A performance audit of the Structural Pest Control Board

              STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
A PERFORMANCE AUDIT
OF THE
STRUCTURAL PEST CONTROL BOARD
SEPTEMBER 1983
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 83- 16
DOUGLAS R. NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
September 19, 1983
Members of the Arizona L e g i s l a t u r e
The Honorable Bruce Babbitt, Governor
M r . Wayne Earley, Chairman
S t r u c t u r a l Pest Control Board
Transmitted herewith is a report of the Auditor General, A Performance
Audit of the S t r u c t u r a l Pest Control Board. This report is i n response t o
a January 18, 1982, r e s o l u t i o n of t h e J o i n t L e g i s l a t i v e Oversight
Committee. The performance a u d i t was conducted as a p a r t of the Sunset
Review s e t f o r t h i n A. R. S. § § 41- 2351 through 41- 2379.
The blue pages present a summary of the r e p o r t ; a response from the
S t r u c t u r a l Pest Control Board is found on the yellow pages preceding the
appendices.
My s t a f f and I w i l l be pleased t o discuss or c l a r i f y items i n the report.
~ o u ~ y Ra. s Norton
Auditor General
Enclosure
S t a f f : William Thomson
Peter Francis
Martha Bradley
Addie Ceballos
1 1 1 WEST MONROE SUITE 600 PHOENIX, ARIZONA 85003 ( 602) 255- 4385
OFFICE OF THE AUDITOR GENERAL
A PERFORMANCE AUDIT OF THE
STRUCTURAL PEST CONTROL BOARD
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 83- 16
TABLE OF CONTENTS
SUMMARY
INTRODUCTION AM> BACKGROUND
SUNSET FACTORS
FINDING I
Regulation of t h e s t r u c t u r a l p e s t c o n t r o l industry
should be continued and strengthened .
CONCLUSION
FINDING I1
The Board needs t o l i c e n s e companies as well as
individuals.
CONCLUSION
RECOMMENDATION
FINDING I11
The Board can strengthen its enforcement a c t i v i t i e s
t o b e t t e r p r o t e c t the public.
CONCLUSION
RECOMMENDATIONS
FINDING I V
The Board's c u r r e n t f e e s t r u c t u r e is inequitable.
CONCLUSION
RECOMMENDATION
OTHER PERTINENT INFORMATION
AREAS FOR FURTHER AUDIT WORK
WRITTEN RESPONSE TO AUDITOR GENERAL'S REPORT
APPENDIX
- Page
i
1
7
13
Subterranean and Drywood Termites
LIST OF TABLES
Page
TABLE 1 - Actual Revenues and Expenditures f o r F i s c a l Years
1979- 80 through 1982- 83 and Estimated Revenues and
Expenditures f o r F i s c a l Year 1983- 84: S t a t e and
Federal Funds
TABLE 2 - Summary of Actual Board A c t i v i t i e s f o r F i s c a l
Years 1979- 80 through 1981- 82 and Estimated
Board A c t i v i t i e s f o r F i s c a l Years 1982- 83 and
1983- 84
TABLE 3 - P e s t i c i d e Poisoning Information: Immediate E f f e c t s
TABLE 4 - Statutory Ambiguity: Exanples of Various References
t o License Recipients
TABLE 5 - Size of S t r u c t u r a l Pest Control Companies a s of
May 1983
TABLE 6 - Business Fee S t r u c t u r e s i n Other S t a t e s
TABLE 7 - Business Fee S t r u c t u r e i n Tennessee
SUMMARY
The Office of the Auditor General has completed a performance a u d i t of t h e
Arizona S t r u c t u r a l Pest Control Board i n response t o a January 18, 1982,
r e s o l u t i o n of the J o i n t L e g i s l a t i v e Oversight Committee. This performance
a u d i t was conducted a s a p a r t of the Sunset Review process s e t f o r t h i n
A. R. S. § § 41- 2351 through 41- 2379.
The S t r u c t u r a l Pest Control Board, e s t a b l i s h e d i n 1965, is comprised of ,
f i v e members who a r e appointed by the Governor. Three of the f i v e Board
members' p r i n c i p a l businesses must have been s t r u c t u r a l pest c o n t r o l f o r
a t l e a s t f i v e years preceeding t h e i r appointments. The remaining two
Board members a r e public members who must be well versed i n the f i e l d of
p u b l i c h e a l t h , p e s t i c i d e s , entomology or s t r u c t u r a l pest c o n t r o l
p r a c t i c e s . The purpose of the Board is t o administer l i c e n s e and
c e r t i f i c a t i o n exams, renew l i c e n s e s and c e r t i f i c a t i o n s annually, conduct
both F e d e r a l u s e and regular S t a t e inspections, i n v e s t i g a t e consumer
complaints and hold hearings i f necessary. The Board's full- time s t a f f
c o n s i s t s of an executive s e c r e t a r y , two t y p i s t s and two inspectors.
Need f o r Continued and
Strengthened Regulation ( Page 13)
The S t a t e should continue t o r e g u l a t e t h e s t r u c t u r a l p e s t c o n t r o l industry
t o p r o t e c t t h e public from p o t e n t i a l l y s e r i o u s chemical harm and
s t r u c t u r a l damage. Pest c o n t r o l operators ( PCOs) use many p e s t i c i d e s
which can be deadly t o humans and animals; furthermore, inadequate
treatment by PCOs can and does r e s u l t i n c o s t l y damage t o property.
In a d d i t i o n , the Board's current regulatory powers over the termite-c
o n t r o l p o r t i o n of t h e industry* should be strengthened t o allow f o r more
e f f e c t i v e d i s c i p l i n e . Presently, the Board i s unable t o adequately c o n t r o l
* See Appendix f o r information on termites.
unethical or incompetent t e r m i t e treatment p r a c t i c e s . The Board needs t o
develop 1) enforceable termite treatment standards and 2) more informative
reporting requirements f o r termite inspections.
Business Licenses ( Page 25)
The S t r u c t u r a l Pest Control Board needs t o l i c e n s e both i n d i v i d u a l s and
businesses. The c u r r e n t system of r e g u l a t i n g the business through the
i n d i v i d u a l ' s l i c e n s e is based on vague s t a t u t e s and does not allow f o r
e f f e c t i v e i n d u s t r y c o n t r o l . Unscrupulous companies can continue as long
as the owning management can f i n d l i c e n s e e s t o q u a l i f y the business.
Unprofessional l i c e n s e e s may continue t o operate s i n c e t h e business may
not be h e l d u l t i m a t e l y responsible f o r the l i c e n s e e ' s a c t i o n s . The
S t r u c t u r a l Pest Control Board s t a t u t e s should be revised t o e s t a b l i s h a
l i c e n s i n g or r e g i s t r a t i o n system f o r both companies and individuals.
Strengthened Enforcement
A c t i v i t i e s Needed ( Page 33)
Although t h e Board a c t s aggressively on many consumer complaints, some
improvements a r e needed t o p r o t e c t the public more f u l l y .
- Current procedures used by the Board t o i s s u e consent orders a r e
misleading and could be considered u n f a i r t o l i c e n s e e s . As a r e s u l t
of the procedures, a l i c e n s e e may f e e l intimidated i n t o signing a
consent order as o r i g i n a l l y offered without knowing he has other
options a v a i l a b l e . The Board should follow consent order procedures
described by t h e Attorney G e n e r a l ' s O f f i c e .
- Board members and s t a f f could benefit from t r a i n i n g adequately i n
gathering and presenting evidence necessary t o properly dispose of
complaints.
- The Board ' s current procedures f o r informally disposing of complaints
can be made p o t e n t i a l l y more beneficial t o consumers and/ or simpler
f o r the Board. The Board needs t o consider requiring refunds or
training more often through i t s consent order process, a s well a s a
simpler a l t e r n a t i v e t o consent orders f o r minor violations.
Licensiqg Fee Schedule ( Page 4 3 ) '
The current licensing f e e schedule is inequitable and w i l l require
restructuring i f businesses a r e licensed. Although l a r g e r companies
generate more costs f o r the Board, the same license f e e i s charged t o each
" qualifying party" licensee regardless of the s i z e of the company with
which he is associated. If businesses are licensed, Board s t a t u t e s should
be amended to allow f o r a more equitable fee s t r u c t u r e based on company
size.
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has completed a performance audit of the
Arizona Structural Pest Control Board ( SPCB) i n response t o a January 18,
1982, resolution of the Joint Legislative Oversight Committee. This
performance audit was conducted a s a part of the Sunset Review process s e t
f o r t h i n A. R. S. § § 41- 2351 through 41- 2379.
Structural Pest Control
S t r u c t u r a l pest control is defined by A. R. S. s32- 2301, paragraph 4 as
". . . controlling household pests, wood destroying
pests or organisms, other pests which may invade
households or o t h e r s t r u c t u r e s , including railroad
c a r s , boats, docks, trucks, airplanes or the contents
thereof, or pests, including weeds, which e x i s t i n ,
near or around s t r u c t u r e s , i n lawns or ornamental
shrubs or t r e e s . . . ."
This e f f e c t i v e l y includes most commercial exterminations of v i r t u a l l y a l l
kinds of common pests ( e. g., i n s e c t s , termites, rodents) a s well a s
r e s i d e n t i a l weed control or lawn spraying.
Board Composition
The Structural Pest Control Board, established i n 1965, is comprised of
f i v e members who a r e appointed by the Governor. Three of the f i v e Board
members' principal businesses must have been s t r u c t u r a l p e s t c o n t r o l f o r
a t l e a s t f i v e years preceeding t h e i r appointments. The remaining two
Board members a r e public members who must be well versed i n the f i e l d of
public health, p e s t i c i d e s , entomology or s t r u c t u r a l pest c o n t r o l
practices. The d u t i e s of the Board include administering license and
c e r t i f i c a t i o n exams, renewing licenses and c e r t i f i c a t i o n s annually, con-
ducting both Federal use and regular State inspections," investigating
consumer complaints and holding hearings i f necessary. The Board's
full- time s t a f f c o n s i s t s of an executive secretary, two t y p i s t s and two
inspectors.
Requirements f o r Licensure
In order t o be granted a license t o practice pest control i n Arizona
applicants must 1) be of good moral character, 2) possess the necessary
p r a c t i c a l experience, 3) pass the Board- administered examinations i n the
area of pest c o n t r o l t o be conducted, 4) not have violated any Board
s t a t u t e rule or regulation, and 5) pay the appropriate f e e s . Licensees
a r e a l s o required to be e i t h e r insured or bonded f o r a minimum of $ 100,000
f o r property damage and public l i a b i l i t y .
The Board must hold two examinations a year, one i n March and one i n
September. Additional examinations may be held a s the Board deems
necessary. Currently, there a r e approximately 350 licensees. The Board
renews l i c e n s e s on an annual basis.
Licensure Categories - The Board issues one l i c e n s e which may include one
or more of the following c l a s s i f i c a t i o n s :
1. General pest control ( not including t h e c o n t r o l of wood- destroying
i n s e c t s or organisms, weed control and fumigation),
2. Control of wood- destroying i n s e c t s and organisms,
3. Weed control,
4. Fumigation, and
5. Turf and ornamental h o r t i c u l t u r e pest control.
* Federal use inspections consist of Board inspectors monitoring the
a c t u a l application of p e s t i c i d e s , e s p e c i a l l y restricted- use
pesticides. S t a t e inspections consist of Board inspectors v i s i t i n g
s t r u c t u r a l p e s t c o n t r o l business establishments and checking f o r
compliance with s t a t u t e s and rules addressing company records,
pesticide storage, application equipment, truck markings, etc.
The Board a l s o i s s u e s a l i c e n s e which encompasses a l l the c a t e g o r i e s of
p e s t c o n t r o l l i s t e d . Licensees and the companies they q u a l i f y ( see
discussion, page 25) may p r a c t i c e only those types of p e s t c o n t r o l i n
which they have been l i c e n s e d . F o r i n s t a n c e , a l i c e n s e e with only a weed
c o n t r o l l i c e n s e may not perform t e r m i t e c o n t r o l work.
Requirements f o r C e r t i f i c a t i o n
The Board a l s o c e r t i f i e s p e s t c o n t r o l operators and a p p l i c a t o r s t o
r e g u l a t e and assure minimum q u a l i f i c a t i o n s of persons applying
r e s t r i c t e d - u s e pesticides." ( Pest c o n t r o l operators a r e l i c e n s e d ,
a p p l i c a t o r s a r e n o t . ) Applicants who pass an examination and pay the
associated f e e s a r e granted c e r t i f i c a t i o n . Pest c o n t r o l operators do not
have t o be licensed t o be c e r t i f i e d or vice versa. The Board c u r r e n t l y
conducts t r a i n i n g f o r and administers the c e r t i f i c a t i o n examination on a
monthly b a s i s . The Board has c e r t i f i e d approximately 1,300 a p p l i c a t o r s .
Funding
Ninety percent of t h e examination and l i c e n s e f e e s c o l l e c t e d by t h e Board
a r e deposited i n a s p e c i a l Board fund t o support its operation.
Additionally, the Board has received Federal grant monies annually from
t h e Environmental Protection Agency since October 1978 t o supplement its
c e r t i f i c a t i o n and enforcement programs. The Board's c u r r e n t EPA g r a n t s
w i l l terminate September 30, 1983. Recent budget cutbacks at EPA
diminishes t h e l i k e l i h o o d of SPCB continuing t o receive Federal funds.
Table 1 r e p o r t s Board revenues and expenditures f o r f i s c a l years 1978- 79
through 1982- 83. Table 2 shows t h e Board's a c t i v i t y l e v e l s during t h i s
period.
* The Environmental Protection Agency ( EPA) determines which p e s t i c i d e s
a r e designated r e s t r i c t e d use based on g u i d e l i n e s e s t a b l i s h e d i n the
1972 Federal I n s e c t i c i d e , Fungicide and Rodenticide Act ( FIFU). The
Board of P e s t i c i d e Control has t h i s a u t h o r i t y on the S t a t e l e v e l .
( See discussion of r e s t r i c t e d - u s e p e s t i c i d e s on page 14.)
TABLE l*
ACTUAL REVENUES AND EXPENDITURES FOR FISCAL YEARS 1979- 80 THROUGH
1982- 83 AND ESTIMATED REVENUES AND EXPENDITURES FOR FISCAL
YEAR 1983- 84: STATE AND FEDERAL FUNDS
Estimated
1979- 80 1980- 81 1981- 82 1982- 83 1983- 84
S t a t e Revenues
Balance forward
from p r i o r year $ 29,274 $ 26,224 $ 21,680 $ 31,965 $ 31,965
90 percent of
c o l l e c t i o n s 54,840 66,118 78,959 112,452 157,100
Total S t a t e
funds $ 84.114 $ 92,342 $ 100,639 $ 144.417 $ 189,065
S t a t e E x ~ e n d i t u r e s
Personal s e r v i c e s $ 27,200 $ 31,085 $ 36,084
Employee- related
expenses 4,950 5,900 7,000
P r o f e s s i o n a l and
outside s e r v i c e s 215 185 614
Travel 7,350 14,035 4,410
Other operating 11,650 18,065 20,202
Other 530 1,425 362
Total S t a t e
funds 51,895 70,700 68,670
Federal Expenditures
Personal s e r v i c e s
Employee- related
expenses
P r o f e s s i o n a l and
outside s e r v i c e s
Travel
Other operating
Equipment
Total Federal
funds
TOTAL PROGRAM $ 110.685
* Source: S t r u c t u r a l Pest Control Board's budget requests f o r f i s c a l years
1981- 82. Computation e r r o r s i n these documents were corrected where
possible.
TABLE 2*
SUMMARY OF ACTUAL BOARD ACTIVITIES FOR FISCAL YEARS 1979- 80
THROUGH 1982- 83 AND ESTIMATED BOARD ACTIVITIES FOR
FISCAL YEAR AND 1983- 84
Estimated
1979- 80 1980- 81 1981- 82 1982- 83 1983- 84
Inspections :
S t a t e pest c o n t r o l
companies 2,366
Federal use 386
Samples c o l l e c t e d 10
Complaints 594
C e r t i f i e d
a p p l i c a n t s N/ A
D i s c i p l i n a r y Actions:
Hearings 15
Revocation o r
suspension 5
Consent agreements 4 1
PCO** - Examination
& License
PC0 examination 6 0
PC0 l i c e n s e s 3 0
PC0 l i c e n s e renewal 325
C e r t i f i c a t i o n :
C e r t i f i c a t i o n 224
R e c e r t i f i c a t i o n 1,051
* Source: S t r u c t u r a l Pest Control Board's budget requests f o r f i s c a l
years 1981- 82 through 1983- 84 ** Pest Control Operator
Scope of Audit
Our audit of t h e S t r u c t u r a l Pest Control Board addressed issues s e t f o r t h
i n the 11 Sunset Factors i n A. R. S. s41- 2354. Additional detailed work was
conducted on the following issues:
1. The need f o r continued regulation of the pest control industry,
2. The appropriateness of t h e c u r r e n t level and manner of regulation,
3. The effectiveness of the Board's current enforcement policies and
actions, and
4. The appropriateness of the c u r r e n t l i c e n s u r e f e e s t r u c t u r e .
Due t o t i m e c o n s t r a i n t s , we were unable t o address s e v e r a l o t h e r issues of
concern. See page 51 f o r a description of areas f o r f u r t h e r audit work.
The Auditor General and s t a f f express appreciation t o the members of the
Structural Pest Control Board, its executive secretary and s t a f f f o r t h e i r
cooperation and assistance during the course of t h i s audit.
SUNSET FACTORS
I n accordance with A. R. S. $ 41- 2354, the L e g i s l a t u r e should consider the
following 11 f a c t o r s i n determining whether t o continue or terminate the
Arizona S t r u c t u r a l Pest Control Board.
1. Objective and purpose i n e s t a b l i s h i n g the Board
The L e g i s l a t u r e ' s i n t e n t i n e s t a b l i s h i n g the S t r u c t u r a l Pest Control
Board is specified i n the s t a t u t e s a s public p r o t e c t i o n from
1 ) chemical harm and 2) harm r e s u l t i n g from inadequate s t r u c t u r a l
pest c o n t r o l . A. R. S. s32- 2302 s t a t e s :
" Statement of l e g i s l a t i v e policy. It is recognized
t h a t the business known a s ' s t r u c t u r a l p e s t c o n t r o l ' is
a d e s i r a b l e and honorable p u r s u i t and of g r e a t public
b e n e f i t . It is f u r t h e r recognized t h a t t h e chemicals
and other devices used i n connection with said business
can be harmful t o public h e a l t h and s a f e t y when applied
by persons not under the supervision of persons
possessing proper t r a i n i n g and knowledge i n the proper
uses of such devices. It is f u r t h e r recognized t h a t
unqualified persons may attempt t o i d e n t i f y and
e r a d i c a t e c e r t a i n conditions involving s t r u c t u r a l p e s t s
and t h a t members of the general public may not receive
the best r e s u l t s from attempts at i d e n t i f i c a t i o n and
e r a d i c a t i o n by such unqualified persons."
The Board f u l f i l l s t h i s i n t e n t by examining l i c e n s e a p p l i c a n t s f o r both
i n i t i a l and renewed l i c e n s e s , inspecting p e s t c o n t r o l companies,
i n v e s t i g a t i n g complaints and d i s c i p l i n i n g l i c e n s e e s .
The Board is a l s o empowered by s t a t u t e t o enforce the Federal I n s e c t i c i d e ,
Fungicide and Rodenticide Act ( FIFRA). The purpose of FIFRA i s t o
regulate p e s t i c i d e s r e s t r i c t e d i n use by the U. S. Environmental Protection
Agency. To accomplish t h i s the Board examines, c e r t i f i e s , i n v e s t i g a t e s
and d i s c i p l i n e s s t r u c t u r a l commercial a p p l i c a t o r s i n the use of f e d e r a l l y
r e s t r i c t e d chemicals.
The effectiveness with which the Board has met its objectives and
purpose and the efficiency with which the Board has operated
The Board has examined and licensed qualified s t r u c t u r a l p e s t c o n t r o l
applicants. It has also inspected each of approximately 350 licensed
p e s t c o n t r o l operators ( PCOs) an average of three times annually. In
addition, the Board investigates approximately 900 complaints per
year.
However, three f a c t o r s have limited the Board's effectiveness and
efficiency. F i r s t , the Board's regulatory powers are weak i n the area
of termite c o n t r o l , l i m i t i n g the effectiveness of consumer protection
a c t i v i t i e s ( Finding I, page 13). Second, the current licensing
structure does not allow for comprehensive regulation of the
industry. ( Finding 11, page 25). Finally, the Board's enforcement
actions need t o be improved and a d d i t i o n a l t r a i n i n g provided t o
produce f a i r e r and simpler dispositions ( Finding 111, page 33).
The extent t o which the Board has operated within the public i n t e r e s t
The Board has acted aggressively on many consumer complaints and
violations noted during routine inspections. The Board's general view
is t h a t it is a policing and not a conciliatory Board. Its policy is
t o act on every reported statutory violation, regardless of whether
the complaint was s e t t l e d t o the consumer's s a t i s f a c t i o n .
During our review we discovered three instances where it appeared the
Board was slow i n considering whether t o suspend or revoke PCOs'
licenses. However, each of these cases involved complicating
f a c t o r s . Given the circumstances surrounding each case, we concluded
t h a t i n general the Board a c t s promptly.
4. The extent to which rules and regulations promulgated by the Board are
consistent with the l e g i s l a t i v e mandate
The Board's rules and regulations were reviewed f o r consistency with
s t a t u t e s and were approved by the Attorney General.
5. The extent to which the Board has encouraged input from the public
before promulgating i t s rules and regulations and the extent t o which
it has informed the public a s t o i t s actions and t h e i r expected impact
on the public
The Board f i l e s notices with the Secretary of S t a t e regarding rules
and regulations hearings. For instance, before r u l e promulgation i n
June 1983, the Board held a hearing a t which public input was
s o l i c i t e d .
The Board also sends copies of proposed l e g i s l a t i o n t o each licensee
and i n v i t e s t h e l i c e n s e e s t o discuss the l e g i s l a t i o n a t a regular
Board meeting.
The Board appears t o have complied with Open Meeting Law
requirements . Meetings have been properly noticed and minutes
adequately maintained.
6. The extent t o which the Board has been able to i n v e s t i g a t e and resolve
complaints that are within its j u r i s d i c t i o n
The Board's executive secretary indicates t h a t a l l complaints received
a r e investigated unless the matter is resolved p r i o r t o its scheduled
investigation. The Board resolves complaints e i t h e r 1) with the
a s s i s t a n c e of Board inspectors p r i o r t o Board intervention,
2) informally through the use of consent orders, or 3) formally by a
hearing before the Board.
However, the Board has not resolved a l l complaints adequately because
1) it lacks enforceable t e r m i t e treatment guidelines and inspection
reporting requirements ( see page 18), and 2) its l i c e n s u r e s t r u c t u r e
is vague and does n o t a l l o w f o r e f f e c t i v e d i s c i p l i n e ( Finding 11, page
25).
7. The extent t o which the Attorney General or any other applicable
agency of S t a t e Government has the a u t h o r i t y t o prosecute a c t i o n s
under the enabling l e g i s l a t i o n
A. R. S. $ 32- 2323 e s t a b l i s h e s criminal p e n a l t i e s f o r v i o l a t i o n of t h e
s t r u c t u r a l pest c o n t r o l s t a t u t e s . Violations a r e a c l a s s 3
misdemeanor unless another c l a s s i f i c a t i o n is s p e c i f i e d . Violations
may be prosecuted by the Attorney General o r the County Attorney.
8. The e x t e n t t o which the Board has addressed d e f i c i e n c i e s i n t h e
enabling s t a t u t e s which prevent it from f u l f i l l i n g its s t a t u t o r y
mandate
The Board has made numerous attempts t o address d e f i c i e n c i e s i n its
enabling s t a t u t e s . The following list, though not comprehensive,
describes l e g i s l a t i o n introduced within t h e l a s t four years:
- HB 2099 ( 1982 - passed) c l a r i f i e d the procedure a licensee must
follow when d i s a s s o c i a t i n g from a company;
- HB 2006 ( 1981 - f a i l e d ) provided f o r l i c e n s i n g t e r m i t e i n s p e c t o r s
and e s t a b l i s h e d recovery of c i v i l p e n a l t i e s through superior
c o u r t ;
- HB 2282 ( 1980 - f a i l e d ) provided f o r r e g i s t e r i n g termite
i n s p e c t o r s ; and
- HB 2013 ( 1979 - ~ a s s e d ) addressed changes i n t h e Board's f e e
schedule, expanded upon the c r i t e r i a f o r revocation o r suspension
of a l i c e n s e and provided t h a t i n s p e c t i o n s be conducted p r i o r t o
i s s u i n g a c o n t r a c t f o r wood- destroying i n s e c t pest c o n t r o l .
9. The extent t o which changes a r e necessary i n the laws of the Board t o
adequately comply with t h e f a c t o r s l i s t e d i n the Sunset Law
S u b s t a n t i a l changes a r e needed i n Board s t a t u t e s . The L e g i s l a t u r e
should consider:
Revising T i t l e 32, Chapter 22, A r t i c l e 1 t o c l a r i f y the Board's
l i c e n s u r e s t r u c t u r e ( Finding 11, page 25);
Revising the l i c e n s u r e f e e s t r u c t u r e t o r e f l e c t t h e changes we
recommend i n l i c e n s u r e s t r u c t u r e and t o make l i c e n s u r e f e e s
equitable based on company s i z e ( Finding I V , page 43); and
Allowing the Board t o i s s u e a d m i n i s t r a t i v e warnings ( Finding 111,
page 33).
10. The extent t o which the termination of the Board would s i e n i f i c a n t l v
harm the public h e a l t h , s a f e t y or welfare
Termination of the Board could s i g n i f i c a n t l y harm the public h e a l t h ,
s a f e t y and welfare. Inadequate p e s t c o n t r o l s e r v i c e s could r e s u l t i n
1) s e r i o u s chemical harm, including f a t a l i t i e s and 2) c o s t l y
s t r u c t u r a l damage ( Finding I, page 13).
11. The extent t o which the l e v e l of r e g u l a t i o n exercised by t h e Board is
appropriate and whether less o r more s t r i n g e n t l e v e l s of r e g u l a t i o n
" would be appropriate
The l e v e l of r e g u l a t i o n exercised by the Board should be increased.
The Board's s t a t u t e s need t o be c l a r i f i e d t o allow it t o regulate both
t h e p e s t c o n t r o l companies and t h e i r responsible p a r t i e s ( Finding 11,
page 25).
FINDING I
REGULATION OF THE STRUCTURAL PEST CONTROL INDUSTRY SHOULD BE CONTINUED AND
STFENGTHENED.
The S t r u c t u r a l Pest Control Board should be continued and its s t a t u t e s
strengthened t o provide adequate p u b l i c p r o t e c t i o n . P e s t c o n t r o l
operators ( PCOs) use many p e s t i c i d e s which can be deadly t o humans, and
inadequate treatment by PCOs can and does r e s u l t i n c o s t l y s t r u c t u r a l
damage. However, the Board's c u r r e n t regulatory powers a r e inadequate i n
t h a t it cannot e f f e c t i v e l y d i s c i p l i n e PCOs f o r inadequate or unethical
termite treatment practices."
Regulation Is Needed
The adverse physical e f f e c t s of chemical contamination a s well a s the
f i n a n c i a l impact of unethical p r a c t i c e s j u s t i f y continued r e g u l a t i o n of
PCOs. While t h e e f f e c t s of p e s t i c i d e poisoning w i l l depend on the type of
chemical and the manner i n which it is ingested, several chemicals
commonly used f o r s t r u c t u r a l pest c o n t r o l can be f a t a l . The consumer can
be subject t o considerable f i n a n c i a l harm as the r e s u l t of f r a u d u l e n t ,
unethical or inadequate pest c o n t r o l p r a c t i c e s , e s p e c i a l l y i n the termite-c
o n t r o l area. The Board's complaint work load and the s e r i o u s n a t u r e of
many of the complaints received i s f u r t h e r evidence of the need f o r
r e g u l a t i o n of p e s t c o n t r o l operators.
Pest Control Chemicals Can Cause Death - Many of the chemicals commonly
used i n s t r u c t u r a l pest c o n t r o l can be immediately f a t a l t o humans, and
poisoning can occur through s e v e r a l d i f f e r e n t means of i n g e s t i o n .
Moreover, some chemicals may be linked t o cancer. Proper p e s t i c i d e
a p p l i c a t i o n is e s s e n t i a l t o prevent poisoning.
* See Appendix f o r information on termites.
Physical harm r e s u l t i n g from p e s t i c i d e poisoning is dependent upon the
chemical's means of entry i n t o the body and the type of chemical. There
a r e t h r e e r o u t e s by which any chemical can e n t e r the body: the dermal
( s k i n ) , t h e g a s t r o i n t e s t i n a l system or the r e s p i r a t o r y system. Poisoning
symptoms w i l l vary depending on t h e exposure route. Also, the nature of
t h e chemical i t s e l f is s i g n i f i c a n t i n considering exposure problems.
Table 3 provides information about the immediate poisoning e f f e c t s of
p e s t i c i d e s commonly used f o r each c l a s s of p e s t c o n t r o l l i c e n s e .
Certain s t r u c t u r a l p e s t i c i d e s a r e s o t o x i c t h a t Federal r e g u l a t i o n s
r e q u i r e only c e r t i f i e d a p p l i c a t o r s be allowed t o use them, hence the term
" r e s t r i c t e d - u s e p e s t i c i d e s . " However, a s the t a b l e i n d i c a t e s , the e f f e c t s
of nonrestricted- use p e s t i c i d e s can a l s o be s e r i o u s .
Aside from the immediate adverse physical e f f e c t s of these p e s t i c i d e s , the
long- term impact of a t l e a s t the termiticides-- chlordane, termide, a l d r i n
-- is unknown at t h i s t i m e . Tests have proven them t o be carcinogenic i n
c e r t a i n mouse s t r a i n s , but no data e x i s t s t o support these carcinogenic
e f f e c t s i n humans. Because t h e s e t e r m i t i c i d e s a r e organochlorines, they
do not break down r e a d i l y when exposed t o various environmental conditions
( s u n l i g h t , high temperatures, s o i l microorganisms, enzymes). Thus, they
a r e ref erred t o as " p e r s i s t e n t " chemicals. Organochlorines do not
d i s s o l v e i n water and a r e r e a d i l y soluble i n o i l s . As a r e s u l t , these
chemicals dissolve and accumulate i n animals' and humans' f a t t i s s u e s .
Animals can g e t a f u r t h e r buildup or accumulation of chemicals when they
consume other animals or p l a n t s contaminated with organochlorines.
Proper a p p l i c a t i o n of p e s t i c i d e s c a n c u r b the p o t e n t i a l dangers associated
with t h e i r use. It is important t h a t the p e s t i c i d e a p p l i c a t o r have
knowledge of appropriate p e s t i c i d e usage and a p p l i c a t i o n techniques. The
incidence of poisoning is c o n t r o l l e d t o a l a r g e degree by container l a b e l
d i r e c t i o n s and warnings. Applying these chemicals according t o t h e i r
" intended use" l i m i t s t h e p o s s i b i l i t y of poisoning.
TABLE 3
PESTICIDE POISONING INFORMATION:
IMMEDIATE EFFECTS
Type of
License
General Pest Control
Wood- Destroying Insect
and Organism Control
( Termiticides)
Weed Control
Fumigation
Turf and Ornamental
Horticulture Pest
Control
Chemical Label Warning Poisoning Symptoms
Diazinon May be f a t a l i f swallowed.
Dursban May be f a t a l i f swallowed.
Chlordane May be f a t a l i f swallowed.
Contact with skin may cause
toxic symptoms.
Headache, dizziness, weakness, incoordination, muscle twitching
tremor, nausea, abdominal cramps, diarrhea, sweating. Blurred
or dark vision, confusion, wheezing. Unconsciousness and
convulsions i n d i c a t e very severe poisoning. Respiratory
depression may be f a t a l .
Apprehension, e x c i t a b i l i t y , dizziness, headache, d i s o r i e n t a t i o n
weakness, muscle twitching, convulsions when absorbed dermally.
Unconsciousness may also occur.
Termide Contact with skin causes f a t a l symptoms. Same a s f o r Chlordane.
Aldrin May be f a t a l i f swallowed. Same a s f o r Chlordane.
Roundup I r r i t a n t t o eyes and r e s p i r a t o r y t r a c t .
Princep Harmful i f swallowed, inhaled or
absorbed through skin.
Surf lan May be harmful i f swallowed.
Mildly i r r i t a t i n g t o skin, eyes and upper r e s p i r a t o r y t r a c t .
Systematic t o x i c i t y i s unlikely unless very l a r g e amounts have
been ingested.
S l i g h t l y t o moderately i r r i t a t i n g to skin, eyes, and mucous
membranes.
Dacthal Harmful i f swallowed. Mild i r r i t a n t .
Phostoxin* Poisonous i f inhaled or swallowed.
DANGER - POISON
Methyl- Inhalation may be f a t a l or cause
Bromide* delayed lung injury.
Vikane** May be f a t a l i f inhaled.
DANGER - POISON
Malathion Harmful i f swallowed.
Dursban May be f a t a l i f swallowed.
Diazinon May be f a t a l i f swallowed.
* Rest r i c ted- use chemicals ** Manufacturer has limited use t o professional fumigators.
Headache, dizziness, nausea, vomiting are early symptoms of
excessive exposure. Drowsiness, tremors, double vision and
weakness are early manifestations of c e n t r a l nervous system
impairment. Tremors may progress t o generalized seizures,
unconsciousness and death. Those who survive the acute phase
suffer l i v e r injury and kidney damage.
( See discussion f o r Phostoxin, Fumigation License.)
( See discussion f o r Phostoxin, Fumigation License.)
( See discussion f o r Diazinon, General Pest Control License.)
( See discussion f o r General Pest Control License.)
( See discussion f o r General Pest Control License.)
Source: Recognition and Management of Pesticide Poisonings - U. S. Environmental Protection Agency
Financial Impact Is Significant - The f i n a n c i a l impact of unethical or
incompetent p e s t c o n t r o l p r a c t i c e s is s i g n i f i c a n t and appears to be
concentrated primarily i n t h e termite control segment of the industry.
Structures i n Arizona a r e p a r t i c u l a r l y subject t o termite i n f e s t a t i o n .
Fraudulent, unethical or inadequate termite treatment practices can r e s u l t
i n considerable f i n a n c i a l harm f o r the public.
Structures b u i l t i n Arizona are q u i t e susceptible t o termite
i n f e s t a t i o n s . The r e l a t i v e l y warm year- round temperatures do l i t t l e t o
discourage termite population growth. In addition, c e n t r a l heating i n
most buildings helps keep termites " comfortable" during the cooler
seasons. In uncultivated desert areas, where much of the s t a t e ' s growth
is being absorbed, a s many a s 17 t o 20 termite colonies e x i s t per acre.
Termites are capable of causing considerable damage. A normal termite
colony with a population of 90,000 can consume a 2- foot section of a
two- by- four i n one year. ( Termite damage, however, is r a r e l y t h a t
concentrated and most normally w i l l e x i s t throughout a structure.)
According t o one estimate, damage due t o termites amounts t o about $ 1.2
b i l l i o n annually i n the U. S.
The following case examples taken from Board f i l e s i l l u s t r a t e s 1) the
extent of damage possible from termite i n f e s t a t i o n and 2) the possible
consequences t o the homeowner of improper or unethical treatment
practices.
Case 1
On May 21, 1980, a wood i n f e s t a t i o n report ( WIR*) was issued f o r a
home i n Phoenix. The WIR indicated no v i s i b l e evidence of active
termite i n f e s t a t i o n existed, and escrow closed. The adobe home was
valued a t $ 55,000. The new owner moved i n on May 23 and began
inspecting h i s new home. H i s testimony from a Board discussion of the
complaint follows.
* See page 20 f o r an explanation of the WIR.
". . . I s t a r t e d scraping down the things . . . t h a t I
thought were a l i t t l e i r r e g u l a r and t h i n g s j u s t began
t o pulverize underneath the scraper . . . I also pulled
off t h i s paneling . . . on an i n t e r i o r adobe wall . . .
and there was a gigantic hole back there. . . . The
wall i t s e l f is about a f o o t t h i c k and t h i s hole was
about halfway through the wall. And there was what
looked l i k e l i t t l e tiny tunnels running through t h i s
wall. . . . I think there is more than cosmetic damage
because I can s t i c k a screwdriver c l e a r through the
woodwork, a c t u a l s t r u c t u r a l woodwork around the
doorjams, i n the c e i l i n g s and roof r a f t e r s a s well a s
evidence of i n f e s t a t i o n i n t h e c e n t e r adobe
wall- supporting s t r u c t u r e of the house. . . . There's
l o t s of evidence of the c e i l i n g crashing and the f a c t
t h a t recently, the owners sprayed t h e c e i l i n g f u l l of
material t o cover up a l o t of cracks i n t h e c e i l i n g
i t s e l f . . . is evidence t o me t h a t t h e r e ' s been a l o t
of s e t t l i n g i n the c e i l i n g r a f t e r s . "
The complainant received repair estimations from contractors t h a t
ranged from $ 31,000 t o $ 48,000. The company that issued the WIR had
t r e a t e d the home f o r termites a year before the WIR was issued a t
close of escrow.
I n October of 1980, the complainant s e t t l e d i n c i v i l court f o r
1 ) s e l l e r paying $ 14,139.66 ( down payment, closing c o s t s ) together
with 10 percent i n t e r e s t from the date of close of escrow and
2) s e l l e r assuming buyer's r e a l e s t a t e loan of $ 44,000.*
Case 2
Improper preventative treatment of new homes apparently caused
widespread damage i n t h i s case. Between January 1980 and October
1982, the Board received approximately 130 complaints from homeowners
against one pest control company. The company had performed the
p r e t r e a t s on approximately 90 of the homes i n question. The ages of
* The Board revoked the PCO's license i n t h i s case.
these homes ranged anywhere from six months t o s i x years. A l l were
infested with termites. In addition, many of the homes had been
r e t r e a t e d a t l e a s t once. Consumer statements on many of the
complaints indicated e n t i r e neighborhoods pretreated by t h i s company
had termite problems.
Complaint Activity - The large number of serious complaints handled by the
Board is a l s o an indication of the need f o r continued regulation. Since
f i s c a l year 1979- 80, the Board has handled over 2,300 consumer
complaints. This f i g u r e does not include any violations the inspectors
may have encountered during routine inspections. Many of the complaints
received can be considered serious, e i t h e r pertaining t o chemical
contamination or, as Cases 1 and 2 i l l u s t r a t e , s i g n i f i c a n t f i n a n c i a l
harm. According t o a Board report submitted t o the U. S. Environmental
Protection Agency, the Board received 41 complaints of serious chemical
contamination by restricted- use pesticides alone between 1977 and 1982.
Regulation of the Termite- Control
Industry Needs t o Be S t r e w thened
The Board needs t o strengthen r u l e s and regulations governing the termite-control
industry to b e t t e r protect the public. Although termite- related
complaints are numerous, the Board l a c k s t h e a b i l i t y to e f f e c t i v e l y
d i s c i p l i n e t h e i n d u s t r y f o r poor termite treatment practices. In
addition, although the Board takes action on many complaints involving
WIRs, the Board is unable t o protect the public because 1) reporting
requirements are inadequate and 2) consumers may overestimate the WIR's
role.
Background: Description of Available Termite Services and Termite- Related
Complaints - Subterranean termite control services f a l l i n t o three
categories: p r e t r e a t s , treatments of e x i s t i n g s t r u c t u r e s , and Wood
I n f e s t a t i o n Reports ( WIRs). Following is a description of each:
P r e t r e a t s - During b u i l d i n g c o n s t r u c t i o n , c e r t a i n preventive measures
can be taken t o discourage termite i n f e s t a t i o n . P r i o r t o laying the
s l a b , the s o i l beneath the s t r u c t u r e may be t r e a t e d with a t e r m i t i c i d e
( i . . , chlordane, a l d r i n or termide). This process, a " p r e t r e a t , "
e s t a b l i s h e s a chemical b a r r i e r between the s o i l and the s t r u c t u r e
which prevents subterranean termites from entering the s t r u c t u r e t o
f i n d a food supply ( i . e . , wood and wood products). The chemicals used
i n p r e t r e a t s have been proven t o have p r o t e c t i v e c a p a b i l i t i e s f o r up
t o 25 years.
Treatments of Existing S t r u c t u r e s - Chemicals used t o prevent
subterranean termites from attacking b u i l d i n g s c a n a l s o be used t o
check e x i s t i n g i n f e s t a t i o n s i n buildings. There a r e too many
v a r i a t i o n s i n c o n s t r u c t i o n t o permit a d e t a i l e d discussion here of
chemical treatments f o r use i n a l l possible s i t u a t i o n s . As i n
p r e t r e a t s , the purpose of treatments i n e x i s t i n g buildings is t o
e s t a b l i s h a b a r r i e r of t r e a t e d s o i l adjacent t o the foundation through
which termites cannot pass.
Methods of a p p l i c a t i o n include d r i l l i n g e i t h e r through 1) the s l a b
c l o s e t o t h e p o i n t s where the termites a r e o r where they may be
entering and applying the chemicals through the holes or 2) e x t e r i o r
foundation walls t o the s o i l j u s t underneath the s l a b and introducing
the chemicals through the holes. S t r u c t u r e s w i t h crawl spaces and
basements a r e t r e a t e d by digging a trench adjacent t o the wall around
the perimeter of the s t r u c t u r e (" trenching"). The chemical is poured
i n t o the trenches and allowed t o seep i n t o the s o i l . I f necessary,
crowbar, pipe o r rod holes a r e extended from the bottom of the
trench. This " rodding" ensures seepage of the chemical a s f a r a s
necessary.
WIRs - Wood I n f e s t a t i o n Reports a r e required by the Federal Housing
Administration ( FHA) and the Veteran's Administration ( VA) f o r
approval of home loans. The purpose of the report form is t o
a s c e r t a i n , by i n s p e c t i o n , whether any v i s i b l e evidence e x i s t s of
c u r r e n t o r previous termite i n f e s t a t i o n or damage. The r e a l e s t a t e
agent s e l l i n g the property, and not the prospective buyer, commonly
s e l e c t s the PC0 t o perform the inspection and i s s u e the report. FHA
and VA r e q u i r e t h a t the buyer receive a copy of the WIR.
Audit s t a f f conducted a n a n a l y s i s of service- related complaints f o r 102*
randomly s e l e c t e d p e s t c o n t r o l companies. Of a t o t a l of 94
service- related complaints received by the Board regarding these companies
between July 1, 1980, and April 25, 1983, over half were r e l a t e d t o
t e r m i t e c o n t r o l services. Of those r e l a t e d t o t e r m i t e s , half ( 25)
involved allegedly i n c o r r e c t or f a l s e Wood I n f e s t a t i o n Reports ( WIRs),
which the Board disposed of as follows:
- 14 consent orders ( including f i n e s ) ,
- 3 dismissed,
- 7 no a c t i o n , and
- 1 no record of a c t i o n .
The Board took no d i s c i p l i n a r y a c t i o n on the remaining 25 termite- related
complaints. Instead, the Board acted a s follows:
- 2 warning l e t t e r s ,
- 11 dismissed, and
- 1 2 n o a c t i o n .
Need f o r Enforceable Standards - Board f a i l u r e t o a c t on termite- related
complaints is due a t l e a s t i n p a r t to a l a c k of treatment standards, the
v i o l a t i o n of which could r e s u l t i n d i s c i p l i n a r y action. Although the
Board recently adopted treatment standards a s informal g u i d e l i n e s ,
* Out of a possible 398 a c t i v e companies e x i s t i n g i n 1983, 1982 and/ or
1981 ( not sold t o another e x i s t i n g company during t h i s period)
according t o its Attorney General r e p r e s e n t a t i v e it cannot use them t o
bring enforcement a c t i o n because it did not promulgate the standards i n t o
its r u l e s and r e g u l a t i o n s . Several s t a t e s have treatment standards i n
t h e i r r u l e s and r e g u l a t i o n s , among them C a l i f o r n i a and Arkansas.
Although t e r m i t i c i d e l a b e l s provide some i n s t r u c t i o n i n t h e i r use, t h e
successful a p p l i c a t i o n of these chemicals t o a s t r u c t u r e requires a
c e r t a i n amount of t e c h n i c a l knowledge regarding s e v e r a l f a c t o r s , including
s o i l composition and c o n s t r u c t i o n types. Disregarding these f a c t o r s , even
while following the l a b e l ' s general i n s t r u c t i o n s , can r e s u l t i n
i n e f f e c t i v e treatment and/ or chemical harm t o homeowners. For example:
1. Arizona's s o i l is highly a l k a l i n e , which causes t e r m i t i c i d e s t o
break down more rapidly than normal. Failing t o take t h i s f a c t i n t o
account, while merely following the l a b e l ' s mixing i n s t r u c t i o n s , *
could render the treatment i n e f f e c t i v e i n a r e l a t i v e l y short time.
2. Several cases of t e r m i t i c i d e contamination were recently reported i n
New York. In at l e a s t one case, the home i n question was t e s t e d ,
d e c l a r e d u n i n h a b i t a b l e and destroyed a f t e r the r e s i d e n t family
reported i l l n e s s . The homeowner claimed the PC0 misapplied the
t e r m i t i c i d e , allowing it t o seep i n t o the home.
Recently the Board adopted minimum treatment standards a s informal
guidelines f o r PCOs t o use i n performing t e r m i t e treatments. These
guidelines were the r e s u l t of considerable d e l i b e r a t i o n with members of
the pest c o n t r o l industry through s e v e r a l public hearings. A committee of
Board and industry members drafted a s e t of t e r m i t e treatment standards
which received overwhelming opposition from the industry. As a r e s u l t , a
committee of industry members d r a f t e d a n a l t e r n a t e s e t of standards. The
Board recognized these standards as guidelines but did not adopt them a s
r u l e s . According t o the Board, the standards submitted by the industry
committee do not provide s u f f i c i e n t p u b l i c p r o t e c t i o n .
* The chemicals a r e d i l u t e d with water according t o a s p e c i f i e d r a t i o .
Moreover, according t o the Board's Attorney General r e p r e s e n t a t i v e ,
informal guidelines cannot be used t o bring d i s c i p l i n a r y a c t i o n against a
l i c e n s e e who " v i o l a t e s " t h e s e guidelines. In e f f e c t , then, these
g u i d e l i n e s s e r v e only a s suggestions which PCOs may or may not choose t o
follow. Therefore, the current lack of a c t i o n on t e r m i t e treatment
complaints could continue."
C a l i f o r n i a and Arkansas a r e two of s e v e r a l s t a t e s which have promulgated
treatment standards as r u l e s and regulations. Both s t a t e s ' standards
specify i n d e t a i l a p p l i c a t i o n techniques based on e x i s t i n g conditions such
as the type and s i z e of s t r u c t u r e t o be t r e a t e d . These s p e c i f i c a t i o n s
include 1) appropriate chemical dosage, with regard t o both
chemical- to- water r a t i o and amount of chemical mixture t o be applied and
2) d r i l l i n g , trenching or rodding procedures required f o r t h e s t r u c t u r e
type
Wood I n f e s t a t i o n Reports Should Be Improved - Although the Board a c t s on
problems involving WIRs, the WIR has limited value and may be misleading
t o consumers. T h i s r e p o r t would be more u s e f u l and meaningful t o
consumers i f it provided a d d i t i o n a l information and included a disclaimer.
* In 1981 the Board promulgated a r u l e ( R4- 29- 15) prescribing
requirements f o r p r e t r e a t s . The r u l e provides some standards based on
c o n s t r u c t i o n types. However, it does not specify chemical dosage.
Instead it r e l i e s on the FIFRA s p e c i f i c a t i o n , which allows any
percentage of chemical up t o o r below t h a t s p e c i f i e d on the chemical
l a b e l . The r u l e is s i l e n t regarding t e r m i t e treatments other than
p r e t r e a t s .
Consumers may assume i n c o r r e c t l y t h a t a negative o r " clean" WIR guarantees
t h a t t h e i r home is f r e e from termites. I n f a c t , the WIR is of very
limited b e n e f i t t o the consumer. The Kansas Termite and Pest Control
Association ( t h e s t a t e ' s p r o f e s s i o n a l a s s o c i a t i o n ) issued the following
statement concerning WIRs :
" The Termite Control S p e c i a l i s t ' s report is a f a c t u a l
i n v e s t i g a t i v e statement a s t o the v i s i b l e evidence of
c u r r e n t and previous termite i n f e s t a t i o n and damage,
based upon a thorough v i s u a l inspection of a c c e s s i b l e
areas. By its very tenor, the report is limited t o
v i s i b l e and a c c e s s i b l e areas, and does not include the
s t a t u s of any s t r u c t u r e s or areas which a r e hidden,
i n a c c e s s i b l e , or behind a c c e s s i b l e areas. It is not a
guarantee t h a t i n f e s t a t i o n or damage does not e x i s t ,
nor is it a guarantee t h a t f u t u r e i n f e s t a t i o n or damage
w i l l not occur. It is an objective statement, based
upon reasonably a s c e r t a i n a b l e evidence, of the current
s t a t u s of a s t r u c t u r e with regard t o the presence or
absence of wood- destroying organisms i n v i s i b l e and
a c c e s s i b l e a r e a s only." ( emphasis added)
Since an estimated 70 percent of any home is not r e a d i l y a c c e s s i b l e ( f o r
example, i n s i d e walls and under f l o o r coverings), the WIR cannot ensure a
home's freedom from t e r m i t e s . Moreover, an FHA o f f i c i a l s t a t e d the WIR
c a r r i e s no guarantee or e f f e c t past the day on which it is issued.
The reporting format f o r the WIR required by FHA and VA could be improved
t o b e t t e r h i g h l i g h t f o r the consumer any evidence of conditions which may
i n v i t e termite i n f e s t a t i o n . These c o n d i t i o n s i n c l u d e , f o r example,
earth- to- wood contact ( e. g., a p i l l a r or post s e t i n the ground instead of
on concrete) and dry r o t . The FHA/ vA form does not provide a space f o r
t h i s information which the consumer can r e a d i l y note. I n s t e a d , the form
a l l o w s o n l y t h a t the PC0 add t h i s information t o its reverse s i d e , and
t h i s could be e a s i l y overlooked by the consumer. One Board member
indicated information regarding conditions conducive was perhaps the most
valuable information t h a t could be given t o the consumer, because it could
i n d i c a t e a need t o t a k e c o r r e c t i v e measures t o prevent termite i n f e s t a t i o n .
Arizona's Board agrees t h a t the WIR i s of minimal b e n e f i t t o the homebuyer
and should be made t o require more s p e c i f i c information regarding 1)
problem conditions at the inspection s i t e and 2) the form's intended
use. The Kansas Termite and Pest Control Association, a f t e r studying the
l e g a l h i s t o r y of termite c o n t r o l , developed a model WIR and standards
p r e s c r i b i n g its use. The model WIR contains an item requiring the
i n s p e c t o r t o describe any v i s u a l evidence of conditions conducive t o
i n f e s t a t i o n . It a l s o c a r r i e s a disclaimer which s t a t e s e x p l i c i t l y t h e
form1 s purpose and l i m i t a t i o n s .
CONCLUSION
The S t a t e should continue t o r e g u l a t e t h e s t r u c t u r a l p e s t c o n t r o l industry
t o p r o t e c t the public from p o t e n t i a l l y serious chemical harm and
s t r u c t u r a l damage. I n a d d i t i o n , the Board's c u r r e n t regulatory powers
over the termite- control p o r t i o n of the industry should be strengthened t o
allow f o r more e f f e c t i v e d i s c i p l i n e f o r inadequate or u n e t h i c a l t e r m i t e
treatment p r a c t i c e s .
RECOMMENDATIONS
1. The L e g i s l a t u r e should renew the S t r u c t u r a l Pest Control Board's
enabling s t a t u t e s .
2. The Board should amend its r u l e s and r e g u l a t i o n s t o
a. Include s p e c i f i c t e r m i t e treatment standards and
b. Revise the c u r r e n t WIR t o include, i n a d d i t i o n t o FHAIVA
requirements, 1) information regarding conditions conducive t o
t e r m i t e i n f e s t a t i o n and 2) an appropriate disclaimer advising
consumers of i t s intended use. The Board should require PCOs t o
use t h i s S t a t e form.
FINDING I1
THE BOARD NEEDS TO LICENSE COMPANIES AS WELL AS INDIVIDUALS.
The S t r u c t u r a l Pest Control Board needs t o l i c e n s e both i n d i v i d u a l s and
companies. The c u r r e n t regulatory scheme of issuing l i c e n s e s t o
i n d i v i d u a l s only does not provide adequate means t o monitor pest c o n t r o l
companies and, t o a degree, l i c e n s e e s . The Board's s t a t u t e s do not
s p e c i f i c a l l y d e l i n e a t e the l i c e n s i n g s t r u c t u r e required f o r the s t r u c t u r a l
pest c o n t r o l industry. Other s t a t e s have c l e a r e r l i c e n s i n g s t a t u t e s and
more e f f e c t i v e l i c e n s i n g systems.
Current Licensim Svstem
The Board attempts t o r e g u l a t e both companies and i n d i v i d u a l s through a
s i n g l e l i c e n s e . Pest c o n t r o l companies i n Arizona a r e required t o
i d e n t i f y a l i c e n s e e who w i l l a c t a s the qualifying party f o r t h a t business
t o operate. The qualifying party l i c e n s e e 1) q u a l i f i e s t h a t business t o
operate and 2) is responsible f o r the pest c o n t r o l a c t i v i t i e s of t h a t
company. I f the owner of the company is a l i c e n s e e , he may serve a s the
qualifying party f o r the business. However, the owner of the company i s
not n e c e s s a r i l y licensed t o p r a c t i c e pest c o n t r o l . In t h e s e c a s e s , a
licensed employee w i l l be designated a s the r e s p o n s i b l e p a r t y .
The Board has e s t a b l i s h e d t h i s dependent r e l a t i o n s h i p between licensee and
company i n an e f f o r t t o monitor the e n t i r e industry. In essence, the
l i c e n s e of any i n d i v i d u a l is i n v a l i d unless t h a t l i c e n s e is 1) formally
connected with a business and 2) supported by a public l i a b i l i t y insurance
policy or a bond. The business, on t h e o t h e r hand, cannot operate unless
a l i c e n s e e has been designated a s the r e s p o n s i b l e p a r t y . In the event a
l i c e n s e e chooses not t o be formally connected with a company, the Board
provides the l i c e n s e e t h e o p t i o n t o put h i s l i c e n s e on " nonworking"
s t a t u s . *
Inadequate Regulation of
the Pest Control Industry
The c u r r e n t regulatory scheme of only issuing l i c e n s e s t o i n d i v i d u a l s does
not provide adequate means t o monitor pest c o n t r o l companies and, t o a
degree, l i c e n s e e s . This scheme is d e f i c i e n t because 1) unscrupulous
companies can continue a s long a s the owning management can find l i c e n s e e s
t o qualify the business, and 2) unprofessional l i c e n s e e s may continue t o
operate since the business is not held u l t i m a t e l y responsible f o r the
l i c e n s e e ' s a c t i o n s .
Inadequare Control Over Companies - The following case example i l l u s t r a t e s
how t h e c u r r e n t l i c e n s i n g s t r a t e g y prevents the Board from d i s c i p l i n i n g
companies a s long a s they employ qualifying party l i c e n s e e s :
Case 1
Company B was e s t a b l i s h e d i n 1976 by a nonlicensee owner. In the six
years between 1976 and 1982, Company B had a t l e a s t seven d i f f e r e n t
qualifying p a r t y l i c e n s e e s . I n t h a t same period, the company had
numerous, s e r i o u s complaints lodged against it.
* Nonworking s t a t u s allows the licensee the option of not being formally
associated with a business. The required proof of f i n a n c i a l
r e s p o n s i b i l i t y may lapse but the l i c e n s e e continues t o pay a yearly
l i c e n s e renewal f e e . The l i c e n s e may be " reactivated" a t any time by
1) proving f i n a n c i a l r e s p o n s i b i l i t y and 2) becoming the qualifying
party l i c e n s e e f o r a business. In a d d i t i o n the l i c e n s e e does not have
t o r e t a k e t h e l i c e n s i n g exam. However, a June 3, 1983, Arizona
L e g i s l a t i v e Council Opinion i n d i c a t e s the Board does not have
s t a t u t o r y a u t h o r i t y t o o f f e r t h i s s t a t u s .
- The Board attempted t o bring a c t i o n against Company B f o r issuing
a f a l s e Wood I n f e s t a t i o n Report which r e s u l t e d i n the homeowner
absorbing thousands of d o l l a r s worth of damages. However,
because the company was operating without a l i c e n s e a t the time,
the Board had no j u r i s d i c t i o n . The complainant sought r e l i e f
through the small claims court.
- Company B operated without a l i c e n s e e a t l e a s t f i v e times between
1976 and 1982 f o r periods of up t o four months.
Company B misrepresented i t s e l f a s the new owners of the accounts
of another company which had j u s t gone out of business.
( Generally, the accounts of companies t h a t g o o u t of business a r e
purchased by another pest c o n t r o l company). Conpany B approached
customers of the then- defunct company, performed the necessary
treatments and received payment. The following day, t h e p e s t
c o n t r o l company which had a c t u a l l y purchased the accounts
approached these same customers, expecting t o t r e a t t h e i r homes
and be paid. The customers refused t o receive or pay f o r what
appeared t o be a double treatment.
The Board t r i e d on s e v e r a l occasions t o bring charges a g a i n s t t h i s company
based on its p r a c t i c i n g without a qualifying party l i c e n s e e . Because the
Board l i c e n s e s i n d i v i d u a l s , not companies, its own s t a t u t e s provided no
d i s c i p l i n a r y recourse. Companies p r a c t i c i n g without a qualifying party
l i c e n s e e can only be prosecuted through the Courts. The Board's f i r s t
attempt was r e j e c t e d by the C i t y P r o s e c u t o r ' s Office because more than a
year had lapsed from t h e d a t e of the company's offense t o the d a t e t h e
Board f i l e d the charges. The Board then gathered evidence on a more
recent i n c i d e n t . The City P r o s e c u t o r ' s O f f i c e returned the m a t e r i a l s
based on i n s u f f i c i e n t evidence. The case was f i n a l l y prosecuted almost a
year l a t e r . The Court ruled a g a i n s t the City P r o s e c u t e r ' s Office because
the s t r u c t u r a l p e s t l i c e n s i n g s t a t u t e s were vague concerning the
d i f f e r e n c e between p r a c t i c i n g without a l i c e n s e and allowing a company 90
days t o replace a qualifying party licensee.
According t o Board records, Company B was sold t o another nonlicensee
owner i n 1982. The name of the company was changed. Had the Board
required business l i c e n s e s , it could have revoked the business l i c e n s e
r e s u l t i n g i n public record of d i s c i p l i n a r y a c t i o n a g a i n s t t h e o r i g i n a l
nonlicensee owner.
I n e f f e c t i v e Control Over Individual Licensees - The Board ' s licensing
scheme may not always encourage companies t o h i r e competent licensees.
The Board receives complaints against companies, not licensees. Consumers
a r e generally unaware that companies even have licensees. Movement of
licensees among companies is common. Therefore, the Board may have
d i f f i c u l t y bringing action a g a i n s t t h e responsible licensee. Consider the
following scenario :
A pest control operator ( PCO) is the qualifying p a r t y l i c e n s e e f o r
Company A. Company A is owned by a nonlicensee who has provided the
c a p i t a l t o s t a r t the business. The PC0 possesses a termite license
and proceeds t o perform numerous inadequate p r e t r e a t and r e t r e a t
applications during h i s six- month employment a t Company A. The PC0
then leaves Company A, and Company A is forced to find a new
qualifying p a r t y l i c e n s e e . One year l a t e r the Board begins t o
receive complaints lodged against Company A from customers serviced
by the o r i g i n a l PCO.
The Board can attempt to bring action against the o r i g i n a l qualifying
party who may have 1) become a licensee f o r another company, 2) put his
l i c e n s e on nonworking s t a t u s , or 3) not renewed h i s license.
Licensing companies would provide the Board the additional option of
reprimanding the business a s w e l l , i f necessary. This option may increase
nonlicensee owners' d e s i r e s t o h i r e competent licensees.
Current Licensing Structure
and Statutory Language Unclear
The Board's s t a t u t e s do not s p e c i f i c a l l y delineate the licensing s t r u c t u r e
required f o r the s t r u c t u r a l p e s t c o n t r o l industry. The s t a t u t e s themselves
make reference t o licensing persons, partnerships, corporations or
associations but do not s t a t e whether n a t u r a l persons, businesses or both
a c t u a l l y receive a license. The inherent ambiguity of the Board's s t a t u t e s
has prompted Board l e g a l counsel to r e d i r e c t the Board a s to what the
licensing s t r u c t u r e should be.
Licensing S t a t u t e s - The l i c e n s i n g s t a t u t e s r e f e r t o the
" licensee" i n a v a r i e t y of ways. In some s e c t i o n s , t h e s t a t u t e s
mention i n d i v i d u a l s only. In o t h e r s e c t i o n s , t h e s t a t u t e s r e f e r
t o p a r t n e r s h i p s , c o r p o r a t i o n s or a s s o c i a t i o n s a s l i c e n s u r e
a p p l i c a n t s while s t i l l other s e c t i o n s r e f e r t o both. Exactly who
or what is being licensed is never specified. The following t a b l e
summarizes the various references t o the l i c e n s e e i n t h e s t a t u t e s .
TABLE 4
STATUTORY AMBIGUITY: EXAMPLES OF VARIOUS REFERENCES
TO LICENSE RECIPIENTS
S t a t u t e s
A. R. S. 32- 2321
A. R. S. 32- 2313
32- 2314
A. R. S. 32- 2303
32- 2313. A. I.
32- 2322. C.
32- 2325
A. R. S. 32- 2313. A.
32- 2313. H.
32- 2322. B.
A. R. S. 32- 2313. D.
32- 2313. F.
32- 2313. G.
A. R. S. 32- 2321. A.
Statutory Language
Licenses t o engage i n t h e business of
s t r u c t u r a l p e s t c o n t r o l
Individual a p p l i c a n t s on t h e i r own behalf
and as responsible persons licensed on
behalf of a p a r t n e r s h i p , corporation or
a s s o c i a t i o n
P a r t n e r s h i p s , c o r p o r a t i o n s , firms or
a s s o c i a t i o n s
Licensure applicant - p a r t n e r s h i p ,
corporation or a s s o c i a t i o n
Licensure applicant - someone who has
p r a c t i c a l experience and takes and passes
the examination
Licensure applicant must submit proof of
f i n a n c i a l r e s p o n s i b i l i t y
A. R. S. 32- 2321. B. License of the a p p l i c a t o r
This ambiguity i n the l i c e n s i n g s t a t u t e s was noted i n a June 3, 1983,
Arizona L e g i s l a t i v e Council Opinion. The opinion s t a t e d , i n part
" Since l i c e n s u r e and who or what is licensed is
r e f e r r e d t o i n d i f f e r e n t manners . . . the s t a t u t e s are
not c l e a r and can lead t o confusion i n i n t e r p r e t a t i o n . "
Conflicting Legal Advice - The Board's l e g a l counsel has advised t h e Board
t o change its l i c e n s i n g s t r u c t u r e a t l e a s t once due t o ambiguous s t a t u t o r y
language. P r i o r t o 1981, on the advice of its a s s i s t a n t attorney general,
the Board should have required both businesses and i n d i v i d u a l s t o obtain
s e p a r a t e l i c e n s e s . Each l i c e n s e type had a separate numerical scheme and
separate f e e s were c o l l e c t e d f o r each.* According t o the Board's
executive s e c r e t a r y , the assignment of a new a s s i s t a n t a t t o r n e y g e n e r a l i n
1981 r e s u l t e d i n a d i f f e r e n t i n t e r p r e t a t i o n of the Board's s t a t u t e s . The
new a s s i s t a n t a t t o r n e y general advised the Board t h a t it did not have the
s t a t u t o r y a u t h o r i t y t o require l i c e n s e s of both e n t i t i e s . Since t h a t
i n t e r p r e t a t i o n was rendered, the Board has licensed persons only. An
i n t e r p r e t a t i o n c o n f l i c t on such a major point strongly suggests t h a t
problems e x i s t i n the language of the l i c e n s i n g s t a t u t e s .
Regulatory Schemes i n Other S t a t e s
Other s t a t e s have c l e a r e r and more e f f e c t i v e l i c e n s i n g s t a t u t e s . These
s t a t e s s p e c i f i c a l l y define schemes which include both i n d i v i d u a l and
business l i c e n s i n g . Licensing of both the i n d i v i d u a l and the business
allows f o r more e f f e c t i v e r e g u l a t i o n of a l l aspects of t h e p e s t control
industry.
The pest c o n t r o l laws of C a l i f o r n i a and Texas provide examples of c l e a r
l i c e n s i n g s t a t u t e s . C a l i f o r n i a s t a t u t e s c l e a r l y define who is licensed
and who w i l l be t h e responsible party i n a l l s i t u a t i o n s . Also, the
s t a t u t e s contain d e f i n i t i o n s of " person" and " branch o f f i c e , " f o r
i n s t a n c e , t o f u r t h e r c l a r i f y the l i c e n s i n g scheme.
* However, the Board never a c t u a l l y issued a business l i c e n s e t o the
companies and never brought d i s c i p l i n a r y a c t i o n a g a i n s t a business.
The S t r u c t u r a l Pest Control Act of Texas leaves no question a s t o who o r
what is licensed. Texas' l i c e n s i n g s t r u c t u r e is s t a t e d t h i s simply:
"( b) The board s h a l l develop standards and c r i t e r i a
f o r issuing S t r u c t u r a l Pest Control Business Licenses
t o persons engaged i n the business of s t r u c t u r a l pest
c o n t r o l . Persons engaged i n the business of s t r u c t u r a l
p e s t c o n t r o l must possess a S t r u c t u r a l Pest Control
Business License f o r each place of said business,
including each branch o f f i c e . Each s t r u c t u r a l pest
c o n t r o l business l i c e n s e e s h a l l have i n h i s employment
at a l l times a c e r t i f i e d a p p l i c a t o r . "
For increased c l a r i f i c a t i o n , the s t a t u t e s include d e f i n i t i o n s of " person,"
" branch o f f i c e , " " c e r t i f i e d a p p l i c a t o r " and " s t r u c t u r a l p e s t c o n t r o l
business license."
Other s t a t e s can more e f f e c t i v e l y r e g u l a t e both i n d i v i d u a l s and companies
because both are e i t h e r licensed or registered." The systems vary from
s t a t e t o s t a t e ; but C a l i f o r n i a , Texas, Nevada and Florida a l l have
l i c e n s i n g s t r u c t u r e s which include 1) l i c e n s i n g or r e g i s t e r i n g the
business and 2) l i c e n s i n g or c e r t i f y i n g qualifying p a r t i e s f o r the
business.
This type of l i c e n s i n g scheme provides f o r g r e a t e r c o n t r o l of the major
components of the pest c o n t r o l industry and increased d i s c i p l i n a r y options
f o r regulatory agencies. Regulatory o f f i c i a l s i n C a l i f o r n i a and Florida,
f o r i n s t a n c e , s t a t e d t h a t a c t i o n may be brought against the business
l i c e n s e , t h e i n d i v i d u a l l i c e n s e or both, i f necessary.
CONCLUSION
The S t r u c t u r a l Pest Control Board needs t o l i c e n s e both i n d i v i d u a l s and
businesses. The c u r r e n t system of r e g u l a t i n g both through the
i n d i v i d u a l ' s l i c e n s e is based on vague s t a t u t e s and does not allow f o r
e f f e c t i v e c o n t r o l of the industry.
* The s t a t e s surveyed were recommended by Board members, t h e i r s t a f f and
entomologists knowledgeable about s t r u c t u r a l p e s t i c i d e enforcement.
The L e g i s l a t u r e should c o n s i d e r a comprehensive r e v i s i o n of the S t r u c t u r a l
Pest Control Board s t a t u t e s t o e s t a b l i s h a l i c e n s i n g or r e g i s t r a t i o n
system f o r both companies and individuals.
FINDING I11
THE BOARD CAN IMPROVE ITS ENFORCEMENT ACTIVITIES TO BETTER PROTECT THE
PUBLIC .
Although the Board a c t s aggressively on many consumer complaints, some
improvements a r e needed t o p r o t e c t the public more f u l l y . Board
procedures f o r issuing consent orders could be considered u n f a i r t o
l i c e n s e e s . In a d d i t i o n , the Board could b e n e f i t from l e g a l t r a i n i n g i n
case development. The Board should a l s o use other d i s p o s i t i o n a l options,
such as requiring t r a i n i n g more o f t e n o r i s s u i n g warnings, which could
more d i r e c t l y aid consumers harmed by pest c o n t r o l operators ( PCOs) or
allow the Board t o dispose of minor v i o l a t i o n s more simply.
S u b s t a n t i a l Board Action
on Consumer Complaints
The Board has taken considerable a c t i o n on many consumer complaints. The
Board's general viewpoint is t h a t it must a c t on every reported s t a t u t o r y
v i o l a t i o n , r e g a r d l e s s of whether t h e consumer and the PC0 resolve the
complaint.
Board d i s c i p l i n a r y a c t i o n h a s c o n s i s t e d mainly of issuing consent orders
which u s u a l l y i n c l u d e c i v i l p e n a l t i e s . During f i s c a l years 1980- 81,
1981- 82 and p a r t of 1982- 83," the Board issued 119 consent orders and
charged a t o t a l of $ 14,810 i n c i v i l p e n a l t i e s and i n v e s t i g a t i v e costs.**
As shown i n Table 2 on page 5, the Board revoked 11 l i c e n s e s during f i s c a l
years 1980- 81 through 1982- 83.
* This f i g u r e includes only those consent orders issued i n 1982- 83 f o r
which records were a v a i l a b l e a t the time of review. ** The Board is allowed t o keep its c i v i l penalty monies.
Use of Consent Orders
Current procedures used by the Board to o f f e r consent orders could be
considered u n f a i r t o licensees. As a r e s u l t of Board procedures, a
licensee may f e e l forced t o sign a consent order a s o r i g i n a l l y offered
without knowing he has other options available. The Board should follow
consent order procedures described by the Attorney General's Office.
Background - The Board began using consent orders about f i v e years ago i n
an attempt t o provide, through informal means, a l e s s severe penalty than
revocation or suspension ( the only formal penalties allowed by s t a t u t e a t
t h a t time). The s t a t u t e s were amended a t the same time t o allow the Board
t o issue c i v i l penalties of up to $ 1,000 f o r violations of the general
s t r u c t u r a l pest control s t a t u t e s . The Board now routinely charges c i v i l
penalties and i n v e s t i g a t i v e costs through its consent orders.
The Board o f f e r s consent orders based on e i t h e r 1) a preliminary
i n v e s t i g a t i o n following a formal complaint or 2) a routine inspection by
Board s t a f f . In the f i r s t case, the Board i n v e s t i g a t e s the complaint and
n o t i f i e s the respondent by mail t h a t a complaint has been f i l e d . I n t h e
second case, the respondent is required to s i g n t h e i n i t i a l violation
notice a t the time of the inspection. The Board a l s o n o t i f i e s the
respondent by mail t h a t a v i o l a t i o n was discovered. In both cases the
Board asks the respondent t o c o n t a c t t h e Board regarding the matter within
10 days. The respondent is not notified when the Board w i l l discuss h i s
case or what action may r e s u l t .
The Board proceeds with e i t h e r s i t u a t i o n by discussing it a t a regularly
scheduled meeting, a t which time it may vote t o o f f e r a consent order. If
so, Board s t a f f sends the consent order to the respondent. Prior t o t h i s
the Board makes no formal attempt to n o t i f y t h e l i c e n s e e t h a t a consent
w i l l be offered .
Misleading Procedures - Board procedures can mislead l i c e n s e e s regarding
both the nature of the consent order and the r e s u l t i n g Board a c t i o n i f the
l i c e n s e e r e f u s e s t o sign the consent order. Although the Board uses
consent orders t o discover f a c t s surrounding alleged v i o l a t i o n s , it does
not n o t i f y the respondents t h a t they can d i s c u s s the a l l e g a t i o n s and terms
contained i n the orders with t h e Board. I n s t e a d , the Board sends a cover
l e t t e r with each order which implies t h a t t h e respondent may e i t h e r 1)
s i g n t h e consent order and r e t u r n it within 10 days o r 2) go t o a formal
hearing. Because of these procedures, respondents can and have assumed
t h a t the consent order o f f e r is f i n a l and its terms cannot be negotiated.
This assumption is i n c o r r e c t and may serve t o i n t i m i d a t e respondents i n t o
signing consent orders they otherwise would not have signed.
The Board s t a t e d t h a t it uses the consent order p a r t l y a s a fact- finding
tool,* its purpose being t o avoid t h e cost of verifying f a c t s through the
formal hearing process.** Therefore, the Board relies on t h e respondent's
acceptance or d e n i a l of t h e consent order a s v e r i f i c a t i o n regarding the
a l l e g a t i o n s . The Board considers a consent order an admission of g u i l t i f
the respondent signs and r e t u r n s it.
* In a review of seven recently challenged consent orders, we found
t h r e e were rescinded during formal hearings because Board evidence did
not support the findings of f a c t s s t a t e d i n t h e consent orders.
According t o Board members t h i s occurred because the consent order is
used i n some cases a s a means of e s t a b l i s h i n g t h e f a c t s .
** Consent orders a l s o serve a s a revenue- raising t o o l since the Board
may impose c i v i l p e n a l t i e s up t o $ 1,000 f o r each v i o l a t i o n . These
c i v i l p e n a l t i e s a r e placed i n the Board's funds.
The Board claimed it does not deny respondents a n o p p o r t u n i t y t o discuss
the consent and negotiate its a l l e g a t i o n s or terms. I n f a c t , we reviewed
s e v e r a l instances where l i c e n s e e s had s u c c e s s f u l l y negotiated consent
order a l l e g a t i o n s or terms.* However, we a l s o found t h a t i n s i x of nine
cases we reviewed, the respondents were not aware t h a t they could have
discussed and negotiated the consent orders with t h e Board p r i o r t o
signing them.
The following case example describes one l i c e n s e e ' s experience w i t h t h e
Board's consent order procedures.
Case 1
In 1982 t h e Board offered Respondent A a consent order a l l e g i n g t h a t
he had violated A. R. S. $ 32- 2321 by allowing h i s insurance t o l a p s e and
charging him $ 100. In a recent interview, Respondent A t o l d us he was
unaware t h a t he could have discussed and negotiated the consent order
with the Board. He had assumed t h a t h i s choice was t o e i t h e r pay the
$ 100 or go out of business. However, i n a t l e a s t one instance the
Board voided an insurance- related consent order once the licensee
corrected the problem.
* In most of the cases we reviewed, t h e l i c e n s e e s had h i r e d a t t o r n e y s t o
represent them i n these matters.
Board Should Adopt Recommended Procedures - The Attorney General's Off i c e
suggests t h a t consent orders be discussed and negotiated p r i o r t o being
formalized. The Arizona Agency Handbook* discusses consent orders a s
follows :
" 12.4.1.5 Consent Orders. A consent order imposes
some type of d i s c i p l i n a r y sanction or remedial a c t i o n .
It is entered by the decision maker with the consent of
the l i c e n s e e or o t h e r a f f e c t e d party. The co. n- .- s e- . n. - t
or- der . is - g- en. er ally not the r e s u l t of the decision maker's d e l i b e r a t i o n s , but represents the decision
maker's acceptance of an agreement reached between the
agency s t a f f and the l i c e n s e e . The consent order is
issued by the decision maker t o carry out the p a r t i e s '
agreement and generally involves a l i c e n s e e ' s consent
t o some form of d i s c i p l i n e o r c o r r e c t i v e a c t i o n . The
consent order must be i n writing and approved by the
l i c e n s e e .
" Consent orders should c o n t a i n f i n d i n g s of f a c t and
conclusions of
p a r t i e s . This
r a i s e d by the
law which have been aireed t o by the
i n s u r e s against a question being l a t e r
l i c e n s e e or others concerning- e i t h e r
c u l p a b i l i t y or the reasons f o r the issuance of such
consent order. At a minimum, the agency should not
allow the issuance of a consent order without findings
of f a c t , unless the l i c e n s e e s p e c i f i c a l l y s t a t e s i n the
order t h a t he n e i t h e r admits nor denies a l l e g a t i o n s
t h a t have been made a g a i n s t him by the agency. Some
agencies have s p e c i f i c r u l e s which p r o h i b i t the
issuance of consent orders where the l i c e n s e e maintains
h i s innocence of any wrongdoing." ( emphasis added)
L e g i s l a t i v e Council endorses the Arizona Agency Handbook recommendations,
emphasizing the importance of f a i r n e s s t o the alleged v i o l a t o r . In a
memorandum dated June 6, 1983, L e g i s l a t i v e Council s t a t e d :
* In 1982, the Attorney General's Office published the Arizona Agency
Handbook which, i n layman's language, explains the major S t a t e laws
governing the operation of S t a t e agencies. One s e c t i o n of the
handbook discusses procedures f o r c i v i l enforcement and use of consent
orders.
37
" The board ' s procedure f o r issuing consent orders is
not the most proper procedure t h a t can be
u t i l i z e d . . . . A l i c e n s e e who r e f u s e s t o sign a
consent order offered ~ u r s u a n t t o the board's - - . - -
d e l i b e r a t i o n s . . . may not receive a f a i r hearing by
the board when formal proceedings commence. The board
may have already decided or prejudged the l i c e n s e e ' s
g u i l t without the l i c e n s e e being able t o defend
himself. Unfortunatelv t h i s is a common ~ r 0 b l e m with
a d m i n i s t r a t i v e agencies because they must a c t as both
prosecutors and judges. The board's procedure could be
improved by following the Arizona Agency Handbook."
( emphasis added)
Training i n Evidentiary
Matters Is Needed
Board members and s t a f f have not been trained adequately i n gathering and
presenting evidence necessary t o p r o p e r l y d i s p o s e of complaints. However,
the Board often d e a l s with l e g a l l y s o p h i s t i c a t e d cases. Other S t a t e
i n s p e c t o r s have received t r a i n i n g on r u l e s of evidence and case
development, and such t r a i n i n g could be of b e n e f i t t o t h e Board and its
s t a f f .
Following proper e v i d e n t i a r y procedures is e s p e c i a l l y important i n the
case of the S t r u c t u r a l Pest Control Board, since many of its actions a r e
challenged by a t t o r n e y s and s e v e r a l have r e s u l t e d i n court a c t i o n . S i n c e
1979, the Board has been sued twice, its decisions appealed four times and
its i n v e s t i g a t i v e a c t i v i t i e s halted by a temporary r e s t r a i n i n g order once.
Inspectors from the Commission on Agriculture and H o r t i c u l t u r e , whose
d u t i e s involve a g r i c u l t u r a l p e s t i c i d e c o n t r o l , have received t r a i n i n g from
t h e Phoenix Police Department regarding r u l e s of evidence and case
development. Such t r a i n i n g could a s s i s t the Board and i t s s t a f f i n
assuring b e t t e r case documentation.
Available O ~ t i o n sf o r
Complaint Disposition Not Used
The Board's current procedures f o r informally disposing of complaints can
be made p o t e n t i a l l y more b e n e f i c i a l t o consumers and simpler f o r the
Board. The Board should c o n s i d e r r e q u i r i n g refunds o r t r a i n i n g more o f t e n
through i t s consent order process, which may be more b e n e f i c i a l t o the
consumer than the c i v i l penalty. In a d d i t i o n , the Board should consider a
simpler a l t e r n a t i v e t o consent orders f o r minor v i o l a t i o n s .
Board Should Consider Additions or A l t e r n a t i v e s t o C i v i l P e n a l t i e s - The
Board can expand the a c t i o n s it takes through consent orders t o include
requiring refunds o r t r a i n i n g more often a s a l t e r n a t i v e s o r a d d i t i o n s t o
c i v i l p e n a l t i e s . Such a c t i o n s may b e n e f i t consumers more d i r e c t l y than
c i v i l p e n a l t i e s alone. L e g i s l a t i v e Council s t a t e s t h a t remedial a c t i o n s
a r e allowed when complaints a r e handled informally:
" An informal d i s p o s i t i o n by consent order may involve
an agreement between the board and a l i c e n s e e which
r e q u i r e s the l i c e n s e e t o take some kind of remedial
a c t i o n such as attending t r a i n i n g or providing
c o n c i l i a t i o n or r e s t i t u t i o n . "
Disposition of Minor Violations Can Be Made Simpler - The Board can use a
simpler a l t e r n a t i v e t o consent orders, t h e " administrative warning," t o
dispose of minor v i o l a t i o n s . Use of the a d m i n i s t r a t i v e warning has
reportedly been used s u c c e s s f u l l y i n New York S t a t e t o dispose of minor
cases quickly and e f f i c i e n t l y but with c o n s i d e r a t i o n of f a i r n e s s t o the
p r o f e s s i o n a l . The a d m i n i s t r a t i v e warning c o n s i s t s simply of a warning
l e t t e r which can be kept on f i l e f o r t h r e e years; i f the v i o l a t o r repeats
the offense during t h a t time he can be brought t o a formal hearing f o r
both the f i r s t and second offenses. The Executive Director f o r t h e New
York S t a t e Office of Professional Discipline described the procedure a s
follows :
* P r i o r t o t h i s the Board had the a u t h o r i t y t o i s s u e c i v i l p e n a l t i e s f o r
v i o l a t i o n s of the s t a t u t e s dealing s p e c i f i c a l l y with those p e s t i c i d e s
r e s t r i c t e d i n use by the Federal I n s e c t i c i d e , Fungicide and
Rodenticide Act ( FIFRA).
" Since a warning is not an a d j u d i c a t i o n , a p r o f e s s i o n a l
may not be e n t i t l e d t o a due process hearing before it
is issued. Once we a r e convinced t h a t a v i o l a t i o n is
minor o r t e c h n i c a l i n nature, we simply send a l e t t e r
t h a t describes the conduct t h a t we believe is offensive
and d i r e c t t h e l i c e n s e e t o stop doing it.
" We keep the issuance of the Administrative Warning on
f i l e f o r t h r e e years. I f there is a s i m i l a r v i o l a t i o n
by t h e p r o f e s s i o n a l during t h a t time, he can be
prosecuted through the a d j u d i c a t i v e process f o r both
t h e i n i t i a l and subsequent violations."*
The Board of Medical Examiners ( BOMEX) has used a d m i n i s t r a t i v e warnings
f o r approximately t h r e e years with reported success. According t o BOMEX's
Executive Director, the a d m i n i s t r a t i v e warning ( L e t t e r of Concern, or LOC)
has provided the Board a midpoint f o r Board a c t i o n between dismissing a
case and penalizing a l i c e n s e e . BOblEX i s s u e s LOCs f o r minor v i o l a t i o n s
which the Board believes the l i c e n s e e should note and c o r r e c t but f o r
which he should not be assessed a penalty unless he repeats the
v i o l a t i o n . BOMEX has the a u t h o r i t y t o i s s u e LOCs without holding a formal
hearing. The Executive Director reported t h a t the LOC has not been
challenged l e g a l l y .
Since the Board has a heavy complaint work load ( approximately 900
complaints per y e a r ) , the a d m i n i s t r a t i v e warning could help the Board
dispose of s e v e r a l minor complaints e f f e c t i v e l y while reducing the time
spent on each.
CONCLUSICN
The Board should improve its enforcement a c t i v i t i e s . Informal
d i s p o s i t i o n s can be made f a i r e r , more b e n e f i c i a l and simpler through the
use of properly issued consent orders, t r a i n i n g or refund requirements and
a d m i n i s t r a t i v e warnings. In a d d i t i o n , t h e Board could b e n e f i t from l e g a l
t r a i n i n g i n gathering and presenting evidence.
* William L. Wood, Jr., " Guest E d i t o r i a l , " D i s c i p l i n e , May 1983.
4 0
RECOMMENDATIONS
1. The Board should
a. Adopt the consent order procedures recommended i n the Arizona
Agency Handbook, Section 12.4.1.5;
b. Seek t r a i n i n g f o r both Board members and s t a f f i n evidence
gathering and case development; and
c. Expand a c t i o n s taken through consent orders t o i n c l u d e r e q u i r i n g
refunds o r t r a i n i n g .
The L e g i s l a t u r e should amend Board s t a t u t e s t o authorize the Board t o
i s s u e a d m i n i s t r a t i v e warnings i n cases involving minor v i o l a t i o n s .
FINDING I V
THE BOARD'S CURRENT FEE STRUCTURE IS INEQUITABLE.
Statutory changes a r e needed i n the Board's l i c e n s i n g f e e s t r u c t u r e ,
e s p e c i a l l y i f businesses a r e licensed a s recommended i n Finding 11. The
c u r r e n t f e e s t r u c t u r e is i n e q u i t a b l e . Although l a r g e r companies generate
more c o s t s f o r the Board, the same l i c e n s e f e e i s charged t o each
q u a l i f y i n g p a r t y l i c e n s e e of every company. Fee schedules e s t a b l i s h e d i n
s e v e r a l other s t a t e s a r e designed t o more equitably a l l o c a t e regulatory
c o s t s .
A l l Licensees Pay Same Fee
Under current s t a t u t e s and Board r u l e s , a l l i n d i v i d u a l l i c e n s e e s pay an
i n i t i a l l i c e n s i n g f e e of $ 150 and an annual renewal f e e of $ 130. The
c u r r e n t f l a t - r a t e f e e schedule contains no provisions f o r f l e x i b i l i t y i n
determining the f e e paid. The same f e e is paid whether t h e l i c e n s e e is
qualifying a " one- man operation" o r a company with over f i f t y a p p l i c a t o r s
and s e v e r a l branch o f f i c e s . The Board does n o t r e q u i r e f e e s from
companies because they a r e not licensed.
This f l a t - r a t e f e e system is u n f a i r t o the l i c e n s e e s of smaller
companies. I n e f f e c t , f e e s paid by i n d i v i d u a l l i c e n s e e s qualifying
smaller companies subsidize the e x t r a c o s t s associated w i t h r e g u l a t i n g the
l a r g e r companies, since l a r g e r companies appear t o generate more a c t i v i t y
and c o s t s f o r the Board. Board records a s well a s Board s t a f f indicated
l a r g e r companies c r e a t e more everyday paperwork processing c o s t s than
smaller companies. For example, the Board maintains records on the number
of a p p l i c a t o r s at each company and must process t h e i r I . D . cards and
c e r t i f i c a t i o n paperwork. Larger companies r e s u l t i n g r e a t e r inspection
c o s t s i n t h a t each branch o f f i c e must be v i s i t e d . In a d d i t i o n , l a r g e r
companies, because they s e r v i c e more consumers, generate more complaints
which must be i n v e s t i g a t e d and resolved by the Board. For i n s t a n c e , the
Board has received 22 complaints ( formal and telephone) since June 1981
against one of the l a r g e s t companies which employs 56 applicators. Some
of the smaller companies have never received a complaint. Board s t a f f
estimates the cost of each complaint i n v e s t i g a t i o n t o be approximately
$ 105.
As shown i n Table 5, most ( 85 percent) of the Board's l i c e n s e e s q u a l i f y
companies with f i v e or fewer p e s t i c i d e c o n t r o l applicators. By c o n t r a s t ,
2 companies employ more than 50 applicators and maintain several branch
off ices.
TABLE 5
SIZE OF STRUCTURAL PEST CONTROL COMPANIES
AS OF MAY 1983
Number of
Applicators
1- 5
6- 10
11- 50
Over 50
Total
Number of
Companies
Percentage of
Total
Alternate Fee Schedules
More equitable fee schedules developed i n other s t a t e s d i s t r i b u t e
regulatory costs based on company size. As shown i n Table 6, f o r example,
Nevada, Kansas, Texas and California assess licensure fees based on the
number of business locations and/ or the number of employees. In addition,
Kansas charges a license fee f o r each category of practice." In
Tennessee, license fees a r e based on a company's gross revenue. Renewal
fees range from $ 50 t o $ 200 a s shown i n Table 7. These systems take i n t o
account the relationship between company s i z e and regulatory costs.
* See discussion of pest c o n t r o l l i c e n s e categories on page 2 of
Introduction and Background.
TABLE 6
BUSINESS FEE STRUCTURES I N OTHER STATES
State
Nevada
Kansas
Texas
California
Basis f o r Business Fee* - Fee
Business $ 25
Each employee 10
Business - each license category
i n which the company intends t o
practice 50
Each unlicensed employee 5
Each business location 7 5
Each employee 2 0
Each business location -
Principal off i c e 50
Branch off i c e 2 5
* Individuals' license fees are assessed separately from business fees.
In t h i s manner, a separate f e e is collected from each e n t i t y being
regulated. This system reinforces the separate s t a t u s of the business
and the licensee and provides f o r the equitable d i s t r i b u t i o n of
regulatory costs.
TABLE 7
BUSINESS FEE STRUCTURE I N TENNESSEE
Gross Amount of Revenue
$ 1 t o $ 50,000
$ 50,001 t o $ 100,000
$ 100,001 t o $ 150,000
$ 150,001 and above
- Fee
The Arizona Structural Pest Control Board already maintains s t a t i s t i c s on
the number of employees and branch o f f i c e s of each company. Therefore,
basing fees on number of employees and/ or number of business locations may
be more f e a s i b l e than basing f e e s on company revenue.
CONCLUSION
Changes are required i n the Board's licensing fee s t r u c t u r e , e s p e c i a l l y i f
businesses a r e licensed a s recommended i n Finding 11. The current
f l a t - r a t e f e e charged each qualifying party licensee is inequitable i n
t h a t l a r g e r companies generate more costs f o r the Board. Fee schedules i n
other s t a t e s assess an individual license fee a s w e l l a s a business f e e
based on company s i z e .
The l e g i s l a t u r e should consider amending Board s t a t u t e s t o allow the Board
t o e s t a b l i s h a more equitable fee s t r u c t u r e . Fees could be based on the
number of business locat ions and/ or the number of applicators employed by
the company.
OTHER PERTINENT INFORMATION
During the course of our a u d i t , we reviewed the following additional
information pertinent t o the Structural Pest Control Board.
L i t t l e Consumer Protection
Against Termite Damage
Currently the consumer has l i t t l e , i f any, recourse i n cases of termite
damage where the PC0 may have been responsible. In most cases i f a
consumer's home is damaged by termites because of inadequate treatment,
the consumer would have t o sue the PC0 t o recover any damages. The
insurance or bond currently required by s t a t u t e does not cover termite
damage. In addition, federally required p r e t r e a t warranties offer only
l i m i t e d p r o t e c t i o n against termite damage.
Insurance and Bonding - A. R. S. 332- 2321 requires t h a t l i c e n s e e s c a r r y
e i t h e r l i a b i l i t y insurance o r a bond i n the amount of a t l e a s t $ 100,000.
Neither the insurance nor the bond protect the treated home against
termite damage resulting from poor treatment. Instead, the insurance
covers the PCO's general l i a b i l i t y i n cases of d i r e c t damage t o the home
or i t s contents ( e. g., a vase broken by the a p p l i c a t o r ) , and the bond
covers employee actions such a s theft.*
Some s t a t e s require t h e i r licensed PCOs t o obtain surety bonds t o cover
termite damage due t o inadequate treatment. The surety bond requires
l i t t l e s t a t e involvement; however, its e f f e c t i n Arizona could be t o
r e s t r i c t the number of small businesses, depending on the bonding l i m i t
set. C a l i f o r n i a ' s s t r u c t u r a l pest control agency is seeking t o increase
its bonding l i m i t from the current 62,000 t o $ 4,000 t o provide more
consumer r e l i e f . However, an Arkansas o f f i c i a l s t a t e d t h a t while its
* The Board's executive secretary s t a t e s t h a t none of the current
l i c e n s e e s c a r r y a bond because it is more c o s t l y than insurance.
current l i m i t of $ 1,500 is too low t o provide adequate r e l i e f , raising the
l i m i t t o $ 5,000 could exclude small PCOs because they may not be able t o
qualify f o r the bond.
P r e t r e a t Warranties - The Federal Housing Authority ( FHA) and the
Veteran's Administration ( VA) require t h a t new construction sites be
pretreated i f the loan is t o be FHA or VA- approved. However, no S t a t e law
e x i s t s which requires p r e t r e a t i n g of a l l new construction. Consumers who
pay cash or have conventional mortgages receive whatever p r e t r e a t
guarantee the contractor and PC0 agree on, i f any.
The guarantee FHA and VA o f f e r to consumers concerning p r e t r e a t s may not
be s u f f i c i e n t . The builder is l i a b l e and must pay f o r any termite damage
received during the f i r s t year a f t e r the p r e t r e a t . While the builder must
pay t o have the s t r u c t u r e completely r e t r e a t e d should termites occur
during the f i r s t f i v e years a f t e r construction, he is not obligated t o
repair any damages a f t e r t h e f i r s t - y e a r period. If damages occur a f t e r
t h i s one- year period, the consumer must pursue c i v i l l i t i g a t i o n to recover
any damages caused by termites.
Penalty f o r Unlicensed
Practice Is I n e f f e c t i v e
A. R. S. $ 32- 2303 prohibits the p r a c t i c e of s t r u c t u r a l pest control f o r
p r o f i t without a l i c e n s e issued by the Board. A. R. S. s32- 2323 e s t a b l i s h e s
the penalty f o r v i o l a t i o n of chapter provisions a s a c l a s s 3 misdemeanor,
which c a r r i e s a maximum $ 500 f i n e o r 30 days i n j a i l .
The Board's a b i l i t y t o a c t on a complaint regarding unlicensed a c t i v i t y is
limited t o f i l i n g a complaint through the S t a t e Attorney General* or the
* The Board's executive s e c r e t a r y r e p o r t s t h a t due t o s t a f f i n g and time
l i m i t a t i o n s the Attorney General's Office has requested t h a t the
Board f i l e the injunctions with the county and c i t y prosecutors.
county or c i t y prosecutor. After f i l i n g the complaint, the Board has no
authority t o pursue the issue f u r t h e r .
The courts view these complaints received from the Board a s lower i n
p r i o r i t y than violations carrying s t i f f e r p e n a l t i e s . Thus, af t e r the
courts i s s u e t h e a r r e s t warrants on unlicensed PCOs,* t h e p o l i c e make only
one attempt t o locate the v i o l a t o r s . If the police a r e unable t o l o c a t e
them, the warrants are issued only i f the v i o l a t o r s a r e stopped o r
apprehended f o r another reason. Many warrants therefore go unserved,**
and a s a r e s u l t they are an i n e f f e c t i v e deterrent to practicing s t r u c t u r a l
pest c o n t r o l without a license.
* The c o u r t s i s s u e warrants i f t h e v i o l a t o r s f a i l t o appear a t the
scheduled t r i a l . ** The Board's executive secretary indicates she receives about 25
complaints of unlicensed a c t i v i t y per year. She estimates t h a t
approximately 1 i n 10 are prosecuted.
AREAS FOR FURTHER AUDIT WORK
During the course of our review of the Board of Structural Pest Control,
we i d e n t i f i e d several issues f o r f u r t h e r audit work. These issues, which
were beyond the scope of our review due t o time c o n s t r a i n t s , include:
1. The need f o r revising Board membership to include experts from related
f i e l d s ( e. g., toxicologists, entomologists);
2. The adequacy of s t a t u t e s and provisions f o r disposing of pesticide
containers ;
3. The a d v i s a b i l i t y of allowing PCOs to store toxic and flammable
chemicals i n r e s i d e n t i a l areas;
4. The need f o r consumer protection measures ( see Other Pertinent
Information, page 47); and
5. The a d v i s a b i l i t y of breaking down the license f e e by licensure
c l a s s i f i c a t i o n so that the applicant is paying only f o r those
categories i n which he w i l l be operating.
Subterranean termites* - Subterranean t e r m i t e s a r e i n s e c t s t h a t l i v e
underground i n n e s t s or c o l o n i e s . Each colony c o n s i s t s of t h r e e
groups-- reproductives, workers and s o l d i e r s . Reproductives, a s the name
implies, replenish the population of the colony. The s o l d i e r s guard the
colony. The workers t r a v e l up out of the n e s t i n search of food which
they t r a n s p o r t back t o the colony.
Subterranean termites t h r i v e i n moist, warm s o i l containing ample food
( wood or o t h e r c e l l u l o s e m a t e r i a l ) . Termites often f l o u r i s h beneath
buildings where the space below the ground f l o o r is poorly v e n t i l a t e d
and/ or where scraps of lumber, form boards, grade s t a k e s , stumps or r o o t s
remain i n t h e s o i l . Most termite i n f e s t a t i o n s i n buildings occur because
wood touches the ground or is c l o s e t o it, e s p e c i a l l y at porches, s t e p s
or t e r r a c e s . Cracks or gaps i n foundations and concrete f l o o r s o f f e r
termites e a s y a c c e s s t o wood t h a t does not a c t u a l l y touch the s o i l .
Unless t e r m i t e s maintain contact with the ground or some other moisture
source, they w i l l d i e . The workers construct g a l l e r i e s i n t h e m a t e r i a l s
they a t t a c k i n order t o maintain moisture. Termites a l s o construct
s h e l t e r tubes which serve a s passageways between the wood and s o i l . These
tubes may measure from one- fourth t o one- half inch wide.
Subterranean termites a r e the most d e s t r u c t i v e i n s e c t s t o wood. They
i n f e s t buildings and other wood products i n a l l s t a t e s except Alaska but
a r e most common, and thus most d e s t r u c t i v e , i n the Country's temperate
areas. Experts estimate as many as 17 t o 1 9 c o l o n i e s e x i s t per a c r e i n
Arizona.
* The bulk of t h i s information was extracted from U. S. D. A. Home and
Garden B u l l e t i n No. 64 - " Subterranean Termites: Their Prevention and
Control i n Buildings." Washington, D. C., 1975.
I n f e s t a t i o n s i n buildings have become more common with the increased use
of central heating. This, together with other changes i n building
practices and material use, explains why termites have caused problems i n
areas where formerly they were not a concern.
Drywood termites - Drywood termites, unlike subterranean forms, nest i n
the s t r u c t u r e i t s e l f . Damage by drywood termites consists of clean
c a v i t i e s cut across the grain of s o l i d , dry wood.
CHAIRMAN
W. Earley
VICE CHAIRMAN
T. Camp
STATE OF ARIZONA
SECRETARY
M. Rollins $ frucfurni Veef Montrol P~ lonrb
MEMBE~ S: 2207 SOUTH 48th STREET, SUITE M
F. Holly TEMPE, ARIZONA 85282
D. Doyle
September 16, 1983
BRUCE BABBITT
GOVERNOR
Mr. Douglas R. Norton
Auditor General
111 West Monroe, Suite
Phoenix, AZ 85003
Re: Comments
600
on the Performance Audit
Arizona Structural Pest Control Board
Dear Mr. Norton:
Thank you for your letter of September 9, 1983,
enclosing your revised preliminary report draft of the
performance audit of the Structural Pest Control Board.
The Structural Pest Control Board is pleased to express
its appreciation to the Auditor General's Sunszt Review Team for
their handliiig of the review of the ~ oard's activities. Board
members have worked diligently to administer their legislative
charge to protect the public health, safety and welfare as it
relates to the licensing and regulation of the structural pest
control industry. It is, therefore, gratifying to read in the
report that " the Board acts aggressively on many consumer
complaints and violations", and " the Board has taken
considerable action on many consumer compiaints" .
In addition, the Auditor General's Sunset Review Team
determined for the " Sunset Factors" that the Board has generally
met its objectives and purposes effectively and efficiently.
The Board r~ holeheartedly endorses the following conclusions in
the Sunset Factors:
1. The Legislature' s intent in establishing the
Structural Pest Control Board is specified in the statutes as
public protection from 1) chemical harm and 2) harm resulting
from inadequate structural pest control. The Board fulfills
this intent by examining license applicants for both initial and
renewed licenses, inspecting pest control companies,
investigating complaints and disciplining licensees.
Letter t o Douglas R. Norton
September 16, 1983
Page 2
2. The Board's en£ orcement functions service the
public i n t e r e s t , since the Board has acted aggressively and
promptly on many consumer complaints and violat ions noted during
routine inspections.
3. The Board has encouraged input from the public
before promillgating its rules and regulations and has informed
the public as to its actions and t h e i r expected impact on the
public by sending copies of proposed l e g i s l a t i o n t o a l l
licensees and by properly noticing meetings and adequately
maintaining the minutes.
4. The i3oard has made numerous attempts to address
deficiencies in the enabling s t a t u t e s which prevent it from
f u l f i l l i n g its statutory mandate.
5. Termination of the Board could s i g n i f i c a n t l y harm
the public h e a l t h , s a f e t y and welfare.
Recommended Legislation
The performance audit review recommends that the
Legislature should consider:
1. Revising T i t l e 32, Chapter 22, Chapter 22, Article
1 t o c l a r i f y the Board's licensure structure.
Comment :
The Board agrees with t h i s recommendation and feels
that the licensing of both individuals and businesses w i l l
provide greater control.
2. Revising the licensure fee structure to make fees
equitable based on company size.
Comment :
In 1980, the Board attempted to obtain l e g i s l a t i o n
establishing a fee structure based on the number of business
locations by licensing branch offices and in 1982, the Board
attempted to obtain l e g i s l a t i o n establishing a fee structure
based on the number of employees. The Board is pleased the
Auditor General's evaluation recognizes the need for these
changes.
3. Allowing the Board to issue administrative warnings.
Letter t o Douglas R. Norton
September 16, 1983
Page 3
Comment :
The Board has reviewed and revised its consent
agreement procedures. These procedures simplify the consent
agreement process allowing effective and e f f i c i e n t resolution of
minor violations. Board f e e l s administrative warnings ars not
necessary.
Findinss :
Procedural recommendations were provided by the review
team and documented in Findings I, 11, I11 and I V . Tile Board
concurs with the majority of t h e i r findings and i s i n i t i a t i n g
corrective action t o improve and strengthen regulations and
improve enforcement action. The Board has previously attempted
t o obtain l e g i s l a t i o n t o license both the individual and company
and also to modify the f e e s t r u c t u r e .
I. REGULATION OF THE STRUCrrURAL PES'I' CONTROL INDUSTRY
SHOULD BE CONTINUED AND STRENGTHENED.
The review team has recommended that the Board
amend its rules and regulations to include specific termite
treatment standards and that the Board revise the current Wood
Infestation Report. The Board is working on treatment standards
for a more effective termite treatment control. A proposed rule
has been scheduled for discussion a t its October meeting. The
Board is also considering the adoption of a more comprehensive
Wood Infestation Report which would clearly inform the public of
the scope of inspection. Approval of t h i s form w i l l need t o be
obtained from FHA/ VA.
1 . THE BOARD NEEDS TO LICENSE COII. IPANIES AS ' VJELL AS
INDIVIDUALS.
The review team has recommended that the
Legislature consider a comprehensive revision of the Structural
Pest Control Board's s t a t u t e s t o establish a licensing or
registration system for both companies and individuals. As
indicated previously, the Board endorses t h i s recommendation.
Licensing companies as well as individuals w i l l provide greater
control of the major components of the pest control industry and
increase disciplinary options available to the Board in cases
where the pest control company replaces individual licensees
when complaints a r i s e .
L e t t e r t o Douglas R. Norton
September 16, 1983
Page 4
111. THE BOARD CAN STRENGTHEN I ENFORCEMENT
ACTIVITIES TO BETTER PKOTEC'L" THE PUBLIC.
The review team has recommended t h a t the Board
modify its consent agreement procedures, seek a d d i t i o n a l
t r a i n i n g f o r Board m e m b e r s and s t a f f , expand consent agree-ments
t o i n c l u d e refunds and t r a i n i n g f o r l i c e n s e e s , and has
recommended l e g i s l a t i o n a u t h o r i z i n g t h e Board t o i s s u e
a d m i n i s t r a t i v e warnings.
A s i n d i c a t e d p r e v i o u s l y , t h e Board has reviewed and
r e v i s e d its consent agreement procedures s i m p l i f y i n g t h e
e f f e c t i v e and e f f i c i e n t r e s o l u t i o n of minor v i o l a t i o n s ,
t h e r e f o r e , t h e Board b e l i e v e s t h a t a d m i n i s t r a t i v e warnings are
unnecessary. The Board has and w i l l continue t o i n c l u d e
t r a i n i n g f o r l i c e n s e e s i n its consent o r d e r s .
The Board and s t a f f have a t t e n d e d t r a i n i n g s e s s i o n s
with t h e Environmental P r o t e c t i o n Agency, S e c r e t a r y of S t a t e ,
Attorney G e n e r a l ' s O f f i c e , and A g r i c u l t u r e and H o r t i c u l t u r e
Commission and w i l l continue t o seek t r a i n i n g a s a v a i l a b l e .
In many cases, complaints a r e resolved by l i c e n s e e s
themselves through r e f u n d s ; however t h e Board f e e l s t h a t
a r b i t r a t i o n by t h e Board is not its proper f u n c t i o n and
complainants may seek compensatory r e l i e f through o t h e r avenues
i f u n s a t i s f i e d by t h e l i c e n s e e ' s a c t i o n s .
IV. THE BOARD'S CURRENT FEE STRUCTURE IS INEQUITABLE.
The review team has recommended t h a t t h e Board's
s t a t u t e s be amended t o e s t a b l i s h a more e q u i t a b l e f e e s t r u c t u r e .
As i n d i c a t e d earlier, t h e Board sought such
l e g i s l a t i o n i n 1980 and 1982. T'ne Board is pleased t h a t the
Auditor General agrees with t h e Board's p o s i t i o n regarding a
more e q u i t a b l e f e e s t r u c t u r e and has recommended t h e s e changes.
Other P e r t i n e n t Information:
The review team r e p o r t e d t h a t A. R. S. $ 32- 2321 r e q u i r e s
l i c e n s e e s c a r r y insurance o r a bond i n the amount of $ 100,000 o r
more, but n e i t h e r t h e insurance or t h e bond p r o t e c t s t h e t r e a t e d
home a g a i n s t p e s t o r termite damage r e s u l t i n g from poor p e s t
c o n t r o l t r e a t m e n t .
Letter to Douglas R. Norton
September 16, 1983
Page 5
Although the review f a i l s to recommend a solution to
t h i s problem, the Board requests that the Legislature consider
changes to the s t a t u t e to expand the required insurance or bond
coverage to include damage caused by pests or improper applica-t
ions.
The Structural Pest Control Board again thanks you and
your staff for your courtesy and sincerity.
Sincerely,
Wayne ' 0. Earley ,/"
Cl~ ia rman
Structural Pest Control Board
% w* Betty . yckoff - -
Executive Secretary
Structural Pest Control Board
WOE: jm
3893A