ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before this Court on remand from the South Carolina Tax Commission. It
involves an application for an off-premises beer and wine permit at 7162 Flat Rock Road, Heath
Springs, South Carolina, in Lancaster County. Following a hearing on May 6, 1994, this Court,
by Order and Decision dated May 31, 1994, found no material change with respect to the
proposed location since the denial of a previous application for the same location. Petitioner's
application was therefore ordered not to be processed. On appeal to the South Carolina Tax
Commission, the Tax Commission, by Commission Decision Number 95-22, dated January 24,
1995, remanded the case for the submission of additional evidence and reconsideration.
Specifically, this Court was ordered to consider new evidence relating to the issuance of an on-premises beer and wine permit for a business in approximately the same area as the proposed
location and to determine whether such evidence amounts to a material change with respect to the
proposed location.
A hearing was held on April 17, 1995, at the Administrative Law Judge Division. At the
hearing, the South Carolina Department of Revenue and Taxation (hereinafter referred to as
"DOR") informed the Court that it no longer objected to processing the application. There being
no issue in controversy between the named parties for this Court to resolve, this action is
dismissed.
DISCUSSION
The proposed location has the been the subject of extensive litigation during the last seven
years. The present case involves only the issue of whether Petitioner's application should be
processed by DOR; it is not a case on the merits of the application to determine whether the
permit will be issued.
DOR initially refused to process Petitioner's application on the ground that a previous
applicant's application for the same proposed location was denied after the Commission found it
an unsuitable location. Area residents also protested the processing of Petitioner's application.
Pursuant to 23 S.C. Code Ann. Regs. 7-96 (1976), DOR transmitted the case to the
Administrative Law Judge Division for a hearing. The hearing was conducted by this Court on
May 6, 1994, on the issue of whether a material change with respect to the proposed location had
occurred to warrant processing the application. DOR did not appear at that hearing; however, a
group of local residents, with Marshall Robinson as spokesperson, did appear and testify at the
hearing. Based upon the evidence submitted, this Court found no material change with respect to
the location and ordered DOR not to process the application. Petitioner appealed that decision to
the Tax Commission, which remanded the case for additional evidence and reconsideration.
Petitioner, DOR, and Protestants appeared and participated in the subsequent hearing before this
Court held on April 17, 1995. DOR informed the Court at that proceeding that, upon further
investigation and review, it had changed its position and would consent to Petitioner's request to
process the application. Protestants maintained their opposition to processing the application.
The applicable regulation in this matter is 23 S.C. Code Ann. Regs. 7-96 (1976). It
provides:
The Alcoholic Beverage Control Commission will not hear an
application for retail beer and wine permit or an application for a retail
off-premise beer permit when the location involved has been declared
by the Alcoholic Beverage Control Commission to be improper unless
the applicant can affirmatively show that some material change with
respect to the location has occurred, or unless otherwise ordered by
the Alcoholic Beverage Control Commission.
Prior to July 1, 1993, the South Carolina Alcoholic Beverage Control Commission (ABC
Commission) was the sole administrative agency responsible for all licensing, enforcement, and
adjudicatory functions involving alcoholic beverages in this State. Three commissioners served as
the governing authority of the agency, exercising administrative powers in licensing and
enforcement matters, as well as performing a quasi-judicial role in contested cases pursuant to the
Administrative Procedures Act. Effective July 1, 1993, under the provisions of Act 181 of 1993
(popularly referred to as the Restructuring Act), that scheme changed. The Licensing Division of
the former ABC Commission became a part of the Department of Revenue and Taxation, with
DOR administering all ABC licensing functions. S.C. Code Ann. § 1-30-95 (Supp. 1994). The
ABC Enforcement Division became part of the State Law Enforcement Division (SLED).
S.C. Code Ann. § 1-30-120 (Supp. 1994). The Administrative Law Judge Division assumed the
quasi-judicial functions of the ABC Commission, taking jurisdiction of contested cases involving
alcoholic beverage cases on March 1, 1994. S.C. Code Ann. §§ 1-23-310, et seq. (Rev. 1986 &
Supp. 1994) and S.C. Code Ann. § 61-1-55 (Supp. 1993) amended by S.C. Code Ann. § 61-1-55
(Supp. 1994). Regulations of the former ABC Commission are still effective and binding, even
though the Commission no longer exists. Regulations which refer to the ABC Commission must
now be interpreted with the reallocation of authority in mind. The "ABC Commission" now
refers to either DOR, SLED, or the ALJ Division, depending upon the particular governmental
function in question.
Before a permit application will be processed for a proposed location which has previously
been denied a permit on the ground of unsuitability of the location, the applicant must show some
material change in the proposed location since the prior denial. An administrative law judge must
make that determination after a hearing. Absent a showing of material change, the application
may nonetheless be processed if the licensing authority allows it in exercise of its discretion.
In the present case, DOR transmitted the case to the ALJ Division for a change of
condition hearing; however, DOR did not appear at the initial hearing on May 6, 1994. At the
remand hearing held on April 17, 1995, counsel for DOR not only appeared, but also represented
to this Court that DOR no longer objected to the processing of the application and having an ALJ
conduct a hearing on the merits of the application. The sole parties in this case are Petitioner and
DOR. They are now in agreement that the application should be processed, rendering the
question of material change moot. While area citizens maintain their opposition to the application
and continue to persuasively insist that no material change has occurred, Protestants are not
formal parties to this action and have not moved this Court to intervene as parties.
Processing the application does not prejudice the rights or interests of the Protestants.
Applicant is still required to meet publication and notice requirements and area citizens are still
entitled to protest the application and voice their opposition at a hearing on the merits of the
application. Protestants are entitled to move to intervene as formal parties prior to the merits
hearing.
In application hearings on the merits, DOR routinely does not appear or take an active
position or role. Generally, if an applicant meets the statutory requirements for a permit, DOR
will grant the permit unless a member of the public files a written protest. Pursuant to
23 S.C. Code Ann. Regs. 7-90 (Supp. 1994), if issuance of the permit is protested, the permit can
not be issued by DOR until a hearing is held in the matter. There is no similar provision requiring
a hearing on the issue of material change solely because a protest has been received from a
member of the public. Nothing prohibits protestants from appearing and testifying at the material
change hearing, but it is only the refusal of DOR to process the application which triggers the
material change hearing. Without DOR's objection to perform the ministerial function of
processing the application, there is no basis for a contested case hearing before an administrative
law judge Accordingly, this Court is left with no recourse except to dismiss this matter and allow
the processing of the application in DOR's discretion.
FINDINGS OF FACT
By a preponderance of the evidence, I find:
(1) Petitioner seeks an off-premises beer and wine permit for a location at 7162 Flat Rock
Road, Heath Springs, South Carolina, having filed an application with DOR, AI #96723, on
November 18, 1993.
(2) By Final Order of the ABC Commission dated August 30, 1991, the proposed
location was found to be unsuitable and the permit application of Donna E. Bailey, d/b/a Donna's
One Stop, was denied.
(3) This Court, by Order and Decision dated May 31, 1994, following a hearing on
May 6, 1994, found no material change with respect to the proposed location since the denial of
a previous application for the same location and ordered Petitioner's application to be refused.
(4) Petitioner appealed the May 31, 1994 Order to the South Carolina Tax Commission,
and the Tax Commission remanded this case to this Court for additional evidence and
reconsideration, by its Order dated January 24, 1995, Commission Decision Number 95-22.
(5) Pursuant to the remand Order, a hearing was held on April 17, 1995, at the
Administrative Law Judge Division. At the hearing, DOR informed the Court that it no longer
objected to processing the application.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude as a matter of law the following:
(1) The Administrative Law Judge Division has jurisdiction in this matter, pursuant to
S.C. Code Ann. §§ 1-23-310, et seq. (Rev. 1986 & Supp. 1994) and S.C. Code Ann. § 61-1-55
(Supp. 1993) amended by S.C. Code Ann. § 61-1-55 (Supp. 1994).
(2) The applicable regulation in this matter is 23 S.C. Code Ann. Regs. 7-96 (1976). It
provides:
The Alcoholic Beverage Control Commission will not hear an
application for retail beer and wine permit or an application for a retail
off-premise beer permit when the location involved has been declared
by the Alcoholic Beverage Control Commission to be improper unless
the applicant can affirmatively show that some material change with
respect to the location has occurred, or unless otherwise ordered by
the Alcoholic Beverage Control Commission.
(3) Opposition by a protestant notwithstanding, and absent a showing of material change
with respect to a proposed location since a prior permit denial, a subsequent application may
nonetheless be processed under S.C. Code Ann. Regs. 7-96 in the discretion of the licensing
authority.
(4) Effective July 1, 1993, under the provisions of Act 181 of 1993, the Licensing
Division of the Former ABC Commission became a part of the Department of Revenue and
Taxation, with DOR assuming the exclusive authority to administer all ABC licensing functions
formerly exercised by the ABC Commission. S.C. Code Ann. § 1-30-95 (Supp. 1994).
(5) Upon DOR's decision to exercise its administrative discretion to process the
application as requested by Petitioner, this Court is not faced with a justiciable controversy
requiring adjudication; therefore, no ruling is necessary on the issue of material change.
ORDER
IT IS HEREBY ORDERED that this matter be dismissed from the Administrative Law
Judge Division and transferred back to DOR for administrative handling of the initial permit
application process. Upon completion of the application process, if DOR receives notice of
written protest to the issuance of the permit sought, the matter shall be transferred to the ALJ
Division for a contested case hearing on the merits.
________________________________________
STEPHEN P. BATES
ADMINISTRATIVE LAW JUDGE
April 28, 1995
Columbia, South Carolina |
