An Act concerning workers compensation coverage of motor vehicle owner-operators; amending K.S.A. 1995 Supp. 44-503 and repealing the existing section.

Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 1995 Supp. 44-503 is hereby amended to read as follows: 44-503. (a) Where any person (in this section referred to as prin- cipal) undertakes to execute any work which is a part of the principal's trade or business or which the principal has contracted to perform and contracts with any other person (in this section referred to as the con- tractor) for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any worker employed in the execution of the work any com- pensation under the workers compensation act which the principal would have been liable to pay if that worker had been immediately employed by the principal; and where compensation is claimed from or proceedings are taken against the principal, then in the application of the workers compensation act, references to the principal shall be substituted for ref- erences to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the worker under the employer by whom the worker is immediately employed.

(b) Where the principal is liable to pay compensation under this sec- tion, the principal shall be entitled to indemnity from any person who would have been liable to pay compensation to the worker independently of this section, and shall have a cause of action under the workers com- pensation act for indemnification.

(c) Nothing in this section shall be construed as preventing a worker from recovering compensation under the workers compensation act from the contractor instead of the principal.

(d) This section shall not apply to any case where the accident oc- curred elsewhere than on, in or about the premises on which the principal has undertaken to execute work or which are otherwise under the prin- cipal's control or management, or on, in or about the execution of such work under the principal's control or management.

(e) A principal contractor, when sued by a worker of a subcontractor, shall have the right to implead the subcontractor.

(f) The principal contractor who pays compensation to a worker of a subcontractor shall have the right to recover over against the subcontrac- tor in the action under the workers compensation act if the subcontractor has been impleaded.

(g) Notwithstanding any other provision of this section, in any case where the contractor (1) is an employer who employs employees in an employment to which the act is applicable, or has filed a written statement of election with the director to accept the provisions of the workers com- pensation act pursuant to subsection (b) of K.S.A. 44-505, and amend- ments thereto, to the extent of such election, and (2) has secured the payment of compensation as required by K.S.A. 44-532, and amendments thereto, for all persons for whom the contractor is required to or elects to secure such compensation, as evidenced by a current certificate of workers compensation insurance, by a certification from the director that the contractor is currently qualified as a self-insurer under that statute, or by a certification from the commissioner of insurance that the con- tractor is maintaining a membership in a qualified group-funded workers compensation pool, then, the principal shall not be liable for any com- pensation under this or any other section of the workers compensation act for any person for which the contractor has secured the payment of compensation which the principal would otherwise be liable for under this section and such person shall have no right to file a claim against or otherwise proceed against the principal for compensation under this or any other section of the workers compensation act. In the event that the payment of compensation is not secured or is otherwise unavailable or in effect, then the principal shall be liable for the payment of compensation. No insurance company shall charge a principal a premium for workers compensation insurance for any liability for which the contractor has se- cured the payment of compensation.

(h) (1) For purposes of this section, any individual who is an owner- operator and the exclusive driver of a motor vehicle that is leased or contracted to a licensed motor carrier shall not be considered to be a contractor within the meaning of this section or an employee of the li- censed motor carrier within the meaning of subsection (b) of K.S.A. 44- 508, and amendments thereto, and the licensed motor carrier shall not be considered to be a principal within the meaning of this section or an employer of the owner-operator within the meaning of subsection (a) of K.S.A. 44-508, and amendments thereto, if the owner-operator is covered by an occupational accident insurance policy and is not treated under the terms of the lease agreement or contract with the licensed motor carrier as an employee for purposes of the federal insurance contribution act, 26 U.S.C. (section) 3101 et seq., the federal social security act, 42 U.S.C. (section) 301 et seq., the federal unemployment tax act, 26 U.S.C. (section) 3301 et seq., and the federal statutes prescribing income tax withholding at the source, 26 U.S.C. (section) 3401 et seq.

(2) As used in this subsection:

(A) ``Motor vehicle'' means any automobile, truck trailer, semitrailer, tractor, motor bus or any other self-propelled or motor-driven vehicle used upon any of the public highways of Kansas for the purpose of trans- porting persons or property;

(B) ``licensed motor carrier'' means any person, firm, corporation or other business entity that holds a certificate of convenience and necessity, a contract carrier permit, or an interstate license as a common, contract or exempt carrier from the state corporation commission or is required to register motor carrier equipment pursuant to 49 U.S.C. (section) 11506; and

(C) ``owner-operator'' means an individual who is the owner of a sin- gle motor vehicle that is driven exclusively by the owner under a lease agreement or contract with a licensed motor carrier.

Sec. 2. K.S.A. 1995 Supp. 44-503 is hereby repealed.

Sec. 3. This act shall take effect and be in force from and after its publication in the statute book.

Approved February 8, 1996.