A. The morale, welfare and recreational fund is established as a state fund for morale, welfare and recreational activities and support personnel for the national guard. Support personnel are employees of the fund and not of this state. The adjutant general shall administer the fund subject to approval of the governor. Monies shall be deposited, pursuant to sections 35-146 and 35-147, in the fund from the following sources:

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1. Monies transferred by the director of the department of transportation pursuant to section 28-2415.

2. Monies deposited pursuant to section 26-102, subsection B, paragraph 8 or monies generated from recycling activities consistent with federal recycling policies.

3. Gifts, donations and contributions to the department accepted by the adjutant general.

4. Any other nonappropriated monies received by the national guard from state and federal revenue producing military activities relating to morale, welfare and recreation.

B. Monies in the fund are from nonappropriated sources, are not subject to legislative appropriation and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. The adjutant general may establish bank accounts for monies withdrawn from the fund to administer the operations of the morale, welfare and recreational programs.

C. On notice from the adjutant general, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

D. Expenditures of monies in the fund are subject to rules adopted by the department of emergency and military affairs and are exempt from the procurement code requirements of title 41, chapter 23.