adopting the 19 points because on their own, under the present system, it has been a disaster for someone that works in a textile mill. It has been a disaster in many of the States that have little or no benefits, and it has not served the workers of this Nation.

So, we have to do something and we will do something in this area: I am not surprised that many in business are against this legislation, because anything that is going to give benefits to the workers, the business community is going to be against it. That is nothing new.

Mr. BRAIN. I think, Congressman, I believe-I do not have a chart with me so that I can establish it but I do not believe there are any States who have not improved their workman's compensation system in some way in the last few years, the last 5 years.

Mr. BEARD. Some States have even gone backward, I am informed by my legal counsel.

Mr. BRAIN. Well, I think that is a matter of definition, but I do not want to prolong that. I think basically the thing we see from a small business point of view, from handling the bulk of the workman's compensation throughout the country is that a process such as is proposed in this bill is not evolutionary, it is revolutionary, if you willif I can compare that-in the sense that I believe if improvements are to be made, they need to be made in an evolutionary way, not in a sudden precipitous way because I think in effect that will impose a tremendous burden, particularly on small business people.

Mr. BEARD. I have been here for 6 years, and for 6 years they have talked about coming up to the 19 points. Few States are going to move unless they are forced to move, that is the way they operate out there. Very few States have volunteered to go from 14 points to 19 points. As a matter of fact, some of them have gone the other way.

So, that is the story, those are the facts we are dealing with. Mr. BRAIN. I think in the States I am particularly well acquainted with, in the Middle West, for instance, they have significantly improved their workman's compensation system. I do not know if your counsel agrees with that or not, but I really think that is true. We have significantly improved ours in our State, and I believe that this will come about. I really believe this will come about.

I just again think that one of the significant things is that the answer to every problem is not a Federal system. I believe that the States, while perhaps some of them do not move as fast as we would like, I think to many of us, at times, legislatures do not move as fast as we would like. I think you have to face the fact that none of us get what we want in perfection. I think today we are immeasurably better than we were.

Mr. BEARD. Some people say that the answer to every problem is not the Federal system, except when it is convenient to them as in the case of Chrysler Corp.. and revenue sharing to the States.

Mr. BRAIN. Well, I am not here speaking for them. I am speaking for small business people.

Mr. BEARD. I can get someone in vour chair 5 minutes from now, and he will be saying, "Tremendous, let us go with national standards for workman's compensation." It depends on what hat you wear. Mr. Erlenborn?

Mr. ERLENBORN. Thank you, Mr. Chairman.

Mr. Brain, let me thank you for your testimony. I will say at the outset, I agree with the conclusions that you have reached, and the reasoning behind those conclusions.

I am tempted to give a speech, rather than ask questions. If I lapse into that, please forgive me.

Legislation such as this is based, as you pointed out-maybe in a different way-on an elitist theory, and that is that we in Washington are much smarter than those governors and State legislators, and are able to do a better job, and therefore we should impose our standards on the rest of the States. That is a premise that I do not accept.

Second, not only are we unable to do better, we can prove that by what we have done already. You have pointed out some of the things we have done.

We have a workers' compensation statute, drawn up by the Congress of the United States, for the District of Columbia. You have pointed out some of the things that happened as a result of that, a 500 or 600 percent increase in premiums just since the 1972 amendments.

I suppose some people, looking at your projection of 500 to 1,000 percent increase in the cost of workers' compensation as a result of legislation such as this would say, "Well, now, that is ridiculous." It is not ridiculous when we can show a 600 percent increase in the District of Columbia, caused by the Government.

We had hearings on the District of Columbia's Longshoremen and Harbor Workers' Act experience, and let me just put this in the record because I think it belongs here as well as in those hearings.

If you build a home in the District of Columbia in the range of about $80,000, it costs $5,000 more than if you build that identical home in the State of Virginia or in Maryland, in the immediately adjacent areas-$5,000 more for workers' compensation premiums.

When they built the subway here in the District of Columbia, it cost $1.7 million per mile in claims for workers' compensation. I do not know how much the materials that went into it cost, probably no more than that. But, $1.7 million per mile just for workers' compensation claims.

By the way, some people would say that is because the insurance companies are ripping us off. Actually, the insurance companies that carried that coverage lost money.

Here, in the District, there are about 6,000 Metro employees, 3,000 claims are pending from those 6,000 employees at the present time. Once employees have claims approved, it is almost impossible to get them to go back to work because the benefits are so great; there is no requirement for rehabilitation. All of the incentives are for people to file claims and to stay on compensation, to the extent that the Metro management here decided to do something about it-and the people outside the District may not have read about this. When I tell them this back home, they burst into laughter, they think I have made up a joke. The Metro management in the District is considering putting into effect a system where, if a worker fails to file a claim for 3 months under workers' compensation, his name or her names goes into a hat for a drawing for a colored television set. If they hold off for a whole 6 months, it goes into the hat for a new automobile. Now, they are so desperate to try to make some sense out of a miserable

system that we have imposed upon them, that they are thinking about doing this. This is not a joke, it is a sad commentary on what this Congress can do if you turn us loose in establishing workers' compensation minimum standards.

One other thing, the black lung program devised by this subcommittee, this Congress, back in 1969. We had uncontroverted medical evidence that no more than 8 percent of long-term exposure coal miners ever have the slightest disability from pneumoconiosis, so-called black lung. Yet, with almost every ex-coal miner filing claims and all the widows, about 70 percent of the claims are being approved.

The philosophy in the Department of Labor is to approve every claim they possibly can, sometimes ignoring medical evidence and using instead the affidavit of the widow who said, in her opinion her husband had black lung and therefore she was entitled to compensation. Now, that is what we can do. I am not just speculating what might happen if we took this over. I am telling you what our track record is. With that kind of a track record for anybody to suggest that the Federal Government can do it better is beyond comprehension. How they can reach that conclusion I do not know, it is just to ignore the evidence just completely ignore the evidence.

I want to thank you again for your testimony and for the opportunity of making this speech.

Mr. BRAIN. Thank you, Congressman. I am particularly concerned about what the effect of this would be not on major industries which, I think, can adjust better than medium and small industries, which would have a severe problem.

Thank you very much.

Mr. BEARD. The next witness is a representative of Lawn Sprayers Association of Michigan, Mr. Robert Brown.

Mr. Brown, do you have a prepared statement?

Mr. BROWN. Yes, sir.

Mr. BEARD. That will be incorporated into the record in full, or you may read it, whatever is your pleasure.

Mr. BROWN. Thank you.

Mr. BEARD. Do you have a panel with you?

Mr. BROWN. Gus Kramer is with me, I am representing both of us.

Mr. BEARD. All right, fine; you may proceed.

[The statement presented by Robert E. Brown follows:]

STATEMENT OF LAWN SPRAYERS ASSOCIATION OF MICHIGAN PRESENTED BY ROBERT BROWN, OWNER/OPERATOR, MICHIGAN LAWN SPRAYERS SERVICE

We are here today representing a small but fast growing industry, that of The Professional Lawn Fertilizing Industry. We feel we are being charged exorbitant rates, because we have been put in with a high risk category, that of the Landscape Industry. Landscape workers rate 40th most hazardous of a total of 600 categories.

Professional Lawn Fertilizing or "Lawn Spraying" represents about 20 percent of the total employees in the Landscape category in Michigan. It appears that the Insurance Rating Committee is unwilling to adjust down our rates for fear of loss of revenue. They have shown an ability to single out a small group and raise their rates. One of such groups is the tree trimmers.

The type of work that we do is not near as hazardous as General Landscaping. Landscaping employees operate lawn mowers, hedge trimmers, sidewalk edgers and drive tractors and self propelled mowers. All of this equipment is extremely hazardous. The only power equipment we in the Lawn Fertilizing Business oper

ate is the truck we drive. Truck driving rates are around 4 percent of payroll, whereas, we are being charged 9 percent.

The heaviest work we have to perform is pulling a hose or pushing a spreader across a lawn. The landscaper, however, is manually lifting sod, shrubs, trees, railroad ties, ornamental rocks and shovels dirt.

Landscape employees for the most part are unskilled, nonprofessional help, where as the average lawn fertilizing employee is highly skilled and trained to do his job.

The Lawn Fertilizing Industry in Michigan is closely regulated by the EPA and each Company must be licensed by the State and have certified employees. We must be bonded and insured. Our actions from a safety standpoint are closely observed by the State Licensing Bureau and we can be held responsible for our actions. The Landscape Industry on the other hand does not have to be licensed and does not have to comply with any safety regulations.

Not only is the Landscape employee not certified or regulated he or she has to operate a number of pieces of power equipment that can be hazardous. Learning all the idiosyncrasies of each piece of equipment is a difficult task and most often they are not as versed as they should be. On the other hand, the lawn fertilizing employee only has to learn to operate one or two simple, non-powered, hand propelled pieces of equipment. The degree of risk is much lower.

In closing, I would like to state that the number of claims we have experienced is so small that we feel we should be given a much lower rate. We have made several attempts to get the insurance companies to voluntarily make their adjustment, but have as yet been unsuccessful. The State has made it mandatory for us to have Workman's Comp Insurance and it appears the insurance people can charge any rate they please. We are hoping that this trip to Washington can help our plight and we would appreciate any assistance we can get.

STATEMENT OF ROBERT E. BROWN, OWNER/OPERATOR, MICHIGAN LAWN SPRAYERS SERVICE, REPRESENTING THE LAWN SPRAYERS ASSOCIATION OF MICHIGAN

Mr. BROWN. Thank you very much.

We represent the Lawn Sprayers Association of Michigan, some 60 firms, all small businesses, and we are concerned with rates of premiums. Our premiums have increased from 6 percent to 9 percent in the last 3 years. We feel that the fees are getting exorbitant. Our one concern is that the classification we are put into is not a proper classification.

We are here today representing a fast growing industry, that of the Professional Lawn Spray-Fertilizing Industry. We feel we are being charged exorbitant rates because we have been put in with a high-risk category, that of the landscape industry. Landscape workers rate 40th most hazardous in a total of 600 categories.

Professional lawn fertilizing, or lawn spraying, represents about 20 percent of the total employees in the landscape category in Michigan. It appears that the Insurance Rating Committee is unwilling to adjust down our rates for fear of loss of revenue. They have shown an ability to single out a small group and raise the rates. One such group is tree trimmers.

The type of work that we do is not near as hazardous as general landscaping. Landscaping employees operate lawnmowers, hedge trimmers, sidewalk edgers, drive tractors and self-propelled mowers. All of this equipment is extremely hazardous. The only power equipment we in the lawn fertilizing business operate is trucks we drive. Truck drivers' rates are around 4 percent of payroll, whereas we are being charged 9 percent. The heaviest work we have to perform is

pulling a hose or pushing a spreader across the lawn. The landscaper, however, is manually lifting sod, shrubs, trees, railroad ties, ornamental rocks, and shovels dirt.

Landscape employees, for the most part, are unskilled, nonprofessional help, whereas the average lawn fertilizing employee is highly skilled and trained to do his job.

The lawn fertilizing industry in Michigan is closely regulated by the EPA and each company must be licensed by the State and have certified employees. We must be bonded and insured. Our actions from safety standpoint are closely observed by the State Licensing Bureau. We can be held responsible for our actions. The landscape industry, on the other hand, does not have to be licensed, does not have to comply with any safety regulations.

Not only is the landscape employee not certified or regulated, he or she has to operate a number of pieces of power equipment that can be hazardous. Learning all the idiosyncracies of each piece of equipment is a difficult task, and most often they are not versed as well as they should be. On the other hand, the fertilizing employee only has to learn to operate one or two simple, nonpowered, hand-propelled pieces of equipment. The degree of risk is much lower.

In closing, I would like to state that the number of claims we have experienced is so small that we feel we should be given a much lower rate. We have made several attempts to get the insurance companies to voluntarily make their adjustment, but have as yet been unsuccessful. The State has made it mandatory for us to have Workman's Compensation Insurance and it appears the insurance people can charge any rate they please. We are hoping that this trip to Washington can help our plight and would appreciate any assistance we can get.

It appears that the State allows the insurance companies to set premiums and set categories, and assign category titles, rather than, say, lettering categories A, B, C and D. Our industry fits the title "landscaping" better than any other title, so we are stuck with the landscaping rating.

I hope that whatever you do on this bill, if there is a rating system, that the system be more flexible so that a small industry, such as ours, will be able to get into an appropriate rating, rather than a rating that has a name attached to it that sounds appropriate. Thank you very much.

Mr. BEARD. Thank you very much for your testimony.

In your opinion, you are placed in the wrong category. Do you have the right of appeal?

Mr. BROWN. We do. We did a test appeal with one company on two occasions and were denied the appeal because lawn fertilizing sounds like the landscaping category. It sounds like a good place to put us, so that is where we are.

Mr. BEARD. Well, maybe if there were a rating system it would make distinction between your job and that of the other workers in the

same area.

Mr. BROWN. I think one of the problems is, the insurance companies are the ones who do the rating and decide what classification any industry qualifies for. The insurance company has the ability to take a