H.B. 512
GENERAL ASSEMBLY OF NORTH CAROLINA
Mar 28, 2023
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH40213-STxf-36
Short Title: Forgivable Loans/HBCU Supplemental Funding. (Public)
Sponsors: Representative Warren.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO ESTABLISH THE NORTH CAROLINA COMMUNITY COLLEGE
3 FORGIVABLE LOAN PROGRAM AND TO PROVIDE FOR RECURRING
4 SUPPLEMENTAL APPROPRIATIONS TO NORTH CAROLINA HISTORICALLY
5 BLACK UNIVERSITIES AND COLLEGES THROUGH THE REGULATION OF VIDEO
6 GAMING ENTERTAINMENT.
7 The General Assembly of North Carolina enacts:
8 SECTION 1. Chapter 18C of the General Statutes is amended by adding a new
9 Article to read:
10 "Article 9.
11 "Video Gaming Terminals.
12 "Part 1. General Provisions.
13 "§ 18C-200. Definitions.
14 In addition to the definitions in Article 1 of this Chapter, the following definitions apply in
15 this Article:
16 (1) Associated equipment. – Any hardware that is connected to the video gaming
17 terminal or to the central monitoring system for the purpose of
18 communication, validation, play, or other functions of the video gaming
19 terminal.
20 (2) Central monitoring system. – The system that maintains on a real-time basis
21 the financial, integrity, and security controls on video gaming terminals and
22 associated equipment and provides administrative services for its operation.
23 (3) Independent testing laboratory. – A nationally recognized testing laboratory
24 that is not otherwise subject to control by others and is approved by the
25 Commission for use in testing whether a video gaming game or video gaming
26 terminal complies with the standards set forth in this Article.
27 (4) Manufacturer. – A person licensed by the Commission who manufactures,
28 assembles, services, or produces video gaming terminals or associated
29 equipment.
30 (5) Net machine revenue. – Gross revenues less prizes actually paid per machine.
31 (6) Off-site ABC permit. – An off-premises malt beverage permit or off-premises
32 unfortified or fortified wine permit issued by the North Carolina Alcoholic
33 Beverage Control Commission under Chapter 18B of the General Statutes.
34 (7) On-site ABC permit. – An on-premises malt beverage permit, on-premises
35 unfortified or fortified wine permit, or mixed beverages permit issued by the
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1 North Carolina Alcoholic Beverage Control Commission under Chapter 18B
2 of the General Statutes.
3 (8) Operator. – A person licensed by the Commission who owns, leases, or
4 otherwise controls a video gaming terminal for which a video gaming terminal
5 permit has been issued by the Commission and places those video gaming
6 terminals or associated equipment for public use in the State of North
7 Carolina.
8 (9) Video gaming games. – Electronically simulated games of chance that are
9 displayed and played on permitted video gaming terminals and approved by
10 the Commission.
11 (10) Video gaming merchant. – A person licensed by the Commission and with
12 whom an operator has contracted to allow placement of video gaming
13 terminals for public play and redemption of shares of video gaming games in
14 accordance with this Article.
15 (11) Video gaming terminal. – A device operated under the authority of the
16 Commission that shall be exempt under G.S. 14-306.1A and is any electronic
17 computerized video game machine that, upon the insertion of cash or a lottery
18 share, is available to play a video gaming game authorized by the Commission
19 and which uses a video display and microprocessors in which, by chance, the
20 player may receive free games or credits that can be redeemed for cash. The
21 term does not include a device that directly dispenses coins, cash, or tokens.
22 (12) Video gaming terminal permit. – A permanently affixed tag or other device
23 issued to a licensed operator for each video gaming terminal approved by and
24 registered with the Commission.
25 "§§ 18C-201 through 18C-202. Reserved for future codification purposes.
26 "§ 18C-203. Video gaming; allocation of revenues.
27 (a) The Commission shall determine that video gaming games are a type of lottery game
28 in this State and shall contract with operators and video gaming merchants to operate video
29 gaming games for play by the public. Play of video gaming games shall be deemed a share for
30 purposes of this Chapter, shall be exempt from G.S. 18C-131(c), and shall be played only on
31 video gaming terminals with a valid video gaming terminal permit. Except as otherwise provided
32 in this Article, the provisions of this Chapter shall apply to operation and play of video gaming
33 games in this State.
34 (b) Notwithstanding G.S. 150B-1, the Commission shall adopt rules in accordance with
35 Article 2A of Chapter 150B of the General Statutes to determine play of video gaming games.
36 The rules adopted by the Commission shall address the procedures for the monitoring, collection,
37 and remittance of net machine revenue from the video gaming games under this Article, in
38 conformity with all of the following:
39 (1) Notwithstanding Article 7 of this Chapter, no less than thirty-two percent
40 (32%) of the total net machine revenues from video gaming games shall be
41 transferred to the North Carolina Video Gaming Fund pursuant to
42 G.S. 18C-204. The Commission shall adopt rules to establish a schedule of
43 remittance, calculation of net machine revenue, and calculation of net revenue
44 per operator. The Commission may adopt rules to set a minimum percentage
45 of annual revenue, per machine or per operator, to be returned to the public in
46 the form of prizes.
47 (2) Notwithstanding Article 7 of this Chapter, any monies unused by the
48 Commission after covering administrative expenses in accordance with this
49 subsection shall be transferred to the North Carolina Video Gaming Fund
50 pursuant to G.S. 18C-204. No more than eight percent (8%) of the total annual
51 net machine revenues from video gaming games shall be allocated for
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1 administrative expenses of the Commission, which shall include all of the
2 following:
3 a. Costs associated with the central monitoring system.
4 b. Costs of the Department of Public Safety, Alcohol Law Enforcement
5 Division, associated with enforcement of this Article, which shall
6 include a transfer of at least three million dollars ($3,000,000).
7 c. A transfer of one million dollars ($1,000,000) annually to the
8 Department of Health and Human Services for gambling addiction
9 education and treatment programs.
10 (3) Of the net machine revenues, thirty-five percent (35%) shall be allocated to
11 operators and twenty-five percent (25%) to video gaming merchants.
12 (4) Video gaming terminals and associated equipment shall be connected to a
13 central monitoring system at all times during play and as otherwise determined
14 by the Commission.
15 (5) All video gaming terminals shall be placed with a video gaming merchant who
16 holds an active off-site ABC permit or an active on-site ABC permit. No video
17 gaming merchant shall be engaged primarily in the business of placing video
18 gaming terminals for play by the public in this State.
19 (6) The Commission shall allow each video gaming merchant to operate up to six
20 video gaming terminals per location and may allow up to an additional four
21 video gaming terminals per location.
22 (7) In contracting with operators, the Commission shall require that there shall be
23 no video gaming terminals placed within 500 feet of a church, public school,
24 or any nonpublic school as defined by Part 1 or 2 of Article 39 of Chapter
25 115C of the General Statutes.
26 (8) Prizes for play of video gaming terminals shall be issued by a share that is
27 redeemable in accordance with G.S. 18C-132 or may be inserted into video
28 gaming terminals to generate credits for the play of video gaming games.
29 (9) The Commission may contract only with manufacturers and operators
30 licensed under this Article.
31 (10) Operators placing video gaming terminals for play in this State may only do
32 the following:
33 a. Purchase, lease, or otherwise obtain video gaming terminals and
34 associated equipment from manufacturers licensed under this Article.
35 b. Contract with licensed video gaming merchants for placement of video
36 gaming terminals for play by the public.
37 (c) The Department of Public Safety, Alcohol Law Enforcement Division, shall have
38 enforcement authority under this Article.
39 "§ 18C-204. North Carolina Video Gaming Fund.
40 (a) An enterprise fund, to be known as the North Carolina Video Gaming Fund, is created
41 within the State treasury consisting of the transfer of net machine revenues pursuant to
42 G.S. 18C-203(b)(1), any monies remaining from the administrative expenses of the Commission
43 under G.S. 18C-203(b)(2), and any interest earned on those funds.
44 (b) The General Assembly shall appropriate the monies in the North Carolina Video
45 Gaming Fund annually in the Current Operations Appropriations Act based upon estimates of
46 the net machine revenue from video gaming terminals to the North Carolina Video Gaming Fund.
47 The appropriation shall include all of the following:
48 (1) Two million dollars ($2,000,000) in each fiscal year to each of the following
49 institutions for improving graduation rates and student success or
50 sustainability of the institution:
51 a. Elizabeth City State University.
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1 b. Fayetteville State University.
2 c. North Carolina Agricultural and Technical State University.
3 d. North Carolina Central University.
4 e. Winston-Salem State University.
5 f. University of North Carolina at Pembroke.
6 (2) Ten million dollars ($10,000,000) in each fiscal year to independent
7 historically black colleges and universities in the State for grants of up to two
8 million dollars ($2,000,000) per institution. The grants shall be used for
9 improving graduation rates and student success.
10 (3) An amount to the State Education Assistance Authority for each fiscal year in
11 an amount sufficient to fund scholarship forgivable loans for eligible students
12 under the Community College Scholarship Loan Program, and such funds are
13 hereby appropriated to the Community College Scholarship Loan Trust Fund
14 established under G.S. 116-209.93.
15 (4) One million dollars ($1,000,000) in each fiscal year to the Department of
16 Public Safety for grants to counties for sheriffs to combat illegal gaming, to
17 be awarded upon recommendation by the Governor's Crime Commission.
18 (c) A security interest shall not be granted in any funds appropriated pursuant to this
19 section.
20 (d) Each of the constituent institutions receiving appropriations or a grant under this
21 section shall annually report to the Joint Legislative Education Oversight Committee as to how
22 that institution has used the funds from the prior fiscal year, including the measures by which
23 that institution is gauging success of the programs and other uses of the funds.
24 "§§ 18C-205 through 18C-209. Reserved for future codification purposes.
25 "Part 2. Licenses and Permits.
26 "§ 18C-210. Video gaming permit required on video gaming terminals.
27 (a) Every video gaming terminal shall have affixed to it a video gaming terminal permit
28 prior to play in the manner set forth by the Commission. The placement of the video gaming
29 terminal permit represents that the machine has been registered, inspected, and approved for
30 operation in the State.
31 (b) The Commission shall issue the video gaming terminal permit annually based on the
32 number of approved video gaming terminals registered with the Commission per licensed
33 operator. The Commission shall adopt rules establishing the schedule for issuance and affixation
34 of video gaming terminal permits. The Commission shall include an option for a licensed
35 operator or licensed video gaming merchant to request to add video gaming terminals into play
36 by the public during the license year.
37 (c) It shall be unlawful for a person other than authorized Commission personnel to affix
38 or remove a video gaming permit. No video gaming terminal may be transported out of this State
39 until the video gaming permit has been removed.
40 (d) Manufacturers, operators, and video gaming merchants must make video gaming
41 terminals and associated equipment available for inspection by the Commission. No video
42 gaming terminal shall be issued a video gaming permit unless the software and hardware of the
43 video gaming terminal and associated equipment are compatible with the Commission's central
44 monitoring system and all games installed on the video gaming terminal are approved by the
45 Commission.
46 (e) Any video gaming terminal that does not display the video gaming permit as required
47 by this section is illegal and subject to confiscation by any law enforcement officer.
48 "§§ 18C-211 through 18C-213. Reserved for future codification purposes.
49 "§ 18C-214. Minimum qualifications for all licensees.
50 (a) Except as provided in subsection (b) of this section, an applicant whom the
51 Commission determines is qualified to receive a license under this Article shall be issued a
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1 license. A person shall not engage in the manufacture, operation or service, or placement for play
2 by the public of any video gaming terminal without a license issued by the Commission under
3 this Article.
4 (b) The Commission shall not approve an applicant for licensure if any of the following
5 apply at the time of license:
6 (1) The applicant meets one or more of the following:
7 a. Has been convicted of a felony in any state or federal court of the
8 United States within 10 years of issuance of the license.
9 b. Employs officers or directors who have been convicted of a felony in
10 any state or federal court of the United States within 10 years of
11 issuance of the license.
12 c. Has completed a sentence for a felony in any state or federal court of
13 the United States within 10 years of issuance of the license.
14 d. Employs officers or directors who have completed a sentence for a
15 felony in any state or federal court of the United States w