I have a 70 page document that is one long list with 5 levels. Within this list 5-cell headings appear between sub-sections. When new headings appear I kept the hierarchy level in effect. For example if the list continued past a new heading that level didn't change under that new heading.
In the attached screen shot you see (3), which is level 2. After the new heading "Same, standards..." I continued the level 2. The "Agency" thinks the hierarchy level should begin in cell-1 after each heading.
It's very hard to answer this question based on this little bit. Looking at this bit I would say that what you have is a headings (in bold in print) followed by a paragraph (labeled 3 & 4) followed by itemized sentences which could be done in 1-3. If the heading is "under" something else, it could be done as a cell 7 heading.
Now, as I said, this is based on the little bit you sent.