Senate effectively blocks California’s “EV Mandate” and related waivers using Congressional Review Act

Background

California waivers 

Consistent with Title II of the CAA, only the federal government has the authority to regulate emissions from new motor vehicles, and states are expressly prohibited from enacting or enforcing their own conflicting mobile emissions standards. Given that California had adopted such emissions standards prior to the CAA enactment in 1966, it is uniquely positioned as the sole state that may seek a waiver of this CAA federal preemption. Pursuant to Section 209 of the CAA, EPA is required to grant a waiver of preemption for California emissions standards that the state determines will be, in the aggregate, at least as protective of public health and welfare as applicable federal standards. 42 U.S.C. § 7543(b). Specifically, under CAA Section 209(b), EPA must approve such a waiver unless it determines any one of three disqualifying findings: (1) the determination of the state is arbitrary and capricious; (2) the state does not need state standards to meet “compelling and extraordinary conditions”; or (3) the state standards and accompanying enforcement procedures are not consistent with CAA Section 202(a) (i.e., 42 U.S.C. § 7521(a), EPA’s standards for emissions from new motor vehicles or new motor vehicle engines). 42 U.S.C. § 7543(b)(1)(A)–(C). Once EPA grants California a CAA waiver of preemption, CAA Section 177 allows other states that meet certain factors to adopt standards identical to the California standards for which a waiver has been granted.  Currently, 17 states plus the District of Columbia have adopted some subset of California standards for which CAA waivers have been granted.

Historically, California Air Resources Board (CARB) has applied for and received over 100 CAA waivers of preemption from EPA.  Under the Biden administration, the EPA granted California waivers for the ACC II regulations, Heavy-Duty ACT regulationsHeavy-Duty Low-NOx Omnibus regulation.

Congressional Review Act

The CRA is a federal law that allows Congress to review and disapprove federal agency rules through a simple majority vote. Historically, the preemption waivers granted to California under the CAA have not been considered “rules” reviewable under the CRA, including by the EPA. To that end, the Government Accountability Office (GAO) in a recent report, B-337179, and the Senate Parliamentarian both advised that the CAA waivers granted by EPA to California were not agency “rules” and therefore did not meet the standards to be disapproved/invalidated using the CRA.

Senate vote 

The House voted to disapprove the waivers under the CRA in early May. The Senate took longer given the GAO and Parliamentarian advisories.  In order to use the CRA but avoid directly overturning the Parliamentarian, the Senate majority ultimately advanced the resolutions to disapprove California’s waivers using a series of procedural moves that redefined Senate rules for CRA applicability, effectively overriding the Parliamentarian’s ruling without a formal vote. The ultimate vote disapproving the waiver for California’s ACC II regulation was 51 to 44, with one Democrat joining all Republicans in supporting the resolution (technically making it a bi-partisan vote – a full vote count is available here).

Once President Trump signs the resolutions into law, the ACC II waiver, as well as the ACT and Low NOx waivers, will be disapproved and “shall have no force or effect.”  See e.g., H.J. Res. 88. Subsequently, EPA will likely take action to remove the waivers, consistent with the joint resolutions.  

Legal implications

Disapproval of California’s waivers under the CRA means that neither California nor the 12 other Section 177 states that have adopted California’s ACC II regulations will be able to enforce these emissions regulations. Importantly, California’s waiver for the Advanced Clean Cars I regulations, as well as numerous other CAA waivers, remain intact and we anticipate California will attempt to enforce as many regulations under existing waivers as possible.

California will likely also explore other approaches to regulate emissions. Some possibilities include state Executive Orders and Indirect Source Reviews (ISRs). California has proposed legislation that explicitly mandates CARB to regulate indirect sources of emissions, such as ports, rail yards, warehouses, and major roadways. In addition, California and other states may continue to seek voluntary “framework” agreements with regulated parties as another means of advancing emissions reductions. A bipartisan coalition of governors called the United States Climate Alliance has launched an “Affordable Clean Cars Coalition” with the purpose of “sustain[ing] America’s transition to cleaner and more affordable cars, support U.S. automotive manufacturers and workers, and preserve states’ clean air authority.”

California and others have indicated that they will likely pursue legal challenges against using the CRA to disapprove the waivers (California has already indicated its intent to sue). However,the judicial review pathways under the CRA are very limited due to the statute’s jurisdictional-stripping provision. “No determination, finding, action, or omission under this chapter shall be subject to judicial review.” 5 U.S.C. § 805;">. Any legal challenge will likely need to present new and compelling arguments to establish that a court has jurisdiction to review the matter. This significantly decreases the possibility that such a challenge will ultimately be decided on the merits.

The disapproval of California’s waivers under the CRA marks a notable shift in federal oversight of state emissions standards and will likely create challenges as well as opportunities for the automotive industry and regulators in the coming years.

Authored by Joanne Rotondi, Hannah Graae, and Érida Tosini-Corea.