Will Reinstating the RRP Opt Out Provision Really Help Your Business?

Recently Legislation introduced by Senator Inhofe (R) in Bill 2148, the ‘‘Lead Exposure Reduction Amendments Act of 2012’’, among other amendments within the bill, included reinstating the RRP opt out provision that was previously removed when the Sierra Club sued the EPA back in 2009. There is certainly some difference of opinion within the industry regarding whether reinstating the RRP opt out provision makes sense and or will actually be beneficial.   A recent guest blog on RRPedia by Peter Lawton triggered comments from many in favor and against the opt out.  One commenter admitted he was originally in favor of the opt out but was rethinking his position after reading Peter’s blog post.

So, will the opt out actually help businesses?  Maybe.  Maybe not...

I suggest the real problem is that the original rule was poorly conceived and poorly written. Because we are now stuck with it, the proposed amendments are really just band-aid approaches to try to make it better for or more palatable to those affected by the rule. What we really need is a new well thought out rule to replace the existing rule, with the input and leadership of the industry this time.  And, the industry needs to be proactive this time in its writing, its content and its enforcement.

That said it is not likely that the rule will be abandoned and replaced by EPA.   Doing so would be an embarrassment to EPA because it would essentially be admitting it had screwed up.    So, we have to deal with trying to improve upon the existing rule.

Here are several considerations that need to be recognized if the Opt-Out becomes available again:

• Not using lead safe practices on a pre 1978 property is a big risk.  Unless the house is pretested before renovations there is no point of reference regarding existing contamination. If lead safe work practices are not used, how will the business prove it did not cause the contamination?
• If not following the RRP protocols and documenting work practices, the contractor will not be able to provide a preponderance of evidence in his/her favor if accused by the client and or their children of lead related problems after a renovation.
• If the contractor allows a client’s use of the opt out the business and the business owner will still be responsible and liable for damages if the work done by employee well as sub contractors contaminates the house during the work.
• If the home is pre 1978 and is not tested for lead, the contractor must still assume it has lead and must follow OSHA requirements to protect workers and sub contractors. 
• Are your employees aware of the above point?   What would they do and how will your business be affected if they do become aware and contact OSHA and/or have their blood checked for lead?

Not having to follow the RRP rule might just create more problems and risks than following it.   The home owner can choose the opt out to avoid the extra cost.  A contractor can also choose to opt out on the opt out.  If you’re a renovator what will you do regarding the opt out and why?

A Few Steps in the Right Direction Regarding the RRP Rule

Legislation introduced by Senator Inhofe (R) will soon be before the US Senate for consideration.  Inhofe introduced Bill 2148, the ‘‘Lead Exposure Reduction Amendments Act of 2012’’.  As well as several other amendments, the bill seeks to reinstate the RRP Opt Out provision that was previously removed when the Sierra Club sued the EPA back in 2009. Inhofe’s bill is also being supported by Senator Vittor (R-LA), Senator Coburn (R-OK), Senator Grassley (R-IA), Senator Blunt (R-MO), and Senator Enzi (R-WY).

The RRP Rule is a mess.  What we really need is a new well thought out rule to replace the existing rule.   We need a new rule that actually makes sense to follow, addresses the real sources of lead poisoning due to RRP activities, and one that takes into account the financial realities of supporting and enforcing such regulation.  And, the remodeling industry needs to be proactive this time in the rule’s writing, its content and its enforcement. 

Unfortunately we are stuck with the RRP Rule. Maybe the best we can do is try to improve upon it.

It is obvious that someone helped Inhofe understand some of the challenges the rule has created for remodelers. That said there are some positive components found in Inhofe’s bill worth recognizing. 

Check out this one in regards to reinstating the opt out provision.  It adds language to protect the contractor if the homeowner provides false information:

LIMITATION OF CONTRACTOR LIABILITY.—A contractor that receives written certification described in subparagraph (B)(ii) shall be exempt from liability resulting from any misrepresentation of the owner of the target housing.

This one prevents EPA from fining a certified firm that has created the proper documentation required, but made clerical errors filling it out, something several firms claim they have already been taken to task for by EPA:

APPLICABILITY OF CERTAIN PENALTIES.—Any regulation promulgated by the Administrator under this section requiring the submission of documentation to the Administrator shall provide— ‘‘(A) an exemption from penalty for a person who—‘‘(i) is submitting the required documentation for the first time; and‘‘(ii) submits documentation that contains de minimus or typographical errors, as determined by the Administrator; and‘‘(B) a process by which a person described in subparagraph (A) may resubmit the required documentation.

This one requires EPA to actually use science to justify its position regarding any future RRP related regulations related to residential as well as commercial properties:

STUDY OF CERTIFICATION.—‘‘(A) IN GENERAL.—Prior to proposing any new regulation applicable to target housing or public or commercial buildings constructed before 1978, the Administrator shall conduct a study of the extent to which persons engaged in various types of renovation and remodeling activities in the target housing or public or commercial buildings constructed before 1978— ‘‘(i) are exposed to lead in the conduct of those activities; or ‘‘(ii) disturb lead and create a lead based paint hazard on a regular or occasional basis.

What to do if EPA Sends You a Request for Information

Recently I found an article written by Anne E. Viner, a principle attorney at the Chicago law firm of Much Shelist, P.C.  In her article Anne offers several practical tips for responding to governmental requests for information.  I thought her article was well written, straight forward and easy for a contractor to understand.   I got her permission to share some highlights here on RRPedia.

Anne points out that EPA Administrator Lisa was quoted to say “EPA is back on the job" and that EPA has received the largest enforcement budget in its history, making it more likely that your business will be subject to some type of investigation.
Below are some practical tips from Anne to keep in mind when your business receives a request for information from any government agency, not just from EPA regarding the RRP Rule.  (I have summarized quite a bit, click here to see her full article.)  This information should not be construed as legal advice or a legal opinion on any specific facts or circumstances.

• Don’t respond to verbal requests:  It is important to get all requests in writing, so that all parties clearly understand the scope of the information sought and the time period covered by the request.  Without a written request, you risk being accused of failing to fully comply with a verbal request that you may have simply misunderstood. Asking the government to put its inquiry in writing is within your rights.

• Determine if the government has authority to seek the information requested:  Although a written request for information should specify the statutory authority for the request, don't assume that the agency actually has the cited authority.   Knowing the source of the government's authority for the request, as well as determining the applicability of the request to your business, is imperative in both limiting the scope of your response and protecting your business interests with customers and other parties that may be affected by the request.

• Voluntary compliance versus litigation:  Your business should be aware of the pros and cons of voluntary compliance versus requiring the government to follow more formal procedures such as issuing a subpoena or filing a lawsuit. Generally, cooperation is the better course at the early stages of an investigation. On the flip side, refusing to voluntarily comply with a governmental request may subject you to higher scrutiny and or administrative penalties.  Of course, cooperation is not always an option, so understanding the risks of fighting with the government is essential at the outset.

• Assume your company is a target and involve counsel early in the process:  Regardless of the apparent target of the government's inquiry, assume that your business is, in fact, under investigation and may be subject to fines, penalties or otherwise embroiled in a civil or criminal enforcement action.  An experienced environmental attorney can help advise your business concerning its rights and responsibilities.

• Be honest:  As we all learned in childhood, honesty is the best policy.  Handling the request in an inappropriate manner could result in claims of obstruction of justice, interfering with investigations, or other types of administrative and civil violations.

Don’t Be Mislead By the Vote to Cut Off RRP Enforcement Funding

On July 13, 2011 the House Appropriations Committee voted to cut off funding for enforcement of the RRP Rule until a reliable test kit is recognized by EPA.  The amendment was included in the House Appropriations Bill by Representative Denny Rehberg (R-Mont.).   

Note: For clarification, a “reliable test kit” means a test kit that would be able to determine if a painted or coated surface contains lead equal to or in excess of 1.0 milligrams per square centimeter (mg/cm2) or 0.5% by weight.   The current test kits will reliably indicate whether the surface contains any lead or not, but do not measure the amount of lead. 

Unfortunately, as a result of the vote many renovators are now assuming that they no longer need to comply with the RRP rule and do not have to use lead-safe work practices on pre-1978 target housing and child occupied facilities.  If you are a renovator making that assumption it would be a big mistake that could cost you big time.  Let me explain.

First, any cut or stoppage of enforcement would only apply to states where EPA administers and enforces the rule.  It would not have any effect at all in those states that have assumed administration and enforcement of the rule from EPA. 

Regarding the vote, it is an amendment added to a proposed bill which must go before the full House and Senate for approval.  Even if approved in the House and Senate it must then be sent to the president for his signature before passing.  The president signing it, at least in my opinion, is not very likely.  Obama had a lot to do with why the rule exists to begin with.

Even if the amendment to the rule were to go into effect, all it would do is take away the money EPA has to fund enforcement.  It would not eliminate the rule.   If and when a reliable test kit were to be eventually recognized by EPA, and finally made it to the marketplace, enforcement funding would then become available again.

EPA can eventually get you anyway:
Keep in mind that the rule requires that renovators keep all required documentation and that it be available for EPA audit for 3 years.   That means EPA can retroactively enforce the rule 3 years back.  If and when enforcement happens, all EPA needs to do is ask to see a renovators documentation to determine whether all the regulated work performed during that 3 year period was properly documented, met the rule’s requirements and that property owners and/or tenants received the required Renovate Right pamphlet, any lead testing results documentation as well as a copy of the required renovation checklist. Remember, the fine is up to $37,500 per violation per day!

Property Owners, Tenants and Parents can get you anytime:
Also, keep in mind that even if EPA can’t or doesn’t enforce the rule, your customers, their neighbors and the parents of children attending a child occupied facility can still sue you for not following the law.  And, as a business, if accused, you are considered guilty until you prove you and your business is innocent at your own expense, money you cannot recoup in court. 

Plus, one fact that many business owners may not be aware of is that, under the rule, the business owner can be held civilly liable for violating the rule.    Don’t assume you are personally protected just because of the legal status of your business.

The following information is from the NARI Government Affairs Committee’s newsletter of June 23, 2011 titled “NARI on the Hill”.  

NARI Work Group Findings on LRRP

From March through June 2011, a dedicated work group of NARI members regularly convened for the purpose of documenting challenges in the application of EPA's Lead Renovation, Repair and Painting Rule (LRRP Rule).  NARI's purpose is to convey to the EPA what is working and what is not working in implementation and to make recommendations.  The work group identified the following prioritized concerns with recommendations:

Concern #1

The rule application is presented as a "one size fits all" and fails to provide guidance on the varying conditions often found on job sites.

Recommendation #1

The EPA should revise the rule to define the desired outcomes and provide a tool box of options to address varying conditions.

Concern #2

The cost of compliance is driving homeowners to either DIY or hire an uncertified renovator thus defeating the purpose and intent of the rule.  Also, the rule does not address the contractor's responsibility when the work of disturbing lead paint has been undertaken and completed by the homeowner or an uncertified contractor. 

Recommendation #2

The EPA needs to educate the general public about the rule, clarify the contractor's responsibility under this scenario, and assess the impact of homeowner-initiated projects on childhood lead poisoning.

Concern #3

The EPA lacks an effective method of providing updates and information on the rule.  The website housing over 600 FAQs is not a feasible communications tool.

Recommendation #3

EPA and states with oversight should provide a regular newsletter with necessary updates.  The website should be overhauled addressing the topical information needs of the user.

Concern #4

The rule is not clear on the training and certification requirements for subcontractors used by the certified renovator.

Recommendation #4

The EPA should clarify the responsibilities of subcontractors and define a "certified renovator of record" as a single point of contact throughout the project. 

Concern #5

The model training program is not consistent with the current rule.  Curriculum and materials do not reflect amendments.

Recommendation #5

The EPA must exercise responsibility in properly maintaining training curriculum and material content.

 Why we convened a Work Group: to inform various entities in Washington about the issues with regard to this regulation.  Since regulatory reform is a hot topic in Washington right now, the time is right to share these findings and garner more support. When trying to bring an issue to light in Washington, officials want current data to review, so the Work Group convened for a current, detailed analysis and NARI is sharing recommendations of the Work Group in Washington.

A copy of the complete report is available by request by e-mailing: gac@nari.org.

Do My Sub Contractors Need To Be RRP Certified?

There has been a lot of confusion regarding the details of the EPA RRP rule.  One that seems to pop up over and over is certification requirements for sub contractors.  There are two different certification considerations regarding sub contractors; firm certification and worker certification.  Let’s take a look at each separately.

Firm Certification for Sub Contractors:

The EPA is very clear on this.  The following question and answer comes from the EPA web site’s FAQ page:

Question: My firm performs renovations covered by the RRP rule, but solely in the capacity of a subcontractor. If the general contractor is a certified firm, does my firm also have to be certified, or can we just provide the certified renovator?

EPA Answer: All firms performing, offering, or claiming to perform renovations covered by the RRP rule must be certified. In this case, both the general contractor and subcontractor must become certified firms.  

Whether working for the general contractor as a trade partner or a 1099 sales person (offers the work), sub contractors must become certified firms by apply for certification through the EPA.   Ensuring that the subs they use are certified firms is particularly important for general contractors, because as part of the required documentation under the rule, the renovation checklist must include the names of all workers who participated in RRP activities on the job.  If a sub contractor and his workers do work on the job and the sub’s firm is not certified, the EPA will easily be able to find both the general contractor and the sub in violation of the rule.  If a general contractor knows that subs must be certified firms, hiring a non-certified firm to work on a job becomes a knowing and willful violation of the rule, which brings with it serious penalties.  It’s also one easy way for a customer’s lawyer to suggest the contractor is/was negligent.

Note: Both Massachusetts and Rhode Island have this same requirement for sub contractors. 

Worker Certification for Sub Contractors:

Again, the EPA is very clear on this.  The following question and answer comes from the EPA web site’s FAQ page:

Question: Under the RRP Rule, can a certified renovator supervise workers of a different company, or must each firm involved in a project furnish a certified renovator?

EPA Answer: All firms performing renovations must ensure that all individuals performing renovation activities on behalf of the firm are either certified renovators or have been trained by a certified renovator.  The RRP Rule does not prohibit firms from reaching agreement on which will supply the certified renovator who is responsible for ensuring compliance with the RRP Rule and who directs and trains non-certified workers.  All firms remain liable for ensuring compliance with the RRP Rule.    

Who is Liable, The General Contractor or the Sub?

The following question and answer provides clarification regarding the responsibility and liability of the business that is acting as the general contractor:

Question: Is the certified renovator assigned to a specific project responsible for the work practices of other contractors on the project if the certified renovator is an employee of the general contractor of the project?

EPA Answer: All firms performing renovations must ensure that all individuals performing renovation activities on behalf of the firm are either certified renovators or have been trained by a certified renovator. A firm acting as a general contractor may satisfy this requirement by hiring another certified firm that takes responsibility for ensuring that all individuals performing the renovation activities are either certified renovators or have been trained by a certified renovator. With respect to assigning a certified renovator who is responsible for any on-the-job training and regularly directing workers who are not certified renovators, a firm acting as a general contractor my satisfy this requirement by hiring another certified firm that in turn assigns a certified renovator to the job. However, this does not discharge the general contractor's liability to ensure compliance with the Renovation, Repair, and Painting Rule.

Note: The answer above also applies in Massachusetts, but does not apply in Rhode Island.  In Rhode Island, the RI Lead Hazard Control Standard (Section 14.0) requires the Licensed Lead Hazard Control Firm (LHCF) to have a RI licensed Lead-Safe Remodeler/Renovator (LRM) designee as a condition of licensure.

Former Detroit Lead Inspector Sentenced for Fraud

According to an article in the Detroit Free Press, Donald Patterson, a former lead inspector for the City of Detroit, was indicted last year on charges of soliciting bribes, wire fraud and making false statements about lead inspections. Among the allegations were that he allowed a 2-year-old child with high blood-lead levels to return to a home with lead-based paint hazards, falsely declaring it safe and making the child sicker.

The following is News Release from EPA, published on February 8, 2011.  Though not specific to the RRP Rule, this action by both EPA and the FBI shows that willfull violators of lead related regulations are currently a major focus for EPA and they are serious about prosecuting violators. 

EPA uses news releases and press releases like the one below to make the public aware of LBP related violations.   The use and purposes of the releases as tools is clearly explained in footnote #10 included inside the Consolidated Enforcement Response and Penalty Policy for the RRP Rule:

"EPA may, at its discretion, issue a press release or advisory to notify the public of the filing of an enforcement action, settlement, or adjudication concerning a person’s violation of TSCA. A press release can be a useful tool to notify the public of Agency actions for TSCA noncompliance and specifically, to educate the public on the requirements of LBP Program. The issuance of a press release or advisory as well as the nature of their contents are within the sole discretion of the Agency and shall not be subject to negotiation with the violator."

News Release as Follows:

CONTACT:
Stacy Kika
kika.stacy@epa.gov
202-564-0906
202-564-4355

WASHINGTON — Former city of Detroit Health Department lead inspector Donald Patterson was sentenced today to three years and 10 months in prison and 24 months of supervised release on wire fraud charges stemming from an U.S. Environmental Protection Agency (EPA) investigation. In July 2010, Patterson pleaded guilty and admitted he accepted cash to provide a clean bill of health to homes in which he had either done no inspection or provided fraudulent lead removal training. Lead is a serious public health issue causing a range of health effects from behavioral problems and learning disabilities, to seizures and death. Children six years old and under are most at risk.

“The actions of this public official put the health and lives of children at risk,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “In this case, the local government inspector failed to do his job by submitting false reports for personal gain. Today’s sentencing shows that those who knowingly put the public at risk, particularly our most vulnerable citizens, our children, will be prosecuted to the fullest extent of the law.”

Patterson, 50, was employed by the city of Detroit as a lead paint inspector. His job was to ensure that all paint-based lead hazards were safely removed from the homes he inspected. Instead, Patterson used his position to obtain cash from the owners or renters of these homes in exchange for falsely certifying that the homes were free of lead or for providing fraudulent lead removal training. Patterson admitted that between October 2008 and August 2009 he had accepted cash totaling $1,350 in connection with fraudulent abatement of lead hazards to which children were being exposed at four separate properties.

The Patterson case was investigated by EPA and the FBI, with assistance from the city of Detroit and the state of Michigan.

Deleading vs. Renovation, Repair and Painting Work: What's the Difference? 

Note:  The following information is from the MA Labor and Workforce Development Web site.

While deleading activities conducted in residences and child-occupied facilities often involve work methods similar to those typically used in renovation, repair or painting (RRP) activities, such as replacing windows, painting and installing vinyl siding, the two types of activities are distinct from each other in terms of purpose and effect.

Deleading work is work conducted to achieve compliance with the Massachusetts Lead Law through the abatement of lead paint hazards.  Carried through to completion, deleading work leads to the issuance of a document called a Letter of Compliance, which indicates that the property has met deleading requirements administered by the Childhood Lead Poisoning Program of the Massachusetts Department of Public Health (CLPPP) under the Massachusetts Lead Law and 105 CMR 460.000. In some instances, deleading work takes place after the owner has received an order to bring the property into compliance with the Massachusetts Lead Law.  In other instances, the owner voluntarily decides to delead the property and seek a Letter of Compliance.

Renovation work (RRP work) is work conducted for a fee that disturbs more than threshold amounts of painted surfaces in pre-1978 residences (target housing) and child-occupied facilities (kindergartens, daycares, etc.), where the purpose of the work is other than the abatement of lead paint hazards or the achievement of a Letter of Compliance.  Renovation work is often carried out to repair, upgrade or beautify the property.

Once you have made the initial determination regarding whether your project is a renovation project or a deleading project, the next question is how to choose a contractor who is licensed and qualified to perform the work.   Click on the following link to view a helpful guide on choosing a deleading contractor, “Deleader Contractor Information Bulletin.”  Click on the following link to view a helpful guide on choosing a “lead safe” renovation contractor, “Lead Safe Renovation Contractor Information Bulletin.” 

RRP Enforcement Has Started, But You Ain’t Seen Nothing Yet!

Legitimate and professional contractors seeking to level the playing field of doing business have been expressing their desire for enforcement of the new EPA RRP rule.  Their biggest gripe has been that those not following the rule maintain a pricing advantage because those who do comply must include the additional related overhead, material and labor costs.  This concern is further validated because the EPA so far has done little in the way of enforcement. 

It will take time, but enforcement is on the way.  Momentum in this area will likely be caused by the residual effects of the RRP rule, not because the EPA chooses to ramp up its enforcement efforts.  Contractors and the EPA better get ready though.  Catalysts like the ones listed below are coming and will force contractors to comply. At the same time these catalysts will increase the number of violations reported to and requiring action by the EPA and or by those states that have assumed administration and enforcement of the rule.

The list below includes titles for several other articles previously posted to RRPedia.  Clicking on the titles will bring you to that article.  Rather than make this article extremely long, readers can pick and choose which articles they would like to read.  If you choose to read all or most of the articles, I suggest reading them in the order listed below.

Delegated States Likely Better Prepared To Enforce EPA RRP Rule

Doing EPA RRP Work?  OSHA Will Be Watching For You.

Uninformed and Nervous Neighbors Will Keep RRP Renovators on Their Toes

Insurance companies Rethinking Coverage and Premiums Due to EPA RRP Rule

Contractors and Subs Doing EPA RRP Work Will Need to Work Things Out

Property Values and Equity Will Drop as a Result of the EPA RRP Rule

Home Inspectors Will Help Spread The News About The EPA RRP Rule

Banks And Other Lenders Are Starting to Find Out About the EPA RRP Rule Too.

Six Ways Non-Compliance with The RRP Rule Could Affect Your Business

Renovators should be aware that in addition to EPA or administering states, other individuals or entities may likely take advantage of the documentation requirements to hold renovators accountable for their actions or lack thereof.

Here is a partial list of possible time bombs for renovators who are not in compliance with the new RRP lead laws:

• Lawyers could use non-compliance with the RRP rule to demonstrate negligence by the renovator.   Even if allegations of negligence have nothing to do with lead or the RRP rule, non-compliance with RRP documentation requirements will be easy to prove and will be an easy way for suing clients and their lawyers to argue that if negligent with RRP requirements, a contractor could also be negligent in other areas.
• Insurance companies could use a lack of compliance to deny coverage.  Several insurance agents have told me that insurance companies will soon be requiring proof of RRP compliance, both for the GC as well as subs the GC uses, before renewing general liability and workers compensation policies.  Insurance and the cost of a policy are all about risk.  Renovators not in compliance with the RRP rule increase the risk insurers take when they write insurance policies
• Home owners could use lack of RRP compliance to avoid paying their renovator.  Think of it as blackmail.   If the renovator did not follow RRP requirements, their customers could avoid paying for services by threatening to report non-compliance.  Think this is farfetched?  One contractor told me he knows of another contractor who already had this happen to him.
• Employees could use non-compliance against employers. Whether an employee really is affected by lead or not, it will be very easy for employees to prove their employers put them at risk and or were negligent in protecting them on the job by simply referring to the worker protection training and methods taught to them during the required eight hour certified renovator training class. 
• OSHA could use RRP paperwork to prove non-compliance with its Lead in Construction Standards.   OSHA’s worker protection requirements related to lead are very specific.   Information contained in the required RRP documentation, particularly the renovation checklist and non-certified worker training documentation, could easily be used to show workers were not adequately trained and or protected when working in contained work areas.  A lack of the required documentation could also be used by OSHA to demonstrate negligence by the business. 
• A renovator may want to store RRP documentation for a lot longer than the three years required by the RRP rule.  In regards to lead poisoning, the statute of limitations for children doesn’t start until they are 18 years old.  If a child, rather than their parents, decides to sue a renovator for lead poisoning, having the documentation to prove lead safe work practices will be an importance defense for the renovator.  If the documentation is no longer in existence, or never existed to begin with, proving compliance will be difficult or impossible.

If you are looking for forms and signage to help you with comply with the EPA RRP rule, I recommend you check out what The Lead Paint Forms Store has to offer.  They offer a complete assortment of multi-part carbon forms, signage and checklists to assist you and your employees with RRP compliance