34\ Comments of Global Automakers, EPA-HQ-OAR-2010-0653-0003, 
page 5.
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    The first prong of EPA's inquiry into consistency with section 
202(a) of the Act depends upon technological feasibility. This requires 
EPA to evaluate whether adequate technology already exists; or if it 
does not, whether there is adequate time to develop and apply the 
technology before the standards go into effect. Here, CARB has not 
changed its overall California fleet average greenhouse gas emission 
standards. The amendments at issue have been adopted to provide 
additional means and flexibilities for manufacturers to comply with the 
standards. These amendments do not require the development or 
application of any additional technology beyond that already required 
by California's original greenhouse gas emission standards. EPA 
received no comments indicating that CARB's amendments present lead-
time or technology issues with respect to consistency under section 
202(a) and knows of no other evidence to that effect. Consequently, 
CARB's amendments do not affect our prior determination regarding 
consistency with section 202(a), based on lead-time or technological 
feasibility issues.
    The second prong of EPA's inquiry into consistency with section 
202(a) of the Act depends on the compatibility of the Federal and 
California test procedures. CARB's greenhouse gas amendments are 
designed to deem manufacturer compliance with EPA's greenhouse gas 
emission standards as compliant with California's requirements. CARB 
further points out that its amendments are intended to provide 
flexibility and reduce compliance costs. Therefore, CARB asserts that 
its amended regulations strengthen CARB's previous analysis that its 
regulations are consistent with section 202(a) of the Clean Air Act. 
EPA agrees with this analysis, and EPA received no comments that 
dispute this analysis. Because CARB's regulations provide additional 
flexibilities, which

[[Page 34697]]

reduce compliance costs and even make CARB compliance more flexible to 
the extent that Federal compliance is deemed to comply with 
California's requirements, CARB has made their compliance program, 
including its test procedures, more compatible with the Federal 
compliance program. Consequently, nothing in the amendments undermines 
our prior determination concerning consistency of California's test 
procedures with our own.
    For the reasons set forth above, EPA confirms that California's 
greenhouse gas amendments do not undermine our prior determination 
concerning consistency with section 202(a) of the Clean Air Act.
3. New Issues
    EPA has stated in the past that if California promulgates 
amendments that raise new issues affecting previously granted waivers, 
we would not confirm that those amendments are within the scope of 
previous waivers.\35\ CARB states that it is not aware of any new 
issues presented by its greenhouse gas amendments.\36\ Similarly, 
Global Manufacturers state that the amendments do not raise any new 
issues affecting the Administrator's previous waiver: ``[T]he 
amendments merely provide manufacturers the increased compliance 
flexibility of pooling their California and Section 177 State fleets, 
and using compliance with the Federal program to show compliance with 
the California program.'' \37\
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    \35\ See, e.g., 75 FR 8056 (February 23, 2010), and 70 FR 22034 
(April 28, 2005).
    \36\ CARB, Request that Amendments to California's New Passenger 
Motor Vehicle Greenhouse Gas Regulations Be Found Within the Scope 
of the Existing Waiver of Clean Air Act Preemption, EPA-HQ-OAR-2010-
0653-0002, (June 28, 2010), at page 5.
    \37\ Comments of Global Automakers, EPA-HQ-OAR-2010-0653-0003, 
page 5.
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    The comments from NADA do not specifically state that the 
amendments create new issues, but the comments appear to suggest NADA's 
belief that they do. NADA states that the provision that allows 
compliance with Federal greenhouse gas regulations as an alternative 
compliance option for compliance with California's greenhouse gas 
regulations renders California's greenhouse gas standards redundant and 
because of this ``CARB cannot claim that its rules any longer are 
needed to meet compelling and extraordinary circumstances.'' This quote 
is a reference to the requirement in Clean Air Act section 209(b)(1)(B) 
that EPA shall not grant a waiver to California if it finds that 
California ``does not need such State standards to meet compelling and 
extraordinary conditions.''
    EPA does not believe that California's amendment allowing 
compliance with federal greenhouse gas regulations as an option for 
compliance with California's greenhouse gas regulations raises any new 
issues regarding our prior determination concerning CAA section 
209(b)(1)(B).
    In the underlying waiver decision, EPA found that ``the better 
approach for analyzing the need for `such State standards' to meet 
`compelling and extraordinary conditions' is to review California's 
need for its program, as a whole, for the class or category of vehicles 
being regulated, as opposed to its need for individual standards.'' 
\38\ EPA also reiterated its traditional understanding that ``the term 
compelling and extraordinary conditions `do not refer to the levels of 
pollution directly.' Instead, the term refers primarily to the factors 
that tend to produce higher levels of pollution--`geographical and 
climatic conditions (like thermal inversions) that, when combined with 
large numbers and high concentrations of automobiles, create serious 
air pollution problems.' '' \39\ EPA further found that CARB has 
repeatedly demonstrated the need for its motor vehicle program to 
address compelling and extraordinary conditions in California.'' \40\ 
In its initial greenhouse gas Waiver Request letter, CARB stated:
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    \38\ 74 FR at 32762.
    \39\ 74 FR at 32759.
    \40\ 74 FR at 32762-32763.

    California--the South Coast and San Joaquin Air basins in 
particular--continues to experience some of the worst air quality in 
the nation. California's ongoing need for dramatic emission 
reductions generally and from passenger vehicles specifically is 
abundantly clear from its recent adoption of state implementation 
plans for the South Coast and other California air basins.\41\ The 
unique geographical and climatic conditions, and the tremendous 
growth in the vehicle population and use which moved Congress to 
authorize California to establish separate vehicle standards in 
1967, still exist today.\42\
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    \41\ See, e.g., Approval and Promulgation of State 
Implementation Plans; California--South Coast, 64 FR 1770, 1771 
(January 12, 1999). See also 69 FR 23858, 23881-90 (April 30, 2004) 
(designating 15 areas in California as nonattainment for the federal 
8-hour ozone national ambient air quality standard).
    \42\ California Air Resources Board, EPA-HQ-OAR-2006-0173-
0004.1, at page 16.

    NADA's comments do not indicate that, as a result of the 
amendments, California no longer needs a separate motor vehicle 
emissions program to address compelling and extraordinary conditions in 
California, or provide any indication that EPA's prior determination on 
this issue is undermined in any way. Therefore, its comments do not 
show that California's amendments raise any new issues relevant to 
EPA's initial waiver decision.
    Moreover, although NADA's comments reference the words of the 
section 209(b)(1)(B), ``need * * * to meet compelling and extraordinary 
circumstances'' criterion, they do not appear to be directed towards 
the geographical or climatological conditions that are being referred 
to by the words ``compelling and extraordinary circumstances.'' 
Instead, NADA's comments appear to be directed at the stringency of the 
greenhouse gas standards. The stringency of California's standards is 
at issue in section 209(b)(1)(A), where Congress addressed the 
comparison of California standards to federal standards, but it is not 
an issue under section 209(b)(1)(B). As noted in EPA's underlying 
waiver decision, section 209(b)(1)(A) calls for a review of California 
standards ``in the aggregate,'' and EPA can only deny a waiver if it 
finds that California was arbitrary and capricious in its finding that 
``its standards will be, in the aggregate, at least as protective of 
public health and welfare as applicable Federal standards.'' EPA notes 
that the language of section 209(b)(1)(A) clearly indicates Congress's 
determination that EPA review the effect of stringency on the 
protectiveness of California's standards ``in the aggregate,'' and that 
EPA cannot deny a waiver on the grounds of protectiveness if California 
standards are at least equally protective as Federal standards. 
``Redundancy'' is not the criterion; it is whether California's 
standards are, in the aggregate, at least as protective as applicable 
Federal standards. Furthermore, NADA does not address California's 
standards ``in the aggregate'' and, as noted above, does not provide 
any evidence to suggest, even with regard to California's greenhouse 
gas standards, that California was arbitrary and capricious in its 
finding that its standards are at least as protective as comparable 
federal standards. The stringency issue raised by NADA is not relevant 
under section 209(b)(1)(B), and it would be inconsistent with the 
intent of Congress to deny a waiver or a within-the-scope determination 
based on section 209(b)(1)(B) for reasons Congress clearly addressed 
and clearly determined should not be the basis for a denial under 
section 209(b)(1)(A). NADA's comments, therefore, do not raise any

[[Page 34698]]

new issues regarding our preexisting waiver for California greenhouse 
gas emission standards.
    For these reasons, EPA confirms that California's greenhouse gas 
amendments raise no new issues with respect to previously granted 
waivers of preemption.
4. Within-the-Scope Confirmation
    For all the reasons set forth above, EPA can confirm that 
California's amendments to its motor vehicle greenhouse gas emissions 
program are within the scope of existing waivers of preemption.

B. Full Waiver of Preemption Analysis

    In our January 31, 2011 Federal Register notice, EPA requested 
comment on the within-the-scope criteria, and on issues relevant to a 
full waiver analysis, in the event that EPA determined that 
California's standards should not be considered within the scope of 
CARB's previous waivers, and should instead be subjected to a full 
waiver analysis. Specifically, EPA sought comment on: (a) Whether 
CARB's determination that its standards, in the aggregate, are at least 
as protective of public health and welfare as applicable Federal 
standards is arbitrary and capricious; (b) whether California needs 
separate standards to meet compelling and extraordinary conditions; and 
(c) whether California's standards and accompanying enforcement 
procedures are consistent with section 202(a) of the Act. As discussed 
above, EPA confirms that California's amendments meet the within-the-
scope criteria. Additionally, because we received comment that appears 
to dispute this within-the-scope determination, we have applied our 
traditional full waiver analysis to California's amendments in the 
alternative to that determination. We have determined that those in 
opposition to granting a waiver have not met their burden of showing 
that California's regulations, as amended, do not meet the criteria for 
a new waiver of preemption.
1. California's Protectiveness Determination
    Section 209(b)(1)(A) of the Act requires EPA to deny a waiver if 
the Administrator finds that California was arbitrary and capricious in 
its determination that its State standards will be, in the aggregate, 
at least as protective of public health and welfare as applicable 
Federal standards. When evaluating California's protectiveness 
determination, EPA compares the stringency of the California and 
Federal standards at issue in a given waiver request. That comparison 
is undertaken within the broader context of the previously waived 
California program, which relies upon protectiveness determinations 
that EPA previously found were not arbitrary and capricious.
    In our existing waiver for California's greenhouse gas standards, 
we reviewed California's protectiveness determination:

    California made a protectiveness determination with regard to 
its greenhouse gas regulations in Resolution 04-28, adopted by the 
California Air Resources Board on September 23, 2004. Included in 
that Resolution were several bases to support California's 
protectiveness determination. Most generally, CARB made a broad 
finding that observed and projected changes in California's climate 
are likely to have a significant adverse impact on public health and 
welfare in California, and that California is attempting to address 
those impacts by regulating in a field for which there are no 
comparable federal regulations. CARB also found that its greenhouse 
gas standards will increase the health and welfare benefits from its 
broader motor vehicle emissions program by directly reducing 
upstream emissions of criteria pollutants from decreased fuel 
consumption. Beyond that analysis of the new regulations' impact on 
its broader program, CARB projected consumer response to the 
greenhouse gas regulations. With respect to consumer shifts due to a 
potential ``scrappage effect'' (the impact of increased vehicle 
price on fleet age) and ``rebound effect'' (the impact of lower 
operating costs on vehicle miles travelled), CARB found minor 
impacts--but net reductions--on criteria pollutant emissions. 
Further, even assuming larger shifts in consumer demand attributable 
to the greenhouse gas emission standards, CARB found that the result 
remains a net reduction in both greenhouse gas emissions and 
criteria pollutant emissions. That is, CARB found that the addition 
of its greenhouse gas emission standards to its larger motor vehicle 
emissions program (LEV II), which generally aligns with the federal 
motor vehicle emissions program (Tier II), renders the whole program 
to be more protective of public health and welfare. CARB noted that 
EPA has already determined that California was not arbitrary and 
capricious in its determination that the pre-existing California 
standards for light-duty vehicles and trucks, known as LEV II, is at 
least as protective as comparable Federal standards, the Tier II 
standards. Implicit in California's greenhouse gas protectiveness 
determination, then, is that the inclusion of greenhouse gas 
standards into California's existing motor vehicle emissions program 
will not cause California's program to be less protective than the 
federal program.\43\ (citations omitted)
---------------------------------------------------------------------------

    \43\ 74 FR 32749-32750 (July 8, 2009).

    After reviewing California's protectiveness determination and the 
evidence presented by opponents of the waiver, EPA was unable to find 
that California was arbitrary and capricious in its making its 
protectiveness determination. Against this backdrop, California made 
new protectiveness determinations when amending its motor vehicle 
greenhouse gas emissions program.
    In both of the CARB rulemakings for the amendments at issue here, 
the CARB Board found that the amendments did not undermine the Board's 
previous determination that the regulation's emission standards, other 
emission related requirements, and associated enforcement procedures 
are, in the aggregate, at least as protective of public health and 
welfare as applicable Federal standards.\44\ The CARB Board found that 
no basis existed for it to find that its previous protectiveness 
determination would be undermined by the amendments. With respect to 
the 2009-2011 model years, the fleet average greenhouse gas emission 
limits remain unchanged from the previously waived standards; moreover, 
they remain the only greenhouse gas emission limits in existence for 
those model years. Because of those factors, California maintains that 
those standards are ``undisputedly more protective.'' \45\ With respect 
to the 2012-2016 model years, in addition to making a new 
protectiveness determination, CARB's Executive Officer made an 
additional protectiveness determination after reviewing EPA's final 
rule promulgating Federal greenhouse gas emission standards.\46\
---------------------------------------------------------------------------

    \44\ California Air Resources Board, Resolution 09-53 (September 
25, 2009) and Resolution 10-15 (February 25, 2010).
    \45\ CARB Request Letter at page 4.
    \46\ CARB Executive Order G-10-051 (June 28, 2010).
---------------------------------------------------------------------------

    No commenter expressed an opinion or presented any evidence 
suggesting that CARB was arbitrary and capricious in making its three 
above-noted protectiveness findings. Therefore, based on the record 
before me, I cannot find that California was arbitrary and capricious 
in its findings that California's motor vehicle greenhouse gas emission 
standards, as amended, are, in the aggregate, at least as protective of 
public health and welfare as applicable Federal standards.
2. California's Need for State Standards To Meet Compelling and 
Extraordinary Conditions
    Under section 209(b)(1)(B) of the Act, I cannot grant a waiver if I 
find that California ``does not need such State standards to meet 
compelling and extraordinary conditions.'' EPA has traditionally 
interpreted this provision

[[Page 34699]]

as considering whether California needs a separate motor vehicle 
emissions program to meet compelling and extraordinary conditions. In 
EPA's greenhouse gas waiver decision issued on June 30, 2009, EPA 
followed its traditional interpretation and was unable to identify any 
change in circumstances or any evidence to suggest that the conditions 
that California identified as giving rise to serious air quality 
problems in California no longer exist. Therefore, EPA was unable to 
deny the waiver request under section 209(b)(1)(B).
    EPA also reviewed California's greenhouse gas standards on the two 
alternative grounds relied upon in the March 2006 decision to deny a 
waiver. EPA reviewed California's greenhouse gas standards separately 
from its program and found that it could not find that opponents of the 
waiver had demonstrated that California did not need its greenhouse gas 
emission standards to meet compelling and extraordinary conditions, or 
that opponents of the waiver had demonstrated that the impacts of 
climate change in California are not compelling and extraordinary. 
While recognizing that EPA was not adopting these alternative 
interpretations of section 209(b)(1)(B), EPA determined that it would 
be unable to deny the waiver request under section 209(b)(1)(B) under 
these alternative grounds.
    As discussed above in section II.A.3, CARB has repeatedly 
demonstrated the need for its motor vehicle emissions program to 
address compelling and extraordinary conditions in California. 
Furthermore, no commenter has presented any argument or evidence to 
suggest that California no longer needs a separate motor vehicle 
emissions program to address compelling and extraordinary conditions in 
California, or that EPA's prior determination on this issue is 
undermined in any way. Therefore, I determine that I cannot deny 
California a waiver for its motor vehicle greenhouse gas emission 
standards, as amended, under section 209(b)(1)(B). Furthermore, no 
commenter has presented any argument or evidence to suggest that EPA's 
prior determinations regarding the alternative interpretations 
discussed in the June 30, 2009 waiver decision are undermined in any 
way.
3. Consistency With Section 202(a) of the Clean Air Act
    Under section 209(b)(1)(C) of the Act, EPA must deny a California 
waiver request if the Agency finds that California standards and 
accompanying enforcement procedures are not consistent with section 
202(a) of the Act. The scope of EPA's review under this criterion is 
narrow. EPA has stated on many occasions that the determination is 
limited to whether those opposed to the waiver have met their burden of 
establishing that California's standards are technologically 
infeasible, or that California's test procedures impose requirements 
inconsistent with Federal test procedures. Previous waivers of Federal 
preemption have stated that California's standards are not consistent 
with section 202(a) if there is inadequate lead time to permit the 
development of technology necessary to meet those requirements, giving 
appropriate consideration to the cost of compliance within that time. 
California's accompanying enforcement procedures would be inconsistent 
with section 202(a) if the Federal and California test procedures 
conflict, i.e., if manufacturers would be unable to meet both the 
California and Federal test requirements with the same test vehicle.
    In the June 30, 2009 waiver decision, EPA found that industry 
opponents had not met their burden of producing the evidence necessary 
for EPA to find that California's greenhouse gas standards are not 
consistent with section 202(a) of the Act. EPA determined that CARB 
demonstrated a reasonable projection that compliance with California's 
greenhouse gas standards was reasonable based on availability of 
technologies in the lead-time provided and consideration of cost of 
compliance. Therefore, EPA was unable to find that California's 
greenhouse gas emission standards were not technologically feasible 
within the available lead-time, giving appropriate consideration to the 
cost of compliance.
    In its within-the-scope request, CARB states that its greenhouse 
gas amendments ``do not undermine [its] previous discussions [regarding 
consistency with section 202(a)] both because the California standards 
have remained the same (i.e., covering the same vehicles for the same 
model-years at the same stringency) and because the amendments were 
intended to provide flexibility and reduce the costs of manufacturers' 
compliance, thereby increasing the feasibility of meeting the 
standards.'' \47\ CARB also asserts that its amendments may reduce 
compliance costs. EPA received one public comment on this issue, from 
Global Automakers. Global Automakers believes that California's 
amendments ``do not cause California's requirements to be inconsistent 
with Section 202(a) of the Act.'' \48\ Global Automakers further states 
that harmonizing the California program with EPA's Federal program 
renders California's regulations to be ``more consistent'' with the 
Clean Air Act. No commenter expressed any disagreement with these 
statements from CARB, and no commenter presented any evidence opposing 
CARB's assertions regarding technological feasibility, lead-time, and 
cost of compliance. Therefore, EPA is unable to find that California's 
greenhouse gas emission standards, as amended, are not technologically 
feasible within the available lead-time, giving appropriate 
consideration to the cost of compliance.
---------------------------------------------------------------------------

    \47\ CARB Request at page 4.
    \48\ Comments of Global Automakers, EPA-HQ-OAR-2010-0653-0003, 
page 5.
---------------------------------------------------------------------------

4. Full Waiver of Preemption Determination
    After a review of the information submitted by CARB and other 
parties to this proceeding, I find that those opposing California's 
request have not met the burden of demonstrating that a waiver of 
California's amended greenhouse gas regulations should be denied based 
on any of the three statutory criteria of section 209(b)(1). For this 
reason, I find that, in the alternative, even if California's revisions 
to its greenhouse gas standards were not within-the-scope of the 
earlier waiver, California's amended motor vehicle greenhouse gas 
emission regulations would receive a full waiver.

C. Other Issues

    NADA requests that EPA not take action on this within-the-scope 
request until after the Court of Appeals for the District of Columbia 
Circuit has acted on NADA's petition for review of the underlying 
waiver related to California's greenhouse gas emission standards. On 
April 29, 2011, the Court of Appeals acted on NADA's petition for 
review, dismissing it for want of jurisdiction. The request by NADA is 
therefore moot.

III. Decision

    The Administrator has delegated the authority to grant California a 
section 209(b) waiver of preemption to the Assistant Administrator for 
Air and Radiation. This includes the authority to determine whether 
amendments to its regulations are within the scope of a prior wavier. 
CARB's June 28, 2010 letter seeks confirmation from EPA that CARB's 
amendments to its new passenger motor vehicle greenhouse gas 
regulations are within the scope of its

[[Page 34700]]

existing waiver of preemption. After evaluating CARB's amendments, 
CARB's submissions, and the public comments, EPA confirms that 
California's regulatory amendments meet the three criteria that EPA 
uses to determine whether amendments by California are within the scope 
of previous waivers. First, EPA agrees with CARB that the greenhouse 
gas amendments do not undermine California's protectiveness 
determination from its previously waived greenhouse gas request. 
Second, EPA agrees with CARB that California's greenhouse gas 
amendments do not undermine EPA's prior determination regarding 
consistency with section 202(a) of the Act. Third, EPA agrees with CARB 
that California's greenhouse gas amendments do not present any new 
issues which would affect the previously issued waiver for California's 
greenhouse gas regulations. Therefore, I confirm that CARB's greenhouse 
gas amendments are within the scope of EPA's waiver of preemption for 
California's greenhouse gas regulations.
    While EPA has confirmed that the amendments to California's 
greenhouse gas regulations are within the scope of EPA's prior waiver, 
we have also, in the alternative analyzed California's greenhouse gas 
regulations, as amended, under the criteria for a full waiver. Based on 
that analysis, we have determined that EPA could not deny a waiver of 
preemption for California's regulations, as amended. California has 
made a determination that its regulations as amended are at least as 
protective as the Federal GHG standards, and those opposing the waiver 
have not met the burden of demonstrating that any of the three 
statutory criteria for a denial under section 209(b)(1) have been met. 
Therefore, having given consideration to all the material submitted for 
this record, and other relevant information, I find that I cannot make 
the determinations required for a denial of a waiver pursuant to 
section 209(b) of the Act. I find that, even if California's revisions 
to its greenhouse gas standards were not within-the-scope of its 
earlier waiver, California's amended motor vehicle greenhouse gas 
emission regulations would receive a full waiver. Consequently, even if 
the amendments were not within the scope of the earlier waiver, I am, 
in the alternative, granting California a full waiver of preemption for 
its amended motor vehicle greenhouse gas regulations.
    My decision will affect not only persons in California, but also 
manufacturers outside the State who must comply with California's 
requirements in order to produce vehicles for sale in California. For 
this reason, I determine and find that this is a final action of 
national applicability for purposes of section 307(b)(1) of the Act. 
Pursuant to section 307(b)(1) of the Act, judicial review of this final 
action may be sought only in the United States Court of Appeals for the 
District of Columbia Circuit. Petitions for review must be filed by 
August 15, 2011. Judicial review of this final action may not be 
obtained in subsequent enforcement proceedings, pursuant to section 
307(b)(2) of the Act.

IV. Statutory and Executive Order Reviews

    As with past authorization and waiver decisions, this action is not 
a rule as defined by Executive Order 12866. Therefore, it is exempt 
from review by the Office of Management and Budget as required for 
rules and regulations by Executive Order 12866.
    In addition, this action is not a rule as defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601(2). Therefore, EPA has not prepared a 
supporting regulatory flexibility analysis addressing the impact of 
this action on small business entities.
    Further, the Congressional Review Act, 5 U.S.C. 801, et seq., as 
added by the Small Business Regulatory Enforcement Fairness Act of 
1996, does not apply because this action is not a rule for purposes of 
5 U.S.C. 804(3).

    Dated: June 8, 2011.
Gina McCarthy,
Assistant Administrator for Air and Radiation.
[FR Doc. 2011-14686 Filed 6-13-11; 8:45 am]
BILLING CODE 6560-50-P