(1) There is hereby created in the state treasury the principal development scholarship fund, referred to in this section as the "fund", that shall consist of any moneys that may be credited to the fund pursuant to subsection (2) of this section. The moneys in the fund shall be subject to annual appropriation by the general assembly for the direct and indirect costs associated with the implementation of this article. Any moneys in the fund not expended for the purpose of this article may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of moneys in the fund shall be credited to the fund. Any unexpended and unencumbered moneys remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be credited or transferred to the general fund or another fund.

(2) The department is authorized to accept gifts, grants, or donations from any public or private entity to carry out the purposes of this article, subject to the terms and conditions under which given; except that the department shall not accept a gift, grant, or donation if the conditions attached thereto require the use or expenditure thereof in a manner contrary to law. The department shall transmit to the state treasurer any gifts, grants, or donations received pursuant to this subsection (2), and the state treasurer shall credit the same to the fund.

(3) The department may expend up to one percent of the moneys annually appropriated from the fund to offset the costs incurred in implementing this article.