Session of 1998
                   
HOUSE BILL No. 2592
         
By Joint Committee on Economic Development
         
12-17
            9             AN ACT relating to workers compensation; allowing certain subcontrac-
10             tors to self insure; amending K.S.A. 1997 Supp. 44-503 and repealing
11             the existing section.
12            
13       Be it enacted by the Legislature of the State of Kansas:
14           Section 1. K.S.A. 1997 Supp. 44-503 is hereby amended to read as
15       follows: 44-503. (a) Where any person (in this section referred to as prin-
16       cipal) undertakes to execute any work which is a part of the principal's
17       trade or business or which the principal has contracted to perform and
18       contracts with any other person (in this section referred to as the con-
19       tractor) for the execution by or under the contractor of the whole or any
20       part of the work undertaken by the principal, the principal shall be liable
21       to pay to any worker employed in the execution of the work any com-
22       pensation under the workers compensation act which the principal would
23       have been liable to pay if that worker had been immediately employed
24       by the principal; and where compensation is claimed from or proceedings
25       are taken against the principal, then in the application of the workers
26       compensation act, references to the principal shall be substituted for ref-
27       erences to the employer, except that the amount of compensation shall
28       be calculated with reference to the earnings of the worker under the
29       employer by whom the worker is immediately employed.
30           (b) Where the principal is liable to pay compensation under this sec-
31       tion, the principal shall be entitled to indemnity from any person who
32       would have been liable to pay compensation to the worker independently
33       of this section, and shall have a cause of action under the workers com-
34       pensation act for indemnification.
35           (c) Nothing in this section shall be construed as preventing a worker
36       from recovering compensation under the workers compensation act from
37       the contractor instead of the principal.
38           (d) This section shall not apply to any case where the accident oc-
39       curred elsewhere than on, in or about the premises on which the principal
40       has undertaken to execute work or which are otherwise under the prin-
41       cipal's control or management, or on, in or about the execution of such
42       work under the principal's control or management.
43           (e) A principal contractor, when sued by a worker of a subcontractor,

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  1       shall have the right to implead the subcontractor.
  2           (f) The principal contractor who pays compensation to a worker of a
  3       subcontractor shall have the right to recover over against the subcontrac-
  4       tor in the action under the workers compensation act if the subcontractor
  5       has been impleaded.
  6           (g) Notwithstanding any other provision of this section, in any case
  7       where the contractor (1) is an employer who employs employees in an
  8       employment to which the act is applicable, or has filed a written statement
  9       of election with the director to accept the provisions of the workers com-
10       pensation act pursuant to subsection (b) of K.S.A. 44-505, and amend-
11       ments thereto, to the extent of such election, and (2) has secured the
12       payment of compensation as required by K.S.A. 44-532, and amendments
13       thereto, for all persons for whom the contractor is required to or elects
14       to secure such compensation, as evidenced by a current certificate of
15       workers compensation insurance, by a certification from the director that
16       the contractor is currently qualified as a self-insurer under that statute,
17       or by a certification from the commissioner of insurance that the con-
18       tractor is maintaining a membership in a qualified group-funded workers
19       compensation pool, then, the principal shall not be liable for any com-
20       pensation under this or any other section of the workers compensation
21       act for any person for which the contractor has secured the payment of
22       compensation which the principal would otherwise be liable for under
23       this section and such person shall have no right to file a claim against or
24       otherwise proceed against the principal for compensation under this or
25       any other section of the workers compensation act. In the event that the
26       payment of compensation is not secured or is otherwise unavailable or in
27       effect, then the principal shall be liable for the payment of compensation.
28       No insurance company shall charge a principal a premium for workers
29       compensation insurance for any liability for which the contractor has se-
30       cured the payment of compensation.
31           (h) (1) For purposes of this section, any individual who is an
32       owner-operator and the exclusive driver of a motor vehicle that is leased
33       or contracted to a licensed motor carrier shall not be considered to be a
34       contractor within the meaning of this section or an employee of the li-
35       censed motor carrier within the meaning of subsection (b) of K.S.A. 44-
36       508, and amendments thereto, and the licensed motor carrier shall not
37       be considered to be a principal within the meaning of this section or an
38       employer of the owner-operator within the meaning of subsection (a) of
39       K.S.A. 44-508, and amendments thereto, if the owner-operator is covered
40       by an occupational accident insurance policy and is not treated under the
41       terms of the lease agreement or contract with the licensed motor carrier
42       as an employee for purposes of the federal insurance contribution act, 26
43       U.S.C. § 3101 et seq., the federal social security act, 42 U.S.C. § 301 et

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  1       seq., the federal unemployment tax act, 26 U.S.C. § 3301 et seq., and the
  2       federal statutes prescribing income tax withholding at the source, 26
  3       U.S.C. § 3401 et seq.
  4           (2) As used in this subsection:
  5           (A) ``Motor vehicle'' means any automobile, truck trailer, semitrailer,
  6       tractor, motor bus or any other self-propelled or motor-driven vehicle
  7       used upon any of the public highways of Kansas for the purpose of trans-
  8       porting persons or property;
  9           (B) ``licensed motor carrier'' means any person, firm, corporation or
10       other business entity that holds a certificate of convenience and necessity,
11       a contract carrier permit, or an interstate license as a common, contract
12       or exempt carrier from the state corporation commission or is required
13       to register motor carrier equipment pursuant to 49 U.S.C. § 11506; and
14           (C) ``owner-operator'' means an individual who is the owner of a sin-
15       gle motor vehicle that is driven exclusively by the owner under a lease
16       agreement or contract with a licensed motor carrier.
17           (i) For purposes of this section, a person who is self employed and
18       performing work to which subsection (a) would apply shall not be con-
19       sidered to be a contractor within the meaning of this section or an em-
20       ployee of any principal within the meaning of this section, if such person
21       is covered by an occupational accident insurance policy.
22           Sec. 2. K.S.A. 1997 Supp. 44-503 is hereby repealed.
23           Sec. 3. This act shall take effect and be in force from and after its
24       publication in the statute book.
25