    [Senate Hearing 114-545]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-545

            CONTINUED REVIEW OF AGENCY REGULATORY GUIDANCE, PART III

    =======================================================================

                                    HEARING

                                   before the

                                SUBCOMMITTEE ON
                   REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                                     of the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               SEPTEMBER 22, 2016

                                   __________

                       Available via http://www.fdsys.gov

           Printed for the use of the Committee on Homeland Security
                            and Governmental Affairs

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                      ______

                             U.S. GOVERNMENT PUBLISHING OFFICE

    23-559 PDF                     WASHINGTON : 2017
    -----------------------------------------------------------------------
      For sale by the Superintendent of Documents, U.S. Government Publishing
      Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
             DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
                              Washington, DC 20402-0001

            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                        RON JOHNSON, Wisconsin, Chairman
    JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
    ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
    RAND PAUL, Kentucky                  JON TESTER, Montana
    JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
    MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
    KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
    JONI ERNST, Iowa                     GARY C. PETERS, Michigan
    BEN SASSE, Nebraska

                      Christopher R. Hixon, Staff Director
                  Gabrielle A. Batkin, Minority Staff Director
               John P. Kilvington, Minority Deputy Staff Director
                         Laura W. Kilbride, Chief Clerk

           SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                       JAMES LANKFORD, Oklahoma, Chairman
    JOHN MCCAIN, Arizona                 HEIDI HEITKAMP, North Dakota
    ROB PORTMAN, Ohio                    JON TESTER, Montana
    MICHAEL B. ENZI, Wyoming             CORY A. BOOKER, New Jersey
    JONI ERNST, Iowa                     GARY C. PETERS, Michigan
    BEN SASSE, Nebraska
                         John Cuaderess, Staff Director
                      Eric Bursch, Minority Staff Director
                          Rachel Mairella, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statement:
                                                                       Page
        Senator Lankford.............................................     1
        Senator Heitkamp.............................................     1
    Prepared statement:
        Senator Lankford.............................................    41
        Senator Heitkamp.............................................    44
        Senator Tester...............................................    46

                                   WITNESSES
                          Thursday, September 22, 2016

    Hon. Howard Shelanski, Administrator, Office of Information and
      Regulatory Affairs, Office of Management and Budget............     2
    Hon. M. Patricia Smith, Solicitor of Labor, U.S. Department of
      Labor..........................................................     4
    Amy McIntosh, Principal Deputy Assistant Secretary Delegated the
      Duties of the Assistant Secretary, U.S. Department of Education     6

                         Alphabetical List of Witnesses

    McIntosh, Amy:
        Testimony....................................................     6
        Prepared statement...........................................    59
    Shelanski, Hon. Howard:
        Testimony....................................................     2
        Prepared statement...........................................    47
    Smith, Hon. M. Patricia:
        Testimony....................................................     4
        Prepared statement...........................................    51

                                    APPENDIX

    Responses to post-hearing questions for the Record:
        Mr. Shelanski................................................    62
        Ms. Smith....................................................    69
        Ms. McIntosh.................................................    80

            CONTINUED REVIEW OF AGENCY REGULATORY GUIDANCE, PART III

                                  ----------

                          THURSDAY, SEPTEMBER 22, 2016

                                     U.S. Senate,
                            Subcommittee on Regulatory,
                          Affairs and Federal Management,
                        of the Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 3 p.m., in room
    SD-342, Dirksen Senate Office Building, Hon. James Lankford,
    Chairman of the Subcommittee, presiding.
        Present: Senators Lankford, Heitkamp, Tester, and Carper.

                 OPENING STATEMENT OF SENATOR LANKFORD

        Senator Lankford. Good morning--good afternoon, I should
    say, to everyone. I guess it is morning somewhere but not here
    currently. Good afternoon.
        I am going to begin this hearing. This is a hearing before
    Regulatory Affairs, Federal Management Subcommittee on the
    continuing review of agency regulatory guidance. This is the
    third in our series, to be able to walk through just guidance
    and regulations, how it comes about, and the process and the
    decisionmaking, obviously the interaction with the Office of
    Information and Regulatory Affairs (OIRA) and all the agencies,
    and the American people.
        I am going to put my opening statement into the record\1\
    for the benefit of time. And we have blocked off about two
    hours of time to be able to go through this conversation. So to
    be able to honor and get to our questions faster, I am going to
    put this toward the record for my opening Statement.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Lankford appears in the
    Appendix on page 41.
    ---------------------------------------------------------------------------
        With that, I would recognize the Ranking Member.

                 OPENING STATEMENT OF SENATOR HEITKAMP

        Senator Heitkamp. And in the interest of time and great
    gratitude to our witnesses, who I understand are a little time-
    crunched, I am going to do the same. So I will submit my
    opening statement for the record.\2\
    ---------------------------------------------------------------------------
        \2\ The prepared statement of Senator Heitkamp appears in the
    Appendix on page 44.
    ---------------------------------------------------------------------------
        Senator Lankford. Great.
        At this time we will proceed to testimony from our
    witnesses. Let me introduce all three of them.
        Do you want to be able to make an opening statement?
        Senator Tester. I would like to submit my opening statement
    for the record\1\ too, Mr. Chairman.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Tester appears in the
    Appendix on page 46.
    ---------------------------------------------------------------------------
        Senator Lankford. You are welcome to be able to put your
    opening statement in the record.
        At this time we will proceed with testimony from our
    witnesses. We have three witnesses here.
        Howard Shelanski is the Administrator of the Office of
    Information and Regulatory Affairs, a post he has held since
    confirmation in June 2013.
        Patricia Smith is Solicitor for the Department of Labor
    (DOL). Before assuming this post in 2010, Ms. Smith served as
    the New York State Commissioner of Labor. Ms. Smith also served
    as the Chief of the Labor Bureau in the Office of New York
    State Attorney General for eight years, and as the Deputy
    Bureau Chief and Section Chief for the Labor Bureau before
    that.
        Amy McIntosh is the Deputy Assistant Secretary, delegated
    duties of Assistant Secretary, at the Department of Education's
    Office of Planning, Evaluation, and Policy Development--which,
    as we mentioned before, her business card has two sides.
    [Laughter.]
        In this capacity, Ms. McIntosh oversees policy development
    on all aspects of education, from pre-kindergarten through
    higher education, and leads Policy Program Study Services.
        I appreciate all three of you here. It is the custom of
    this Subcommittee to swear in witnesses before they testify. I
    would ask you to please stand and raise your right hand.
        Do you swear the testimony that you are about to give
    before the Subcommittee is the truth, the whole truth, and
    nothing but the truth, so help you, God?
        Mr. Shelanski. I do.
        Ms. Smith. I do.
        Ms. McIntosh. I do.
        Senator Lankford. Thank you. You may be seated. Let the
    record reflect all three answered in the affirmative.
        We are using a timing system today. You will see that
    count-down clock. All three of you are familiar with the timing
    clock on that, and I will ask you to honor that and leave
    plenty of time for our questions.
        Mr. Shelanski, you are recognized first.

    TESTIMONY OF THE HONORABLE HOWARD SHELANSKI,\2\ ADMINISTRATOR,
        OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF
                         MANAGEMENT AND BUDGET

        Mr. Shelanski. Thank you very much.
    ---------------------------------------------------------------------------
        \2\ The prepared statement of Mr. Shelanski appears in the Appendix
    on page 47.
    ---------------------------------------------------------------------------
        Chairman Lankford, Ranking Member Heitkamp, and Members of
    the Subcommittee, thank you for the invitation to appear before
    you today. I am pleased for this opportunity to discuss the
    role of the Office of Information and Regulatory Affairs, in
    the development of Good Guidance Practices for Federal
    agencies.
        OIRA's role with respect to guidance documents is twofold.
    We advise agencies regarding best practices for developing and
    issuing guidance and we also review of subset of those guidance
    documents.
        Agencies issue guidance to explain existing regulatory or
    statutory requirements, often at the public's request, or to
    make non-binding policy statements and recommendations. These
    documents provide substantial value to the regulated community.
    They can increase efficiency and help the public understand the
    full scope of applicability and available compliance options
    for current statutes and regulations.
        Agency guidance practices should be transparent,
    consistent, and require agency accountability. In 2007, the
    Office of Management and Budget (OMB) published a bulletin in
    the Federal Register titled ``Agency Good Guidance Practices to
    Establish New Policies and Procedures for the Development,
    Issuance, and Use of Significant Guidance Documents.''
        This bulletin, which remains in effect, establishes
    policies, practices, and procedures for guidance documents that
    executive branch agencies identify as significant or
    economically significant. Designations that arise from criteria
    are very similar to those for regulatory significance.
        Those criteria include whether a guidance may reasonably be
    anticipated to cause changes that have a $100 million annual
    economic impact, have material budget effects, implicate
    interagency interest, or otherwise raise novel legal or policy
    issues.
        For the subset of guidance documents that agencies
    designate as significant, the 2007 bulletin sets forth the
    general policies and principles for agencies to help ensure
    quality and transparency. These include adoption of written
    internal approval procedures at each agency; establishing a
    website that lists all significant guidance documents, in
    effect, and that specify how the public can comment on them,
    request modifications or rescissions or submit a complaint; and
    following a notice and comment process for economically
    significant guidances.
        The bulletin also reminds agencies that the Administrative
    Procedure Act (APA) generally requires notice and comment when
    an agency establishes new requirements that it treats as
    binding. In addition to the procedures required by the 2007
    bulletin, OIRA also works with agencies to identify significant
    guidance documents that will undergo interagency review.
        Once a guidance document is under interagency review, OIRA
    plays two roles. The first is to coordinate the review. OIRA
    circulates the guidance to other agencies in the executive
    branch whose own policies, expertise, or responsibilities may
    in some way interrelate with the draft guidance document.
        The second role that OIRA plays is to ensure that the
    guidance embodies the relevant principles laid out in Executive
    Orders (EO) 12866 and 13563, including whether the guidance is
    both necessary and consistent with applicable statutes and
    regulations.
        OIRA reviews economically significant guidance documents as
    well, although such guidance documents have been relatively
    uncommon. In OIRA's experience, and based on agency analysis,
    the behavioral impacts associated with non-binding guidance
    documents do not often exceed $100 million in a given year.
        One example where this could happen is when an agency
    issues guidance on emergency or disaster preparedness to State
    and local authorities. Even though the guidance is not binding,
    if the guidance is sound, many States might be expected
    willingly to follow such recommendations and change their
    behavior accordingly.
        The implementation of governmentwide Good Guidance
    Practices continues to be a priority for OMB and OIRA. Agency
    guidance documents serve an important role in the regulatory
    sphere. The Good Guidance Practices set forth in the 2007
    bulletin serve as a useful tool for agencies in setting the
    appropriate scope for their guidance documents and in deciding
    whether regulation would be a more appropriate mechanism. OIRA
    will continue to work with agencies, as appropriate, on the
    review of the various kinds of significant guidance documents
    that the agencies issue.
        Thank you for your time and attention. I would be happy to
    answer any questions you may have.
        Senator Lankford. Thank you. Ms. Smith.

     TESTIMONY OF THE HONORABLE M. PATRICIA SMITH,\1\ SOLICITOR OF
                    LABOR, U.S. DEPARTMENT OF LABOR

        Ms. Smith. Thank you. Chairman Lankford, Ranking Member
    Heitkamp, and Members of the Subcommittee, I am pleased to
    testify before you today on the Department of Labor's efforts
    to ensure that we develop guidance which is accurate, helpful,
    and appropriate; that informs workers and employers and all of
    our stakeholders about their rights and responsibilities under
    the laws that we administer and we enforce.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Smith appears in the Appendix on
    page 51.
    ---------------------------------------------------------------------------
        We take seriously our obligation to develop regulations
    that implement laws. The Department issues effective
    regulations to help achieve Congress' objectives to do things
    like invest in human capital to build a skills infrastructure
    that helps American businesses. Our regulations also ensure
    that employers and workers have the information they need to
    better understand their rights and responsibilities, to improve
    compliance with worker protection laws, and to achieve safety
    and security in the workplace. We developed those regulations
    consistent with governing laws and executive orders.
        While the Department strives for full clarity in its
    regulations, we know from long experience that our regulations
    cannot seek to speak to every scenario in our complex economy.
    And with any other governmental agencies, our stakeholders
    often have legitimate questions about practical implications of
    our regulations.
        Therefore, we issue guidance to our stakeholders to clarify
    either statutory requirements or our regulations. Our guidance
    often includes answers to frequently asked questions about how
    the rules apply to specific circumstances, or examples of best
    practices for compliance and implementation.
        We strive to issue guidance that is timely as well as
    responsive to stakeholders, and one that is applicable to a
    broad range of stakeholders. I can tell you firsthand how well-
    drafted guidance can really help increase efficiency and reduce
    stakeholder confusion, and reduce the need for enforcement.
        We strive to issue guidance that is clear and accessible to
    members of the public who are not subject matter experts and
    who should not have to retain a lawyer to understand their
    rights and responsibilities. Many guidance documents aim to
    inform employers about their rights and responsibilities in
    plain language, focusing on their most common concerns and
    questions.
        For example, the Department's Wage and Hour Division has
    created a fact sheet and handbook about rights for workers and
    responsibilities for employers under the Family Medical Leave
    Act (FMLA) that lay out together the most common types of
    requests for familial leave and what FMLA requires that
    employers should do in response to those requests.
        Another important aspect of Department guidance is that we
    must provide timely assistance that is responsive to
    stakeholder questions or emerging challenges. For example, in
    April of this year, the Occupational Safety and Health
    Administration (OSHA) and the National Institute for
    Occupational Safety and Health issued interim guidance on
    protecting workers from occupational exposure to the Zika
    virus.
        The Department of Labor remains committed to continuously
    working to improve our guidance process. Following helpful
    recommendations from the Government Accountability Office (GAO)
    over the past year, the Department has pursued multiple
    improvements in our issue of guidance. We have adopted
    procedures to assure that, in accordance with OMB's Final
    Bulletin for Agency Good Guidances Practices, the Department's
    written procedures for approval of significant guidance are
    made available to component agency staff.
        We shared best practices on the development of non-
    significant guidance among our component agencies and created a
    checklist document that provides questions based on best
    practices for agencies to consider when developing guidance. We
    developed additional materials to assist agencies in developing
    internal control procedures for guidance development.
        And, finally, we conducted training and developed best
    practices and tools to assist agencies in using and
    interpreting Web metrics for guidance documents on their agency
    websites, including ensuring that the documents are up to date,
    relevant, and easy to access on the Department's website.
        The Department remains committed to our broad efforts to
    develop and disseminate accurate, timely, helpful, and lawful
    guidance that informs our stakeholders of their rights and
    responsibilities under the laws that we administer and enforce.
    We continue to look forward to having a dialogue with you and
    the public to discuss ways to improve our processes.
        Thank you, and I am pleased to answer any questions you may
    have.
        Senator Lankford. Thank you. Ms. McIntosh.

       TESTIMONY OF AMY McINTOSH,\1\ PRINCIPAL DEPUTY ASSISTANT
      SECRETARY, DELEGATED THE DUTIES OF THE ASSISTANT SECRETARY,
     OFFICE OF PLANNING, EVALUATION, AND POLICY DEVELOPMENT, U.S.
                        DEPARTMENT OF EDUCATION

        Ms. McIntosh. Hello, Chairman Lankford and Ranking Member
    Heitkamp. I appreciate the opportunity to appear before you
    again to testify about the Department of Education's issuance
    and use of guidance.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. McIntosh appears in the Appendix
    on page 59.
    ---------------------------------------------------------------------------
        The Department uses guidance to communicate timely and
    consistent information to the diverse groups that we serve. In
    general, we communicate with our stakeholders and the public
    through a variety of forms, and guidance documents are one
    important tool.
        Guidance provides useful information about the statutes,
    regulations, and programs that we administer. In addition,
    guidance often responds to stakeholders' questions, helps them
    understand and comply with the laws of Congress and related
    regulations, and communicates best practices.
        The Department uses guidance to promote transparency and
    assist and guide our stakeholders, not to create new rules. We
    use the rulemaking process, not guidance, when we need to issue
    legally binding rules to carry out the Department's mission.
        The Department is committed to issuing guidance that
    reflects appropriate review and is well-developed, responsive
    to grantee and other stakeholder needs, and appropriately
    disseminated. We appreciate and often seek the opportunity to
    hear from members of the public about their views before and
    after the issuance of guidance.
        The Department fully adheres to OMB's Bulletin on Good
    Guidance Practices. As confirmed in the recent GAO report, the
    Department has established written procedures for the approval
    of all significant guidance. We have also compiled a list of
    the Department's significant guidance documents, posted it in a
    central location on our website, and update it periodically.
        The Department often issues new or revised guidance to
    respond to questions and feedback that program offices receive
    from stakeholders. In some cases, the development of new
    regulations may serve as the impetus for developing new
    guidance. As the Department indicated to GAO, we make every
    effort to issue guidance documents that restate the statute or
    regulation in plainer language, that summarize requirements and
    suggest ways to comply with the new regulation or offers best
    practices.
        The Department believes that its internal controls for
    developing and producing guidance are effective, but we are
    committed to continuous improvement of our internal control
    processes and we appreciate the recommendations provided in the
    GAO report. We have a plan approved by GAO that is in place and
    we have made progress on implementing it since I last
    testified. For example, we are finalizing new protocols for our
    offices to use to clarify management roles and document
    management review and approve all types of guidance beyond
    those that are deemed significant.
        Regarding significant guidance documents, we have recently
    begun to require that all documents include a prominent
    statement clarifying the purpose of the guidance and explaining
    that it is not legally binding, nor does it have the force or
    effect of law.
        Additionally, we now more prominently encourage the public
    to comment on each document and we explain how they can submit
    comments. Also, we have recently created a separate page on our
    website that explains, in general, the role of guidance and how
    the public can provide feedback.
        Finally, we have provided Department of Education staff
    with a new best practices document about how best to most
    effectively present guidance documents online.
        The Department is committed to using guidance in a way that
    will best assist our stakeholders and inform the public. We
    believe we have done a good job implementing the OMB bulletin
    and will continue with the recommendations made by GAO.
        Thank you for the opportunity to testify today about the
    Department's use of guidance documents, and I, too, would be
    glad to answer any questions from the Committee.
        Senator Lankford. Thank you.
        I would like to first recognize the Ranking Member for
    questions.
        Senator Heitkamp. Thank you, Mr. Chairman.
        And we on this Committee do not do, necessarily, oversight
    on individual guidances or regulations, but sometimes getting
    into the details of those guidance does, in fact, help us
    evaluate where the issues may be with blurring the lines
    between guidance and rulemaking taking shortcuts.
        It is no surprise to the panel here that I have deep
    concerns about the OSHA regulation as it relates to anhydrous
    ammonia. And I think--I do not intend this to be an oversight
    hearing on that, and I just want to make that clear, Ms. Smith,
    but I think it does--I am trying to understand how we got to
    the point that this was a guidance and not a rulemaking.
        First I am going to ask Mr. Shelanski. In my opening
    statement, I talked about a survey that the Department of
    Agriculture (USDA)--the State Department of Agriculture--did on
    the OSHA guidance and asked, what are the impacts, because I
    wanted some kind of comparable analysis to what information we
    have received from OSHA.
        I want to just kind of give you some statistics: Only four
    companies representing 11 facilities--that was 3 percent of the
    North Dakota overall facilities--state that they are prepared
    to be compliant October 1 of this year. Twenty-six companies
    representing 67 facilities--which is 2 percent of the North
    Dakota facilities--indicated that they will not be in
    compliance by October 1. Eighteen companies representing 31
    facilities--which is roughly 9 percent of North Dakota
    facilities--indicated that they will, in fact, shut their door
    if OSHA begins enforcement on October 1.
        The estimate that we got from OSHA about costs of
    compliance was about $2,100 and some change. Each one of these
    companies that answered this survey and reported that they
    believe that their compliance costs are in the neighborhood of
    $25,000 to $50,000.
        Now, I want to set the context that these are folks who
    have been operating for a lot of years, in fact as many years
    as what some of these staff people have been born, under the
    same regulation, under the same rule. Nothing has changed. But
    now a guidance has been issued that results in them believing
    they have to shut their doors or incur $25-to $50,000 worth of
    costs to be in compliance.
        In your opinion, Mr. Shelanski, do you believe that this is
    non-significant guidance? Senator Lankford asked this question
    for the record. I think that it is fair to say OSHA did not
    give us a direct answer. But given what I am telling you about
    the attitude of this and the appearance of cost on the ground,
    I mean, would you say this is non-significant?
        Mr. Shelanski. Thank you very much, Senator.
        I will just start by saying I will treat the question as
    asking about whether it should be economically significant,
    just because ``significant'' and ``economically significant''--
    --
        Senator Heitkamp. Yes.
        Mr. Shelanski [continuing]. Are two different categories.
        Senator Heitkamp. That is a fair point.
        Mr. Shelanski. Certainly the guidance--just to start with
    the basic principle--I think was significant in that there was
    interagency interests in that guidance. And that is one of the
    reasons that the Department of Labor I think brought it to OIRA
    for review at the time that it came in.
        It can be quite hard, especially with guidance, which
    already has a pre-existing regulation that it is interpreting,
    to know at the time of review what the costs will be. And I
    think that, in this particular case, at the time that--and I
    will refer you to DOL and to OSHA for the particulars of their
    process, but certainly when it came to OIRA--and we coordinated
    the interagency review process--I do not think that we had the
    kind of data that you just articulated before us.
        And one of the good things about guidance is that it is
    flexible. There is the opportunity for the public to come back
    to the agency and bring this kind of information forward. So I
    would have to look at what the current state of the numbers are
    and what the current evidence is to know whether or not the
    guidance would be economically significant, but I think at the
    time it was treated as a significant guidance but not an
    economically significant one.
        Senator Heitkamp. Yes, I think we would concede that there
    probably is $100 million worth of impact. But my concern is
    that if guidance is simply clarification under, kind of
    everybody--and does not have the force and effect of law--that
    guidance cannot change the law, cannot change a regulation; it
    can clarify--how can implementation of a guidance shut down a
    business?
        Mr. Shelanski. I think in this particular case----
        Senator Heitkamp. Legally.
        Mr. Shelanski. In this particular case there was an
    underlying regulation that at one point had been interpreted to
    have an exemption--a particular exemption--that was in place
    under which many of these businesses operated, or at least to
    some extent operated. And then this was an interpretation that
    changed, is my understanding, what the earlier interpretation
    had been.
        Senator Heitkamp. Yes, and this is a problem because we
    give deference--and I do not mean to give the Chairman any more
    ammunition than what he already has on deference--but we give
    deference to longstanding interpretations of agencies. We say,
    look, if Congress believed that should change, they have had
    notice over a long period of time that this is the
    interpretation, it is entitled to deference. It is how we have
    interpreted this rule.
        When we change how we interpret either rules or statutes,
    and the change has a dramatic impact on the livelihood of
    business people, we get a little suspicious that that does not
    look much like a guidance and it is not a legitimate new
    interpretation that somehow we have been wrong these 20-plus
    years and now we are right.
        And so, I think that this is the kind of example that leads
    people to really question all the good work that can be done in
    guidance. And I would be the first one to argue I think we need
    guidance. I think that guidance is extraordinarily valuable. I
    have seen it work, especially in the tax arena when we think
    about tax letters and giving certainty so people can move
    forward. But I am really concerned about putting a label on an
    agency interpretation that changes a longstanding
    interpretation and that has this kind of impact in the
    marketplace.
        And so I want to just want to kind of go through where we
    are at, Ms. Smith, because I want to acknowledge some of the
    work that OSHA has done in response to probably this Committee
    more than almost anything. And so I want to say, both the
    Chairman and I wrote letters which resulted in six months' stay
    of enforcement and OSHA attendance at the Anhydrous Ammonia
    Dealers Conference in Mandan, North Dakota, which I greatly
    appreciate.
        The Fiscal Year 2016 Omnibus Appropriations bill included
    report language that restricted implementation of the guidance
    that resulted in reclassification of retail facilities. It is
    my understanding that OSHA considered it report language and
    not legal language and announced that it will begin enforcement
    on October 1. On May 6, OSHA announced the convening of a panel
    and is asking that panel to make recommendations.
        I guess my question is, this might be a path forward. And,
    if the best thing that we can do is just two more months of
    forbearance while we work through some of these issues--I know
    you
    guys--October 1 is around the corner, but it would be
    extraordinarily helpful for us as we work through this.
        So I want to know where the panel is in process. And what
    can you tell me about the work that you are doing? How will the
    results of the panel affect the decisions that you make at OSHA
    going forward? And is OSHA planning to commence enforcement
    next Saturday?
        Ms. Smith. I am having problems pushing the right button.
        So, thank you, Senator, for those questions.
        The OSHA rulemaking process, as you probably know, is
    long and complicated, longer and more complicated than most.
    Before they engage in rulemaking, they have to go to the small
    business--called a Small Business Regulatory Enforcement
    Fairness Act (SBREFA) panel and basically ask the panel what is
    their opinion about whether they should engage in rulemaking.
    That is a required first step to rulemaking.
        So we have gone to that panel. We have not gone through
    that process--it can be a lengthy process--and we will take the
    recommendations of that panel into serious consideration. We
    cannot do rulemaking until we go to that panel. So that is the
    first thing.
        And the second thing is, it is true that we at the Labor
    Department did not consider the report language legally
    binding. However, given the facts that you have, given the
    interest that Congress has had, we did agree that we would
    abide by the report language and not do any enforcement before
    October 1, 2016.
        My understanding is that the text of the continuing
    resolution (CR) was released this afternoon. I have not seen
    it. I do not know if that report language continues. And,
    honestly, I have not been able to consult with my colleagues in
    OSHA to determine--if there is report language, they clearly
    will follow it. If there is not report language, I honestly do
    not know what they are thinking of doing.
        Senator Heitkamp. And I would say this: I do not think that
    at this point, although this is a moving--it is an instrument
    in process, so we do not know what the final CR is going to
    look like, but I do not think you need a CR to say, look, we
    may have been too hasty in making a determination.
        And I get safety. I mean, anyone who lives in farm country
    the way I do--I basically was on the board of directors of an
    entity that manufactured anhydrous. I understand what anhydrous
    ammonia is and I understand the risk. So the net result is when
    you do not have retailers who are managing it at that level,
    you have direct sales off semis in a farmstead. So let's just
    presuppose that that might even be more dangerous. In the law
    of unintended consequences, that might be actually even more
    dangerous than what you are proposing.
        And so, I do not think you need Congress to tell you not to
    do this. I think what you need to say is, guidance should be
    interpretive. Guidance should not change the status quo in a
    dramatic way. We need to rethink our cost estimates, and that
    we are going to make an election to delay the implementation of
    this guidance.
        I mean, if you have the authority to issue it, you have the
    authority to delay it. That is just law 101. If you just do
    that, and even if it is just until the end of the year while we
    work through this, that would go a long way toward people in
    rural America,
    who already have a whole lot of stress right now, given the
    economics--people saying, well, at least they listened and we
    have a chance to actually have a conversation.
        And I recognize all the statements, especially yours, Ms.
    McIntosh, about, we want access to letting people know, but,
    guidance--if you said, as a lawyer, we issued a guidance, I go,
    hmm, guidance does not have the force and effect of law. If I
    only have so much time and so many billable hours to my client,
    am I going to read a guidance or am I going to read a proposed
    rule?
        And so, just understand the frustration that I have
    defending this kind of action when I believe that it has an
    economic consequence issued in a guidance, not in a rule, and
    as a result we are going to put people in North Dakota out of
    business. It is just tough.
        Ms. Smith. So, Senator, I appreciate your comments and I
    will take them back to my colleagues in OSHA. Obviously, I am
    not the Assistant Secretary for OSHA so I cannot make any
    commitments to you, but one thing I would like to point out,
    which is that I think OSHA did recognize the seriousness of
    these changes and they did put out a request for information.
    They put out, in the Federal Register, notice to the regulated
    community that they were considering making these changes. They
    asked for comments on these changes. They got a lot of comments
    on these changes, including from many of the trade
    associations.
        Senator Heitkamp. You know you are just arguing that this
    should have been a rules change.
        Ms. Smith. I am not arguing. [Laughter.]
        I am arguing that we go above and beyond----
        Senator Heitkamp. Yes, you are convincing me it should have
    been a rule change.
        Ms. Smith. We go above and beyond what we are required to
    do.
        Senator Heitkamp. I think you did less than what was
    required. And that is our difference of opinion on--and it
    leads this Committee to think, guidance, boy, that does not
    look like guidance, because something that should not have the
    force and effect of law, simply provides some structure to a
    regulation, should not change the status quo the way this has
    changed the status quo.
        And I do not want to beat a dead horse here. I would like
    an answer on whether you guys are going to--regardless of what
    happens with the CR, whether your colleagues at OSHA are going
    to delay implementation of this guidance as we work through
    some of these additional issues and as we get a response to
    some of the concerns that I have raised today and that have
    been raised across rural America.
        Ms. Smith. Senator, like I said, I can commit to you that I
    will take these remarks back to OSHA and discuss this with them
    very seriously.
        Senator Lankford. OK, as is the tradition of the Committee,
    I am going to open up the microphone just for an open
    conversation here between the two of us and other Members as
    they join us in the conversation as well.
        But, Mr. Shelanski, let me start with you. Are you
    confident that OIRA sees all the agency guidance documents that
    could potentially be significant? Are you confident you are
    seeing all those now in all definitions of ``significant''?
        Mr. Shelanski. No, we do not, and I do not think that we
    would expect to. The number of guidances that we would review I
    think is just a subset even of significant guidances.
        Agencies are required, under the 2007 Good Guidance
    Practices, or are advised under the 2007 Good Guidance
    Practices, to follow certain procedures and develop certain
    procedures for significant guidances. But I think it would get
    in the way of the real benefits of guidance if all such
    significant guidances were to come through OIRA for review, or
    any entity for review.
        Senator Lankford. So what is the standard of what the
    agency should send to you for review?
        Mr. Shelanski. Well, certainly the economically significant
    guidances are ones that they must take notice and comment on,
    and those are the ones that we want to see. As I said, those
    are relatively uncommon.
        The ones we tend to see--I would say the largest categories
    of the documents that we tend to see are ones that just
    agencies are interested in getting additional input on and help
    in developing clarity, so they will voluntarily bring a number
    of them with us.
        Guidances that are associated with a rule that we have
    under review or have recently had under review tend to be ones
    that we would see as a matter of course and that we ask the
    agencies to submit to us because they are closer related to
    something that is really very much our core function of
    reviewing the executive branch regulations.
        Senator Lankford. But you are looking for overlap as well,
    and what I am trying to figure out is--I would assume you are
    trying to get as many significant guidance documents as
    possible, because if three different entities are all putting
    out some sort of rule that affects the same industry at nearly
    the same time, possibly different deadlines--which has happened
    before--you are the person that is supposed to help sort that
    out and to say, pause, wait, somebody else is doing this; let's
    coordinate this together.
        Mr. Shelanski. Right. That is exactly right. And the third
    category I think that is, one of the very common ones where we
    would see a guidance document is where there are those
    interagency kinds of interests, and we want to make sure that
    the agencies are coordinated.
        Senator Lankford. But they would only know if they actually
    sent it to you. What I am trying to figure out is if--you have
    an interest in seeing as many as possible. If I am an entity
    and I have my own process in place for developing--whether it
    is significant or not; I look at it as significant--I would
    assume that is coming to you, not assume I have it. It sounds
    like you are saying, it would be nice if they sent it to us,
    but they do not have to unless it is economically significant.
        Mr. Shelanski. They do not have to unless--if we get a
    request that as----
        Senator Lankford. But then who is sorting out the
    conflicting guidances that may come out or the conflicting
    deadlines that may come out from multiple entities because they
    do not know someone else is doing this unless you flag them to
    it.
        Mr. Shelanski. So I think there are two ways for that to be
    sorted out.
        In the time that I have been in the job, I have not seen
    instances where a guidance that affects another agency's
    similar guidance has failed to come through us. We tend to see
    those because agencies bring them to us, or the agency that has
    not promulgated a guidance but regulates in the same area will
    contact us and say, we know that Department X is developing a
    guidance on a topic that is relevant for us; we would like to
    see it.
        I think the other very important way that this kind of
    thing gets sorted out is, under the 2007 Good Guidance
    Practices and under a lot of the practices that the GAO
    identified and that the departments are developing, there is a
    lot of feedback--even on guidances that do not go out for
    formal notice and comment and for guidances that we do not
    review--for the public to submit comments, concerns,
    complaints, inconsistencies so that those guidances can be
    coordinated.
        So there is, I think, a pretty good system in place without
    our intervention for making those corrections.
        Senator Lankford. It gets noisy in a hurry when industry,
    individuals, employers, employees suddenly realize, I have two
    or three bosses here all telling me to do different things.
    Their perception, rightfully so, is no one is watching. And so
    the opportunity for those things to be able to come to you
    first rather than individuals having to raise it and know the
    right person to call and to say, this is a problem, we have two
    different deadlines that conflict or two different guidances,
    would be helpful.
        Let me ask a question with that same thing on what you were
    just saying on working at deconflicting. If a guidance is
    promulgated by any entity and, fairly quickly, industry,
    businesses, whoever it may be, States--contacts you and say,
    this has above $100 million of cost, and they can show you
    pretty quickly how and why, is there a position from OIRA to
    then stop and say: This is economically significant, or it
    could be. Was there a study done? Let's pause on this guidance.
    Let's make sure that it is done--just make sure this should
    have not been a regulation rather than a guidance document.
        Because you go back into some of the process safety
    management (PSM) rules and other things that we have discussed,
    pretty quickly it was learned this is well in excess of $100
    million. But to be able to raise some issues up and to say,
    well, this is guidance, we are going to keep pressing it as
    guidance, who has the pause button to say, we have to relook at
    this as economically significant?
        Mr. Shelanski. Thank you, Senator.
        If we get information from the public--if industry contacts
    us or stakeholders of any kind contact us to let us know that a
    guidance has gone out that is either having the effect of new
    law, so really is not on the side of the line of guidance but
    more of regulation, or is having an economically significant
    effect and did not go through the notice and comment
    requirements of the 2007 Good Guidance Practices, we are in a
    position to ask the agencies to please come in to talk to us
    about the guidance. And once we get a better picture of what is
    going on, we can call that guidance in for review.
        Senator Lankford. Do you have the ability to be able to
    force a pause? It sounds like a very polite process: We can ask
    them to go back and review on that. Who has the ability to be
    able to say this is an issue? Is that an outside court? Is that
    working with the agency? Is that OIRA? Who has it?
        Mr. Shelanski. I do not know the extent to which I can say
    I have an--I can absolutely stop something.
        Senator Lankford. I am just saying it is not hypothetical,
    obviously.
        Mr. Shelanski. No.
        Senator Lankford. We can all go through multiple guidances
    that when it went out and came out, agencies all said, I do not
    think this is economically significant, did not come to OIRA so
    therefore was not open to the Congressional Review Act (CRA),
    for instance, and could have the possibility of skirting
    Federal law. There are so many different things that go out.
    And immediately it comes up and individuals say, just in my
    company that will cost $20 million. So it is easily above $100
    million nationwide.
        How do we pause and say, let's do this right; I think we
    put out something that is economically significant without good
    input?
        Mr. Shelanski. I think at that point there are two
    processes that can be in place. I do not think an agency would
    refuse our request to look at the guidance to determine whether
    or not there was a likelihood that it was economically
    significant and then to consider what remedial steps should be
    taken.
        Senator Lankford. Do you have an example of when that might
    have happened or--I mean, I am not trying to put you on the
    spot on it, but just, is there one that you know of at this
    point that has happened like that?
        Mr. Shelanski. There are times when we have known that
    agencies were working on guidances that could possibly have a
    significant effect on the public, a significant economic
    effect, and we have asked the agencies not to issue it without
    interagency review, and the agency has said OK and submitted it
    to us.
        A recent example of that would be the Food and Drug
    Administration (FDA's) sodium guidance. It is a guidance that
    sets no thresholds; it sets no sodium reduction methods. It
    makes recommendations. We do not know the extent to which
    restaurants or food manufacturers will follow those
    recommendations, but there is a reasonable chance that one
    could anticipate they would take a number of steps that could
    cost quite a bit of money.
        We therefore asked for that guidance to come through
    review. We put it through review and now it is out for notice
    and comment, which is how we would treat a guidance that either
    will have or has a reasonably good possibility of having an
    economically significant effect.
        Senator Lankford. Because there are guidance documents that
    are going out that are not coming through OIRA, do you have a
    concern that there may be some guidances being promulgated and
    put out there that are economically significant that might
    bypass the CRA legal requirement for the Congressional Review
    Act, and to say: We are putting this out; it is not
    economically significant so it is not exposed to the
    Congressional Review Act?
        Mr. Shelanski. I think that would be--I have not
    encountered such a situation.
        Senator Lankford. So that is not a concern to you that that
    would come out?
        Mr. Shelanski. I think it would be a very unlikely event
    that that would happen. If it happens, I think it is extremely
    rare and unusual.
        Senator Lankford. I hope you are correct on that. The
    question is the unknown part of it. There is a concern to say,
    if something looks significant, there is a benefit for the
    agency to go within the executive branch and ask the second
    opinion. That is why the process was set up in the first place,
    not to bog you down.
        But you are seen by everyone within industry and across the
    United States--that know you are an incredibly important but
    invisible agency in many ways. You are seen by the entity as
    being the gatekeeper to make sure there are no conflicting
    rules, there is not significant things that come out, that
    everybody is following the law through the process.
        The agencies see the thing that has to be done, you see the
    way that it has to be done, and I think there is a great
    benefit of the design of it to make sure that there is a check.
    And my concern is--it is right to be able to run it through you
    whenever it gets close, and my perception--and you can tell me
    I am wrong--my perception is, because there are so many rules
    that are coming out, there is not time to be able to run
    through all of them so set up a process in the agency and we
    will trust you on it, when really everybody else is trusting
    you on it.
        Do you have a thought on that?
        Mr. Shelanski. Yes. My thought is this: I think while there
    is the theoretical possibility and maybe the occasional example
    of where that has happened, I think it is unusual for two
    reasons. Agencies do not want their guidances to be held in
    abeyance, whether by a court or Congress or some other process.
    They therefore are interested--I think if they are concerned
    that there would be that kind of public response--to get that
    cleared up ahead of time. So I think in most cases agencies
    would bring those kinds of guidance documents to us.
        Because guidance is, by its nature, non-binding and should
    not be creating new legal obligations----
        Senator Lankford. That is the theory.
        Mr. Shelanski [continuing]. I think the number of guidance
    documents that would, themselves, separately from the
    underlying regulation, create a lot of economic impact are very
    limited.
        And I would point out that the one case that we have talked
    about today, I think we and the agency heard rather quickly
    what the public concern was about that guidance, which is one
    of the reasons it has not gone in to effect. So I suggest that
    there are some pretty good safeguards.
        Senator Lankford. Well, I would say only this: That public
    consternation that came back at the agency and entities
    obviously floods into our office when they raise the question,
    what is the Federal Government doing to us rather than for us?
    And it begged for early notice and comment rather than late
    having to fight it.
        I can assure you, Americans are not excited about fighting
    their own government. Once it is out there, there is a
    perception that they are now fighting it. If you can help them
    in the process to go, this is going to be a fight, this is
    economically significant, you can certainly help resolve a lot
    of the frustration across the ``fruited plain'' just because
    people want their government to help them, not do something to
    them on that. And I get that.
        Let me ask you a question just on exemptions. In 1993, OMB
    gave exemptions to the Internal Revenue Service (IRS) from a
    lot of the process of going through OIRA. It was an interesting
    letter. And it was obviously OMB had the opportunity to be able
    to give exemptions based on the statute and they did that. They
    still hold on that today. Do you think it is appropriate for
    the IRS to be exempt from OIRA review?
        Mr. Shelanski. Thank you, Senator.
        I want to clarify first that the IRS is, in fact, not
    exempt from OIRA review. We do review some IRS regulations.
        Senator Lankford. Make a guess on a percentage.
        Mr. Shelanski. Oh, it is small, but that has to do with the
    nature of IRS rulemaking.
        Senator Lankford. Sure, and I understand a lot of their
    rules are very specific in their letters, as we have talked
    about before.
        And by the way, I am not trying to cut off those letters
    because they do help provide clarity. I am trying to figure out
    oversight.
        Please go ahead. Continue.
        Mr. Shelanski. Thank you.
        I think the purpose of that Memorandum of Understanding
    (MOU) with the Treasury Department was that many of the IRS
    rules--in fact, the vast majority--really are purely
    interpretive rules that are rather directly implementing
    statutory directives from Congress into the tax code. And often
    those have to be put in place rather quickly so people can do
    new tax planning, and there is very little value to another
    layer of review.
        So I think the decision was reached for the interpretive
    rules of the IRS to be outside of the OIRA review process. On
    the other hand, rules that do not fit that description do come
    to OIRA for review. The IRS just does rather few of those.
        Senator Lankford. Right. Well, the question that hangs out
    there, though, is the GAO just did this study where they
    determined that the IRS really does not document their analysis
    of their economic impact. They basically refer that there is
    not an economic impact. Or if they have it, they are not
    documenting it.
        And so it is the unknown that hangs out there as well that,
    again, the GAO determined IRS is not really tracking this. And
    OIRA is in a position to say, we are only looking at what they
    have tracked. There seems to be no gatekeeper in between the
    two. That is my concern.
        Senator Heitkamp. I guess, Mr. Shelanski, one of the IRS
    rules that is--or IRS interpretive changes that we have seen
    has been the inversion, the change in terms of how we are
    dealing with inversions, corporate inversions. Is that a change
    that came to OIRA?
        Mr. Shelanski. So we have had two rules from the IRS
    related to inversions and they did come through for review.
        Senator Heitkamp. OK. So that would be a good example of
    something that would reach that level of review at OIRA?
        Mr. Shelanski. Yes, those would not fall within the
    exemption or the Memorandum of Understanding that was issued in
    the early 1990s, because those do not fit the definition of
    interpretive rules that are really dictated by the statutory
    changes.
        Senator Heitkamp. I think that we all know that financial
    and commercial paper changes, the nature of it changes. There
    has to be some flexibility that they have because they have to
    make those determinations. They cannot wait five years. I mean,
    the tax returns have to be filed.
        And so I can appreciate it, but I do believe that there are
    things that are done at the IRS that need maybe a second look,
    especially when people believe that they have relied on
    longstanding interpretation and that interpretation now is
    changing.
        And that is--it goes back to--and I do not mean to beat a
    dead horse, but you did say, that very quickly you realized
    that there was a significant impact, a lot of significant
    interests that implantation has been delayed. It is not exactly
    true. We are up against the wire, again October 1. And, we
    still have not satisfied the public that they have had adequate
    input in this process.
        And so, would you join me in encouraging OSHA to delay
    implementation of that regulation, or that guidance?
        Mr. Shelanski. Well, I think one of the things that I think
    OSHA has done that is really heartening is that they did
    initiate the SBREFA panel to make recommendations.
        Senator Heitkamp. Right.
        Mr. Shelanski. And I think that they did that because they
    heard this kind of----
        Senator Heitkamp. But if I can--I mean, I am going to add
    to this because so often what we hear is that: We go to court
    but in the meantime the court does not stay the implementation.
    The process goes on. So even if we win through that review
    process, even if we win in court, we have already changed and
    implemented and spent this money, so we were not given an
    opportunity to really have input before the economic input hit
    us.
        So I think that is the case here, and I think we need to be
    really careful. You say, well, we are heartened that they
    started this process. So, fine, let's say that through this
    process they reverse it but they are going to do enforcement
    October 1 and you already have some people who have changed
    their operation to facilitate the change. Is that really the
    kind of relationship we want with the public as it relates to
    an interpretive change that we see in this case?
        Mr. Shelanski. I think that certainly the public feedback
    and acting in an accountable way on that public feedback is
    important to all of our regulatory system.
        Senator Heitkamp. Yes.
        Mr. Shelanski. And I will look forward to discussing the
    matter with our colleagues at the Department of Labor and OSHA
    in the wake of this hearing.
        Senator Heitkamp. Yes. And, it has to be done fairly soon.
    Is it the 21st today?
        Senator Lankford. Twenty-second.
        Senator Heitkamp. Twenty-second, so we have 8 days.
        Senator Lankford. Just following up on that same issue--we
    obviously talked about this last year as well and it is still
    an ongoing issue, and it is a good example of process and how
    the process works or does not work on determining guidance or
    non-guidance.
        So the last time that we actually talked through this with
    the wonderful Recognized and Generally Accepted Good
    Engineering Practices (RAGAGEP), which has the worst possible
    acronym ever out there----
        Senator Heitkamp. I could not agree more.
        Senator Lankford [continuing]. Yes--the chemical
    concentrations and the retail exemption. We in this Committee
    challenged all three of those, saying these do not smell like
    guidance. These look like regulations to us but they are being
    given out as guidance.
        Obviously OSHA and the Department of Labor dealt with
    multiple lawsuits. This was not just industry saying, hey,
    there is a problem. It all goes to court. Tremendous amount of
    cost and expense both to the Federal taxpayer and outside
    industry to be able to fight against that. And since that time,
    we have delayed enforcement of the retail exemption. And we
    received at this Committee a very interesting letter from the
    Department of Labor coming back and saying, we are now putting
    this out for notice and comment.
        And then we have had a settlement dealing with the
    Recognized and Generally Accepted Good Engineering Practices
    piece in the chemical concentrations, which again look like
    regulations to me when it is all said and done because those
    were pulled out, gone to a court; with that court and those
    group of individuals that were in the lawsuit, created a
    settlement and came out with a decision, and then now are
    giving it to everyone.
        That looks like a new regulatory process to us to say: We
    needed a regulation. We put out a guidance. We went to a
    lawsuit, did a settlement, then came out with a piece. It just
    looks like a faster way to create a regulation in a different
    route to be able to get there.
        And it also comes back to us and reaffirms our question
    from a year ago. These smell like regulations and it certainly
    looks like they ended up acting like regulations, based on just
    not only cost but what they did and how they were treated once
    they left off here. What am I missing?
        Ms. Smith. Both the RAGAGEP guidance, the original
    guidance, and the Appendix A guidance were guidance documents.
    They were never legally binding.
        When the Department of Labor was asked to look into that by
    the President's Executive Order, we did go above and beyond
    what we thought and put out, for notice and comment that we
    were thinking of changing these guidance documents. We then did
    change the guidance documents after we got notice and comments.
        And, yes, we were sued. The plaintiffs in both the lawsuits
    that we settled, although their original claims were that we
    had to
    go through notice and comment, in the end the plaintiffs who
    were--the trade associations representing most of the regulated
    industry, the plaintiffs were willing to basically say: If you
    make certain changes in these guidance documents we are happy
    with them.
        Senator Lankford. Again, that is only those individuals
    that were in the suit.
        Ms. Smith. Right.
        Senator Lankford. That is part of the challenge. It created
    a new process but not everyone was privy to the conversation.
    Those that had enough money, and through the trade association,
    were able to do the lawsuit. They got to negotiate that rather
    than everybody.
        Ms. Smith. Well, everyone could have negotiated it. I mean,
    we would have been perfectly happy with OSHA, that if those
    individuals had come in to us and say, we think there are some
    problems with the guidance; we want to make changes to the
    guidance, we would have sat down and talked to them. We have
    made changes to other guidances when individuals have come in
    after the guidances were done and they tell us that. But----
        Senator Lankford. But you know--I am sorry to interrupt--
    you know as well as I do, those were coming out very rapidly
    after the fertilizer plant explosion in West, Texas. And what
    we heard in this Committee and what was out in the public was:
    This is an emergency. We have to do this. Let's get it done
    quickly and let's get the process started. Of course, now we
    have learned the West plant was actually intentionally set
    fire, not an industrial accident after all. But the perception
    at the time was, we are running; we are going.
        And so I understand industry stepping in, raising their
    hand and saying, include us in the conversation, but it seemed
    to take a lawsuit to be included, not just a, hey, let's sit
    down at the office and talk.
        Ms. Smith. With all due respect, Senator, after the
    explosion the President put out an Executive Order. We did put
    out the request for information, specifically saying that we
    were considering changing the three guidances. And we waited
    three months for comments from the public. We got a lot of
    comments. We then extended
    it--at the public's request we extended the comment period even
    further for about three weeks. And then we sat back and we
    analyzed the comments and put out the guidance.
        Senator Heitkamp. Under the Administrative Agencies
    Practice Act there is an emergency rulemaking procedure that
    can be utilized in circumstances where public safety needs to
    be addressed in an expedited fashion. Why wasn't that used?
        Ms. Smith. Because what we were changing was guidance. We
    were not changing a rule.
        Senator Heitkamp. That is a problem. [Laughter.]
        And, we keep going back to, what we were changing was
    guidance. And, it just keeps getting to that point where had
    you started with a rulemaking process, you would have a firmer
    foundation for this whole structure that you have created, and
    therefore more systematic support, I think.
        And, we are talking in circles here because we are here to
    try and figure out how we more effectively delineate between
    guidance that we know--and I think it is unanimous at this
    podium--that these guidances that were issued by OSHA are a
    whole lot more like rules and not guidance, in our
    understanding of what that means.
        So, I mean, you obviously have a difference of opinion.
    Just work with us to try and figure out where that line is. And
    when it so dramatically affects people's livelihoods, it just
    really gets us to that spot where we just go, that should not
    be done. And I am not saying on a whim. I understand what you
    are saying about process, Ms. Smith. I understand what you are
    saying about opening it up. But it looks and reads to me like
    guidance is being used as ``rulemaking light.''
        Ms. Smith. Senator, I understand your point.
        Two things I would like to say, which is that the original
    guidances were not done through notice and comment rulemaking.
    And maybe that is the problem, because we were interpreting a
    rule. If we had gone through notice and comment, for all we
    know we would not have put out the original guidance. We would
    not have put out guidance. We might have put out a different
    rule than the one that we put out. But we did not go through
    notice and comment guidance when we originally put out all
    these interpretations.
        And I know I am being the lawyer in the room here, so I
    apologize for that, but the Supreme Court has said that if you
    put it out originally as guidance, you do not have to go
    through notice and comment rulemaking to change that guidance.
    So I wonder whether we should consider if we are putting out
    guidance that is interpreting certain regulations, maybe we do
    need to put more notice and comment, but we did not do notice
    and comment.
        And remember--Senator Lankford, I would like to say this to
    you about the settlements. Yes, we settled those cases, but it
    is still guidance documents. In any individual situation--if,
    for instance, OSHA cites someone for violation of Appendix A,
    they can contest that citation. It is not legally binding on
    them. It is our interpretation. But there is a whole contest
    provision that can go. And from time to time, the OSHA or the
    Labor Department, either the administrative law just says, you
    are wrong; your guidance is wrong.
        And so that is the difference between guidance, in my
    opinion, and notice and comment rulemaking. If we had gone
    through notice and comment rulemaking in the beginning or the
    second time, there would not be that opportunity to contest it.
        Senator Heitkamp. Would you agree, as a lawyer, that
    longstanding agency interpretation is given a certain level of
    deference by the courts?
        Ms. Smith. I would have said that 5 years ago, but given
    the recent Supreme Court decisions, I am not so sure that is
    true. I mean, I think the most interesting thing in the
    mortgage bankers case, which is that the Court said you did not
    have to go through notice and comment rulemaking to change
    guidance----
        Senator Lankford. Only on interpretive.
        Ms. Smith. Only interpretive guidance, but it did not say
    what level of deference it would give to that change in
    guidance.
        Senator Heitkamp. I think that there are intellectually
    challenging questions here in terms of where the line is. And I
    think that there is some common ground that we can achieve with
    agencies, especially when we are now operating with a third
    branch of government, which is the judicial branch, which you
    hardly ever get clarity from, right? I mean, that takes a much
    longer period of time to build the case law. That is a pretty
    big ship to move.
        And so, I could not agree with you more that guidance,
    especially the kind of guidance that we are talking about here,
    if, in fact, you have it in an agency, that you may have to
    rethink whether a guidance document is the right instrument to,
    in fact, provide that kind of clarity to the law, that kind of
    direction, and that if this is not better done in rulemaking. I
    could not agree with you more.
        And maybe that is the cyclical discussion that we are
    having here, because you know what you are doing in terms of
    your guidance, your amending guidance, and we are saying, we do
    not get how any of this can be guidance and how this cannot be
    rulemaking, given the consequences of what the change means to
    the industry.
        Senator Lankford. OK, can I jump in here as well, just
    based on what you were saying on that, because what Senator
    Heitkamp is saying is the crux of the issue. It is trying to
    figure this out and why this process part of this conversation
    is so important. And obviously we are talking through specifics
    here because they give examples, but it is much larger issue
    that we are trying to get to the crux of in the definition and
    how we can help provide some clarity to this.
        Based on what you were just saying, Ms. Smith, on the
    legally binding and going to a court to be able to review this
    and to go through the process on it--Ms. McIntosh, before you
    think we are just going to skip Education on this----
    [Laughter.]
        Let me draw back and come right off of what Ms. Smith was
    just saying.
        Last year Secretary King and I were having a conversation
    in one of the hearings and we were talking about the 2011
    ``Dear Colleague Letter (DCL)'' sexual assault guidance that
    was put out. The change from clear and convincing evidence--
    which most universities use--to the preponderance of evidence,
    and to try to figure out how this works within that
    institution--Ms. Smith was alluding to something that we have
    all talked about--it is not legally binding.
        The question is, if a school chooses to apply clear and
    convincing evidence in their issues for sexual assault, how
    would the Department respond?
        Ms. McIntosh. So, thank you for including me in this
    conversation and for that question.
        I am not a lawyer, and you did ask me before about the
    change--what you determine--what you call a change in the
    standard of evidence. It is my understanding that our ``Dear
    Colleague'' that makes a reference to the preponderance did not
    change our interpretation--longstanding interpretation----
        Senator Lankford. I could introduce you to a lot of
    university presidents that do not agree with that statement and
    a tremendous number of law professors across the country that
    do not agree with that statement. They see it as a very large
    change in how evidence is handled.
        Ms. McIntosh. So we may have to disagree for this moment,
    but that was the evidence standard that our agency had been
    using and it is what we understand many universities were
    using, and we think it properly derives from the words in Title
    9.
        So, that said, that guidance document, again, does not have
    the force of law. So the guidance document----
        Senator Lankford. I am so sorry to interrupt. Can you help
    me understand, from Title 9, where that comes from? And again,
    not trying to put you on the spot----
        Ms. McIntosh. Right.
        Senator Lankford [continuing]. But you were just mentioning
    you think it comes from Title 9 and from the word that is
    there. I cannot seem to draw that standard from anything that I
    read in Title 9.
        Ms. McIntosh. So I will tell you what I believe the source
    is.
        So, this is our interpretation of the words ``equitable''
    in the Title 9 regulation, and this burden of proof is how we,
    you know--here we go. Apparently multiple administrations, not
    just our administration, that for procedures to be equitable
    they must use the preponderance of evidence standard. And that
    that is our interpretation of Title 9.
        Now, the guidance document itself simply explains that. It
    does not have the force of law. So any----
        Senator Lankford. So we are back to my original question.
    If a university chooses to use clear and convincing standards
    versus preponderance of evidence, what does the Department of
    Education do with that school?
        Ms. McIntosh. Well, so what would happen in all of our
    enforcement is there could potentially be a complaint that
    comes from someone who feels that the sexual harassment policy
    in the university was violating their rights, and we would
    investigate that complaint thoroughly and around all the
    specific facts of that individual case. And that could take
    some time. And we would then come to a determination on the
    law--not about our guidance but on the law--and work with the
    university to come into compliance, if that was required.
        Senator Lankford. I am still waiting. I am sorry. If a
    university uses clear and convincing as their evidence
    standard, which many have for a long time----
        Ms. McIntosh. So, I cannot answer about any hypothetical
    case or example where there might be----
        Senator Lankford. Well, how many----
        Ms. McIntosh [continuing]. Clear and convincing.
        Senator Lankford. How many lawsuits are currently pending
    in the United States based on this ``Dear Colleague'' letter?
    Do you know?
        Ms. McIntosh. I do not know the answer to that. I can
    certainly follow up.
        Senator Lankford. You know what? I would be interested to
    know.
        Ms. McIntosh. Based on the letter or the clear and
    convincing?
        Senator Lankford. Correct. So, for instance, just this
    week--and I am going to leave all the different universities
    out--just this week I was talking with a university president,
    and I mentioned that we were going to have this hearing, we
    were going to talk about some of these issues, and he shook his
    head and he said: I currently have two lawsuits against my
    university right now because we chose to use preponderance of
    evidence instead of clear and convincing, and we have lawsuits
    against our university right now.
        And that story is repeated over and over again from
    students or former students that are challenging the new
    process, and also from universities that are challenging the
    Department of Education.
        This has not been a simple guidance just to be able to
    clarify what most universities do. This has been an enormous
    change that it would have been extremely helpful not only to be
    able to look at and to be able to go through a full notice and
    comment, but to also be able to determine why this standard
    versus this standard?
        And it has created this long fight over an issue that we
    all care very much about. None of us want sexual assaults on
    campuses. We all want a fair process. This is often a legal
    process with local police within that State, but it is also a
    university issue as well and it has become a very big issue. So
    if there is a way that the Department of Education can identify
    for me how many lawsuits they know of across the country, that
    would be helpful.
        Ms. McIntosh. So, I appreciate your concern about the
    prevalence of sexual harassment and sexual violence on campus
    and how very important it is that our Office of Civil Rights
    (OCR) maintain vigilance and investigate complaints as they
    come to us. I think you know we have over 200 active
    investigations about sexual harassment and sexual violence on
    campuses. It is a very serious problem.
        Senator Lankford. It is a very serious problem.
        Ms. McIntosh. And it is something we take very seriously.
        Senator Lankford. But it suddenly----
        Ms. McIntosh. I cannot answer the question about other
    lawsuits filed against universities on the basis of this
    standard, but I will certainly take the question back and see
    if I can get more information about that.
        Senator Lankford. So at this point your statement would be
    it does not have the force of law, but it is your
    understanding----
        Ms. McIntosh. Our guidance document does not have the force
    of law.
        Senator Lankford. So if someone has a different standard--
    --
        Ms. McIntosh. We would investigate complaints on a case-by-
    case basis. And much of that goes well beyond the evidence
    standards, all the circumstances and facts about how a
    university handles sexual harassment complaints----
        Senator Lankford. Sure.
        Ms. McIntosh [continuing]. And work with the university to
    come to a better place.
        Senator Heitkamp. I think one of my concerns--and it goes
    back to what I said, longstanding agency interpretation and
    deference. I understand you have an opinion about what the law
    provides: clear and convincing evidence versus preponderance of
    the evidence. The university may have a different point of
    view. Eventually we are going to be in litigation, determining
    what, in fact, that standard is.
        The concern is that, when you issue guidance, somehow the
    courts get the idea that: We have given notice now. This is
    what it is. And it is an agency interpretation that is entitled
    to deference and so we are going to rule with the agency, when
    that interpretation was done through a guidance and not through
    a regulation where people were given an opportunity to comment.
        And so, where I may divert a little bit--I understand what
    you are saying. It is just: Hey, guys, this is what we think
    the law says. It is not binding. You want to litigate this. You
    want to have a different opinion. You can, but you run the
    risk, having a different opinion, of us taking enforcement
    action based on how we are interpreting the statute.
        I mean, you would agree that that happens, right? So why
    issue the guidance otherwise, if you are not giving them notice
    that you are going to sue if they do not agree with you?
        Ms. McIntosh. So, we issue the guidance so that a broader
    audience can understand how we interpret the laws and the
    related regulations under Title 9. If we did not issue the
    guidance, we would do one complaint at a time, which would not
    be an especially good use of taxpayer funds, and it would not
    protect students on the very broad and serious question of
    sexual harassment.
        I would repeat that we do not think we have ever changed
    our interpretation of the burden of proof from--we have never
    changed our longstanding interpretation. So----
        Senator Lankford. So why was this published, then, if that
    was the assumption?
        Ms. McIntosh. Well, the ``Dear Colleague'' letter about
    sexual harassment covers a variety of topics related to how a
    university can appropriately handle these. And that is simply
    one----
        Senator Lankford. But that standard of evidence was not
    published before. You are saying it was the assumption, but it
    has caused a firestorm across universities having to create, in
    many places--I am talking about regional colleges, 2-year
    colleges
    having to commit a tremendous amount of individual time and
    literally--as I have talked to some regional universities,
    literally pulling people out of the classroom and not hiring a
    professor in that spot because they had to hire additional
    compliance people to be able to manage just this one ``Dear
    Colleague'' statement.
        Ms. McIntosh. Well, I appreciate your concern and it is
    interesting to hear that feedback. I will certainly discuss it
    with my colleagues.
        Senator Heitkamp. I want to bring you back into this
    discussion, Mr. Shelanski. Obviously you can see we are
    struggling a little bit here. You are a lawyer, right? He is
    like, oh, do not ask me for a legal opinion.
        And I think that, given your experience and the role that
    you play, maybe your insight as we try and kind of narrow this
    issue or look at how we address concerns of the public about
    the overreach of guidance--not overreach in terms of the
    substance, but just that this should not be done with the
    guidance; this should be done with more process.
        I mean, how big of a problem do you think this is in agency
    interpretations today, this use of guidance rather than
    rulemaking?
        Mr. Shelanski. Thanks, Senator.
        I think that while there are certainly examples that we
    have been discussing today where there has been concern over
    agencies' use of guidance, I think that we should not lose
    sight of the fact that the vast majority of guidances do not
    raise this kind of concern, and that overall I think the
    guidance system works quite well.
        Senator Heitkamp. And it is welcomed by the regulated.
        Mr. Shelanski. And it is welcomed by the regulated entities
    because very often what they are looking for is a reasonably
    fast clarification or answer or explanation of how they might
    comply with existing legal obligations.
        Senator Heitkamp. Yes. I do not care what the answer is;
    just give me an answer so that I have certainty.
        Mr. Shelanski. Right, or let me know if what I am doing is
    good enough because the underlying regulation is not
    sufficiently clear to me that my compliance is adequate.
        So, I think that the--overall my observation, what I have
    seen, is a guidance system that works quite well and is quite
    healthy.
        Then I think there are the, few close cases that raise hard
    questions. And I think what I am hearing loud and clear from
    you and from Chairman Lankford today is these close cases need
    further thought in the level of process that they should go
    through. And I think that raises an interesting question that
    my agency colleagues and I, I am sure we will all take back to
    discuss about how----
        Senator Heitkamp. I mean, nobody up here wants to throw out
    the baby with the bathwater.
        Mr. Shelanski. Right.
        Senator Heitkamp. I have long maintained that I think
    guidance can be extraordinarily helpful. In fact, to eliminate
    guidance could be extraordinarily disruptive. But when guidance
    changes longstanding interpretation or somehow flips a switch
    and we are headed in a different direction, the spider sense
    takes off and we go, I am not sure that that is the right way
    to do this.
        Senator Lankford. Senator Carper, we are in just an open
    conversation. You are welcome to be able to join us.
        Senator Heitkamp. It is what we do in this Committee.
        Senator Lankford. Senator Carper, who is the Ranking Member
    of the full Committee, we are glad that you are here as well.
        Senator Carper. I can kindly do that. Thank for holding the
    hearing. All of you, thanks for coming out.
        I walked in and I noticed that the Chair of the
    Subcommittee has red hair and the Ranking Member. I notice the
    reporter here has red hair and one our witnesses appears to
    maybe have it. But I was going to ask unanimous consent for
    someone who did not have red hair to have a chance to say
    something. [Laughter.]
        Senator Lankford. Well, let me check with Senator Heitkamp
    before I give that right away.
        Senator Heitkamp. I do not know. [Laughter.]
        Senator Carper. OK, thanks. Thank you for--I love the
    spirit with which you--the two of you work together. It is an
    inspiration and a loud, good example for all of us. So thank
    you for that.
        Senator Heitkamp. Thank you.
        Senator Carper. I wish I could say something nice about
    your staffs, but I cannot do that too. [Laughter.]
        Good to see you all. Thank you very much for coming, for
    your service to our country.
        Mr. Shelanski, you remind me a lot of a guy who sat before
    us in this room not that many years ago, and I think the
    President nominated you for a job over at OMB. What was it
    called?
        Mr. Shelanski. That was when my hair was still red, before
    it was gray. [Laughter.]
        Senator Carper. That is OK; you still have hair. That is a
    plus.
        All right, I want to go back to something the President
    said in a State of the Union address. And I am not sure what
    year it was. It was about five or six years ago, maybe four,
    five, or six years ago. And he was talking about issuing
    regulations.
        And he was talking about not just, like, looking forward
    but actually taking the time to look back and to see what we
    had done by issuing regulations, if they were having the kind
    of effect that we were hopeful for or not, and if there were
    ways that we could tweak those regulations and in some cases
    retire them entirely, and what would that mean for our country?
        And I have heard a number, in the five or six years since
    he spoke at the State of the Union, that indicate how much we
    have saved in reducing just waste and, in some cases, paperwork
    and so forth. But the initial number I seem to recall hearing
    was like--we thought we would save, like, maybe $10-or $15
    billion over five years. That was, like, a preliminary number.
    And I am told that the number has gone up by quite a bit.
        Would you just talk about that for us and tell us how this
    has happened, because this is a number that I am seeing
    advertised now. I think it is $36-or $37 billion in savings
    over a five-year period. It is a good deal greater than what I
    think I had earlier anticipated, but that is good. But just
    talk about how we got there.
        Mr. Shelanski. Thank you, Senator Carper. I appreciate the
    question.
        The President did issue an Executive Order 13610 that asked
    agencies, all agencies, to put in place a process for
    retrospectively looking at the rules they already have on the
    books and to either eliminate or modify those rules that were
    no longer doing their job or were unnecessarily costly.
        Since that time--and a lot of----
        Senator Carper. When I heard about him doing that my
    thought was, do you think agencies would take this seriously or
    will they hunker down and maybe after a while just it would go
    away?
        Mr. Shelanski. I think the agencies have taken this
    seriously. And I think I actually--by the time I had arrived at
    OIRA, through the hard work of my predecessor and the OIRA
    staff----
        Senator Carper. Cass Sunstein.
        Mr. Shelanski [continuing]. Yes--they had put in place a
    reporting system. And we have kept the agencies on schedule,
    reporting to OIRA twice a year on their plans for retrospective
    review.
        Reports are easy to generate. What is harder is to
    institutionalize a practice of actually acting on those
    reports.
        Senator Carper. Right.
        Mr. Shelanski. And what we have seen in the four to five
    years since this process was undertaken, is that the agencies
    have--and we have asked them to--have been more specific about
    what actions they have completed, what actions they are
    abandoning, and an accounting for what savings they have
    created.
        And I think to date--I think at the time that I was going
    through my confirmation hearings, the number was about $10
    billion in savings were predicted. Since that time, and after
    that initial ramp-up, we have hit a level of five years'
    savings that we now estimate to be $38 billion and growing.
    Agencies have wholesale repealed, I think, you know, dozens of
    regulations and eliminated thousands of pages from the Federal
    Register.
        More importantly, we now have this process
    institutionalized throughout the executive branch agencies and
    have these agencies rather regularly dedicating resources to
    retrospective review.
        This is a process that we hope will continue. It is hard
    work for the agencies. The agencies obviously have tight
    budgets and tight staffing and they are eager to move forward
    with new policies, so to get them to stop and look back at
    regulations they have completed I think is difficult. I give a
    lot of credit to the agencies for taking this seriously and for
    achieving the benefits for the American public through
    regulatory reform that we have achieved to date.
        Senator Carper. If I could ask, who are some of the
    agencies that seem to have taken this more seriously than
    others?
        Mr. Shelanski. We have really gotten very good feedback and
    very good participation across the Federal Government. Some
    agencies have had lower-hanging fruit than others and so have
    been more able to do rules with major savings. USDA and the
    Environmental Protection Agency (EPA) have been able to grab a
    couple of rules that were very costly and change them early on,
    the Department of Transportation (DOT) as well.
        But I do not think that should signal that other agencies
    with less flamboyant single results are taking this any less
    seriously. We have really had very good participation, and it
    is one of the things that I hope will continue into the future
    and be one of this administration's positive legacies.
        Senator Carper. I think that certainly has a potential for
    being--is there anything that the Congress--this Committee of
    the Senate, the Congress could be doing, should be doing to
    make sure that this kind of good work continues?
        Mr. Shelanski. I think that----
        Senator Carper. Because the next President may not be all
    that much interested in this stuff.
        Mr. Shelanski. My hope is that the next President would be
    interested in this, because I think that retrospective review
    is part of good government, and I think that any President and,
    frankly, anybody of any party should think that being good
    stewards of the rules we have on our books is part of good
    government and a healthy regulatory system.
        I would be happy to give some further thought to what more
    you could do to support this, because I do think it is a very
    important function to carry forward.
        Senator Carper. Good. Thank you.
        Senator Lankford. There is a Heitkamp-Lankford bill that
    would help with that, that is already sitting out there, by the
    way, that our Committee has passed and you have supported. And
    there are ways to be able to deal with this directly. So,
    appreciate the conversation.
        Ms. McIntosh, by the way, Senator Carper, you are welcome
    to join in anytime in the conversation on this.
        Senator Carper. Thank you.
        Senator Lankford. Ms. McIntosh----
        Senator Carper. In that case--no, go ahead. [Laughter.]
        Senator Lankford [continuing]. Let me ask you a question
    that deals with current rulemaking in some process areas.
        All three of us on this dais voted for and supported a
    change for the Every Student Succeeds Act last year. In fact,
    85 Senators supported that, overwhelming supported in the
    House, affirmed by the President. In that, we specifically put
    in the ``supplement not supplant'' provision and specifically
    stated that States and local entities created their own
    methodologies.
        Some of the earlier rules that have come out from the
    Department of Education where the Department of Education has
    actually given a Federal methodology rather than allowing the
    local individuals--it seems to be a pretty straightforward,
    plain reading that all of us supported, allowing more local
    control in some of the decisions.
        Tell me that process for that reg coming out, and why,
    after specific statements of saying local decisionmaking on
    these methodologies, there is a Federal methodology coming out.
        Ms. McIntosh. So, on the topic of ``supplement not
    supplant,'' I think you know that the proposed rule first went
    into the negotiated rulemaking process, where people from all--
    the stakeholders that deal with our Department got to discuss a
    first proposal and make a number of very interesting and
    helpful suggestions.
        We did not reach consensus on that negotiated rulemaking,
    but we did obtain quite a lot of feedback. We also obtained
    feedback from Members of Congress on the authorizing Committees
    and others. And after much reflection, we have a new proposal.
    I am not the expert on the details on this one either, but we
    have a new proposal that is now out for public comment. And it
    would basically be inappropriate for me to talk too much about
    how it is structured or how it might be structured in the
    future. We are eager to get public comment on that rule and we
    will then wrestle with those questions and of course be
    interested in your input as well.
        Senator Lankford. Sure. Yes, and we are glad to be able to
    say--but I guess what I am trying to get at is, again, it goes
    back to our Committee is not the authorizing Committee there
    that wrote the Mitchell bill. We are dealing with some of the
    oversight and the decisionmaking behind the scenes.
        The initial proposed rule came out with a Federal guide for
    that, a Federal statement on how to do it, when the law is
    pretty plain there would not be one, but there was right at the
    very beginning. And I guess I am trying to figure out how, in
    the first version that comes out publicly, suddenly there is a
    Federal ruling when everything says locals will decide the
    methodology here.
        Ms. McIntosh. I do not remember if it is true in the first,
    but in the current proposal there are several options for
    States to follow----
        Senator Lankford. Yes, but----
        Ms. McIntosh [continuing]. And districts to follow, so----
        Senator Lankford. But any options still violates, because
    it makes the statement very clearly, local decisionmakers set
    this. There is not a Federal guideline for it.
        Ms. McIntosh. So, I believe the Secretary has also
    addressed this in some of his hearings, and we think our rule
    addresses the very plain language in the statute that Federal
    funding should supplement and not supplant.
        Senator Lankford. Totally agree.
        Ms. McIntosh. And the rest of the rule is how we are
    proposing to implement that, and it is subject to Federal
    comment--public comment rather now for a good long time,
    another month or six weeks.
        Senator Heitkamp. Just to get clarification, so if a
    district does not follow one of the three options, will they be
    considered to be ineligible for Federal funds?
        Ms. McIntosh. I cannot answer that.
        Senator Heitkamp. Well, that would be a problem.
        Ms. McIntosh. First of all, it is a rule under public
    comment. It has gone through extensive legal review here at
    OMB. The Congressional Research Service (CRS) has taken a look.
    But I could not answer that question. I would be happy to let
    the experts get back to you.
        Senator Heitkamp. But, I could see doing something where
    you say, well, you might consider this, you might consider
    that; here are some things that we would consider appropriate.
    But foreclosing all other options when we say we are giving
    local option, those are the kinds of things that rise to the
    attention of Committees like this one and create, kind of,
    mischief. And so, I hope you take back the concerns that we
    have.
        Ms. McIntosh. Well, thank you for the feedback.
        Senator Lankford. Yes. No, please do.
        And while we are talking about non-controversial topics----
    [Laughter.]
        Let's talk a little bit about the reinterpretation in Title
    9, what is affectionately called the ``bathroom/locker room/
    dorm room'' policy as it came out, dealing with gender identity
    on the basis of sex.
        I think it would be safe to say that many school officials
    did not find the interpretation to be inherent in Title 9, just
    based on their response. So many districts around the country,
    thankfully, were incredibly engaged in trying to find ways
    locally to be able to help transgender students not be
    isolated, not be bullied, and they were already very engaged in
    local districts, thankfully finding ways to be able to have a
    safe environment for every single child in the school--
    terrific.
        Then a new interpretation came out on Title 9, which
    obviously a court has now stayed and has said no. Again, it is
    the thinking process of what went into this that is helpful to
    us to be able to determine how that guidance came out and that
    process was done.
        Congress has passed legislation defining both ``sex'' and
    ``gender.'' It is two different sets of issues; for instance,
    the Violence Against Women Act, where we have dealt with that
    specifically. Clearly that was not in the previous statute and
    was not clarified that way, and so I am trying to figure out
    the jump.
        How did it move from the assumption in the statement that
    gender was always implied, when Congress has separated that out
    in previous statutes and when districts all over the country
    did not deal with that in the past and they already found other
    ways? So help me understand the process of that decisionmaking
    to suddenly include ``gender'' where it said ``sex.''
        Ms. McIntosh. So, thank you for your concern about the
    protection of the rights of transgender students and for
    pointing out how many States and school districts are actively
    engaged in trying to make sure that these students are not
    bullied and have a safe and protective environment. In fact,
    when we issued that ``Dear Colleague'' letter, we also put out
    a guidance document that highlighted some of the excellent
    practices of many of those States and school districts.
        Sadly, that is not universally true, however. And through
    OCR's enforcement process, where they have gotten complaints
    about transgender discrimination as long ago as at least 2010,
    OCR has, in their enforcement work, interpreted discrimination
    on the basis of sex to include gender identity. And I think, as
    you know, our ``Dear Colleague'' letter, that explains this, to
    a general audience, cites a number of case law and legal
    precedent that is consistent with that interpretation.
        It is true, as you point out, that a Texas court has
    recently stayed our work on that interpretation. And we
    respectfully disagree with that decision but of course are
    complying with that judge's order while we investigate our
    legal options. I do not think the last legal chapter has been
    written here.
        Senator Lankford. No, but it is an interesting challenge
    just to be able to look at five courts ruled the other
    direction; one court ruled that way. Education grabbed the one
    court that ruled their way, ignoring the five others. And then
    a statute that did not refer to gender, all the way from the
    1970s, when clearly Congress has passed statutes before that
    dealt with both--I understand the dynamics and the challenges
    of it. I talk to school districts, as you do as well, and there
    is a very real challenge to be able to make sure that student
    is protected.
        The challenge is, it was not just a statement of: Make sure
    that your school has a policy. It was a Federal imposition of:
    We have Title 9 authority. We will remove funding from you if
    you do not follow this, though it is guidance, though everyone
    understands it the same. And what I hear from every district
    and from every university president is: We treat ``Dear
    Colleague'' as regulation because we feel like we better. And
    that is a different dynamic.
        Now, I do want to do something here back and forth on it. I
    know, Ms. Smith--I understand you asked a month ago to be able
    to go, and this has been a longstanding planning time to be
    able to get to this spot. And so I do want to respect your time
    on this. I know you have to slip away. We have quite a few
    questions that we still have dealing with things like the
    overtime rule, which has been incredibly significant, the
    fiduciary rule, a lot of the challenges that we are currently
    facing. So I would like to be able to submit those to the
    record for you.
        But I will tell you just quickly, on the overtime rule,
    this has a tremendous effect for nonprofits and for
    universities, and every nonprofit and university and small
    business that I talk to is struggling under this tremendously,
    especially nonprofits, where the nonprofits--often the people
    who work there understand they are not there to get rich and
    they understand the nonprofit does not have very much money,
    but you put the nonprofits in a very difficult situation.
        The nonprofits advertise to their donors that: We are very
    efficient in the use of dollars because we have very low
    overhead, because the people that work there work for very
    little money and love to do it. Now you are literally making it
    tougher for them to fundraise because they are going to show a
    higher amount of overhead cost, which some donors do not want
    to give to something with a higher overhead cost. They want to
    make sure it gets directly to the place it needs to go. So it
    makes it tougher for them in fundraising and makes it tougher
    for the entities.
        Secretary Perez and I had this conversation last year. I
    brought him letters that the YWCA sent to my office saying: We
    have X amount of dollars. When the overtime rule is
    implemented, if it is, we will close domestic violence shelters
    because we do not have enough money to run all of them and meet
    the standard. We will meet the standard, but it will force the
    closure of domestic violence shelters.
        I hear the same thing from church employees, that rarely a
    church employee makes that amount, in the Central Time Zone,
    and that they are struggling on: What do I do? I love to give
    my time. I am involved in this work because of my love for it.
        And even dealing with how it is implemented. As you go
    through the rule--which I am sure you have taken a good, hard
    look and gone through the overtime rule--it is incredibly
    difficult just to be able to determine, and with 25 weeks for
    small businesses to be able to implement it, when you walk
    through all of the exceptions--which I took some time to be
    able to walk through all
    the exceptions that are within it, things as simple as
    commissioned sales employees, farm workers, motion picture
    theater employees--which I thought was interesting--motor
    carrier drivers, amusement park employees--all these brought
    exemptions, the allowance to be able to do, are you a 51
    percent supervisor or are you a 49 percent supervisor?
        One of my favorites, as I look through it, a generally not-
    exempt are registered nurses, but generally exempt are licensed
    practical nurses, but--no, they are not exempt but nurses are
    exempt, registered nurses. And everybody is trying to figure
    this out in a 25-week time period of who is in, who is out?
        Is there any chance that small business, that nonprofits,
    that universities and others can get more time on this or to be
    able to have some consideration within that lane? And this is a
    very big issue for a tremendous number of companies, as is the
    fiduciary rule, as is things like the rules dealing with
    franchises. There are so many issues that are coming at so many
    small businesses right now. They are having a very difficult
    time maintaining this.
        Ms. Smith. So that is a very large question in a very short
    period of time.
        Senator Lankford. Yes, ma'am. I know you are running out of
    time too.
        Ms. Smith. But one thing I would like to talk about for the
    not-for-profits, one of the things that the Labor Department
    has been doing in recognition of that is that we have been--
    since the final rule has come out, and even before then, we
    have been working directly with funders of not-for-profits.
        We have sat down; we have had many meetings with
    foundations and other funders to talk to them about why they
    should increase their funding for not-for-profits so that there
    would be an opportunity, and why, even though their
    administrative costs are going up, it is not because they are
    being frivolous in any way. We have gotten some good responses
    from foundations.
        Senator Lankford. How many non-for-profits are there out
    there in America?
        Ms. Smith. Senator, I could not tell you. I mean, I think
    if I read the rule I might know. I mean, if I read in the----
        Senator Lankford. How many have you met with at this point,
    because there are hundreds of thousands.
        Ms. Smith. Do you mean how many not-for-profits we have met
    with?
        Senator Lankford. Yes. No, no, no--yes, how many have you
    met with, because there are hundreds of thousands of them.
        Ms. Smith. Before the rule came out we had a number of
    listening sessions specifically with not-for-profits. Then,
    since the rule has come out, not only did we put out guidance
    for not-for-profits, specific guidance, but we also had a
    number of webinars specifically for not-for-profits to talk to
    them about how they could implement the rule.
        I mean, there is not just one way to implement the overtime
    rule, and we have been giving a lot of technical assistance
    both specifically to universities, as you mentioned, and higher
    education, for not-for-profits, and for small businesses.
        Senator Lankford. So, basically you are giving donors to
    non-for-profits 25 weeks to donate more so that they can stay
    open, because I am telling you, some of these domestic violence
    shelters are closing because they do not have the money to be
    able to run them. And this is a big issue to a lot of non-
    profits in this very short window. They do not just magically
    have more money in October, December.
        Senator Heitkamp. If I can add to this, because I think the
    nonprofits that are struggling the most with this are
    nonprofits who may have 24-hour call centers. They may, in
    fact--you could sit there and say, well, there is an easy way
    to comply with this rule: Make sure no one works over 40 hours
    a week, right?
        Senator Lankford. Or donate more money.
        Senator Heitkamp. Well, yes, I get that, but my point is
    that very many of these nonprofits that are hit the hardest are
    nonprofits that rely on call centers, rely on the ability to
    call workers in at two in the morning to deal with a domestic
    violence situation, deal with placement of a child.
        And I think you need to understand that where the simple
    answer sometimes in the overtime rule is that you can, in fact,
    comply by maintaining, and I am sympathetic to your rule. I
    mean, I think that when you work someone, what is it, $23,000 a
    year right now----
        Ms. Smith. That is correct.
        Senator Heitkamp [continuing]. Somebody can be classified
    as a manager and then you can work them 60 hours----
        Ms. Smith. Or 80 hours.
        Senator Heitkamp [continuing]. Or 80 hours. And, to me the
    problem is that you are not only not paying them enough for the
    40 hours, you are also taking away the advantage that they may
    have of getting a second job to support their family.
        So I may see this a little differently than Senator
    Lankford, but I will say I think that the overtime as it
    relates to on-call is very problematic.
        Ms. Smith. So, thank you, Senator. I do not think I am
    going to have, really, time to answer all these questions, but
    I would be happy, if you wanted to submit some QFRs for the
    record----
        Senator Heitkamp. Yes, we will.
        Senator Lankford. We will definitely do that.
        Ms. Smith [continuing]. We would be happy to answer those.
        Senator Lankford. Is it possible for us to be able to get
    responses back--and we will be very specific--within 30 days?
    Is that a reasonable time period?
        Ms. Smith. We will do our level best.
        Senator Lankford. Give me a percentage of what ``level
    best'' looks like--80 percent chance I get those?
        Ms. Smith. I guess it depends upon the number of questions.
    [Laughter.]
        Senator Lankford. So we will be very specific in our
    questions as we walk through it.
        I would tell you, December 1 is screaming at a lot of
    people in my State as it is coming.
        Ms. Smith. I understand that. You may or may not know,
    Senator, that there were two lawsuits filed in the last two
    days in an attempt to enjoin the overtime rule, so it is very
    possible that, no matter what the Department of Labor would
    prefer to happen as to the date, that it may be pushed back.
        Senator Lankford. Well, there are a tremendous number of
    people that are begging for that because it is incredibly
    difficult to both understand and implement in a lot of
    businesses because of the number of exceptions. And if you are
    a nonprofit, especially, or a university--I have spoken with
    university presidents again. They tell me tuition is going up
    in the spring specifically because of this rule.
        Ms. Smith. Just one last comment, Senator, which is that
    the exemptions that you were talking about, those are statutory
    exemptions to overtime. They are not affected one way or
    another by our overtime rule, which only deals with the white
    collar exemptions.
        Senator Lankford. Right.
        Ms. Smith. So, I understand that those exemptions are
    confusing. That is because the Fair Labor Standards Act has
    been amended from time to time and Congress puts in an
    exemption for this one and an exemption for that one, but those
    are longstanding exemptions. They are not new to this overtime
    law.
        Senator Lankford. But every small business employer is
    right now hiring a consultant to be able to come help explain
    this to them because they know what they have and they do not
    know what is coming. And so they have added expense already of
    that consultant, and then trying to figure out what to do on
    the costs on it, or who they are going to lay off or who they
    are going to keep, or who they are going to switch to hourly,
    as multiple businesses I have talked to have already shifted
    salary to hourly to try to make the shift.
        I know you have to get gone. I am trying to honor my
    commitment to everybody else that we would be done by five
    and----
        Ms. McIntosh. And, Senator, I am sorry, but I also
    communicated a prior commitment, that I would need to leave
    soon as well, although of course I would be happy to take your
    comments, your questions.
        Senator Lankford. Can you stay until 5 o'clock?
        Ms. McIntosh. I really need to be somewhere else at 5. It
    is getting very close to that. Can I take a few more questions?
    And then we would certainly be very happy to answer any others
    that you would like to submit to us for the record.
        Senator Lankford. OK. If we can get a few more questions to
    you, that would be helpful.
        Ms. McIntosh. OK.
        Senator Cardin. Mr. Chairman?
        Senator Lankford. Yes, sir.
        Senator Cardin. I have other questions. I will just ask
    them for the record.
        Senator Lankford. OK, thank you.
        Senator Cardin. Sure. And thanks for letting me join you.
        Senator Lankford. You bet. I am glad you joined us.
        Senator Heitkamp, do you have anything that you would like
    to start with?
        Senator Heitkamp. No, you go ahead. I do not want to take
    up more of Amy's time.
        Senator Lankford. Well, let me try to get through a couple
    of these here, because it is part of the challenge that we have
    as we go through some of the ``Dear Colleague'' letters, when
    they were determined--for instance, the one on the Title 9
    dealing with transgender, it was determined to be a significant
    guidance. My understanding was, based on the previous hearing,
    that it raised a novel set of questions from the stakeholders.
        What kind of processes go back and forth with OIRA when it
    ends up being a significant guidance based on novel questions?
    And why is that a guidance rather than a regulation?
        Ms. McIntosh. Well, it is a guidance document because it is
    interpreting and saying in plain language how OCR is enforcing
    the law and related regulations to Title 9. We do not believe
    the DCL added any new requirements.
        Senator Lankford. But it started with: It is a novel piece.
        Ms. McIntosh. But we deemed it--we have a centralized
    process at the Department to review guidance for--based on the
    bulletin, for what are the characteristics of significant
    guidance, and we judged that one to be significant. And as we
    do with all significant guidance documents, we offered it to
    OIRA for review. And I believe OIRA accepted it in that case
    because it touched on issues that were involved with other
    agencies as well as--clearly we were getting a great deal of
    questions and urgency from our regulated parties.
        Senator Lankford. But it was the perception of the
    Department of Education this was nothing new, this was always
    in the statute; it had just never been enforced? Or it had been
    enforced; it just needed clarification?
        Ms. McIntosh. So, I think I mentioned earlier the
    interpretation of Title 9, where discrimination based on sex
    includes gender identity, is actually a longstanding
    interpretation of the Department, backed by case law. As you--
    --
        Senator Lankford. When you say ``longstanding''--somebody
    help me understand ``longstanding.''
        Ms. McIntosh. At least 2010, arguably earlier than that.
    But the specific issues around transgender students and
    bathrooms in schools did increase--we got an increasing number
    of complaints and questions over the last few years. And the
    Office of Civil Rights was engaged in investigating and
    reaching agreements with States and districts.
        Because those complaints seemed to be accelerating as, in
    general, the world has been paying much more attention to gay
    and lesbian and transgender rights in the recent years, we felt
    that it was important that we tell a broader audience than just
    the audience that OCR was getting to one complaint at a time
    how we were interpreting Title 9.
        Senator Lankford. So you determined at that point, early
    on, this is not a regulation, this is a guidance, because
    internally this was always the understanding in the Department
    of Labor at least since 2010.
        Ms. McIntosh. So, the Department of Education. And not
    internally. It was the interpretation that the Office of Civil
    Rights was using in their active, ongoing, external work
    investigating civil rights complaints around this issue. It was
    not widely known because it was investigation-specific.
        And we do not think that school districts and States, who
    are not lawyers and not, deeply immersed in this law, should
    have to read the resolution agreements we come up with, with an
    individual investigation, and figure out how that applies to
    them.
        So we simply explained in this guidance document how OCR
    has been doing interpreting. And, as I mentioned, we also
    published examples of States and school districts who were
    coming up with very excellent solutions to stay in compliance
    with the law.
        Senator Lankford. And by the way, I completely agree with
    that. That is entirely reasonable to say: It is an expectation
    that every student is able to be at school in a safe
    environment for that student, free of bullying and the threats
    of all those things, and here are good examples of some schools
    that have done it.
        That is entirely reasonable. You took the next step and
    said: And here is how you are going to do it now. And it
    changed dramatically and redefined a statute from the 1970s in
    a new way.
        Ms. McIntosh. I would respectfully point out the ``Dear
    Colleague'' letter is not binding. It does not have the force
    of law. And it does not specify a single way that States and
    school districts can stay in compliance with the law.
        Senator Lankford. I would say there are a lot of districts
    that disagree with that, and we can agree to disagree.
        Let me ask a question here. As well as language--and we are
    back to the same issue here in just helping me understand this.
    This comes from that ``Dear Colleague'' letter: ``A school may
    not, however, adopt or adhere to requirements that rely on
    overly broad generalizations or stereotypes about the
    differences between transgender students and other students of
    the same sex.'' Help me understand the term ``overly broad
    generalizations.''
        Ms. McIntosh. I would not be able to comment on that
    specific phrase. I could certainly ask the Office of Civil
    Rights to elaborate on that.
        Senator Lankford. I will try to follow up on it because,
    again, we are back to everyone else has to read it and to be
    able to understand what it means. And clearly a guidance
    document is there to be able to provide clarity. A term like
    ``overly broad generalizations'' really needs some clarity
    itself, trying to figure out what that means because, again,
    every school district lives in fear of the Department of
    Education walking in and saying: You have a Title 9 violation
    and your funding is at risk.
        Ms. McIntosh. So I will take that input about that phrase
    back to our office.
        Senator Lankford. Tell me as well about--when we are trying
    to deal with a new piece that has come out from the Department
    of Education and the Office of Civil Rights--there was a
    document that was put out saying that there is a process that
    we are going through right now to be able to identify religious
    discrimination or bullying based on religions, and specifically
    highlighted minority religions in the United States, to make
    sure that we do not have individuals that are discriminated
    against, and trying to form some sort of process to be able to
    collect complaints.
        So I am trying to figure out where this is going and how
    the process will go to collecting. Again, I am in the same
    position. I do not want any kid of any faith, of any
    background, of any--whoever it may be, to have an unsafe
    environment. So I am trying to figure out this. How will you
    collect the data based on religious discrimination in a school,
    or statements about religious discrimination?
        Ms. McIntosh. So, I apologize, Senator. I am not familiar
    with the document or the process that you are referring to, but
    I can certainly get more information for you.
        Senator Lankford. I will try to send a list of questions
    into you as well. Same question as well. Can I get those within
    30 days responded to?
        Ms. McIntosh. I will ask my colleagues. We will do our very
    best.
        Senator Lankford. I am back to ``our dead level best,''
    yes.
        The question really, then, boils down to several things we
    need to deal with religious liberty on a school campus. Again,
    that has been longstanding policy that individuals can both
    have a faith and live their faith, especially for a student on
    a campus. It has been well-protected and restated multiple
    times by both courts and by Presidents, affirming over and over
    again, of both parties.
        I would just be interested to be able to know some of the
    process of what is out there. And there are some very specific
    situations that become more challenging of who this is
    collected on, the process of how it is collected, and where we
    go from here.
        Ms. McIntosh. And we will get back to you on all your
    questions.
        Senator Lankford. Thank you.
        Ms. McIntosh. I apologize for having to slip out. Thank you
    very much for having me here.
        Senator Lankford. All right, thank you. And we will follow
    up with additional questions.
        Mr. Shelanski, you are the last man standing. It is redhead
    on redhead now. [Laughter.]
        Mr. Shelanski. All right.
        Senator Lankford. So my question for you is, again, back to
    where we started. This is difficult in our conversation. It is
    much more difficult in conversations outside of this building:
    What is a regulation? What is a guidance? Which one do I
    follow? Which one do I not follow?
        I had a university president as recently as this week say
    to me: When a ``Dear Colleague'' letter comes out, I follow
    it--and his exact words were--as if it is regulation, because I
    understand the price that I may pay in trying to explain to my
    board in case I do not and in case the Department of Education
    steps in and says, I am going to take away your funding.
        This is not a level playing field where an individual can
    just, as it has been argued: Well, it is not legally binding.
    We are just giving you guidance. Everyone there understands
    full well the consequences of not following it. And if they do
    not, it is not just a court hearing; it is the possibility of
    losing funding and being published as a school that has a Title
    9 violation, or, in multiple cases with the Department of
    Labor, having a public setting that this place is under
    investigation, or now even with contracting, because some of
    the new conversation is that if you are going to get a Federal
    contract, you are going to have to say how many investigations
    they you have been through, and that is going to count in your
    scoring.
        So if Department of Labor shows up at my place three times
    a year and shows up at someone else's place once every three
    years, you are at a much greater risk for not getting a Federal
    contract because you are going to show active investigations
    and they are not, though they may be exactly equal as two
    entities.
        These have very serious consequences both to businesses,
    individuals, taxpayers--lots of litigation both for the Federal
    Government and us. How do we provide clarity to this? And who
    is the gatekeeper to make sure that there is a difference
    between guidance and regulation and people know the difference
    within the agencies? Who has that?
        Mr. Shelanski. So, I think in the first instance it is up
    to the agencies because the vast majority of guidances that
    they are issuing are pretty clearly explanatory and
    interpretive. I do think that in cases where agencies overstep,
    I think there are a couple of different paths that can be
    adopted.
        The one thing I would note is that, in a guidance document,
    what we look for first is whether or not the guidance is adding
    anything by way of obligation or requirement to the underlying
    law or regulation. And sometimes when the guidance is repeating
    that which is already established in the underlying law and
    regulation, one would expect that the recipients of the
    guidance document would treat at least that part of it as
    regulation, as binding, because it is a repetition of that
    which went through that proper process.
        After that, what we try to do--and I think what the good
    guidances practices do, what the back-and-forth outreach that
    agencies do in accordance the Good Guidance Practices and the
    kinds of things the GAO has recommended--is to try to give
    really helpful advice about alternative ways to meet those
    preexisting obligations.
        And so, I think it is primarily on the agencies to follow
    those practices and to make sure that what they are giving to
    stakeholders is something that does not go beyond that which
    was previously established and which is helpful.
        Senator Lankford. And if there is the perception they have
    gone, it is the courts? Who do they respond back to----
        Mr. Shelanski. So I think there are a couple----
        Senator Lankford [continuing]. As individuals that are
    affected?
        Mr. Shelanski. I think there are three different routes
    that one sees happening.
        I think the most direct route is to go back to the agency,
    because typically when an agency puts a significant guidance
    out, it does provide contact and invite response. That is,
    indeed, a best practice that is in the 2007 document. It was
    identified by GAO. And, in fact, we have seen the two agencies
    that were sitting here this afternoon increase their specific
    request for that kind of feedback so that they can tune their
    guidances in response to that. So number one would be the
    agencies.
        Another option is to come to us at OIRA and to say, we
    think either that this guidance is not a guidance and should be
    regulation, or it is a guidance but it is turning out to be
    economically significant; it should have gone through the
    notice and comment. And as stewards of the 2007 Good Guidance
    Practices, we would be in a position to call the agencies in,
    again, to discuss what options there might be to remedy the
    problem that was brought by stakeholders. So we are another
    place that stakeholders can come.
        And then the final place, which we have seen in a couple of
    recent examples quite clearly, are the courts.
        Senator Lankford. What is the best timing in the process
    for people to be able to come to you as the gatekeeper?
        Mr. Shelanski. As early as possible. And so an example
    would be the following: Patricia Smith identified some requests
    for information that were issued to the public and a comment
    period that was issued to the public when they put the public
    on notice they were considering some guidance changes.
        I think concern at that point about, A, whether the
    document is really guidance or really should be APA rulemaking,
    and,
    B, whether even if a guidance--it might be economically
    significant--would be things we would be interested in learning
    quite early from those stakeholders, because when we can engage
    before a guidance is developed and issued, we are better able
    to work with the agencies and to put in place a good process.
        Senator Lankford. I would also say to you--and something we
    have discussed before--when the American people have the
    opportunity to be able to do the same, that helps. That is one
    of the reasons this Committee has promoted advanced notice of
    proposed rulemaking, to get more people involved in the process
    earlier so that when significant things like that come out, we
    do have the opportunity to be able to get maximum amount of
    input from the affected individuals.
        That is a positive input. As you and I have discussed
    before, we are still a nation of the people, by the people, for
    the people. And when people find out about it last rather than
    get the opportunity to be able to contribute first, it makes a
    big difference to people in their frustration level. They do
    not have money to go hire lawyers and to go chase down and do
    lawsuits. They just want their own government to be responsive.
    And they expect someone is watching that, and that is very
    helpful to them.
        One of the things that would be extremely helpful for us to
    know is that OIRA is active, that when a guidance comes out and
    immediately people across the country raise the issue and say,
    this is more expensive than $100 million, it has the effect
    that OIRA will lean in quickly and second-guess that agency and
    at least ask them: Did you do cost-benefit? Where did this
    stand? Why didn't we get this, and to be able to hold the
    agencies to account, because that seems to have come up several
    times of late where guidance is coming out and everyone says,
    no one seemed to have done cost-benefit on this, or if they
    did, they did not see it was $100 million and we are trying to
    figure out why because this will have a dramatic effect on our
    business. We will have to close, we will have to merge,
    whatever this may be. That would be helpful for us to know that
    OIRA is leaning in on that aspect.
        Mr. Shelanski. Thank you. This is certainly something for
    me to take back. We can always try to do better that which we
    already do. And I think it is an important issue for me to take
    back and discuss with our team about what more we can do to
    make that assurance more salient for Congress and for the
    American people.
        Senator Heitkamp. Yes, I do not know what the rest of our
    Committee schedule is in this Congress, but I want to express,
    as long as we are still here, our great appreciation for your
    cooperation, our interest in continuing this relationship in
    the next Congress, depending upon who is sitting in either
    chair here.
        But I think you can tell from the way we work, we are very
    serious about trying to do things that give the American public
    confidence that the government actually has a level of
    transparency and openness to listen to varying opinions, but
    also not so hamstringing these agencies that we do not get
    regulations out, which is one thing that I talk about quite a
    bit, that the failure to regulate can also create huge
    problems.
        But I want to thank you, Howard. You have just been a great
    guy to work with. And if we do not get a chance to publicly
    thank you for your service to our country as this transition
    moves forward and ask you to remain engaged in an intellectual
    and academic way with this Committee as we move forward. Your
    advice is always welcome, I think by both the Chairman and by
    this Ranking Member, and we look forward to working with you
    even if you are not in the capacity as head of OIRA.
        Mr. Shelanski. Thank you very much, Senator. I also look
    forward to that.
        Senator Lankford. Yes, I would second that as well.
        And do you have additional comments?
        Senator Heitkamp. No, I am good.
        Senator Lankford. I would say--and not looking for you to
    move any place, but I am grateful to be able to have the
    ongoing conversation. We do want this just to work. There are a
    lot of jobs, there are a lot of businesses that are on the
    line, and these decisions that are made based on preferences
    here have real effect out there.
        Senator Heitkamp. I----
        Senator Lankford. Now, you said that was your last
    statement.
        Senator Heitkamp. Oh, I am sorry, but I forgot----
        Senator Lankford. This is it. [Laughter.]
        Senator Heitkamp. On the OSHA, just some commitment--you
    said you would take that back--maybe have a discussion with
    OSHA on the anhydrous guidance and see if there is a way that
    we can at least delay that, because I do not know what we are
    going to be able to negotiate in the CR. There is a whole lot
    of discussion about something being purer than what it has been
    in the past. But leaving this in limbo will create great
    stress----
        Senator Lankford. I agree.
        Senator Heitkamp [continuing]. On businesses. And I do not
    think, given what we know right now, a delay to the end of the
    year is asking too much so that we can get additional dialogue.
        Mr. Shelanski. Thank you, Senator.
        Senator Lankford. Yes, I would agree with that completely.
        I would tell you, this Committee has had a particular sense
    of benefit over the past several years, now the past couple
    years, by connecting with former heads of OIRA, and they have
    been extremely helpful to us in multiple times and multiple
    conversations because they are able to say the things as former
    head they could not say as head. [Laughter.]
        And so, not looking for you to leave your job, but I do
    hope we maintain this relationship, because you have in your
    head and from your experience a lot of things that would help
    the American people for a long time. And so we hope to be able
    to maintain that relationship for the sake of the American
    people and for the future of how we actually operate on all
    these issues.
        Mr. Shelanski. Thank you, Senator.
        Senator Heitkamp. And what you say will matter to us.
        Senator Lankford. Yes, it will. Thank you.
        Let me do a quick closing statement that I am sure will be
    moving and stirring to all that hear it.
        I do want to announce, on September the 29 we will hold a
    hearing connected with Millennials--strategies for the Federal
    Government to attract and utilize younger workers.
        That concludes today's hearing. I would like to thank our
    witnesses for their testimony. The hearing record will remain
    open for 15 days until the close of business on October 7 for
    the submission of statements, questions for the record.
        Do you have a statement?
        OK, the hearing is adjourned. Thank you.
        [Whereupon, at 5:01 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

                                  ----------

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                     [all]