To enact sections 9.51 to 9.53 of the Revised Code to require public improvement or service contracts between a state agency and a contractor to contain a provision requiring the contractor to use an electronic employment verification system.

Section 1. That sections 9.51, 9.52, and 9.53 be enacted to read as follows:

Sec. 9.51.  As used in this section and sections 9.52 and 9.53 of the Revised Code:

(A) "Bidder" means a person or entity who submits a bid to a state agency to perform work under a public improvement or service contract.

(B) "Contractor" means any person or entity who directs, supervises, or has responsibility for the means, method, and manner of implementing a public improvement or service contract, and any subcontractor who performs specialized work on the contractor's behalf regardless of the subcontractor's tier.

(C) "Electronic employment verification system" means any electronic system the federal government operates to assist an employer in verifying the identity and legal working status of new or current employees.

(D) "Public improvement contract" means any contract that is financed in any manner by a state agency, and that is awarded by a state agency for the construction, alteration, or repair of any public building, public highway, or other public improvement.

(E) "Service contract" means a contract that is financed in any manner by a state agency, and that is awarded by a state agency for labor, time, or effort, by a person or persons, not involving the delivery of a specific end product other than a report.

(F) "State agency" means any organized body, office, agency, institution, or other entity established by the laws of the state for the exercise of any function of state government.

Sec. 9.52. (A) The director of commerce shall select from the available electronic employment verification systems a system to be used by contractors entering into a public improvement or service contract with a state agency.

(B) Each state agency desiring to enter into a public improvement or service contract shall include both of the following non-negotiable terms in the contract:

(1) A provision requiring the contractor who is awarded the contract to use the electronic employment verification system selected by the director pursuant to division (A) of this section with respect to both of the following types of employees of the contractor:

(a) All individuals hired during the contract term by the contractor to perform duties within this state;

(b) All individuals assigned by the contractor to perform work within this state on the public improvement or service contract.

(2) A provision that the state agency shall cancel the contract if, after awarding the contract, the contractor does not use the electronic employment verification system as this section requires.

(C) Notwithstanding any provision of the Revised Code to the contrary, no state agency shall award a public improvement or service contract to a bidder unless the contract contains terms consistent with division (B) of this section. Any contract entered into in violation of this section is void.

(D) No provision in this section shall be construed to supersede any other requirements that apply to the contract selection process by a state agency.

Sec. 9.53.  (A) The office of internal auditing shall conduct periodic audits of state agencies to ensure that state agencies are including within their public improvement and service contracts a provision requiring use of an electronic employment verification system. Audits shall be conducted in the manner as prescribed in sections 126.45 to 126.48 of the Revised Code.

(B) Each state agency found in violation of division (B) or (C) of section 9.52 of the Revised Code shall be fined one thousand dollars per violation.

(C) All money collected pursuant to division (B) of this section shall be paid into the state treasury to the credit of the employment compliance fund, which is hereby created. The office of internal auditing within the office of budget and management shall use the money in the fund for paying the expenses associated with the performance of audits pursuant to division (A) of this section.

Section 2. The provisions of this act shall apply to contracts entered into or renewed beginning one hundred fifty days after the effective date of this act.

Section 3. Within ninety days after the effective date of this act, the director of commerce shall select the electronic employment verification system as required in division (A) of section 9.52 of the Revised Code. During the selection process, the Director shall collaborate with the business community to determine which currently available verification system is the most efficient, accurate, and user-friendly.