SC Administrative Law Court Decisions

This matter comes before me for a contested case hearing pursuant to S.C. Code Ann. §§ 1-23-310, et seq. (Supp. 1996) and S.C. Code Ann. § 12-4-30(D) (Supp. 1996) on alleged administrative violations. The South Carolina Department of Revenue ("Department") alleges that on June 13, 1996, Respondents violated S.C. Code Ann. § 12-21-2804(A) by applying for, receiving, maintaining, or permitting to be used permits for the operation of more than five machines authorized under S.C. Code Ann. § 12-21-2720(A) (3) (Supp. 1996) at a single place or premises. Specifically, the Department alleges a violation of the "one separate employee" requirement of S.C. Code Regs. 117-190 (Supp. 1996).

For alleged violations of S.C. Code Ann. § 12-21-2804(A) (Supp. 1996), the Department seeks a $5,000 fine against Ace-Hi, Inc. ("Ace-Hi"), a $5,000 fine against Border Court, Inc. ("Border Court"), a $5,000 fine against South of the Border, Inc. ("South of the Border"), revocation of twenty (20) Class III video game machine licenses located at these businesses on June 13, 1996, and preclusion of the use of any Class III video game machine licenses at the business known as the Silver Slipper, Highway 301 and I-95, Dillon, South Carolina for a period of six months from the date of revocation.

The hearing of this matter was held on June 9, 1997. The issues before this tribunal are (1) whether Respondents violated S.C. Code Ann. § 12-21-2804(A) and S.C. Code Regs. 117-190 (Supp. 1996) and, (2) if so, what are the proper penalties for such violations. Based upon the following Findings of Fact and Conclusions of Law, this tribunal concludes that Respondent Ace-Hi violated S.C. Code Ann. § 12-21-2804(A) and S.C. Code Regs. 117-190 (Supp. 1996), by utilizing video game machine licenses in contravention of these laws. Consequently, the licenses shall be revoked. No video game machine licenses shall be utilized in Room 50-A for a period of six months from the date of revocation of the licenses. Further, the Department shall impose a fine of $2,500 against Ace-Hi.

FINDINGS OF FACT

Having carefully considered all testimony and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. On June 13, 1996, the Department's agents, Shirley Hucks and Carol Pierce, conducted an inspection of the video gaming business located at Highway 301 and I-95, Dillon, South Carolina.

2. At the time of inspection, the facts relating to the "single place or premises" requirement of S.C. Code Ann. § 12-21-2804(A) and S.C. Code Regs. 117-190 (Supp. 1996) were as follows:

a. The video gaming businesses were housed in a mall-type structure.

b. There was a main entrance into the structure which opened into a common area.

c. The main entrance door of the structure was unlocked.

d. There was one payout counter located in the common area.

e. Four video gaming businesses were located in four separate rooms which opened into the common area. These four businesses were designated as Room 50-A, Room 50-B, Room 50-C, and Room 50-D.

f. All of the businesses were open and contained operational Class III video game machines which were available for play.

g. There were no customers present in any of the businesses.

h. Each of the video gaming businesses had separate sales tax licenses.

3. On June 13, 1996, the following Class III video game machine licenses were affixed to the machines in Rooms 50-A, 50-B, 50-C, and 50-D and held by the corresponding licensee:

Business Entity License Number Licensee

Room 50-A 30471 Pedroland, Inc.

30472 Pedroland, Inc.

30473 Pedroland, Inc.

30474 Pedroland, Inc.

30475 Pedroland, Inc.

Room 50-B 29686 Pedroland, Inc.

29696 Pedroland, Inc.

29701 Pedroland, Inc.

30468 Pedroland, Inc.

30467 Pedroland, Inc.

Room 50-C 30480 Pedroland, Inc.

30477 Pedroland, Inc.

30478 Pedroland, Inc.

30479 Pedroland, Inc.

30476 Pedroland, Inc.

Room 50-D 30514 Pedroland, Inc.

30512 Pedroland, Inc.

30515 Pedroland, Inc.

30513 Pedroland, Inc.

30511 Pedroland, Inc.

4. Ace-Hi holds retail licenses for Rooms 50-A and 50-B.

5. Border Court holds the retail license for Room 50-C.

6. South of the Border holds the retail license for Room 50-D.

7. Pedroland owns numerous Class III video game machines. Pedroland leased twenty (20) Class III video game machines to the Silver Slipper for video gaming businesses located at Highway 301 and I-95, Dillon, South Carolina.

8. No sufficient evidence was proffered by the Department to establish that Pedroland managed or operated the video game machine businesses located at the Silver Slipper at Highway 301 and I-95, Dillon, South Carolina. Further, insufficient evidence was presented to establish that Pedroland applied for, received, maintained, or permitted to be used Class III video game machine licenses in contravention of Section 12-21-2804(A).

9. One June 13, 1996, the Department issued a Regulatory Violation and Proposed Assessment Report against Pedroland. In this report, the Department alleged a violation of the single place or premises requirements of S.C. Code Ann. § 12-21-2804(A) (1996) and S.C. Code Regs. 117-190 (Supp. 1996). Specifically, the Department alleged that the operator of the business and owner of the machine licenses failed to have a separate employee in the business designated as Room 50-A at Hwy. 301 and I-95, Dillon, South Carolina.

10. On June 14, 1996, the Department left a copy of the violation report with Victor H. Cook, the general manager of both Pedroland and the Silver Slipper.

11. In its Final Determination Report, issued on January 8, 1997, the Department amended the initial violation report to expand the citation to include Pedroland, Border Court, and South of the Border for failure to have a separate employee in each of the businesses designated as Rooms 50-B, 50-C, and 50-D.

12. Respondents concede that no employee was on the premises of Room 50-A at the time of the inspection. Respondents assert that the employee assigned to Room 50-A left the premises to answer the phone at the cashier desk in the common area.

13. The four persons employed and working on the date of inspection testified at the hearing of this matter:

a. Amy Moody was assigned to Room 50-B. Ms. Moody is no longer affiliated with the business; however, she was employed there for approximately 3 months. At the time of the hearing, Ms. Moody was not employed at all, but had graduated from nursing school and was preparing to take a nursing certification exam. She testified that Mary Ann Thompson was the only employee not in her respective business at the time of inspection. She also testified that one door is used to enter the premises and that no customers were present.

b. Mary Ann Thompson was working at the Silver Slipper at the time of inspection. She is no longer employed with the Silver Slipper, but currently works under the same management at the Golden Eagle. Ms. Thompson was assigned to Room 50-A. She testified that there is only one door to enter the premises of the Silver Slipper. She corroborated Ms. Moody's testimony that she was the only employee away from her room at the time of inspection. Ms. Thompson further testified that she only left to answer the phone.

c. Alicia Johnson was also working at the Silver Slipper, and was assigned to Room 50-C at the time of inspection. At the time of the hearing, Ms. Johnson was no longer working with the Silver Slipper. Her tenure of employment at the Silver Slipper was approximately eight to nine months. Ms. Johnson also testified that there is only one door to enter the premises and only Ms. Thompson was away from her room at the time of inspection. She further testified that no customers were present in any of the businesses.

d. Angela Stackhouse was assigned to Room 50-D. Ms. Stackhouse is still employed at the Silver Slipper. She corroborated the testimony of the other three witnesses that there is only one door to enter the premises and only Ms. Thompson was away from her room at the time of inspection.

14. The Department seeks a $5,000 fine against Ace-Hi, a $5,000 fine against Border Court, a $5,000 fine against South of the Border, revocation of twenty (20) Class III video game machine licenses located at these businesses on June 13, 1996, and preclusion of the use of any Class III video game machine licenses at Highway 301 and I-95, Dillon, South Carolina for a period of six months from the date of revocation.

CONCLUSIONS OF LAW AND ANALYSIS

A. Jurisdiction

1. Pursuant to S.C. Code Ann. § 12-4-30(D) (Supp. 1996) and S.C. Code Ann. § 1-23-320 (Supp. 1996), the Administrative Law Judge Division has jurisdiction to hear this matter.

B. Burden of Proof

2. In civil cases, generally, the burden of proof rests upon the party who asserts the affirmative of an issue. 29 Am. Jur 2d, Evidence § 127 (2d ed. 1994); Alex Sanders, et al, South Carolina Trial Handbook § 9:3 Party With Burden, Civil Cases (1994). The Department is the party asserting the affirmative in this case, therefore, the Department must prove by a preponderance of the evidence that Respondents failed to have a separate employee in each of their respective businesses in violation of S.C. Code Ann. § 12-21-2804(A) (1996) and S.C. Code Regs. 117-190 (Supp. 1996). The preponderance of the evidence "is evidence which is of the greater weight or more convincing that the evidence which is offered in opposition to it . . . ." Black's Law Dictionary 1182 (6th ed. 1990). "The preponderance of the evidence means such evidence as, when considered and compared with that opposed to it, has more convincing force and produces in the mind the belief that what is sought to be proved is more likely true than not true." Alex Sanders, supra, § 9:5 Quantum of Evidence in Civil Cases (1994), (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)).

C. Single Place or Premises Violation

3. Respondent Pedroland is the licensee of Class III video game machines licensed under S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1996), which are the subject of this case.

4. Respondent Ace-Hi is the operator of the Class III video game machines located in Rooms 50-A and 50-B at Highway 301 and I-95, Dillon, South Carolina, which are the subject of this case.

5. Respondent Border Court is the operator of the Class III video game machines located in Room 50-C at Highway 301 and I-95, Dillon, South Carolina, which are the subject of this case.

6. Respondent South of the Border is the operator of the Class III video game machines located in Room 50-D at Highway 301 and I-95, Dillon, South Carolina, which are the subject of this case.

7. The Video Game Machines Act ("Act"), which regulates video game machine activity in South Carolina, was enacted in 1993 and became effective on July 1, 1993. This Act is codified at S.C. Code Ann. §§ 12-21-2770, et seq. (Supp. 1996). The purpose of the Act is to regulate the video game machines industry and to prevent large-scale casino type gambling operations in the State of South Carolina. See Reyelt v. S.C. Tax Comm'n, 6:93-1491-3 and 6:93-1493-3 (U.S. Dist. Ct., Greenville, S.C., Nov. 15, 1993); See also 1994 Op. Atty. Gen. No. 94-21 at 51.

8. Petitioner alleges that on June 13, 1996, Respondents violated S.C. Code Ann. § 12-21-2804(A) and S.C. Code Regs. 117-190 (Supp. 1996) by applying for, receiving, maintaining, or permitting to be used permits for the operation of more than five machines authorized under S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1996) at a single place or premises. Section 12-21-2804(A) provides:

No person shall apply for, receive, maintain, or permit to be used, and the commission shall not allow to be maintained, permits or licenses for the operation of more than eight machines authorized under Section 12-21-2720(A)(3) at a single place or premises for the period beginning July 1, 1993, and ending July 1, 1994. After July 1, 1994, the commission may not issue nor authorize to be maintained any licenses or permits for more than five machines authorized under S.C. Code Ann. § 12-21-2720(A)(3) at a single place or premises . . . . (emphasis added).

9. On June 23, 1995, regulations were promulgated which further clarify the provisions of the Video Game Machines Act, and, as such, these regulations have the force and effect of law. See Young v. S.C. Dep't of Highways and Pub. Transp., 287 S.C. 108, 336 S.E.2d 879 (1985); Faile v. S.C. Employment Sec. Comm'n, 267 S.C. 536, 230 S.E.2d 219 (1976). Specifically, S.C. Code Regs. 117-190 was promulgated to clarify the meaning of the phrase "single place or premises" as set forth in Section 12-21-2804(A). This regulation, effective June 23, 1995, provides in relevant part:

A "single place" or "premises" means a structure surrounded by exterior walls or firewalls consistent with the requirements of the applicable building code (or where no building code is applicable, a one hour rated firewall), provided such exterior walls and firewalls may not have any windows, doors or other openings leading to another area where video game machines are located.

If a structure surrounded by exterior walls has two or more areas where video game machines are located, each surrounded by exterior walls or firewalls as defined and required above, the Department must review all the facts and circumstances to determine if each area in reality constitutes a single place or premise for video game machines.

In determining whether each entity is in fact a single place or premises, the Department of Revenue will consider the following factors:

(1) Does each entity or business have a separate electric utility meter?

(2) Does each entity or business have at least one separate employee on the premises during business hours?

(3) Does each entity or business have a separate local business license where required?

(4) Does each entity or business have a separate state sales tax license?

A positive answer to these four questions is required for each area to be considered a "single place or premise" for purposes of the Video Game Machines Act.

S.C. Code Regs. 117-190 (1996) (emphasis added).

10. The first issue before this tribunal is whether any person applied for, received, maintained, or permitted to be used permits for the operation of more than five machines authorized under S.C. Code Ann. § 12-21-2720(A) (3) (Supp. 1996) at a single place or premises, in violation of S.C. Code Ann. § 12-21-2804(A) and 27 S.C. Code Regs. 117-190.

11. It is well established that in interpreting a statute, the court's primary function is to ascertain the intention of the legislature. State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991); First South Savings Bank, Inc. v. Gold Coast Assocs., 301 S.C. 158, 390 S.E.2d 486 (Ct. App. 1990); State v. Harris, 268 S.C. 117, 232 S.E.2d 231 (1977). In ascertaining the intent of the legislature, a court should not focus on any single section or provision but should consider the language of the statute as a whole. Creech v. S.C. Public Service Auth., 200 S.C. 127, 20 S.E.2d 645 (1942). Furthermore, in construing statutes, the language used should be given its plain and ordinary meaning without resort to subtle or forced construction to limit or expand the statute's operation. Home Health Serv., Inc. v. S.C. Tax Comm'n, 312 S.C. 324, 440 S.E.2d 375 (1994); Bryant v. City of Charleston, 295 S.C. 408, 368 S.E.2d 899 (1988). Where terms of a statute are clear and unambiguous, they must be applied according to their literal meaning. Medlock v. 1985 Ford F-150 Pick Up, et al., 308 S.C. 68, 417 S.E.2d 85 (1992); Green v. Zimmerman, 269 S.C. 535, 238 S.E.2d 323 (1977). "A statute should be so construed that no word, clause, sentence, provision or part shall be rendered surplusage, or superfluous . . . ." 82 C.J.S. Statutes § 346; Savannah Bank & Trust Co. of Savannah v. Shuman, 250 S.C. 344, 157 S.E.2d 864 (1967). This tribunal has no legislative powers, and the justice or wisdom of statutes rests exclusively with the General Assembly. See Smith v. Wallace, 295 S.C. 448, 369 S.E.2d 657 (Ct. App. 1988).

It should be emphasized that S. C. Code Ann. § 12-21-2804(A) (Supp. 1996) clearly precludes any person, not just the licensees, from applying for, receiving, maintaining, or permitting to be used permits for the operation of more than five Class III video game machines in a single place or premises. The term person is not defined in the Act, but its common and ordinary meaning clearly encompasses an individual, a business entity, as well as, a licensee or machine owner. See Black's Law Dictionary, 1142 (6th ed. 1995). Further, Section 12-21-2804(A) mandates that the Department revoke the licenses of the machines located in an establishment which fails to meet the requirements of this section. Hence, Section 12-21-2804(A) (Supp. 1996) mandates revocation of the licenses so used, even if licensee, Pedroland was not directly involved in applying for, receiving, maintaining, or permitting its licenses to be used by Ace-Hi in contravention of the statute. Such an interpretation is consistent with the plain language of the statute.

12. The facts of this case clearly indicate that there were at least twenty operational Class III video game machines located in the Silver Slipper on June 13, 1996. Room 50-A, Room 50-B, Room 50-C, and Room 50-D each contained five operational licensed Class III video game machines. The evidence further indicates that all rooms were open for business at the time of inspection. There were four employees in the location. The employee assigned to room 50-A was situated in the common area at or near the payout counter, while insufficient evidence was presented to establish that the other three were not located in their respective rooms.

13. The business owner, Ace-Hi, clearly permitted licenses to be used in contravention of the statute, S.C. Code Ann. § 12-21-2804(A), which prohibits the operation of more than five Class III video game machines within a single place or premises. The Department did not present sufficient evidence to establish that the owners of Border Court and South of the Border applied for, received, maintained, or permitted to be used permits for the operation of more than five machines authorized under S.C. Code Ann. § 12-21-2720(A) (3) (Supp. 1996) at a single place or premises, in violation of S.C. Code Ann. § 12-21-2804(A) and S.C. Code Regs. 117-190.

14. Whether an establishment is being operated as a "single place or premises" is determined by evaluating the facts against the standard set forth in Regulation 117-190. With respect to the "employee" requirement, Regulation 117-190 requires that each entity or business have at least one separate employee on the premises of that respective entity or business during business hours to comply with the "single place or premises" requirements of Section 12-21-2804(A).⁽¹⁾

If a game room containing operational Class III video game machines is accessible to customers and no employee is present in that room, the room is being operated in violation of Section 12-21-2804(A). An employee working in a common area or anywhere else outside the game room is not considered to be "on the premises" of the game room. See S.C. Dep't of Revenue and Taxation v. Mickey Stacks, 95-ALJ-17-0742-CC (March 8, 1996). This application is consistent with the intent of the General Assembly to prevent large-scale casino type gambling. See Singletary v. S.C. Dep't of Educ., 316 S.C. 153, 447 S.E.2d 231 (Ct. App. 1994), citing State v. Thrift, 312 S.C. 282, 440 S.E.2d 341 (1994) (legislative intent must prevail if it can be reasonably discovered and language of a statute must be construed in the light of the intended purpose of the statute).

This tribunal finds the testimony presented by the Respondents' witnesses to be more credible than the testimony of the Department's agents. The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass'n v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992). Furthermore, a trial judge, who observes a witness, is in the better position to judge the witness's demeanor and veracity and evaluate their testimony. See Mann v. Walker, 285 S.C. 194, 328 S.E.2d 659 (Ct. App. 1985); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984); McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322 (1982); Peay v. Peay, 260 S.C. 108, 194 S.E.2d 392 (1973).

At the hearing of this matter, Agents Carol Pierce and Shirley Hucks testified on behalf of the Department. Agent Pierce testified that she passed through two doors to enter the building, and was able to view the employees from the outside of the second door by looking through the glass. Agent Hucks could only remember entering one door. The general manager and four employees who were working on the day of the investigation testified that there is only one entrance to the building and that door consists of tinted glass which does not allow a view from the outside looking in. Two of the five witnesses for the Respondents are no longer affiliated with the business. The Respondents concede that no separate employee was physically located on the premises of Room 50-A at the time of inspection. The original Violation Report issued by the agents only cited Room 50-A. All the Respondents' witnesses testified that the employee assigned to Room 50-A exited to answer the telephone, which was located in the common area at the cashier stand. Although this tribunal does not question the veracity of the Department's witnesses, nonetheless, I find the testimony rendered by the Respondents' witnesses to be more persuasive, as the agents' perceptions appeared questionable. Agent Hucks testified that two or three customers were present at the time of inspection. Agent Pierce testified that at least one patron was present at the time of inspection. Respondents' witnesses testified that no customers were present in any of the businesses. Therefore, I conclude that the evidence indicates there was only one employee in the common area at the time of the inspection and no employee was present in Room 50-A.

The Respondents have failed to meet the "one separate employee" requirement set forth in Regulation 117-190 with regard to Room 50-A. Failing to satisfy one requirement is a sufficient ground constituting a violation of the single place or premises requirements of S.C. Code Ann. § 12-21-2804(A) (Supp. 1996). Therefore, I conclude that one of the businesses, specifically Room 50-A, located at the Silver Slipper, Highway 301 and I-95, Dillon, South Carolina was operated in violation of S.C. Code Ann. § 12-21-2804(A) by Ace-Hi. Consequently, five (5) of Respondent Pedroland's Class III video game machine licenses are subject to revocation.

D. Penalty

15. S.C. Code Ann. § 12-21-2804(A) (Supp. 1996) expressly authorizes the "commission" [Department] to enforce the provisions of this section and also requires the Department to revoke licenses utilized in a fashion that fails to comply with the provisions of this section.

16. S.C. Code Ann. § 12-21-2804(A) (Supp. 1996) provides that the penalty for exceeding the maximum number of video game machines permitted in a single place or premises requires the revocation of the licenses of machines located in the establishment.

17. S.C. Code Ann. § 12-21-2804(A) (Supp. 1996) further provides: "No license may be issued for a machine in an establishment in which a license has been revoked for a period of six months from the date of revocation." The clear import of this language is to preclude an establishment which has had a license revoked from operating for a six month period. That is, the Department does not issue licenses for specific locations, but rather issues licenses to individuals. Therefore, licenses may be utilized by an operator at any, otherwise qualified, location in the State. Consequently, the above provision would be rendered meaningless if it were read not to require an establishment whose licenses have been revoked to cease operations for six months. See Singletary v. S.C. Dep't of Educ., 316 S.C. 153, 447 S.E.2d 231 (Ct. App. 1994), citing State v. Thrift, 312 S.C. 282, 440 S.E.2d 341 (1994) (legislative intent must prevail if it can be reasonably discovered and language of a statute must be construed in the light of the intended purpose of the statute).

18. S.C. Code Ann. § 12-21-2804(F) (Supp. 1996) provides that a person who violates S.C. Code Ann. § 12-21-2804(A) is subject to a fine of up to $5,000. The Department seeks a $5,000 fine against Pedroland, the licensee of the machines in question. However, the Department has not established that Pedroland applied for, received, maintained, or permitted to be used permits for the operation of more than five machines authorized under S.C. Code Ann. § 12-21-2720(A) (3) (Supp. 1996) at a single place or premises. See Mickey Stacks, d/b/a Red Dot Amusement Co. v. S.C. Dep't of Revenue and Taxation, Court of Common Pleas, County of Richland, 95-CP-40-0239 at 8-9 (April 20, 1995). Under Section 12-21-2804(A), a license on a video game machine must be revoked by virtue of its misuse under the Act, regardless if the actual violator is the licensee, machine owner, or lessee. However, a monetary fine under Section 12-21-2804(F) may only be imposed on the actual person directly involved in the violation of Section 12-21-2804(A). In this case, the Department only presented sufficient evidence to establish that the operator of the location, Ace-Hi, was directly involved in violating the Act. The Department did not present sufficient evidence to warrant the imposition of a fine against Respondents Pedroland, Border Court, or South of the Border, pursuant to S.C. Code Ann. § 12-21-2804(F) (Supp. 1996).

19. It is a generally recognized principle of administrative law that the fact finder has the authority to impose an administrative penalty after the parties have had an opportunity to have a hearing and be heard on the issues. See Ohio Real Estate Comm'n v. Aqua Sun Inv., 655 N.E.2d 266 (Ohio 1995); Shadow Lake of Noel, Inc. v. Supervisor of Liquor Control, 893 S.W.2d 835 (Mo. App. S.D. 1995); Matter of Henry Youth Hockey Ass'n, 511 N.W.2d 452 (Minn. App. 1994); Vermont Agency of Natural Resources v. Duranleau, 617 A.2d 143 (Vt. 1992); City of Louisville v. Milligan, 798 S.W.2d 454 (Ky. 1990); Com. Dept. of Transp. v. Slipp, 550 A.2d 838 (Pa. 1988); Dept. of Transp. v. Miller, 528 A.2d 1030 (Pa. 1987); State Police v. Cantina Gloria's, 639 A.2d 14 (Pa. 1994).

Prior to governmental restructuring, the Tax Commission, sitting in its adjudicatory capacity, imposed penalties for violations of statutory provisions administered by the Commission's subordinate agency. In its capacity as the fact-finder, the Tax Commission would conduct an adjudicatory hearing in all contested cases arising under Title 12 of the South Carolina Code of Laws, and would render an order containing findings of fact and conclusions of law. As the fact-finder, it was the Commission's prerogative "to impose an appropriate penalty based on the facts presented." Walker v. S.C. ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). With the advent of restructuring and the abolition of the Tax Commission, however, such authority has devolved to the Administrative Law Judge Division. This tribunal now hears "all contested cases, as defined by Section 1-23-310 and as previously considered by the three [Tax] commissioners. . . ." S.C. Code Ann. § 12-4-30(D) (Supp. 1996). An administrative law judge, as the fact-finder, must also determine an appropriate penalty based on the facts presented at the contested case hearing. Parties are entitled to present evidence on all issues arising out of the contested agency action. Additionally, the tribunal responsible for conducting the contested case proceeding has the authority to decide the issues based on the facts presented, and make the final decision on all the issues, including the appropriate penalty.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY ORDERED that, as mandated by S.C. Code Ann. § 12-21-2804(A) (Supp. 1996), the Department shall revoke the following five (5) video game machine licenses owned by Pedroland, located at Highway 301 & I-95, Dillon, South Carolina in the business known as Room 50-A:

Business Entity License Number Machine Type Licensee

Room 50-A 30471 Type III Pedroland, Inc.

30472 Type III Pedroland, Inc.

30473 Type III Pedroland, Inc.

30474 Type III Pedroland, Inc.

30475 Type III Pedroland, Inc.

IT IS FURTHER ORDERED that no video game machine licenses shall be utilized in game room 50-A for a period of six months from the date of revocation of the licenses.

IT IS FURTHER ORDERED that the Department shall impose a fine of $2,500 against Respondent Ace-Hi.

IT IS FURTHER ORDERED that the imposition of a $5,000 fine against the other Respondents must fail.

IT IS FURTHER NOTED that according to ALJD Rule 29(B), issues raised in the proceedings, but not addressed in the Order are deemed denied.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

Post Office Box 11667

Columbia, South Carolina 29211-1667

July 18, 1997

Columbia, South Carolina

1. S.C. Code Regs. 117-190 has been held to be "valid and enforceable and a valid exercise of the power of the . . . Department." McNickel's Inc. v. S.C. Dep't of Revenue, Court of Common Pleas, Beaufort County, No. 96-CP-07-1072 (June 6, 1997); See also AAA Entertainment Corporation, et al. v. S.C. Dep't of Revenue, Court of Common Pleas, Beaufort County, No. 96-CP-07-1595 (June 6, 1997); William Scurry v. S.C. Dep't of Revenue, Court of Common Pleas, Beaufort County, No. 97-CP-07-0408 (June 6, 1997). The one separate employee requirement of Regulation 117-190 was specifically considered in each of these decisions and held to be a valid exercise of legislative authority. Id.