No payment may be made upon any contract for any local improvement until the work is approved and adopted by resolution of the governing body. However, the contracts may permit progress payments, but an amount necessary to complete the improvement shall be retained from the final payment until the contract is executed in full and the public improvement completed to the satisfaction and acceptance of the public corporation or its governing body. Further, if the contractor has furnished the governing body all required records and reports and a final inspection has been made, the governing body shall pay to the contractor interest as set by the governing body at a rate of not less than the Category E rate of interest as established by § 54-3-16 on the amounts retained and on the final payment due the contractor, beginning thirty days after the work under the contract has been completed, as evidenced either by the completion date established by the resolution of the governing body or by the use and occupancy of the public improvement. The interest shall continue until the date when payment is tendered to the contractor, unless delay in payment has been the result of federal participation in the contract, in which event interest may not begin until thirty days after payment by the federal authority involved.

Source: SL 1890, ch 37, art XX, § 5; RPolC 1903, § 1345; RC 1919, § 6351; SL 1931, ch 187; SDC 1939, § 45.1505; SL 1955, ch 205; SL 1963, ch 281; SL 1977, ch 79, § 1; SL 1983, ch 28, § 23; SL 1984, ch 319, § 8; SL 1987, ch 57, § 2.