1.  Authorization.  The legislative body of a municipality may authorize its municipal officers or their designee to enter into an agreement, not financed by the State, with the commissioner for the purpose of providing job services or job service facilities, or both.  

2.  Liability of the State.  Notwithstanding any other provision of law or agreement to the contrary, for the purposes of this section, the municipality shall be considered an agent of the State and the municipal officials and employees shall be considered to be acting on behalf of the State in its official capacity. The State shall indemnify, hold harmless and, with the consent of the municipality or its officials or employees, defend the municipality and its officials and employees against any claim which arises out of an act or omission occuring within the course or scope of employment for purposes of performing the duties within the purview of this section. If the defense of the municipality or its officials or employees creates a conflict of interest between the State and the municipality, official or employee, the State need not assume the defense; however, the State shall be liable for reasonable attorney's fees and court costs of the municipality, official or employee.