(A) There is hereby created in the state treasury the Ohio fairs fund. The director of agriculture shall distribute money in the fund annually, on or before the first day of March, as follows:

1. (1) To each county agricultural society and to each independent agricultural society conducting an annual fair, twelve per cent of the total money in the Ohio fairs fund, to be allocated for general operations;
2. (2) To the Ohio expositions commission, the sum of one hundred twenty thousand dollars annually, to be divided equally as purse money among four stake races for two-year-old and three-year-old colts and for four stake races for two-year-old and three-year-old fillies at each gait of trotting and pacing; provided, that five thousand dollars and all entry fees shall be added to each race by the Ohio expositions commission.
3. (3) To each county agricultural society and each independent agricultural society conducting horse races during its annual fair, the sum of four thousand dollars, to be used as purse money for horse races in accordance with this section, and the additional sum of one thousand dollars to each such county agricultural society and independent agricultural society to be used for race track maintenance and other expenses necessary for the conduct of such horse races or colt stakes. A grant of four thousand dollars shall be available to each county or independent agricultural society for the conduct of four stake races for two-year-old and three-year-old colts and for four stake races for two-year-old and three-year-old fillies at each gait of trotting and pacing; provided, that at least five hundred dollars shall be added to each race. Exclusive of entrance fees and the excess money provided in division (A)(4) of this section from the grant of four thousand dollars for purse money provided in this division, a sum not to exceed three thousand dollars may be used by a society to reach the required purse for each of the eight stake races. Such stake races shall be distributed as evenly as possible throughout the racing season.
4. (4) In the event that the money available on the first day of March of any year are less than that required to carry out divisions (A)(1), (2), and (3) of this section, the money so available in the Ohio fairs fund shall be prorated equally to the items set forth in such divisions. In the event that the money available on the first day of March of any year are in excess of that required to carry out divisions (A)(1), (2), and (3) of this section, such excess shall be distributed equally to those county agricultural societies and independent agricultural societies conducting stake races, such excess to be added to the stake races conducted under division (A)(3) of this section. The balance of such excess shall be distributed to provide four per cent of such excess to the Ohio expositions commission to be added to the purses pursuant to division (A)(2) of this section, and the balance shall be distributed to the county and independent agricultural societies conducting stake races, such excess to be added to and divided equally among the stake races conducted under division (A)(3) of this section.

(D) All the foals in stake races conducted for two-year-old and three-year-old colts and fillies under this section shall have been sired by a stallion registered with the state racing commission. To be eligible for registration, a stallion shall be one of the following:

1. (1) Owned by a resident of Ohio and regularly standing the entire stud season in Ohio;
2. (2) Owned by a resident of a state other than Ohio but regularly standing the entire stud season in Ohio and leased by a resident of Ohio for a term of not less than ten years;
3. (3) Owned jointly by a resident of a state other than Ohio and a resident of Ohio, regularly standing the entire stud season in Ohio, and leased by a resident of Ohio for a term of not less than ten years. Each race shall be conditioned to admit only registered two-year-old and three-year-old colts and fillies sired by a registered stallion owned or leased and permanently standing for service at and within this state at the time of the foal's conception. All other conditions for the scheduling and conduct of these races shall be approved by the state racing commission. The races shall be scheduled subject to the right of the commission to prevent conflicts in the event of contemporaneous meetings. Such stake races shall be open for nomination not earlier than the fifteenth day of February in the year the race is to be held. All entrance fees in such events shall be added to the money distributed under this section as purse money.