News

SACRAMENTO -- The Department of Pesticide Regulation today reported $1.6 million in payments and penalties for unregistered pesticide sales and unpaid environmental fees during fiscal 2004-05.

“It is absolutely critical to establish a level playing field in the marketplace,” said DPR Director Mary-Ann Warmerdam. “Law-abiding businesses face unfair competition if others sell unregistered products or fail to pay environmental fees in full. And every dollar unpaid is a dollar denied to regulatory programs that protect the public.”

DPR is now focusing its limited resources on investigating non-licensed sellers, including some “big box” retailers, as well as other businesses that consistently fail to pay fees on their pesticide sales, said Warmerdam.

The investigations haven proven to be time-consuming. More than 18 months ago, DPR auditors first sought information on Home Depot’s sales in California. Without the data, DPR cannot confirm whether environmental fees were paid, or that products sold are registered for use in California. The home improvement chain is the nation’s second largest retailer, with more than 170 stores in California.

Last week, Home Depot pledged to cooperate with DPR. Attorneys at Home Depot’s corporate headquarters in Atlanta apologized for the delay.

Meanwhile, DPR audits and negotiations continue with other chains. These include an audit of the Rite Aid drug chain, begun in November 2003. DPR auditors said Rite Aid has been slow to cooperate thus far.

In September, DPR announced a preliminary investigation of Wal Mart – the nation’s largest retailer, with more than 150 stores in California. DPR found unlicensed pesticide products and unpaid mill fees. Wal Mart immediately pledged cooperation. However, no issues have been resolved to date.

“Many of these investigations are long and arduous,” said Director Warmerdam. “In some cases, there may be legitimate, complex issues. In other cases, sellers have been less than cooperative. If they think DPR will just give up and go away, then they should think again. We have an obligation to enforce the law.”

She noted Assembly Bill 1011, which takes effect January 1, will require major retailers and others to register as pesticide brokers for the first time.

The law, carried by Assembly Member Barbara Matthews, D-Tracy, should make it easier for DPR auditors to track over-the-counter pesticide sales estimated at $1 billion annually. (As part of an outreach campaign, DPR posted information on the new requirements.)

While pesticide sales are often associated with agriculture, products subject to the mill fee also include a broad range of professional and household sanitizers, disinfectants, and other products.

Warmerdam noted some retailers and intermediary pesticide sellers have readily cooperated with DPR once they realized their product sales were subject to DPR fees.

For example, DPR began reviewing dental supply sales for the first time in 2004. The first audit found a national supply firm sold 19 unregistered pesticides in California. Henry Schein Inc., headquartered in New York, immediately cooperated with DPR and paid nearly $56,000 in fees and penalties in November.

However, more than 30 other dental supply firms may continue to sell unregistered products in California. DPR plans to launch a wider investigation of sales by the dental and medical supplies industry early in 2006.

DPR’s environmental fee -- called the mill -- is a 2.1-cent-per-dollar assessment on the first sale of pesticides in California. This mandatory seller fee supports pesticide enforcement, health and safety, and other DPR environmental programs. State law also requires DPR registration of pesticides sold here to assure their safety.

DPR received a total of about $41.6 million in mill fee payments for 2004-05, compared to $34.7 million the prior year. Pesticide registrants -- primarily manufacturers -- reported total pesticide sales of approximately $1.9 billion. About half involve agricultural products, and half are non-agricultural chemicals, including over-the-counter, consumer products.

DPR relies on pesticide sellers to accurately report sales and pay mill assessments upon the first sale in California (usually a wholesale transaction). There are about 11,000 registered brand-name products sold by about 1,200 registrants, 450 dealers, and 25 brokers in California.

To monitor business, DPR’s Product Compliance and Mill Assessment Branch has three auditors who conduct selective audits of pesticide sellers in California and throughout the nation. The branch also coordinates field inspections by DPR Enforcement Branch staffers who check retail shelves for illegal products.

One of six departments and boards within the California Environmental Protection Agency, DPR regulates the sale and use of pesticides to protect people and the environment.