5-113. Disposition of revenues and monies; funds; committee

A. All revenues derived from permittees, permits and licenses as provided by this article shall be deposited, pursuant to sections 35-146 and 35-147, in the racing regulation fund established by section 5-113.01.  The commission shall further allocate all monies deposited in the Arizona breeders' award fund pursuant to this subsection to support incentives as authorized by subsection F of this section for thoroughbred and quarter horse breeds only.

B. The Arizona county fairs racing betterment fund is established under the jurisdiction of the department. The department shall distribute monies from the fund to the county fair association or county fair racing association of each county conducting a county fair racing meeting in a proportion that the department deems necessary for the promotion and betterment of county fair racing meetings.  All expenditures from the fund shall be made on claims approved by the department. In order to be eligible for distributions from the fund, a county fair association must provide the department with an annual certification in the form required by the department supporting expenditures made from the fund.  Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.

C. The county fairs livestock and agriculture promotion fund is established under the control of the governor and shall be used for the purpose of promoting the livestock and agricultural resources of the state and for the purpose of conducting an annual Arizona national livestock fair by the Arizona exposition and state fair board to further promote livestock resources.  The direct expenses less receipts of the livestock fair shall be paid from this fund, but this payment shall not exceed thirty percent of the receipts of the fund for the preceding fiscal year. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.  All expenditures from the fund shall be made on claims approved by the governor, as recommended by the livestock and agriculture committee, for the promotion and betterment of the livestock and agricultural resources of this state. The livestock and agriculture committee is established and shall be composed of the following members, at least three of whom are from counties that have a population of less than five hundred thousand persons, appointed by the governor:

1. Three members representing county fairs.

2. One member representing Arizona livestock fairs.

3. One member representing the university of Arizona college of agriculture.

4. One member representing the livestock industry.

5. One member representing the farming industry.

6. One member representing the governor's office.

7. One member representing the Arizona state fair conducted by the Arizona exposition and state fair board.

8. One member representing the general public.

D. The governor shall appoint a chairman from the members.  Terms of members shall be four years.

E. Members of the committee are not eligible to receive compensation but are eligible to receive reimbursement for expenses pursuant to title 38, chapter 4, article 2.

F. The Arizona breeders' award fund is established under the jurisdiction of the department. The department shall distribute monies from the fund to the breeder, or the breeder's heirs, devisees or successors, of every winning horse or greyhound foaled or whelped in this state, as defined by section 5-114, in a manner and in an amount established by rules of the commission to protect the integrity of the racing industry and promote, improve and advance the quality of race horse and greyhound breeding within this state. The department may contract with a breeders' association to provide data, statistics and other information necessary to enable the department to carry out the purposes of this subsection.  Persons who are not eligible to be licensed under section 5-107.01 or persons who have been refused licenses under section 5-108 are not eligible to participate in the Arizona greyhound breeders' award fund. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. For the purposes of this subsection, "breeder" means the owner or lessee of the dam of the animal at the time the animal was foaled or whelped.

G. The Arizona stallion award fund is established under the jurisdiction of the department to promote, improve and advance the quality of stallions in this state. The department shall distribute monies from the fund to the owner or lessee, or the owner's or lessee's heirs, devisees or successors, of every Arizona stallion whose certified Arizona bred offspring, as prescribed in section 5-114, finishes first, second or third in an eligible race in this state. The department may contract with a breeders' association to provide data, statistics and other information necessary to enable the department to carry out the purposes of this subsection.  Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. The commission shall adopt rules pursuant to title 41, chapter 6 to carry out the purposes of this subsection. The rules shall prescribe at a minimum:

1. The manner and procedure for distribution from the fund, including eligibility requirements for owners and lessees.

2. Subject to availability of monies in the fund, the amount to be awarded.

3. The requirements for a stallion registered with the jockey club, Lexington, Kentucky or with the American quarter horse association, Amarillo, Texas to be certified as an Arizona stallion.

4. The types and requirements of races for which an award may be made.

H. The retired racehorse adoption fund is established. The department shall administer the fund.  All revenues derived from retired racehorse adoption surcharges collected pursuant to section 5-104, subsection G shall be deposited, pursuant to sections 35-146 and 35-147, in the fund. The fund also consists of any monies contributed to the fund by a nonprofit organization pursuant to subsection K of this section.  The department shall distribute monies from the fund to provide financial assistance to nonprofit enterprises approved by the commission to promote the adoption of retired racehorses pursuant to section 5-104, subsection G in a manner and in an amount established by rules of the commission. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.

I. The county fair racing fund is established. The department shall administer the fund. Monies in the fund are continuously appropriated.  The department shall use fund monies for the administration of county fair racing. Any monies remaining unspent in the fund at the end of the fiscal year in excess of $75,000 shall revert to the state general fund.

J. The agricultural consulting and training trust fund is established for the exclusive purpose of implementing, continuing and supporting the agricultural consulting and training program established by section 3-109.01. The director of the Arizona department of agriculture shall administer the trust fund as trustee. The state treasurer shall accept, separately account for and hold in trust any monies deposited in the state treasury, which are considered to be trust monies as defined in section 35-310 and which shall not be commingled with any other monies in the state treasury except for investment purposes.  On notice from the director, the state treasurer shall invest and divest any trust fund monies deposited in the state treasury as provided by sections 35-313 and 35-314.03, and monies earned from investment shall be credited to the trust fund. The beneficiary of the trust is the agricultural consulting and training program established by section 3-109.01. Surplus monies, including balances remaining in the trust fund at the end of a fiscal year, do not revert to the state general fund.

K. One percent of the in-state handle, none of which shall come from the amount paid to bettors, shall be allocated to the department on a monthly basis for distribution to a nonprofit organization that represents a majority of the horse breeders in this state, that maintains a financial bond and that has previously contracted with the department to provide data, statistics and other information. The nonprofit organization that receives monies pursuant to this subsection shall establish a separate fund for the receipt of these monies that shall be designated as the Arizona horse breeders' fund. The nonprofit organization shall add monies to purses and provide purse awards for the Arizona bred horses that finish in first, second or third place in races held in this state, provide awards to the breeders, owners or lessees or the breeders', owners' or lessees' heirs, devisees or successors, of the dams and sires whose certified Arizona bred offspring finish in first, second or third place in races held in this state and contribute not more than $25,000 of these monies each year to the retired racehorse adoption fund established by subsection H of this section. The nonprofit organization may spend a portion of these monies for administrative costs.  For the purposes of this subsection, the breeder of a thoroughbred horse shall be considered the owner of the broodmare at the time that the foal is dropped.  The nonprofit organization shall submit an annual report to the governor, the president of the senate and the speaker of the house of representatives that provides a detailed summary of the monies distributed pursuant to this subsection, including the amount spent for administrative costs. The nonprofit organization shall provide a copy of this report to the commission and the secretary of state. For the purposes of this subsection, "in-state handle" means the total amount of monies contributed on live races in this state to all pari-mutuel pools by bettors plus the total amount of monies contributed by bettors in this state on simulcast races that originate outside this state.