A BILL TO BE ENTITLED
AN ACT TO increase regulation of the possession or operation of VIDEO GAMING mACHINES and providing funding for such regulation.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 14‑306(c) reads as rewritten:
"(c)	Any video machine, the operation of which is made lawful by subdivision (b)(2)of this section, shall have affixed to it in view of the player a sticker informing that person that it is a criminal offense with the potential of imprisonment for the location where video gaming machines are operating to pay more than that which is allowed by law. Within 60 days after the effective date of this sentence, all machines referred to in subdivision (b)(2) of this section will be equipped with a hand count feature to permit the reconciliation of the number of plays and the number of paper coupons issued. In addition, if the machine has an attract chip which allows programming, the static display shall contain the same message regarding the illegality of payments in excess of those allowed by law."
SECTION 2.  G.S. 14‑306.1 reads as rewritten:
"§ 14‑306.1.  Types of machines and devices prohibited by law; penalties.
(a)	Ban on New Machines. – It shall be unlawful for any person to operate, allow to be operated, place into operation, or keep in that person's possession for the purpose of operation any video gaming machine as defined in subsection (c) of this section unless either:
(1)	Such machine was:
a.	Lawfully in operation, and available for play, within this State on or before June 30, 2000; and
b.	Listed in this State by January 31, 2000 for ad valorem taxation for the 2000‑2001 tax year; or
(2)	Such machine is within the scope of the exclusion provided in G.S. 14‑306(b)(1).
(b)	Prohibition of More Than Three Existing Video Gaming Machines at One Location. – It shall be unlawful for any person to operate, allow to be operated, place into operation, or keep in that person's possession for the purpose of operation at one location more than three video gaming machines as defined in subsection (c).
(c)	Definitions. – As used in this section, a video gaming machine means a slot machine as defined in G.S. 14‑306(a) and other forms of electrical, mechanical, or computer games such as by way of illustration:
(1)	A video poker game or any other kind of video playing card game.
(2)	A video bingo game.
(3)	A video craps game.
(4)	A video keno game.
(5)	A video lotto game.
(6)	Eight liner.
(7)	Pot‑of‑gold.
(8)	A video game based on or involving the random or chance matching of different pictures, words, numbers, or symbols not dependent on the skill or dexterity of the player.
For the purpose of this section, a video gaming machine is a video machine which requires deposit of any coin, token, or use of any credit card, debit card, or any other method that requires payment to activate play of any of the games listed in this subsection. The enumeration of games in the list in this subsection does not authorize the possession or operation of such game if it is otherwise prohibited by law.
For the purpose of this section, a video gaming machine includes those that are within the scope of the exclusion provided in G.S. 14‑306(b)(2), but does not include those that are within the scope of the exclusion provided in G.S. 14‑306(b)(1).
(d)	Age Requirement. – It shall be an infraction for any person under the age of 18 years to play any video gaming machine defined in subsection (c) of this section. It shall be unlawful for the operator of the video gaming machine to knowingly allow a person under the age of 18 years to play any video gaming machine as proscribed by this subsection.
(e)	Hours of Operation. – It shall be unlawful to operate or allow the operation of any video gaming machine during the hours of 2:00 A.M. Sunday through 7:00 A.M. Monday.
(f)	Plain View. – Any video gaming machine available for operation shall be in plain view of persons visiting the premises.
(g)	Advertising Prohibited. – It is unlawful to advertise the operation of video gaming machines by use of on‑premise or off‑premise signs.
(g1)	Each video gaming machine shall have a serial number which shall be permanently affixed to the machine. No machine operated under this section shall display the words "jackpot," "casino," or "Las Vegas," either with signage or electronically nor shall such machine emit those words in an audible fashion.
(h)	Proximity to Other Locations Regulated; Permanent Building Required. – Each location where it is lawful to operate any video gaming machines as defined in G.S. 14‑306.1(c) shall be at least 300 feet in any plane from any other location where such machines are operated. For the purpose of this section, a location is a permanent building having, or being within, a single exterior structure. Notwithstanding this subsection, two or more places where video gaming machines were lawfully operated under separate ownership on June 30, 2000, shall be considered to be separate locations more than 300 feet from each other, regardless of the distance from each other or whether they are located in the same building or edifice. Video gaming machines as defined in G.S. 14‑306.1(c) may be operated only within permanent buildings.
(i)	Registration With Alcohol Law Enforcement (A.L.E.). – No later than  October 1, 2004, the owner of any video  gaming machine which is regulated by this section and which was previously eligible to be registered with the appropriate Sheriff in calendar year 2000 under the previous version of this subsection shall register all machines with Alcohol Law Enforcement using a standardized registration form or online process supplied by the A.L.E. Such registration shall contain the name and address of the machine owner, the serial number of all machines owned by said machine owner, the name and address of the location of all such machines at the time of registration, as well as the name of the owner of the location of all machines in operation. Any change in location of registered machines for warehousing or temporarily for repair of nonoperational machines, or to another business location for operation must be reported to A.L.E. within five days of such relocation and before such machines are operational. A.L.E. shall be allowed by all such businesses where machines are operated or housed to enter the premises to inspect its video gaming machines.
The registration form shall be signed under oath by the owner of the machine. A material false statement in the registration form shall subject the owner to seizure of the machine under G.S. 14‑298 in addition to any other punishment imposed by law. 		
(l)	Exemption for Certain Machines. – This section shall not apply to assemblers, manufacturers, and transporters of video gaming machines who assemble, manufacture, and transport them for sale in another state as long as the machines, while located in this State, cannot be used to play the prohibited games, and does not apply to those who assemble, manufacture, and sell such machines for the use only by a federally recognized Indian Tribe if such machines may be lawfully used on Indian Land under the Indian Gaming Regulatory Act.
(m)	Warehousing Permitted. – It is lawful to warehouse any number of video gaming  machines which are lawful under  this section and which are not in operation.
(n)	Exemption for Activities Under IGRA. – This section does not make any activities of a federally recognized Indian Tribe unlawful or against public policy, which are lawful for any federally recognized Indian Tribe under the Indian Gaming Regulatory Act, Public Law 100‑497.
(o)	 Local Preemption. – This section preempts any more restrictive ordinance lawfully adopted under Article 18 of Chapter 153A of the General Statutes or under Article 19 of Chapter 160A of the General Statutes.
(p)	No person who has been convicted:
(1)	Once under G.S. 14‑309(a) or (b) may own or possess any video gaming machine as defined in G.S. 14‑306.1 for a period of one year.
(2)	Twice under G.S. 14‑309(a) or (b) may own or possess any video gaming machine as defined in G.S. 14‑306.1 for a period of two years.
(3)	Three or more times under G.S. 14‑309(a) or (b) may own or possess any video gaming machine.
(q)	Not Legalizing Unlawful Activity. – This section does not make lawful any activity which is currently unlawful."
SECTION 3. G.S. 14‑298 reads as rewritten:
"§ 14‑298.  Seizure of illegal gaming items.
Upon a determination that probable cause exists to believe that any gaming table prohibited to be used by G.S. 14‑289 through G.S. 14‑300, any illegal punchboard or illegal slot machine, or any video game machine prohibited to be used by G.S. 14‑306 or G.S. 14‑306.1, is in the illegal possession or use of any person within the limits of their jurisdiction, all A.L.E. and other law enforcement officers are authorized to seize the items.Any law enforcement agency in possession of that item shall retain the item pending a disposition order from a district or superior court judge. Upon application by the law enforcement agency, district attorney, or owner, and after notice and opportunity to be heard by all parties, if the court determines that the item is unlawful to possess by its owner, it shall enter an order releasing the item to the law enforcement agency for destruction or for training purposes. If the court determines that the item is not unlawful to possess by its owner, the item shall be ordered released to its owner upon satisfactory proof of ownership. The foregoing procedures for release shall not apply, however, with respect to an item seized for use as evidence in any criminal action or proceeding until after entry of final judgment."
SECTION 4.  G.S. 14‑309 reads as rewritten:
"§ 14‑309.  Violation made criminal.
(a)	Any person who violates any provision of G.S. 14‑304 through 14‑309 is guilty of a Class 1 misdemeanor for the first offense, and is guilty of a Class I felony for a second offense and a Class H felony for a third or subsequent offense.
(b)	Notwithstanding the provisions of subsection (a) of this section, any person violating the provisions of G.S. 14‑306.1 involving the operation of five or more machines prohibited by that section or knowingly owning or possessing a machine which was not eligible for registration on October 1, 2000, under the language of G.S. 14‑306.1 effective as of that date, is guilty of a Class G felony."
SECTION 5.  Article 2 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑37.3.  Video gaming machines.
(a)	Scope. – A privilege tax is imposed on operation of a video gaming machine as defined in G.S. 14‑306.1.
(b)	Rate and Payment. – The rate of the privilege tax is one hundred twenty‑five dollars ($125.00) per calendar quarter, payable by the fifteenth day of the first month of each calendar quarter, for each location the video gaming machines are operated as of the first day of each calendar quarter, to be paid by the proprietor of the business where the machine is located.
(c)	The quarterly tax levied under subsection (b) of this section shall be paid beginning with the third calendar quarter of 2004.
(d)	Use by A.L.E. – The privilege permit tax paid under subsection (b) of this section shall be credited to the budget of the Alcohol Law Enforcement Division and shall be used for administering G.S. 14‑298, 14‑306, 14‑306.2, and 14‑309 or for other law enforcement purposes.
(e)	Local Taxes. – Cities and counties may not levy a license or permit tax on a person taxed under this section."
SECTION 6.  This act becomes effective October 1, 2004.