Transcripts For CSPAN2 Hearing On Issuance Of Regulatory Guidelines 20150923

Legislation in the United States senate. Save more than 18,000 lives each and every year. Thats right, 18,000 lives each and every year. We arent talking about anything other than the results of sound science. And because of that sound science, we know that at approximately five we know that at approximately five months babies can feel pain. We know that if a baby were to need prenatal surgery at that age tivhey would be given an anesthia why, because that little life feels pain. Yesterday, mr. President , senator gave name after name after name of babies born around five months who have gone onto live healthy and full lives. This, mr. President , is not about prochoice or prolife. It is simply about protecting tenin fingers, ten toes and one beating heart and bringing the amazing gift of life. And in our world, out of merely 200en nations, only seven allow abortions on demand of 20 weeks. Only seven out of 200 nations, whos among the seven nations, china, north korea, vietnam and the United States, really . And so while i may stand here today, mr. President , with a nine in my stomach, i also stand with hope. Hope that we can take a massive step forward in protecting life. 18,000 lives a year by passing this important legislation. America is truly a great nation and so lets improve our reputation and not lower our expectations because as john wythm said nearly 400 years ago, we should be as a city upon a hill the eyes of all people upon us. Thank you, mr. President. Mr. President , senator from soutseh carolina. I ask consent that quorum call be equally charged to each side. With that objection i note the we are live now in capitol hill for a Senator Committee hearing examining the labor and education to clarify issues and existing regulations. Witnesses today include officials from the tbot Government Accountability departments and oklahoma senator is the chair of the committee. Im sorry, north dakota senator. It appears we are waiting for the democrats to arrive including the Committee Member and as soon as that happens, we expect the hearing to go under way. Lye coverage on cspan2. Well get started. Good morning, everyone. Welcome to the discussion on the regulatory state, use of guidance. One of the common ways to communicate. In my first to take a full step back and look at the whole pictures. Not always begins with us, with congress, passing law to provide statutory. One of the areas that the Ranking Member have talked about often that congress has responsibility to write statutes. Agencies and rule making authorities and regulations, regulations are legally binding that are enforceable and those who fail comply my face hefty fine and jail. It requires agencies to publish a notice and receive Public Comment before they promulgate rules. Notice in comment is critical for the agency to get feedback from related parties and to the american peam people to make sure it is transparent and fair. People must have a voice in the rule making. Congress in the need to get information, also provide in the apa requirements for interpreted rules. These terms are grouped together under the umbrella of guidance. Guidance is a helpful tool, for example, agencies desire point of view, Agency Guidance is useful by exempting it from notice requirements. Therefore, when an agency chooses it may public on web scythe website and do that immediately. It comes with a catch. Guidelines may not impose legal obligation on the agency or parties it regulates beyond those inherent. Given characteristics guidance is not binding but legal requirements and regulated partys obligations, it can be very difficult even for experts to determine or when a document can be rightly called a guidance and go to rigor of apa and rule making. In fact, the Government Accountability office found legal scholars with determinations. I do believe that agencies my issue guidance with the best of intention to clear confusion or provide timely information. However, also i also concerns of regulated entities that must swift through huge stacks of guidance with varying names to make sure they are complying with standards. For example, the department has issued advisory opinions, notices to interested persons, questions and answers and circulars just to make a few. Frequently asked questions, program memos and manuals. I hope the discussion to select guidance and Going Forward. Today concerns by which decision to issue guidance is made. Making process to the Public Notice and comment is wrong in and of itself. Even if the substance of the policy it articulates is sensible. In the past, for example, watchdog organizations and committees have expressed concerns with department guidance. In 2010, 11 and 14, the officer issued guidance on bullying, Sexual Assault. The letter expand prohibited conduct in the way Disciplinary Procedures can be conducted and the scope to prohibit contact. The department of education is rarely challenged likely because the powerful position, schools frequently follow guidance without question for fear of an investigation that may damage their Academic Reputation or federal funding. Because of this the department may continue to improperly issue guidance. More recently t Labor Department Occupational Health and Safety Administration issued guidance on standards. Both issued three process Safety Standards and ps memorandum. Suggested many presly unregulated parties and compounded costs. To maintain integrity of process, i hope the department of labor reconsiders the manner in which it affected regulated stakeholders within the jurisdiction. Principles are subject to procedures mandated by the ap ark. Im grateful for work and look forward for her testimony. Also with us officials with the department of labor and education. In may senator alexander wrote to the department of labor and education asking to determine when to issue guidance in lieu of rule making. In response, they provided some helpful insights and i look forward to expanding on some of the insights today. This is something that is a serious issue. Its not just the two agencies, this is a bigger issue. And even in the letter that we promulgated and in other questions that we had, this is not picking on two agencies, this happened to be two agencies that there are a lot questions and a lot of guidance documents. As i mentioned before, some of the guidance is good policy, its the process that we are talking about to make sure people are included in it. With that, i would like to recognize member. Thank you, it may not sound like the most topic. We get very excited about all these topics. But obviously this is one of incredible importance and one that affects so many of our businesses and so many of our schools and pretty much the regulatory community. As i said, regulations almost what our nation and citizens do. They keep products and food safe, they work to prevent fraud and keep our economy and americans working. However, sometimes the language agencies use creates confusing and seemingly conflicting standards. Guidance is the means by which businesses can get the clarity and answers theyre searching for. It gives them certainty. Guidance helps clarify expectations. Guidance for exchanges and tool to streamline processes. Guidance allows business to better understand the relationship with the regulator. Guidances nor should it be rule making. Its important to recognize that more obvious than not, guidance comes at the request of the regulated parties. Any work that we do here must not exchange for valuable tool and full business government. Theres more to guidance than simply clarifying views and expectations. The create creation must take into account to the parties. Guidance cannot change law, it has the power to influence markets. In order for this to be truly exceptional process, we must ensure that there are seats for all interested parties at the table, and that seat must be a real seat. However, theres a difference between having a seat at the table and getting one own way. The Congress Holds the key. Sometimes agencies simply do not have the authority to alter a regulation due to a statutory mandate. In these instances, it is up to congress, it is up to everyone to ensure that we listen to agencies an we listen to businesses and we listen to those who are regulated. It is up to us to be willing to Work Together to tweak and amend legislation when necessary. It is up to us to ensure that good intentions do not overly burden our economy. In reviewing the testimony and reports in preparation for the hearing, it seems that theres much we can do as a chamber to ensure that guidance published is of the highest quality. Its important that theres con consistency. We are looking at and thats the role at the committee to look at a systemic view, however illustrations can inform us on the types of reforms that we may we may be advancing out of this committee. Small businesses dont always have the staff or the time to swift through pages and pages. In fact, i can guaranty you they do not have the staff or the time to swift through pages. Administrator memorandums and program instructions. We need to work to make sure that guidance is accessible to the public. We need to ensure that one does not have, does not need to have intimate knowledge of the regulatory state to understand what is and what is not a guidance document. We need to simplified terms and create consist consist i look forward to hearing from our witnesses and hopefully having a fairly lively debate on what we could all learn from these examples and move forward to amend the system when it isnt working. Thank you, mr. Chairman. Thank you. At this time we will proceed testimony from the witnesses. It is the tradition of this committee that we have two rounds of questions. The first round of the questions will be structured 5minute time period. So we will go around the dias. We will have open dialogue so any member can jump in at any time and have dialogue and follow up on questions and answers. But the first round will be very structured. I hope that makes sense. Let me introduce our witnesses and well ask you to be sworn in as well. Michelle sagger. Ms. Sagger manages governmental and budget issues with multiple federal agencies. She served at john hopkins as well as Public Policy. Previously chief of staff from the department, Senior Adviser to the secretary of labor. Amy of the department of Education Office of policy development. Your card must have two sides. [laughs] the front and the back. In this capacity she overseas policy management from kindergarten and policy services. She was assistant secretary k12. Before that she served in various capacities in new york state, new York City Department of education. Thank you all for appearing before today as its a custom to swear. If you dont mind, please stand and raise your right hand. Do you swear the testimony that youre about to give before the subcommittee is the truth, the whole truth and nothing but the truth, so help you god. Thank you, you may be seated. Let the record reflect the witnesses answered in the affirmative. Before we begin, we would ask consent for senators alexander to be recognized before the subcommittee today. Much of what we discuss today will relate directly to a may seventh letter sent to withins in the department of education and labor. The leadership has been extraordinary and im happy to have him here today. Senator danes has taken leadership roles in the issues and we welcome here today. With that objection, so ms. Sager, you are first to give testimony. Thank you for the invitation to appear before you today and discuss guidance process. My remarks will explain aspect of Agency Communication and highlight answer to four key questions that were covered in the topic. First what is Regulatory Guidance and second how do agencies use Regulatory Guidance and when to issue guidance and fourth, how can agencies ensure more effective guidance pro procesees. First in terms of Regulatory Guidance is a communication tool that agencies use to communicate about the implementation of regulatory and Grant Programs to regulate a party, to guarantees and the general public. One of the main purposes of guidance is to explain and help regulate a party comply with agencies regulations. Regulatory guidance can take a variety of formats and names, fax sheets. They help agencies move quickly using rule making. Even though guidance is not legally binding guidance can have a significant effect on regulated entities and the public both because entities rely on large values and guidance can prompt changes in the behavior of regulated parties and the again public. Second, in terms of how agencies use Regulatory Guidance, in our report we focus on four agencies and we found that officials at the Department Said agricultural, education, house and Human Services and labor use guidance for a number of purposes include to go including to explain and respond to questions from regulated entities or leadership priorities. Departments typically identify very few of guidance documents as significant which is defined by the office of management and guidance with a broad and substantial impact on regulated entities. A third in terms of the decision of whether to issue guidance or undertake rule making officials considered a number of factors before making this decision. He among those factors was whether or not they intended for the guidance document to be legally binding. Officials said that they generally understood when guidance was inappropriate and when it was more appropriate to undertake rule making. Fourth, in terms of how agencies can ensure that their guidance process addhere, we also found that they could strengthen their internal control or their management control to ensure that their guidance achieved desired results and also prevent errors. In absent for specific nonspecific guidance which is the majority, the application of internal controls is particularly important. The 25 Agency Components within the four agencies included in our review addressed some control standards more regularly than others. So for example, both components, very few have written procedures that govern their guidance production. All components could describe process that they followed for management approval of their guidance. We recommended that agencies adhere to requirements for significant guidance and also strengthen their internal controls for guidance production processes. They report they were taking actions with the recommendations. In summary, agencies must exercise diligence in issuing guidance. Although its not legally binding, guidance documents can affect the actions of stake holders and other breasted parties by articulating as well as interpretations. The effects of these documents and risk of legal challenges to agencies underscore the need for consistent and well understood processess for guidance. This concludes my statement. I look forward to any questions that you may have. Thank you. Thank you. Good morning, mr. Chairman, Ranking Member, members of the subcommittee, senators. Thank you for the opportunity to testify on the departments labor effort to disseminate accurate guidance to inform stakeholders of opportunities and do so in a way with applicable laws and procedures. The Department Takes this seriously including but issuing regulation that is give employers workers and the workforce system the information they need to comply with the law and achieve safety and security in the workplace. Employers, workers, job seekers and retirees, clarify requirements that are set out in statutes and regulations. We consider letters an phone calls that we received from members of congress, public, listening sessions with stakeholders, regular request for information and more depending on the situation. The departments guidance concern number of different purposes clarifying regulations and providing information and providing assistance responding to specific stake holder questions and directing to existing resources. We strive to issue guidance to members of the public and who should not have to hire a lawyer to understand the law. The wage and Hour Division created a handbook about rights and responsibilities under the family and medical leave act that weigh requests for people and what people should consider in responding to requests. Guidance helps us to maintain responsibility to respond to stake holder questions and challenges. For example, Occupational Safety and Health Administration coordinated the worker safety and Health Aspects of domestic response to last year response to ebola outbreak. Of course, there are situations in which we more formally seek Public Comment on a guidance document because of its cig nickance. We abide by the administrative procedure act and guidance and we are pleased the audit found that the department consistently applied requirements for Public Access and feedback for significant guidance. An example of that this past spring, the Department Published for comment proposed guidance to assist the Contracting Community in applying president obama fair pay and work executive order including severity of violations. Providing 90 days to weigh in on the full implementation picture. As gao noted in agency, and we do work hard to use technology to share guidance. We focus on agencyspecific guidance we know that many dont know where to go to find answers. Another important wide resource is employment laws assistance. Its called elaws, interactive website that enables the public to find information about rights and responsibilities. Elaws advisers is a unique webbase tool about federal employment laws. It you can ask a question and get an answer and file forms online. We receive 44,000 visits a day which is a remarkable for a single program. Workers are finding the site and finding it useful. We are always committed to finding ways to improve. Building upon helpful recommendations from gao, we are reviewing and updating written procedures of how we review and approve significant guidance. The department is convening policymakers and that group is sharing best practices right now for internal control and developing guidance. The department is also identifying ways to improve our website so the public can more easily access and comment on our guidance. The Department Remains committed to our broad efforts to develop and decimate under the laws that we enforce. Mr. Chairman, Ranking Member, senators, thank you again for the opportunity to testify today. Im happy to answer your questions. Great, thank you. Chairman, Ranking Member, senator, my name is amy mcintosh and i appreciate the opportunity to be here to testify about our issuance of guidance. Guidance is an important tool that the department uses to communicate timely and consistent information to the diverse groups that we serve, students, parents, teachers, states, schools and school districts, institutions of Higher Education, advocates and the general public. In particular, we use guidance to assist our partners and stakeholders in understanding and complying with the laws of congress and with regular related regulatory requirements. The department uses guidance to promote transparency and to assist and guide 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 departments mission. We find it helpful to issue guidance for various reasons, including explaining new regulations in plain language, responding to questions from external stakeholders, clarifying policies in response to compliance findings and identifying best practices relating to the topics in the guidance. The department is committed to issuing guidance that is well developed and responses to guarantee and stake holder needs, reflects appropriate review and is properly disseminated to reach the relevant audiences. The 2007 established policy and procedures for the development issuance and use of guidance documents and the gao report that was referenced sound that the department, i quote, had written departmental procedures for the approval of significant guidance as directed by the o b bulletin an consistly acquired on feedback guidance. Guidance does not meet the o b is left to Agency Discretion for procedural development. Because the importance and scope of guidance various, procedures also may vary slightly among the offices within the department. We encourage all offices to consider input from the intended audiences, to go through several leferls levels of review and where appropriate general counsel will ensure legal sufficiency. The department believes that our internal control for developing and producing guidance are effective, but we are committed to continue improvement. We appreciate the guidance that was provided in the gao report and we are taking into consideration. We are currently in the process rf reviewing procedures in our offenses for development and production of all guidance significant or otherwise and we will use our findings to provide offices with standard protocols that they can use to clarify management roles, Document Management review and approval of guidance. The department will also review our presentation of guidance on the departments website and identify best practices to improve the on line presentation and guidance documents. The department is committed to ensure that guidance is used in the best way to assist stakeholders and inform the public. We believe we have done a good job implementing and we are committed to working toward implementation. Thank you, other senators, im glad to be here and ready to answer questions. I quick set of questions and we will go through pretty rapid pace and start moving around. I was to reemphasize, a lot of the issues are not about the rules themselves, about the process of it. We will give you a chance to talk through sa. That. Because youre both experts in the guidance process in your agencies, i want to get your perspective on a couple of guidance thing that is have come out that might have gone through notice. We can talk about more later on it and actually go through the rulemaking process. June 5th of this year osha issued a memorandum, one of the first acronyms in government, recognizeed accepting practices. Are you familiar with this memorandum . Do you believe that memo is an Agency Guidance . Is that the perspective that its a guidance document not a regulation. Okay. If youll turn your microphone too. Thats all right. June the fifth, highly hazardous chemicals and covered concentrations that lifted appendix chemicals. Do you believe thats Agency Guidance . Yes. July 22nd, memorandum with process Safety Management of hazardous chemicals, application of retail insemcion . Familiar with that one . Yes. Let me bounce through a few as well. I think youre prepared for these also. The department of education process for civil rights published a colleague letter on bullying. Do you believe thats Agency Guidance for that . Yes, i do. April the fourth, 2011 a dare colleague letter for Sexual Assault. Familiar with that letter as well . Yes, i am. Agency guidance . Yes, it is. January 2014, department of Education Office Doj Civil Rights Division published colleague letter. Are you familiar with that letter . Yes. Rar also Agency Guidance . Yes. Generally accepted good engineering practices the raga gap we talked about before, was that intended to be a performancebase standard with flexibility for parties to choose thats most appropriate for the business . Performance base to give flexibility, if so, is that continuing in the guidance . Its kind of beyond my personal expertise on that particular issue. But the memo was designed to give guidance to the field on implementing the standards. Okay. The concern that i have is that the new guidance document seem to remove flexibility that previously existed. When we try to look at whats guidance and regulation, and where we should have gone at, regulation gave flexibility to say that you have generally recognized engineering practices, go by those, or wow you can create your own process. It seems to remove that or no, everything is going to shift to the other standard and the flexibility seems to go away. The reason i draw that out is, that seems to be one of those thing that is would like like that would be a regulation that would need to go through noes nos and comment. This june 5 seems to take that away. So the question really is a process. How was that determined this was going to be a guidance rather than a rule that would go out . So to begin, we follow the apa and the o b bulletin on the determinations. We are commit today committed to following the rules and issues of guidance. If theres ever any question that is done in consultation with our solicitor and o b. We are responding to the terrible tragedy of an explosion and sured hundreds of people, when we look and responding to an executive order issued by the president , close the gaps, we have to take action and make sure that a preventible explosion like this does not happen again. Close those gaps. When our folks looked at the regulation, to look at the question is there a need for new notice and comment rule making, its very clear that the red text were clear that guidance was not. There was a need to update the guidance to clarify it. If theres specific questions that you have about the memo, i want to be sure that i get you Accurate Answer. We will definitely pursue that. Okay. The real issue is here. There seems to be a change in the reg. I understand in response of what happened in the explosion. The reg seemed to shift. Was it the assumption that the reason for that explosion is that they were not following the standards, had done their own process, is that why the shift occur . Any of the memos represented any change in the regulation. The enforcement i guess thats really the issue then. You talk about binding, whether its legally binding or not if an entity created their own process, could there be a Court Challenge because previously that was allowed would it still be allowed now to create their own process . Im going to be honest with you, the question about them creating their own regulatory process i feel is okay. Just we can come back and talk about it more in the second round. Previously there were two options. You could follow the set of standards on it and develop because the end is what they were after. Does this provide safe process on it. Now developing their own process seems to go away and you have to do it this way. Thats what we are trying to figure out, what just happened. There seems to be a legal shift that has occurred. We will follow up on the days ahead no, letters on it. Well talk about it in the second round as well. Thank you, mr. Chairman, i know well get into more indepth on this on this particular guidance. I think the disturbing piece of this for so many people, we thought we were in compliance, no rule changed, now we get a letter saying we are not in compliance. It seems like the rule changed. If we were in compliance before doing what we were doing, then how can we so dramatically be out of compliance right now . I think you can understand the confusion because usually if that changes, that dramatically and changes how you implement a law that dramatically, people might turn back and say, that that seems to be something that should have been noticed or something that should have been handled by congress. But to simply without comment or process change the rules, doesnt seem to be what a guidance should do. I think that brings us to this discussion. I want to maybe back away from the regulations a little bit and talk more about guidance. And i think ms. Sager, obviously you had a chance to look across agencies and had a chance to think about what these guidances documents ought to be and what they ought not to be. As you look at the growth, and i think theres a chart over there that shows informal process. Where do you think we need to tweak or change or take a look at legislature in this area. What suggestions would you make . The answer to this question is not a bright line, if you will in part because guidance provides agencies with the kind of flexibility that we just heard from all the witnesses, at the same time if theres a line, that the guidance not be legally binding. Where the difficulty comes in as agencies are issuing guidance to explain regulations to the extent regulated parties are held accountable and believe those guidance, documents go beyond regulation, thats where the difficulty occurs. In terms of next steps, i think there are a number of available one that we talked in our report is making sure agencies have internal controls to be clear about the choices that they are making and who is signing off on those choices. Certainly additional oversight, our report looked at these four agencies. We simply do not know to the extent or is not consistent with other federal agencies. And then certainly another option could be looking at the o b memo to the extent its appropriate government. Again, thats where there is you know, when the Supreme Court says, i know obscenity when i see it. We all may have a different line in terms of where we think guidance may cross over to rule making, but it makes it extraordinarily difficult. I know the benefit of ruling, given that taxpayer the ability to rely on a letterruling so they can make economic decisions for their business. If we move too far to prohibit guidance or to narrowly define guidance, we maybe, in fact, acting against the best interest of the entities that need to have this information. I think one of the problems that ive had reading and thinking about this issue come to go this, has really been definitional. And everybody has a different line but one thing we dont want to have happen is peoples relationship with a regulated agency to materially change as a result of a guidance and dramatically shift because then we start thinking, thats not the right way to make that decision. I just want to express the frustration im hearing from so many of my constituents on some of these very issues that are in front of us today. I hear from them but they feel the government is really out to get them through some of these moran brands and the changes. And desolate memorandums. As look at the proposed guidance us as the ones we have today, our farmers, ranchers and industry in iowa are finding them the changes to the economically significant and they are just really feeling skepticism and distasteful our government. It seems to matter what the issue of the day is, this administration seems to be making a habit of circumventing the American People and the right to comment before they make these changes. So we need to really address about. The memorandum come as you mentioned it, ms. Maxwell, about the process Safety Management of highly hazardous chemicals and application of the retail exemption issued by the department of labor in july, it does reclassify the majority of traditional farmers cooperatives in iowa. And the farmer owned businesses, warehouse and distribute crop nutrients, including anhydrous ammonia at hundreds of sites across the state. Activex hybrid uses more anhydrous ammonia in any other state as it is the most costeffective form of nitrogen for farmers to utilize introducing the affordable food and fuel for a growing population. That changes osha has made will be difficult if not impossible for the companies to implement within the sixmonth provided for in the guidance. And we a little, if any, safety benefits. Further they will cost these retailers tens of thousands of dollars per site, in cost that will ultimately be passed on to the farmers, the family farms that they serve. Unfortunately, since the department of labor didnt go through the formal rulemaking process, these Key Stakeholders were not afforded the opportunity to comment on the impact these changes in regulation will have on their livelihoods. So going back to the anhydrous ammonia safety, the july 22 memorandum, what prompted the change in the retail exemption to get away with the 50 rule . Thank you very much for your question. Let me talk a little bit about the process and what led to that. Because the senators im sure are well aware that these are that the subject of litigation. So i can talk more really about the process and probably not properly about the substance of the specifics of those. As we all know this was in response to this tragic explosion in west texas that killed 15 people. Injured hundreds more, reuters reported 100 million in damage. West texas will never be the same. And all of us i know are committed to preventing any such catastrophic i think it was a very robust Stakeholder Engagement process as we embark on following there. This began with an executive order from the president saying to look at the gap, a careful look at the regulation, at the conclusion that the guidance was out of date. We didnt embark on a very robust Stakeholder Engagement process. We published an rfi in the federal register that clearly forecast that we were looking at the retail exemption, ever look at the hazardous chemicals percentages, so really communicated. This is what were looking at. We are publishing an rfi in the register in getting these comments back. Ill stop you right up there. It sounds like maybe we should have gone through the rulemaking process rather than to a memorandum on this. If we are engaging the public in such a manner. This is a case will be looked at the requirements on significant guidance. This did meet those requirements but we knew this was a really important issue that would benefit from more public input and so we pursued strategies that we get there. We also had meetings and webinars that involved thousands of folks. We worked hard. And this was in response to the west texas explosion. Yes. Was determined to be ammonium nitrate, not anhydrous ammonia. Those are two entirely separate substances. So again my question would be, why the change in the 50 rule for the substance of wasnt even involved in that incident . Thank you for clarifying that it was a response to west texas and other chemical explosions came a looking at, we need to have some commonsense practical approach to make sure that we were actually undermining the intent of that standard and those regulations, that we were giving clear guidance to the community about what we need to be doing differently to keep people safe and to prevent, to prevent an explosion like this from happening again. But again, to separate substances, and we are responding to a situation that certainly needed some guidance and come to fill some gaps, but with the agency ended up doing was covering a hold another group of chemicals where there hasnt been incidents. And we were charged with looking at those regulations, was the guidance of actuating Congress Intent of the standards. There were gaps to be closed and thats what we work to do. And worked very hard over a twoyear process to have a lot of Stakeholder Engagement and again i guess my point would be back in april going to a twoyear process engaging the public, then it should be a formal rulemaking process. If its about life become we are engaging thousands of people, they need to formalize rulemaking process. If we are taking the time we might as well do it anyway we are able to engage all of the stakeholders, especially when it is so economically impractical to their livelihoods. But again it was done through a more informal process where the agency was able to determine that even substances that were not involved in such a significant accident are included. I guess that would be my point that if were taking the time to do this, it should be through formalize rulemaking. Thank you, mr. Chairman. Senator alexander. Thanks, mr. Chairman. Thank you for including me in your hearing today. I appreciate it very much, and i congratulate you for your leadership on this subject to even senator heitkamp both. It may not be the sexiest topic in washington but it is at home. I think in all of our states, at least in tennessee, washington, d. C. Looks like a mountain of rules, guidance is spewing forth from all directions and its what i hear about as much as any other, any other issue. So thank you for the subject and thank you for your leadership. Let me ask ms. Mcintosh about department of education. In june of last year adhering of our health, education, labor and pensions committee, Katherine Lehman county assistant secretary for the office of civil rights in the department was testifying, and this was the exchange we had your you talk about something called the guidance and ive got here about 66 pages of guidance under title ix. Now, do you expect institutions to comply with your title ix guidance documents . We do. Alexander, you do . What authority do you have to do that . Alexander why cannot go to the same process of public, kabul and regulation that your department is going through under the clear act . Current welcome we would if they were regulatory changes. Alexander, why are not the regulatory changes with you record 6000 institutions to comply with this, correct . We do. Then who gave you the authority to do that . Lehman, with gratitude you did when i was confront. Malcolm ms. Mcintosh, do you believe that we gave ms. Lehman the authority to make title ix guidance binding on 6000 education institutions . Thank you senator alexander for the question. As you know i wasnt there during that no. Let me assure you i tried to be very clear in my Opening Statement that guidance at the Department Issues those that have the force of law. But this is the assistant said department with title ix which affects 6000 institutions from 100,000 Public Schools and she apparently had not gotten the word. Who is going to tell the . Are you . As she knows and as i know, title ix is the binding law that applies in cases that so guidance under title ix is not binding, great . Guidance under title ix is not binding. Guidance helps the many people are subject to title ix understand what they need to do to comply with the law spirit who is going to tell ms. Lehman . Ive had a discussion with ms. Lehman and she is only a grain with did she just had a lapse of memory that they . I cant speak to what happened that day. Let me pursue this. The chairman mentioned a bullying guidance. That they guidance, right, under the Department Speak with yes. Thats not listed as a significant guidance. Am i correct about the . I dont have it on my list of significant guidance but let me describe the process that before you do that, if it is a significant guidance, according to the office of management and budget there ought to be some input, right, from those affected . The procedures for significant guidance are very clear in the omb bulletin and we follow those. But apparently this was not a significant guidance. Thats odd to me because bullying is a big subject. We vetted a debate on it in the United States and. We just passed in the senate our reauthorization of our education from elementary and secondary act which got 81 votes, 83, if all the centers had been there, it was bipartisan. And the one overriding subject that we agreed on both sides of the i was we didnt want a National School board. And we didnt have any agreement among ourselves on whether we should be telling 100,000 Public Schools what their discipline Discipline Department should be. Where did he get the authority to issue guidance or even a rule or regulation on bullying . Where is tha that in the law ife kind of the senate thinks that its making the law of bullying or not . First of all, senator alexander, thank you very much for your leadership in the bipartisan work that the senate has done toward a new esea bill. I think the bullying guidance youre talking about stems from civil rights law that is also a lot of congress. And wind speed but it doesnt say anything about the link. You are talking about title vi come talking about title vi, its account of the civil rights . I think you would agree bullying could be a serious problem. But that kind of the senate doesnt agree that the federal government ought to be telling a local school what its bullying balls ought to be so how does the department of education get the right to make a guidance would you be under title ix winhec of title ix thinks everybody should issue a guidance to has to do what she says . So the office of civil rights, according to the los laf congress, gets complaints about civil Rights Violations from schools, from Higher Education institutions come from students all over the place. Some of those complaints relate to bullying and it is up to the office of civil rights to follow up on all complaints about civil Rights Violations. But, ms. Mcintosh, its not up to the office of civil rights to make a long been a federal law doesnt do anything about bullying and the kind of congress is debating it, then off she goes as a National School board telling 100,000 schools whether their native alaskan school over there in the mountains of tennessee, this is how you ought to handle your discipline problem. We did not make any divine requirements with she says her edicts are fighting education by guidance on bullying, give me thats not appropriate. My time is up, mr. Chairman. Thank you, mr. Chairman. And i want to thank the chairman as well as the Ranking Member heitkamp recording this hearing at a like this hearing at a likable adoptees here today. Into outlook senator alexander myself to be part of history. I would completely agree with senator alexander comes about what you back home in montana. I hear more about regulations and concerns and ambiguity in the force of such an impact on the Small Business than i do about taxes a as a travel every corner of our state. I applaud the chairman and the Ranking Member for moving forward here with these discussions. I deeply this map of Regulatory Oversight and accountability as thats one of the most wanted middle congresses responsibilities and our dialogue tragedy is of great importance. My concerns are that agencies also oftentimes use these entropy rules to expand regulations rather than merely provide verification. Since interpretive rules are not required to undergo notice and comment, is often allows agenda for unvetted regulation could negatively affect unknowing Small Businesses. A more transparent and the more particular process for widely promulgated intricate rules would resolve this dilemma and i think encourage Business Growth and job creation. Question for ms. Maxwell in your written testimony you state and i quote effective regulations help achieve congresses objected to invest in Human Capital to build the skills infrastructure that supports Business Growth. And it does seem to be a positive link between regulatory transparency and job creation. The Restaurant Franchise Business Owner in my home state from billings, montana, his name is brad anderson. Hes got Buffalo Wild Wings all over the state. It provides jobs to our oftentimes called it suits the ability to make a wager put themselves through college. Great business. Let me quote what brad said to me. Me. He said adequate interpretive rules are changing the nuts and bolts operations about restaurants operate when the department of labor issues interpretive rules on a regular basis, and unpredictability is the norm. You Better Believe it causes businesslike mind to think twice about considering automating processes over making additional higher. Interpretive rules simply discourage job creation, end quote. Ms. Maxwell, how do you reconcile a statement from the testimony with the economic reality my constituents are facing . Thank you for your question. When i spoke to my opening testimony about the work that we do to invest in the skills infrastructure to make sure that workers have the skills they need to compete in the 20th Century Global economy and that employers have a Skilled Workforce that they need, it speaks to the real diversity and range of responsibility for the department of labor. I think it speaks even two the diversity of all the different guidance documents because we are department that enforcement of labor standards, laws passed by the u. S. Congress, but we are also the department that invest in the workforce system through the employment and training administration. We have a really wide range of responsibilities that Congress Interest in us to implement the i believe you think that speaks some to the range of the kind of guidance documents that you see. But when i hear that these interpretive rules are incentivizing placing the jobs of automation, does that suggest that dol circulation operands affected as we think about trying to stay in the job growth . So we worked so hard again as his earlier to make sure that this guide is not making any new requirements, write, we follow the rules, we follow the ap and omb bulletin to guidance is designed to meet the needs of stakeholders to clarify expectations, to hear from them what we need to do better and differently. And i would also say, senator, and opendoor. Like we would happily make time to hear from that constituent in your district and is about how any of our guidance documents are impacted. We will be talk about that in a bit about creating more transparency and collaboration, particularly interpretive rulemaking as well. I want to the question, im running out of time. Ms. Sager, you mentioned the legal precedent prior to the march 9, 2015 Supreme Court decision which overturned longstanding precedents to subject modified interpretive rules to notice and comment. Do you believe perez ruling that the regulatory this is a private more or less predictable . Thank you for the question. In nature of the perez decision is something that we did note in our report. Of course, we did not reinterpret legal rulings, but as we discussed in senator heitkamp squish as well as he for you go on, is the light on on your microphone . The light should be on. The green light is not coming on. There we go. Thank you. Sorry about that. But in your opinion you look at it, do you think it made it, this is record to provide more or less predictable . The very nature of this entire topic is fraught with difficulty i think in that to the extent theres something that is certain is the regulations provided. The agency benefit of this amount of discretion in issuing guidance. That is by design so that their flexibility in getting information out to effective parties in the tony manner. By the same token depending on how extensive the agencys effort articulated with stakeholders, stakeholders may or may not be aware of public agencies are issuing of what the response those are in complying. The feedback, feedback from the folks in the trenches who are trying to grow jobs and make their Small Businesses work are telling me its making it, its less predictable. Weve introduced the bill, the regulatory predictability for Growth Business act that would reinstate the Previous Court precedent. I think reinstate it, that help provide better predictability in this process. Thats what are going to continue dialogue on this Adult Population is fixed to what happened in the court here earlier this year. I think im ou out of time. Let me explain again. We will open up more microphones. Members need not have to wait on each other in time. Lets just have an open dialogue on some of his and he will be the same for any of our witnesses as well for you to be able to interject any point if you want to add to the common. Want to make a quick comment on what senator daines just sit and ask one question. I do share some concerns on the perez v. Mba decision and i dont think im alone on that the let me mention a couple of things. Justice sotomayor made a comment where she said there may be times when it agencies assist issued an interpretive rule rather than a legislative is driven primarily i decided to skirt notice and comment provisions. Justice scalia made the statement to expand this debate agency need only write substantive rules more broadly and vaguely leaving plenty of gaps to be filled in later using interpretive rules unchecked by notice and comment to the apa does not remotely contemplate this regime. So this is an issue that i have a concern and its one of the reasons were having this hearing today is tuesday weve got to get ahead of this so that in the days ahead we are very clear on what the guideline, whats guidance that was the rule and when to go to notice and comment. We are still a nation of the people, by the people, for the people which we mean people should stop engaged with their government to africa but notifies the powder run their business rather than businesses work with governments to tell whats the best scheme, the whole thing is on its head. To let me also make a quick comment here just to build to back up some from of my questions earlier. Trying to get a complete list of guidance and let me give you an example, a new compliance person comes in at a university. The previous person didnt take good notes answered got a brandnew compliance person walks into university. They can easily go to the federal register and typified all of the regulations, but looking up a Dear Colleague letter from as far back as they want to go and try to determine where all the guidance documents, a new person comes into compliance adding fertilizer facility or a Chemical Plant and a time to find it all come where would they go to get all the previous guidancecome and how far do they have to go back to get that but its one of the questions senator alexander, as when we wrote to secretary for education to how to get a complete list of guidance . The challenge was with all the different entities give us all that the guidance we can take a look at it. What we got back was a list of hyperlinks to websites that we got many of these different hyperlinks that were not all connected to each other. They were so central location. Some of the hyperlinks did not work. Pleased also to give in terms of you couldnt have with the guidance and whats not to guidance on the. Even one of the simple question that we asked it already was tell us any complaints that have come in about guidance, shockingly since 2007 the department of education should with senator alexander and either been no complaints on any guidance. We got nothing back as a complaint. So while i find striking come doing some of my own tell oklahomans we seem to fight a lot of things to complain about when its time to complaint about something. Im stunned at 300 million americans have no complaints from the department of education. Let me ask a general question and then we will just launch into how would someone go get guidance so they know they have a complete, comprehensive, theyve got them all guidance documents from either education or department of labor quick way would they go to get that . I will start. So the new person in a university does not need to get all of the guidance that weve ever issued. They need to go and find the documents that are relevant to someone in a position. And they would hide them on our website. It would take all the significant guidance is clearly labeled, and in one place on the websites relating to people from universities, references to other kinds of Dear Colleague letter than guidance. I would argue that its most important that that person start with understanding which laws apply because many of the guidance documents that we issued might not be relevant. Much relevant to them is what laws apply, and then the guidance can help that person sort out what they need to do. I would also say that its a very important let me add one thing. The gao report does point out for many of our agencies data can be a little difficult to get everything in one place. And as a result we are committed to taking a good hard look at the usability of the guidance documents on our websites, and analyzing the data about usage accounts from them to make sure that people are able to find the documents. And then the last thing i would say is that, you asked about guidance documents and whether they close the door to Public Comment here and i would strongly disagree. Almost every guidance documents almost starts from a set of questions that come from constituents. In many cases we engage with external audiences during guidance. And in every guidance document opens up another opportunity for comment and feedback because all of our guidance documents have links to communicate back with us. And we take all those additional questions and thoughts and work on whether we need update or revise guidance, or do a webinar which is another form of guidance. So its a continuous process of back and forth with our constituents. I understand that the challenge is for a new person, new entity trying to get that information, the assumption is made of course ago is keeping uptodate with her guidance, and weve done this for years but as a people moving to different universities or in compliance in a Different Company they dont have previous experience and there is no centralized place to be able to go to find out what connects to them. Thats a major issue for us and theres an expectation as you mentioned, theres very few significant guidance documents to the agencies would put a something they call significant, and well talk more about that in a about that in the moment. So this all the significant guidance is over here, they needed to all guidance related to the. Department of labor, did you want to mention on that . For starters i was i think the gao i did find that actually dol did a pretty good job on most of the components websites of clearly marking where things are although i will also note we take really seriously and are committed to giving you the information that you need. If there were gaps in our response to you we commit to follow up with you to make sure you have the information you need in that regard. That piece i would say to this question of how people find what they need and this question of which is the pulse of guidance documents, i would just draw, i grew up in omaha, nebraska. I have not lived most of my life in the beltway i bring a perspective to my work every single day. And where i grew up in what most of my folks still live, people dont know the apa, they dont know the omb bulletin. They dont know what a significant guidance compared to office at the guidance. Just real people in america different situations that are running a business or are a worker working in a business or a state agency running a program. And they just want to understa understand, right, what the rights and responsibility are. They want to b be in compliance. It was to be in compliance. And that is really, that is the purpose of guidance. That is our purpose. People may or may not know to call a guidance. I dont know that they would look on the website for guidance per se. It is our responsibility that we take really, really seriously that we do this well. Absolutely we are following the rules but that we do it well, that we are hearing from the people that are affected by these programs, affected by these laws and regulations. They want to be in compliance. Its the obligation to be dashed after us to hear we dont get it right. We are absolutely taken seriously some othe recommendations from trannineteen there are some things we could do better to make it easier for people to find. I would also note the website is certainly not the sum total of hothat would make that informatn available. We worked really hard not just a way for people to come to us, but for us to go out to people, to be in conversation. So through listening sessions, in our field staff come in communication with folks. Hearing from our investigators our investigators were some the most important information. This is included people. We send those guidance is out proactively through the newsletter. Through email blasts. Our agency heads go to i did not. The challenge is trying to find if youre the new person. If your time to get something started. Let me give you a quick example and to open this up and everyone else engaged in the conversation. We did go to the site and give the look of the department of labor site and list what you find Agency Guidance pages, it is not even a link to get the osha guidance at all. So there are things we look at and say, either from this list osha doesnt have ay guidance documents are significant guidance documents but does not a link to it at all. And Employee Benefits Security Assistance officer of federal contract compliance, wage and Hour Division but nothing from osha, for instance,. So its a great question and to speak to some of the recommendations into gao report were working on. I think intuitively most of those documents have been housed on a particular agency website. If youre looking for osha to go to the osha website. But in part because of our dialogue with you in some the questions are raising we are looking at doing each great a new web portal that would link just some way because we put these were clouds up there because when we got information back from both of you, and we went to all those hyperlinks can we start asking the question what is called the guidance . These were the these were the words that were used to is that a Dear Colleague, is that a guidance document . What standard does this have come what enforcement . We have to find a way to make occur to someone whos knew coming into this. Again im hogging the time. And i want to follow up a little bit on senator alexanders direction and maybe some of this direction. A really simplistic way of looking at this. But it seems to me that we passed the statute, thats binding. Thats got the full force and effect of law. You go through a formal rulemaking process, full force and effect of the law. I guidance shouldnt hurt you. Right . A guidance should only help you meet the requirements that are set out in the statute and in the substantive rule process. Where were getting concerned and what youre hearing is the guidance seems to hurt us. It should be instructive, it should be helpful in being the requirements but we should know what those requirements are from both the statute and the substantive rulemaking. And when it seems like we crossed the rubicon, when we stop thinking that this is helpful in interpretation and it seems to change the interpretation or changes what has been known historically to be a traditional kind of record for an apartment that senator ernst talked about, and we start thinking that doesnt look like its helpful interpretive, you know, help you get through the regulation. This looks like its a shortcut. Right . Looks like its a shortcut, changing the role. And so im back, can you help me understand how we can make those delineations more certain . Because when somebody, you know, i know check and exchanger but when somebody at a very high level elsewhere that an interpretive rule has the full force and effect of law, we are not really communicating whether it is interpretive, not an attribute of rol rule but what a guidance is, right . We all agreed hopefully here at a guidance does not have the full force and effect of law, right . Let the record reflect we all agree on that. But yet it seems like it does. So help you think about this in the context of how we can more clearly delineate what a guidance is. Thank you for the question. A couple of options available. So that think this kind of oversight calls attention to the importance of the topic. Of course, in the absence of a congressional hearing a gao study over time is easy for this kind of layering on to happened he managed to reiterate the soviet gao. Sometimes might describe ourselves as internal control geeks. What i mean is by having a control process in place even something as simple as having a periodic evaluation the kind of retrospective review of you talked about 40 regulatory process can having a process in place for guidance documents were Agency Officials review kind of the cuba to the effect of the guidance documents, see if its good to see the links were, say what an effective party would be able to take away from the punitive body of information is very helpful. So, for example, one of the components will look at in our report with the office of the federal contracting policy, they initiated a process such as this thats a multiyear process and in doing so they eliminated 85 of the guidance documents that they have. I use that as an illustration of the potential real value of just making sure that each agency has Something Like that in place. But just at the Department Level but every individual something that provides input control, some kind of written policy on visible going to review, visible ability to find out i would add they can be extraordinarily helpful. Ive used them in private life but yet they can sometimes wonder if they have across the line again. And so that the review process where people really look at guidance in the framework of our these helpful to the regulated industry. Exactly the think about yourself as a private citizen, Small Business owner, summer commit to a particular topic area perhaps inevitable information, what things would you look at that through. So that you extraordinarily helpful having had regular review process. How many agencies have a process which is systematically going back through the guidance documents to the fight with them tax. We did not hear many examples of that kind of systematic process come particularly having a written documentation of the process as well as those of review. That is one of the recommendations in your report is that we actually look at written policies as relates to guidance. You know, that agencies have a responsibility to actually have their own not to say we are a be a complete our we are only be complete without a written policy. Let me ask, whats the agency that got 85 . Ofcp. Part of the department of labor. I would like to jump in again and talk about some of the processes as well. Weve all agreed today that the guidance is his nonlegally binding, and yet, im going to go back to my folks in iowa, the retail exemption memorandum that came out on the 22nd of july, it is requiring these retailers who were now reclassified to follow this regulatory process through we classification. And osha has estimated that the cost of compliance for each of the retailers would be 2100 per site to come in compliance. But those retailers, those on the ground where the rubber meets the road, theyve actually calculate it could cost up to 25,000 per retailer. And again that is significant cost. If you look at the retailers and the areas that the cover in iowa, thats a big cost. Thats a really big cost. So in light of that is impossible to go back and have osha go through the proper rulemaking process so that it is enforceable . If we are truly trying to correct the problem, then why dont we go through the rulemaking process and make sure that we understand what it takes to go into compliance, open that up for Public Comment and review. Is that something osha would be willing to do speak with so i think in this case we really clear that we were following the apa and the omb bulletin and, of course, that we pursued on this guidance and that the rfi and a long Public Comment period was designed specifically to get that feedback. We are always always open door and want to continue to be in dialogue with folks about this big and effect is partly why osha has delayed it was supposed about is to get people more time to come into compliance and to give additional compliance assistance. Six months for compliance to bring these ag retailers. Again this is a manufacturing rule that is not extend the retailers weather is absolutely no manufacturing process to they are not mixing chemicals. They are distributors. And so i think whoever wins had with this guidance may be doesnt fully understand what these ag retailers do. So i am encouraging osha to open this up to formal rulemaking. And it sounds like you said extended periods of time there was a lengthy comment process. It sounds like youre trying to get around the rulemaking. Its the rulemaking process without the full enforcement of the rulemaking. So again a way to circumvent action reaching out to the American Public and extending an invitation to everyone to comment on these practices. And the costs to them in doing business. If, my original point was if you are doing that, why not a formal rulemaking where everyone can engage in an open dialogue and process and it sure that the comments are being heard . I think that seems very common sense. Thank you for your question and i would just say this. We would never be circumventing the formal rulemaking process but it would not be appropriate but we are totally committed to working with you and following up with you on this issue. Thank you. Some of the jobs we have on this as look at it, these are entities that were exempted before that are now drawn into it. Would you put out a request for information, extended entities dont respond to that the they are exempt. They dont assume suddenly they will be drawn in. If theres a request for a summation that goes out from the even of a retailer and would even notice that, now we can go to the process of how they would even know that. As shocking as amazing most americans dont read executive orders and requests for information. As we mentioned before there living their lives and doing their business. Now you have a group of folks that were exempted that using we did a comic. And we put out a request for information. If they were exempted you would think to respond and other suddenly looped in. Some of the challenge is when you do a guidance and ascension of wha orders of 100 million in impact. This is every appearance that does have 100 million of that back across the country. If you go down the list it is not new or novel. Its not drawing any people that were previously unaffected which this does. Smh at the beginning this is nothing about the rule itself on this guidance. This is about the process. Shouldnt we go to the full process and to be able to say new people are affected by this that were not produced affected. They didnt have the notice and comment about 100 impact on the nation with this. That sounds like that should go to the apa process. I know you say youre committed to doing apa. We say this doesnt feel like this with you apa if youre affected. If the guidance is have the force and effect of law how can you change by legal status when im exempt or not accept . Basil we are grappling with. Its not a topic for the ag committee, probably a topic for epw. But it does illustrate for us a kind of this, if i think i understand the regulation and the law in the way that adequate i should never have to read your guidance. I shouldnt care what your guidance is as it has i can read and analyze. Understand we need to enpage. It would be helpful if we knew how the process worked and right now that is a black box to us. We know somewhere in the agencies there is a discussion, is this going to be a guidance or a rule . We dont know how that works because that will help us. If you could do this, follow up with this particular rule. The three that i listed, in my first original questions. Well follow up to get it written out to you. How did the process of decision actually happen . Who was it made the decision, this will be guidance, not a rule . The process how that decision was made. One of the things we looked at and gao identified as well there doesnt seem to be a clear list in several agencies. Several agencies do have it. Department of labor has a outdated system how they go through the process determining this is guidance or is this rule . Where is the check box . 100 million worth of impact to the nation. Clearly that goes to the rulemaking side. This is novel. This is something not previously discussed in a reg. Clearly that goes over. Were trying to figure out that. Could you help us what is the checklist and where do you go for that and who is involved in the decisionmaking process. I absolutely commit to making that miss macintosh, will you i will follow up. Let me make it clear one more time. We go through rulemaking when we need to create a new binding requirement. When there are no new binding requirements and we are simply following up with questions or explaining existing rules or regulations then we use guidance and we have written procedures for our significant guidance and they are largely followed for other guidance where we notice, we have a centralized process for reviewing guidance documents that often involve our general council. We have many eyes on the question whether this guidance was property rattily issued before appropriately issued before it goes out. If it is significant guidance we give omb the chance again to make sure that we are properly following the rules and as you yourself noted we have not received complaint say that weve issued guidance where we should have issued rules. I say we havent received from you. I dont know, as far as i can tell we have several examples where, where our guidance has been challenged in courts and weve been told we should have issued, issued rules. Let me just bring up a couple of thoughts on that. And again i dont want to hog all this time. We can have this open conversation. The 2011 rule dealing with the Sexual Assault disciplinary process, when the standard was changed from clear and convincing to preponderance of evidence, professors at university of pennsylvania, harvard professors, came out pretty quickly with opeds there is legally questionable stuff with this. That was an immediate challenge that came out. When we look at the process of how that was done, that is a guidance put out, that was one of the famous, Dear Colleague letters, here is a new set of guidance for you on something that change ad standard. Even the department of education put out a press release related that is groundbreaking that implies to me this is something new or this is a real change, whether you call it significant or not. But when you put out a guidance document saying this is groundbreaking in a press release and you have professors coming out saying wow, wish they would have got input on this because there is some issues here, again, none of us that are disagreeing with universities need to have clear Sexual Assault policies. The question was how this was done, was input actually engaged into the process and when does this become regulatory or rule making or guidance or Dear Colleague letter. Let me point out that the office of civil rights gets hundreds of complaints alleging civil Rights Violations and around the time that of this particular piece of guidance there was an escalating series of complaints. And as required by law, the office of civil rights has to investigate and follow up on complaints and at times take enforcement action. Without guidance, then it is more likely that universities would run afoul of the laws of congress. And we would have a gotcha moment. Senator heitkamp made a point minute ago, guidance should not hurt people. Well, understanding and knowing how to comply with law and how to avoid running afoul of the civil rights laws can reduce the gotcha moments. That is what our Sexual Violence guidance was inclined, was intended to do. And we were hearing from universities that they needed help in this very complicated issue. That involves many people and is very serious problem. I think sometimes people who write press releases should be more controlled in what they say. You know, because this shouldnt have been new. It should have been clarification of responsibilities under the law, you know, as a result of Enforcement Actions taken, we now see that this is something that might be helpful. People can agree or disagree. If you disagree with the interpretation, you run the risk that you might be wrong in terms of whether that is the correct interpretation but you should never be acting like youre enforcing the guidance. Being guidance is not enforceable. That is what were trying to get at here. So when the guidance changes what seems to be the legal relationship then it goes beyond what a guidance should do. We need to make sure what were doing with all of this body of work is not taking shortcuts and thats why were here. Were trying to figure out how not just these two agencies but all of these agencies actually are not shortcutting the process set out in law thats providing the regulated americans the opportunity to at least weigh in. And access their government. You know this, is like Everything Else. You know, when you dont, i think weve been probably pretty aggressive as a committee looking at all of these issues and every time we turn around, what we see is a body of problems that are historic. And weve got to not only try to delineate what the process is Going Forward but weve got to deal with all of that stuff in the back. And so, like, the chairman said on the front end, this isnt about, were not doing an oversight hearing on your regulation. Were trying to figure out how some of this became guidance when it seems to us some of might have been better done in a substantive rule making or better done in the process by congress. As senator alexander said this is big debate. Still going on. And a bullying amendment failed on floor of the senate to get enough votes to actually be included. So it then becomes, for us, to sit down, and i understand appreciate that bullying can in fact be a civil rights violation. So then you end up with that problem which is enforcement is put ahead of Public Policy. We dont like that anymore than we like guidance being put ahead of Public Policy decisions but im trying to, once again, figure out how we can be instructive without throwing the baby out with the bath water because if in fact i have now someone says, boy, i used to get these notices and they were really helpful in implementing. Now the agency says because Heidi Heitkamp and James Lankford were mean, evil members of this committee, we no longer get this guidance. We dont want that we dont want things that are helpful to be changed but we do want, you know, a clear delineation or as clear of a delineation as what we can get on expectations between us and the agencies on what constitutes guidance. Mr. Chairman, if i could weigh in on it just for a minute say im the Compliance Officer at my college in my hometown and one of 6,000 colleges and universities and i get a guidance tell me that in a Sexual Assault case were dealing with clear and convincing evidence, that making a change whether it is clear and convincing or preponderance of the evidence and i hear a assistant secretary of education tell the chairman of the Education Committee that she expects everybody to follow that, to me thats a change in the law. That in the first place should not have been made by guidance and second place, should be enforced by guidance. In a practical sense, if im the Compliance Officer at Maryville College im going, im not going to take the risk of not following that guidance. Im going to assume thats the law. And it is not supposed to be. So, let me shift a little bit to the Labor Department, if i may, mr. Chairman, just for a second. On august 27 the National Labor Relations Board created a big fuss in a case called the browningferris case. Got into area of what we call joint employer and for those who are worried about the case, the joint employer issues means that for the first time in my view since 1984, the nlrb said that a franchisee, i say a mcdonalds franchisee, and a mcdonalds franchiser are joint employer if, and it created a new standard for that, in my view, by saying that indirect, indirect control, let me get the exact words so i dont say it a new standard saying if the corporate entity, mcdonalds, exercises direct or indirect control over say, pay or working conditions, or even has the unexercised potential to do that, then, then the mcdonalds and the mcdonalds franchisee are treated as single employer. And the problem with that for 780,000 franchises across the country is that encourages mcdonalds to own all their own stores and in all the small stores in america and big towns too, you have fewer franchise opportunity, pure contractors, because the big boys and girls dont want to run the risk of delegating all that to a franchisee. So thats a big change in the labor law. Yet the day before there was leaked out to politico a draft guidance from the department of labor instrucking osha and it is investigators to look at same new test for joint employer. Osha is supposed to be looking at health and safety violations, i thought. So i guess my, i have two questions. One is that draft guidance something you plan to make final . And second, if youre going to change the osha law which goes back to 1970, so say instead of looking at health and safety, you suddenly want to have your investigators looking at a test for joint, for whether a franchisee and a franchisee are joint employers, dont you think that ought to be a change in the law that congress makes, or at least, a rule or a regulation . How could it possibly be done in a, in a guidance . Thank you, senator, for your question. And i certainly cant speak to any decision that nlrb made about this decision or about the ferris case. Kind of suspicion they made the decision one day and this was leaked day before osha. Looks like a coordinated effort to change the law to me but go ahead. So, actually, for over 10 years the case law under the osh act specifically recognized there is concept of joint employment that applies. There is many different Work Arrangements so when osha is going to a work place to protect the work and safety, the health and safety of workers they do it to look at these different Work Arrangements. There is temporary workers, there is subcontractors, franchising arrangements come into that and there are elements of joint employment that could be implicated in that. Wait, just a minute. Were talking about health and safety, right . Isnt that what osha is interested in . Absolutely. You have a multiple employer test you may use especially with contractors. You may say this contractor, this contractor, one might franchisers or franchisee, but doesnt make any work difference whether it controls workers pay or menus, does it . What would you look at franchisor is looking at menu if all youre caring about is health and safety . All we were doing in this, i would say this was not a guidance document. This was a draft, a draft document of questions to teach investigators for the kind of things that they should be looking for. This is really important because you need investigators, having consistent approach when theyre going into a work place around asking questions. That is what it was designed to do. And it was for that investigator to be able to be asking concrete questions about what theyre sighing since when did osha get into the business to figure out whether youre a joint employer or not . Why is that, why does osha care about that . Why isnt osha interested my father was the first chairman of the osha board in tennessee. They were interested he was safety director. He was interested in health and safety tore, not whether a franchiser is in charge of a franchisee . How would your investigates be looking at that . Osha absolutely is, their focus is the health and safety of those workers. In asking those questions, it is simply trying to better understand who is responsible for the safety of those workers. If this is a topic on, that you would like to do additional followup on were committed to having more of a conversation with you about that. I would like to do a lot more followup on the joint employer rule, because i think it is biggest attack on opportunity for Small Businessmen and women in this country to make their way into the middle class that weve seen in a long, long time. To have osha perhaps through guidance join in with nlrb just, even more of a threat to up to well several hundred thousand franchisees and millions of contractors across the country. Mr. Chairman, that is all i have. I would have to agree. This is something we had a hearing on, had conversations on as well and appropriations where senator alexander and i also serve together and the concern on this is how many people this really affects. We had millions of americans that want to start a business, that now suddenly every franchiser is deciding im not sure i want to be able to have that. We have millions of americans selfemployed, suddenly theyre at risk in this. You have every company that does temporary work, that has helped people that are currently unemployed get employment suddenly at risk. With a change in the nlrb. So yes, the enforcement of this and process of this had better be right or it will do serious damage to the economy and to millions of americans that are either trying to start a business for the first time, or to actually get employment for the first time. So i know that exceeds are with we are as far as the rule but i can tell you there will be a lot of attention to that because that rule, as it stands now, and that conversation about that from nlrb could have some of the most significant longterm impact on our economy than weve had in quite a while in changing how we do business as america. And how people actually get out of the middle class and actually start businesses and be able to have the opportunity to rise. That closes the door to rising and thats a serious problem. Let me go over to education, get a chance to bring this up as well. I have several other questions well try to run through quickly. When we talked about the bullying standard, that guidance changed the prior test of bullying, from severe, pervasive and objectionably offensive, to behavior, this is the change, that is severe, pervasive, or, persistent. Now that is a pretty significant shift on that, to say there is threepart test, now to say there is onepart test on it. If any one of these, then, triggers into bullying on that. Tell me about the input that you received in advance of that. Again, the notice and comment that went out, i understand people were contacting saying there is bullying at the school. I get that. It is the solution that is trying to get input on, how did that happen . So, i cant speak to the details of point you made about one standard versus anotr. But what i can say, when we issued that guidance document, it was first in response to the office of civil rights was seeing from complaints about bullying coming from all over the country. What enforcement decisions they were making according to the laws of congress. And, the guidance was intended to help schools comply with the law, and therefore, reduce bullying and avoid having to be in a position of, of enforcement. When by the way i dont have any doubt we want kids to be out of a environment that is dangerous for them. Right. There is no question on that. Again were back to process. Right. In terms of the process, any guidance document we issue, and that one im certain, confident can say went through multiple layers of review within our agency, including many different lawyers making very certain that no new requirements were being created by that piece of guidance and it was cleared internally. That was not, i think a significant document, so i dont know, if may have had omb review but it wasnt required again were back to question on this. Hold on just a moment. The statement, it doesnt add any new criteria on it, there is a threestandard test that changed to a onestandard test. Right. So you literally hadnt is that were entities, previously two of those were met but not three. Theyre not affected. Now they are affected. Right. So youre changing not only the standard there but youre changing the number of people that are affected. Does that make sense . So that is a change where someone who is not under it now suddenly is under it by design. I cant speak to the details on that. I would very happy to follow up in writing with clear answer about that particular part of the guidance and why we determined that it was a proper use of guidance. Okay. So here is what i would like to be able to walk through. It thinks, how do we actually get to this spot and who does this . Mr. Secretary, if were going to have a clear set of guidance to agencies and have new guidance, omb attempted to do this, i think it was in 2007 if i remember correctly. They attempted to be able to put a structure together to say if youre going going to do guidant will be under this. Has that been revised since 2007 . No. We met with the officials as part of our review and that was still in effect. Okay. So let me just go through some basics. The basics you had mentioned before, is it legally binding . Okay, if it is legally binding that goes over to the regulatory side from there. Yes. Is it novel, think has been listed there as well. So this is something new, correct . Right. Is it 100 million worth of Economic Impact . Right. Lets go through a couple things. Does it expand a rule or reterming a rule, on track for that . Yes. Does it affect new entities is that clearly put out there . Someone previously not regulated looped into they are now regulated . That would be considered as part of novel or legal policy, yes. If theyre changing it, discretionary issue to mandatory . In other words if it used to say may, now is has shall. That would be subject to a review. All these things we should be a i believe to get a clear list, come back, here is how we make sure everyone knows. Because at the end of the day i dont find a lot of americans say you know what i really want, a i want unsafe working environment, i want unsafe schools. No one says that. But what i do hear all the time from entities i hear it from University Folk as lot. This simple phrase, make it stop. Every time i turn on my computer that morning there is a new set of guidance coming down to me. There is a new hint coming down to me of Something Else to do. I cant run my university anymore because im hiring so many compliance people. They feel they cant complain those are the folks that also control a lot of their federal funding and a lot of grants. So theyre in this weird catch 22. They have no problem complaining to the department of labor, im confident. They dont get all their funding from the department of labor and their accreditation and Everything Else is not connected to this group of individuals. With education it is. And i hear an awful lot from University Folks that are concerned there are all these guidance, number one, they had no input on, but they also feel like they really cant come back and complain. So our door is wide open to everyone in the university community, our secretary has made it very clear that he wants all of us to be in touch with our constituents. I know that which i would highly recommend. We have many forums where we hear directly from University Personnel and we have, take all of those very seriously. So we certainly do understand universities worries about burden and worries about making it easy for them to comply with the laws of congress. Is that enough . The cumulative effect as it is with your agency and requirements for promulgating rules and Everything Else, stacks up and slows everything down. The cumulative effect for them has the same thing. This is not just an issue of a, a law that has been passed because for many of these issues there is new guidance over a law that is 30 and 40 years old. Its a new interpretation. Its a new understanding. Its a new enforcement process that goes in and thats their concern. This is not coming out of a new statute. This is new understanding after statute that is 20, 30, or 40 years old. That what we have to be able to find balance for. Just this one thing people know they have input in their government and know how to do it, suddenly show up and say last week i wasnt affected by this reg and now suddenly im hearing i am affected by it and i didnt have anyone to talk to and i didnt know that it was coming that is the unaffected party in this. Let me walk through a couple things. Well follow up in writing to walk through this process, trying to determine a complete list of guidance people can access where that would come from. Trying to determine when people have a question or a concern about a guidance how would they voice that . How would they express that before the guidance comes out and then actually after the guidance is out, how that would actually change . Because one thing to say, heres the guidance, someone response back to you, this is nonsensical. You have to go through a guidance for the guidance or youve got to be able to revise it when it Motor Vehicle been better to let people know in advance so they can be engaged on that. How often we actually review guidance in process of that what would be advisable how we do that . Who makes the final decision on guidance. And simple statements what do we know, what is the process of making that decision. Where is the checklist, if any of these are a yes we know this cant be guidance. This has to be a rule to be able to go through the process and who actually does that. Heres one is difficult for us, the cost benefit because some of these guidances obviously have a clear cost thats attached to it as well. My perception is, you can correct me if im wrong, most guidance documents there, is not a guidance benefit analysis run on this. There estimation internally probably wont cost very much, when you do probably wont cost much times 6,000 universities that is a lot of money or times multithousand of different entities retail, chemical manufacturing locations that gets up in a hurry. There is a 100 milliondollar figure sitting out there for any of the rules for instance, the guidance documents i mentioned before, on some of the process management. Did any of those go through a cost benefit analysis before they were actually put out, those guidance documents . Cost benefit analysis really specific term that is used in the process of rule making. Was there an estimate on the cost or effect . There is the sense of 100 million effect on the economy that is out there that is pretty clear bright line. Was there a thought of how much this would cost on the economy . I think we were very clear it was well below that 100 million. But in interest of getting awe more Accurate Answer let me go back to check with my colleagues. Lets do. I would like to know how the determination was made it is well below the 100 million figure. Several entities out there seen this and many ways are extremely concerned this does exceed 100 million worth of costs. It would be economically significant to be able to make that change. So i think that is, i think that is a fair question to ask when they again find out one day theyre suddenly is a very expensive rule that will cost them and their consumers a tremendous amount of money for something they wish they would have input on and could have had input on if it was actually a rule, part of the issue here that people want to know if it will have binding effect. Will it change something i used to be exempt now im not exempt. If i used to have flexibility, now i cant have flexibility. Old rule that gave me flexibility im now noncompliant on and i have to make this shift and i have this cost. These two have reallife effects. Again no one is arguing on safety issues but we are arguing on process to be able to make sure we can get that. Get one more thing as you are walking through your entities, how do you define significant guidance versus just guidance . Because both of your entities, agencies, have very few rules that you declare significant. What is the bright line for you what is significant and nonsignificant . In education we follow the procedures that are laid out in the bulletin for determining what is significant guidance and we have a internal check process that we are classifying guidance as significant or otherwise. I know of know case where someone has complained that we should have labeled something significant guidance. That is the same for us. Its a legal question. That is done in consultation with the solicitor and with omb