18994 Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Rules and Regulations 

1 49 U.S.C. 32902. The authorities vested in the 

Secretary under chapter 329 of Title 49, U.S.C., 

have been delegated to NHTSA. 49 CFR 1.95(a). 

2 49 U.S.C. 32911, 32912. 

3Within statutory constraints, credits may be 

either earned (for over-compliance by a given 

manufacturer’s fleet, in a given model year), 

transferred (from one fleet to another), or purchased 

(in which case, another manufacturer earned the 

credits by over-complying and chose to sell that 

surplus). 49 U.S.C. 32903. 

4A manufacturer may have up to three fleets of 

vehicles, for CAFE compliance purposes, in any 

given model year—a domestic passenger car fleet, 

an imported passenger car fleet, and a light truck 

fleet. Each fleet belonging to each manufacturer has 

its own compliance obligation, with the potential 

for either over-compliance or under-compliance. 

There is no overarching CAFE requirement for a 

manufacturer’s total production. 

July 28, 2021), WC Docket No. 12–375, 

FCC 21–60 (2021 ICS Order), in which 

it continued its reform of the calling 

services marketplace. In that Order, the 

Commission, among other actions, 

delegated authority to WCB/OEA to 

implement a data collection for ICS 

providers. Pursuant to that delegation, 

WCB/OEA adopted the Mandatory Data 

Collection Order, including the 

instructions, reporting template, and 

certification form for the data collection, 

on January 18, 2022. 

Federal Communications Commission. 

Lynne Engledow, 

Deputy Chief, Pricing Policy Division, 

Wireline Competition Bureau. 

[FR Doc. 2022–06517 Filed 3–31–22; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

49 CFR Part 578 

[Docket No. NHTSA–2021–0001] 

RIN 2127–AM32 

Civil Penalties 

AGENCY: National Highway Traffic 

Safety Administration (NHTSA), 

Department of Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: On January 14, 2021, NHTSA 

published an interim final rule in 

response to a petition for rulemaking 

from the Alliance for Automotive 

Innovation. The interim final rule 

applied the adjusted civil penalty rate 

applicable to automobile manufacturers 

that violate relevant corporate average 

fuel economy (CAFE) standards 

beginning with vehicle Model Year 

(MY) 2022. The interim final rule also 

requested comment. In light of a 

subsequent Executive order and the 

agency’s review of comments, NHTSA 

reviewed and reconsidered that interim 

final rule, a process that included a 

supplemental notice of proposed 

rulemaking (SNPRM) to consider the 

appropriate path forward and to allow 

interested parties sufficient time to 

provide comments. As a result of this 

review and reconsideration, including a 

careful consideration of the comments 

received in response to the SNPRM, 

NHTSA is repealing the interim final 

rule and reverting to the December 2016 

final rule that would apply the 

adjustment for the CAFE civil penalty 

rate beginning with Model Year 2019. In 

this rule, NHTSA is also applying the 

statutorily required annual adjustments 

through 2022. Going forward, NHTSA 

will continue to make the mandatory 

adjustments to the CAFE civil penalty 

rate, as required by law for all civil 

monetary penalties. 

DATES: 

Effective date: This rule is effective as 

May 31, 2022. 

Petitions for reconsideration: Petitions 

for reconsideration of this final rule 

must be received not later than May 16, 

2022. 

ADDRESSES: Any petitions for 

reconsideration should refer to the 

docket number of this document and be 

submitted to: Deputy Administrator, 

National Highway Traffic Safety 

Administration, 1200 New Jersey 

Avenue SE, West Building, Fourth 

Floor, Washington, DC 20590. 

Docket: All documents in the docket 

are listed on the www.regulations.gov 

website. Although listed in the index, 

some information is not publicly 

available, e.g., confidential business 

information or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available either electronically through 

www.regulations.gov or in hard copy at 

the following location: Docket 

Management Facility, M–30, U.S. 

Department of Transportation, West 

Building, Ground Floor, Rm. W12–140, 

1200 New Jersey Avenue SE, 

Washington, DC 20590. The telephone 

number for the docket management 

facility is (202) 366–9324. The docket 

management facility is open between 9 

a.m. and 5 p.m. Eastern Time, Monday 

through Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Michael Kuppersmith, Office of Chief 

Counsel, NHTSA, email 

michael.kuppersmith@dot.gov, 

telephone (202) 366–2992, facsimile 

(202) 366–3820, 1200 New Jersey Ave. 

SE, Washington, DC 20590. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

A. CAFE Statutory and Regulatory 

Background 

B. Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015 

C. NHTSA’s Actions to Date Regarding CAFE 

Civil Penalties 

1. Initial Interim Final Rule 

2. Initial Petition for Reconsideration and 

Response 

3. NHTSA Reconsideration 

4. Subsequent Petitions and Interim Final 

Rule 

5. Supplemental Notice of Proposed 

Rulemaking 

D. Overview of the Comments Received 

E. Response to the Comments 

1. Agency Reconsideration 

2. Procedural Issues 

3. Statutory Authorization 

4. Retroactivity 

5. Reliance Interests 

6. Economic Impact of the COVID–19 

Pandemic and Other Factors 

7. Usage of Credits 

8. Additional Adjustments Required by 

Law 

F. Rulemaking Analyses and Notices 

1. Executive Order 12866, Executive Order 

13563, and DOT Regulatory Policies and 

Procedures 

2. Regulatory Flexibility Act 

3. Executive Order 13132 (Federalism) 

4. Unfunded Mandates Reform Act of 1995 

5. National Environmental Policy Act 

6. Executive Order 12778 (Civil Justice 

Reform) 

7. Paperwork Reduction Act 

8. Privacy Act 

A. CAFE Statutory and Regulatory 

Background 

NHTSA sets 1 and enforces 2 corporate 

average fuel economy (CAFE) standards 

for the United States light-duty 

automobile fleet, and in doing so, 

assesses civil penalties against 

manufacturers that violate applicable 

standards and are unable to make up the 

shortfall with credits.3 The civil penalty 

amount for CAFE violations was 

originally set by statute in 1975, and 

beginning in 1997, included a rate of 

$5.50 per each tenth of a mile per gallon 

(0.1) that a manufacturer’s CAFE 

performance falls short of its 

compliance obligation. This shortfall 

amount is then multiplied by the 

number of vehicles in that 

manufacturer’s fleet.4 The basic 

equation for calculating a 

manufacturer’s civil penalty amount, 

before accounting for credits, is as 

follows: 

(penalty rate, in $ per 0.1 mpg per vehicle) 

× (amount of shortfall, in tenths of an 


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5The process of determining civil penalties 

occurs after the end of a model year, following 

NHTSA’s receipt of final reports from the 

Environmental Protection Agency (EPA). See 77 FR 

62624, 63126 (Oct. 15, 2012). NHTSA uses the 

penalty rate from the calendar year that is the same 

as the model year to assess CAFE violations. For 

example, NHTSA will assess the civil penalties for 

Model Year 2022 vehicles using the 2022 calendar 

year rate—even if NHTSA ultimately assesses the 

penalty in a later calendar year. 

6Public Law 110–140, 104. 

7 42 U.S.C. 7521, see also 74 FR 66495 (Dec. 15, 

2009) (‘‘Endangerment and Cause or Contribute 

Findings for Greenhouse Gases under Section 

202(a) of the Clean Air Act’’). 

8 49 U.S.C. 32902(b)(4). 

9Memorandum from the Director of OMB to 

Heads of Executive Departments and Agencies, 

Implementation of the Federal Civil Penalties 

Inflation Adjustment Act Improvements Act of 2015 

(Feb. 24, 2016), available online at https://

www.whitehouse.gov/sites/whitehouse.gov/files/ 

omb/memoranda/2016/m-16-06.pdf. 

10Memorandum from the Director of OMB to 

Heads of Executive Departments and Agencies, 

Implementation of the 2017 Annual Adjustment 

Pursuant to the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 2015 (Dec. 16, 

2016), available online at https://

www.whitehouse.gov/sites/whitehouse.gov/files/ 

omb/memoranda/2017/m-17-11_0.pdf; 

Memorandum from the Director of OMB to Heads 

of Executive Departments and Agencies, 

Implementation of Penalty Inflation Adjustments 

for 2018, Pursuant to the Federal Civil Penalties 

Inflation Adjustment Act Improvements Act of 2015 

(Dec. 15, 2017), available online at https://

www.whitehouse.gov/wp-content/uploads/2017/11/ 

M-18-03.pdf; Memorandum from the Director of 

OMB to Heads of Executive Departments and 

Agencies, Implementation of Penalty Inflation 

Adjustments for 2019, Pursuant to the Federal Civil 

Penalties Inflation Adjustment Act Improvements 

Act of 2015 (Dec. 14, 2018), available online at 

https://www.whitehouse.gov/wp-content/uploads/ 

2017/11/m_19_04.pdf; Memorandum from the 

Acting Director of OMB to Heads of Executive 

Departments and Agencies, Implementation of 

Penalty Inflation Adjustments for 2020, Pursuant to 

the Federal Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015 (Dec. 16, 2019), available 

online at https://www.whitehouse.gov/wp-content/ 

uploads/2019/12/M-20-05.pdf; Memorandum from 

the Director of OMB to Heads of Executive 

Departments and Agencies, Implementation of 

Penalty Inflation Adjustments for 2021, Pursuant to 

the Federal Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015 (Dec. 23, 2020), available 

online at https://www.whitehouse.gov/wp-content/ 

uploads/2020/12/M-21-10.pdf. 

11 81 FR 43524 (July 5, 2016). 

mpg) × (# of vehicles in manufacturer’s 

fleet).5

Starting with Model Year 2011, the 

Energy Independence and Security Act 

of 2007 (EISA) provided for credit 

transfers among a manufacturer’s 

various fleets.6 The law also provided 

for trading between vehicle 

manufacturers, which has allowed 

vehicle manufacturers the opportunity 

to acquire credits from competitors 

rather than paying civil penalties for 

violations. Manufacturers can choose to 

carry back credits to apply to any of 

three model years before they are earned 

or carry them forward to apply to any 

of the five model years after they are 

earned. 

In complement to NHTSA’s regulation 

of fuel economy, the Environmental 

Protection Agency (EPA) regulates the 

emissions of light-duty vehicles. These 

regulations include standards to 

regulate greenhouse gas emissions from 

the light-duty fleet. The Clean Air Act 

requires EPA to set greenhouse gas 

(GHG) emissions standards from lightduty vehicles since EPA has made an 

‘‘endangerment finding’’ that 

greenhouse gases ‘‘cause[s] or 

contribute[s] to air pollution which may 

reasonably be anticipated to endanger 

public health or welfare.’’ 7 Although 

NHTSA and EPA have different roles 

and independent enforcement and 

compliance obligations, and operate 

under different statutory authority, the 

agencies work together to achieve the 

goals of their respective statutes, and 

their light-duty vehicle fuel economy 

rulemakings are harmonized to the 

extent possible to work in tandem. 

However, the CAFE program is subject 

to various statutory requirements not 

applicable to the EPA GHG program. 

One such requirement, for example, 

requires automakers to meet a separate 

average fleet requirement for 

automobiles that are manufactured 

domestically.8 The Clean Air Act does 

not include a similar requirement for 

EPA’s GHG standards. 

B. Civil Penalties Inflation Adjustment 

Act Improvements Act of 2015 

On November 2, 2015, the Federal 

Civil Penalties Inflation Adjustment Act 

Improvements Act (2015 Act), Public 

Law 114–74, Section 701, was signed 

into law. The 2015 Act required Federal 

agencies to promulgate an interim final 

rule to make an initial ‘‘catch-up’’ 

adjustment to the civil monetary 

penalties they administer, and then to 

make subsequent annual adjustments. 

The 2015 Act limited the initial 

adjustment to 150 percent of the thencurrent penalty. 

In a February 24, 2016 memorandum, 

the Director of the Office of 

Management and Budget (OMB) 

provided initial guidance to all Federal 

agencies on how to calculate the initial 

adjustment required by the 2015 Act.9

The initial ‘‘catch-up’’ adjustment was 

based on the change between the 

Consumer Price Index for all Urban 

Consumers (CPI–U) for the month of 

October in the year the penalty amount 

was established or last adjusted by 

Congress and the October 2015 CPI–U. 

The February 24, 2016 memorandum 

contained a table with a multiplier for 

the change in CPI–U from the year the 

penalty was established or last adjusted 

to 2015. To arrive at the adjusted 

penalty, the agency multiplied the 

penalty amount when it was established 

or last adjusted by Congress, excluding 

adjustments under a prior adjustment 

statute, by the multiplier for the 

increase in CPI–U from the year the 

penalty was established or adjusted. 

Ensuing guidance from OMB identifies 

the appropriate multiplier for agencies 

to use to calculate the subsequent 

annual adjustments.10

C. NHTSA’s Actions to Date Regarding 

CAFE Civil Penalties 

1. Initial Interim Final Rule 

On July 5, 2016, NHTSA published an 

interim final rule, adopting the 

adjustments required by the statute for 

all civil penalties under its 

administration, following the procedure 

and the formula in the 2015 Act. One of 

the adjustments NHTSA made at the 

time was raising the civil penalty rate 

for CAFE violations from $5.50 to $14.11

NHTSA also indicated in that interim 

final rule that the Secretary’s statutory 

authority under the Energy Policy and 

Conservation Act (EPCA) to establish an 

additional increase for such violations 

would similarly need to be adjusted 

from the statutory cap of $10 to $25, but 

did not codify this change in the 

regulatory text. In the preamble 

discussion, NHTSA provided detailed 

discussion of the authority granted in 

Public Law 95–619, 402, 92 Stat. 3255 

(Nov. 9, 1978), which allowed the 

Secretary of Transportation to establish 

a new civil penalty for each .1 of a mile 

a gallon by which the applicable average 

fuel economy standard under EPCA 

exceeds the average fuel economy for 

automobiles to which the standard 

applies manufactured by the 

manufacturer during the model year. 

NHTSA explained that these 

amendments, codified in 49 U.S.C. 

32912(c), state that the new civil penalty 

cannot be more than $10. NHTSA 

further explained that applying the 

multiplier for the increase in CPI–U for 

1978 in Table A of the February 24, 

2016 memorandum (3.54453) to the $10 

maximum penalty the Secretary is 

permitted to establish under 49 U.S.C. 

32912(c) results in an adjusted civil 

penalty of $35. NHTSA then explained 

that because this calculation would 

result in an increase of greater than 150 

percent, the adjusted maximum civil 

penalty that the Secretary is permitted 

to establish under 49 U.S.C. 32912(c) is 

$25 (current maximum penalty $10 × 

2.5). NHTSA concluded that because the 

new maximum penalty that the 

Secretary is permitted to establish under 


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12 Jaguar Land Rover North America, LLC also 

filed a petition for reconsideration in response to 

the July 5, 2016 interim final rule raising the same 

concerns as those raised in the joint petition. Both 

petitions, along with a supplement to the joint 

petition, can be found in Docket No. NHTSA–2016– 

0075 at www.regulations.gov. 

13 81 FR 95489 (December 28, 2016). 

14 82 FR 8694 (January 30, 2017); 82 FR 15302 

(March 28, 2017); 82 FR 29009 (June 27, 2017); 82 

FR 32139 (July 12, 2017). 

15Order, ECF No. 196, Natural Res. Def. Council 

v. NHTSA, Case No. 17–2780 (2d Cir. Apr. 24, 

2018); see also Natural Res. Def. Council v. NHTSA 

(NRDC), 894 F.3d 95, 116 (2d Cir. 2018) (‘‘The Civil 

Penalties Rule, 81 FR 95,489, 95,489–92 (December 

28, 2016), no longer suspended, is now in force.’’). 

16New York v. NHTSA, 974 F.3d 87 (2d Cir. 

2020). 

17The Auto Innovators also submitted a 

supplement to its petition on October 22, 2020. The 

petition, the supplement, and other supporting 

materials were posted with the interim final rule 

and can be found in Docket No. NHTSA–2021–0001 

at www.regulations.gov. 

18See Executive Order 14018, 86 FR 11855, 

‘‘Revocation of Certain Presidential Actions’’ (Feb. 

24, 2021). 

19The rate is increasing to $14, plus any required 

adjustments that occurred or may occur. 49 CFR 

578.6(h)(2). 

20The reasoning for the interim final rule is set 

forth more fully in the January 14, 2021 document 

published at 86 FR 3016. 

49 U.S.C. 32912(c) is $25, the new 

adjusted civil penalty in 49 CFR 

578.6(h)(2) of $14 does not exceed the 

maximum penalty that the Secretary is 

permitted to impose. NHTSA addresses 

the adjustments that occurred to the 

statutory cap since that time and 

codifies the adjusted cap in this final 

rule. That initial interim final rule 

became effective on August 4, 2016. 

2. Initial Petition for Reconsideration 

and Response 

On August 1, 2016, the then-Alliance 

of Automobile Manufacturers and the 

Association of Global Automakers (since 

combined to form the Alliance for 

Automotive Innovation) jointly 

petitioned NHTSA for reconsideration 

of the CAFE penalty provisions issued 

in the interim final rule.12 The Alliance 

and Global joint petition raised 

concerns with the impact that the 

increased penalty rate would have on 

CAFE compliance costs, which they 

estimated to be at least $1 billion 

annually. Specifically, the petition 

identified several issues, including 

retroactivity. The petitioners were 

concerned that applying the penalty 

increase associated with model years 

that had already been completed or for 

which a company’s compliance plan 

had already been ‘‘set’’ was a retroactive 

application of the adjustment. 

In response to the joint petition, 

NHTSA issued a final rule on December 

28, 2016.13 In that rule, NHTSA agreed 

that raising the penalty rate for model 

years already fully complete at the time 

the 2015 Act was enacted would be 

inappropriate, given that courts 

generally disfavor the retroactive 

application of statutes, and that 

applying penalties to model years that 

were already completed could not deter 

non-compliance, incentivize 

compliance, or lead to any 

improvements in fuel economy. NHTSA 

also agreed that raising the rate for 

model years for which product changes 

were infeasible due to lack of lead time 

from the enactment of the 2015 Act did 

not seem consistent with Congress’s 

intent that the CAFE program be 

responsive to consumer demand. 

Accordingly, NHTSA stated that it 

would not apply the adjusted penalty 

rate of $14 (plus any other required 

adjustments that occurred or may occur) 

until Model Year 2019, as the agency 

believed that 2019 would be the first 

year after the 2015 Act in which product 

changes could reasonably be made in 

response to the higher penalty rate. This 

final rule had an effective date of 

January 27, 2017. 

3. NHTSA Reconsideration 

Beginning in January 2017, NHTSA 

took a series of actions to delay the 

effective date of the December 2016 

final rule, ultimately leading to a rule 

announcing that the effective date 

would be delayed indefinitely.14 In 

April 2018, the United States Court of 

Appeals for the Second Circuit vacated 

NHTSA’s indefinite delay of the rule’s 

effective date, stating that the December 

2016 rule was in force.15

In July 2019, NHTSA finalized a rule 

determining, in part, that the 2015 Act 

did not apply to the CAFE civil penalty 

rate. On September 9, 2019, the Institute 

for Policy Integrity at New York 

University School of Law (IPI) 

submitted a petition for reconsideration 

of NHTSA’s July 2019 final rule. IPI 

argued that the rule was unreasonable 

and not in the public interest because it 

did not properly account for the 

associated costs and benefits. 

Additionally, IPI challenged NHTSA’s 

statutory interpretations. 

On August 31, 2020, the United States 

Court of Appeals for the Second Circuit 

vacated the July 2019 rule and ruled 

again that the December 2016 rule was 

in force.16 The Second Circuit denied 

panel rehearing on November 2, 2020. 

NHTSA did not issue a decision on the 

IPI petition prior to the Second Circuit’s 

decision vacating the rule. 

4. Subsequent Petitions and Interim 

Final Rule 

Following the Second Circuit’s 

decision, on October 2, 2020, NHTSA 

received a petition for rulemaking from 

the Alliance for Automotive Innovation 

(Auto Innovators) requesting that the 

adjustment to $14 not be applied until 

Model Year 2022.17 According to the 

Auto Innovators’ petition, ‘‘Model Years 

2019 and 2020 are effectively lapsed 

now,’’ and ‘‘[m]anufacturers are unable 

to change MY 2021 plans at this point.’’ 

The Auto Innovators argued that, as in 

the December 2016 rule, applying the 

increased penalty to any violations that 

cannot practically be remedied does not 

serve the statutory purposes of deterring 

prohibited conduct or incentivizing 

favored conduct. According to the Auto 

Innovators, doing so would effectively 

be punishing violators retroactively. 

In addition to relying on the reasoning 

of the December 2016 rule as it applied 

to the increase based on the timing of 

the enactment of the 2015 Act, the Auto 

Innovators’ petition noted, but did not 

provide detailed evidence of, the 

significant economic impact suffered by 

the industry due to COVID–19. 

Accordingly, the Auto Innovators’ 

petition also cited the now-revoked 

Executive Order 13924,18 requiring 

Federal agencies to take appropriate 

action—consistent with applicable 

law—to combat the economic 

emergency caused by COVID–19. 

Several individual vehicle 

manufacturers submitted supplemental 

information to NHTSA further 

articulating the negative economic 

position they were in due to the 

COVID–19 public health emergency and 

the potential and significant adverse 

economic consequences of the increased 

civil penalty rate. 

After considering the issues raised, 

NHTSA granted the Auto Innovators’ 

petition and promulgated an interim 

final rule providing that the increase 19

will apply beginning with Model Year 

2022. The interim final rule stated that 

applying the increased civil penalty rate 

to vehicles in Model Years 2019, 2020, 

and 2021 would not result in additional 

fuel savings and would impose higher 

penalties retroactively because those 

model years were already completed, or, 

for Model Year 2021, production plans 

were set prior to the Second Circuit’s 

decision striking down the 2019 rule. 

The interim final rule relied in large 

part on the reasoning in the December 

2016 final rule, though it did not 

discuss the extent to which the four 

years between the two rules should 

affect that reasoning. Additionally, the 

interim final rule addressed the negative 

economic impact on the automotive 

sector caused by the global outbreak of 

COVID–19.20 That interim final rule 


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21Natural Res. Def. Council v. NHTSA, No. 21– 

139 (2d Cir.) (consolidated with New York v. 

NHTSA, No. 21–339 (2d Cir.) and Tesla, Inc. v. 

NHTSA, No. 21–593, transferred from No. 21–70367 

(9th Cir.)). This litigation is currently being held in 

abeyance pending NHTSA’s reconsideration of the 

interim final rule. 

22NHTSA–2021–0001–0001; NHTSA–2021– 

0001–0009. 

23 86 FR 3016, 3023 n.74 (Jan. 14, 2021). 

24NHTSA received a ninth comment that simply 

said, ‘‘Help.’’ NHTSA–2021–0001–0018. Without 

any additional information, NHTSA cannot 

reasonably address or respond to this commenter’s 

concern. After the close of the comment period, 

NHTSA also received a letter from two U.S. 

Representatives regarding the economic harms of 

applying the adjustment before Model Year 2022. 

NHTSA–2021–0001–0046. NHTSA is treating this 

letter as a comment for this rulemaking and 

addressing the issue it raises in this final rule. See 

49 CFR 553.23. 

25NHTSA–2021–0001–0017. 

26NHTSA–2021–0001–0015. 

27NHTSA–2021–0001–0013. 

28NHTSA–2021–0001–0011. 

29NHTSA–2021–0001–0012. 

30NHTSA–2021–0001–0014. 

31NHTSA–2021–0001–0016. 

32NHTSA–2021–0001–0019. 

amended the relevant regulatory text 

accordingly—effective immediately and 

without having afforded prior notice or 

the ability to comment in advance—and 

requested comment within ten days. 

The interim final rule also noted that 

IPI’s petition was moot, and, to the 

extent it was not moot, NHTSA denied 

it. 

The interim final rule is currently the 

subject of legal challenges that have 

been consolidated in the Second 

Circuit.21

5. Supplemental Notice of Proposed 

Rulemaking 

Before NHTSA’s interim final rule 

was published but after the agency had 

announced, through the publication of 

the Fall 2020 Unified Agenda of 

Regulatory and Deregulatory Actions, 

that it had initiated a rulemaking in 

response to the Auto Innovators’ 

petition, NHTSA received two letters 

regarding the rulemaking: One jointly 

from the State of New York, the Natural 

Resources Defense Council, and the 

Sierra Club, and one from Tesla.22 These 

letters raised concerns with NHTSA’s 

rulemaking, particularly with the 

entities’ inability to review or comment 

on the Auto Innovators’ petition for 

rulemaking in advance. NHTSA did not 

respond to these letters prior to the 

publication of the interim final rule, but 

NHTSA included both letters in the 

docket when the interim final rule was 

published and noted that they would 

‘‘be treated as comments for appropriate 

consideration.’’ 23

After the interim final rule was 

published, NHTSA received eight more 

substantive comments.24 NHTSA 

received comments from: 

• The Attorneys General of California, 

New York, Connecticut, Delaware, 

Illinois, Iowa, Maine, Maryland, 

Massachusetts, Minnesota, New Jersey, 

Oregon, Pennsylvania, Rhode Island, 

Washington, and Vermont; 25

• 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; 26

• Natural Resources Defense Council 

and Sierra Club; 27

• The Institute for Policy Integrity at 

New York University School of Law; 28

• Tesla; 29

• The Alliance for Automotive 

Innovation; 30

• The National Automobile Dealers 

Association (NADA); 31 and 

• An anonymous individual.32

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 

adjusted rate 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—both in the initial 

interim final rule in July 2016 and in the 

rule in response to the initial petition 

for reconsideration in December 2016— 

and NHTSA’s subsequent actions that 

were invalidated by the Second Circuit 

did not change that fact. In these 

commenters’ view, manufacturers have 

been on notice of the increase since well 

before Model Year 2019, and any 

reliance to the contrary was undue. 

These comments argued that this was 

particularly true given the rulings from 

the Second Circuit litigation, in which 

many of these commenters and the Auto 

Innovators were involved, with the 

predecessor organizations having 

intervened and participated in this 

litigation. 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. That is, a credit earned at the 

$5.50 rate is likely to be more 

valuable—either for the manufacturer’s 

own use or to sell to another 

manufacturer—in a model year when 

the rate increases to at least $14 

(although credits must be used within a 

limited number of years before they 

expire). The comments also argued that 

the interim final rule improperly 

analyzed the economic effects of the 

COVID–19 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), by, for example, not taking a 

hard look at the environmental 

consequences of the action and ignoring 

the environmental harms that may 

result from delaying the penalty 

increase. Lastly, in response to 

NHTSA’s 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 tenday comment period provided by the 

interim final rule—and only after the 

rule was already effective without any 

opportunity to comment beforehand. 

Two of the comments supported the 

interim final rule. The Auto Innovators 

reiterated the reasoning set forth in its 

petition, which NHTSA granted in the 

interim final rule. According to the Auto 

Innovators, the interim final rule was 

consistent with NHTSA’s December 

2016 rule; appropriately accounted for 

the industry’s production and design 

processes, including the unforeseen 

challenges of the COVID–19 public 

health emergency; and fairly 

implemented the Second Circuit’s 

decision. The Auto Innovators also 

noted that Model Year 2022 vehicles 

could have begun being produced as 

early as January 2, 2021—about two 

weeks before the interim final rule was 

published—but it believes NHTSA was 

reasonable to make the adjustment 

applicable beginning in Model Year 

2022, declining to request a further 

delay in the adjustment to Model Year 

2023. NADA supported the Auto 


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33 86 FR 7037, 7037 (Jan. 25, 2021). 

34Memorandum 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. 

35Nat. Res. Def. Council v. Nat’l Highway Traffic 

Safety Admin., 894 F.3d 95, 116 (2d Cir. 2018); New 

York v. Nat’l Highway Traffic Safety Admin., 974 

F.3d 87, 101 (2d Cir. 2020). 

36 86 FR 46811 (Aug. 20, 2021). 

37Shortly prior to publication of the interim final 

rule, NHTSA received two letters regarding the 

rulemaking. Both letters are included in the docket 

for this matter and were treated as comments for 

appropriate consideration. 

38An eighteenth comment only expressed a 

desire to have the sides of the freeways in the Los 

Angeles area cleaned. NHTSA–2021–0001–0030. As 

NHTSA is required to consider only relevant matter 

in finalizing a rule, this comment is outside the 

scope of this rulemaking. 

39NHTSA 2021–0001–0039. After the close of the 

comment period, the Attorneys General of New 

York, Connecticut, Delaware, Illinois, Iowa, Maine, 

Maryland, Massachusetts, Minnesota, New Jersey, 

Oregon, Pennsylvania, Rhode Island, Vermont, and 

Washington jointly submitted an additional letter 

regarding the need to adjust the CAFE civil penalty 

rate for 2022. NHTSA–2021–0001–0047. NHTSA is 

treating this letter as a comment for this rulemaking 

and addressing the issue it raises in this final rule. 

See 49 CFR 553.23. 

40NHTSA 2021–0001–0037. 

41NHTSA–2021–0001–0036. 

42NHTSA 2021–0001–0038. 

43NHTSA 2021–0001–0043. 

44NHTSA 2021–0001–0042. Stellantis requested 

confidential treatment for the business information 

included in its comment, pursuant to 49 CFR part 

512. As with the companies that requested 

confidential treatment for some of the business 

information included in each of their individual 

submissions supplementing the Auto Innovators’ 

petition that resulted in the interim final rule, the 

public version of Stellantis’ submission can be 

found in the docket for this action at 

www.regulations.gov. 

45NHTSA 2021–0001–0040. 

46NHTSA–2021–0001–0044. NHTSA received 

this comment after the comment period closed, but 

still considered it in promulgating this final rule. 

Under NHTSA’s regulations, ‘‘[l]ate filed comments 

will be considered to the extent practicable.’’ 49 

CFR 553.23. 

47NHTSA 2021–0001–0041. 

48NHTSA–2021–0001–0028; NHTSA 2021–0001– 

0029; NHTSA 2021–0001–0032; NHTSA 2021– 

0001–0033; NHTSA 2021–0001–0034; NHTSA 

2021–0001–0035; NHTSA 2021–0001–0045. 

Innovators’ 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. 

On January 20, 2021—while the postpromulgation comment period for the 

interim final rule was still open—the 

President issued Executive Order 13990, 

entitled ‘‘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.’’ 33 The 

Secretary of Transportation expressly 

identified the January 14, 2021 CAFE 

civil penalties interim final rule as 

subject to E.O. 13990.34

In accord with E.O. 13990 and the 

Secretary’s determination, and in light 

of the significant concerns raised by the 

commenters after the interim final rule 

was issued, NHTSA began reviewing 

and reconsidering the January 14, 2021 

interim final rule. Specifically, NHTSA 

considered repealing the interim final 

rule and reverting to the December 2016 

final rule that would apply the adjusted 

rate beginning with Model Year 2019— 

the rule that the Second Circuit has said 

twice is ‘‘now in force.’’ 35

NHTSA believed that an additional 

period of public comment would aid the 

agency in its reexamination of the issues 

involved in the interim final rule. 

Considering the importance of this 

rulemaking and the short comment 

period—ten days—previously provided 

to interested parties, NHTSA published 

a supplemental notice of proposed 

rulemaking (SNPRM) on August 20, 

2021, to provide the public with an 

appropriate amount of time to comment 

and to enable NHTSA to more fully 

review and consider the issues.36 In 

doing so, NHTSA expressly requested 

comment on whether it should proceed 

to a final rule that repeals the interim 

final rule and reverts to the December 

2016 final rule, restoring the application 

of the increased CAFE civil penalty rate 

beginning with Model Year 2019. 

NHTSA also accepted comments on 

whether the adjustment should apply 

beginning with a model year later than 

Model Year 2019, with commenters 

arguing for such a position asked to 

explain how it is consistent with the 

2015 Act and the Second Circuit’s 

decisions. NHTSA also noted it would 

consider comments already submitted 

in response to the interim final rule as 

part of its review and the anticipated 

promulgation of a final rule following 

the comment period. The comment 

period for the SNPRM closed on 

September 20, 2021. 

D. Overview of the Comments Received 

In addition to the comments received 

in response to the interim final rule,37

NHTSA received seventeen substantive 

comments in response to the SNPRM.38

NHTSA received comments from: 

• The Attorneys General of California, 

New York, Connecticut, Delaware, 

Illinois, Iowa, Maryland, Massachusetts, 

New Jersey, Oregon, Pennsylvania, 

Washington, and Vermont; 39

• Natural Resources Defense Council 

and Sierra Club; 40

• Tesla; 41

• The Institute for Policy Integrity at 

New York University School of Law; 42

• The Alliance for Automotive 

Innovation; 43

• Stellantis (FCA US LLC); 44

• Jaguar Land Rover North America 

LLC; 45

• Ferrari; 46

• The National Automobile Dealers 

Association (NADA); 47 and 

• Private citizens and anonymous 

individuals.48

The majority of comments submitted 

in response to the interim final rule and 

to the supplemental notice of proposed 

rulemaking support returning to the 

December 2016 final rule. These 

comments primarily argue that NHTSA 

lacked the statutory authority to issue 

the January 2021 interim final rule. 

These comments also generally argue 

that retroactivity was not an issue: 

Automakers were already aware as of 

December 2016 that the adjustment 

would apply in Model Year 2019 and 

beyond. It was not until Model Year 

2019 was already nearly complete that 

NHTSA issued a final rule changing 

that, which the Second Circuit 

subsequently determined was legally 

invalid. The predecessor organizations 

of Auto Innovators participated in that 

litigation as intervenors and were well 

aware of the possibility that the Second 

Circuit would restore the applicability 

of the adjusted rate beginning with 

Model Year 2019. In fact, the Second 

Circuit decision expressly stated that 

the court understood the effect of its 

decisions to be that the increased 

penalty amount was in effect. 

Accordingly, these commenters argue 


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49Encino Motorcars, LLC v. Navarro, 579 U.S. 

211, 221 (2016); FCC v. Fox Television Stations, 

Inc., 556 U.S. 502, 515–16 (2009). 50 FCC v. Fox Television Stations, Inc., 556 U.S. 

502, 515 (2009). 

51Natural Res. Def. Council v. NHTSA, 894 F.3d 

95, 113 (2d Cir. 2018). 

that it would be appropriate for NHTSA 

to revisit the interim final rule’s 

characterization of the application of the 

adjustment beginning with Model Year 

2019 as ‘‘retroactive.’’ Moreover, these 

commenters raised concerns regarding 

the procedures that the agency used in 

issuing the interim final rule, which did 

not proceed through a more typical 

notice-and-comment process and which 

made the rule effective immediately 

upon publication. In addition, these 

commenters urged NHTSA to further 

review and consider the Second 

Circuit’s prior decisions and, in light of 

the ongoing litigation, assess the legal 

risk of leaving the interim final rule in 

place, as the interim final rule was 

based on an assertion of discretion that 

is in conflict with the 2015 Act and the 

Second Circuit’s decisions. 

The comments in favor of retaining 

the interim final rule largely re-raised 

the reasoning of the December 2016 

final rule, noting that the affected model 

years have already lapsed or largely 

lapsed, and design and production 

cycles for the affected model years were 

already locked in based on the 

unadjusted CAFE civil penalty rate. 

These comments also described the 

economic harm that applying the 

adjusted rate would have on the 

industry, which is already facing 

difficult economic conditions due to the 

effects of COVID–19, microchip 

shortages, and other supply chain 

issues. 

E. Response to the Comments 

1. Agency Reconsideration 

As a threshold matter and as NHTSA 

has explained before, NHTSA, like all 

agencies, must continually consider a 

range of possible statutory 

interpretations and reassess their 

validity, including in response to 

changed circumstances or when 

questions arise regarding the legality of 

the prior action—particularly when a 

Federal court already has ruled twice on 

related issues. Not only is it an agency’s 

responsibility to reevaluate its 

interpretations to ensure they are legally 

sound, an agency is allowed to change 

its interpretations, within reason, based 

on evolving notions about the 

appropriate balance of varying policy 

considerations. NHTSA is permitted to 

change its views based upon its 

experience and expertise, provided that 

the requirements of the Administrative 

Procedure Act (APA) and other 

governing statutes are met. To do so, an 

agency must show that it is aware it is 

changing its position and must provide 

a reasoned explanation for the change.49

In the SNPRM, NHTSA expressly 

acknowledged that it was reconsidering 

the January 2021 interim final rule as a 

result of E.O. 13990, the Secretary’s 

related determination, the significant 

concerns raised by commenters in the 

earlier rulemakings on this issue, further 

review and consideration of the Second 

Circuit’s prior decisions, and in light of 

the pending litigation. NHTSA provided 

a reasoned explanation for its tentative 

decision in the SNPRM that it does not 

have discretion over when the required 

adjustment should begin to take effect, 

and after careful consideration of the 

relevant information, finalizes and 

elaborates on that decision here. In 

particular, NHTSA concludes that the 

interim final rule was procedurally 

flawed and did not appropriately carry 

out the clear command from the Second 

Circuit’s decision that struck down the 

2019 final rule. 

As explained further below, NHTSA 

does not believe that ‘‘its prior policy 

has engendered serious reliance 

interests that must be taken into 

account,’’ which may require the agency 

to ‘‘provide a more detailed justification 

than what would suffice for a new 

policy created on a blank slate.’’ 50

Nonetheless, NHTSA has provided ‘‘a 

more detailed justification’’ in the 

following discussion. Moreover, the 

administrative and public process 

leading to this rule has been more 

thorough than the process leading to the 

interim final rule. NHTSA undertook 

extensive agency review, issued an 

SNPRM, gave the public an opportunity 

to comment in advance, and responded 

to those comments in detail here. By 

contrast, NHTSA promulgated the 

interim final rule without notice, with 

only a brief window for public 

comments, and without the opportunity 

to comment in advance. 

2. Procedural Issues 

NHTSA promulgated the January 

2021 interim final rule without 

providing notice and without providing 

the opportunity to comment in advance. 

NHTSA also made the interim final rule 

effective immediately and only 

provided ten days after publication for 

comments. The interim final rule did 

not explain why the post-promulgation 

comment period was so short, even 

though NHTSA could have provided 

more time for comments given that the 

rule was already in effect. 

Upon review, NHTSA agrees with the 

commenters that argue that these 

procedural issues alone merit repeal of 

the interim final rule. The Second 

Circuit previously held that changing 

the effective date of the rule that was in 

force at the time would generally 

require notice-and-comment.51 For the 

January 2021 interim final rule, NHTSA 

concluded that good cause existed for 

immediate implementation of the rule 

without prior notice and comment on 

the grounds that it was impracticable to 

delay publication of the interim final 

rule for notice and comment, public 

comment was unnecessary, and the 

agency’s action was in the public 

interest. However, as many of the 

affected manufacturers and their trade 

association have noted for other 

purposes, the affected model years were 

either completed or already underway at 

the time of the interim final rule. There 

was no pressing emergency that would 

have made it impracticable to provide 

notice and request comment in advance. 

Public comment was also necessary. 

While the 2015 Act provides that the 

first adjustment shall be made through 

an interim final rulemaking without 

public comment, NHTSA’s first 

adjustment was made in an interim final 

rule in July 2016 with a subsequent final 

rule issued in December 2016. The 

January 2021 interim final rule was 

issued years later—after multiple 

rounds of requests for comments in 

other notices on this same issue. 

Moreover, NHTSA should have 

sought comment given the public 

interest. NHTSA was aware of the 

public interest in this issue, having 

received multiple rounds of comments 

from a variety of entities and having 

proceeded through two rounds of 

litigation. While the automotive 

industry argued in its petition that it has 

faced unprecedented economic 

challenges arising from the COVID–19 

national emergency, NHTSA did not 

consider any countervailing evidence, 

discussed further below. Additionally, 

any economic harm—which would only 

be caused by manufacturers’ failures to 

comply with the applicable CAFE 

standards—does not outweigh the 

public interest in commenting on the 

change in advance. Indeed, affording the 

public the opportunity to comment on 

the petition in advance would have 

given NHTSA additional insight into the 

impact of the COVID–19 national 

emergency on the industry. 

Because NHTSA lacked good cause, 

the interim final rule also should not 

have gone into effect immediately upon 


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52The interim final rule also stated that a delayed 

effective date was not required because, under 5 

U.S.C 553(d)(2), it ‘‘relieve[d] a restriction’’ by 

allowing additional time before the higher penalty 

rate would have begun to apply. Regardless of 

whether NHTSA continues to believe that delaying 

the application of a higher penalty rate counts as 

relieving a restriction, the lack of good issue and 

other procedural issues would still merit repeal of 

the interim final rule. 

53 86 FR 3016, 3019–20 (Jan. 14, 2021). 54Public Law 94–163, 89 Stat. 871 (1975). EPCA 

created a comprehensive approach to federal energy 

policy, including establishing the CAFE program. 55 86 FR 3016, 3020 (Jan. 14, 2021). 56 86 FR 3016, 3020 (Jan. 14, 2021). 57To the extent that the interpretation of 

NHTSA’s statutory authority in the interim final 

rule was reasonable, NHTSA nonetheless concludes 

that a different interpretation is appropriate now, 

for the reasons described throughout this rule. 58NRDC, 894 F.3d at 108. Agencies do possess 

some inherent powers, but issuing an interim final 

rule to delay the application of a previously-issued 

rule is not one of them. 59See id. at 112 (noting that EPCA provides no 

authority ‘‘to delay the penalty as part of’’ NHTSA’s 

‘‘responsibility for administering the fuel economy 

portions of that statute’’). 60New York v. NHTSA, 974 F.3d 87, 100 (2d Cir. 

2020); Natural Res. Def. Council v. NHTSA, 894 

F.3d 95, 109, 113 n.12 (2d Cir. 2018). 

61See New York, 974 F.3d at 99–100. 

62 84 FR 36007, 36021 (July 26, 2019). 

63 28 U.S.C. 2461 note, sec. 2(b)(1)–(2). 

64 86 FR 3016, 3020–21 (Jan. 14, 2021). 

65 86 FR 3016, 3020–21 (Jan. 14, 2021). 

66 28 U.S.C. 2461 note, sec. 6 (emphasis added). 

67Natural Res. Def. Council v. NHTSA, 894 F.3d 

95, 109 (2d Cir. 2018). 

68Auto Innovators Comment, at 6. 

publication in the Federal Register 

under 5 U.S.C. 553(d)(3) and 5 U.S.C. 

808(2).52

3. Statutory Authorization 

In the interim final rule, NHTSA 

described its authority to issue the rule 

as based on its specific statutory 

authority to administer the CAFE 

program and its general statutory 

authority to do so efficiently and in the 

public interest.53 NHTSA also explained 

that the procedure established in the 

Energy Policy and Conservation Act 

(EPCA) 54 to increase the CAFE civil 

penalty rate implies that NHTSA has the 

broader authority to oversee the 

administration and enforcement of the 

rate more generally.55 NHTSA also 

noted that for the CAFE civil penalty to 

be covered by the 2015 Act, NHTSA 

must have the authority to assess or 

enforce it, and thus oversee and 

administer it as appropriate.56

For the reasons explained by the 

Second Circuit and the comments, 

NHTSA did not have statutory authority 

to promulgate the interim final rule.57

As the Second Circuit noted, ‘‘an agency 

may only act within the authority 

granted to it by statute.’’ 58 Neither the 

2015 Act, which applied to all Federal 

agencies, nor EPCA authorized NHTSA 

to issue an interim final rule delaying 

the application of the previously-issued 

adjustment.59 To the contrary, the 

Second Circuit has concluded that the 

2015 Act contains a ‘‘highly 

circumscribed schedule for penalty 

increases’’ that confers ‘‘no discretion to 

the agencies regarding the timing of the 

adjustments.’’ 60

Further, as the Second Circuit made 

clear, the procedure in EPCA that allows 

NHTSA to increase the CAFE civil 

penalty rate does not conflict with the 

agency’s duty to comply with the 2015 

Act,61 which includes the timing of 

when the adjustment will apply. To the 

contrary, the limited nature of the 

specific statutory procedure in EPCA for 

increasing the CAFE penalty rate (apart 

from the 2015 Act) suggests that 

Congress was restricting the scope of 

NHTSA’s power, authorizing it to 

increase the CAFE civil penalty rate 

only under certain circumstances. Note 

that, as NHTSA has previously 

explained, EPCA acts as a ‘‘one-way 

ratchet’’ with no means for lowering the 

CAFE civil penalty rate 62 or conferring 

NHTSA any discretion over when 

penalties ought to be assessed. The 2015 

Act and its procedures for adjustments 

are consistent with EPCA. 

To the extent that the 2015 Act affords 

NHTSA any discretion to act, NHTSA 

concludes that its discretion would be 

limited. For example, the 2015 Act 

provides express procedures and 

deadlines for agencies to apply the 

adjustments. It also provides narrow 

exceptions for the amount of the 

adjustment and only for the initial 

‘‘catch-up’’ adjustment. The purposes of 

the 2015 Act, as Congress stated in the 

Act itself, include ‘‘allow[ing] for 

regular adjustment for inflation of civil 

monetary penalties’’ and ‘‘maintain[ing] 

the deterrent effect of civil monetary 

penalties and promote compliance with 

the law.’’ 63 NHTSA notes that the CAFE 

civil penalty rate was established as $5 

in 1975 and held constant at $5.50 since 

1997 and that making the required 

adjustment aligns with the legislative 

purpose of catching up the rate for the 

lack of adjustments. Accordingly, 

NHTSA would decline to delay the 

adjustment further, even if it had the 

discretion to do so. 

4. Retroactivity 

In the January 2021 interim final rule 

being repealed by this action, NHTSA 

accepted the industry petition’s 

argument that applying the increased 

civil penalty rate to completed or largely 

completed model years would raise 

serious retroactivity concerns.64 NHTSA 

acknowledged that retroactivity 

generally is not favored in the law and 

concluded that imposing a higher civil 

penalty rate for model years already 

completed or nearly so would not have 

incentivized improvements to fuel 

economy, given the industry timelines 

for the design, development, and 

production of new vehicles.65

While retroactivity generally is not 

favored in the law, there is no rule that 

Congress cannot legislate retroactively. 

The 2015 Act expressly recognizes that 

it may have a partially retroactive effect; 

that is part of the statute’s design and 

Congress’s intent. The statute provides 

that ‘‘[a]ny increase under this Act in a 

civil monetary penalty shall apply only 

to civil monetary penalties, including 

those whose associated violation 

predated such increase, which are 

assessed after the date the increase takes 

effect.’’ 66

Nonetheless, NHTSA now concludes 

that the effect of the adjustment here 

applying beginning in Model Year 2019 

is not retroactive. As NHTSA mentioned 

in the SNPRM, automakers were aware, 

as of December 2016, that the 

adjustment would apply beginning with 

Model Year 2019. The Second Circuit 

confirmed that an immediate 

adjustment was compelled by the 2015 

Act, which long preceded Model Year 

2019.67 Indeed, the Auto Innovators 

acknowledge that ‘‘manufacturers knew 

there was a possibility that the $14 civil 

penalty rate might be applied to MYs 

2019 to 2021 vehicles.’’ 68 It was not 

until Model Year 2019 was already 

nearly complete that the agency issued 

a final rule changing that—a rule that 

the Second Circuit subsequently 

determined was legally invalid. Auto 

Innovators (through its predecessor 

entities) participated in that litigation as 

an intervenor and was well aware of the 

possibility that the Second Circuit 

would—and indeed, did—restore the 

applicability of the adjustment 

beginning with Model Year 2019. 

Accordingly, NHTSA has reconsidered 

and rejected its previous 

characterization of the application of the 

adjustment beginning with Model Year 

2019 as ‘‘retroactive.’’ 

Any violation of the CAFE standards 

for Model Years 2019 through 2021 

occurred or will occur well after 

NHTSA confirmed in December 2016 

that it would apply penalties beginning 

with Model Year 2019—in response to 

a petition from industry to delay the 

effective application of the penalty 

increase precisely to Model Year 2019. 

Indeed, industry had reason to believe 

from the enactment of the 2015 Act and 

NHTSA’s July 2016 adjustments that the 

adjustments could have applied 


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69New York, 974 F.3d at 101; NRDC, 894 F.3d at 

116. 

70Auto Innovators Comment, at 7. 

71Auto Innovators Comment, at 7 

(‘‘[Manufacturers] had every reason to assume that, 

if the rule under review in the New York case were 

vacated, NHTSA would have the authority to 

undertake the same non-retroactivity analysis that 

the Obama Administration Department of 

Transportation undertook in the December 2016 

Final Rule. They also had every reason to assume 

that NHTSA was likely to opt for a first model year 

later than MY 2019 for the application of the $14 

civil penalty rate and was not precluded by either 

Second Circuit decision from doing so.’’ (emphasis 

added)). 

72At least one manufacturer had been budgeting 

for the possibility of paying civil penalties with the 

adjustment in effect before the July 2019 final rule 

was enacted. See IPI Comment, at 7. 

73See 28 U.S.C. 2461 note, sec. 2(b)(2); see also 

id., sec. 2(a)(2); NRDC, 894 F.3d at 109. 

74NRDC, 894 F.3d at 109. 

75 28 U.S.C. 2461 note, sec. 2(b)(1). 

76Auto Innovators Comment, at 10. The Auto 

Innovators argue that ‘‘the imposition of the $14 

civil penalty rate to MYs 2019 to 2021 vehicles 

actually could have deleterious environmental 

impacts: Penalties that lead to increases in the 

prices of newer vehicles could discourage 

consumers from purchasing more efficient, cleaner 

vehicles.’’ Id. While NHTSA agrees that applying 

the adjusted rate to Model Year 2019 to Model Year 

2021 vehicles could have environmental effects, 

NHTSA believes it is likely that manufacturers have 

already priced in the potential of having to pay 

increased penalties—if not during the earlier 

rounds of litigation and rulemaking, then very 

likely when the SNPRM was made public. 

77Auto Innovators Comment, at 7. 

78 ‘‘A higher amount prescribed under 

subparagraph (A) of this paragraph is effective for 

the model year beginning at least 18 months after 

the regulation stating the higher amount becomes 

final.’’ 49 U.S.C. 32912(c)(1)(D). 

immediately, or in any event, well 

before Model Year 2019. To the extent 

that manufacturers did not have notice 

by the 2015 Act itself, they 

unquestionably had notice by NHTSA’s 

2016 rules. The industry previously 

argued that vehicle designs are often 

fixed years in advance. Thus, by the 

time NHTSA promulgated its July 2019 

final rule (that was promptly challenged 

in litigation and was subsequently 

vacated by the Second Circuit), 

automakers’ designs for Model Years 

2019 through 2021 were likely largely 

set already. At that time, NHTSA’s 

regulations stated that the CAFE civil 

penalty adjustment to $14 (plus any 

other adjustments that needed to be 

made) would go into effect beginning 

with Model Year 2019. There was no 

guarantee at that time that NHTSA 

would have issued a rule reversing 

course and blocking the adjustment, and 

any attempt to do so would have been 

legally vulnerable. Any automakers that 

made their plans for Model Years 2019 

through 2021 thinking that penalties 

would not increase did so at their own 

risk and in defiance of the Second 

Circuit’s decisions. 

The Second Circuit ruled that 

NHTSA’s previous actions to delay or 

avoid the adjustment were unlawful, 

ultimately determining—twice—that the 

adjustment was ‘‘now in force.’’ 69 And 

the Auto Innovators concede that the 

Court’s determinations that the 

adjustment is ‘‘now in force’’ is 

currently ‘‘having effects on 

manufacturers’ decisions with regard to 

future model-year fuel economy 

decisions,’’ even though the interim 

final rule remained on the books until 

the effective date of this final rule.70

That some manufacturers may have 

chosen to base their compliance 

decisions and production plans on the 

chance that NHTSA may take additional 

action to attempt to delay or avoid the 

adjustment despite legal vulnerability is 

a risk they took on their own, aware of 

the circumstances. The Auto Innovators’ 

argument is expressly based on 

assumptions manufacturers made about 

how the Administration was ‘‘likely’’ to 

act.71 These manufacturers— 

particularly those, as noted by the Auto 

Innovators, that participated in the court 

proceedings through their trade 

associations—were aware (or at least 

should have been aware) of the 

possibility that their predictions 

regarding NHTSA’s actions would 

ultimately prove incorrect.72 That 

possibility is not enough to create 

retroactivity concerns. 

The Auto Innovators did argue that 

the statutory purposes of an adjustment 

are ‘‘primarily deterrent,’’ as stated in 

the 2015 Act and acknowledged by the 

Second Circuit.73 However, the first 

purpose listed in the statute—and also 

recognized by the Second Circuit as ‘‘a 

primary purpose’’ of the statute 74—is to 

‘‘allow for regular adjustment for 

inflation of civil monetary penalties.’’ 75

Making the initial ‘‘catch-up’’ 

adjustment will allow NHTSA to 

conduct the required subsequent annual 

adjustments in line with the agency’s 

other civil penalties that have already 

been adjusted on a regular basis. 

Furthermore, establishing the increased 

rate may have a deterrent effect in future 

model years as the rate continues to 

increase. And, indeed, the fact that 

automakers knew that an adjustment 

under the statute was likely at the time 

of the statute’s passage, as well as upon 

the adoption of the 2016 rule—as the 

Auto Innovators acknowledged—very 

likely served as a deterrent for those 

manufacturers who opted to meet fuel 

economy standards rather than pay 

penalties. 

Moreover, the Auto Innovators note 

elsewhere that imposing an 

appropriately adjusted rate to vehicles 

in Model Years 2019 to 2021 could still 

have future environmental impacts.76 In 

any event, these purpose-based policy 

concerns, even if correct, are 

insufficient to override the language and 

structure of the governing statute, as the 

Second Circuit has plainly interpreted 

it. 

The Auto Innovators also noted that 

‘‘in the December 2016 Final Rule, 

NHTSA recognized the need for lead 

time (and in fact used the 18-month 

CAFE statutory lead time as a proxy) 

when initially delaying applicability of 

the $14 civil penalty rate to MY 

2019.’’ 77 NHTSA does acknowledge the 

importance of lead time for 

manufacturers, but concludes here that 

manufacturers did receive appropriate 

lead time for Model Years 2019 through 

2021 when the timing of the adjustment 

was established in December 2016— 

established at that time in response to 

a request from industry for delay. Under 

the interim final rule, the mandatory 

adjustment would not be applied until 

Model Year 2022, i.e., to vehicles sold 

more than five years after the statutory 

deadline for agencies to make their 

initial adjustments. 

NHTSA also notes that it does not 

need to give 18 months’ lead time before 

this adjustment becomes effective. The 

statutory lead time provision in EPCA 

for increasing the CAFE civil penalty 

rate expressly refers to the specific 

process described in that paragraph for 

increasing the penalty rate, not to 

adjustments required to be made 

pursuant to a separate statute.78 The 

2015 Act established the timing NHTSA 

and all other federal agencies were 

required to follow for the initial catchup adjustment and the process for doing 

so through an interim final rulemaking 

without notice-and-comment. 

NHTSA will make the mandatory 

adjustments to the CAFE civil penalty 

rate going forward, as required by law 

for all civil monetary penalties. 

5. Reliance Interests 

For similar reasons, to the extent that 

industry relied on the CAFE civil 

penalty rate not being adjusted as 

required by the statute, any such 

reliance was unreasonable and was at 

those manufacturers’ own risk—prior to 

the promulgation of the January 2021 

interim final rule or after. 

In the January 2021 interim final rule, 

NHTSA concluded that the industry’s 

reliance on the $5.50 rate was 

reasonable, as NHTSA reconsidered 

application of the 2015 Act by 

proposing in 2018 that the 2015 Act did 

not apply and finalizing the proposal in 


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79 86 FR 3016, 3021 (Jan. 14, 2021). 

80NRDC, 894 F.3d at 102 (‘‘[I]ndustry petitioners 

conceded that ‘NHTSA was obligated to take some 

action in response to the Improvements Act’ and 

‘NHTSA [was] not empowered to exempt the CAFE 

program from this directive.’ ’’). 

81See States Attorneys General Comment, at 5 

(citing Envtl. Def. v. Leavitt, 329 F. Supp. 2d 55, 64 

(D.C. Cir. 2004) (‘‘[T]he vacatur restores the status 

quo before the invalid rule took effect and the 

agency must initiate another rulemaking proceeding 

if it would seek to confront the problem anew.’’ 

(internal citations and quotations omitted))); Nat’l 

Fuel Gas Supply Corp. v. Fed. Energy Regulatory 

Comm’n, 59 F.3d 1281, 1288 (D.C. Cir. 1995); see 

also United States v. Sec. Indus. Bank, 459 U.S. 70, 

79 (1982) (‘‘The principle that statutes operate only 

prospectively, while judicial decisions operate 

retrospectively, is familiar to every law student.’’)). 

82See, e.g., Tesla Comment on IFR, NHTSA– 

2021–0001–0012, at 9. 

83See, e.g., Tesla Comment at 9–10. 

84State Attorneys General Comment, at 5 (citing 

NRDC v. EPA, 808 F.3d 556, 584 (2d Cir. 2015) 

(when equity demands, remand without vacatur 

allows agencies to correct legal deficiencies while 

leaving challenged, unlawful regulations in place); 

see also Sugar Cane Growers Coop. of Fla. v. 

Veneman, 289 F.3d 89, 97–98 (D.C. Cir. 2002) 

(invoking equitable discretion to remand without 

vacatur because there was ‘‘no apparent way to 

restore the status quo ante’’); Allied-Signal, Inc. v. 

U.S. Nuclear Regulatory Comm’n, 988 F.2d 146, 

150–51 (D.C. Cir. 1993)). 

85See NRDC, 894 F.3d at 116; New York, 974 F.3d 

at 101. 

86 86 FR 3016, 3022 (Jan. 14, 2021). 

87 86 FR 11855, 11855 (Mar. 1, 2021). 

88EPCA does, of course, allow the agency to 

consider general economic impacts in determining 

whether to further increase the CAFE civil penalty 

rate under U.S.C. 32912(c)(1), as well as the specific 

economic conditions of a particular manufacturer in 

determining whether to compromise or remit a 

penalty under 49 U.S.C. 32913. However, neither 

provision is relevant here. 

89 28 U.S.C. 2461 note, 4(c). Note also that this 

exception only related to the amount of the 

adjustment, not the timing of it. 

90NADA Blog, NADA Issues 2021 Second 

Quarter Auto Sales Analysis (July 8, 2021), https:// 

blog.nada.org/2021/07/08/nada-issues-2021- 

second-quarter-auto-sales-analysis/. 

91 Id. 

92See, e.g., Tesla Comment, at 7–9. 

2019.79 However, manufacturers knew 

(or should have known) that the CAFE 

civil penalty rate was going to be 

adjusted when the 2015 Act was 

enacted, when NHTSA issued its initial 

catch-up adjustments in July 2016, and 

when NHTSA issued its response to 

industry’s petition in December 2016 

establishing the timing of the 

adjustment (and accommodating the 

industry’s request for additional lead 

time in doing so). Indeed, the industry 

petition in 2016 acknowledged and did 

not challenge that the 2015 Act applied 

to the CAFE civil penalty rate.80 While 

there was subsequent rulemaking on the 

issue, industry participants were also 

aware that there was litigation over the 

subsequent rules—indeed, they 

participated actively in the litigation— 

and they relied on those subsequent 

rules at their own risk. Once the Second 

Circuit vacated each of the rules, the 

industry had no basis for relying on 

either of those agency actions.81 By 

industry’s own argument, to the extent 

that manufacturers relied on the July 

2019 final rule, much less the January 

2021 interim final rule, the planning for 

Model Years 2019 to 2021 was already 

or largely complete. This was not a 

longstanding policy in effect for years 

before. Moreover, the interim final rule, 

by definition, was an interim rule that 

remained subject to change following 

public comment. It was also quickly 

subject to legal challenge and agency 

reconsideration. In particular, the 

President issued Executive Order 13990, 

directing review of the interim final rule 

and other regulations, just one week 

after the interim final rule was 

published in the Federal Register and 

while the post-promulgation comment 

period was still open. Given this short 

window, there was minimal time for 

manufacturers to reasonably rely on the 

interim final rule remaining in effect. 

Furthermore, there are countervailing 

reliance interests to consider here. It is 

very likely that some manufacturers 

relied on the 2015 statute, the July 2015 

initial catch-up adjustment, and the 

December 2016 final rule in planning 

for an adjustment to be in effect for 

Model Year 2019 and continued to do 

so given the uncertainty of the legal 

challenges to NHTSA’s subsequent 

actions regarding the CAFE civil penalty 

rate.82 And manufacturers had a strong 

financial incentive to do so, given that 

the value of credits for over-complying 

with the standards would be expected to 

increase dramatically with the initial 

adjustment to the CAFE civil penalty 

rate.83 Delaying the application of the 

adjustment would almost certainly 

diminish the value of those credits. 

As noted in the comments,84 industry 

could have asked the Second Circuit to 

invoke its equitable discretion and to 

remand to NHTSA without vacatur, but 

they did not do so in either case that has 

already been decided (nor in the 

pending case challenging the January 

2021 interim final rule). The Court also 

did not do so on its own, instead 

confirming twice its conclusion that the 

December 2016 rule was ‘‘now in 

force.’’ 85

6. Economic Impact of the COVID–19 

Pandemic and Other Factors 

In the January 2021 interim final rule, 

NHTSA concluded that, based on the 

available information, applying the 

adjustment to the CAFE civil penalty 

rate beginning in Model Year 2019 

might inhibit economic recovery from 

the effects of the pandemic, while 

applying the adjustment beginning in 

Model Year 2022 was an appropriate 

action to take for the purpose of 

promoting job creation and economic 

growth, citing Executive Order 13924, 

‘‘Regulatory Relief To Support 

Economic Recovery.’’ 86

Executive Order 13924 has since been 

revoked.87 Moreover, because NHTSA 

now concludes that it did not have the 

authority to issue the interim final rule 

and lacks discretion regarding when to 

apply the adjustment, there is no 

opportunity for NHTSA to consider the 

economic impact of the COVID–19 

pandemic or other economic impacts 

such as those caused by supply chain 

shortages and microchip shortages in 

determining when to apply the 

adjustment.88 It is true that the 2015 Act 

did allow an agency to make the first 

adjustment of the amount of a civil 

monetary penalty by less than the 

otherwise required amount if increasing 

the civil monetary penalty by the 

otherwise required amount would have 

a negative economic impact, or if the 

social costs of increasing the civil 

monetary penalty by the otherwise 

required amount outweighed the 

benefits.89 However, NHTSA’s attempt 

to apply this exception through the 

‘‘negative economic impact’’ prong was 

vacated by the Second Circuit as too 

late, and the statute provides that the 

exception could only be applied to the 

initial ‘‘catch-up’’ adjustment. 

Accordingly, there is no need for 

NHTSA to evaluate the economic 

evidence now to determine when it 

should apply the required adjustment; 

as the Second Circuit held, NHTSA has 

no such discretion. 

Regardless, the economic record on 

this question is mixed. For example, 

despite the industry having lower sales 

in the middle of 2020, sales bounced 

back in 2021. Indeed, NADA reported 

‘‘incredibly high sales in April 2021, 

. . . the fourth highest monthly total 

since the year 2000,’’ 90 Demand also 

remained ‘‘strong,’’ despite ‘‘newvehicle average transaction prices 

reach[ing] record highs at the end of 

second quarter.’’ 91 Additional 

information reported by the 

manufacturers themselves also shows 

evidence of economic success, despite 

the challenges presented by the COVID– 

19 pandemic, microchip shortages, and 

other supply chain issues.92

NHTSA also notes that the CAFE civil 

penalty formula incorporates the 

number of vehicles manufactured, so if 

production is reduced because of lower 

sales, supply chain issues, or microchip 

shortages, then the CAFE civil penalty 


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93 ‘‘CDC Museum COVID–19 Timeline,’’ https://

www.cdc.gov/museum/timeline/covid19.html. 

94Auto Innovators Comment, at 12 (‘‘[O]lder 

credits will be used to mostly, if not completely, 

cancel any shortfalls. For this reason, delaying the 

application of a $14 civil penalty rate to MY 2022 

is highly unlikely to affect manufacturers’ 

compliance strategies by allowing them to delay the 

use of 2017 or later credits to MY 2022.’’). 

95The January 2021 interim final rule also used 

this language, requiring that the civil penalty rate 

be $14, plus any adjustments that occurred or may 

occur. 86 FR 3016, 3026 (Jan. 14, 2021). 

96The adjusted amount would have rounded 

down to remain $14 for each required annual 

adjustment for 2017 through 2021. 

97 49 U.S.C. 32912(c). 

98 81 FR 43524, 43526 (July 5, 2016). 

liability will also be reduced (before 

accounting for credits). 

Two additional points bear noting. On 

the ‘‘front end,’’ much of the relevant 

conduct (i.e., designing and 

manufacturing) occurred before the 

COVID–19 pandemic commenced. The 

earliest cases that were later classified 

as COVID–19 were first identified in 

December 2019.93 By that time, Model 

Year 2019 was complete for almost the 

entire industry, and under the 

industry’s own view, the planning for 

Model Year 2020 had long since been 

completed by then with planning for 

Model Year 2021 well underway in the 

very least. Further, it was not until midMarch 2020 when the World Health 

Organization (WHO) declared COVID– 

19 a pandemic and the President 

declared a national emergency in the 

United States—approximately halfway 

through Model Year 2020 and only six 

months before the beginning of Model 

Year 2021 for most manufacturers. 

On the ‘‘back end,’’ NHTSA has not 

yet assessed CAFE civil penalties for 

Model Year 2019 and beyond. It is 

possible that the economic state of the 

industry will be stronger, perhaps even 

above average, when those penalties are 

assessed. And the industry may have 

accrued or planned to accrue more 

credits by then to offset any additional 

penalty liability. 

7. Usage of Credits 

As noted in the SNPRM, some 

commenters on this issue have argued 

that delaying the application of the 

increased rate would negatively affect 

future compliance because 

manufacturers may be incentivized to 

hold credits for model years when the 

higher rate will apply. Similar to the 

economic evidence discussed above, 

NHTSA lacks discretion to consider 

manufacturers’ planned uses of credits 

in determining when to apply the 

required adjustment. The governmentwide 2015 Act applies regardless of how 

manufacturers plan to apply credits to 

any shortfalls. 

Even if NHTSA could consider the 

use of credits in determining the 

appropriate timing of the adjustment, 

the Auto Innovators acknowledge that 

while manufacturers would likely use 

their earliest earned credits to offset 

their shortfalls before those credits 

expire, there could still be some credits 

that manufacturers would need to 

decide whether to use immediately or 

carry forward to future model years.94

While the magnitude of the effects of 

these decisions may be small in the 

immediately affected model years, the 

magnitude of the effects could be 

compounded in future model years in a 

cascade as additional credits continue to 

be time-shifted. 

8. Additional Adjustments Required by 

Law 

Under the SNPRM, which NHTSA is 

now finalizing, the civil penalty rate for 

violations of CAFE standards for model 

years beginning with MY 2019 was $14, 

plus any adjustments that occurred or 

may occur.95 $14 was the initial ‘‘catchup’’ adjustment made by NHTSA on 

July 5, 2016, following the procedure 

and the formula in the 2015 Act. 

NHTSA is now addressing the 

adjustments that occurred since that 

time. Applying the annual adjustment 

procedures in the 2015 Act (including 

the requirement to round to the nearest 

$1) does not result in an increase in the 

$14 rate for the annual adjustments in 

2017 through 2021,96 but does result in 

an increase to $15 for 2022. Therefore, 

NHTSA is codifying the civil penalty 

rate of $15, along with clarifying 

regulatory text explaining that the civil 

penalty rate is $14 for MY 2019 through 

MY 2021 (and $5.50 for MYs before 

2019). 

EPCA provides a separate statutory 

authority for NHTSA to increase the 

CAFE civil penalty rate based on the 

impacts on energy conservation and the 

economy.97 Any increase pursuant to 

that authority was initially capped by 

the statute at $10, based on the original 

$5 civil penalty rate. In the 2016 interim 

final rule, NHTSA noted that the 2015 

Act, which required an initial 

adjustment of the CAFE civil penalty 

rate to $14, also required a 

corresponding adjustment on the cap 

under NHTSA’s EPCA authority to $25 

(from $10). NHTSA explained this in 

the preamble of the 2016 interim final 

rule, but this adjustment was 

inadvertently never codified in 

NHTSA’s regulations.98 NHTSA is now 

codifying that adjustment and the 

necessary adjustments for the 

intervening years. Applying the 

multipliers for the subsequent years, the 

adjusted amount would have remained 

$25 for 2017, increased to $26 for 2018, 

increased to $27 for 2019, remained $27 

for 2020 and 2021, before being 

increased to $29 for 2022. Therefore, 

NHTSA is codifying the cap at $29, and 

NHTSA will make subsequent annual 

adjustments as required. 

Pursuant to the 2015 Act, NHTSA did 

not undertake notice or comment to 

enact these adjustments. The 2015 Act 

provides clear direction for how to 

adjust the civil penalties, and states at 

Section 4(b)(2) that these adjustments 

shall be made ‘‘notwithstanding section 

553 of title 5, United States Code.’’ 

NHTSA will continue to make the 

mandatory adjustments to the CAFE 

civil penalty rate and the statutory cap 

going forward, as required by law for all 

civil monetary penalties. 

F. Rulemaking Analyses and Notices 

1. Executive Order 12866, Executive 

Order 13563, and DOT Regulatory 

Policies and Procedures 

NHTSA has considered the impact of 

this rulemaking action under Executive 

Order 12866, Executive Order 13563, 

and the Department of Transportation’s 

regulatory policies and procedures. 

OMB has designated this rule as a 

‘‘significant regulatory action’’ under 

section 3(f) of Executive Order 12866. 

The Office of Information and 

Regulatory Affairs (OIRA) has 

determined that this rulemaking is 

‘‘economically significant’’ and a ‘‘major 

rule’’ as NHTSA believes that the 

difference in the amount of penalties 

received by the government as a result 

of this rule are likely to exceed $100 

million in at least one of the years 

affected by this rulemaking and that 

there may be additional economic 

effects as discussed below. 

As explained in the SNPRM, the 

adjusted civil penalty rate will likely 

induce some degree of greater 

compliance with fuel economy 

standards as a general matter. 

Manufacturers that are paying civil 

penalties for CAFE violations have 

likely calculated that it is less costly or 

otherwise preferable to pay the penalties 

than to meet the statutory and 

regulatory requirements. An increased 

penalty rate, as required by the statute, 

changes this calculation, as it likely 

raises either the costs of credits a 

noncompliant manufacturer may choose 

to purchase, the total penalty amount a 

manufacturer will pay, or both. 

In this final rule, NHTSA is repealing 

the interim final rule, which delayed the 

adjusted penalty rate by three model 

years, two of which are already 


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99See ‘‘Civil Penalties,’’ available online at 

https://one.nhtsa.gov/cafe_pic/CAFE_PIC_Fines_

LIVE.html. 

100 49 U.S.C. 32903(f)(2), (g)(4); 49 CFR 536.9(c). 101 86 FR 46811, 46816–17 (Aug. 20, 2021). 

102The 2015 Act, of course, did allow NHTSA 

one opportunity at the time of the initial catch-up 

to use the notice-and-comment process to adjust the 

rate ‘‘less than the otherwise required amount’’ 

under two conditions, but the Second Circuit 

rejected NHTSA’s belated attempt to use this 

provision in its decision on the July 2019 final rule. 

See New York, 974 F.3d at 100–01. 

103 13 CFR 121.105(a). 

complete and the last one which is 

largely complete. This final rule also 

codifies the adjusted penalty rate for 

2022. An analysis here would be limited 

to estimating over this short time 

horizon: (1) Which manufacturers did 

not produce compliant fleets for Model 

Years 2019 and 2020 and are likely to 

not produce compliant fleets for Model 

Years 2021 and 2022; (2) what the 

shortfalls will be for those noncompliant manufacturers; and (3) the 

extent to which those manufacturers 

will choose to use credits (either their 

own or those purchased from overcompliant manufacturers) or pay 

penalties to address these shortfalls. 

Pointedly, such an analysis would not 

have sufficient information to account 

for whether, and if so, how 

manufacturers will adjust the 

composition of the fleet for these model 

years in response to the penalty change. 

Any analysis would estimate what the 

compliance shortfalls will be and 

whether manufacturers will pay 

penalties or use credits. These estimates 

could be used to estimate the effects on 

individual manufacturers in the form of 

higher penalty payments, higher 

payments to other manufacturers for 

credits, or higher receipts for 

overcomplying manufacturers for 

credits sold to other manufacturers. 

However, NHTSA has only limited 

ability to estimate what strategies 

manufacturers will take either to use 

credits or pay penalties to deal with any 

noncompliance. That is a decision that 

each manufacturer must take based on 

their unique circumstances, and 

historically, NHTSA is not privy to the 

financial terms of any trades 

manufacturers make with each other. In 

the past, the vast majority of 

manufacturers pay no penalties, as only 

five manufacturers have paid civil 

penalties since Model Year 2011.99 And 

only one of those manufacturers faced 

particularly heavy penalties—even 

before the $14 rate would have gone 

into effect—for failing to comply with 

the minimum domestic passenger car 

standard, which cannot be made up 

through the application of transferred or 

traded credits.100

Despite this uncertainty, NHTSA 

continues to be confident that, based on 

the experience of recent model years, 

this rule will lead to at least $100 

million difference in the amount of 

penalties in at least one model year. As 

explained in the SNPRM, NHTSA 

projects that the difference in the 

nationwide fleetwide net shortfall 

would result in at least $100 million 

more civil penalties being assessed at 

the $14 rate than the $5.50 for Model 

Year 2019.101 Specifically, based on 

mid-model year fuel economy 

performance data and assuming a 

similar magnitude of production from 

Model Year 2018 for Model Year 2019, 

the projected shortfall of 1.3 miles per 

gallon across the U.S. fleet in Model 

year 2019 would result in a nationwide 

fleet-wide net shortfall of approximately 

$115.4 million at the $5.50 rate or an 

approximately $293.9 million shortfall 

at the $14 rate—an approximately 

$178.5 million difference. 

As previously noted, it is expected 

that much of this increase would likely 

fall on a single automobile manufacturer 

and likely is due to a failure to comply 

with the minimum domestic passenger 

car standard (which, by law, cannot be 

made up for through transferred or 

traded credits). 

In addition, NHTSA reiterates that 

commenters on this issue have raised 

valid questions about further economic 

effects, namely that longer-term impacts 

may vary as a result of manufacturer 

multi-year planning, the transfer of 

credits across model years and between 

manufacturers, and the changing value 

of credits over time. According to these 

commenters, if such variation were to 

occur, applying the $14 penalty rate 

beginning in Model Year 2019 may 

result in manufacturers applying credit 

balances to Model Year 2019 through 

2021 vehicles and being incentivized to 

make fuel economy improvements in 

their fleet beyond that timeframe. And 

for manufacturers that do not currently 

have credits or cannot transfer or trade 

for them to make up a shortfall of the 

minimum domestic passenger car 

standard, applying the adjusted penalty 

rate beginning in Model Year 2019 

places an even greater incentive on 

future compliance and fuel economy 

improvements to avoid additional 

higher penalties going forward, on top 

of the added benefits of energy 

conservation and improved 

environmental and public health 

benefits. 

In any event, based on further 

consideration of the 2015 Act and the 

Second Circuit’s decisions on this issue, 

NHTSA believes that that it does not 

have discretion over when the 

adjustment should begin to take effect. 

Further, the 2015 Act provided NHTSA 

no discretion over what the adjusted 

rate should be, as that is merely a 

function of the formula established by 

Congress and calculated by OMB, and 

mandated streamlined processes for 

making both the initial adjustment and 

any subsequent adjustments that do not 

require accompanying analyses or 

public comment.102

2. Regulatory Flexibility Act 

Pursuant to the Regulatory Flexibility 

Act (5 U.S.C. 601 et seq., as amended by 

the Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996), whenever an agency is required 

to publish a notice of proposed 

rulemaking or final rule, it must prepare 

and make available for public comment 

a regulatory flexibility analysis that 

describes the effect of the rule on small 

entities (i.e., small businesses, small 

organizations, and small governmental 

jurisdictions). No regulatory flexibility 

analysis is required if the head of an 

agency certifies the proposal will not 

have a significant economic impact on 

a substantial number of small entities. 

NHTSA has considered the impacts of 

this notice under the Regulatory 

Flexibility Act and recertifies that this 

rule would not have a significant 

economic impact on a substantial 

number of small entities under 5 U.S.C. 

605(b), based on the factual basis 

provided in the SNPRM. NHTSA 

requested comment on the economic 

impact of this rule on small entities. 

None of the comments NHTSA received 

in response to the interim final rule or 

the SNPRM discussed this issue. The 

Small Business Administration’s (SBA) 

regulations define a small business in 

part as a ‘‘business entity organized for 

profit, with a place of business located 

in the United States, and which operates 

primarily within the United States or 

which makes a significant contribution 

to the U.S. economy through payment of 

taxes or use of American products, 

materials or labor.’’ 103 SBA’s size 

standards were previously organized 

according to Standard Industrial 

Classification (‘‘SIC’’) Codes. SIC Code 

336211 ‘‘Motor Vehicle Body 

Manufacturing’’ applied a small 

business size standard of 1,000 

employees or fewer. SBA now uses size 

standards based on the North American 

Industry Classification System 

(‘‘NAICS’’), Subsector 336— 

Transportation Equipment 

Manufacturing. This action is expected 

to affect manufacturers of motor 


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104 42 U.S.C. 4321–4347. 

105 42 U.S.C. 4332. 

106See Dept. of Transp. v. Public Citizen, 541 

U.S. 752, 768–69 (2014) (holding that the agency 

need not prepare an Environmental Impact 

Statement (EIS) or analyze certain environmental 

effects in its EA, and stating, ‘‘[s]ince [the Federal 

Motor Carrier Safety Administration] FMCSA has 

no ability categorically to prevent the cross-border 

operations of Mexican motor carriers, the 

environmental impact of the cross-border 

operations would have no effect on FMCSA’s 

decisionmaking—FMCSA simply lacks the power to 

act on whatever information might be contained in 

the EIS.’’). 

107 86 FR 3025. 

108 86 FR 46818. 

109 40 CFR 1501.5(c). 

110 40 CFR 1501.6(a). 

111See NHTSA–2021–0001–0036, at 5–6 (arguing 

that the interim final rule was ‘‘procedurally 

invalid’’ for failing to abide by the NEPA 

requirement to take a hard look at the 

environmental consequences of the rule, but raising 

no objections to the NEPA analysis in the SNPRM); 

NHTSA 2021–0001–0037, at 8 (‘‘[T]he agency need 

not conduct a NEPA analysis before repealing the 

Exemption Rule.’’); NHTSA 2021–0001–0043, at 13 

(‘‘NHTSA’s NEPA analysis [in the interim final 

rule] was adequate,’’ and ‘‘to the extent that NHTSA 

is concerned about the NEPA issue or any of the 

other procedural issues raised by commenters, this 

SNPRM proceeding provides the opportunity to 

promulgate a rule in accordance with applicable 

procedural standards.’’). 

vehicles. Specifically, this action affects 

manufacturers from NAICS codes 

336111—Automobile Manufacturing, 

and 336112—Light Truck and Utility 

Vehicle Manufacturing, which both 

have a small business size standard 

threshold of 1,500 employees. 

Though civil penalties collected 

under 49 CFR 578.6(h)(1) and (2) apply 

to some small manufacturers, low 

volume manufacturers can petition for 

an exemption from the Corporate 

Average Fuel Economy standards under 

49 CFR part 525. This would lessen the 

impacts of this rulemaking on small 

business by allowing them to avoid 

liability for penalties under 49 CFR 

578.6(h)(2). Small organizations and 

governmental jurisdictions will not be 

affected significantly as the price of 

motor vehicles and equipment ought not 

to change as the result of this rule. 

3. Executive Order 13132 (Federalism) 

Executive Order 13132 requires 

NHTSA to develop an accountable 

process to ensure ‘‘meaningful and 

timely input by State and local officials 

in the development of regulatory 

policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

the Executive order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the [N]ational [G]overnment 

and the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ Under 

Executive Order 13132, the agency may 

not issue a regulation with federalism 

implications, that imposes substantial 

direct compliance costs, and that is not 

required by statute, unless the Federal 

Government provides the funds 

necessary to pay the direct compliance 

costs incurred by State and local 

governments, the agency consults with 

State and local governments, or the 

agency consults with State and local 

officials early in the process of 

developing the proposed regulation. As 

noted previously, this rulemaking will 

not have substantial direct effects on the 

States, on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. The reason is 

that this rulemaking is expected to 

generally apply to motor vehicle 

manufacturers. Thus, the requirements 

of Section 6 of the Executive order do 

not apply. 

4. Unfunded Mandates Reform Act of 

1995 

The Unfunded Mandates Reform Act 

of 1995, Public Law 104–4, requires 

agencies to prepare a written assessment 

of the cost, benefits, and other effects of 

proposed or final rules that include a 

Federal mandate likely to result in the 

expenditure by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of more than $100 

million annually. Because this 

rulemaking does not include a Federal 

mandate, no unfunded mandate 

assessment has been prepared. 

5. National Environmental Policy Act 

The National Environmental Policy 

Act of 1969 (NEPA) 104 directs that 

Federal agencies proposing ‘‘major 

Federal actions significantly affecting 

the quality of the human environment’’ 

must, ‘‘to the fullest extent possible,’’ 

prepare ‘‘a detailed statement’’ on the 

environmental impacts of the proposed 

action (including alternatives to the 

proposed action).105 However, there are 

some instances where NEPA does not 

apply. One consideration is whether the 

action at issue is a non-discretionary 

action to which NEPA may not apply or 

for which NEPA may require less 

detailed analysis.106

NHTSA addressed NEPA in 

promulgating the interim final rule, 

concluding that even though a NEPA 

analysis ‘‘is not required, this section [of 

the preamble to the interim final rule] 

may serve as the Agency’s 

Environmental Assessment (EA) and 

Finding of No Significant Impact 

(FONSI) for this interim final rule.’’ 107

In the SNPRM, NHTSA again concluded 

that no further analysis pursuant to 

NEPA is required in adjusting the 

penalty rate this time, which is in line 

with legal precedent concerning nondiscretionary agency action.108 NHTSA 

reiterates that conclusion here. 

Although NHTSA tentatively 

concluded in the SNPRM (and affirms 

here) that it does not have discretion on 

whether to adjust the CAFE civil 

penalty rate as required by the statute 

and thus that a NEPA analysis was not 

required, NHTSA prepared an 

environmental assessment to evaluate 

the effects of the timing of such an 

increase on the environment. When a 

Federal agency prepares an 

environmental assessment, the Council 

on Environmental Quality (CEQ) NEPA 

implementing regulations require the 

agency to (1) ‘‘[b]riefly provide 

sufficient evidence and analysis for 

determining whether to prepare an 

environmental impact statement or a 

finding of no significant impact,’’ and 

(2) ‘‘[b]riefly discuss the purpose and 

need for the proposed action, 

alternatives . . . , and the 

environmental impacts of the proposed 

action and alternatives, and include a 

listing of [a]gencies and persons 

consulted.’’ 109 Generally, based on the 

environmental assessment, the agency 

must make a determination to prepare 

an environmental impact statement or 

‘‘prepare a finding of no significant 

impact if the [a]gency determines, based 

on the environmental assessment, not to 

prepare an environmental impact 

statement because the proposed action 

will not have significant effects.’’ 110

NHTSA solicited public comments on 

the applicability of NEPA to this action 

and the contents and tentative 

conclusions of the Draft EA. The 

comments were silent on NEPA issues 

or agreed that no additional analysis 

was necessary.111 Having reviewed the 

comments, this section may serve as the 

Agency’s EA and FONSI for this final 

rule. NHTSA considered the findings of 

this EA prior to deciding that the 

adjusted rate will go into effect 

beginning in Model Year 2019 and 

making the subsequent required 

adjustments through 2022. 

I. Purpose and Need 

The SNPRM and this final rule set 

forth the purpose of and need for this 

action. Pursuant to the 2015 Act and the 

Second Circuit’s decision, NHTSA is 

required to make an initial ‘‘catch-up’’ 


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112See NHTSA’s Final Environmental Impact 

Statements for the CAFE rulemaking for MYs 2017 

and beyond (Docket No. NHTSA–2011–0056) and 

for MYs 2021–2026 (Docket No. NHTSA–2017– 

0069), both of which illustrate these trends as fuel 

economy standard stringency increases across 

alternatives. Both EISs are also available on the 

agency’s fuel economy website: https://

www.nhtsa.gov/laws-regulations/corporate-averagefuel-economy. 

113Because NHTSA does not have final model 

year performance data verified by EPA for these 

model years, any quantitative projections of the 

environmental impact across multiple model years 

would be too speculative to rely upon at this time. 114Auto Innovators Comment, at 12. 

adjustment to the civil monetary 

penalties it administers for the CAFE 

program. The purpose of the SNPRM 

and this final rule is to consider the 

timing of the application of the 

adjustment to the CAFE civil penalty 

rate, consistent with the statutory 

requirements. 

II. Alternatives 

NHTSA considered two alternatives 

for this action. The first alternative was 

to restore the status quo ante prior to the 

interim final rule, which is adjusting the 

CAFE civil penalty rate from $5.50 to 

$14 beginning in Model Year 2019, 

before making any subsequent required 

adjustments. This timing was originally 

established by the December 2016 final 

rule and was twice made effective by 

decisions of the Second Circuit. The 

second alternative was applying the 

initial adjustment beginning in Model 

Year 2022, which reflects the action 

taken in the interim final rule (the No 

Action Alternative). As noted in the 

SNPRM, NHTSA was no longer 

considering the alternative of applying 

the initial adjustment beginning in 

Model Year 2023, but NHTSA accepted 

comments on whether it should 

consider other alternatives of the 

adjustment applying beginning with a 

model year later than Model Year 2019. 

No commenter suggested any other 

alternative. This EA describes the 

potential environmental impacts 

associated with the two alternatives in 

comparison with each other. 

III. Environmental Impacts of the Action 

and Alternatives 

In the interim final rule, NHTSA 

asserted that it anticipated no 

differences in environmental impacts 

associated with the alternatives of 

applying the adjustment beginning in 

Model Year 2019, 2020, 2021, or 2022. 

NHTSA based this conclusion on the 

fact that vehicles for Model Years 2019 

and 2020 had largely if not entirely been 

produced already, and many 

manufacturers were already selling 

Model Year 2021 vehicles. 

As explained in the SNPRM, NHTSA 

reconsidered whether this assessment is 

complete after reviewing the comments 

received in response to the interim final 

rule. Commenters had argued that, 

regardless of the impact of this 

rulemaking action on Model Year 2019 

through 2021 vehicles, longer-term 

impacts may vary as a result of 

manufacturer multi-year planning, the 

transfer of credits across model years 

and between manufacturers, and the 

changing value of credits over time. If 

this is correct, applying the adjustment 

earlier could result in manufacturers 

applying credit balances to Model Year 

2019 through 2021 vehicles and being 

incentivized to make fuel economy 

improvements in their fleet beyond that 

timeframe, rather than paying civil 

penalties at the $5.50 rate for Model 

Years 2019 through 2021 and saving the 

credits for future model years when they 

could be valued more due to the 

adjustment. Additionally, for 

manufacturers without credit balances, 

the potential application of a 

significantly higher civil penalty for 

Model Years 2019 through 2021 may 

spur more rapid implementation of fuelsaving technology in order to allow the 

manufacturer to accrue credits that may 

be carried back to cover the shortfall in 

Model Years 2019 through 2021. 

Overall, NHTSA anticipates that 

applying the adjustment beginning with 

Model Year 2019 may lead to the 

eventual application of more fuel-saving 

technology, resulting in fewer 

greenhouse gas emissions and 

reductions in many criteria and toxic air 

pollutants compared to applying the 

adjustment beginning in Model Year 

2022.112 Although Model Years 2019 

and 2020 are already completed, and 

Model Year 2021 is essentially 

complete, the civil penalty assessment 

process is not yet complete for any of 

them, much less for Model Year 

2022.113 As a result, NHTSA does not 

yet know the anticipated manufacturer 

compliance shortfall for these model 

years. Because manufacturers can apply 

credits across a multi-year window, 

their decisions about how to apply 

credits in earlier model years will affect 

the availability of credits and the 

application of fuel-saving technology in 

later model years. However, NHTSA 

does not know whether and to what 

degree manufacturers will choose to pay 

fines in lieu of applying accrued credits, 

trade credits with other manufacturers, 

or rely on multi-year planning and 

credit carry-forward and carry-back to 

address shortfalls. NHTSA invited 

comments, information, and analyses 

from the public on the degree to which 

this may occur as a result of changes to 

the civil penalty rate in Model Year 

2019 versus Model Year 2022. The Auto 

Innovators provided an analysis arguing 

that ‘‘delaying the application of a $14 

civil penalty rate to MY 2022 is highly 

unlikely to affect manufacturers’ 

compliance strategies by allowing them 

to delay the use of 2017 or later credits 

to MY 2022’’ because ‘‘older credits will 

be used to mostly, if not completely, 

cancel any shortfalls.’’ 114

At this time, NHTSA continues to 

anticipate the impacts to be small. The 

difference between the alternatives 

contemplated in this action is only 

whether or not the initial civil penalty 

rate increase applies to three Model 

Years: 2019, 2020, and 2021. NHTSA 

continues to believe the impacts on 

those Model Years alone is expected to 

be de minimis, as all three model years 

have largely if not entirely been 

produced already. Further, as NHTSA 

has addressed in its CAFE rulemakings, 

many manufacturers have been 

unwilling to pay civil penalties 

historically. Those manufacturers may 

continue to opt to apply credits even if 

a lower civil penalty rate applied, rather 

than hold credits for future model years 

when the civil penalty rate would be 

higher. 

IV. Agencies and Persons Consulted 

NHTSA and DOT have consulted with 

OMB and the U.S. Department of Justice 

and provided other Federal agencies 

with the opportunity to review and 

provide feedback on this rulemaking. 

V. Conclusion 

NHTSA has reviewed the information 

presented in this EA and concludes that 

adjusting the CAFE civil penalty rate 

beginning with Model Year 2019, as 

compared to Model Year 2022, would 

have, at most, a more positive impact on 

the quality of the human environment to 

the extent that manufacturers may be 

more likely to expend credit balances on 

Model Year 2019 through 2021 vehicles 

than if the civil penalty rate remained 

at $5.50 for those model years. Lacking 

such credits in future years, 

manufacturers would be more likely to 

make improvements to the fuel 

economy of their fleets to avoid paying 

the higher civil penalty rates that would 

occur under either alternative. 

Additionally, higher civil penalty rates 

in Model Years 2019 through 2021 may 

cause manufacturers to more rapidly 

implement fuel-saving technology so 

that they may accrue credits to be 

carried back to cover compliance 

shortfalls. But NHTSA does not expect 

any differences in the impacts under 

either of the alternatives to rise to the 


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Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Rules and Regulations 19007 

115 40 CFR 1501.6(a). 

level of significance that would 

necessitate the preparation of an 

Environmental Impact Statement. 

VI. Finding of No Significant Impact 

NHTSA has reviewed this EA. Based 

on the EA, NHTSA concludes that 

implementation of either of the action 

alternatives (including this final rule) 

will not have a significant effect on the 

human environment and that a ‘‘finding 

of no significant impact’’ is appropriate. 

This statement constitutes the Agency’s 

‘‘finding of no significant impact,’’ and 

an environmental impact statement will 

not be prepared.115

6. Executive Order 12988 (Civil Justice 

Reform) 

This rulemaking does not have a 

preemptive effect. For the reasons 

explained above, this rulemaking does 

not have a retroactive effect. Judicial 

review of the interim final rule or a 

subsequent final rule may be obtained 

pursuant to 5 U.S.C. 702. 

7. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1980, NHTSA states 

that there are no requirements for 

information collection associated with 

this rulemaking action. 

8. Privacy Act 

Please note that anyone is able to 

search the electronic form of all 

comments received into any of DOT’s 

dockets by the name of the individual 

submitting the comment (or signing the 

comment, if submitted on behalf of an 

association, business, labor union, etc.). 

You may review DOT’s complete 

Privacy Act Statement in the Federal 

Register published on April 11, 2000 

(65 FR 19477), or you may visit https:// 

www.transportation.gov/privacy. 

List of Subjects in 49 CFR Part 578 

Imports, Motor vehicle safety, Motor 

vehicles, Penalties, Rubber and rubber 

products, Tires. 

In consideration of the foregoing, 49 

CFR part 578 is amended as set forth 

below. 

PART 578—CIVIL AND CRIMINAL 

PENALTIES 

■ 1. The authority citation for 49 CFR 

part 578 continues to read as follows: 

Authority: Pub. L. 92–513, Pub. L. 94–163, 

Pub. L. 98–547, Pub. L. 101–410, Pub. L. 

102–388, Pub. L. 102–519, Pub. L. 104–134, 

Pub. L. 109–59, Pub. L. 110–140, Pub. L. 

112–141, Pub. L. 114–74, Pub. L. 114–94 (49 

U.S.C. 30165, 30170, 30505, 32308, 32309, 

32507, 32709, 32710, 32902, 32912, 33114, 

and 33115); delegation of authority at 49 CFR 

1.81, 1.95. 

■ 2. Amend § 578.6 by revising 

paragraph (h)(2) and adding paragraph 

(h)(3) to read as follows: 

§ 578.6 Civil penalties for violations of 

specified provisions of Title 49 of the United 

States Code. 

* * * * * 

(h) * * * 

(2) Except as provided in 49 U.S.C. 

32912(c), a manufacturer that violates a 

standard prescribed for a model year 

under 49 U.S.C. 32902 is liable to the 

United States Government for a civil 

penalty of $15 (for model years before 

model year 2019, the civil penalty is 

$5.50; for model years 2019 through 

2021, the civil penalty is $14), 

multiplied by each .1 of a mile a gallon 

by which the applicable average fuel 

economy standard under that section 

exceeds the average fuel economy— 

(i) Calculated under 49 U.S.C. 

32904(a)(1)(A) or (B) for automobiles to 

which the standard applies produced by 

the manufacturer during the model year; 

(ii) Multiplied by the number of those 

automobiles; and 

(iii) Reduced by the credits available 

to the manufacturer under 49 U.S.C. 

32903 for the model year. 

(3) If a higher amount for each .1 of 

a mile a gallon to be used in calculating 

a civil penalty under paragraph (h)(2) of 

this section is prescribed pursuant to 

the process provided in 49 U.S.C. 

32912(c), the amount prescribed may 

not be more than $29 for each .1 of a 

mile a gallon. 

* * * * * 

Issued in Washington, DC, under authority 

delegated in 49 CFR 1.95 and 501.5. 

Steven S. Cliff, 

Deputy Administrator. 

[FR Doc. 2022–06648 Filed 3–31–22; 8:45 am] 

BILLING CODE 4910–59–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 300 

[220325–0079] 

RIN 0648–BL14 

Pacific Halibut Fisheries; Catch 

Sharing Plan 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Final rule. 

SUMMARY: This final rule approves 

changes to the Pacific Halibut Catch 

Sharing Plan for the International 

Pacific Halibut Commission’s regulatory 

Area 2A off of Washington, Oregon, and 

California. In addition, this final rule 

implements management measures 

governing the 2022 recreational fisheries 

that are not implemented through the 

International Pacific Halibut 

Commission. These measures include 

the recreational fishery seasons, quotas, 

and management measures for Area 2A. 

These actions are intended to conserve 

Pacific halibut and provide angler 

opportunity where available. 

DATES: This rule is effective on March 

31, 2022. 

ADDRESSES: Additional information 

regarding this action may be obtained by 

contacting the Sustainable Fisheries 

Division, NMFS West Coast Region, 

1201 NE Lloyd Boulevard Suite 1100, 

Portland, OR, 97232. For information 

regarding all halibut fisheries and 

general regulations not contained in this 

rule, contact the International Pacific 

Halibut Commission, 2320 W. 

Commodore Way Suite 300, Seattle, WA 

98199–1287. 

FOR FURTHER INFORMATION CONTACT: 

Kathryn Blair, phone: 503–231–6858, 

fax: 503–231–6893, or email: 

kathryn.blair@noaa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The Northern Pacific Halibut Act of 

1982 (Halibut Act), 16 U.S.C. 773–773k, 

gives the Secretary of Commerce 

(Secretary) responsibility for 

implementing the provisions of the 

Convention between Canada and the 

United States for the Preservation of the 

Halibut Fishery of the North Pacific 

Ocean and Bering Sea (Halibut 

Convention), signed at Ottawa, Ontario, 

on March 2, 1953, as amended by a 

Protocol Amending the Convention 

(signed at Washington, DC, on March 

29, 1979). The Halibut Act requires that 

the Secretary adopt regulations to carry 

out the purposes and objectives of the 

Halibut Convention and Halibut Act (16 

U.S.C. 773c). Additionally, as provided 

in the Halibut Act, the Regional Fishery 

Management Councils having authority 

for the geographic area concerned may 

develop, and the Secretary of Commerce 

may implement, regulations governing 

harvesting privileges among U.S. 

fishermen in U.S. waters that are in 

addition to, and not in conflict with, 

approved International Pacific Halibut 

Commission (IPHC) regulations (16 

U.S.C. 773c(c)). 

At its annual meeting January 24–28, 

2022, the IPHC recommended an Area 


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