prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: The federal government receives funds from numerous sources in addition to tax revenues, including collections of user fees, fines, and penalties  According to the Budget of the U S  Government, in fiscal year 2017, the U S  government’s total receipts were $3 3 trillion and collections of fees, fines, penalties, and forfeitures were more than $350 billion  User fees (fees): Fees are charges assessed to users for goods or services provided by the federal government, such as fees to enter a national park, and charges assessed for regulatory services, such as fees charged by the Food and Drug Administration for prescription drug applications  Fees are an approach to financing federal programs or activities that, in general, are related to some voluntary transaction or request for government services above and beyond what is normally available to the public  By requiring identifiable beneficiaries to pay all or part of the cost of a good or service, fees can promote both equity and economic efficiency  Regularly reviewing fees help ensure that agencies, Congress, and stakeholders have complete information  Fines and penalties: Criminal fines and penalty payments are imposed by courts as punishment for criminal violations  Civil monetary penalties are not a result of criminal proceedings but are employed by courts and federal agencies to enforce federal laws and regulations  For example, civil monetary penalty payments are collected from financial institutions by certain financial regulators, such as the Federal Deposit Insurance Corporation, from enforcement actions assessed against financial institutions for violations related to anti-money laundering requirements  Reviews and, as needed, adjustments to fines and penalties could help ensure they provide a meaningful incentive for compliance  The design and structure of statutory authorities for fees, fines, and penalties can vary widely  In prior work, we have identified key design decisions related to how fee, fine, and penalty collections are used that help Congress balance agency flexibility with congressional control and oversight  Congress determines the availability of collections by defining the extent to which an agency may obligate and expend them, including the availability of the funds, the period of time the collections are available for obligation, the purposes for which they may be obligated, and the amount of the collections that are available to the agency  Fees, fines, and penalties may be categorized as one of three types of collections based on the structure of their statutory authority: offsetting collections, offsetting receipts, or governmental receipts (see figure 1)  Offsetting collections can provide agencies with more flexibility because they are generally available for agency obligation without an additional annual appropriation  In contrast, offsetting receipts and governmental receipts involve greater congressional opportunities for control and oversight because, generally, additional congressional action is needed before the collections are available for agency obligation  For example, Congress must appropriate collections from offsetting receipts before agencies are authorized to obligate these funds  The type of collection also determines how OMB and Treasury report the collections  Offsetting collections and offsetting receipts result from businesslike transactions and are recorded as offsets to spending  Offsetting collections are authorized by law to be credited to appropriation or fund expenditure accounts, while offsetting receipts are deposited in receipt accounts  Because offsetting collections are offsets to spending, an account will generally show the net amount that was collected and spent at any point in time  While there is no statutory requirement for government-wide reporting of data of specific fees, fines and penalties, Congress has enacted legislation to make other data on federal spending and federal programs publicly available: The Digital Accountability and Transparency Act of 2014 (DATA Act)  The DATA Act built on previous transparency legislation by expanding what federal agencies are required to report regarding their spending  The act significantly increased the types of data that must be reported, and required the use of government-wide data standards and regular reviews of data quality to help improve the transparency and accountability of federal spending data  These data are reported on the USAspending gov website  The GPRA Modernization Act of 2010 (GPRAMA)  GPRAMA, in part, requires OMB to present a coherent picture of all federal programs by making information available about each federal program on a website, including related budget and performance information  Programs have been defined as an organized set of activities directed toward a common purpose or goal that an agency undertakes or proposes to carry out its responsibilities  A federal program inventory would consist of the individual programs identified by the agencies and OMB and information collected about each of them  OMB and agencies implemented the inventory once, in May 2013  In October 2014, we found several issues limited the usefulness of that inventory and made several recommendations to OMB to ensure the effective implementation of federal program inventory requirements and to make the inventories more useful  Further, in September 2017, we found that OMB continued to delay implementation of the program inventory  We recommended that OMB consider a systematic approach to developing the program inventory and issue instructions to provide time frames and milestones for its implementation  Although OMB updated its instruction in June 2018, it did not provide any time frames or milestones for implementing the inventory  OMB has yet to develop a systematic approach for resuming implementation of the inventory or specific time frames for doing so  There is no source of data that lists all collections of specific fees, fines, and penalties at a government-wide or agency level  Both OMB and Treasury report government-wide budgetary and financial data, including some information on collections of fees, fines, and penalties; however, none of the reports identifies all specific fees, fines, and penalties, and their associated collection amounts at a government-wide level  OMB reports budgetary and financial data in various parts of the Budget of the U S  Government, including Analytical Perspectives, the Budget Appendix, and the Public Budget Database  Treasury reports financial data in the Combined Statement  Each source provides information for a broader purpose than reporting on collections of fees, fines, and penalties  OMB and Treasury provide specific instructions for agency submission of the underlying data, as described in table 2  OMB’s reports include budgetary and financial information on federal collections at different levels of detail—from aggregated government-wide data to agency account-level data—depending on the source and its purpose  Analytical Perspectives identifies collections as fees and as fines, penalties, and forfeitures and reports government-wide summary information on these collections  For example, in a table summarizing government-wide governmental receipts in Analytical Perspectives, OMB reported fines, penalties, and forfeitures in federal funds as $20 98 billion and in trust funds as $1 17 billion for fiscal year 2017  These summary data do not provide a government-wide total of all federal collections from fines, penalties, and forfeitures because they do not include those that are categorized as offsetting collections or offsetting receipts, according to OMB staff  OMB staff said that OMB does not publish a government- wide total of fines, penalties, and forfeitures  OMB data on governmental receipts include source codes—including a code that identifies fines, penalties, and forfeitures—but data on offsetting collections and offsetting receipts do not include a comparable source code  In the Budget Appendix and the Public Budget Database, OMB reports account-level information by agency, identified by types of collections, such as offsetting collections, offsetting receipts, and governmental receipts  The Budget Appendix and the Public Budget Database do not label collections as fees, fines, or penalties and therefore, cannot be used to calculate government-wide totals for fees, fines, or penalties  To assemble Analytical Perspectives, the Budget Appendix, and the Public Budget Database, OMB compiles data from federal agencies into OMB MAX  OMB MAX, which is not publicly available, contains government-wide data at the account level and captures information such as the type of collection and the type of fund to which collections are deposited  While the data in OMB MAX help drive reporting in the Budget, not all data compiled in OMB MAX appear in the Budget  For example, OMB MAX includes an indicator for accounts that contain fees, but that information is not made available in the Budget of the U S  Government  According to congressional staff we spoke with, they do not have open access to OMB MAX, but OMB provides excerpts of OMB MAX data to staff upon request  Treasury’s Combined Statement reports both government-wide totals and agency account-level data for collections classified as receipts, by various source categories—such as proprietary receipts from the public, miscellaneous receipts, and fines, penalties, and forfeitures  Fees  Fees may fall within several source categories  Therefore, Treasury does not have a single government-wide total for fees  It does present government-wide totals for various source categories, including, Sale of Products and Fees for Permits and Regulatory and Judicial Services, for example  Treasury also reports some fees under non-fee categories, such as Miscellaneous Taxes and Excise Taxes  Fines, Penalties, and Forfeitures  Treasury reports a government- wide total of receipts of fines, penalties, and forfeitures, which in fiscal year 2017 was $22 2 billion  Treasury’s Combined Statement presents these data, disaggregated by account, in the tables Receipts by Source Categories and Receipts by Department  For example, it identifies total Internal Revenue Service receipts in the category Fines, Penalties, and Forfeitures of about $6 8 million in fiscal year 2017  Treasury also reports some fines, penalties, and forfeitures receipts under other categories; these receipts are not included in its total of fines, penalties, and forfeitures  For example, Department of Homeland Security breached bond penalties are reported in two categories labeled as fees: Miscellaneous Receipts – Fees for Permits and Regulatory and Judicial Services and Offsetting Governmental Receipts – Regulatory Fees (see figure 2)  In addition to the government-wide data sources, agencies report some data on their collections of specific fees, fines, and penalties in their annual financial reports, congressional budget justifications, and on agency websites  These data are dispersed by agency, are not comprehensive, and cannot be aggregated to create government-wide data because they vary in format and in the level of detail presented  For example: The Environmental Protection Agency (EPA) has an online, searchable database of enforcement and compliance information that includes data on individual fine and penalty assessments for violations of certain, but not all, statutes  The Department of Labor also makes selected enforcement data accessible in an online database collected by the Employee Benefits Security Administration, the Mine Safety and Health Administration, the Occupational Safety and Health Administration, and the Wage and Hour Division without Department of Labor-wide data standards on individual fine and penalty assessments  USDA’s Animal and Plant Health Inspection Service’s 2019 Congressional Budget Justification, on the other hand, is a PDF document that provides annual collection totals for Agriculture Quarantine Inspection Fees, Import-Export User Fees, Phytosanitary Certificate User Fees, Veterinary Diagnostics User Fees, and Other User Fees, rather than disaggregated to individual fee assessments  The government-wide totals for fees that OMB reports in Analytical Perspectives are not presented at a more disaggregated level, such as by agency or program, except for some major fee collections identified by OMB  For example, in Analytical Perspectives for fiscal year 2017, OMB reported $335 4 billion as a government-wide total of fee collections  OMB also reported some disaggregated data for the subset of fees that were offsetting collections and offsetting receipts  Specifically, it listed 11 fees totaling $258 4 billion collected by specific agencies and listed the remaining $72 3 billion as “all other user charges” without identifying the agency or program  As described in table 1 above, clear and accessible data can be aggregated or disaggregated by the user  OMB has more detailed data on collections in OMB MAX, including the agency, account, type of collection, and fund type, which it uses to compile reported totals of fees as well as fines, penalties, and forfeitures  OMB does not publicly report these data disaggregated below the government-wide level, such as at the agency level  OMB staff said that they do not report the disaggregated data because the purpose of Analytical Perspectives is to develop or support the President’s policies and more detailed tables may not be included if they are not considered necessary for that purpose  However, Analytical Perspectives also serves to provide other significant data that place the President’s Budget in context and assist the public and policymakers in better understanding the budget proposals  For example, Analytical Perspectives includes a chapter on aid to state and local governments that presents the President’s budget proposals for grant programs along with crosscutting information on federal grants to state and local governments, including government-wide grant spending, by agency and program  Analytical Perspectives also presents a summary of fee proposals but does not provide comparable crosscutting information about current fees  For fines and penalties, neither proposals nor crosscutting information is presented by agency  Until OMB makes more disaggregated data on fees, fines, and penalties maintained in its OMB MAX database—such as collections by agency—publicly available, Congress has limited information on such collections to inform oversight and decision-making  Analytical Perspectives’ government-wide totals of fees may include inaccurately labeled collections—other collections that are not fees—and may exclude some fee collections  Data that are clear and accessible are presented with known limitations, as shown in table 1  OMB Circular No  A-11 states that all accounts in which more than half of collections are from fees will be designated as containing fees  OMB staff said that the entire account is designated as containing fees because account-level data are the most disaggregated data OMB collects from agencies  OMB calculates its government-wide total for fees by adding collections in all accounts designated in OMB MAX as containing user fees  However, agency accounts can include multiple sources of budget authority  For example, Treasury’s U S  Mint’s account “United States Mint Public Enterprise Fund” includes offsetting collections from Mint operations and programs; these include the production and sale of commemorative coins and medals, the production and sale of circulating coinage, the protection of government assets, as well as gifts and bequests of property  The United States Mint Public Enterprise Fund is designated as containing fees in OMB MAX  Therefore, budget authority that is not derived from the collection of fees but is still included in this account will be designated as fees as well when calculating a government-wide total  Conversely, accounts in which fees contribute to less than half of collections are not designated as containing fees amounts, and those fees will not be included in the government-wide total OMB calculates  OMB Circular No  A-11 describes the designation of fee accounts, but the data presented in Analytical Perspectives as totals for fees do not disclose OMB’s designation criteria, including the limitations to the accuracy of the data  OMB staff said they do not report this limitation because they consider OMB Circular No  A-11 a more appropriate document for providing technical information like the designation of accounts containing user fees  However, the section on fees in Analytical Perspectives does not direct the reader to OMB Circular No  A-11 for key information related to the data presented on fees  For other topics, including lease-purchase agreements, Analytical Perspectives directs the reader to OMB Circular No  A-11 for further details  Furthermore, for other topics, OMB provided explanatory information along with the data in Analytical Perspectives  For example, OMB explained a recent change to definitions in the research and development section of Analytical Perspectives and the effect of the change on budget authority  Until OMB provides a description of data limitations regarding the criteria used to identify accounts with fees for compiling government-wide totals in Analytical Perspectives, or directs users to the relevant section of OMB Circular No  A-11, some users are likely to be unaware of the potential for the total user fees to be overestimated or underestimated  In addition, OMB does not regularly review and update implementation of its criteria for designating fees  Standards for Internal Control in the Federal Government state that agency management should use quality information to achieve the objectives, such as processing data into quality information that is current and accurate  OMB Circular No  A-11 states that the fee designation is applied at the time the account is established  OMB staff told us that when establishing a new account, OMB collaborates with Treasury to determine the legal attributes of the account, including any fee authorities, and whether to designate the account as containing fees  OMB staff further explained they review the designation when new legislation is enacted that would change the attributes of the account, or if an agency informs OMB that the makeup of an account has changed because of programmatic changes  However, OMB Circular No  A-11 does not instruct agencies to regularly review or update this designation and report changes to OMB  Therefore, if the makeup of collections in an account changes so that fees go from being more than half of the collections to less than half, or vice versa, the account’s fee designation may not be updated accordingly  Until OMB instructs agencies to regularly review the fee designation in OMB MAX and update the designation, as needed, OMB cannot provide reasonable assurance that accounts are designated correctly, and that the government-wide totals of fees reported in Analytical Perspectives are accurate  While Analytical Perspectives reports government-wide data labeled as fees, fines, and penalties, the other three sources we reviewed—the Budget Appendix, the Public Budget Database, and the Combined Statement—report account-level information by agency  Users cannot further disaggregate the data presented to specific fee, fine, and penalty collections  For example, USDA’s Animal and Plant Health Inspection Service (APHIS) is funded in part by six fees: (1) Agricultural Quarantine Inspection (AQI) fee, (2) Phytosanitary Export Certification fee, (3) Veterinary Services Import Export fee, (4) Veterinary Diagnostics fee, (5) Reimbursable Overtime, and (6) Trust Funds and Reimbursable Funds  However, a user cannot identify collections from each of these APHIS fees in the Budget Appendix  The Budget Appendix specifically identifies AQI fee collections—$768 million in fiscal year 2017—because they are receipts deposited to a trust fund  The other five fees are combined within the total for offsetting collections—$152 million (see figure 3)  The Budget Appendix, the Public Budget Database, and the Combined Statement report data at the account level because the purposes of these reports are broader than fees, fines, and penalties, and OMB and Treasury instruct agencies to report data at that level  Treasury’s Financial Manual states that agencies post appropriations and spending authorizations by Congress to accounts established by Treasury  OMB’s Circular No  A-11 instructs agencies to report data at the budget account level in OMB MAX, which supports the data in the Budget Appendix and the Public Budget Database  Because OMB and Treasury do not collect data that can be disaggregated to the level of fee, fine, or penalty, the collections for specific fees, fines, and penalties within accounts are not identifiable within account totals  Both the Budget Appendix and Public Budget Database label and present data within each account by collection type: offsetting collections, offsetting receipts, and governmental receipts  These collection types include fees, fines, and penalties, as well as other sources of collections, as shown in the text box below  Budgetary Collections as Labeled by the Budget of the U S  Government Include More than Fees, Fines, and Penalties Offsetting Collections and Offsetting Receipts include user fees as w ell as reimbursements for damages, intragovernmental transactions, and voluntary gifts and donations to the government  Governmental Receipts include collections that result from the government’s exercise of its sovereign pow er to tax or otherw ise compel payment, and include taxes, compulsory user fees, regulatory fees, customs duties, court fines, certain license fees, and deposits of earnings by the Federal Reserve System  As a result, the user cannot separate fees, fines, and penalties from other collections  For example, offsetting collections may include fees, reimbursements for damages, gifts or donations of money to the government, and intragovernmental transactions with other government accounts  Analytical Perspectives explains that amounts collected by government agencies are recorded in two ways that broadly affect the formulation of the government-wide budget, but may not provide detail on specific agency collections: (1) governmental receipts, which are compared to total outlays in calculating the surplus or deficit; and (2) offsetting collections or offsetting receipts, which are deducted from gross outlays to calculate net outlay figures  These collections are presented together for budgeting purposes, but cannot be separated to specific fees, fines, or penalties  Therefore, it is not clear what percentage of the reported collections are fees, fines, and penalties as opposed to other collections  Treasury’s Combined Statement and OMB’s Public Budget Database do not identify offsetting collections, including collections of fees, fines, and penalties  Instead, the Combined Statement reports net outlays, which include any offsetting collections as deductions from outlays  Similarly, the Public Budget Database reports budget authority net of any offsetting collections  Treasury clearly describes this presentation of the data in the Combined Statement, but OMB does not in the Public Budget Database  In the “Explanation of Transactions and Basis of Figures” section of the Combined Statement, Treasury describes that outlays are stated net of collections representing reimbursements as authorized by law, which include offsetting collections  With the description provided in the Combined Statement, the user can understand that fees, fines, and penalties that are offsetting collections are not identifiable in the data  OMB reports receipts and budget authority—which include collections from fees, fines, and penalties—in separate spreadsheets of the Public Budget Database  Similar to outlays reported in Treasury’s Combined Statement, the Budget Authority spreadsheet reports the net budget authority of accounts after agencies have credited offsetting collections from fees, fines, penalties, or other collections  For example, the National Park Service reported net budget authority of $2 425 billion for the Operation of the National Park System account in fiscal year 2017 in both the Budget Appendix and the Public Budget Database, both of which present data compiled in OMB MAX  The Budget Appendix presents additional information, reporting offsetting collections that are at least partially derived from fees of $35 million, and gross budget authority of $2 46 billion, as shown in figure 4  The Public Budget Database, on the other hand, does not identify the amount of offsetting collections in the account or gross budget authority  OMB does not describe this presentation of the data in the Public Budget Database User’s Guide  As shown in table 1, data that are clear and accessible are presented with descriptions of the data  The User’s Guide directs users who may not be familiar with federal budget concepts to Analytical Perspectives and OMB Circular No  A-11  However, OMB does not describe, either in the User’s Guide or in the Budget Authority spreadsheet of the Public Budget Database, that this source reports budget authority net of offsetting collections, such as collections of fees, fines, and penalties  OMB staff said they do not describe the presentation because it is explained in Analytical Perspectives  However, the Public Budget Database is available for download separate from Analytical Perspectives, and the User’s Guide specific to the Public Budget Database includes other information describing the data in the spreadsheets  Describing the presentation of the data in the User’s Guide would help ensure that users of the Public Budget Database can correctly interpret the information and not underestimate agencies’ fee, fine, or penalty collections  No source of government-wide data consistently reports data elements related to fees, fines, and penalties that could help inform congressional oversight of agencies and programs, such as the amount collected annually, account balances, and whether the collection is a fee, fine, or penalty  See figure 5 for the extent to which data elements are included in the Budget Appendix, Public Budget Database, and Combined Statement  See appendix I for more detailed information on the data elements that are useful for congressional oversight  To a limited extent there are some cases where government-wide reports included data elements useful for the purpose of congressional oversight of fees, fines, and penalties  In some cases the Budget Appendix includes information on the fund type receiving collections and the extent to which the collections from fees may be appropriated to the agency collecting the fee  The Budget Appendix, for example, reports that collections for the Agricultural Quarantine Inspection (AQI) fee are recorded under “Special and Trust Fund Receipts,” as shown previously in figure 3  The user can also identify the appropriation of collections from the AQI fee under “Program and Financing, Budgetary resources,” as shown below in figure 6  As discussed previously, the other five fees the Animal and Plant Health Inspection Service(APHIS) collects are not individually identifiable in the Budget Appendix, but fall under offsetting collections  OMB and Treasury reports, and the systems that support them, are designed for budget and financial information and not for an inventory of fees, fines, and penalties that includes the data elements that Congress may use in oversight  OMB staff said the agency does not have a requirement to prioritize reporting fee, fine, and penalty data over more detailed information on other types of funds  OMB staff said while they generally agree that additional data elements would be useful for oversight, there are trade-offs between transparency and the burden of collecting and reporting additional information  According to OMB staff and officials from Treasury, the Congressional Research Service, and external organizations with expertise in federal budget issues and data transparency, there are two primary benefits to government-wide reporting of fee, fine, and penalty data: increased transparency and better information for congressional oversight and decision-making  Generally, all congressional staff we spoke with said making additional government-wide data on fees, fines, and penalties, such as those data elements described previously, without additional outreach to agencies, would be useful and increase transparency  While some congressional staff said such data elements are available through direct outreach to agencies, other congressional staff told us they could not always obtain the information they wanted  For example, staff from a congressional committee said that one of the most critical data elements for the purpose of congressional oversight is information on agency reporting of obligations and expenditures because, in their view, currently many agencies do not adequately report this information and some agencies do not report this information at all  These data would provide Congress a more complete picture of individual agencies’ activities and any potential overlap or duplication in multiple agencies’ activities  Congressional staff also said having government-wide data on collections of fees could inform efforts that are crosscutting in nature  For example, APHIS and Customs and Border Protection jointly implement the AQI program to help prevent the introduction of harmful agricultural pests and diseases into the United States, and AQI fee collections are divided between the two agencies  Publicly available data on government-wide collections of fines and penalties could inform the public on agency enforcement activities and compliance of regulated parties, such as those related to health or safety  Some officials from external organizations and congressional staff said that it would be useful to have government-wide data on individual fines and penalties levied by agencies  For example, the Environmental Protection Agency publishes an online database on its compliance and enforcement actions, Enforcement and Compliance History Online (ECHO)  According to the website, the data available on ECHO allows the public to monitor environmental compliance in communities, corporations to monitor compliance across facilities they own, and investors to more easily factor environmental performance into decisions  Further, an official from an external organization with expertise in data transparency stated that, ideally, a user would be able to link fine and penalty data to spending data on USAspending gov to increase transparency in instances where an organization receiving a federal grant or contract has also had a fine or penalty levied against it  Last, publicly available government-wide data on collections could inform the public, specifically payers of fees, fines, and penalties, and facilitate their participation in public comment opportunities  For example, OMB staff said government-wide data could provide the public with clear, transparent information across agencies on fee collections and allow the public to analyze differences in fee programs among agencies  Payers of fees may be able to make more informed comments on proposed changes to a fee program if they had information on how it relates to other fee programs across the federal government  Government-wide fee, fine, and penalty data would provide more information to facilitate congressional oversight  These data could help Congress identify trends in collections and significant changes that could be an indication of an agency’s performance  For example, staff of a Congressional committee stated that fine and penalty data can be used to examine enforcement actions on a particular issue or to identify potential trends over time as an indicator of stronger or weaker enforcement actions by an agency  Congress could also use these data to identify variations in enforcement action among geographic regions or as an indicator of the frequency of violations  Additionally, data on review and reporting requirements can inform congressional oversight of fees, fines, and penalties  We previously reported that regular comprehensive reviews of fees provide opportunities for agencies and Congress to make improvements to a fee’s design which, if left unaddressed, could contribute to inefficient use of government resources  For example, fee reviews could help ensure that fees are properly set to cover the total costs of those activities which are intended to be fully fee-funded  Fee reviews may also allow agencies and Congress to identify where similar activities are funded differently; for example, one by fees and one by appropriations  One such example is the export control system, in which the State Department charges fees for the export of items on the U S  Munitions List, while the Commerce Department does not charge fees for those items exported under its jurisdiction  Government-wide reporting of fee, fine, and penalty data could also inform Congress’s funding decisions by providing a clearer picture of agencies’ total resources  Congressional staff stated that knowing the statutory authority to collect and obligate funding from fees, fines, and penalties—along with any appropriation an agency may have received from an annual appropriation act, which are currently available to congressional staff—would provide a more complete picture of an agency’s total annual funding, including the portion attributed to the taxpayer and the portion attributed to payers of specific fees, fines, and penalties  For example, staff from congressional committees we spoke with said it would be useful to have data to show programs that receive appropriations from both offsetting collections and appropriations not derived from offsetting collections to inform decisions on how the program is funded  Congressional staff also said this would provide more opportunities to track the flow of money in and out of the government  Overall funding decisions may be affected if an agency has an increase in fee collections, for example  Congressional committee staff also said it would be useful to have government-wide data on specific fees, fines, and penalties that are offsetting collections because these collections are available for obligation without going through the annual appropriations process  Our prior work has shown that it is important to consider how the agencies and entities with this authority facilitate oversight to ensure effective management, transparency, and public accountability  Some committee staff said they can request data directly from agencies when they need more disaggregated information on fees, fines, and penalties, and reported different levels of responsiveness from agencies  Publicly available data could reduce potentially overlapping or duplicative requests from staff to agencies  According to officials from agencies and external organizations, there are potential challenges to defining the government-wide data standard or definition of fee, fine, and penalty programs by which agencies could report  Because there is no statutory requirement for government-wide reporting of fee, fine, and penalty data, agencies collect and use these data for their own purposes, and are not using government-wide data elements and standards that are consistent and comparable between agencies  First, an agency may define a fee program as a single fee or a set of related fees  For example, the U S  Citizenship and Immigration Services charges more than 40 immigration and naturalization fees to applicants and petitioners that could be grouped together as related fees or split into up to 40 different fee programs  Second, officials from external organizations said there are also challenges in defining data standards the level of detail to report  For example, an official from an external organization said, for large financial penalties, it may be useful for oversight for the data to identify each instance of the penalty, including the fined party  However, that level of detail could raise privacy sensitivities  For example, reporting every individual that paid an entrance fee at a national park could present privacy concerns  Finally, for elements that are useful for congressional oversight, one challenge could be the timing of when funds are collected compared to when they are available for obligation  The amount of funds collected in a year does not necessarily equal the amount available to the agency that year  For example, collections of Harbor Maintenance Fees are deposited to the Harbor Maintenance Trust Fund and are not available for obligation without appropriation  Funds collected in one year may not be necessarily appropriated and obligated until a subsequent year  Our prior work on the Digital Accountability and Transparency Act of 2014 (DATA Act) implementation underscores the importance of standardized and clearly defined data elements  We found inconsistent and potentially confusing instructions from OMB regarding the Primary Place of Performance data elements that resulted in inconsistent reporting among agencies  The standard established by OMB and Treasury defines Primary Place of Performance as “where the predominant performance of the award will be accomplished” while other instructions define it as “the location of the principal plant or place of business where the items will be produced, supplied from stock, or where the service will be performed ” We found some agencies used the first definition and some used the second  In one case, the Departments of Labor and Health and Human Services issued contracts to the same company for similar office printers, but one reported the primary place of performance as California, the location of the office where the printers were delivered and used  The other agency reported the primary place of performance as New Jersey, the location of the company that supplied the printers  As a result, the data were not comparable between agencies or across the federal government, limiting the usefulness for congressional oversight  We previously recommended that OMB and Treasury provide additional instruction to agencies on how to report Primary Place of Performance to ensure the definitions are clear and the data standards are implemented consistently by agencies  Staff from one congressional committee cautioned that attempts to present information on budget authorities for fees, fines, and penalties in a simple and accessible database create an unacceptable risk of confusion and legislative error  The staff said an accurate description of the nature of the spending–-including whether there is authority to obligate without further appropriation–-would be labor intensive and require significant legal analysis and research  Government-wide reporting of fees, fines, and penalties could increase transparency and facilitate oversight and decision-making, but would require time and resources to develop given that there is currently no government-wide system or requirements for agencies to collect and report detailed fee, fine, and penalty data  The level of federal investment would vary depending on factors, such as the number of data elements included and the level of detail reported  Developing a comprehensive and accessible data source would provide greater benefits, but would likely be resource intensive  We have reported on other federal transparency efforts that could provide strategies for reporting government-wide fee, fine, and penalty data  For example, to create a clear and accessible government-wide data source that includes the data elements we identified that would be useful for congressional oversight, Treasury officials said the process would be similar to the implementation of the DATA Act for spending data  To implement the DATA Act, OMB and Treasury led an intensive effort starting in May 2014 through May 2017 when the first government-wide data were reported under the DATA Act’s new standards  Data Standards: OMB, in coordination with Treasury, established 57 standardized data element definitions and approximately 400 associated sub-elements for reporting federal spending information  OMB and Treasury created opportunities for non-federal stakeholders to provide input into the development of data standards, including publishing a Federal Register notice seeking public comment on the establishment of financial data standards; presenting periodic updates on the status of DATA Act implementation to federal and non-federal stakeholders at meetings and conferences; soliciting public comment on data standards using an online collaboration space; and collaborating with federal agencies on the development of data standards and the technical schema through MAX gov, an OMB- supported website  Technical Process for Reporting: Treasury developed the initial DATA Act Information Model Schema, which provided information on how to standardize the way financial assistance awards, contracts, and other financial and nonfinancial data would be collected and reported under the DATA Act  System to Collect and Validate Data: Treasury developed a system that collects and validates agency data (the DATA Act Broker), which operationalizes the reporting framework laid out in the schema  In addition, Treasury employed online software development tools to provide responses to stakeholder questions and comments related to the development and revision of the broker  Public Reporting: Treasury created and updated the new USAspending gov website to display certified agency data submitted under the DATA Act  Agencies also took steps to prepare to report spending data  They reviewed data elements OMB identified, participated in standardizing the definitions, performed an inventory of their existing data and associated business processes, and updated their systems and processes to report data to Treasury  OMB and Treasury issued policy directions to help agencies meet their reporting requirements under the act  They also conducted a series of meetings with participating agencies to obtain information on any challenges that could impede effective implementation and assess agencies’ readiness to report required spending data  Although the steps to developing comprehensive, detailed reporting on government-wide collections of fees, fines, and penalties might be similar to the DATA Act efforts, the dollar amounts of collections would be smaller than those of federal spending  In fiscal year 2017, federal spending was $3 98 trillion compared to about $350 billion in collections of fees, fines, penalties, and forfeitures reported by OMB  On the other hand, defining data elements and standards for fee, fine, and penalty data could be more resource intensive than developing data standards for DATA Act implementation because the DATA Act built on earlier reporting requirements  The DATA Act amended the Federal Funding Accountability and Transparency Act of 2006 (FFATA), which required OMB to establish the website USAspending gov to report data on federal awards, including contracts, grants, and loans  The DATA Act required OMB and Treasury to standardize data required to be reported by FFATA  For fee, fine, and penalty data, OMB and Treasury would be starting without the benefit of some data elements already defined  Further, we have previously reported that effective implementation of provisions to make federal data publicly available, including the DATA Act and GPRAMA’s program inventory, especially the ability to crosswalk spending data to individual programs, could provide vital information to assist federal decision makers in addressing significant challenges the government faces  Incorporating a small number of data elements that Congress identifies as most useful for oversight into ongoing government-wide agency reporting efforts could incrementally improve transparency and information for oversight and decision-making, with fewer resources  For example, Congress required agencies to add selected data elements to their annual financial reports on civil monetary penalties  Specifically, the Federal Civil Penalties Adjustment Act Improvements Act of 2015 requires agencies to include information about the civil monetary penalties within the agencies’ jurisdiction, including catch-up inflation adjustment of the civil monetary penalty amounts, in annual agency financial reports or performance and accountability reports  As shown in figure 7, to facilitate agencies’ reporting, OMB provided a table to define the data elements required in the act in its annual instructions, OMB Circular No  A-136, Financial Reporting Requirements  Agencies started reporting these data in their agency financial reports in fiscal year 2016  In July 2018, we reported that 40 of 45 required agencies reported in their fiscal year 2017 agency financial report information on civil monetary penalties as directed by the OMB instructions  Similarly, if Congress sought additional fine and penalty data elements, such as amounts collected and authority to spend collections, OMB could expand this table in Circular No  A-136 to include those data elements  Circular No  A-136 also outlines that agencies may include the results of biennial reviews of fees and other collections in their agency financial reports  OMB could also update this portion of the circular to require agencies to report specific data elements that are useful for oversight, such as review and reporting requirements  While this information reported in agency financial reports would be disaggregated in portable document format, or PDF, documents, it would provide some transparency on agencies’ activities that Congress could use to prioritize its oversight efforts  In another example, if OMB implements the federal program inventory as required by GPRAMA, it could include a data element on whether a program has a fee, fine, or penalty  We previously reported that the principles and practices of information architecture—a discipline focused on organizing and structuring information—offer an approach for developing such an inventory to support a variety of uses, including increased transparency for federal programs  A program inventory creates the potential to aggregate, disaggregate, sort, and filter information across multiple program facets  For example, from a user’s perspective, a program could be tagged to highlight whether it includes activities to collect fees, fines, or penalties  Then, a user interested in this data facet could select a tag (e g , fees) that could generate a list of programs that also have fees, fines, or penalties  While the program inventory is broader than agency collections of fees, fines, and penalties and would include programmatic descriptions, it would increase transparency by enabling Congress and the public to identify and isolate all programs that include, as a source of funding or a key data element, a fee, fine, or penalty to inform oversight and target additional requests for information to agencies  Federal agencies are authorized to collect hundreds of billions of dollars from fees, fines, and penalties each year that fund a wide variety of programs, but Congress and the American public do not have government-wide data on these collections that would provide increased transparency and facilitate oversight  OMB’s MAX database contains some disaggregated data labeled as fees, fines, and penalties, but OMB does not make these data publicly available  Without more disaggregated, government-wide, accessible data on collections of fees, fines, and penalties, such as by agency, Congress and the public do not have a complete and accurate picture of federal finances, the sources of federal funds, and the resources available to fund federal programs  In addition, improving the data OMB currently reports related to fees, fines, and penalties could help the user better understand the data and the potential limitations  First, until OMB describes how it identifies accounts with fees including that the government-wide totals of fees it reports in Analytical Perspectives may include collections that are not fees and exclude some fee collections, some users will likely be unaware that reported totals could be over- or under-estimates  Second, without OMB instruction to agencies to regularly review and update implementation of the criteria for designating accounts that contain fees, accounts could be designated incorrectly if the makeup of the collections changes  Therefore, OMB cannot provide reasonable assurance that the total amount of fees it reports is accurate  Third, until OMB describes in the User’s Guide that its Public Budget Database reports budget authority net of offsetting collections, including collections of fees, fines, and penalties, users could misinterpret the information and underestimate collections in some cases  OMB and Treasury do not collect many of the data elements on fees, fines, and penalties that would be useful for congressional oversight, such as review and reporting requirements  There are trade-offs between the potential costs and the potential benefits  While reporting government- wide data on specific fees, fines, and penalties would improve transparency and information for decision-making, more data elements would require greater investment of resources from OMB, Treasury, and agencies  Any new reporting of fee, fine, and penalty data would be most useful if it is designed to be compatible with other transparency efforts— the DATA Act reporting and the federal program inventory  Regardless of the approach taken, linkage of data on fees, fines, and penalties with other government-wide data reporting, such as USASpending gov, would enhance transparency and facilitate congressional oversight  We are making the following four recommendations to OMB: The Director of OMB should make available more disaggregated data on fees, fines, and penalties that it maintains in its OMB MAX database  For example, OMB could report data on fee collections by agency in Analytical Perspectives  (Recommendation 1) The Director of OMB should present, in Analytical Perspectives, the data limitations related to the government-wide fee totals by describing the 50- percent criteria OMB uses to identify accounts with fees or by directing users to the relevant sections of OMB Circular No  A-11  (Recommendation 2) The Director of OMB should instruct agencies to regularly review the application of the user fee designation in the OMB MAX data and update the designation, as needed, to meet the criteria in OMB Circular No  A-11  (Recommendation 3) The Director of OMB should describe in the Public Budget Database User’s Guide that budget authority is reported net of any offsetting collections, such as collections of fees, fines, and penalties  (Recommendation 4) We provided a draft of this report to Treasury and OMB for review and comment on December 10, 2018  Treasury informed us that they had no comments  As of March 4, 2019, OMB did not provide comments  We are sending copies of this report to the appropriate congressional committees, the Secretary of the Department of the Treasury, and the Director of the Office of Management and Budget  In addition, the report is available at no charge on GAO’s website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-6806 or nguyentt@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix II  This report examines: (1) the extent to which government-wide data on collections of fees, fines, and penalties are publicly available and useful for the purpose of congressional oversight, and (2) the benefits and challenges to government-wide reporting of specific fees, fines, and penalties including data elements that facilitate congressional oversight  To assess the extent and usefulness of publicly available data, we developed criteria for the availability and usefulness for the purpose of congressional oversight of data on collections of fees, fines, and penalties reported in government-wide sources (see table 3)  The first three criteria—clear and accessible presentation, complete, and accurate—address the availability of the data and the final criterion, useful for the purpose of congressional oversight, addresses content of the data specific to congressional oversight needs  These criteria are based on: Standards for Internal Control in the Federal Government related to Digital Accountability and Transparency Act of 2014 (DATA Act) government-wide instruction from the Office of Management and Budget (OMB) on public access to data and open government, our prior work on user fees, fines, and penalties, and input from staff of congressional committees on appropriations, budget, and oversight  Using a standard list of semistructured interview questions, we interviewed congressional staff that were available to meet with us on or before November 1, 2018  We shared the criteria with OMB staff and Department of the Treasury (Treasury) officials, and they agreed the criteria are relevant and reasonable  To identify publicly available government-wide sources of data with information on collections of fees, fines, and penalties, we reviewed our prior work on user fees, fines, penalties, and permanent funding authorities, conducted general background research including reviewing Congressional Budget Office (CBO) and Congressional Research Service (CRS) reports, and interviewed staff from OMB, and officials from Treasury, CBO, and CRS  We identified the Budget of the U S  Government—including Analytical Perspectives, the Budget Appendix, and the Public Budget Database—produced annually by OMB; the Financial Report of the U S  Government (Financial Report), the Daily Treasury Statement, the Monthly Treasury Statement, the Combined Statement of Receipts, Outlays, and Balances, and USAspending gov produced by Treasury; and CBO products, such as its budget projections and historical budget tables as containing government-wide federal budget or financial data  Of the sources we identified, we included Analytical Perspectives, the Budget Appendix, the Public Budget Database, and the Combined Statement of Receipts, Outlays, and Balances in our study because they contain government-wide information on collections of fees, fines, and penalties  We excluded the Treasury’s Daily Treasury Statement, Monthly Treasury Statement, Financial Report, and USAspending gov from this review because we determined that the information presented did not differentiate between types of collections in a way that would allow us to separately identify fees, fines, and penalties  For example, Treasury’s Financial Report reports government-wide information in categories that are broader than fees, fines, and penalties  Specifically, it reports “earned revenue,” which includes collections of interest payments for federal loan programs  Such collections are not fees  The Financial Report also reports fines and penalties combined with interest and other revenues  We also reviewed and excluded CBO products because the data reported are not designed to differentiate between types of collections  We assessed Analytical Perspectives, the Budget Appendix, the Public Budget Database, and the Combined Statement of Receipts, Outlays, and Balances using the criteria we developed for clear and accessible presentation, accurate, and complete  We also assessed the Budget Appendix, the Public Budget Database, and the Combined Statement of Receipts, Outlays, and Balances using the criteria for useful for the purpose of congressional oversight  Further, we assessed relevant portions of OMB and Treasury instructions using Standards for Internal Control in the Federal Government  We also used OMB and Treasury data to identify and report government- wide totals for fees, fines, and penalties to the extent that they were reported  To assess the reliability of OMB’s MAX database data related to the collections of fees, fines, and penalties, we reviewed related documentation, interviewed knowledgeable agency officials, and conducted electronic data testing  To assess Treasury’s Bureau of the Fiscal Service data related to the collections of fees, fines, and penalties, we reviewed related documentation and interviewed knowledgeable agency officials  In both cases, we found the data to be reliable for our purposes  We did not examine whether agencies accurately report collections as fees, fines, and penalties to OMB and Treasury  In addition, we identified and reviewed other sources of data on fees, fines, and penalties that are specific to federal agencies, including annual financial reports and agency websites  We did not apply the criteria we developed for available and useful for the purpose of congressional oversight to these sources because they contain data for an individual agency rather than government-wide data  To determine the benefits and challenges to government-wide reporting of fees, fines, and penalties, we interviewed staff of congressional committees on appropriations, budget, and oversight, OMB staff and Treasury officials, staff of CBO, and external organizations, including the Committee for a Responsible Federal Budget, the Data Coalition, the Data Foundation, the Project on Government Oversight, the Peter G  Peterson Foundation, and the Sunlight Foundation, on the potential benefits and challenges of government-wide reporting of fees, fines, and penalties  In addition, we reviewed our prior work on the DATA Act, federal program inventories, and federal fees, to identify and assess issues to consider in government-wide reporting  We conducted this performance audit from November 2017 to March 2019 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  In addition to the contact named above, Susan E  Murphy (Assistant Director), Barbara Lancaster (Analyst in Charge), Michael Bechetti, Jacqueline Chapin, Colleen Corcoran, Ann Marie Cortez, Lorraine Ettaro, John Mingus, and Rachel Stoiko made key contributions to this report 


Report 2:  However, as discussed later in this report, Congress has abrogated Watters 's holding that states may not examine or regulate the activities of national bank subsidiaries  While the Court adopted a broad view of preemption in Watters , it cabined the preemptive effect of the relevant NBA provision two years later in Cuomo v  C learing House Association, LLC  In that decision, the Court held that this NBA provision did not preempt an information request that the New York Attorney General (NYAG) sent to several national banks  Specifically, the NYAG had sent letters to several national banks requesting nonpublic information about their lending practices in order to determine whether the banks had violated state fair lending laws  In response, a banking trade group and the OCC argued that the relevant NBA provision—together with an OCC regulation interpreting that provision to mean that "[s]tate officials may not       prosecut[e] enforcement actions" against national banks, "except in limited circumstances authorized by federal law"—preempted the information request  The Supreme Court rejected this interpretation of the NBA's visitorial powers provision, drawing a distinction between (1) "supervision," or "the right to oversee corporate affairs," which qualify as "visitorial powers," and (2) "law enforcement " Because the Court concluded that the NYAG had issued the information requests in his "law enforcement" capacity—as opposed to "acting in the role of sovereign-as-supervisor"—it held that the NBA did not preempt the requests  As the above discussion makes clear, OCC regulations have figured prominently in litigation over the preemptive scope of federal banking law  While some commentators have contended that the NBA's text and legislature history implicitly provides the OCC with the authority to promulgate preemption rules, Congress formally recognized that the OCC has such authority in the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Riegle-Neal Act)  Specifically, Section 114 of the Riegle-Neal Act provides that "[b]efore issuing any opinion letter or interpretive rule       that concludes that Federal law preempts the application to a national bank of any State law" concerning certain specified subjects, the OCC must give the public notice and an opportunity submit written comments  In the 1990s and early 2000s, the OCC exercised this authority in a number of interpretive letters and legal opinions  In these documents, the OCC took the position that federal law preempted state laws that limited the ability of national banks to: advertise; operate offices within a certain distance from state-chartered bank home offices; operate ATM machines; engage in fiduciary activities; finance automobile purchases; sell annuities; sell repossessed automobiles without an automobile dealer license; and conduct Internet auctions of certificates of deposit  In 2004, the OCC expanded upon these interpretive letters and legal opinions by issuing what one commentator has described as "sweeping" preemption rules  The OCC's 2004 preemption rules articulated a general preemption standard according to which "state laws that obstruct, impair, or condition a national bank's ability to fully exercise" its federally authorized powers "are not applicable to national banks" except "where made applicable by Federal law " This general standard accordingly expanded on Barnett Bank 's "significant interference" test in two ways  First, the OCC's 2004 standard omitted the intensifying phrase "significantly" from the Barnett Bank test  Second, the 2004 standard by its terms required that national banks be able to "fully" exercise their authorized powers—a phrase that does not appear in Barnett Bank   However, despite these facial differences with the Barnett Bank test, the OCC explained that it intended the phrase "obstruct, impair, or condition" to function "as the distillation of the various preemption constructs articulated by the Supreme Court, as recognized in Hines [ v  Davidowitz ] and Barnett Bank , and not as a replacement construct that is in any way inconsistent with those standards " Beyond this general preemption standard, the OCC's 2004 rules concluded that the NBA preempted certain categories of state laws  First, the rules provided that national banks "may make real estate loans       without regard to state law limitations concerning": licensing and registration (except for purposes of service of process); "[t]he ability of a creditor to require or obtain private mortgage insurance, insurance for other collateral, or other credit enhancements or risk mitigants, in furtherance of safe and sound banking practices"; loan-to-value ratios; terms of credit; "[t]he aggregate amount of funds that may be loaned upon the security of real estate"; escrow accounts; security property; access to and use of credit reports; disclosure and advertising; processing, origination, servicing, sale or purchase of, or investment or participation in, mortgages; disbursements and repayments; rates of interest on loans; due-on-sale clauses, with certain exceptions; and "[c]ovenants and restrictions that must be contained in a lease to qualify the leasehold as acceptable security for a real estate loan " Second, the rules provided that national banks "may make non-real estate loans without regard to state law limitations concerning" many of the same matters identified in the regulation concerning real estate lending  Finally, the rules provided that national banks "may exercise [their] deposit-taking powers without regard to state law limitations concerning": (1) abandoned and dormant accounts, (2) checking accounts, (3) disclosure requirements, (3) funds availability, (4) savings account orders of withdrawal, (5) state licensing or registration requirements (except for purposes of service of process), and (6) special purpose savings services  The OCC's 2004 rules also identified general categories of state law that the agency interpreted as surviving preemption  Specifically, the rules provided that the NBA does not preempt state laws that are consistent with federal law and involve (1) contracts, (2) torts, (3) criminal law, (4) rights to collect debts, (5) the acquisition and transfer of property, (5) taxation, (6) zoning, and, with respect to real estate lending, (7) certain homestead laws  According to the OCC's 2004 rules, such laws survive preemption so long as they "do not regulate the manner, content or extent of the activities authorized for national banks under federal law " The OCC's 2004 preemption rules proved controversial  In 2008, the United States experienced a financial crisis caused in part by reckless subprime mortgage lending and a collapse in the real estate market  In the wake of the crisis, commentators debated the role that federal preemption of state predatory lending laws played in generating the pre-2008 housing bubble  Some commentators contended that national banks played a significant role in the predatory lending that preceded the crisis, and that federal preemption "effectively gut[ted] states' ability to legislate against predatory lending practices " By contrast, others rejected the contention that preemption played a significant role in causing the crisis, arguing that national banks and their subsidiaries accounted for only a small share of subprime mortgage lending  In 2010, Congress responded to concerns over federal preemption of state consumer protection laws in Section 1044 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)  Section 1044 provides that federal law preempts such laws only if: (A) application of a State consumer financial law would have a discriminatory effect on national banks, in comparison with the effect of the law on a bank chartered by that State; (B) in accordance with the legal standard for preemption in the decision of the Supreme Court of the United States in [ Barnett Bank ], the State consumer financial law prevents or significantly interferes with the exercise by the national bank of its powers; and any preemption determination under this subparagraph may be made by a court, or by regulation or order of the Comptroller of the Currency on a case-by-case basis, in accordance with applicable law; or (C) the State consumer financial law is preempted by a provision of Federal law other than title 62 of the Revised Statutes  Beyond this general preemption standard, Section 1044 contains a number of other provisions narrowing the OCC's preemption authority  First, Section 1044 provides that courts reviewing OCC preemption determinations should accord those determinations only Skidmore deference, under which courts assess an agency's interpretation of a statute "depending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consistency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its decision " Before the enactment of Dodd-Frank, certain courts had afforded OCC preemption determinations a more permissive form of deference known as Chevron deference, according to which courts defer to agency interpretations as long as they are reasonable  Section 1044 accordingly requires that courts take a less deferential posture toward OCC preemption determinations  Second, Section 1044 provides that no OCC preemption determination "shall be interpreted or applied so as to invalidate, or otherwise declare inapplicable to a national bank, the provision of the State consumer financial law, unless substantial evidence, made on the record of the proceeding, supports the specific finding regarding the preemption of such provision in accordance with the legal standard" established by Barnett Bank   This "substantial evidence" standard is often used in cases involving the Administrative Procedure Act, which provides that courts shall hold unlawful an agency's formal rules and other determinations made on the basis of a formal hearing when they are "unsupported by substantial evidence " The Supreme Court has explained that "substantial evidence" entails "more than a mere scintilla" of evidence, and requires "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion " Third, Section 1044 provides that the OCC shall (1) "periodically conduct a review, through public notice and comment, of each determination that a provision of Federal law preempts a State consumer financial law," (2) "conduct such review within the 5-year period after prescribing or otherwise issuing such determination, and at least once during each 5-year period thereafter," and (3) "[a]fter conducting the review of, and inspecting the comments made on, the determination,       publish a notice in the Federal Register announcing the decision to continue or rescind the determination or a proposal to amend the determination " Fourth, Section 1044 provides that the OCC must submit to Congress a report addressing its decision to continue, rescind, or propose an amendment to any preemption determination  Finally, Section 1044 abrogated the Supreme Court's decision in Watters , providing that "State consumer financial laws" apply to the subsidiaries and affiliates of national banks "to the same extent" that they apply "to any person, corporation, or other entity subject to such State law " After Dodd-Frank's enactment, commentators debated the meaning of Section 1044's general preemption standard  As discussed, Section 1044's preemption standard provides that federal law preempts "State consumer financial laws" that "prevent[] or significantly interfere[]" with the powers of national banks "in accordance with the legal standard for preemption in the decision of the Supreme Court of the United States in [ Barnett Bank ] " Some commentators have argued that this language simply codifies the Barnett Bank standard and was not intended to significantly modify pre-existing law  However, others have argued that Section 1044 was intended to pare back the OCC's 2004 preemption rules, which interpreted the NBA as preempting state laws that "obstruct, impair, or condition" the powers of national banks  According to this latter group of commentators, the OCC's "obstruct, impair, or condition" standard was more expansive than Barnett Bank 's "significant interference" test, meaning that a codification of that test would modify pre-existing law  In 2011, the OCC responded to the enactment of Section 1044 by issuing a notice of proposed rulemaking that reaffirmed its pre-Dodd-Frank preemption decisions while deleting the "obstruct, impair, or condition" language from its preemption rules  While the OCC acknowledged that this language "created ambiguities and misunderstandings regarding the preemption standard that it was intended to convey," it maintained that the specific preemption determinations reflected in its 2004 rules were nevertheless consistent with Barnett Bank   The OCC accordingly proposed reaffirming the specific preemption determinations in its 2004 rules while removing the "obstruct, impair, or condition" standard  The OCC's proposal quickly generated controversy  After the OCC issued the notice, the Treasury Department's General Counsel wrote a letter to the Comptroller of the Currency arguing that the OCC's proposed rule was "inconsistent with the plain language of [Dodd-Frank] and its legislative history " Specifically, the Treasury Department argued that interpreting Section 1044 as making no significant changes to existing preemption law conflicted with "basic canons of statutory construction" and legislative history indicating that the provision was intended to "revise[]" the OCC's preemption standard  Senator Carl Levin also expressed disagreement with the proposed rules in a letter to the Comptroller, arguing that "[i]f [Congress] had wanted to leave the OCC's purported federal preemptive powers unchanged, [it] could have engaged in a very simple exercise—do nothing " Other Senators expressed support for the OCC's proposed rules  Senators Tom Carper and Mark Warner criticized the Treasury Department's letter for "ignor[ing] the clear legislative history indicating that [Section 1044] is intended to codify the Barnett case " In responding to the Treasury Department's argument that Section 1044 was intended to "revise" the OCC's preemption standards, Senators Carper and Warner argued that the OCC's proposed rules would effectuate the contemplated revision by removing the potentially troublesome "obstruct, impair, or condition" language from the agency's 2004 rules  The OCC ultimately agreed with Senators Carper and Warner  In July 2011, the OCC published a final regulation revising its preemption rules  In the final rule, the OCC concluded that "the Dodd-Frank Act does not create a new, stand-alone 'prevents or significantly interferes' preemption standard, but, rather, incorporates the conflict preemption legal standard and the reasoning that supports it in the Supreme Court's Barnett decision " The OCC's 2011 rule also deleted the phrase "obstruct, impair, or condition" from the relevant preemption standard, noting that preemption determinations based "exclusively" on that language "would need to be reexamined to ascertain whether the determination is consistent with the Barnett conflict preemption analysis " However, the rule indicated that the OCC had not identified any preemption determinations that in fact relied "exclusively" on the relevant language  The final rule also noted that all future OCC preemption determinations would be subject to Section 1044's requirement concerning "case-by-case" determinations  Since the enactment of Dodd-Frank, a number of courts have interpreted Section 1044 as codifying the Barnett Bank standard  Some courts have accordingly concluded that Barnett Bank demarcates the boundaries of the OCC's 2011 preemption rules, reasoning that those rules do not preempt any state laws that would survive preemption under the Barnett Bank test  One court has also addressed the appropriate level of judicial deference towards the OCC's 2011 preemption determinations  As discussed, Section 1044 provides that courts "shall" assess OCC preemption determinations "depending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consistency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its decision"—a standard commonly known as " Skidmore deference " In 2018, the Ninth Circuit concluded that the OCC's 2011 preemption determinations are "entitled to little, if any, deference" under Skidmore   Specifically, the Ninth Circuit reasoned that because the OCC's 2011 preemption determinations represent the agency's "articulation of its legal analysis" under Barnett Bank (as opposed to being grounded in expert factual findings), those determinations would not warrant significant deference even in the absence of Section 1044  Whether other federal circuit courts will follow the Ninth Circuit in affording minimal deference to the OCC's 2011 preemption rules remains to be seen  As the debates over Section 1044 of Dodd-Frank make clear, a number of banking preemption issues remain the subject of active debate  This final section of the report discusses three additional current issues involving banking preemption and related federalism questions  A number of recent judicial decisions have generated debate over the circumstances in which non-bank financial companies can benefit from banks' ability to "export" the maximum interest rates of their "home" states  As discussed, the Supreme Court has held that national banks may charge any interest rate allowable under the laws of their home states even when lending to borrowers in other states with stricter usury laws  After this decision, Congress extended the power to export maximum interest rates to federally insured state banks  Recently, courts have grappled with whether this exportation power extends to non-bank financial companies and debt collectors that purchase loans originated by federally insured banks  That is, courts have addressed the circumstances in which loans originated by federally insured banks remain subject to the usury laws of the banks' home states even when the loans are (1) made to borrowers in other states with stricter usury laws, and (2) subsequently purchased by non-banks, which do not possess the exportation power when they originate loans themselves  A number of courts have concluded that in certain contexts, a loan that is non-usurious when originated remains non-usurious irrespective of the identity of its subsequent purchasers—a principle that some commentators have labeled the "valid when made" doctrine  However, in 2015, the Second Circuit rejected the application of this rule in Madden v  Midland Funding , holding that non-bank debt collectors that had purchased debt originated by a national bank could not benefit from the bank's exportation power  In Madden , a New York resident brought a putative class action under New York usury law against debt collectors that had purchased her credit card debt from a Delaware-based national bank  In response, the debt collectors argued that federal law preempted the New York usury claims because the credit card debt had been originated by a Delaware-based national bank and was not usurious under Delaware law  The Second Circuit rejected this argument, reasoning that the application of New York usury law to the debt collectors did not "significantly interfere" with the national bank's powers under Barnett Bank   Specifically, the court reasoned that because the debt collectors were not national banks and were not acting "on behalf of" a national bank, the New York usury claims did not interfere with the national bank's power to export the maximum interest rates of its home state  The Second Circuit's decision in Madden has generated significant debate  In an amicus brief supporting the debt collectors' petition for re-hearing before the Second Circuit, industry groups argued that the decision threatened to seriously disrupt lending markets  Specifically, these groups argued that the court's decision would "significantly impair" banks' ability to manage their risk by selling loans in secondary credit markets—a result that would ultimately inhibit their capacity to originate loans  Similarly, in an amicus brief submitted to the Supreme Court, the OCC and the Office of the Solicitor General (OSG) argued that the Second Circuit's decision was "incorrect," reasoning that "[a] national bank's federal right to charge interest up to the rate allowed by [the NBA] would be significantly impaired if [a] national bank's assignee could not continue to charge that rate " In response, the plaintiff in Madden argued that the Second Circuit's decision is unlikely to significantly affect credit markets  Specifically, the Madden plaintiff argued that the court's decision will not disrupt credit markets because non-banks that purchase loans originated by banks retain the right to collect the balances of those loans within applicable state law usury limits  While the Second Circuit ultimately denied the debt collectors' petition for re-hearing and the Supreme Court denied their petition for a writ of certiorari, the Madden decision has attracted congressional interest  The Financial CHOICE Act—comprehensive regulatory reform legislation that passed the House of Representatives in June 2017 but did not become law—would have codified the "valid when made" doctrine and abrogated Madden   A more limited bill directed solely at codifying the "valid when made" doctrine ( H R  3299 ) also passed the House in February 2018 but did not become law  Echoing the arguments made by industry groups, the bill's sponsor contended that the Second Circuit's decision will harm credit markets and impede financial innovation  By contrast, the bill's critics argued that it would facilitate predatory lending by allowing non-banks to evade state usury laws  These proposals have not been re-introduced in the 116th Congress  In a number of cases involving the scope of the exportation doctrine, non-bank financial companies have played a more active role in the origination process than the debt collectors in Madden   Specifically, a number of these cases have involved arrangements in which a non-bank financial company solicits borrowers, directs a partner bank to originate a high-interest loan, and purchases the loan from the bank shortly after origination in order to benefit from the bank's exportation power  Some courts have held that non-banks employing these so-called "rent-a-charter" schemes are not eligible for federal preemption, reasoning that preemption depends on a transaction's economic realities rather than its formal characteristics  Specifically, these courts have concluded that non-banks do not assume their partner banks' exportation power when the economic realities surrounding a transaction indicate that the non-banks are the "true lenders " According to this "true lender" doctrine, non-banks that have established these types of relationships qualify as the "true lenders" when they possess the "predominant economic interest" in the relevant loans when the loans are originated  In these circumstances, some courts have concluded that the non-banks are not entitled to the benefits of federal preemption  Like the Second Circuit's decision in Madden , these "true lender" decisions have attracted Congress's attention  In the 115th Congress, H R  4439 would have abrogated this line of decisions by making clear that a loan's originator is always the "true lender" for purposes of the exportation doctrine  The bill's supporters argued that the "true lender" decisions threaten to undermine partnerships between banks and FinTech companies —a broad category of businesses offering digital financial products that some commentators have hailed for their innovative potential  The bill's opponents, by contrast, contended that the legislation would allow non-banks to circumvent state usury laws and questioned the value of bank-FinTech partnerships designed with that purpose in mind  H R  4439 was referred to the House Committee on Financial Services during the 115th Congress but has not been re-introduced in the 116th Congress  Congress is not alone in considering whether to extend the benefits of federal preemption to FinTech companies  In July 2018, the OCC issued a Policy Statement announcing that it will begin accepting applications for "special purpose national bank charters" (SPNB charters) from FinTech companies that are engaged in "the business of banking" but do not take deposits  In the Policy Statement, the OCC explained that the NBA provides it "broad authority" to grant national bank charters to institutions that engage in the "business of banking"—a category that includes paying checks and lending money  The OCC accordingly concluded that it has the statutory authority to grant national bank charters to FinTech companies that engage in these core banking activities  According to the OCC, SPNB charters will help foster responsible innovation and promote regulatory consistency between FinTech companies and traditional banks  The OCC further explained that it will use its existing chartering standards and procedures to evaluate applications for SPNB charters, and that FinTech companies that receive such charters "will be supervised like similarly situated national banks, including with respect to capital, liquidity, and risk management " While the OCC touted the ability of SPNB charters to "level the playing field with regulated institutions" without explicitly mentioning federal preemption, commentators have observed that preemption represents "the central benefit" offered by such charters  The OCC's decision to accept applications for national bank charters from FinTech companies has generated debate  Critics of the policy have contended that FinTech companies' interest in such charters "is virtually entirely about avoiding state consumer protection laws," and that "[f]ederal chartering should not be a move to eviscerate" such laws  State regulators have also filed lawsuits challenging the OCC's authority to charter non-depository FinTech companies  In the spring of 2017, the Conference of State Bank Supervisors (CSBS) and the New York Department of Financial Services (NYDFS) responded to an early OCC proposal to charter FinTech companies by filing suits in the U S  District Court for the District of Columbia and the U S  District Court for the Southern District of New York, respectively  The CSBS and NYDFS made substantially similar claims, arguing that (1) the NBA does not give the OCC the authority to charter non-depository institutions, (2) the Administrative Procedure Act requires the OCC to follow notice-and-comment rulemaking procedures before issuing SPNBs, (3) the OCC's decision was arbitrary and capricious, and (4) the OCC's decision violated the Tenth Amendment by invading states' sovereign powers  Both district courts dismissed the lawsuits on jurisdictional grounds, reasoning that the organizations failed to identify any imminent injuries to their members and that the case was not ripe for resolution because the OCC had not issued any SPNBs  However, after the OCC issued its Policy Statement in July 2018, both organizations filed new lawsuits that remain pending  Policymakers have also turned their attention to how federal law affects traditional banks' responses to changes in state law—namely, state-level efforts to legalize marijuana  While a number of states have legalized marijuana for medical or recreational use, federal law criminalizes the drug's sale, distribution, and possession, in addition to the aiding and abetting of such activities  Federal law also criminalizes money laundering, making it unlawful to: conduct a financial transaction involving the proceeds of a specified unlawful activity —a category that includes the sale or distribution of marijuana—"knowing that the transaction is designed       to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds       or to avoid a transaction reporting requirement under State or Federal law"; or knowingly engage in a monetary transaction in criminally derived property of a value greater than $10,000 that is derived from specified unlawful activity   Finally, the Bank Secrecy Act (BSA) and associated regulations require that financial institutions report illegal and suspicious activities to the Financial Crimes Enforcement Network (FinCEN) and maintain programs designed to prevent money laundering  Federal banking regulators have broad powers to discipline banks for violations of these laws  The Federal Reserve regularly conducts examinations of member banks that include evaluations of BSA compliance, and the FDIC has the authority to terminate a bank's deposit insurance for violations of law  Because of marijuana's status under federal law, many banks have refused to serve marijuana businesses even when those businesses operate in compliance with state law  While some small banks have offered accounts to marijuana businesses, an estimated 70 percent of marijuana businesses remain unbanked  Because of this inability to access the banking system, many marijuana businesses reportedly operate entirely in cash, raising concerns about tax collection and public safety  These perceived problems have attracted congressional interest  In March 2019, the House Committee on Financial Services approved legislation intended to minimize the legal risks associated with banking the marijuana industry  The proposed bill— H R  1595 , the SAFE Banking Act of 2019—would create a "safe harbor" under which federal banking regulators could not take various adverse actions against depository institutions for serving marijuana businesses that comply with applicable state laws ("cannabis-related legitimate businesses")  The legislation would also provide that for purposes of federal anti-money laundering law, the proceeds from transactions conducted by cannabis-related legitimate businesses shall not qualify as the proceeds of unlawful activity "solely because the transaction[s] [were] conducted by a cannabis-related legitimate business " Finally, H R  1595 would require FinCEN to issue guidance concerning the preparation of suspicious activity reports for cannabis-related legitimate businesses that is "consistent with the purpose and intent" of the bill and "does not significantly inhibit the provision of financial services" to cannabis-related legitimate businesses  Variations on some of the SAFE Banking Act's provisions have been incorporated into broader marijuana-related legislation  The Responsibly Addressing Marijuana Policy Gap Act of 2019 ( S  421 and H R  1119 ) would eliminate federal criminal penalties for persons who engage in various marijuana-related activities in compliance with state law and create a "safe harbor" from adverse regulatory action for depository institutions that serve marijuana businesses  Another Senate bill— S  1028 , the STATES Act—would provide that the Controlled Substances Act's (CSA's) marijuana-related provisions do not apply to persons acting in compliance with state marijuana regulation s, subject to certain exceptions  While the bill does not have the type of "safe harbor" for depository institutions in H R  1595 , S  421 , or H R  1119 , it contains a "Rule of Construction" clarifying that conduct in compliance with the legislation shall not serve as the basis for federal money laundering charges or criminal forfeiture under the CSA 

ground_truth: Congress has authorized federal agencies to collect hundreds of billions of dollars annually in fees, fines, and penalties. These collections can fund a variety of programs, including programs related to national security, and the protection of natural resources. Data on collections are important for congressional oversight and to provide transparency in agencies' use of federal resources. GAO was asked to review the availability of government-wide data on fees, fines, and penalties. This report examines (1) the extent to which data on collections of fees, fines, and penalties are publically available and useful for the purpose of congressional oversight; and (2) the benefits and challenges to government-wide reporting of fees, fines, and penalties. GAO assessed government-wide fee, fine, and penalty data against criteria for availability and usefulness based on multiple sources, including prior GAO work and input from staff of selected congressional committees. GAO interviewed OMB staff, Treasury officials, and representatives of organizations with expertise in federal budget issues and reviewed prior GAO work to identify benefits and challenges of reporting these data. There are no comprehensive, government-wide data at the level of detail that identifies specific fees, fines, or penalties. The Office of Management and Budget (OMB) and the Department of the Treasury (Treasury) report data that include these collections at the budget account level, which generally covers a set of agency activities or programs. OMB and Treasury also report some summary data for budgeting and financial management purposes. In the Budget of the U.S. Government , for example, OMB data showed government-wide fees totaled just over $335 billion in fiscal year 2017. These reports, however, are not designed to inventory or analyze fee, fine, or penalty collections and have significant limitations for that purpose. Although OMB collects more disaggregated data on fees, fines, and penalties, it does not make the data publicly available. OMB uses the disaggregated data in its OMB MAX database—such as the agency and account—to compile reported totals, such as the government-wide fees total in the Budget of the U.S. Government . Until OMB makes more disaggregated data publicly available, Congress has limited information on collections by agency to inform oversight and decision-making. OMB's government-wide total of fees includes collections that are not fees and excludes some fee collections. The total includes all collections for accounts in which fees make up at least half of the account's collections and excludes all others. OMB does not direct agencies to regularly review and update the accounts included in the total. Therefore, if accounts' makeups change such that fee collections drop below, or rise above, the 50 percent threshold, accounts may have incorrect fee designations and the total may be inaccurate. Further, OMB does not disclose the limitation that the total may exclude some fees and include other collections that are not fees. As a result, some users of the data are likely unaware of the potential for the total fees to be overestimated or underestimated. Further, no source of government-wide data consistently reports data elements on fees, fines, and penalties that could help inform congressional oversight. Generally, congressional staff told us that additional data, such as amounts of specific penalties, would increase transparency and facilitate oversight. These data could help Congress identify trends in collections and significant changes that could be an indication of an agency's performance. While reporting government-wide fee, fine, and penalty data provides benefits, there are trade-offs in terms of the time and federal resources it would take to develop and implement a process for agencies to report these data. The level of federal investment would vary depending on factors, such as the number of data elements included and the level of detail reported. Developing a comprehensive and accessible data source would provide greater benefits, but would likely be resource intensive. Alternatively, incorporating a small number of data elements that Congress identifies as most useful for oversight into ongoing government-wide reporting efforts could incrementally improve transparency and information for oversight and decision-making, with fewer resources. GAO is making four recommendations to enhance OMB reporting on fees, fines, and penalties, including making disaggregated data publically available, updating instructions to federal agencies to review accounts designated as containing fees, and disclosing limitations in data reported. OMB did not provide comments.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.



Report 2: NASA’s mission is to drive advances in science, technology, aeronautics, and space exploration, and contribute to education, innovation, our country’s economic vitality, and the stewardship of the Earth  To accomplish this mission, NASA establishes programs and projects that rely on complex instruments and spacecraft  NASA’s portfolio of major projects ranges from space satellites equipped with advanced sensors to study the Earth to a telescope intended to explore the universe to spacecraft to transport humans and cargo to and beyond low-Earth orbit  Some of NASA’s projects are expected to incorporate new and sophisticated technologies that must operate in harsh, distant environments  The life cycle for NASA space flight projects consists of two phases— formulation, which takes a project from concept to preliminary design, and implementation, which includes building, launching, and operating the system, among other activities  NASA further divides formulation and implementation into phase A through phase F  Major projects must get approval from senior NASA officials at key decision points before they can enter each new phase  Figure 1 depicts NASA’s life cycle for space flight projects  Formulation culminates in a review at key decision point C, known as project confirmation, where cost and schedule baselines are established and documented in a decision memorandum  To inform those baselines, each project with a life-cycle cost estimated to be greater than $250 million must also develop a joint cost and schedule confidence level (JCL)  The JCL initiative, adopted in January 2009, is a point-in-time estimate that, among other things, includes all cost and schedule elements, incorporates and quantifies known risks, assesses the impacts of cost and schedule to date, and addresses available annual resources  NASA policy requires that projects be baselined and budgeted at the 70 percent confidence level  The agency baseline commitment established at key decision point C includes cost and schedule reserves held at the project—those within the project manager’s control—and NASA headquarters level  Cost reserves are for costs that are expected to be incurred—for instance, to address project risks—but are not yet allocated to a specific part of the project  Schedule reserves are extra time in project schedules that can be allocated to specific activities, elements, and major subsystems to mitigate delays or address unforeseen risks  NASA’s current portfolio of major space telescopes includes three projects—WFIRST, TESS, and JWST—that vary in cost, complexity, and phase of the acquisition life cycle  WFIRST, a project that entered the concept and technology development phase and established preliminary cost and schedule estimates in February 2016, is in the earliest stages of the acquisition life cycle  With preliminary cost estimates ranging from $3 2 billion to $3 8 billion, this project is an observatory designed to perform wide-field imaging and survey of the sky at near-infrared wavelengths to answer questions about the structure and evolution of the universe and to expand our knowledge of planets beyond our solar system  The current design includes a 2 4 meter telescope that was built and qualified for another federal agency over 10 years ago; the project is evaluating which components to reuse and which to modify, refurbish, or build new  TESS—a smaller project whose latest cost estimate is approximately $337 million—is targeted to launch in March 2018 and will be used to conduct the first extensive survey of the sky from space for transiting exoplanets  And finally, JWST, with a life-cycle cost estimate of $8 835 billion, is one of NASA’s most complex projects and top priorities  The telescope is designed to help understand the origin and destiny of the universe, the creation and evolution of the first stars and galaxies, and the formation of stars and planetary systems  With a 6 5-meter primary mirror, JWST is expected to operate at about 100 times the sensitivity of the Hubble Space Telescope  JWST’s science instruments are to detect very faint infrared sources and, as such, are required to operate at extremely cold temperatures  To help keep these instruments cold, a multi-layered tennis-court-sized sunshield is being developed to protect the mirrors and instruments from the sun’s heat  We have reported for several years on the JWST project, which has experienced significant cost increases and schedule delays  Prior to being approved for development, cost estimates for JWST ranged from $1 billion to $3 5 billion, with expected launch dates ranging from 2007 to 2011  Before 2011, early technical and management challenges, contractor performance issues, low levels of cost reserves, and poorly phased funding levels caused JWST to delay work after confirmation, which contributed to significant cost and schedule overruns, including launch delays  The Chair of the Senate Subcommittee on Commerce, Justice, Science, and Related Agencies requested from NASA an independent review of JWST in June 2010  In response, NASA commissioned the Independent Comprehensive Review Panel, which issued its report in October 2010  The panel concluded that JWST was executing well from a technical standpoint, but that the baseline cost estimate did not reflect the most probable cost with adequate reserves in each year of project execution, resulting in an unexecutable project  Following this review, Congress in November 2011 placed an $8 billion cap on the formulation and development costs for the project and NASA rebaselined JWST with a life-cycle cost estimate of $8 835 billion that included additional money for operations and a planned launch in October 2018  The new baseline represented a 78 percent increase to the project’s life-cycle cost from the original baseline and a launch date in October 2018, a delay of 52 months  The revised life-cycle cost estimate included a total of 13 months of funded schedule reserve  Our ongoing work indicates that these three projects are each making progress in line with their phase of the acquisition cycle, but also face challenges in execution  Some of these challenges are unique to the projects themselves and some are common among the projects in NASA’s portfolio  For example, when projects enter the integration and test phase, unforeseen challenges can arise and affect the cost and schedule for the project  Table 1 provides more details about the current acquisition phase, cost, and schedule status of NASA’s major space telescope projects based on our ongoing work  WFIRST  NASA’s preliminary cost and schedule estimates for the WFIRST project are currently under review as the project responds to findings in the WFIRST Independent External Technical/Management/Cost Review  This independent review was conducted to ensure the mission’s scope and required resources are well understood and executable  NASA initiated this review in April 2017 to address the National Academies’ concerns that WFIRST cost growth could endanger the balance of NASA’s astrophysics program and negatively affect other scientific priorities  The review found that the mission scope is understood, but not aligned with the resources provided and concluded that the mission is not executable without adjustments and/or additional resources  For example, the study team found that NASA’s current forecasted funding profile for the WFIRST project would require the project to slow down activities starting in fiscal year 2020, which would result in an increase in development cost and schedule  NASA agreed with the study team’s results and directed the project to reduce the cost and complexity of the design in order to maintain costs within the $3 2 billion cost target  The project is currently identifying potential ways to reduce the scope of planned activities (called “descopes”), assessing the science impact of those descopes, and then developing recommendations for the Astrophysics Division leadership  An example of a descope that may be considered is the requirement for WFIRST to be “star-shade ready,” which means the design must be compatible with a star-shade device that is positioned between it and the star being observed to block out starlight while allowing the light emitted by the planet through  TESS  The TESS project is currently holding cost and schedule reserves consistent with NASA center requirements, but there are no longer headquarters-held cost reserves to cover a delay if the project cannot launch as planned in March 2018  According to a project official, the project is holding 16 days of schedule reserve to its target March 2018 launch readiness date, which includes 6 days for the completion of integration and test, and 10 days for launch operations  The project previously used schedule reserves to accommodate the delayed delivery of its Ka-band transmitter, which is essential for TESS as it transmits the mission data back to Earth, due to continued performance and manufacturing issues  The two main risks to the March 2018 launch date are if: 1) SpaceX requires additional time past December 2017 for NASA’s Launch Services Program to certify that TESS can fly on its upgraded launch vehicle—certification is necessary because it will be the first time that NASA will use this version of the vehicle—and 2) any issues are identified during the remainder of environmental testing  The project is also conducting additional testing on its spare camera at temperatures seen in space to better understand expected camera performance on orbit  TESS will use four identical, wide field-of-view cameras to conduct the first extensive survey of the sky from space for transiting exoplanets  However, during thermal testing, the project found that the substance attaching the lenses to the camera barrel places pressure on the lenses and causes the cameras to be slightly out of focus  In June 2017, NASA directed the project to proceed with integrating the cameras—as they are expected to meet TESS’s top level science requirements even with the anomaly  At its most recent key decision review in August 2017, NASA reallocated $15 million of TESS’s headquarters-held reserves to the WFIRST project  While this had the effect of decreasing life cycle costs for TESS, it also increased risk as the project no longer has any additional headquarters-held cost reserves to cover a launch delay past March 2018  JWST  The JWST project continues to make progress towards launch, but the program is encountering technical challenges that require both time and money to fix and may lead to additional delays, beyond a delay recently announced  While the project has made much progress on hardware integration and testing over the past several months, it also used all of its remaining schedule reserves to address various technical issues, particularly on the spacecraft element  In September 2017, the JWST project requested from the European Space Agency—who will contribute the Ariane V launch vehicle—a launch window from March to June 2019, or 5 to 8 months later than the planned October 2018 launch readiness date, established in 2011  The project based this request on the results of a schedule risk assessment that incorporated inputs from the contractor on expected durations of ongoing spacecraft element integration work and other challenges that were expected to increase schedule  With the later launch window to June 2019, the project expected to have up to 4 months of new schedule reserves  However, shortly after requesting the revised launch window, the project learned from its contractor that up to another 3 months of schedule reserve use is likely, due to lessons learned from conducting deployment exercises of the sunshield, such as reach and access limitations on the flight hardware  As a result, and pending further examination of the schedule, the project now has approximately one month of schedule reserve to complete environmental testing of the spacecraft element and the final integration phase  The final integration phase is where the instruments and telescope will be integrated with the spacecraft and sunshield to form the completed observatory  As I previously noted, our work has shown the integration and test is the riskiest phase of development, where problems are most likely to be found and schedules slip  Given the risks associated with the integration and test work ahead, coupled with a level of schedule reserves that is currently well below the level stated in the procedural requirements issued by the NASA center responsible for managing JWST, additional delays to the project’s revised launch readiness date of June 2019 are likely  As a result, the funding available under the Congressional cost cap of $8 billion may be inadequate as the contractor will need to continue to retain higher workforce levels for longer than expected to prepare the mission for a delayed launch  As Congress, NASA, and the science community consider future telescope efforts, it will be exceedingly important to shape and manage new programs in a manner that minimizes cost overruns and schedule delays  This is particularly important for the largest programs as even small cost increases can have reverberating effects  NASA’s telescope and other science projects will always have inherent technical, design, and integration risks because they are complex, specialized, and often push the state of the art in space technology  But too often, our reports find that management and oversight problems—which can include poor planning, optimistic cost estimating, funding gaps, lax oversight, and poor contractor performance, among other issues—are the real drivers behind cost and schedule growth  To its credit, NASA has taken significant steps, partly in response to our past recommendations, to reduce acquisition risk from both a technical and management standpoint, including actions to enhance cost and schedule estimating, provide adequate levels of reserves to projects, establish better processes and metrics to monitor projects, and expand the use of earned value management to better monitor contractor performance  For example, in November 2012, we found that NASA employee skill sets available to analyze and implement earned value management vary widely from center to center, and we recommended that NASA conduct an earned value management skills gap analysis to identify areas requiring augmented capability across the agency, and, based on the results of the assessment, develop a workforce training plan to address any deficiencies  NASA concurred with this recommendation and developed an earned value management training plan in 2014 based on the results of an earned value management skills gap analysis that was conducted in 2013  Moreover, in recent years, we have found that many of the projects within the agency’s major project portfolio have improved their cost and schedule performance  Nevertheless, the extent to which NASA has adopted some of the following lessons learned within its portfolio of major projects is mixed, and NASA has an opportunity to strengthen its program management of major acquisitions, including its space telescopes, by doing so  Manage Cost and Schedule Performance for Large Projects to Limit Implications for Entire Portfolio  In 2013, following JWST’s cost increases and schedule growth, we found that though cost and schedule growth can occur on any project, increases associated with NASA’s most costly and complex missions can have cascading effects on the rest of the portfolio  For example, we found that the JWST cost growth would have reverberating effects on the portfolio for years to come and required the agency to identify $1 4 billion in additional resources over fiscal years 2012 through 2017, according to Science Mission Directorate officials  NASA identified approximately half of this required funding from the four science divisions within the Science Mission Directorate account  The majority of the cuts were related to future high priority missions, missions in the operations and sustainment phase, and research and analysis  In essence, NASA had to mortgage future high priority missions and research to address JWST’s additional resource needs  Similarly, the National Academy of Sciences has concluded in the past that it is important for NASA to have a clearly articulated and consistently applied method for prioritizing why and how its scarce fiscal resources are apportioned with respect to the science program in general and on a more granular level among component scientific disciplines  The academy noted that failure to do so could result in a loss of capacity, capability, and human resources in a number of scientific disciplines and technological areas that may take a generation or more to reconstitute once eliminated  NASA’s establishment of the WFIRST Independent External Technical/Management/Cost Review that I previously discussed is a step in the right direction to help ensure the Astrophysics Division incorporates this lesson learned  Establish Adequate Cost and Schedule Reserves to Address Risks  Twice in the history of the JWST program, independent reviewers found that the program’s planned cost reserves were inadequate  First, in April 2006, an Independent Review Team confirmed that the project’s technical content was complete and sound, but expressed concern over the project’s reserve funding, reporting that it was too low and phased in too late in the development lifecycle  The review team reported that for a project as complex as JWST, 25 to 30 percent total reserve funding was appropriate  The team cautioned that low reserve funding compromised the project’s ability to resolve issues, address risk areas, and accommodate unknown problems  As I previously mentioned, following additional cost increases and schedule threats, NASA commissioned the Independent Comprehensive Review Panel  In 2010, the panel again concluded JWST was executing well from a technical standpoint, but that the baseline cost estimate did not reflect the most probable cost with adequate reserves in each year of project execution, resulting in an unexecutable project  NASA heeded these lessons when it established a new baseline for JWST in 2011  For example, the revised schedule included more reserves than required by the procedural requirements issued by the NASA center responsible for managing JWST  We have found, however, that NASA has not applied this lesson learned to all of its large projects— most notably with its human spaceflight projects, including the Space Launch System, Orion Crew Capsule, and associated ground systems— and similar outcomes to the JWST project have started to emerge with these projects  We previously reported that all three of these programs were operating with limited cost reserves, which limited each program’s ability to address risks and unforeseen technical challenges  For example, we found in July 2016 that the Orion program planned to maintain very low levels of annual cost reserves until 2018  The lack of available cost reserves in the near term led to the program deferring work to address technical issues to stay within budget, and put the program’s future cost reserves at risk of being overwhelmed by deferred work  In April 2017, we also found that all three programs faced development challenges in completing work, and each had little to no schedule reserve remaining to the launch date—meaning they would have to complete all remaining work with minimal delay during the most challenging stage of development  We found that it was unlikely that the programs would achieve the planned launch readiness date and recommended that NASA reassess the date  NASA agreed with this recommendation and stated that it would establish a new launch readiness date  In November 2017, NASA announced that a review of the possible manufacturing and production schedule risks indicated a launch date of June 2020—a delay of 19 months—but the agency will manage to a December 2019 launch date because, according to NASA, they have put in mitigation strategies for those risks  We will follow-up on those mitigation strategies as part of future work on the human space exploration programs  Regularly and Consistently Update Project JCLs to Provide Realistic Estimates to Decision Makers  In 2009, NASA began requiring that programs and projects with estimated life-cycle costs greater than $250 million develop a JCL prior to project confirmation  This was a positive step for NASA to help ensure that cost and schedule estimates are realistic and projects are thoroughly planning for anticipated risks  This is because a JCL assigns a confidence level, or likelihood, of a project meeting its cost and schedule estimates  Our cost estimating best practices recommend that cost estimates should be updated to reflect changes to a program or be kept current as a program moves through milestones  As new risks emerge on a project, an updated cost and schedule risk analysis can provide realistic estimates to decision-makers, including the Congress  This is especially true for NASA’s largest projects as updated estimates may require the Congress to consider a variety of actions  However, there is no requirement for NASA projects to update their JCLs, and our prior work has found that projects—including JWST—do not regularly update cost risk analyses to take into account newly emerged risks  Our ongoing work indicates that of the 16 major projects currently in NASA’s portfolio that have developed JCL estimates, only 2 have reported updating their JCLs (other than required due to a rebaseline)  For example, the Interior Exploration using Seismic Investigations, Geodesy, and Heat Transport Project (InSight), a Mars lander, updated its JCL after the project missed its committed launch date  As a result, the project was able to provide additional information to decision makers about the probability that it will meet its revised cost and schedule estimates  As a project reaches the later stages of development, especially integration and testing, the types of risks the project will face may change  An updated project JCL would provide both project and agency management with data on relevant risks that can guide the project decisions  For example, in December 2012, we recommended the JWST project update its JCL  NASA concurred with this recommendation; however, we recently closed the recommendation because NASA had not taken steps to implement it and the amount of time remaining before launch would not have allowed the benefit of implementing the recommendation to be realized  An updated JCL may have portended the current schedule delays, which could have been proactively addressed by the project  Enhance Oversight of Contractors to Improve Project Outcomes  In December 2012, we found that the JWST project had taken steps to enhance communications with and oversight of its contractors  According to project officials, the increased communication allowed them to better identify and manage project risks by having more visibility into contractors’ activities  The project reported that a great deal of communication existed across the project prior to the Independent Comprehensive Review Panel; however, additional improvements were made  For example, the project increased its presence at contractor facilities as necessary to provide assistance; this included assigning two engineers on a recurring basis at a Lockheed Martin facility to assist in solving problems with an instrument  The JWST project also assumed full responsibility for the mission system engineering functions from Northrop Grumman in March 2011  NASA and Northrop Grumman officials both said that NASA is better suited to perform these tasks  We continue to see instances in our ongoing work that highlight the importance of implementing this lesson learned from JWST  For example, we found in 2017 that the Space Network Ground Segment Sustainment project—a project that plans to develop and deliver a new ground system for one Space Network site that provides essential communications tracking services to NASA and non-NASA missions—exceeded its original cost baseline by at least $401 7 million and been delayed by 27 months  The project has attributed some of the cost overruns and schedule delays to the contractor’s incomplete understanding of its requirements, which led to poor contractor plans and late design changes  The project also took steps to assign a new NASA project manager, increase physical presence at the contractor facility, and have more staff focused on validation and verification activities  In summary, NASA continues to make progress developing its space telescopes to help understand the universe and our place in it  But much like other major projects that NASA is developing, there continues to be an opportunity for NASA to learn from JWST and other projects that have suffered from cost overruns and schedule delays  Key project management tools and prior GAO recommendations that I have highlighted here today, could help to better position these large, complex, and technically challenging efforts for a successful outcome  We look forward to continuing to work with NASA and this subcommittee in addressing these issues  Chairman Babin, Ranking Member Bera, and Members of the Subcommittee, this completes my prepared statement  I would be pleased to respond to any questions that you may have at this time  If you or your staff have any questions about this testimony, please contact Cristina T  Chaplain, Director, Acquisition and Sourcing Management at (202) 512-4841 or chaplainc@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement  GAO staff who made key contributions to this statement include Molly Traci, Assistant Director; Richard Cederholm, Assistant Director; Carrie Rogers; Lisa Fisher; Laura Greifner; Erin Kennedy; and Jose Ramos  This is a work of the U S  government and is not subject to copyright protection in the United States  The published product may be reproduced and distributed in its entirety without further permission from GAO  However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately 
Report 2:  However, as discussed later in this report, Congress has abrogated Watters 's holding that states may not examine or regulate the activities of national bank subsidiaries  While the Court adopted a broad view of preemption in Watters , it cabined the preemptive effect of the relevant NBA provision two years later in Cuomo v  C learing House Association, LLC  In that decision, the Court held that this NBA provision did not preempt an information request that the New York Attorney General (NYAG) sent to several national banks  Specifically, the NYAG had sent letters to several national banks requesting nonpublic information about their lending practices in order to determine whether the banks had violated state fair lending laws  In response, a banking trade group and the OCC argued that the relevant NBA provision—together with an OCC regulation interpreting that provision to mean that "[s]tate officials may not       prosecut[e] enforcement actions" against national banks, "except in limited circumstances authorized by federal law"—preempted the information request  The Supreme Court rejected this interpretation of the NBA's visitorial powers provision, drawing a distinction between (1) "supervision," or "the right to oversee corporate affairs," which qualify as "visitorial powers," and (2) "law enforcement " Because the Court concluded that the NYAG had issued the information requests in his "law enforcement" capacity—as opposed to "acting in the role of sovereign-as-supervisor"—it held that the NBA did not preempt the requests  As the above discussion makes clear, OCC regulations have figured prominently in litigation over the preemptive scope of federal banking law  While some commentators have contended that the NBA's text and legislature history implicitly provides the OCC with the authority to promulgate preemption rules, Congress formally recognized that the OCC has such authority in the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Riegle-Neal Act)  Specifically, Section 114 of the Riegle-Neal Act provides that "[b]efore issuing any opinion letter or interpretive rule       that concludes that Federal law preempts the application to a national bank of any State law" concerning certain specified subjects, the OCC must give the public notice and an opportunity submit written comments  In the 1990s and early 2000s, the OCC exercised this authority in a number of interpretive letters and legal opinions  In these documents, the OCC took the position that federal law preempted state laws that limited the ability of national banks to: advertise; operate offices within a certain distance from state-chartered bank home offices; operate ATM machines; engage in fiduciary activities; finance automobile purchases; sell annuities; sell repossessed automobiles without an automobile dealer license; and conduct Internet auctions of certificates of deposit  In 2004, the OCC expanded upon these interpretive letters and legal opinions by issuing what one commentator has described as "sweeping" preemption rules  The OCC's 2004 preemption rules articulated a general preemption standard according to which "state laws that obstruct, impair, or condition a national bank's ability to fully exercise" its federally authorized powers "are not applicable to national banks" except "where made applicable by Federal law " This general standard accordingly expanded on Barnett Bank 's "significant interference" test in two ways  First, the OCC's 2004 standard omitted the intensifying phrase "significantly" from the Barnett Bank test  Second, the 2004 standard by its terms required that national banks be able to "fully" exercise their authorized powers—a phrase that does not appear in Barnett Bank   However, despite these facial differences with the Barnett Bank test, the OCC explained that it intended the phrase "obstruct, impair, or condition" to function "as the distillation of the various preemption constructs articulated by the Supreme Court, as recognized in Hines [ v  Davidowitz ] and Barnett Bank , and not as a replacement construct that is in any way inconsistent with those standards " Beyond this general preemption standard, the OCC's 2004 rules concluded that the NBA preempted certain categories of state laws  First, the rules provided that national banks "may make real estate loans       without regard to state law limitations concerning": licensing and registration (except for purposes of service of process); "[t]he ability of a creditor to require or obtain private mortgage insurance, insurance for other collateral, or other credit enhancements or risk mitigants, in furtherance of safe and sound banking practices"; loan-to-value ratios; terms of credit; "[t]he aggregate amount of funds that may be loaned upon the security of real estate"; escrow accounts; security property; access to and use of credit reports; disclosure and advertising; processing, origination, servicing, sale or purchase of, or investment or participation in, mortgages; disbursements and repayments; rates of interest on loans; due-on-sale clauses, with certain exceptions; and "[c]ovenants and restrictions that must be contained in a lease to qualify the leasehold as acceptable security for a real estate loan " Second, the rules provided that national banks "may make non-real estate loans without regard to state law limitations concerning" many of the same matters identified in the regulation concerning real estate lending  Finally, the rules provided that national banks "may exercise [their] deposit-taking powers without regard to state law limitations concerning": (1) abandoned and dormant accounts, (2) checking accounts, (3) disclosure requirements, (3) funds availability, (4) savings account orders of withdrawal, (5) state licensing or registration requirements (except for purposes of service of process), and (6) special purpose savings services  The OCC's 2004 rules also identified general categories of state law that the agency interpreted as surviving preemption  Specifically, the rules provided that the NBA does not preempt state laws that are consistent with federal law and involve (1) contracts, (2) torts, (3) criminal law, (4) rights to collect debts, (5) the acquisition and transfer of property, (5) taxation, (6) zoning, and, with respect to real estate lending, (7) certain homestead laws  According to the OCC's 2004 rules, such laws survive preemption so long as they "do not regulate the manner, content or extent of the activities authorized for national banks under federal law " The OCC's 2004 preemption rules proved controversial  In 2008, the United States experienced a financial crisis caused in part by reckless subprime mortgage lending and a collapse in the real estate market  In the wake of the crisis, commentators debated the role that federal preemption of state predatory lending laws played in generating the pre-2008 housing bubble  Some commentators contended that national banks played a significant role in the predatory lending that preceded the crisis, and that federal preemption "effectively gut[ted] states' ability to legislate against predatory lending practices " By contrast, others rejected the contention that preemption played a significant role in causing the crisis, arguing that national banks and their subsidiaries accounted for only a small share of subprime mortgage lending  In 2010, Congress responded to concerns over federal preemption of state consumer protection laws in Section 1044 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)  Section 1044 provides that federal law preempts such laws only if: (A) application of a State consumer financial law would have a discriminatory effect on national banks, in comparison with the effect of the law on a bank chartered by that State; (B) in accordance with the legal standard for preemption in the decision of the Supreme Court of the United States in [ Barnett Bank ], the State consumer financial law prevents or significantly interferes with the exercise by the national bank of its powers; and any preemption determination under this subparagraph may be made by a court, or by regulation or order of the Comptroller of the Currency on a case-by-case basis, in accordance with applicable law; or (C) the State consumer financial law is preempted by a provision of Federal law other than title 62 of the Revised Statutes  Beyond this general preemption standard, Section 1044 contains a number of other provisions narrowing the OCC's preemption authority  First, Section 1044 provides that courts reviewing OCC preemption determinations should accord those determinations only Skidmore deference, under which courts assess an agency's interpretation of a statute "depending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consistency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its decision " Before the enactment of Dodd-Frank, certain courts had afforded OCC preemption determinations a more permissive form of deference known as Chevron deference, according to which courts defer to agency interpretations as long as they are reasonable  Section 1044 accordingly requires that courts take a less deferential posture toward OCC preemption determinations  Second, Section 1044 provides that no OCC preemption determination "shall be interpreted or applied so as to invalidate, or otherwise declare inapplicable to a national bank, the provision of the State consumer financial law, unless substantial evidence, made on the record of the proceeding, supports the specific finding regarding the preemption of such provision in accordance with the legal standard" established by Barnett Bank   This "substantial evidence" standard is often used in cases involving the Administrative Procedure Act, which provides that courts shall hold unlawful an agency's formal rules and other determinations made on the basis of a formal hearing when they are "unsupported by substantial evidence " The Supreme Court has explained that "substantial evidence" entails "more than a mere scintilla" of evidence, and requires "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion " Third, Section 1044 provides that the OCC shall (1) "periodically conduct a review, through public notice and comment, of each determination that a provision of Federal law preempts a State consumer financial law," (2) "conduct such review within the 5-year period after prescribing or otherwise issuing such determination, and at least once during each 5-year period thereafter," and (3) "[a]fter conducting the review of, and inspecting the comments made on, the determination,       publish a notice in the Federal Register announcing the decision to continue or rescind the determination or a proposal to amend the determination " Fourth, Section 1044 provides that the OCC must submit to Congress a report addressing its decision to continue, rescind, or propose an amendment to any preemption determination  Finally, Section 1044 abrogated the Supreme Court's decision in Watters , providing that "State consumer financial laws" apply to the subsidiaries and affiliates of national banks "to the same extent" that they apply "to any person, corporation, or other entity subject to such State law " After Dodd-Frank's enactment, commentators debated the meaning of Section 1044's general preemption standard  As discussed, Section 1044's preemption standard provides that federal law preempts "State consumer financial laws" that "prevent[] or significantly interfere[]" with the powers of national banks "in accordance with the legal standard for preemption in the decision of the Supreme Court of the United States in [ Barnett Bank ] " Some commentators have argued that this language simply codifies the Barnett Bank standard and was not intended to significantly modify pre-existing law  However, others have argued that Section 1044 was intended to pare back the OCC's 2004 preemption rules, which interpreted the NBA as preempting state laws that "obstruct, impair, or condition" the powers of national banks  According to this latter group of commentators, the OCC's "obstruct, impair, or condition" standard was more expansive than Barnett Bank 's "significant interference" test, meaning that a codification of that test would modify pre-existing law  In 2011, the OCC responded to the enactment of Section 1044 by issuing a notice of proposed rulemaking that reaffirmed its pre-Dodd-Frank preemption decisions while deleting the "obstruct, impair, or condition" language from its preemption rules  While the OCC acknowledged that this language "created ambiguities and misunderstandings regarding the preemption standard that it was intended to convey," it maintained that the specific preemption determinations reflected in its 2004 rules were nevertheless consistent with Barnett Bank   The OCC accordingly proposed reaffirming the specific preemption determinations in its 2004 rules while removing the "obstruct, impair, or condition" standard  The OCC's proposal quickly generated controversy  After the OCC issued the notice, the Treasury Department's General Counsel wrote a letter to the Comptroller of the Currency arguing that the OCC's proposed rule was "inconsistent with the plain language of [Dodd-Frank] and its legislative history " Specifically, the Treasury Department argued that interpreting Section 1044 as making no significant changes to existing preemption law conflicted with "basic canons of statutory construction" and legislative history indicating that the provision was intended to "revise[]" the OCC's preemption standard  Senator Carl Levin also expressed disagreement with the proposed rules in a letter to the Comptroller, arguing that "[i]f [Congress] had wanted to leave the OCC's purported federal preemptive powers unchanged, [it] could have engaged in a very simple exercise—do nothing " Other Senators expressed support for the OCC's proposed rules  Senators Tom Carper and Mark Warner criticized the Treasury Department's letter for "ignor[ing] the clear legislative history indicating that [Section 1044] is intended to codify the Barnett case " In responding to the Treasury Department's argument that Section 1044 was intended to "revise" the OCC's preemption standards, Senators Carper and Warner argued that the OCC's proposed rules would effectuate the contemplated revision by removing the potentially troublesome "obstruct, impair, or condition" language from the agency's 2004 rules  The OCC ultimately agreed with Senators Carper and Warner  In July 2011, the OCC published a final regulation revising its preemption rules  In the final rule, the OCC concluded that "the Dodd-Frank Act does not create a new, stand-alone 'prevents or significantly interferes' preemption standard, but, rather, incorporates the conflict preemption legal standard and the reasoning that supports it in the Supreme Court's Barnett decision " The OCC's 2011 rule also deleted the phrase "obstruct, impair, or condition" from the relevant preemption standard, noting that preemption determinations based "exclusively" on that language "would need to be reexamined to ascertain whether the determination is consistent with the Barnett conflict preemption analysis " However, the rule indicated that the OCC had not identified any preemption determinations that in fact relied "exclusively" on the relevant language  The final rule also noted that all future OCC preemption determinations would be subject to Section 1044's requirement concerning "case-by-case" determinations  Since the enactment of Dodd-Frank, a number of courts have interpreted Section 1044 as codifying the Barnett Bank standard  Some courts have accordingly concluded that Barnett Bank demarcates the boundaries of the OCC's 2011 preemption rules, reasoning that those rules do not preempt any state laws that would survive preemption under the Barnett Bank test  One court has also addressed the appropriate level of judicial deference towards the OCC's 2011 preemption determinations  As discussed, Section 1044 provides that courts "shall" assess OCC preemption determinations "depending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consistency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its decision"—a standard commonly known as " Skidmore deference " In 2018, the Ninth Circuit concluded that the OCC's 2011 preemption determinations are "entitled to little, if any, deference" under Skidmore   Specifically, the Ninth Circuit reasoned that because the OCC's 2011 preemption determinations represent the agency's "articulation of its legal analysis" under Barnett Bank (as opposed to being grounded in expert factual findings), those determinations would not warrant significant deference even in the absence of Section 1044  Whether other federal circuit courts will follow the Ninth Circuit in affording minimal deference to the OCC's 2011 preemption rules remains to be seen  As the debates over Section 1044 of Dodd-Frank make clear, a number of banking preemption issues remain the subject of active debate  This final section of the report discusses three additional current issues involving banking preemption and related federalism questions  A number of recent judicial decisions have generated debate over the circumstances in which non-bank financial companies can benefit from banks' ability to "export" the maximum interest rates of their "home" states  As discussed, the Supreme Court has held that national banks may charge any interest rate allowable under the laws of their home states even when lending to borrowers in other states with stricter usury laws  After this decision, Congress extended the power to export maximum interest rates to federally insured state banks  Recently, courts have grappled with whether this exportation power extends to non-bank financial companies and debt collectors that purchase loans originated by federally insured banks  That is, courts have addressed the circumstances in which loans originated by federally insured banks remain subject to the usury laws of the banks' home states even when the loans are (1) made to borrowers in other states with stricter usury laws, and (2) subsequently purchased by non-banks, which do not possess the exportation power when they originate loans themselves  A number of courts have concluded that in certain contexts, a loan that is non-usurious when originated remains non-usurious irrespective of the identity of its subsequent purchasers—a principle that some commentators have labeled the "valid when made" doctrine  However, in 2015, the Second Circuit rejected the application of this rule in Madden v  Midland Funding , holding that non-bank debt collectors that had purchased debt originated by a national bank could not benefit from the bank's exportation power  In Madden , a New York resident brought a putative class action under New York usury law against debt collectors that had purchased her credit card debt from a Delaware-based national bank  In response, the debt collectors argued that federal law preempted the New York usury claims because the credit card debt had been originated by a Delaware-based national bank and was not usurious under Delaware law  The Second Circuit rejected this argument, reasoning that the application of New York usury law to the debt collectors did not "significantly interfere" with the national bank's powers under Barnett Bank   Specifically, the court reasoned that because the debt collectors were not national banks and were not acting "on behalf of" a national bank, the New York usury claims did not interfere with the national bank's power to export the maximum interest rates of its home state  The Second Circuit's decision in Madden has generated significant debate  In an amicus brief supporting the debt collectors' petition for re-hearing before the Second Circuit, industry groups argued that the decision threatened to seriously disrupt lending markets  Specifically, these groups argued that the court's decision would "significantly impair" banks' ability to manage their risk by selling loans in secondary credit markets—a result that would ultimately inhibit their capacity to originate loans  Similarly, in an amicus brief submitted to the Supreme Court, the OCC and the Office of the Solicitor General (OSG) argued that the Second Circuit's decision was "incorrect," reasoning that "[a] national bank's federal right to charge interest up to the rate allowed by [the NBA] would be significantly impaired if [a] national bank's assignee could not continue to charge that rate " In response, the plaintiff in Madden argued that the Second Circuit's decision is unlikely to significantly affect credit markets  Specifically, the Madden plaintiff argued that the court's decision will not disrupt credit markets because non-banks that purchase loans originated by banks retain the right to collect the balances of those loans within applicable state law usury limits  While the Second Circuit ultimately denied the debt collectors' petition for re-hearing and the Supreme Court denied their petition for a writ of certiorari, the Madden decision has attracted congressional interest  The Financial CHOICE Act—comprehensive regulatory reform legislation that passed the House of Representatives in June 2017 but did not become law—would have codified the "valid when made" doctrine and abrogated Madden   A more limited bill directed solely at codifying the "valid when made" doctrine ( H R  3299 ) also passed the House in February 2018 but did not become law  Echoing the arguments made by industry groups, the bill's sponsor contended that the Second Circuit's decision will harm credit markets and impede financial innovation  By contrast, the bill's critics argued that it would facilitate predatory lending by allowing non-banks to evade state usury laws  These proposals have not been re-introduced in the 116th Congress  In a number of cases involving the scope of the exportation doctrine, non-bank financial companies have played a more active role in the origination process than the debt collectors in Madden   Specifically, a number of these cases have involved arrangements in which a non-bank financial company solicits borrowers, directs a partner bank to originate a high-interest loan, and purchases the loan from the bank shortly after origination in order to benefit from the bank's exportation power  Some courts have held that non-banks employing these so-called "rent-a-charter" schemes are not eligible for federal preemption, reasoning that preemption depends on a transaction's economic realities rather than its formal characteristics  Specifically, these courts have concluded that non-banks do not assume their partner banks' exportation power when the economic realities surrounding a transaction indicate that the non-banks are the "true lenders " According to this "true lender" doctrine, non-banks that have established these types of relationships qualify as the "true lenders" when they possess the "predominant economic interest" in the relevant loans when the loans are originated  In these circumstances, some courts have concluded that the non-banks are not entitled to the benefits of federal preemption  Like the Second Circuit's decision in Madden , these "true lender" decisions have attracted Congress's attention  In the 115th Congress, H R  4439 would have abrogated this line of decisions by making clear that a loan's originator is always the "true lender" for purposes of the exportation doctrine  The bill's supporters argued that the "true lender" decisions threaten to undermine partnerships between banks and FinTech companies —a broad category of businesses offering digital financial products that some commentators have hailed for their innovative potential  The bill's opponents, by contrast, contended that the legislation would allow non-banks to circumvent state usury laws and questioned the value of bank-FinTech partnerships designed with that purpose in mind  H R  4439 was referred to the House Committee on Financial Services during the 115th Congress but has not been re-introduced in the 116th Congress  Congress is not alone in considering whether to extend the benefits of federal preemption to FinTech companies  In July 2018, the OCC issued a Policy Statement announcing that it will begin accepting applications for "special purpose national bank charters" (SPNB charters) from FinTech companies that are engaged in "the business of banking" but do not take deposits  In the Policy Statement, the OCC explained that the NBA provides it "broad authority" to grant national bank charters to institutions that engage in the "business of banking"—a category that includes paying checks and lending money  The OCC accordingly concluded that it has the statutory authority to grant national bank charters to FinTech companies that engage in these core banking activities  According to the OCC, SPNB charters will help foster responsible innovation and promote regulatory consistency between FinTech companies and traditional banks  The OCC further explained that it will use its existing chartering standards and procedures to evaluate applications for SPNB charters, and that FinTech companies that receive such charters "will be supervised like similarly situated national banks, including with respect to capital, liquidity, and risk management " While the OCC touted the ability of SPNB charters to "level the playing field with regulated institutions" without explicitly mentioning federal preemption, commentators have observed that preemption represents "the central benefit" offered by such charters  The OCC's decision to accept applications for national bank charters from FinTech companies has generated debate  Critics of the policy have contended that FinTech companies' interest in such charters "is virtually entirely about avoiding state consumer protection laws," and that "[f]ederal chartering should not be a move to eviscerate" such laws  State regulators have also filed lawsuits challenging the OCC's authority to charter non-depository FinTech companies  In the spring of 2017, the Conference of State Bank Supervisors (CSBS) and the New York Department of Financial Services (NYDFS) responded to an early OCC proposal to charter FinTech companies by filing suits in the U S  District Court for the District of Columbia and the U S  District Court for the Southern District of New York, respectively  The CSBS and NYDFS made substantially similar claims, arguing that (1) the NBA does not give the OCC the authority to charter non-depository institutions, (2) the Administrative Procedure Act requires the OCC to follow notice-and-comment rulemaking procedures before issuing SPNBs, (3) the OCC's decision was arbitrary and capricious, and (4) the OCC's decision violated the Tenth Amendment by invading states' sovereign powers  Both district courts dismissed the lawsuits on jurisdictional grounds, reasoning that the organizations failed to identify any imminent injuries to their members and that the case was not ripe for resolution because the OCC had not issued any SPNBs  However, after the OCC issued its Policy Statement in July 2018, both organizations filed new lawsuits that remain pending  Policymakers have also turned their attention to how federal law affects traditional banks' responses to changes in state law—namely, state-level efforts to legalize marijuana  While a number of states have legalized marijuana for medical or recreational use, federal law criminalizes the drug's sale, distribution, and possession, in addition to the aiding and abetting of such activities  Federal law also criminalizes money laundering, making it unlawful to: conduct a financial transaction involving the proceeds of a specified unlawful activity —a category that includes the sale or distribution of marijuana—"knowing that the transaction is designed       to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds       or to avoid a transaction reporting requirement under State or Federal law"; or knowingly engage in a monetary transaction in criminally derived property of a value greater than $10,000 that is derived from specified unlawful activity   Finally, the Bank Secrecy Act (BSA) and associated regulations require that financial institutions report illegal and suspicious activities to the Financial Crimes Enforcement Network (FinCEN) and maintain programs designed to prevent money laundering  Federal banking regulators have broad powers to discipline banks for violations of these laws  The Federal Reserve regularly conducts examinations of member banks that include evaluations of BSA compliance, and the FDIC has the authority to terminate a bank's deposit insurance for violations of law  Because of marijuana's status under federal law, many banks have refused to serve marijuana businesses even when those businesses operate in compliance with state law  While some small banks have offered accounts to marijuana businesses, an estimated 70 percent of marijuana businesses remain unbanked  Because of this inability to access the banking system, many marijuana businesses reportedly operate entirely in cash, raising concerns about tax collection and public safety  These perceived problems have attracted congressional interest  In March 2019, the House Committee on Financial Services approved legislation intended to minimize the legal risks associated with banking the marijuana industry  The proposed bill— H R  1595 , the SAFE Banking Act of 2019—would create a "safe harbor" under which federal banking regulators could not take various adverse actions against depository institutions for serving marijuana businesses that comply with applicable state laws ("cannabis-related legitimate businesses")  The legislation would also provide that for purposes of federal anti-money laundering law, the proceeds from transactions conducted by cannabis-related legitimate businesses shall not qualify as the proceeds of unlawful activity "solely because the transaction[s] [were] conducted by a cannabis-related legitimate business " Finally, H R  1595 would require FinCEN to issue guidance concerning the preparation of suspicious activity reports for cannabis-related legitimate businesses that is "consistent with the purpose and intent" of the bill and "does not significantly inhibit the provision of financial services" to cannabis-related legitimate businesses  Variations on some of the SAFE Banking Act's provisions have been incorporated into broader marijuana-related legislation  The Responsibly Addressing Marijuana Policy Gap Act of 2019 ( S  421 and H R  1119 ) would eliminate federal criminal penalties for persons who engage in various marijuana-related activities in compliance with state law and create a "safe harbor" from adverse regulatory action for depository institutions that serve marijuana businesses  Another Senate bill— S  1028 , the STATES Act—would provide that the Controlled Substances Act's (CSA's) marijuana-related provisions do not apply to persons acting in compliance with state marijuana regulation s, subject to certain exceptions  While the bill does not have the type of "safe harbor" for depository institutions in H R  1595 , S  421 , or H R  1119 , it contains a "Rule of Construction" clarifying that conduct in compliance with the legislation shall not serve as the basis for federal money laundering charges or criminal forfeiture under the CSA 

ground_truth: Acquisition management has been a long-standing challenge at NASA, although GAO has reported on improvements the agency has made in recent years. Three space telescope projects are the key enablers for NASA to achieve its astrophysics' science goals, which include seeking to understand the universe. In its fiscal year 2018 budget request, NASA asked for about $697 million for these three projects, which represents over 50 percent of NASA's budget for its astrophysics' major projects. In total, these projects represent an expected investment of at least $12.4 billion. This statement reflects preliminary observations on (1) the current status and cost of NASA's major telescope projects and (2) lessons learned that can be applied to NASA's management of its telescope projects. This statement is based on ongoing work on JWST and ongoing work on the status of NASA's major projects. Both reports are planned to be published in Spring 2018. This statement is also based on past GAO reports on JWST and NASA's acquisitions of major projects, and NASA input. The National Aeronautics and Space Administration's (NASA) current portfolio of major space telescopes includes three projects that vary in cost, complexity, and phase of the acquisition life cycle. GAO's ongoing work indicates that these projects are each making progress in line with their phase of the acquisition cycle but also face some challenges. For example, the current launch date for the James Webb Space Telescope (JWST) project reflects a 57-60-month delay from the project's original schedule. GAO's preliminary observations indicate this project still has significant integration and testing to complete, with very little schedule reserve remaining to account for delays. Therefore, additional delays beyond the delay of up to 8 months recently announced are likely, and funding available under the $8 billion Congressional cost cap for formulation and development may be inadequate. There are a number of lessons learned from its acquisitions that NASA could consider to increase the likelihood of successful outcomes for its telescope projects, as well as for its larger portfolio of projects, such as its human spaceflight projects. For example, twice in the history of the JWST program, independent reviews found that the program was not holding adequate cost and schedule reserves. GAO has found that NASA has not applied this lesson learned to all of its large projects, and similar outcomes to JWST have started to emerge. For example, NASA did not incorporate this lesson with its human spaceflight programs. In July 2016 and April 2017, GAO found that these programs were holding inadequate levels of cost and schedule reserves to cover unexpected cost increases or delays. In April 2017, GAO recommended that NASA reassess the date of the programs' first test flight. NASA concurred and, in November 2017, announced a launch delay of up to 19 months. GAO is not making any recommendations in this statement, but has made recommendations in prior reports to strengthen NASA's acquisition management of its major projects. NASA has generally agreed with GAO's recommendations and taken steps to implement them.