[Regulatory Issues] Ebb and Flow

Over time, regulatory trends take on the look and feel of  tides — they tend to rise and fall, based on the current conditions. Like the effect of the moon’s gravity on lifting water levels, subtly in some places and dramatically in others, certain influences push and tug regulatory changes at different rates in different areas.

Chief among those influences are litigious climates; the state of relations between the regulators and the regulated; the public’s immediate attention driven by media coverage; "issue-oriented" organizations that engender fear among their members and have easy access to media exposure; and the political pressure created by these and other influences.

GOLD IN MOLD? Mold continues to make creeping advances on the pest management industry, pushing a slow tide of incremental, state-specific regulatory change. Because of high-profile, multi-million dollar jury awards, pest management professionals now view mold as either a legal threat or a new business opportunity. While some pest management professionals have adopted mold disclaimers, others have inquired about products claiming to control molds and termite inspection dogs now trained to identify molds at pest management trade shows.

Mold inspection and remediation is allowed under current license in some states. In other states like Louisiana, the legislature moved the responsibility for licensure of mold inspection, treatment and remediation to the License Board of Contractors — outside of the purview of the Louisiana Department of Agriculture, which oversees the pest management profession. In Florida, the statute addressing a pest management professional’s responsibility to identify and report "fungi" on the current WDO report is so broad that it can be interpreted to include indoor "air quality" molds such as the now infamous stachybotrys — a fact that hasn’t eluded plaintiff lawyers, who are now starting to include pest management professional in "toxic mold" lawsuits.

The "mold effect" can be seen in different ways: the National Pest Management Association addressed the issue of mold by revising its WDIR form, soon to be available in the 38 states that use it for real estate inspections; the widespread use of mold disclaimers on the WDI/OR forms used in states that have their own inspection form; the introduction of the Toxic Mold Safety and Protection Act into the U.S. House of Representatives, that would require EPA and HUD to regulate mold inspection and remediation; and mold exclusions on most homeowners’ policies, which restricts or eliminates mold coverage resulting from formerly covered causes such as ruptured water pipes.

A note to those pest management professionals considering adding mold to your portfolio of services: Be sure to check the current status of mold regulation, licensing requirements and, of course, the position of your insurance company in protecting your business for this non-traditional pest management service.

POST 9/11. A tidal wave of change in the post-9/11 world continue to be felt today — longer lines at airport security, a stock market just now returning to pre-9/11 levels, and higher rates for all types of business and personal insurance. Presumably the permanent change most apparent is in new security concerns — i.e., the swift passage of the controversial Patriot Act.

The security of the nation’s highways, and a scenario of 18-wheelers used in terrorist acts, prompted the Homeland Security Agency and the Transportation Security Agency to issue regulations requiring states’ departments of transportation to require background checks for all drivers carrying Commercial Drivers Licenses (CDL) with a Hazardous Materials Endorsement. The regulations required state DMVs to collect fingerprints and perform background checks, then forward those findings to federal law enforcement agencies; license holders convicted of "disqualifying crimes" such as extortion and certain violent crimes could be denied a CDL with a Hazmat endorsement. Pest management professionals whose drivers transported fumigants and carried this license were impacted by these regulations.

Issued by the TSA in May 2003, the regulations allowed six months for states to organize their collection efforts. Protests by states, and the political pressure they brought, forced the agency to delay implementation of the regulations until December 2004 — an example of old-fashioned politics (and the reality of limited state budgets) stemming the tide of what is arguably good public safety regulations in a era of unforeseen terrorist threats.

In some instances, the regulatory tide can move swiftly and dramatically. In the summer of 2002, the explosion of a home undergoing fumigation in Torrance, Calif., rocked the state’s fumigation industry and ushered rapid change for pest management professionals, state and local regulators and even the utility companies providing natural gas service for 35 million Californians.

While the situation isn’t completely resolved, several facts are apparent: the fumigating pest management professional terminated natural gas service, extinguished pilot lights and closed an exterior shut off valve, tented the home, including the gas meter. Gas continued to leak into and collect inside the tarp and in the early morning hours of August 14, 2002, the natural gas exploded, resulting in a total loss of the home, damage to over almost 100 nearby structures, and some reported minor injuries.

The fumigation industry responded with rapid resolve: associations representing fumigators in northern and southern California, along with the Pest Control Operators of California, drafted regulations to exclude meters from tarping where possible. The groups approached the utility companies providing gas service and requested that the utilities be responsible for terminating and re-establishing gas service.

Although this procedure would add time and expense to their operations, fumigators (and their insurance companies) believed that the additional safety and liability considerations made this the preferable mode of operation. In swift response, Southern California Gas Company and San Diego Gas & Electric joined with the associations, and in less than 60 days, the Department of Transportation (the agency responsible for utility regulation in California) issued regulations to that effect.

Despite the additional costs of labor and difficulties in scheduling two service calls for more than 80,000 fumigations performed annually in Southern California, utility companies agreed with pest management professionals that safety concerns far outweighed inconvenience or increased expense.

CONCLUSION. Regulatory changes depend on the outside forces driving them. Through our participation in state and national associations, and our relationship with regulatory agencies, legislators and the media, those involved with pest management can impact the rate, direction and effect of those changes to benefit our industry, our customers and our communities. Despite the seeming impossible challenge, we have an impact on those forces that are not really out of our control.

The author is vice president of marketing for the LIPCA Insurance Group, Baton Rogue, La. He can be reached at afugler@pctonline.com.