52-04-06.1. Construction project risk protection

52-04-06.1. Construction project risk protection

1. Any project in this state with an estimated construction cost of at least fifty million

dollars which is planned to be completed or discontinued within a period of seven

years is subject to this section. The general or prime contractor, or the owner in those

situations in which there is no general or prime contractor, of a project that meets the

criteria specified under this section shall post the bond or irrevocable letter of credit

required in subsection 2 before commencement of construction work on the project

and shall report annually, within thirty days of the anniversary date the project

becomes subject to this section, to the bureau any change in the construction costs of

projects subject to this section.

2. If the bureau determines that the project is or will be within the criteria stated by this

section, the bureau shall require the general or prime contractor, or the owner in those

situations in which there is no general or prime contractor, for whom the project is

being constructed, on behalf of each employing unit, excluding design and engineering

firms, to post a bond executed by a surety company authorized to do business in the

state or an irrevocable letter of credit from a federal deposit insurance corporation

insured state or nationally chartered bank authorized to do business in the state which

will insure payment for all benefits claimed by employees of all employing units

working on the project. The bureau may adjust the amount of bond or irrevocable letter

of credit required under this subsection to cover any significant increases or decreases

in project construction costs reported by the general or prime contractor or owner. If

any general or prime contractor or owner fails to comply with this subsection, the

bureau may apply to any court of this state within the jurisdiction in which the

contractor or owner is found, located, or transacts business to obtain an order to

compel the general or prime contractor or owner to post the required bond or

irrevocable letter of credit required under this subsection. Any failure to obey an order

of the court may be punished by the court as a contempt of court.

3. The amount of bond or irrevocable letter of credit must be the difference between the

estimated benefits paid and estimated contributions, multiplied by fifty percent. The

estimation of contributions expected must be made as follows: multiply the current

year's positive employer minimum rate times the current year's taxable wage base

times the estimated number of employees on the project using figures from project

plans, times the number of years between the start date and the estimated completion

date of the project. The estimation of benefits paid must be made as follows: multiply

the estimated number of employees, from the project plans, times the current year's

maximum weekly benefit amount times the duration, twelve weeks for the first year

and twelve weeks for subsequent years, times the number of years between the start

date and the completion date rounded up to the next whole number.

4. Thirty months after the completion or discontinuance of the project, the bureau shall

determine the total benefits paid to employees of the employing unit or units. If the

total amount paid to the employees of the unit or units exceeds the total amount of

contributions collected from the units under the North Dakota unemployment

compensation law, the general or prime contractor, or the owner in those situations in

which there is no general or prime contractor, shall pay the total amount of benefits

paid to the employees of the units which exceeded the total amount of contributions

collected from the unit or units. If the general or prime contractor, or the owner in those

situations in which there is no general or prime contractor, does not pay the payment

contractor, or the owner in those situations in

which there is no general or prime contractor, shall pay the total amount of benefits

paid to the employees of the units which exceeded the total amount of contributions

collected from the unit or units. If the general or prime contractor, or the owner in those

situations in which there is no general or prime contractor, does not pay the payment

requirement, job service North Dakota shall collect the payment from the surety

company that executed the surety bond or bank that issued the irrevocable letter of

credit. The general or prime contractor, or the owner in those situations in which there

is no general or prime contractor, shall remain liable for any amount of benefits paid to

the employees working on the project which exceeds the amount of contributions

collected from the employers who worked on the project which is not covered by the

amount of the bond or irrevocable letter of credit.

5. For the purposes of this section, a project includes all entities that employ or contract

for the employment of, or is employing directly or indirectly through agents,

independent contractors, or subcontractors, excluding design and engineering firms.

Each employing unit, whether contractor, subcontractor, or otherwise, involved in the

project is subject to this section, excluding design and engineering firms.

6. Each employing unit having employees working on a project subject to this section,

excluding design and engineering firms, shall maintain separate records for all

employment on the project showing each individual's name, social security number,

wages paid, and the dates the wages were paid. The employers shall submit separate

reports from other employment subject to the North Dakota unemployment

compensation law under a separate reporting account established for the project.

7. This section applies to projects for which bids are let after August 1, 2001.

8. The determination of whether a project is subject to this section must be made in the

same manner as provided for in section 52-04-17.

9. This section does not apply to any project in which the state is the owner or contractor.