GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	2 

HOUSE BILL 42*
Committee Substitute Favorable 6/24/93

Short Title:  Horse Racing in North Carolina.	(Public)
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Sponsors:
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Referred to: 
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February 4, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPLEMENT THE RECOMMENDATION OF THE HORSE RACING IN NORTH CAROLINA LEGISLATIVE RESEARCH COMMISSION STUDY COMMITTEE TO ESTABLISH THE NORTH CAROLINA RACING COMMISSION, AFTER A BINDING REFERENDUM, TO DEVELOP A PROGRAM OF HORSE RACING FOR NORTH CAROLINA, AND TO PROVIDE FUNDS FOR DEVELOPMENT OF THE EQUINE INDUSTRY IN NORTH CAROLINA.
The General Assembly of North Carolina enacts:
Section 1.  The General Statutes are amended by adding a new Chapter to read:
"Chapter 16A.
"North Carolina Racing Act.
                  "ARTICLE 1.
"General Provisions and Definitions.
"§ 16A-1. Short title.
This Chapter may be cited as the 'North Carolina Racing Act'.
"§ 16A-2. Findings and policy.
The General Assembly finds that horse racing events and pari-mutuel wagering will generate additional revenues and incentives for development of a horse training and breeding industry and further development of the equine industry in this State, for farmland enhancement, and for other governmental purposes, and will provide additional jobs for the residents of the State and benefit the businesses related to tourism and recreation within the State.
It is in the public interest to permit the qualified voters of this State to determine by referendum whether horse racing and pari-mutuel wagering will be permitted.
If horse racing is approved by the voters, it is in the public interest to provide for the establishment of a racing commission to:
(1)	Regulate horse racing and pari-mutuel wagering;
(2)	Promote breeding and training of horses and the further development of the equine industry in this State;
(3)	Promote farmland enhancement, the development of new crops in this State, and the enhancement of the State's agribusiness industry;
(4)	To administer and enforce the provisions of this Chapter; and
(5)	Develop a long-term plan for racing in North Carolina to determine the appropriate location and number of tracks to be built in this State so as to position any major track and its purse structure in the upper segment of good quality tracks while creating a strong born, bred, and training structure throughout the State.
"§ 16A-3. Definitions.
Unless the context clearly otherwise requires, the following definitions apply in this Chapter:
(1)	'Breakage' means the odd cents of all money to be distributed based on each dollar wagered exceeding a sum equal to the next lowest multiple of 10.
(2)	'Breeder' means the owner of a female horse at the time the female horse gives birth to a North Carolina-bred horse.
(3)	'Breeding fund' means special funds established by the Commission pursuant to the provisions of this Chapter and any applicable rules of the Commission concerning the breeding, raising, and racing of horses in the State.
(4)	'Breeding fund fee' means a fee payable to the Commission by an operator pursuant to this Chapter for deposit into the appropriate horse-breeding fund.
(5)	'Commission' or 'NCRC' means the North Carolina Racing Commission which is vested with control of all horse racing with pari-mutuel wagering in the State and with power to adopt rules under which racing and wagering shall be conducted.
(6)	'Handle', when used with reference to any specified period of time, means the total amount deposited in all of the pari-mutuel pools originated by an operator during the period of time.
(7)	'Horse racing' means any form of horse racing in which horses carry human riders or pull sulkies with human drivers.
(8)	'License' means a privilege, not a right, granted to the holder by the Commission in accordance with the provisions of Article 3 of this Chapter.
(9)	'Licensed facility' or 'licensed race facility' means all areas of a race track's grounds, including the parking area, to which admission can be obtained only by payment of an admission fee or presentation of official credentials. 'Licensed facility' also means any site licensed for pari-mutuel wagering.
(10)	'Member' means a member of the Commission.
(11)	'Metro area' means the area defined as a metropolitan statistical area for the purposes of allocating federal funds by the federal Office of Management and Budget.
(12)	'Multiple pool' means a licensed pari-mutuel pool (other than a straight pool, a two-entry pool, or a super multiple pool) involving three or four combinations of wagers to win, place, or show.
(13)	'Multiple wager' means a wager in a multiple pool.
(14)	'Net revenues' means all fees (other than breeding fund fees), commissions, and other monies received by the Commission less all expenses incurred in the administration of this Chapter.
(15)	'North Carolina-trained' is a horse which is boarded and trained in North Carolina when not attending racing meetings and which has been trained under the rules adopted by the Commission and is eligible for special purses.
(16)	'North Carolina-bred horse' means a horse which is registered in the registry designated and administered by the Commission in accordance with the Commission's rules concerning domicile and registration requirements.
(17)	'North Carolina stallion' means a stallion which is standing in the State at the time he is bred to the dam of a North Carolina-bred horse, which is registered with the Commission in accordance with the Commission's rules concerning domicile and registration requirements.
(18)	'Operator' means a corporation licensed by the Commission to conduct horse racing events and pari-mutuel wagering on those events in accordance with the provisions of this Chapter.
(19)	'Owner' means a corporation, partnership, or other business entity licensed by the Commission to own a racing facility in accordance with the provisions of this Chapter.
(20)	'Pari-mutuel wagering' means the system of wagering on horse races where those who wager on the horses that finish in the position or positions for which wagers are taken, share in the total amounts wagered, less deductions required or permitted by law.
(21)	'Person' means an individual, firm, association, partnership, corporation, trustee, or legal representative, and any licensee, participant, or patron.
(22)	'Race track' means a flat or grass surface on which horses race.
(23)	'Racing day' means a day assigned by the Commission on which racing is conducted.
(24)	'Racing meeting' means a series of days in which horse racing days are not separated by more than five nonracing days.
(25)	'Resident of the State' means any one of the following:
a.	A natural person whose principal residence is located in the State;
b.	A natural person who does not maintain his or her principal residence in the State but who owns, singly or jointly with his or her spouse, real property located in the State that has an original cost to that person or a  current fair market value of not less than one hundred thousand dollars ($100,000); or
c.	A corporation or partnership which has its principal place of business in the State and more than fifty percent (50%) of the stock or other ownership interest is owned by natural persons described in subparagraphs a. or b. of this subdivision.
(26)	'Stallion owner' means the owner of a stallion standing in the State at the time he was bred to the dam of a North Carolina-bred horse.
(27)	'State' means the State of North Carolina.
(28)	'Straight pool' means a licensed pari-mutuel pool in which each ticket represents a wager to win, place, or show.
(29)	'Straight wager' means a wager in a straight pool.
(30)	'Super exotic pool' means a licensed pari-mutuel pool (other than a straight pool, a two-entry pool, or a multiple pool) involving a combination of five or more wagers to win, place, or show.
(31)	'Super exotic wager' means a wager in a super exotic pool.
(32)	A 'teletheater' means an enclosed heated and air-conditioned licensed facility or race facility where simulcasting is conducted and there is no live horse racing.  These may include off-site wagering restaurants.
(33)	'Two-entry pool' means a licensed pari-mutuel pool (other than a straight pool or a multiple pool or super multiple pool) involving a combination of two straight wagers to win, place, or show.
(34)	'Two-entry wager' means a wager in a two-entry pool.
(35)	'Two or more entry pools' means an entry in combination with other entries which may be a series of separate two-entry wagers in which any entry combination wins; or which may be a series of combination wagers as in multiple or super exotic wagers in which all of the combinations must win.
(36)	'Year-round' means a race facility operating at least 10 months of the year at which horse racing, or simulcasting, or any combination thereof, is conducted with pari-mutuel wagering.
"ARTICLE 2.
"The Commission.
"§ 16A-4. Commission created.
(a)	There is created the North Carolina Racing Commission.  The Commission shall have the powers and duties specified in this Chapter.  In appointing members to the Commission, preference shall be given to persons with knowledge of either the equine industry or the racing industry, or both.  Persons appointed to serve on the Commission should possess the appropriate judicial temperament.  The Commission shall be located administratively under the Department of Commerce but shall exercise all its prescribed statutory powers independently of the Department of Commerce.
(b)	The Commission shall consist of five members as follows:
(1)	One member shall be appointed by the Governor.  This appointment shall be subject to confirmation by the General Assembly in joint session using the procedures set forth in G.S. 62-10.
(2)	Four members shall be appointed by the General Assembly in accordance with G.S. 120-121, two upon recommendation of the President Pro Tempore of the Senate and two upon recommendation of the Speaker of the House of Representatives.
(c)	The Governor shall designate the initial Chair of the Commission, who shall serve a two-year term.  After the term of the initial Chair is completed, all subsequent Chairs shall be selected by the members of the Commission from among the membership and shall serve two-year terms.  No member shall serve consecutive terms as Chair.
(d)	Of the persons initially appointed to the Commission, the member proposed by the Governor shall serve a two-year term.  One member recommended by the Speaker of the House of Representatives and one member recommended by the President Pro Tempore of the Senate shall serve four-year terms.  One member recommended by the Speaker of the House of Representatives and one member recommended by the President Pro Tempore of the Senate shall serve six-year terms.  After the expiration of the initial terms, appointments are for terms of six years.  Each member of the Commission shall serve until a successor is duly appointed and qualified.
(e)	A member of the Commission shall have been a resident of North Carolina for at least five years before appointment to the Commission and shall have no financial interest in any racing facility.  A member of the Commission shall not have been convicted of a felony or convicted of violating any law or rule relating to horse racing, pari-mutuel wagering, or any other form of gambling.
(f)	A background investigation of each member of the Commission shall be completed by the State Bureau of Investigation, prior to the member being appointed or confirmed by the General Assembly.
"§ 16A-5. Reserved.
"§ 16A-6. Removal; vacancies.
Vacancies on the Commission, whether caused by the death, incapacity, resignation, or removal of a member, shall be filled by the office making the initial appointment.  Vacancies in the appointment filled by the Governor shall be for the remainder of the unexpired term and shall be subject to confirmation by the General Assembly.  Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120-122.  Members appointed to fill vacancies shall be subject to a background investigation as prescribed in G.S. 16A-4.
"§ 16A-7.  Actions.
The Commission may sue and be sued in its own name but no action may be brought against the Commission or any of its members for actions taken in good faith in the performance of its duties.  Suits and actions may be commenced against the Commission or any of its members in any court of competent jurisdiction in this State by the service on the Secretary of State of any summons, process, or pleadings authorized by the laws of this State.  If any summons, process, or pleadings is served upon the Secretary of State, it shall be by duplicate copies.  One copy shall be retained in the Office of the Secretary of State and the other copy shall be forwarded immediately by certified mail to the Chair of the Commission at the current address of the Commission.  The Executive Secretary of the Commission shall inform the Secretary of State of the mailing address of the Commission and any changes.
"§ 16A-8. Annual report.
(a)	The Commission shall submit an annual report to the Governor and the General Assembly on February 15 of each year.  This report shall contain information necessary for the proper oversight of the Commission's operations and responsibilities, including:
(1)	The Commission's activities for the prior year;
(2)	The Commission's organizational structure and personnel;
(3)	The Commission's receipts and disbursements;
(4)	The Commission's recommendations for changes in the laws relating to racing and pari-mutuel wagering;
(5)	The impact of horse racing and pari-mutuel wagering on economic development in this State, including the impact on travel and tourism and agriculture;
(6)	Multiyear projections on the future costs of operating the Commission and on regulating horse racing and pari-mutuel wagering in this State; and
(7)	Recommendations on adjustment of the take-out rates needed to enhance the development of horse racing in North Carolina.
(b)	The General Assembly finds that off-site wagering is essential to successful accomplishment of the purposes of this Chapter, and to that end, it is the intent of the General Assembly that any off-site wagering technology developed and used in any other state in which horse racing and pari-mutuel wagering have been legalized and in which horse racing is conducted shall be permitted in this State. The Commission shall conduct an ongoing study of the types of off-site wagering that are appropriate for this State and shall include the results of that study in each of its annual reports submitted to the General Assembly pursuant to subsection (a) of this section.  These reports shall include the Commission's findings, recommendations, and a summary of arguments opposing the Commission's recommendations on issues related to off-site wagering including, but not limited to, present and anticipated technologies and appropriate take-out rates and funding allocations.  The Commission shall also include in the annual report any required legislation to implement off-site wagering.
(c)	The Commission shall report the extent of minority employment and contracting related to enterprises associated with the operations of licensed facilities over which the Commission has jurisdiction or influence.  The Commission shall establish a task force charged with the monitoring of minority involvement and charged with advising the Commission relative to enhancing minority participation in the enterprises associated with the operations of licensed facilities.
"§ 16A-9. Commission powers and duties.
The Commission shall control all horse racing and pari-mutuel wagering on horse races in the State.  The Commission shall adopt rules implementing the provisions of this Chapter including rules under which racing and pari-mutuel wagering may be conducted, and licenses may be issued. In addition, the Commission has the following specific powers and duties:
(1)	To issue licenses to build only quality racing facilities that are designed to permit year-round racing.
(2)	To assign dates and adopt rules for the conduct of horse racing.
(3)	To license all personnel involved in racing and pari-mutuel wagering.
(4)	To enforce all laws and rules governing horse racing.
(5)	To audit books and distribute funds and to collect and distribute all taxes as provided for in this Chapter.
(6)	To conduct necessary investigations and inquiries and compel the submission of information, documents, and records it deems necessary to carry out its duties.
(7)	To initiate administrative hearings and civil actions in cases of alleged wrongdoing.
(8)	To provide testing facilities for racing animals.
(9)	To supervise the conduct of pari-mutuel wagering on horse racing.
(10)	To employ and supervise personnel under the laws of this Chapter.
(11)	To ensure that all operations are cleanly, efficiently, safely, and honestly run.
(12)	To take all necessary steps to ensure the integrity of racing in North Carolina.
(13)	To maintain the goal of service to the public within the objectives of developing the agribusiness, equine, and travel and tourism industries in North Carolina.
(14)	To enter into contracts as necessary in the administration of this Chapter.
(15)	To do those things necessary and appropriate to carry out the duties imposed by this Chapter.
(16)	To issue rules on the permitted and prohibited locations for all licensed facilities, including race tracks.
"§ 16A-10. Executive Secretary.
(a)	The Executive Secretary shall administer the rules adopted by the Commission and conducting the business of the Commission.  The Executive Secretary shall ensure that pertinent records and statistics are kept for use in the annual reports required by this Chapter and may coordinate this information with other pari-mutuel states in the Association of Racing Commissioners, International and other organizations acceptable to the Commission.
(b)	The Executive Secretary shall act as the Commission's chief personnel officer and shall supervise the employment, conduct, duties, and discipline of all Commission employees.  The Executive Secretary may hire and direct a Chief of Racing Security,  Medical Officer, and Auditor/Inspector of Pari-Mutuels whose duties are set forth in subsequent sections of this Chapter.  The Executive Secretary shall not hire or dismiss the Auditor/Inspector of Pari-Mutuels without the approval of the Commission.  All personnel except the Executive Secretary shall be subject to the provisions of the State Personnel Act.
(c)	The Executive Secretary shall receive a salary in an amount established by the Commission plus travel and subsistence allowance in accordance with G.S. 136-6.
(d)	In addition to the above listed duties, the Executive Secretary shall perform the following:
(1)	Take and preserve records of all proceedings before the Commission, maintain its books, documents, and records, and make them available for public inspection as the Commission directs;
(2)	If so designated by the Commission, act as a hearing officer in hearings conducted under this Chapter and make recommended decisions in those hearings to the Commission; and
(3)	Perform other duties as directed by the Commission.
"§ 16A-11. Auditor/Inspector of Pari-Mutuels.
(a)	The Executive Secretary may employ an Auditor/Inspector of Pari-Mutuels. The Auditor/Inspector of Pari-Mutuels shall be the Commission's auditor. The Auditor/Inspector of Pari-Mutuels shall be responsible for the accuracy of the revenues paid from the facility to the Commission and for the flow of funds to the appropriate categories as specified by this Chapter.
(b)	The Auditor/Inspector of Pari-Mutuels, while employed by the Commission, shall devote his full time to the duties of the position, which are:
(1)	To supervise all forms of pari-mutuel wagering on horse racing in the State;
(2)	To inspect all pari-mutuel machinery;
(3)	To make reports on pari-mutuel wagering as the Commission directs; and
(4)	To perform other duties as directed by the Commission.
(c)	If the Executive Secretary does not appoint an Auditor/Inspector of Pari-Mutuels, his duties are assigned to the Executive Secretary.  The Commission shall contract with outside services or personnel to assist the Executive Secretary in the performance of these duties.
(d)	In extraordinary circumstances, if the Auditor/Inspector determines that the integrity or efficiency of the Commission is in jeopardy, the Auditor/Inspector shall have direct access to the Commission and using this direct access shall not be considered 'just cause' for any disciplinary action under Chapter 126 of the General Statutes, the State Personnel Act.
"§ 16A-12. Chief of Racing Security.
(a)	The Executive Secretary may appoint a Chief of Racing Security.
(b)	The Chief of Racing Security shall devote his full time to the duties of the position while employed by the Commission.  The Chief of Racing Security shall enforce all laws and Commission rules relating to the security and integrity of racing.
(c)	Chief of Racing Security and all other persons designated by the Commission as security officers shall have free and open access to all areas of all facilities licensed by the Commission and may search without a search warrant any part of a licensed race facility and the person of any licensee of the Commission on the premises.
(d)	The Chief of Racing Security may order a licensee to take, at the licensee's expense, security measures that are necessary to protect the integrity of racing, but the order may be appealed to the Commission.
(e)	Nothing in this Chapter prohibits other law enforcement authorities and agents, in performance of their duties, from entering premises licensed under this Chapter.
(f)	If the Executive Secretary does not appoint a Chief of Racing Security, the duties of the position are assigned to the Executive Secretary.  The Commission may contract with outside services or personnel to assist the Executive Secretary in the performance of these duties.
(g)	In extraordinary circumstances, when the Chief of Racing Security determines that the integrity or efficiency of the Commission is in jeopardy, the Chief of Racing Security shall have direct access to the Commission and using this direct access shall not be considered 'just cause' for any disciplinary action under Chapter 126 of the General Statutes, the State Personnel Act.
"§ 16A-13. Medical services.
(a)	The Executive Secretary may appoint a Medical Officer, who shall be a doctor of veterinary medicine licensed in the State of North Carolina.
(b)	The Medical Officer shall, while employed by the Commission, devote his full time to the duties of the position, which are:
(1)	To supervise the formulation, administration, and evaluation of all medical tests required or authorized by the rules of the Commission;
(2)	To advise the Commission on all aspects of veterinary medicine relating to its powers and duties;
(3)	To supervise the taking of samples from winning animals and others at random and to forward these samples to the State Chemist for analysis (test barn personnel shall assist the Medical Officer in the collection of the samples);
(4)	To observe the conduct and efficiency of the facility's appointed veterinarians; and
(5)	To make inspections of the barn areas at licensed racing facilities for cleanliness and to ensure that living and working conditions are compatible with the standards set by the Commission for both horses and personnel.
(c)	If the Executive Secretary does not appoint a Medical Officer, the duties of the position may be assigned to the Executive Secretary.
(d)	In extraordinary circumstances, when the Medical Officer determines that the integrity or efficiency of the Commission is in jeopardy, the Medical Officer shall have direct access to the Commission and using this direct access shall not be considered 'just cause' for any disciplinary action under Chapter 126 of the General Statutes, the State Personnel Act.
(e)	The Commission may obtain medical services and services for testing the blood, urine, saliva, and other samples taken from horses at licensed racing facilities, as necessary, by entering into a contract with the School of Veterinary Medicine, North Carolina State University.
"§ 16A-14. Other employees; staff.
(a)	Subject to the applicable laws, the Commission, through the Executive Secretary, shall employ and assign duties to other officers, employees, agents, and field personnel it deems necessary to discharge its functions.
(b)	Commission personnel are subject to the same laws, particularly conflict of interest, as are the members of the Commission.
"§ 16A-14.1.  Financial interest.
No person may serve on the Commission or be employed by it who has an interest in any corporation, association, or partnership which holds a license from the Commission or which holds a contract to supply goods or services to a licensee or at a licensed race facility, including concessions contracts.  No member or employee of the Commission may own wholly, or in part, or have an interest in a horse which races at a licensed race facility in North Carolina.  No member or employee of the Commission may have a financial interest in or be employed in a profession or business which conflicts with the performance of his duties as a member or employee.
"§ 16A-14.2.  Wagering.
No member or employee of the Commission may wager or cause a wager to be made on a race at a licensed race facility while serving on or being employed by the Commission.  No person appointed or approved by the Commission as a steward may wager or cause a wager to be made at a licensed race facility during a racing meeting at which that person is serving as a steward.  The Commission shall by rule prescribe any restrictions on wagering by its licensees as it deems necessary to protect the integrity of racing.
"§ 16A-14.3.  Violation.
A violation of G.S. 16A-14.1 or G.S. 16A-14.2 is grounds for removal from the Commission or termination of employment.  A wager made directly or indirectly by a licensee in violation of a rule made by the Commission under G.S. 16A-14.2 is grounds for suspension or revocation of the license.
"§ 16A-15. Assistance from State agencies.
The Commission may request assistance from any department or agency of the State in fulfilling its duties and shall make appropriate reimbursement for any assistance and services provided by other governmental entities.
"§ 16A-16. Reserved.
"ARTICLE 3.
"Licensing.
"§ 16A-17. License required.
(a)	In order to guarantee the integrity of horse racing in North Carolina, and to provide for adequate control and supervision of all persons involved with horse racing by the Commission, all persons, other than admission paying patrons or other members of the general public attending horse races at licensed race facilities or attending other licensed facilities, shall be licensed by the Commission.
(b)	No person may engage in any of the activities listed in G.S. 16A-20 without first having obtained the appropriate license from the Commission.
	(c) The Commission may require that all licensed personnel shall sign waivers allowing drug testing.
	(d) A license issued under this Chapter may not be transferred.
"§ 16A-18. Classes.
(a)	The Commission may issue four classes of licenses:
(1)	Class A ownership licenses. For the ownership and use of a race facility with horse racing on which pari-mutuel wagering is conducted;
(2)	Class B operator licenses. For the function, sponsorship, and management of horse racing on which pari-mutuel wagering is conducted;
(3)	Class C occupational licenses. For the privilege of engaging in certain occupations relating to horse racing;
(4)	Class D special licenses. For the privilege of engaging in certain occupations, services, events, and promotions that by their nature require State sanction and control. This includes any special events, promotions, or public service performances by or for associations which by their size and/or nature necessitate the approval or cooperation of various other governmental agencies; and
(b)	All application forms for licenses shall contain a statement to the effect that by accepting a license from the Commission, a licensee consents to having his property and person subject to inspection at any time by the Chief of Racing Security or by security officers designated by the Commission.
"§ 16A-19. Policy.
(a)	Insofar as practical, the Commission shall follow the guidelines on the uniform licensing rules adopted by the Association of State Racing Commissioners, International.
(b)	It shall be the policy of the Commission to favor the applications for Class A licenses from applicants which are corporations with widespread ownership of stock or which are limited partnerships, provided the majority of stockholders or partners are residents of this State.
"§ 16A-20. Class A license application.
(a)	The Commission may issue one or more Class A licenses.
(b)	An application for a Class A license shall be on a form the Commission prescribes and shall be accompanied by detailed plans and specifications of the facilities, buildings, fences, and other improvements as well as possible future additions including living quarters or other buildings around the outside perimeter of the oval racing track.  An application may also contain plans for one or more off-site wagering facilities.  An application for a Class A license shall be accompanied with a nonrefundable application fee of one hundred thousand dollars ($100,000).
(c)	The application shall contain:
(1)	The name and address of the applicant and, if it is a corporation, the names and addresses of all officers and directors, and the names of all shareholders of the corporation, foreign corporation, partnership or joint venture, and any of its holding corporations;
(2)	If required by the Commission, the names of any person or persons holding directly, indirectly, or beneficially an interest of any kind in the applicant or any of its holding corporations, whether the interest is financial, administrative, policy-making, or supervisory;
(3)	A statement of the assets and liabilities of the applicants, and any other information that the Commission deems appropriate regarding the character and responsibility of the applicant and the members, partners, stockholders, officers, and directors of the applicant;
(4)	An affidavit executed by the applicant setting forth that no officer, director, or other person with a present or inchoate direct or indirect financial or management interest in the race facility, to the best of the applicant's knowledge:
a.	Is in default in the payment of an obligation or debt to the State under the current General Statutes of North Carolina;
b.	Has ever been convicted of a felony in a state or federal court or has a state or federal felony charge pending;
c.	Is or has been connected with or engaged in any illegal business;
d.	Has ever been found guilty of fraud or misrepresentation or a false statement in connection with racing or breeding;
e.	Has ever been found guilty of a serious violation, as defined by the Commission, of a law or rule relating to horse racing, pari-mutuel wagering, or any other form of gambling;
f.	Has ever knowingly violated a rule or order of the Commission or a law of North Carolina relating to racing; or
g.	Is not qualified to do business in North Carolina or is not subject to the jurisdiction of the courts of the State.
(5)	An irrevocable consent statement, to be signed by the applicant, which states that suits and actions relating to the subject matter of the application or acts or omissions arising from it may be commenced against the applicant in any court of competent jurisdiction in this State by the service on the Secretary of State of any summons, process, or pleadings authorized by the laws of this State. If any summons, process, or pleading is served upon the Secretary of State, it shall be by duplicate copies. One copy shall be retained in the office of the Secretary of State, and the other copy shall be forwarded immediately by certified mail to the address of the applicant, as shown by the records of the Commission; and
(6)	Any other information which the Commission in its discretion deems appropriate.
"§ 16A-21. Denial of license.
The Commission shall deny a license to any applicant unless it finds as follows:
(1)	That over fifty percent (50%) of the natural persons having an ownership interest in the applicant, either directly or indirectly, shall have been residents of the State continuously for a period of five years next preceding the date of the application in question; and
(2)	That the applicant's facilities will meet the following minimum standards:
a.	That the primary horse racing facility will provide a track racing surface of at least one mile for horse racing;
b.	That the facilities will be designed with quality construction and weather protection for year-round racing and shall have sufficient parking to avoid traffic congestion;
c.	That racing surfaces designed for harness racing shall be at least five-eighths of a mile in length, except for racing surfaces at the State fair or at county fairs; and
d.	That facilities for simulcasting will be appropriately heated and air-conditioned for the conduct of a year-round operation.
"§ 16A-22. License statement.
(a)	Every license issued by the Commission shall contain a statement to the effect that the license is a privilege granted by the State and that all forms of racing conducted under the license shall be subject to the provisions of this Chapter and to the rules issued by the Commission.
(b)	An owner's license shall state the name of the person to whom the license is issued, the duration of the license, the location of the proposed race facility or simulcast facility, and any other conditions of the license and related information that the Commission deems proper.
"§ 16A-23. Hearing.
Before granting a Class A license, the Commission shall:
(1)	Hold at least one public hearing in the area where the race facility is or will be located.
(2)	Request comments on the application from the governing body of the city or town where the facility is or will be located, or from the county board of commissioners if it is to be located outside a city or town, and from the appropriate regional council of government, as the case may be.
"§ 16A-24. Investigation.
(a)	Before granting a Class A license, the Commission shall conduct, or request that the State Bureau of Investigation conduct, a comprehensive background and financial investigation of the applicant and its sources of financing.
(b)	The Commission may charge an applicant an investigation fee, in an amount determined by the Commission, to cover the cost of the investigation.
(c)	If the Commission requests that the State Bureau of Investigation conduct the investigation, the Commission shall reimburse the State Bureau of Investigation for its share of the cost of the investigation.
(d)	The Commission shall have access to all criminal history data compiled by the State Bureau of Investigation on Class A licenses and applicants.
"§ 16A-25.  License issuance.
(a)	In the granting of licenses, the Commission shall give due consideration to:
(1)	The character, reputation, experience, and financial integrity of the applicants;
(2)	The proposed facilities and accommodations for the conduct of racing meetings;
(3)	The location of the facilities in relation to:  the principal centers of population, the other principal cities, and the major resort areas of the State; and
(4)	Other factors which in the discretion of the Commission are worthy of consideration.
(b)	If, after considering the information obtained at the public hearing and from the investigations and the comments received under G.S. 16A-23, the Commission determines:
(1)	That the license will not adversely affect the public health, welfare, and safety;
(2)	That the race facility will be operated in accordance with all applicable laws and rules;
(3)	That the license will not create a competitive situation that will adversely affect racing and the public interest; and
(4)	That the applicant is financially able to operate a licensed race facility;
it may issue a Class A license to the applicant.
The license is effective until revoked or suspended by the Commission or relinquished by the licensee.
"§ 16A-26.  Changes in ownership or management.
If a change in the officers, directors, shareholders, or other persons with a present or inchoate direct or indirect financial or management interest in the licensee, or a change of ownership of more than five percent (5%) of the licensee's shares is made after the application is filed or the license issued, the applicant or licensee shall notify the Commission of the change within five days of its occurrence and provide the affidavit required by G.S. 16A-20(c)(4).
"§ 16A-27.  License suspension and revocation.
(a)	The Commission may suspend or revoke a Class A license for a violation of a law, order, or rule that the Commission determines adversely affects the integrity of horse racing in North Carolina, or for an intentional false statement made in a license application, or for a willful failure to pay any money required to be paid under this Chapter, or for failure to perform material covenants or representations made in a license application.
(b)	The Commission may suspend a Class A license indefinitely if it determines that the licensee has an officer, director, shareholder, or other person with a direct, indirect, or beneficial interest in the licensee who is a person who is in the Commission's opinion inimical to the integrity of horse racing in North Carolina or who cannot be certified under G.S. 16A-20(c)(4).
(c)	If the holder of a Class A, B, or D license is found to have more than fifty percent (50%) ownership or control by residents outside of this State, then the holder shall be considered inimical to the integrity and best interests of racing in North Carolina and shall be subject to license suspension and revocation provided the licensee has not complied by remedying the situation by a reasonable procedure and within a specified time allowance as ordered by the Commission.
(d)	A person whose Class A license is suspended or revoked pursuant to subsections (a), (b), or (c) of this section may commence a contested case hearing under Chapter 150B of the General Statutes.
(e)	In addition to the penalties set forth in this section, criminal penalties may be imposed as provided in Article 5 of this Chapter.
"§ 16A-28.  Multiple licenses.
A licensee may be permitted to hold multiple Class A licenses or Class A and Class B licenses provided the applicant is a corporation or partnership with widespread ownership of the stock or limited partnership interests held by North Carolina residents.
"§ 16A-29.  Work areas.
A Class A licensee shall provide, at no cost to the Commission, suitable work areas for Commission members, officers, employees, and agents who are directed by the Commission to supervise and control racing at the licensed race facility.
"§ 16A-30.  Class B license application.
(a)	The Commission may issue one or more Class B licenses for the operation, sponsorship, and management of licensed race facilities, or other licensed facilities.
(b)	The application for a Class B license shall be on a form the Commission prescribes and shall be accompanied by a bond in the principal amount of five hundred thousand dollars ($500,000) payable to the State of North Carolina conditioned upon the licensee's payment of all fees, taxes, and other money due and payable under this Chapter, including the horse owner's purses and payouts on winning pari-mutuel tickets.
(c)	The application shall contain:
(1)	The name and address of the applicant, and if it is a corporation or association, the names of all officers, directors, and shareholders, including those of any of its holding companies;
(2)	If required by the Commission, the names of any person or persons holding, directly, indirectly, or beneficially, an interest of any kind in the applicant or of any of its holding companies, whether the interest is financial, administrative, policy-making, or supervisory;
(3)	A statement of the assets and liabilities of the applicant;
(4)	An affidavit of the type described in G.S. 16A-20(c)(4); and
(5)	An irrevocable consent statement to be signed by the applicant, which states that suits and actions relating to the subject matter of the application or acts or omissions arising from it may be commenced against the applicant in any court of competent jurisdiction in this State by the service on the Secretary of State of any summons, process, or pleadings authorized by the laws of this State.
		If any summons, process, or pleading is served upon the Secretary of State, it shall be by duplicate copies.  One copy shall be retained in the Office of the Secretary of State and the other copy shall be forwarded immediately by certified mail to the address of the applicant, as shown by the records of the Commission.
"§ 16A-31.  Hearings; investigations.
(a)	Before granting an initial Class B license, the Commission shall hold at least one public hearing on the license.
(b)	Comprehensive investigations shall be conducted and their costs paid in the manner prescribed by G.S. 16A-24.
(c)	The Commission shall have access to all criminal history data compiled by the State Bureau of Investigation on Class B licensees and applicants.
"§ 16A-32.  License issuance and renewal.
(a)	If, after considering the information received from the hearing and investigations, the Commission determines that:
(1)	The applicant will conduct horse racing in accordance with all applicable laws and rules;
(2)	The issuance of a license will not adversely affect the public health, welfare, and safety;
(3)	The license will not create a competitive situation that will adversely affect racing and the public interest; and
(4)	The applicant is fit to sponsor and manage racing;
then, the Commission may issue a Class B license.
(b)	The license shall be granted for a period of 20 years, but it shall be reviewed annually.
(c)	On making the same determination required in G.S. 16A-25, the Commission may renew a Class B license without a hearing.
"§ 16A-33.  Changes in ownership or management.
If a change in the officers, directors, or other persons with a direct or indirect financial or management interest in the licensee or a change of ownership of more than five percent (5%) of the licensee's shares is made after the initial application or license issuance, the applicant or licensee shall notify the Commission of the changes within five days of their occurrence and provide the affidavit required in G.S. 16A-20(c)(4).
"§ 16A-34. License suspension and revocation.
(a)	The Commission may suspend, revoke, or refuse to renew a Class B license as provided under subsections (a), (b), or (c) of G.S. 16A-27.
(b)	A person whose Class B license is suspended, revoked, or refused renewal pursuant to this section may commence a contested case hearing under Chapter 150B of the General Statutes.
"§ 16A-35. Authority to issue Class C occupational licenses.
The Commission may issue Class C occupational licenses to persons who wish to be employed in horse racing where pari-mutuel wagering is conducted as:
(1)	Horse owners or lessees;
(2)	Jockeys or drivers;
(3)	Exercise workers;
(4)	Grooms;
(5)	Trainers and their assistants;
(6)	Pari-mutuel personnel;
(7)	Security officers; or
(8)	Other occupations the Commission determines require licensing to guarantee the integrity of horse racing in North Carolina.
"§ 16A-36. License agreements.
The Commission may enter into agreements with comparable bodies in other racing jurisdictions for the mutual recognition of occupational licenses issued by each body. The Commission may, by rule, provide for and charge a fee in an amount to be determined by the Commission for the registration of each license issued in another jurisdiction.
"§ 16A-37. Application.
An application for a Class C license shall be on a form prescribed by  the Commission and shall be accompanied by an affidavit of qualification that the applicant:
(1)	Is not in default in the payment of an obligation or debt to the State;
(2)	Has never been convicted of a felony in a state or federal court and does not have a state or federal felony charge pending;
(3)	Is not and never has been connected with or engaged in an illegal business;
(4)	Has never been found guilty of fraud or misrepresentation in connection with racing or breeding;
(5)	Has never been found guilty of a violation of law or rule relating to horse racing, pari-mutuel wagering, or any other form of gambling which is a serious violation as defined by the Commission's rules; and
(6)	Has never knowingly violated a rule or order of the Commission or a law of North Carolina relating to racing.
The application shall also contain an irrevocable consent statement, to be signed by the applicant, which states that suits and actions relating to the subject matter of the application or acts or omissions arising from it may be commenced against the applicant in any court of competent jurisdiction in this State by the service on the Secretary of State of any summons, process, or pleading authorized by the laws of this State. If any summons, process, or pleading is served upon the Secretary of State, it shall be by duplicate copies. One copy shall be retained in the Office of the Secretary of State, and the other copy shall be forwarded immediately by certified mail to the address of the applicant, as shown by the records of the Commission.
"§ 16A-38. Investigations.
(a)	The Commission shall investigate each applicant for a Class C license to the extent it deems necessary and may request the assistance of and may reimburse the State Bureau of Investigation in investigating applicants as provided in G.S. 16A-24.
(b)	The Commission may require that an applicant be fingerprinted or furnish his fingerprints.
(c)	The Commission may cooperate with national and international organizations and agencies in conducting investigations.
(d)	The Commission may provide for examining the qualifications of an applicant for the license for which the application is being made.
(e)	The Commission shall have access to all criminal history data compiled by the State Bureau of Investigation on Class C applicants and licensees.
"§ 16A-39. License issuance and renewal.
(a)	If the Commission determines that an applicant is qualified for the occupation for which licensing is sought and issuance of a license will not adversely affect the public health, welfare, and safety or the integrity of racing in North Carolina, it may issue a Class C license to the applicant.
(b)	Class C licenses are effective for one year.
(c)	If the Commission makes a similar finding for a renewal of a Class C license, it may renew the license.
"§ 16A-40. License suspension and revocation.
(a)	The Commission may suspend or revoke a Class C license (i) for a violation of law or rule that the Commission determines adversely affects the integrity of horse racing in North Carolina or (ii) for an intentional false statement made in a license application.
(b)	The Commission may delegate to its designated agents the authority to impose suspensions of Class C licenses, and the suspension may be appealed to the Commission according to its rules.
(c)	A person whose Class C license is suspended or revoked pursuant to this section may commence a contested case hearing under Chapter 150B of the General Statutes.
"§ 16A-41. Application for Class D license.
(a)	The Commission may issue special privilege Class D licenses for engaging in activities listed in G.S. 16A-18(a)(4) while operating, conducting, and managing horse racing on which pari-mutuel wagering is conducted.
(b)	An application for a Class D license shall be on a form the Commission prescribes.  An application for a Class D license shall be accompanied by detailed plans and specifications of the event, promotion, services, logistics, and other details requested by the Commission.
"§ 16A-42. Occupational licenses.
(a)	A person who participates in the management or conduct of horse racing or pari-mutuel wagering holding a Class D license, who is in an occupation listed in G.S. 16A-35, shall have a Class C license from the Commission except for active members of nonprofit organizations who act without compensation as concession workers, pari-mutuel clerks, or grounds attendants.
(b)	The Commission shall issue regulations and shall make decisions that are designed to increase the likelihood of employment for North Carolina citizens as occupational licensees without harming the racing industry.
"§ 16A-43.  Hearing.
Before granting an initial application for a Class D license, the Commission may hold a public hearing in the county where the license is to be issued, and if the race facility to be licensed is within a city or town, it may also request comments on the application from the governing body of the city or town.
"§ 16A-44. Issuance of Class D license.
(a)	If, after considering the information received at any hearing or hearings and considering the comments requested under G.S. 16A-43, the Commission determines that the license will not adversely affect the public health, welfare, and safety and that the racing to be licensed will be conducted in accordance with all applicable laws and rules, it may issue a Class D license to the applicant.
(b)	The license shall be valid for a period of one year or less, with the term to be specified in the license.
"§ 16A-45. Renewal.
After making the determinations required in G.S. 16A-44, the Commission may renew a Class D license without a hearing.
"§ 16A-46. Revocation and suspension.
(a)	Revocation and suspension of Class D licenses, and refusals to renew Class D licenses, are as provided in G.S. 16A-27.
(b)	A  person whose Class D license is suspended or revoked, or who is refused a renewal license, may commence a contested case hearing pursuant to Chapter 150B of the General Statutes.
(c)	Criminal penalties may also be imposed as provided in Article 5 of this Chapter.
"§ 16A-47. License fees.
(a)	The fee for a Class A license is twelve thousand dollars ($12,000), payable at two thousand dollars ($2,000) per month for a period of six months from the date of issuance of the owner's license to the date of the beginning of the operation of the related race facility.  The license fee shall be used by the Commission for operating expenses prior to the beginning of operation of the race facility.
(b)	The fee for a Class B horse racing license is one hundred dollars ($100.00) for each assigned racing day on which racing is actually conducted.
(c)	Fees imposed on Class B and Class D licenses shall be paid to the Commission at the time and in the manner provided by rules adopted by the Commission.
(d)	The Commission shall adopt rules establishing an annual license fee for each occupation it licenses under G.S. 16A-35, but no annual fee for a Class C license may exceed one hundred dollars ($100.00).
(e)	All license fees received by the Commission shall be paid into the Commission's State Treasurer disbursement account, according to G.S. 16A-61.
"ARTICLE 4.
"Wagering/TV/Race Dates/Stewards.
"§ 16A-48. Authority.
A Class B license gives the licensee authority to conduct pari-mutuel wagering on the results of races run at the licensed race facility, and on other races as authorized by the Commission in G.S. 16A-64.
"§ 16A-49. Requirements.
A licensee conducting pari-mutuel wagering shall provide in a licensed heated and air-conditioned facility:
(1)	The necessary equipment for issuing pari-mutuel tickets; and
(2)	Mechanical or electronic equipment for displaying information the Commission requires.  All mechanical or electronic devices shall be approved by the Commission before being used.
"§ 16A-50.  Types of wagering.
(a)	The Commission shall by rule designate those types of pari-mutuel pools which are permitted at licensed facilities, and no licensee may conduct any type of pari-mutuel pool which has not been so designated.
(b)	In addition to publication required under the Administrative Procedure Act, these rules shall be published by the Commission in book or pamphlet form for general distribution to all interested persons.
(c)	Under the authorized pari-mutuel system of wagering, a licensee shall be permitted to provide separate pools for bets to win, place, and show, as well as separate pools for more complex wagers involving such combinations of races and combinations of the outcome of races as shall be approved by the Commission.
(d)	Each pool, less the amount the licensee is permitted to retain pursuant to the provisions of this Chapter, shall be distributed separately to the winners in accordance with the rules of the Commission for that kind of pari-mutuel pool.
(e)	If there is no ticket wagered on the winning horse for any pari-mutuel pool, the portion of the pool which would have been distributed to any winners shall be distributed to the holders of tickets for that pool in accordance with the rules of the Commission for that kind of pari-mutuel pool.
"§ 16A-51. Take-out rate; distribution of winnings.
(a)	A licensee conducting pari-mutuel wagering shall deduct from a straight pari-mutuel pool, before payments to holders of winning tickets, an amount equal to sixteen percent (16%) of the total money in that pool plus the breakage applicable to the winning wagers for that pool.
(b)	A licensee shall deduct from a two-entry pool, before payments to holders of winning tickets, an amount equal to seventeen percent (17%) of the total money in that pool plus the breakage applicable to the winning wagers for that pool.
(c)	A licensee shall deduct from a multiple three- or four-selection pool, before payments to holders of winning tickets, an amount equal to eighteen percent (18%) of the total money in that pool plus the breakage applicable to the winning wagers for that pool.
(d)	A licensee shall deduct from a super exotic pool of five or more selections an amount equal to nineteen percent (19%) of the total money in that pool plus the breakage applicable to the winning wagers for that pool.
(e)	It is the intent of the General Assembly that the take-out rates at all licensed pari-mutuel facilities, including any off-site wagering facilities, be uniform throughout the State.
(f)	The remaining money in each pool shall be distributed among the holders of winning tickets in a manner the Commission by rules prescribes for each type of pool.
"§ 16A-52.  Breakage.
(a)	Breakage shall be computed on the basis of payoffs rounded down to the next lowest increment of ten cents (10¢), with a minimum payoff of two dollars and twenty cents ($2.20) on a two-dollar ($2.00) ticket, except that the licensee may reduce the minimum payoff to two dollars and ten cents ($2.10) on a two-dollar ($2.00) ticket if there is not a sufficient amount in a pool to make a minimum payoff of two dollars and twenty cents ($2.20).
(b)	A licensee shall be permitted to retain all monies representing the breakage provided that those funds are used for special events, publicity, promotions, and projects of the facility.
"§ 16A-53.  Backstretch Fund.
A licensee shall annually furnish to the Commission all net underpayments over net overpayments.  The funds received by the Commission under this section shall be used by the Commission for a Backstretch Fund to provide services to jockeys and racetrack workers who would reside at the licensed facilities including dormitories, the track chaplaincy, jockey and worker disability payments, and other social and educational services.
"§ 16A-54.  Capital improvements.
(a)	From the amounts deducted from all pari-mutuel pools by a licensee, an amount equal to one percent (1%) of all money in all pools shall be set aside by the licensee and used for capital improvements.
(b)	With the permission of the Commission, that amount may be accumulated from year to year provided the funds are directly specified to be used on a qualified project.
"§ 16A-55.  Purses.
(a)	From the amounts deducted from all horse racing pari-mutuel pools by a licensee, an amount equal to seven percent (7%) of all money in all pools shall be set aside by the licensee for horse racing and used for purses for horse races conducted by the licensee.
(b)	From the amounts deducted from all pari-mutuel pools by all licenses, an amount equal to one percent (1%) of all money in all pools shall be set aside by the licensee for use in the North Carolina Horse Breeding and Development Funds described in this Chapter.
"§ 16A-56.  Payments to State.
(a)	There is imposed on the total amount wagered on all pari-mutuel pools on each racing day a tax of one-half of one percent (1/2 of 1%) except that the State shall receive an additional one-half of one percent (1/2 of 1%) of all super exotic pools involving five or more selections.
(b)	A licensee annually shall furnish to the Commission all net underpayments over net overpayments.
(c)	A licensee shall designate and pay to the Commission for deposit in the respective North Carolina Horse Breeding and Development Funds one percent (1%) of the total amount wagered on all pari-mutuel pools on each racing day.
(d)	The taxes imposed by this section shall be paid from the amounts permitted to be withheld by a licensee under G.S. 16A-55.
(e)	The Commission may impose an additional admissions tax of not more than ten cents (10¢) per person at any licensed race facility if:
(1)	The additional tax is requested by a local unit of government within whose borders the facility is located;
(2)	A public hearing is held on the request; and
(3)	The Commission finds that the local unit of government requesting the additional tax is in need of its revenue to meet extraordinary expenses caused by the facility.
"§ 16A-57.  Payment.
(a)	The licensee shall remit the tax to the Commission or its representative within seven days of the day on which it was collected.
(b)	The payments shall be accompanied by a detailed statement of the remittance on a form the Commission prescribes.
(c)	The Commission may by rule provide for the direct deposit of required payments in the Commission's account in a financial institution within the State and for determining the time of applicability of different tax rates under G.S. 16A-56.
"§ 16A-58.  Tax exclusive.
The tax imposed by G.S. 16A-56 is in lieu of any tax or license fee, other than the taxes on real property, imposed by a political subdivision and is in lieu of any other sales or excise tax imposed by the State on race facility admissions or pari-mutuel pools or pari-mutuel ticket sales.
"§ 16A-59. Reports.
(a)	Within 100 days of the end of a racing meeting, a licensee collecting the taxes imposed by G.S. 16A-56 shall file with the Commission a certified statement of receipts from all sources during the racing meeting and of expenses and disbursements, itemized on a form the Commission prescribes after consultation with the State Auditor, showing the licensee's net revenues from all sources.
(b)	The statement shall be prepared by a certified public accountant in accordance with generally accepted auditing standards.
"§ 16A-60. Breeding funds.
(a)	The Commission shall establish the North Carolina Horse Breeding and Development Funds with the respective monies from horse racing paid to it under G.S. 16A-56.
(b)	The Commission shall issue rules that shall provide that after paying the current cost of administering the funds, the remaining funds shall be distributed for:
(1)	North Carolina Purse Enrichment;
(2)	Breeders Awards;
(3)	North Carolina Stallion Owner Awards;
(4)	Owners Premium Awards; and
(5)	Research related to racing horses.
(c)	The Commission shall issue rules defining the requirements for qualifying for payments under subsection (b) of this section and for the distribution of the funds.
(d)	The Commission may establish advisory committees to advise it on the distribution of money under this section, provided that the members of any advisory committee shall serve without compensation.
"§ 16A-61. Distribution of taxes and fees collected by the Commission.
(a)	The Commission shall distribute all money received under this section and all money received from license fees in the following manner:
(1)	All money designated for deposit in the North Carolina Horse Breeding and Development Funds shall be paid into those funds for distribution under G.S. 16A-60.
(2)	Revenue from an additional admissions tax of ten cents (10¢) per person imposed under G.S. 16A-56 shall be paid to the local unit of government at whose request it was imposed, at times and in the manner the Commission, by rule, determines.
(3)	All other revenues received under this Chapter by the Commission, and all license fees and other revenues it receives, shall be paid to the Commission and shall be deposited by the State Treasurer to the account of the Commission.
All monies remaining after (i)	the payment of all expenses incurred in the administration of this Chapter; and (ii) the deposit into the North Carolina Horse Breeding and Development Funds of all amounts required by G.S. 16A-50, shall be allocated, combined by the Commission with other excess funds, or paid not less frequently than once each calendar year, twenty-five percent (25%) to:
(1)	Agricultural research;
(2)	Agriculture extension education (includes 4-H);
(3)	Nonracing horse breeds;
(4)	North Carolina State University College of Veterinary Medicine to be used to help develop the laboratory facilities needed for drug testing and equine research;
(5)	Agricultural program at North Carolina A&T; and
(6)	Other allocations as specified by the General Assembly for any fiscal year, in furtherance of the purposes of this Chapter.
The remaining seventy-five percent (75%) and any other funds not allocated to these programs will be returned to the State Treasurer for deposit in the General Fund.
(b)	If any allocation of any portion of the net revenues of the Commission pursuant to any provision of this Article cannot be made for any reason, then the failure of the allocation shall not impair the validity or effectiveness of any part of this Chapter other than the provisions specifically providing for that allocation, nor shall the failure of the allocation adversely affect any other allocation of net revenues under this Chapter.
"§ 16A-62. Policy.
It is expressly declared that the primary purpose of this Chapter is to provide a means for permitting and regulating horse racing and pari-mutuel wagering, and, further, that it is not a primary purpose of this Chapter to provide funds for the various governmental bodies and public or private institutions and organizations to which allocations or portions of the net revenues of the Commission are made pursuant to this Article.  The allocations of any net revenues made pursuant to this Article represent the legislative effort to confer incidental incentives and benefits upon a spectrum of animal, agricultural, and governmental activities that develop the State's tourism, equine industry, and farmland usage.
"§ 16A-63.  Prohibited acts.
(a)	A licensee may not accept a wager from any person under the age of 21 years.
(b)	A licensee may not accept a wager of less than two dollars ($2.00) from anyone.
(c)	No one under 21 years of age is allowed to be in the betting area.
(d)	During day hours, there is no minimum age for attendance at a racing facility.  During night hours, minors ages 12 to 17 shall be accompanied by an adult, and no person under the age of 12 shall be permitted to attend.
"§ 16A-64. Televised races.
(a)	The Commission by rule may permit a Class B licensee to conduct pari-mutuel wagering on horse races run in this or other states and broadcast by television on the premises of the licensed racing facility.
(b)	All provisions of law governing pari-mutuel wagering apply to pari-mutuel wagering on televised races except as otherwise provided in this section or in the Commission's rules.
(c)	Pari-mutuel pools conducted on televised races may consist only of money wagered on the premises and may, pursuant to rules issued by the Commission, be commingled with other pools off the premises.
(d)	Proceeds from the pari-mutuel pool may be used by the licensee, pursuant to rules issued by the Commission, to:
(1)	Pay a fee to the person or entity conducting the race for the privileges of conducting pari-mutuel wagering on the race;
(2)	Pay the cost of transmitting the broadcast of the race; and
(3)	Pay part of the take-out designated to enhance purses to the sending facility and to enhance purse structure.
(e)	Pari-mutuel wagering on a televised race may be conducted on a racing day other than a racing day assigned by the Commission.
(f)	The take-out and taxes on pari-mutuel pools on televised races are as provided for other pari-mutuel pools.
(g)	All televised races under this section shall comply with the Interstate Horse Racing Act of 1978 as found in the United States Code, Title 15, section 3001 and the following relevant sections.
(h)	Nothing contained in this Chapter shall be construed to authorize or legalize any wagering or gambling at any location other than the pari-mutuel facilities licensed by this Commission.
"§ 16A-65.  Racing dates.
(a)	An operator's racing license issued under this Chapter shall permit the holder to conduct one or more race meetings each year at the race facility to which the license applies.
(b)	Racing may be conducted any six of seven afternoons or nights a week throughout the year, except post or matinee starting times on Sundays shall not be before 1:30 p.m.  and not after 6:00 p.m.
"§ 16A-66.  Assignment of racing days.
(a)	The Commission shall assign racing days to each licensee authorized to conduct racing with pari-mutuel wagering and a licensee may conduct matinee and evening racing with pari-mutuel wagering only on a racing day assigned by the Commission.
(b)	The Commission may assign racing days for up to three years beyond the year in which the assignment is made.
(c)	The assignments of racing days in any year shall be made by July 1 of the previous year, except that days may be assigned after that date to a licensee whose license is issued after that date.
"§ 16A-67.  Racing days; hearing.
(a)	A public hearing is required before the Commission may:
(1)	Make an assignment of racing days;
(2)	Revise the assignment during the year; or
(3)	Assign racing days to a licensee whose license is issued after the initial assignment.
(b)	The Commission may without a hearing assign one additional racing day to a licensee for each originally assigned racing day during the same racing meeting on which racing was not conducted for reasons beyond the licensee's control.
"§ 16A-68.  Required races.
By rule the Commission may set the number of required races.  Each holder of a Class B license shall declare and schedule, on each racing day it conducts, at least one race which:
(1)	Before January 1, 1999, is limited to horses which are North Carolina-bred, North Carolina-foaled, North Carolina-trained, or North Carolina-owned, and
(2)	On and after January 1, 1999, is limited to horses which are North Carolina-bred, or North Carolina-foaled, and which are North Carolina-trained.  If there are not a sufficient number of these horses entered in the declared race to make up an adequate slate of entries, another race may be substituted.  The Commission shall by rule define 'North Carolina-foaled', 'North Carolina-owned', and 'North Carolina-trained'.
"§ 16A-69.  Prohibited assignments.
(a)	The Commission may not assign a license for racing days to any facility not in operation at least 10 months out of the year offering horse racing or simulcasting.
(b)	The Commission may not assign a licensee for county fair racing days; however, all racing facilities shall advertise to their patrons county fair events and agricultural products produced in the State.
"§ 16A-70.  Rescinding of racing days.
The Commission may, after a public hearing, rescind one or more racing days assigned to a licensee if it determines that the licensee has not met or will not meet the terms of the license.  A rescinded day or days may be reassigned to another licensee.
"§ 16A-71.  Stewards, powers and duties.
(a)	All horse races run at a licensed race facility shall be presided over by a board of three stewards, two of whom shall be appointees of the Commission or persons approved by it, and one appointed by the licensee conducting the race meeting.
(b)	The Commission shall designate one steward as chairman.
(c)	At least two stewards for all races shall be employees of the Commission and they shall be exempt from the State Personnel Act.
(d)	The Commission may delegate the following duties and powers to a board of stewards:
(1)	To ensure that races are run in accordance with the Commission's rules;
(2)	To supervise the conduct of racing to ensure the integrity of the sport;
(3)	To settle disputes arising from the running of horse races and to certify official results;
(4)	To impose on licensees, for violation of law or Commission rules, fines not exceeding five hundred dollars ($500.00) and license suspensions not exceeding 30 days;
(5)	To recommend to the Commission where penalties are warranted in excess of those in subdivision (4) of this subsection;
(6)	To otherwise enforce the laws and rules of racing; and
(7)	To perform other duties and have other powers assigned by the Commission.
"§ 16A-72.  Board of stewards; appeals; hearings.
(a)	A ruling of a board of stewards may be appealed to the commission or be reviewed by it on its own initiative.
(b)	The Commission may provide for appeals to be heard by less than a quorum of the Commission.
(c)	A hearing on a penalty imposed by a board of stewards shall be granted on request.
(d)	A Commission decision with regard to a ruling by a board of stewards constitutes a final agency decision for purposes of appeal under the Administrative Procedure Act.
"§ 16A-73. Board of stewards; procedural powers.
A board of stewards may administer oaths, issue subpoenas, order the production of documents and other evidence, and regulate the course of hearings before it, according to the Commission's rules.
"§ 16A-74. Board of stewards; rules.
The Commission may adopt rules governing the qualifications, appointment, approval, authority, removal, and compensation of stewards.
"§ 16A-75. Board of stewards; costs.
The Commission may require that a licensee reimburse it for the costs of providing a State-paid steward or stewards to supervise racing at the licensee's race facility.
"§ 16A-76. Board of stewards; compensation.
The total compensation of stewards who are not employees of the Commission shall be commensurate with the compensation of stewards who are Commission employees.
"ARTICLE 5.
"Judicial.
"§ 16A-77.  Contracts.
(a)	The Commission shall by rule require that all contracts entered into by Class A, Class B, or Class D licensees for the provision of goods or services, including concessions contracts, be subject to Commission approval.
(b)	The Commission may require a contract holder to submit to it documents and records the Commission deems necessary to evaluate the contract.
"§ 16A-78. Appeals.
Appeals from a decision of the Commission shall be made in the manner prescribed by the North Carolina Administrative Procedure Act.
"§ 16A-79. Right of inspection.
The Commission and its representatives have the right to inspect the licensed premises of a licensee and to examine his books and other records at any time without a search warrant.
"§ 16A-80.  Civil penalties.
(a)	The Commission shall by rule establish a graduated schedule of civil penalties for violations of laws related to horse racing or of the Commission's rules.  The schedule shall include minimum and maximum civil penalties for each violation and be based on and reflect the culpability, frequency, and severity of the violator's actions.
(b)	The Commission may impose a civil penalty from this schedule on a licensee for a violation of rules or laws relating to horse racing.
(c)	The civil penalty is in addition to any criminal penalty imposed for the same violation.
(d)	A person who has a civil penalty assessed against them may commence a contested case hearing pursuant to Chapter 150B of the General Statutes.
"§ 16A-81.  Rule-making authority.
The Commission may, in addition to all other rule-making authority granted elsewhere in the General Statutes, adopt rules governing:
(1)	The conduct of horse races held at licensed race facilities in North Carolina, including, but not limited to, the rules of racing, standards of entry, operation of claiming races, filing and handling of objections, carrying of weights, and declaration of official results;
(2)	Wire communications between the premises of a licensed race facility and any place outside the premises;
(3)	Information on horse races which is sold on the premises of a licensed race facility;
(4)	Liability insurance which it may require of all Class A, Class B, and Class D licensees;
(5)	The auditing of the books and records of a licensee by an auditor employed or appointed by the Commission;
(6)	Emergency action plans maintained by licensed race facilities and their periodic review;
(7)	Safety, security, and sanitation of stabling facilities at licensed race facilities as well as general guidelines regarding off-track stables;
(8)	Entry fees and other funds received by a licensee in the course of conducting racing which the commission determines shall be placed in escrow accounts; and
(9)	Any other aspect of horse racing or pari-mutuel wagering which in its opinion affects the integrity of racing or the public health, welfare, or safety.
Rules of the Commission are subject to the North Carolina Administrative Procedure Act.
"§ 16A-82. Illegal wagering.
No person may place or accept a wager on or off the premises of a licensed race facility other than a wager made within a licensed pari-mutuel system.
"§ 16A-83. Off-track wagers; bookmaking.
No person may, as part of an organized commercial activity, place or accept a wager off the premises of a licensed race facility for delivery to a licensed race facility.
"§ 16A-84.  Transmission of racing information prohibited.
(a)	With the exception of television or radio coverage of races authorized in accordance with G.S. 16A-64, it shall be unlawful for any person to transmit or communicate to another person by any means whatsoever the results, changing odds, track conditions, or other information relating to any horse race from any race facility in this State between the period of time beginning one hour prior to the first race of the day and ending 30 minutes after the posting of the official results of each race, as to that particular race, except this period may be reduced to permit the transmitting of the result of the last race each day not sooner than 15 minutes after the official posting of the results.
(b)	The Commission may by rule permit the immediate transmission by radio, television (other than television or radio coverage pursuant to G.S. 16A-64), or press wire of any pertinent information concerning special or feature races.
(c)	It shall be unlawful for any person to transmit by any means whatsoever racing information to any other person or relay the same to any other person by word of mouth, by signal, or by use of telephone, telegraph, radio, or any other means when the information is knowingly used or intended to be used for illegal gambling purposes or is used in furtherance of illegal gambling purposes.
"§ 16A-85.  Influencing races.
No person may influence or attempt to influence a horse race by:
(1)	Making threats;
(2)	Offering anything of value to a person involved in the conduct of a race in return for that person's committing an illegal act or failing to perform a duty; or
(3)	Conspiring with or seeking or having an understanding or agreement with a person involved in the conduct of a race to commit an illegal act or to fail to perform a duty.
"§ 16A-86.  Tampering with horses.
No person may:
(1)	On the premises of a licensed race facility, use, have in his possession with intent to use, or knowingly assist another person in using a battery or buzzer, electrical or mechanical, or other device or appliance, which can be used to affect a horse's racing condition or performance, other than an ordinary whip for a horse;
(2)	Affect or attempt to affect the racing condition or performance of a horse at a race or workout through the use of a drug or medication in violation of the Commission's rules;
(3)	Use any method, injurious or otherwise, to affect a horse's racing condition or performance at a race or workout in violation of the Commission's rules;
(4)	Knowingly enter or cause to be entered in a race any horse under an assumed name or out of its proper grade or class;
(5)	Change the name of any horse for the purpose of entry in a race after the horse has once raced except as provided by the operator's rules under which the contest is advertised to be run; or
(6)	Knowingly misrepresent or fraudulently conceal the public performance in any former race of any horse that is proposed to be entered in a race, whether the horse is actually entered or not.
"§ 16A-87.  False time by official timer.
No official timer at any race shall willfully and falsely announce a slower or faster time than that actually run by a horse when the result of that race is to constitute a record.
"§ 16A-88.  Reporting of information.
A person licensed by the Commission who has information regarding a violation of any provision of this Chapter shall report that information promptly to the Commission or an agent of the Commission.
"§ 16A-89.  False statement.
No person may knowingly make a false statement in a document or application required to be submitted to the Commission or in a sworn statement to or testimony before the Commission.
"§ 16A-90.  Altered tickets.
No person may knowingly offer for payment any pari-mutuel ticket which has been altered or any counterfeit or forged pari-mutuel ticket.
"§ 16A-91.  Conducting race without license.
(a)	Any person who directly or indirectly holds any horse race without having procured a license as prescribed in this Chapter shall be guilty of a misdemeanor.
(b)	Any person wagering upon the results of a race conducted without the proper license, except in the case of pari-mutuel wagering conducted by an operator in accordance with the provisions of this Chapter, shall be guilty of a misdemeanor.
"§ 16A-92. Misuse of license.
Any credential, license, or permit issued by the Commission, if used by the holder for a purpose other than identification and in the performance of legitimate duties on a race facility, shall be automatically revoked whether so used on or off a race facility.
"§ 16A-93. Class G felonies.
A violation of G.S. 16A-85 or G.S. 16A-86 is a Class G felony, in addition to any civil penalty which may be imposed pursuant to this Article.
"§ 16A-94. Class H felonies.
A violation of the prohibition contained in G.S. 16A-83 or a violation of G.S. 16A-90 is a Class H felony, in addition to any civil penalty which may be imposed pursuant to this Article.
"§ 16A-95. Class I felonies.
A violation of G.S. 16A-88 or G.S. 16A-89 is a Class I felony, in addition to any civil penalty which may be imposed pursuant to this Article.
"§ 16A-96. Misdemeanors.
A violation of any other provision of this Chapter or the General Statutes relating to this Chapter, or of a rule or order of the Commission for which another penalty is not provided is a misdemeanor, in addition to any civil penalty which may be imposed pursuant to this Chapter.
"§ 16A-97. Persons excluded.
The Commission may exclude from any and all licensed race facilities in the State a person who:
(1)	Has been convicted of a felony under the laws of any state or the United States;
(2)	Has had a license suspended, revoked, or denied by the Commission or by the racing authority of any other jurisdiction; or
(3)	Is determined by the Commission, on the basis of evidence presented to it, to be a threat to the integrity of racing in North Carolina.
"§ 16A-98. Disqualification due to gambling activities.
No person who engages in the practice of professional gambling on horse races, or in the practice of making gambling or wagering books on races, or who knowingly takes any part in that practice, shall be eligible as an applicant for any license or permit to own or operate a race facility or conduct racing activities under the provisions of this Chapter, or to be connected therewith in any capacity; and any corporation, partnership, or other entity which has an officer, director, stockholder, partner, or executive, or who employs any person who engages in those practices shall likewise be ineligible as a licensee; and the Commission may inquire into these matters in considering any application and otherwise in administering this Chapter.
"§ 16A-99. Appeal; hearing.
An order to exclude a person from any or all licensed race facilities in the State shall be made by the Commission after a public hearing of which the person to be excluded shall have at least 15 days' notice. If the person is present at the hearing, the person shall be permitted to show cause why the person should not be excluded. An appeal of the order may be made in the same manner as other appeals under G.S. 16A-78.
"§ 16A-100. Notice to race facilities.
Upon issuing an order excluding a person from any or all licensed race facilities, the Commission shall send a copy of the order to the excluded person and to all race facilities named in it along with other information as it deems necessary to permit compliance with the order.
"§ 16A-101. Prohibitions.
It is a misdemeanor for a person named in an exclusion order to enter, attempt to enter, or be on the premises of a race facility named in the order while it is in effect, and for a person licensed to conduct racing or operate a race facility knowingly to permit an excluded person to enter or be on the premises.
"§ 16A-102. Exclusions by race facility.
The holder of a license to conduct racing may eject and exclude from its premises any licensee or any other person who is in violation of any State law or Commission rule or order or who is a threat to racing integrity or the public safety. A person so excluded from a race facility premises may appeal his exclusion to the Commission and shall be given a public hearing on his appeal if the person so requests. At the hearing the person shall be given the opportunity to show cause why the person should not be so excluded. If the Commission, after the hearing, finds that the integrity of racing and the public safety do not justify the exclusion, it shall order the race facility making the exclusion to reinstate or readmit the person. An appeal of a Commission order upholding the exclusion is governed by G.S. 16A-79.
"ARTICLE 6.
"Miscellaneous.
"§ 16A-103.  Medication.
(a)	The Commission shall adopt and enforce rules governing medication and medical testing for horses running at licensed race facilities.  The rules shall provide which, if any, medication may be administered to a horse within a specified number of hours of a race before it runs at a licensed race facility.
(b)	The Commission shall adopt rules establishing the qualifications for on- and off-premise laboratories used by it as testing laboratories to enforce its rules under this section.
"§ 16A-104.  Possession of certain drugs prohibited.
(a)	The possession or transportation of any drug or chemical except those permitted by regulations of the Commission within the racing enclosure is prohibited except upon a bona fide veterinarian's prescription with complete statement of uses and purposes on the container.
(b)	A copy of the prescription shall be filed with the stewards.
(c)	The Commission may allow medical emergency exceptions.
"§ 16A-105.  Advisory committee.
The Commission may establish an advisory committee to advise it on medication under this section, provided that the members of an advisory committee shall serve without compensation.
"§ 16A-106.  Determination of class.
The grade or class to which a horse belongs for the purpose of an entry in any race shall be determined by the public performance of that horse in any former race, except as provided by the operator's rules under which the proposed race is advertised to be run.
"§ 16A-107.  Provisions of this Chapter control.
Insofar as the provisions of this Chapter may be inconsistent with the provisions of any other law concerning activities and actions authorized by this Chapter, including, but not limited to, Chapters 14 and 16 of the General Statutes, the provisions of this Chapter shall control, it being specifically declared that any other provisions of existing law, ordinance, or regulation that prohibit or regulate horse racing, admissions, gambling, or pari-mutuel wagering shall not be applicable to any activities or actions authorized by this Chapter."
Sec. 2. G.S. 14-289 reads as rewritten:
"§ 14-289. Advertising lotteries.
Except in connection with a lawful raffle as provided in Part 2 of this Article, if anyone by writing or printing or by circular or letter or in any other way, advertise or publish an account of a lottery, whether within or without this State, stating how, when or where the same is to be or has been drawn, or what are the prizes therein or any of them, or the price of a ticket or any share or interest therein, or where or how it may be obtained, he shall be guilty of a misdemeanor.  As used in this Article, the word 'lottery' does not include pari-mutuel wagering conducted in accordance with the provisions of Chapter 16A of the General Statutes."
Sec. 3. G.S. 14-292 reads as rewritten:
"§ 14-292. Gambling.
Except as provided in Part 2 of this Article, any person or organization that operates any game of chance or any person who plays at or bets on any game of chance, other than pari-mutuel wagering conducted in accordance with the provisions of Chapter 16A of the General Statutes, at which any money, property or other thing of value is bet, whether the same be in stake or not, shall be guilty of a misdemeanor."
Sec. 4.  There is appropriated from the General Fund to the North Carolina Racing Commission the sum of one hundred fifty thousand dollars ($150,000) for fiscal year 1993-94 to provide initial start-up funds for the Commission. This appropriation shall be repaid to the General Fund out of the proceeds collected under the provisions of this Chapter.
Sec. 5.  It is the intent of this act that the Commission shall be a self-supporting agency of State government located in the Department of Commerce.  No appropriations, loans, or other transfer of State funds shall be made to the Commission except for appropriations for initial start-up costs of the Commission as provided by this act.  Any other appropriation, loan, or transfer of State funds to any other entity for the purposes of horse racing with pari-mutuel wagering is prohibited.
Sec. 5.1.  G.S.  120-123 is amended by adding a new subdivision to read: 
"(60)	The North Carolina Racing Commission as established by G.S.16A-4."
Sec. 6.  G.S.  147-69.2(a) is amended by adding a new subdivision to read: 
"(21)	The North Carolina Racing Commission."
Sec. 7. If approved by the qualified voters of the State of North Carolina, Sections 1 through 6 of this act shall become effective on the first day of the second month following the election. The question of approval of this act shall be submitted to the qualified voters of the State of North Carolina at an election held on November 2, 1993.
The referendum shall be held in accordance with the provisions of Chapter 163 of the General Statutes, and the form of the ballot shall be:
"[ ]	FOR approval of an act establishing horse racing and a State Racing Commission.
[ ]	AGAINST approval of an act establishing horse racing and a State Racing Commission."
If less than a majority of the votes are cast in favor of the approval of this act, it shall have no force or effect.
Sec. 8.  Sections 7 and 8 of this act are effective upon ratification.