(a) One third of the funds remaining after deductions for administrative expenses shall be disbursed to those fairs entitled to a special merit award as follows:

(1) The fair which in the opinion of the judges is superior to all other fairs in the same category of those categories adopted by the board shall receive the state championship award, which shall be equal to 100 percent of the state aid allotted to the fair receiving such award. It is intended that there shall be a state championship award for each category of fairs of those categories adopted by the board.

(2) Every fair in each category of fairs judged superior under criteria established by the judges shall receive a superior fair award. The fair eligible to receive the superior fair award shall receive an amount equal to 75 percent of the state aid allotted to it.

(3) Every fair in each category of fairs judged excellent under the criteria established by the judges shall receive an excellent fair award. The fair eligible to receive this award shall receive an amount equal to 50 percent of the state aid allotted to it.

(4) Every fair in each category of fairs judged standard under the criteria established by the judges shall receive a standard fair award. The fair eligible to receive this award shall receive an amount equal to 35 percent of the state aid allotted to it.

(b) No one fair shall be eligible for more than one of the four awards listed above. If the one third of the annual appropriation allocated for merit awards is inadequate to pay such awards provided for in this section, then said merit awards shall be reduced proportionately. The board is hereby authorized to reduce a merit award not to exceed 20 percent in case proper records and reports required by the board or required by the judges for issuance of awards are not promptly and accurately submitted.