Brief⁽¹⁾

H.B. 2591 would amend the Workers Compensation Act as follows:

• delete the provisions enacted in 1997 H.B. 2011 that requires workers compensation coverage for self-employed subcontractors performing work for a contractor;



• prohibit the assessment of any fine against a self-employed subcontractor who failed to secure workers compensation coverage during the time frame in which the requirement for self-employed subcontractors was in effect;



• amend a section of the Act, K.S.A. 44-503, to provide that the term worker does not include a self-employed subcontractor;



• if no dependents are available in a death benefit situation, a lump sum payment of $25,000 will be made to the legal heirs of the employee; any payment under this provision will not escheat to the state (no payment is required if the employer has procured a life insurance policy for the employee in the amount of $18,500);



• raise the funeral expenses amount from the current $4,300 to $5,000; and



• if there are no dependents and no legal heirs, the $18,500 amount (current law) will be paid into the Workers Compensation Fund.

Background

The bill was recommended by the 1997 interim Joint Committee on Economic Development. The report of the Joint Committee can be found in the Committee Reports to the 1998 Kansas Legislature.

At the hearings on the bill, those appearing in support of the measure included: a state senator, an official with the Kansas Association of Insurance Agents, a representative of Dakota, Inc., a representative from Custom Concrete Cutting, an official with the National Federation of Independent Business, and several self-employed subcontractors. Written comments in support of the bill were received from the owner of Louis Droge Construction and a member of Bideau Law Offices.

Opposition to passage of the bill was expressed on behalf of the Kansas Building Industry Association, KanBuild, the Topeka Home Builders Association, and Star Lumber and Supply Company.

Comments and concerns regarding the impact of the 1997 provisions as well as other concerns were brought before the Committee by conferees with the Kansas Chamber of Commerce and Industry and the Kansas Independent Oil and Gas Association.

The Director of Workers Compensation addressed the Committee on behalf of the Workers Compensation Advisory Council to explain pertinent parts of the Workers Compensation Act. Officials with the Insurance Department addressed the Committee to answer several requests for information.

A subcommittee on the bill was appointed to focus on H.B. 2591. Open discussions on the bill were held over a period of several days. The amended bill incorporates a recommendation of the subcommittee. Another recommendation to establish a task force to review the several issues involved was passed by the Committee and will be drafted separately.

The death benefit provisions are from 1998 H.B. 2982.

The Senate Committee deleted the House Committee of the Whole amendment.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.