A. The military installation fund is established consisting of revenues made available to the fund from any lawful source. The adjutant general shall administer the fund. 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. The fund is exempt from the provisions of section 35-190 relating to lapsing of appropriations.

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B. Monies in the fund are continuously appropriated for the purposes of this section.

C. The department, in conjunction with the military affairs commission established by section 26-261, shall adopt by rule procedures for receiving and evaluating applications and awarding the monies as provided by subsection G of this section. If applications for monies exceed the amount available in the fund, the department may request applicants to reduce the amount of the applications or deny or award reduced amounts.

D. The department shall receive each application for fund monies and shall forward each application to the military affairs commission. The military affairs commission shall review each application and recommend to the department both of the following:

1. Each applicant that should be awarded monies from the fund.

2. The dollar amount that each applicant pursuant to paragraph 1 of this subsection should be awarded from the fund.

E. The department shall consider the military affairs commission’s recommendations and shall decide how the monies in the fund shall be awarded among the applicants. The department, after reviewing the recommendations by the military affairs commission, shall make the monies in the fund available for the purpose of military installation preservation and enhancement projects. Except as provided in subsection F of this section, after the department makes an award decision the department shall award the monies.

F. If the department does not comply with the military affairs commission’s recommendation for the awards, within five days after the department’s decision the department shall report in writing to the military affairs commission, the president of the senate, the speaker of the house of representatives and the governor. The report shall include the award decision of the department and the recommendation of the military affairs commission. The department shall not distribute monies from the fund to the applicants for at least sixty days after the report is received.

G. The department shall:

1. Award eighty percent of the monies in the fund for the following purposes, except that up to twenty percent of this amount may be awarded to cities, towns and counties for the purpose of acquiring private land for the purposes prescribed in paragraph 2 of this subsection:

(a) Acquisition of private property for the purpose of preserving a military installation.

(b) Acquisition of real estate and rights to real estate and otherwise preserving real estate from development or mitigating impacts on development in high noise or accident potential zones as defined in section 28-8461 and in areas as required to support a military installation.

(c) Acquisition of real estate, property rights and related infrastructure that are vital to the preservation or enhancement of a military installation.

(d) Structural renovations or construction of building modifications or improvements that mitigate or attenuate impacts in high noise or accident potential zones.

(e) Removal of structures or improvements that are necessary for acquisition of private property for the purpose of preserving a military installation.

(f) Management of acquired property that is necessary to preserve and enhance military missions and military installations.

2. Except as provided by subsection M of this section, award twenty percent of the monies in the fund to cities, towns and counties for:

(a) Military installation preservation and enhancement projects or analytical reports or studies that are requested by federal or state agencies or military facilities in this state.

(b) Investment in or construction of capital improvements or infrastructure for the purpose of preserving a military installation.

(c) Structural renovations or construction of building modifications or improvements that mitigate or attenuate impacts in high noise or accident potential zones.

(d) Removal of structures or improvements that are necessary for acquisition of private property for the purpose of preserving a military installation.

(e) Management of acquired property that is necessary to preserve and enhance military missions and military installations.

H. Before awarding monies pursuant to subsection G of this section, the department shall submit a report of the proposed awards to the joint committee on capital review for review. The legislature shall review the distribution formula prescribed in subsection G of this section at least once every four years.

I. Monies in the fund may be awarded for debt service on bonds issued by a political subdivision for the purpose of acquisition of private property for the purpose of preserving a military airport or ancillary military facility as defined in section 28-8461 if the land acquisition occurs after December 31, 2004.

J. The department shall annually report the awards made pursuant to this section. The report shall be in writing and shall be sent to the president of the senate, the speaker of the house of representatives and the governor. The department shall send a copy of this report to the secretary of state.

K. The department may:

1. Transfer any real estate, property rights and related infrastructure that are acquired pursuant to this section to any other governmental agency for the purposes of preserving or enhancing military installations in this state.

2. Sell or otherwise dispose of any real estate, property rights and related infrastructure acquired pursuant to this section. The conveyance shall be made to the highest and most responsible bidder at a public sale held for that purpose.

3. After establishing, laying out or substantially completing an improvement to real property, convey the real property or any interest in the real property that the department determines is not necessary, useful or convenient for the use of the improvement by the department. The conveyance shall be made to the highest and most responsible bidder at a public sale held for that purpose.

4. Lease or sublease at fair rental value any real estate or related infrastructure that is acquired pursuant to this section. A lease or sublease that is granted pursuant to this paragraph is exempt from section 41-2752.

L. Before any conveyance, lease or sublease pursuant to subsection K, paragraph 2, 3 or 4 of this section, the department shall ensure that the use or development of any real estate, property rights and related infrastructure, real property or improvements to real property complies with section 28-8481.

M. If monies remain after the award of monies pursuant to subsection G, paragraph 2 of this section, the department may use the remaining monies and any monies received pursuant to subsection K, paragraphs 2, 3 and 4 of this section for either of the following:

1. The purposes prescribed in subsection G, paragraph 1 of this section.

2. Projects or studies necessary to preserve or enhance military missions and military installments in this state.

N. Any agency of this state may accept title to and manage real estate, property rights and related infrastructure that are acquired pursuant to this section.

O. For the purposes of this section:

1. "Department" means the department of emergency and military affairs.

2. "Military installation" has the same meaning prescribed in section 26-261.