| (a) A breed registry may use horse industry escrow
account funds only for events that further the horse industry.
(b) The following types of costs may not be paid from
funds allocated from the account:
(1) capital improvements;
(2) donations or contributions made to any individual
or organization without express approval from the Commission for such
contribution or donation;
(3) costs of entertainment, amusements, social activities,
and incidental costs relating thereto, including tickets to shows
or sports events, meals, alcoholic beverages, lodging, rentals, transportation,
tips, and gratuities;
(4) fines, penalties, or other costs resulting from
violations of or failure to comply with federal, state, or local laws
and regulations;
(5) liability insurance coverage not specific to a
particular event or series of events for which the Commission has
allocated funds from the account;
(6) expenses related to litigation;
(7) professional association fees or dues for the breed
registry or an individual;
(8) legislative expenses such as salaries and other
expenses associated with lobbying the state or federal legislature
or similar local governmental bodies, whether incurred for purposes
of legislation or executive direction; or
(9). fundraising.
(c) The following types of costs may only be paid with
funds allocated from the account, in an amount not to exceed five
percent of the amount allocated for the event for which it is allocated,
if specifically approved by the Commission:
(1) operating expenses, including the salaries of breed
registry staff, interest and other financial costs related to borrowing
and the cost of financing, contributions to a contingency reserve
or any similar provision for unforeseen events, and audits or other
accounting services; and
(2) the purchase of capital assets.
(d) A breed registry may pay a cost out of funds awarded
from the horse industry escrow account if it satisfies subsections
(a) through (c) of this section and is reasonable and adequately documented.
(1) A cost is reasonable if the cost does not exceed
that which would be incurred by a prudent individual or organization
under the circumstances prevailing at the time the decision was made
to incur the cost and it is necessary to achieve the purpose for which
the funds were sought.
(2) A cost is adequately documented if the cost is
supported by Generally Accepted Accounting Principles, the breed registry's
accounting records, and documented in accordance with §303.325
of this subchapter (relating to Quarterly Reports).
(e) Use of funds allocated to a breed registry from
the account shall comply with the current Uniform Grant Management
Standards or Texas Grant Management Standards.
(f) If a previously approved and funded event is canceled,
the funds shall be returned to the Commission within 45 days after
the cancelation of the event. All funds expended with respect to any
canceled event or event that does not otherwise occur shall be accounted
for and such accounting shall accompany the return of the balance
of such related canceled event funds.
(g) The Commission may require a breed registry to
repay any funds not expended in accordance with Section 2028.204 of
the Act and this section after the completion of an event.
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