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Frequently Asked Questions

The following are frequently asked questions concerning the future of the Arizona pest control industry that you have sent to us. They started during the SPCC sunset review and have been updated to reflect the new Arizona Office of Pest Management (OPM). These questions represent your fears of change versus new business opportunities and how to make a living under a new set of rules. We have tried to address each question providing a detailed analysis of the issues involved. We want you to understand the implications of picking a specific solution so you can make an informed choice.

Please write us with any additional questions or solutions you would like to have presented here.

List of questions:

What does the EPA say about pesticides?

The Environmental Protection Agency (EPA) is the Federal agency in charge of protecting the environment. The Federal Insecticide, Fungicide, Rodenticide Act (FIFRA) is the primary law governing the use of pesticides. Code of Federal Regulation (CFR) Title 40, Chapter 1 (Protection of Environment), Subchapter E (Pesticide Programs), parts 150 - 189 are the rules that interpret the law governing pest control.

FIFRA 25(b) authorizes EPA Administrator to exempt pesticides that are regulated by another Federal agency or are of a character that they do not need to be regulated by FIFRA. 40 CFR 152.25 lists pesticides that are of a character that they do not need to be regulated by FIFRA.

In general, the EPA wants all pesticides registered, classified and labeled for proper use. The EPA also wants workers protected. Once the labels have been written and reviewed, the EPA wants the labels followed. The EPA generally leaves enforcement of the laws and rules to the states.

There are two broad categories of pesticides: restricted and unrestricted. UNRESTRICTED pesticides have a sufficiently low risk of harm when used according to the Federal Pesticide label that they can be sold and used by anyone - without training or licensing - just read and follow the label.

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Should Arizona go beyond the Federal pesticide label?

Federal law through the Environmental Protection Agency (EPA) completely regulates all pest control products. The EPA expects states to enforce the existing Federal pesticide label during the application of these products.

The Office of Pest Management (OPM), preceded by the Structural Pest Control Commission (SPCC), has effectively modified the Federal pesticide label for products such as Bora-Care (Nisus Corp). Current rule forces a builder to add a vertical barrier even though the Federal pesticide label for a products such as Bora-Care clearly says the product is a stand alone product - i.e, the product does not need to be used with any other product to be effective. See the Economics of Termite Pest Control (PDF) for an explanation of why this rule exists and its economic impact. This rule has the effect of pricing newer technologies out of the market and maintaining the status quo. This rule is anti-consumer and pro-termite industry.

Another example was when the SPCC went after a highschool student for performing building maintenance which included filling cracks and screening holes. His crime? He was accused of performing pest control without a license. The SPCC considered filling cracks and screening holes to be mechanical pest control - the screen and caulk were mechanical pest control devices used to exclude pests. The institute of Justice threatened to sue the SPCC and forced SPCC to drop the complaint. The SPCC was clearly "beyond the Federal pesticide label" and over the top.

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How much license is really needed for occasional application of unrestricted pesticides?

Unrestricted pesticides are considered to be low risk to purchase, transport, store, mix and apply by the average untrained person. The label provides the information on how to use the pesticides safely and effectively. All of the "professional" unrestricted pesticides are available over-the-counter at your local garden supply store, hardware store, do-it-yourself store, grocery store and mail order.

Anybody can go to the store and purchase unrestricted pesticides. No license or other documentation is required. These pesticides can be used around the house - where the residue might come in contact with pets, children and adults - with a low risk of harm. The store will also be happy to sell you mixing and application equipment as well as safety gear.

So if these pesticides are considered safe enough for any homeowner to purchase and apply without a license, why shouldn't the homeowner be able to pay the local high school student, yard worker or maintenance worker to do the same thing - without a license?

The yard workers have been granted a historical exemption. As long as the yard worker is doing other yard work, he can be paid to apply a limited amount of unrestricted herbicide. This exemption mainly exists due to the overly burdensome Arizona licencing laws and a law suit brought by the Institute for Justice back in 2004. We favor expanding this exemption to include any person paid by the owner who applies a limited amount of unrestricted pesticide in addition to that person's other duties and where pesticide application is not the person's primary duty.

We are in favor of better training for the homeowners, highs school student, yard worker or maintenance worker. We think the regulatory agency should encourage education - through public outreach campaigns - by providing easy access to training materials such as the National Pesticide Applicator Certification CORE Manual and notifying people that these materials are available. But there is a difference between encouraging participation and demanding it.

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How much license is really needed to apply unrestricted pesticides professionally?

Someone wanting to become licensed in one of the various catagories must obtain three licenses: an applicator license, an Qualifying Party license and a business license. We have no objection to the applicator license and the business license for someone who's primary job is the application of pesticides. However, the QP license is redundant and a barrier to entry.

An applicator license based on the National Pesticide Applicator Certification CORE Manual should produce a well educated applicator. Even a newly minted applicator should have the knowledge to apply pesticides safely and effectively - and know when to ask questions for situations that are new to the applicator.

Any prudent company will pair a new applicator with an experienced applicator during a probationary period in order to familiarize the new applicator with company policies, equipment, customer routes, local conditions, paperwork system and the like. The experienced applicator will also be observing the new applicator's skills and attitudes. Once the new operator has passed the probationary period, the company will allow the new applicator to service a route by himself.

Any prudent company will also send an experienced person to ride along with an applicator on a regular basis to verify the applicator is doing a good job and to correct any issues observed.

The first theory behind the QP license is that the QP will train and supervise the applicators. As we noted, a licensed applicator will come with a good educational background and will require additional company-specific training. This training can be provided by any experience person within the company. There is no justification for a legislatively mandated licensed position to perform this training. See Responsible Parties in Pest Control (PDF).

Applicators work independently 99% of the time - with no QP in sight - so there is no actual supervision taking place. In the case of the last 1%, it is the applicator calling a more experienced person to ask questions - which is still not supervision. There is no justification for a legislatively mandated licensed position to supervise an independently working person. See Responsible Parties in Pest Control (PDF).

The second theory behind the QP is to add barriers to entry to minimize new competition. The additional licensing requirement makes it more difficult for a new company to get started or for an existing company to expand into new areas. Until recently, the QP required 2000 to 3000 hours of work experience. Following the passage of Senate Bill 1290 (2013), the work experience was be replace by an arbitrary 24 month waiting period.

Adding barriers to entry to stop competition does nothing to promote public health, safety or welfare. It is the low risk nature of the current unrestricted pesticide technologies along with the minimum knowledge requirements of the applicator license that promotes public health, safety and welfare. Small independent businesses depend on word-of-mouth advertising from satisfied customers to stay in business and this will do more to promote quality services industry wide than any mandated QP position. See Responsible Parties in Pest Control (PDF).

The purpose of licensing is to benefit public health, safety and welfare, and to provide a mechanism for collecting and handling consumer complaints. Licensing requires a minimum knowledge level and will tend to eliminate the truly ignorant applicators. Licensing cannot prevent incompetence or fraudulent activities.

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Who or what should be licensed?

In the pest control industry, we have two different types of pesticides: restricted and unrestricted. Restricted pesticides are those that are deemed too dangerous to sell to the general public. Unrestricted pesticides can be purchased by anyone and are generally available in any garden store, hardware store, grocery store and mail order. See What does the EPA say about pesticides? for a reference to the federal laws.

It is possible to draw a distinction between purchasing, transporting, storing and selling closed containers of pesticides and the mixing and application of pesticides. In the first case, you are simply handling closed containers that pose no immediate risk to anyone. In the second case, someone is interacting with the pesticides outside of sealed containers and there is an immediate potential for harm if the pesticides are mishandled.

Packaged harmful substances are regularly handled by unskilled people who may have no training in the safe use of the substance itself. For instance, the local hardware store sells all kinds of harmful chemicals in sealed containers - from strong acids to strong bases to solvents of all kinds. The local delivery guy (e.g., USP) has no training in the use of these substances but he can handle and deliver packages containing them without significant risk. Once the containers are opened, all of these substances can be seriously harmful if mishandled.

Returning to our restricted pesticides, the sale of these pesticides are restricted because of the potential harm they can do. Issuing a license to a business that authorizes the business to purchase, transport, store and sell sealed containers of these restricted pesticides makes sense. Normal business procedures can easily accommodate these activities. The license can specify the packaging and shipping requirements, the conditions of storage, the level of security and the conditions for sale. Little or no actual knowledge of the restricted pesticide is needed to safely carry out the licensed tasks. However, the license may require that the business have people present or on call who are versed in hazardous substance emergency procedures just in case there is an accidental spill. The local fire department may fill the emergency preparedness requirement.

Note that the license just discussed is essentially a resale license for restricted pesticides. This license is held by a business that distributes restricted pesticides. Thus it should be emphasized that this license has nothing to do with the service part of the pest control industry. We covered it here for completeness.

Only an individual can possess the knowledge of when to use restricted pesticides, the conditions required for the safe use of restricted pesticides and knowledge and skills to mix and apply the restricted pesticides. Therefore, only an individual should be licensed to mix and apply restricted pesticides. And thus a license for mixing and application should never be issued to a business.

The same licensing arguments apply to the use of unrestricted pesticides. However, the licensing requirements can be much lower because of the unrestricted nature of the pesticides. See How much license is really needed to apply unrestricted pesticides? for a discussion on what is actually needed.

So let's take a look at a practical way to implement an applicator license. First, we will assume that some exemptions will exist for certain part-time and non-commercial applicators - see How much license is really needed to apply unrestricted pesticides? for an example.

All applicators not otherwise exempted need to be licensed. The structure of the license can consist of a CORE set of skills and one or more add-ons. The CORE test covers reading and understanding the label, storing and mixing of pesticides, equipment and the application process, safety and emergency procedures, the philosophy of integrated pest management and other basic knowledge. This is the common basic knowledge that all pest control applicators are expected to have.

The add-on tests address knowledge that is specific to a distinct area of pest control. Typical add-ons would be weed control, turf and ornamental, wood destroying insects, general (insects, spiders, ticks, etc), aquatic and fumigation. The add-on can be viewed as just a subclass of the main license.

The CORE and the add-on licenses require the applicator to demonstrate the practical knowledge required for those areas of pest control. This should not be burdensome as the course materials can be covered by short courses of study - typically taking only a few weeks and even a thorough test will be relatively short. The course of study for the unrestricted pesticides will be shorter than the course of study that includes use of restricted pesticides.

This structure allows a pest control applicator to begin in one area of pest control and then easily expend into other areas of pest control. Each applicator comes with his/her own license and is not bound to any one business. This structure also allows a small business owner/applicator to expand into other areas to grow the business.

To maintain the applicator license, you should take continuing education classes on an annual basis. The CORE and each add-on are considered separate and each will need its own continuing education classes. If you fail to take the continuing education classes, that part of the license will expire after three years and you will need to take the corresponding test again. The continuing education classes must be registered with and the schedule published by the licensing authority in order for the classes to count toward your license.

A business license is just a way for the government to keep track of businesses operating in their jurisdiction - and to collect taxes from the business. Pest control is purely a service oriented business - a pest control company pays tax on the pesticides when the pesticide is purchased and so the pest control company does not collect [sales] taxes from its customers. That makes pest control a service industry like any other. There should not be any hoops to jump though to obtain a business license - just fill out the forms and pay the fee. Remember, a pest control business cannot perform any pest control until it has hired an applicator.

There is no need for the complexity created by ARS 32-2312, ARS 32-2313 and ARS 32-2314. There is no need for 3 levels of licensing. A trivial service industry business license and an applicator's license are all that is needed

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Is Utah a good model for the pest control industry?

Utah has a very straight forward set of rules for governing the pest control industry. The Utah pest control industry is under the Department Of Agriculture. To be licensed, you need to demonstrate competency in the CORE skills: reading and understanding the label, equipment, safety, environmental issues and a basic understanding of pests. You have to keep the most basic of records - essentially a log. Utah performs annual office, truck and performs tank samples on all applicators to protect the consumer. However, after that, the state mostly leaves you alone.

If there is a complaint, there is a commissioner that will investigate and if necessary, work with the courts to adjudicate the issue. They differentiate between deminous and serious violations. If you follow the label, you have nothing to fear.

Start with the Utah Department of Agriculture and Food (UDAF) State and Federal Pesticide Programs main web page. Then take a look at the Utah Pesticide Control Act (Utah Code Annotated: Title 4, Chapter 14). Then look at the associated rules (R68-7) (PDF). Then look at the compliance procedures (R68-19). This is the referenced law 63J-1-504 that controls how fees are set. Then we have 63G-3 - the Utah Administrative Rulemaking Act.

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What use is the TARF database?

Or will anybody miss the TARF database when it's gone?

We have prepared a detailed white paper on the TARF system: The Case Against TARFs (PDF). We will only summarize some of those points here.

The advertised reason for Office of Pest Management (OPM) having the TARF database is so that potential home buyers can look at the termite history for a house. But what, if anything, can this history tell you? Did the house every have termites? Maybe. Where the termites successfully treated? Impossible to tell. Is there significant termite damage? Cannot tell. Does the house currently have termites? Cannot tell. In short, it is impossible to determine an useful or accurate termite history from the TARF database.

The problem with the TARF database is that the data cannot be trusted to be accurate - even if you assume the pest control company and OPM have worked cooperatively to maximize the accuracy of the data. And even if you assume it is perfectly accurate, no bank is going to provide you with a loan to purchase the house without sending someone out to perform current inspection because the data does not contain enough detail to be useful.

To illustrate this, let's take a look at the issue of termite damage. The TARF database displays a single checkbox that says "Damage Present". There is no indication of how much damage has been done. Does "Damage Present" mean a few inches of the window sill has been eaten or that half of the wall is missing?

Between the time the TARF forms are filed and the time someone wants to know about the damage, the owner may have done nothing or the owner may have repaired the termite damage making the old report obsolete. Have the termites been successfully treated or did they return in three months? There will not be any updates to the TARF database to indicate the current status of the termite infestation or the damage caused.

Before a sale of the building, the realtor or bank is going to send out a home inspector to check the whole structure - the condition of the roof, walls, plumbing, electric and the grounds around the house. The bank wants to know that the roof is not leaking, the walls are sound, the plumbing and electrical works, the grounds drain properly and that there is no evidence of termites or other infestations. One of the jobs of the inspector is to check the structural integrity of the house, which must include looking for termite damage in the structure.

Regardless of the contents of the TARF database, the inspector must still go out to the house and inspect it. See our white paper The Economics of Termite Inspections to Support Real Estate Transactions (PDF) to understand the perspectives of each group involved in a real estate transaction. There is no point in consulting the database prior to the inspection because the information cannot be relied upon by the inspector. The database has served no useful purpose in regards to the sale of the house.

Many people have suggested that the TARF database can be used to keep track of termite warranties. No other industry assumes the consumer is incompetent and cannot keep track of warranty paperwork - requiring the state to keep a copy. No other industry is required to file extensive paperwork for each and every job performed - with little or no benefit to the customer.

Another use of the TARF database is to market to individual home owners. Because the TARF database provides the date of the pretreatment and there is a mandated 5 year pretreatment warranty, you have everything you need to look for people with expiring pretreatment warranties.

There is another use of the TARF database that the large pest control businesses do not want you to know about. The TARF database can be used by large businesses to spy on smaller competitors. See Corruption in the Arizona Pest Control Industry (PDF) to see how easy it is to get this information and how it can be used against successful smaller businesses.

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Should Arizona charge a termite tax (TARF fees)?

Arizona is apparently the only state to track termite treatments and inspections. As a result, Arizona is apparently the only state to incur the expense of tracking these items (via Termite Action Report Forms or TARFs) and to charge a fee to process the accompanying paperwork (currently $8.00 to $16.00 per TARF). See ARS 32-2304.A.6, ARS 32-2304.A.17 and ARS 32-2304.E. This rate is expected to drop significantly in late 2013.

See What use is the TARF database? for a detailed discussion about how useful the data in the database is.

We have done a full economic analysis of the costs of processing the required TARF paperwork. See our detailed white paper on the TARF system: The Case Against TARFs (PDF). Forcing a company to supply the TARF information and changing a fee for it significantly increases the cost of termite treatments. The cost burden is disproportionate to small companies - especially small companies that do not do a large number of termite treatments.

The collection of TARF information and the charging of TARF fees raises the cost of a termite treatment or termite inspection - a cost that must be passed on to the consumer. Unfortunately, the consumer does not receive any benefit in exchange for this higher cost. In other words, the TARF system is anti-consumer.

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Can TARF fees be used for general funding of OPM?

A good place to start this discussion is with the legal basis for the TARFs (Termite Action Report Form). There are currently 4 laws involved:
  • ARS 32-2304.A.6: Maintain a computer system for the benefit and protection of the public that includes the following information on termite treatments that are done before or during construction, initial termite corrective projects, preventative termite treatments and wood-destroying insect inspection reports: (a) The name of the individual who performed the work, (b) The address or location of the work or project, (c) The name of the pest management company, (d) The name of the qualifying party, (e) The applicator license numbers, (f) The nature and date of the work performed, (g) Any other information that is required by rule.
  • ARS 32-2304.A.17: Adopt a wood-destroying insect inspection report form for use by business licensees.
  • ARS 32-2304.E: Each completed form for a termite treatment that is done before or during construction, initial termite corrective treatment project or wood-destroying insect inspection report shall be accompanied by a fee. The initial fee is eight dollars. The acting director may: 1. Adjust the fee upward or downward to a level that is calculated to produce sufficient revenue to carry out the functions prescribed under this section, 2. Establish tiered fees according to the means of submission to encourage electronic submission of the termite action registration form, 3. Assess a penalty of not to exceed one hundred dollars per form for failing to submit the required form or fee, or both, within thirty calendar days.
  • ARS 32.2306: A. On or before September 30 of each year, the acting director shall submit a report regarding the number and types of termite treatments as maintained pursuant to section 32-2304, subsection E. The information shall be categorized according to the general type of treatment used, including pesticide, bait, mechanical, temperature and other methods of treatment. If pesticide treatment is used, the report shall include the active ingredient or trade name of the pesticide used, B. The acting director shall submit copies of the report to the speaker of the house of representatives, the president of the senate, the governor, the secretary of state and the director of the Arizona state library, archives and public records, C. If a buyer of real property makes a request to the acting director, the acting director shall make available to the buyer an information report listing all termite treatments reported for the property. The wood-destroying insect inspection report shall state that a buyer may obtain the information report from the acting director.

ARS 32-2304.A.6, ARS 32-2304.A.17 and ARS 32-2304.E are the laws that mandates and authorizes TARFs. See Corruption in the Arizona Pest Control Industry (PDF) for a detailed account of how the TARF fees are being used illegally.

All 4 of the laws address the TARF database. ARS 32-2304.E.1 says: "Adjust the fee upward or downward to a level that is calculated to produce sufficient revenue to carry out the functions prescribed under this section." In the narrowest interpretation of "section", the word refers only to 32-2304.E and nothing else - the definitions of "functions" being those from ARS 32-2304.A.6, ARS 32-2304.A.17 and ARS 32.2306. The obvious intent of ARS 32-2304.E.1 was in reference to the expenses needed to carry out the administration of the TARF database - and nothing else.

OPM Acting Director Ellis Jones refused multiple requests to document the cost of administering the TARF database. Estimated costs for processing TARFs was under $5.00 in 2010 and much lower with the on-line data entry system now in place. This is a long ways from the current fee of $8.00 and indicates the TARF fee should be reduced.

Thus we come to the first item of corruption. OPM and it's predecessors have all interpreted "section" very broadly, to include all parts of ARS 32-2304 - especially ARS 32-2304.A.2: Administer and enforce this chapter and rules adopted pursuant to this chapter. This interpretation gives OPM the ability to change the TARF fee to match any amount of general operating expense, without restriction. This is clearly not the intent of the law.

The old Structural Pest Control Commission (SPCC) and the new Office of Pest Management (OPM) have both claimed that the funds can be used for general administration and any other purpose they want. Basically they have turned the TARF fees into a cash cow to fund anything they want, including a lobbyist, plush offices and large expensive vehicles. Witness the OPM's attempt in 2009 to dramatically raise the TARF fees - justified solely because the OPM general fund needed more money - not because administering the required database got more expensive.

In reference to questions about the OPM's interpretation of these laws and conversations with the Attorney General pertaining to those interpretations, Director Ellis Jones responded: "I will not be providing any documents from paragraph one and two of your request because they are confidential and are in the realm of attorney-client privilege. The collection and usage of TARF fees are statutory and I have included a copy for your review." On the included copy, he asterisked ARS 32-2304.E.1.

Money is a corrupting influence. History shows that money brings power and power corrupts. In the case of the SPCC, the money went directly into the general operating budget without proper accounting and over-site. So where did the money go to? Unfortunately, no one on the outside knows for sure. Without an extensive financial audit, we will probably never know who lined their pockets and what influence was paid for with these funds.

It should be noted that ARS 12-821.01 along with Martineau v. Maricopa County, 207 Ariz. 332 specifically prevents us from taking OPM to court over this issue because of the 180 day limit - thus OPM can continue to break the law without fear of any legal challenge. However, if we could find someone willing to sue who just became aware of this, then that could turn the tables.

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Should Arizona mandate termite warranties?

There are essentially two opposing positions. The first position is that the state should not require any special termite warranty and allow different pest control operators (PCOs) to select and market their own warranty offerings. The second position is that the state should require a minimum warranty period to protect the consumer. Let's take a detailed look at both positions and see how they will affect you.

First position - no mandated warranties. Warranties are a guarantee of performance and quality. If you offer a short warranty then perhaps you are providing an inferior treatment. If you offer a long warranty, you are likely to be providing a better quality treatment. A company that can provide a longer warranty can advertise the longer warranty and better quality of service and use it as a marketing advantage.

Savvy customers understand that quality termite treatments cost more money initially but will save money over the life of the product or treatment. As long as there is a clear win in the long term cost of the treatment, most customers will take the better treatment.

See the Economics of Termite Pest Control (PDF) for an example of permanent termite control and the economics involved. There are treatments available that are essentially permanent and come with a 25 year manufacturer's warranty that include repairing any termite damage.

Most state consumer laws - including those of Arizona - provide for an implied warranty for all products and services sold if no written warranty is provided. It is your company's responsibility to issue a warranty to your customer or to accept the implied consumer warranty. In normal business fashion, you need to keep track of your warranties in order to determine which ones are still in force. Your customer should keep a copy of any issued warranty for their own records so if there is a problem they can ask for further treatments under the terms of the warranty. In most cases of new construction, the builder will be your customer and the builder will pass your warranty to the purchaser of the building - in the same way appliance, construction and other warranties are passed to the purchaser. It is the consumer's responsibility to keep a copy of their warranties. There is no need for the state to receive and track these warranties.

Most reputable PCOs will quickly resolve warranty issues to retain customers and to keep their reputation intact. Failing that, the ultimate enforcement of all consumer warranties is provided through Small Claims courts or through the regular civil courts. There is no reason to carve out special cases for the termite industry.

Being free to tailor your business allows you to decide what types of customers you want and how to service them. It allows you to educate your customers to understand how your service is a better match to their needs than the services of your competitors. A free market environment will bring out your creative talents to better serve your customers.

Second position - state mandated minimum warranties. Although a warranty implies a minimum level of quality, there is no guarantee that the quality level has been met. See the Economics of Termite Pest Control (PDF) for a detailed explanation of how current soil barriers work - or fail to work. This discussion also shows that a well maintained building has a fairly low probability of getting termites in the first place.

By registering the warranty with the state you are now involving the state in the issuing of the warranty and the enforcement of the warranty. The assumption is that the PCO will be more likely to keep up the quality level because the customer now has the state more directly involved. However, there is little evidence to suggest this actually happens.

Including the state in the warranty process adds a bureaucracy to process and enforce the warranties. The state must now provide a way to find all of the PCOs who are required to provide warranties and register them. The PCOs must file paperwork with the state for every job that requires a warranty. The state must audit PCOs for compliance and make sure there are no PCOs slipping under the wire. The state should regularly inspect application sites to verify the proper application of chemicals through soil and tank testing - but the state rarely does this due to the expense involved. The state must track all of the warranties, including the issuing PCO and the customer who received the warranty and any transfers of the warranty. The state must provide a way for customers to register complaints against the PCO that issues a warranty but failed to satisfy the customer. The state must provide a way to penalize a PCO if the PCO fails to act in accordance with the warranty. Finally, the state must provide a way to pay for the bureaucracy to process and enforce these special warranties.

The above mentioned bureaucracy exists today for tracking termite pretreatments and termite retreatments in the form of the OPM (Office of Pest Management, previously the SPCC). Arizona is apparently the only state that tracks termite treatments and inspections and provides for a minimum warranty period on termite pretreatments.

Registering the warranty with the state allows a home owner who has lost the treatment and warranty records to go back to the state and ask for a copy of the records. As long as the PCO has filed the required paperwork with the state and as long as the state has properly filed the paperwork, the information will be available for the home owner. However, this assumes a certain amount of incompetence on the part of the average homeowner.

Registering warranties with the state has a privacy down side. State databases are generally available as a public record or through a "freedom of information act" filing. There is also the possibility of staff discreetly copying the data for personal gain. This means that every PCO has to effectively publish his customer list for all of his competitors to see. This also allows competitors to monitor each other. See Corruption in the Arizona Pest Control Industry (PDF) for a detail account of how this happens.

In theory, a bureaucracy to track and enforce warranties can provide some level of consumer protection by tracking warranties and assisting consumers in having warranties enforced. Unfortunately, 30 years of experience with the OPM and SPCC have shown that the bureaucracy is prone to ineptitude, corruption and cronyism. The unintended consequence is that consumers are worse off rather than better off. One way this happens is by intentionally putting a PCO out of business with the result that all of the PCO's existing customer warranties become worthless. See Corruption in the Arizona Pest Control Industry (PDF) for a detail account of how this happens.

See What use is the TARF database? for a detailed discussion about how useful the data in the database is. It is much less useful than you would like to believe.

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How should violations be handled

The average person does not try to maliciously violate the law. In general, someone occasionally tapping them on the shoulder and reminding them of the proper way to perform a task is all that is needed to obtain compliance. A little education goes a long way. No fines or harsh words are needed.

A process whereby a violator receives a warning and the opportunity to fix the problem can also provide a record of those violations. Time will reveal any behavior patterns but until then the person should receive the benefit of the doubt. If a person continues to get violations, then a pattern will develop and a fine may be appropriate. If the combination of warnings followed by fines does not get the job done, then the State can take away the license and/or prosecute the case in civil or criminal court.

If a large group of individuals who all work for the same company all get similar violations and warnings, you will also see a pattern develop. This pattern indicates the problem may lie with the company the individuals are working for. The company may have a policy that needs correcting. Once such a pattern develops, the state may need to issue the violation and warning to the company, and to work with the company to resolve the issue.

All conditions that result in fines should be well documented so there is no question when a fine should be issued and how much the fine should be. In general, fines should not be issued until a warning has been given and the individual or company has had an appropriate chance to correct the issue. This will go a long ways to preventing the enforcer from causing undo economic harm or putting companies out of business without just cause. The punishment must never exceed the crime. There is a world of difference between a minor accidental discharge with little likelihood of damage and the intentional dumping of hazardous chemicals. Because judgement is required, the enforcer must be an educated but disinterested third party with nothing to gain and no ax to grind.

In no case should an industry member be part of the violation or prosecution process. See Should you be fined by your peers? for a discussion of this issue.

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Should you be fined by your peers?

One of the problems with the old SPCC is that industry members were on the Board as rule maker, judge, jury and executioner. This is a very corrupting influence. Those industry members on the Board have the power to directly influence the Board in ways that will be economically beneficial to them. There are numerous examples of the Board protecting their own interests by looking the other way while putting competitors out of business through excessive fines. See Corruption in the Arizona Pest Control Industry (PDF) for a detail account of how this happens. This is called selective enforcement. Being on the Board provides a perfect venue to extend their influence over the competition. Let me provide you with some examples.

The SPCC ignored the legislative mandate not to regulate in-house government applicators and created rules to go around the law. You can hear Senator Leff chastise the SPCC for doing exactly this during the Sunset Review hearing - see the archived video of the hearing here - 00:49:00 to 00:53:00. If you can raise the cost of government pest control high enough through regulation, it is much easier to talk government officials into bidding out a contract to a large pest control company - tailored to prevent a small business from qualifying. Plus it allows the SPCC to expand its empire - a favorite objective of bureaucracy.

Several other examples were presented by Jennifer Perkins from the Institute of Justice during the Sunset Review hearing - see the archived video of the hearing here - 01:03:00 to 01:07:00. You may remember "rat boy" - a highschool student doing handy-man work that the SPCC tried to put out of business claiming that he needed a license to fill cracks and screen holes in houses. Several large pest control companies complained that they could not compete with the highschool student and wanted the SPCC to take action - i.e., get rid of the kid.

When the SPCC goes to excessively fine a small PCO, that PCO is at a severe economic disadvantage because of the cost of defending himself. The SPCC Board knows that the likelihood of a small PCO being able to afford the defense is low and thus they are not likely to be stopped. On the other hand, the SPCC knows that a large PCO has plenty of money to mount a legal defense and so the SPCC usually lets the large PCO go with just a warning. Many of the largest PCOs also pay large sums to the SPCC in the form of TARF fees and thus the SPCC has a financial incentive to protect the large PCOs. Read Who hired the lobbyist and why? to learn how the SPCC has been lobbying against the small PCOs and lobbying for the power hogs.

The SPCC has tried to gain control of maids and pool services by claiming chlorine and other common disinfectants are microbial pest control agents and those agents should only be used with a SPCC-issued microbial license. At least two large pest control companies have already diversified into these areas and would love to see regulations to reduce the competition and allow them to expand into these markets. As always, the battle cry is "public safety" and "protect the children". The reality is their real interest is economic turf battles to gain market share.

You should read the Little Hoover Commission report and see what they have to say about a jury of your peers - when your peers have a vested financial interest in the outcome.

One last point about having your peers in a position of power over you. Read How are small companies disadvantaged by paperwork? to see how a large business can disadvantage your small business by increasing the paperwork you are required to fill out.

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Should the state pest control agency notify PCOs of rule changes?

You should start by knowing about the Administrative Procedure Act (APA) that consists of ARS 41-1001 through ARS 41-1060. These laws specify how agency rules are to be created and reviewed. These laws give you specific rights, such as the ability to ask for and receive written notification of proposed rule changes (ARS 41-1022(C)), the ability to ask for and receive a copy of the rule changes (ARS 39-121), the ability for you to ask for and receive an oral public hearing on the proposed rule changes (ARS 41-1023(D)). Take a look at Criteria for Reforming Rules for detailed information about rule making. Specifically, look at Section 1 of the Arizona Rulemaking Manual at the bottom of the page. You should also know about the Governor's Regulatory Review Council (GRRC). See also Section 8 of the Arizona Rulemaking Manual at the bottom of the page. These laws also provide you with the ability to sue the Office of Pest Management (OPM) if they fail to comply with proper rule making procedures or fail to properly perform economic impact studies on small business.

However, you should also be aware of ARS 12-821.01 along with Martineau v. Maricopa County, 207 Ariz. 332. This law and the subsequent ruling places a 180 day limit for filing suit against the government. Further, once the 180 day limit has passed, not only are you barred from suing, they are allowed to continue breaking the law with impunity. How's that for corruption?

The state pest control agency - Office of Pest Management (OPM) - should communicate with the pest control operators (PCOs) on a frequent and regular basis via a newsletter. The newsletter should include information pertaining to law changes, rule changes and procedure changes. The newsletter should also include contact information for the agency. The newsletter should also include other informative content that is of general interest to all PCOs, such as educational seminars.

The newsletter should be printed on paper and mailed via the United States Post Office to all PCOs in a timely manner. The production process of printing and mailing takes less than two weeks and costs under $2.00 per newsletter per PCO for a 4 to 8 page newsletter. That includes printing, folding, labeling, sorting and sorted first class postage.

The state agency can also send out an e-mail form of the newsletter to those who choose e-mail. However, printed correspondence should always be the normal communications method unless the PCO asks for a different method.

The state agency can also create a web site to provide convenient access to information. However, printed correspondence should always be the normal communications method unless the PCO asks for a different method. It is too easy to miss new information posted on a web site, especially if the PCO does not regularly check the web site and if information does not happen to be posted on the front page on the day the PCO checks the web site.

If there will be a public meeting, all PCOs should receive at least 30-days written notification - that is, 30 days from the date the printed newsletter will be delivered. This long advanced notification is needed because the small PCOs are already booking appointments 3 to 4 weeks out. And time must be allowed to make travel arrangements for anyone who does not live close to the meeting location. Remember, attending a 1 hour meeting may require taking a whole day off once travel time is added.

Meetings should be held in other cities outside of the Phoenix metropolitan area to accommodate PCOs who do not live close to Phoenix. Scheduling meetings in Tucson, Flagstaff, Safford, Yuma and Kingman will help this process.

Distributors, property managers, gardeners and other interested persons should be able to sign up to receive the state pest control agency's newsletter. The emphasis is on communications and reaching all people who would benefit from receiving the newsletter.

The SPCC claimed that sending out a newsletter was too expensive, but they have money to pay for a lobbyist - er, "legislative consultant". The reality is they had no interest in communicating with the small PCOs, which are 95% of the licensed PCOs.

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How should education and testing be done

You must demonstrate a minimum level of knowledge to receive a pest control license. Further, you need to periodically refresh that knowledge so you don't forget what you know and you must add to that knowledge because new pests are discovered and new pest control techniques are developed.

In most pursuits, whether it be medical, aviation, law or engineering, there is a prescribed course of study that must be completed to ensure a proper base of knowledge. From there you can specialize into those areas that interest you most. Why should pest control be any different?

The National Association of State Departments of Agriculture (NASDA) publishes the National Pesticide Applicator Certification CORE Manual. This is the nationally accepted basic information every pest control applicator should have to safely and efficiently apply pesticides. The material can be taught in a classroom environment or the student can read the manual cover to cover. The manual includes review questions along with answers to form a complete self-study course.

The test and the course should closely match each other in depth and breath. The test should be structured so that someone who is "over qualified" does not have difficulty understanding what the questions are asking. There should only be one correct answer to every question and the answer should not be ambiguous using standard testing principles. If an essay question is asked that can have multiple correct answers then all possible correct answers must be accepted.

Many industries use multiple choice tests and publish a large pool of test questions with answers. The pool may be 1000 - 2000 questions. The test is 50 to 150 randomly selected questions from the pool. If the pool is easily divided up into subsections, the test will draw a percentage from each subsection. This method leaves no question about what knowledge is required to pass the test.

With a published pool of multiple choice questions, it is possible for the student to memorize all 2000 questions and the corresponding answers. However, even if they do that, they will have learned a significant amount of material. Publishing the question/answer pool also allows everybody to discover mistakes in the testing and study materials so those mistakes can be corrected.

But the emphasis is on education and gaining a full understanding of why each answer is correct - not just memorizing question/answer pairs. The CORE Manual provides a well rounded education.

After the test is complete, the student should be given a list of the questions that were answered incorrectly so the student can review the appropriate material.

The CORE material is very generic. However, there may be a need for additional training for specific classes of pest management. The additional training is built upon the existing CORE material - it is not a substitute for it. For instance, weed, insect, fumigation and aquatic pest control all have their specialized techniques. However, these "add-on" techniques are all built on top of the CORE material.

A good example of this type of education system is provided by King Schools (www.kingSchools.com) for pilots, providing computer-based interactive learning, text books, question and answer books starting with private pilot all the way up through commercial ATP ratings - the highest ratings available. Many student pilots purchase the King School materials in addition to private instruction because the price is very affordable. In fact, the instructor can teach directly from the school materials with no loss of information.

Perdue University provides a good correspondence pest control course that can be adapted to private instruction so you can have an experienced instructor answering your questions as you study.

This type of structure also makes it easier to publish class and test materials that cover all aspects of pest control, such as would be required to qualify for a unlimited class A license. It also allows the materials to be subsetted for subset licenses, such as weed control or bee control.

Periodic continuing education should be offered and taught by people who have considerable experience in the industry. Continuing education is required to stay current with best industry practices.

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How are small companies disadvantaged by paperwork?

Your small business is run mainly by you and perhaps a few other people. Your time must be divided between servicing customers - something that generates revenue for your business - and tasks required to keep your business functioning but generate no revenue - such as accounting and other necessary paperwork. For every hour you spend doing paperwork, you have one less hour to generate revenue for your business.

Now let's say that one of the big pest control businesses lobbies to increase the paperwork required to perform customer jobs. For this example, we will assume it will take one hour a week for you to process this paperwork. For your small business, you are probably the one who will end up processing the paperwork and thus you will have one less hour each week to generate revenue. Over a year, that is 50 hours lost. Effectively, you just lost 6 full days of work and the revenue it would have brought in.

The large pest control business probably already has a book keeper and/or office clerk who is already taking care of various paperwork tasks. This person may be making $10 to $15 per hour. This person can be trained to take on the additional task of this new paperwork with very little impact to the large business.

What is the true cost of this added paperwork? It may cost you lost income in the range of $50 to $100 per hour while it cost your large competitor $10 to $15 per hour. You can bet that a large business would be very willing to take on the overhead of added paperwork in order to disadvantage his smaller competitors.

The Paperwork Reduction Act, the Regulatory Flexibility Act and the Equal Access to Justice Act (EAJA) are three bodies of law that directly affect your business. You should study them and become familiar with these laws. Technically, these laws only affect federal laws at the federal level but you should work toward applying these acts at the state level by writing to your legislators.

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Should Office of Pest Management (OPM) be saved?

Some pest control operators (PCOs) have suggested that the OPM can be salvaged. Just make a few changes to the OPM personal and maybe change a few rules or the director and everything will be fine.

This is the forth time in the 30ish-year history of the Arizona pest control agencies that the agency has degenerated to the point something had to be done. As you may remember, members of the first Structural Pest Control Board (SPCB) were indicted and members of the second Structural Pest Control Commission (SPCC) left [the state] before being indicted. Years later, the SPCC was dissolved due to continuing corruption. Thus we ended up with OPM. Take a look at Corruption in the Arizona Pest Control Industry (PDF) for a detailed account of the corruption.

All of the other states in the Union have come to the conclusion that this type of organization cannot be trusted and all have gotten rid of their commissions. Most states administer pest control under the Department of Agriculture.

This type of bureaucracy is inherently flawed and is prone to corruption as we have explained elsewhere. The only way to fix the OPM is to get rid of it and replace it with a totally new system without the corrupting influences of industry participation and arbitrary fines. Even the use of industry in an advisory position must be severely restricted. We need an impartial third party to regulate the industry, free from the influences of large PCOs and self-serving fees and fines.

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Reward for inappropriate use of funds?

$2000 reward for information leading to the conviction of Office of Pest Management (OPM) staff for inappropriate use of state or federal funds.

According to the Auditor General's report, during the years of 2005, 2006 and 2007, the SPCC hired Stuart Goodman of Goodman Schwartz to lobby for them. It is illegal to use state or federal funds to pay for a lobbyist. A significant part of the SPCC funding comes from state and federal sources. About 75% of the SPCC funding came from TARFs and TARFs are considered private funding. Fines are also considered private funding. So the question comes down to what funds were used to pay for the lobbyist. Did the SPCC employ strict accounting practices to guarantee separation of the funds? Or did the SPCC allow the co-mingling of private funds with state and federal funds?

Why was the SPCC spending $68,553 on a secret lobbyist? Why was the SPCC paying for a lobbyist while running a deficit? Whom was the lobbyist representing and what was he lobbying for? Did the trade association executives know about the lobbyist? The trade associations have consistently acted to protect the SPCC in spite of the hardship they knew the SPCC was causing most smaller business. Why did the SPCC keep the lobbyist a secret if the lobbyist was representing the interests of small businesses? Could it be that the lobbyist was really paid to represent the interests of the power hogs by legislating advantages for the large pest control operators (PCOs) and legislating the small PCOs out of business?

I have filed a Freedom of Information Act request asking for detailed information about why the lobbyist was hired, what he did for the SPCC and how he was paid. If you have any information about the SPCC or their lobbyist, please call me.

You might think that this all ended with the SPCC - but it did not. Come to find out, OPM has recently hired Stuart to represent their interests. But instead of calling him a lobbyist, they are calling him a "legislative consultant." OPM Acting Director Ellis Jones has refused to say what services Stuart is providing for OPM. But you can be assured it is not in the best interest of small businesses.

We were once a country of constitutional law and democratic rule. Now we are a country of lobbyist, power hogs and private equity investors, with no representation for the middle class.

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White Papers?

Yes, we have white papers. The first collection of white papers discus various aspects of the Arizona structural pest control industry in detail. These white papers will enable you to understand the issues from several different perspectives.

The second collection of white papers discuss the issues of regulatory boards and commissions and their affects on consumers and business.

The third collection of white papers discuss the issues of lobbying and money in politics, and shows you how large corporate interests use many means to influence legislators.

  • United States of ALEC by Moyers and Company, September 28, 2012. This is a report on the most influential corporate-funded political force most of America has never heard of - ALEC, the American Legislative Exchange Council.
  • Elections for Sale by Moyers and Company, September 21, 2012. Nothing corrupts our political system more than the ability of the rich and influential to spend limitless amounts of money - often in secret - with the intention of creating preferred political outcomes.

 
 
Copyright © 2010 by Phyllis M. Farenga.  All rights reserved.
Updated May 2013

It's Our Turn
P.O. Box 565
Marana, Arizona 85653

www.Its-Our-Turn.com