Require local governments to fund capital reserve accounts before receiving certain grants and loans

This bill requires local governments in Montana to establish and fund a capital reserve account before they can receive certain grants and loans for infrastructure projects. The reserve account must be funded with 10% of water-related fees or $5 per acre-foot of water storage capacity for dams, and funds can only be used for projects costing at least $50,000. The bill also introduces a priority system where projects with higher local financial contributions receive preference when awarding assistance from renewable resource and coal endowment programs. These changes directly affect counties, cities, irrigation districts, and other local entities seeking state funding for water and infrastructure improvements.