1. If a judicial or administrative proceeding has been initiated, by or on behalf of a person or other entity from outside of this state, that could adversely affect or place in jeopardy a water right or supply of water within this state, a local government may submit a request to the Director of the State Department of Conservation and Natural Resources for a special distribution by the Interim Finance Committee from the Contingency Account. 2. The Director of the State Department of Conservation and Natural Resources shall consider the request, may require from the requester such additional information as it deems appropriate, and shall, if the Director finds that a special distribution should be made, request approval from the State Board of Examiners and amount of the distribution to the Interim Finance Committee for its independent evaluation and action. The Interim Finance Committee is not bound to follow the recommendation of the State Board of Examiners or the Director of the State Department of Conservation and Natural Resources. 3. The State Board of Examiners and the Director of the State Department of Conservation and Natural Resources shall transmit its recommendation to the Director of the Legislative Counsel Bureau, who shall notify the Chair of the Interim Finance Committee. The Chair shall call a meeting of the Committee to consider the recommendation. 4. The Interim Finance Committee may make a special distribution from the Contingency Account if it finds that: (a) The grant will be expended to assist local governments in the defense and protection of water rights and supplies of water, on behalf of the people of this state, from any challenge or encroachment originating outside of this state; and (b) The requester will provide an amount of money, at least equal to the grant, for the same purpose. 5. The recipient of a special distribution made pursuant to this section: (a) Shall provide an amount of money at least equal to the allocation which must be used for the same purpose. (b) May, in accomplishing the public purpose set forth in paragraph (a) of subsection 4, use the money to employ legal counsel and other consultants necessary to participate in or negotiate the settlement of judicial or administrative proceedings concerning water rights or supplies of water. 6. The total of the special distributions made by the Interim Finance Committee pursuant to this section must not exceed $250,000 during each biennium. Any money distributed pursuant to this section that is not expended for the purpose for which it was distributed reverts to the Contingency Account at such time as is specified by the Interim Finance Committee. 7. As used in this section, local government means a political subdivision of this state, including, without limitation, a city, county, irrigation district, water district or water conservancy district.
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