An Act to require proof of workers' compensation insurance for contractors of public improvements.

Be it enacted by the Legislature of the State of South Dakota:

Section 1. That a NEW SECTION be added to chapter 5-18B:

A contract for a public improvement, as defined in § 5-18A-1, between a contractor and a purchasing agency, as defined in § 5-18A-1, must contain a provision requiring verification that the contractor and all subcontractors on the project have obtained workers' compensation insurance. Any public improvement that is subsidized by a government entity, including through a grant or tax increment financing, is subject to the requirements of this Act, regardless of whether the government entity directly contracts for the public improvement.

Section 2. That a NEW SECTION be added to chapter 5-18B:

The Department of Labor and Regulation and the purchasing agency have authority to investigate and monitor the status of workers' compensation insurance coverage and payment of premiums by any contractor or subcontractor for a public improvement. The contractor must provide, at the request of the department or purchasing agency:

(1) A list of all subcontractors involved with the public improvement;

(2) Payroll records of employees of the contractor and any subcontractors involved with the public improvement; and

(3) Any other information necessary to ensure compliance with the requirements of this Act or to prevent the occurrence of workers' compensation fraud in connection with the public improvement.