Relating to workers' compensation insurance coverage and bid bonding requirements for small municipal construction projects for certain municipalities.

HB 875 exempts small municipal construction projects from requiring contractors to have workers' compensation insurance or performance bonds. Specifically, it removes these requirements for projects costing less than 1% of a municipality's most recently adopted budget, defined as a single project at one location within 12 months. Municipalities cannot aggregate multiple projects to qualify under this exemption. The bill applies only to contracts entered into on or after September 1, 2025, and directly affects cities/towns contracting small construction work. This changes existing requirements for local governments managing minor infrastructure projects.