South Carolina General Assembly
113th Session, 1999-2000
Journal of the House of Representatives

Wednesday, June 30, 1999
(Statewide Session)

Indicates Matter Stricken
Indicates New Matter

The House assembled at 12:00 Noon.
Deliberations were opened with prayer by the Chaplain of the House of Representatives, the Rev. Dr. Alton C. Clark, as follows:

God of all wisdom, from the limitations of our sufficiency, we turn in our need to You. Enable us with the light of Your wisdom and the strength of Your might. We pray for light enough to walk nobly through this day, for ability to carry heavy burdens, for uncompromising courage to stand for what is right, for eyes to see Your way and wills to follow that way. Help us to fill fast fleeting hours with mighty deeds that we fail neither our fellowmen nor our God. Lord, in Your mercy, hear our prayer. Amen.

Pursuant to Rule 6.3, the House of Representatives was led in the Pledge of Allegiance to the Flag of the United States of America by the SPEAKER.

After corrections to the Journal of the proceedings of yesterday, the SPEAKER ordered it confirmed.

MOTION ADOPTED

Rep. WHIPPER moved that when the House adjourns, it adjourn in memory of Calvin Hopkins, which was agreed to.

MESSAGE FROM THE SENATE

The following was received.

Columbia, S.C., June 29, 1999
Mr. Speaker and Members of the House:

The Senate respectfully informs your Honorable Body that it has reconsidered the adoption of the Free Conference Report on H. 3002:
H. 3002 (Word version) -- Reps. Wilkins, Hawkins, Altman, J. Brown, Loftis, Leach, Kelley, Harvin, Walker, D. Smith, Campsen, Stille, Davenport, Rice, Barrett, Cotty, Lanford, Wilder, Sharpe, Delleney, Littlejohn, Tripp, Witherspoon, Harris, Carnell, Kirsh, Vaughn, Webb, McKay, Riser, Sandifer, Cato, Simrill, Allison, Harrison, Barfield, McGee, Meacham, Hamilton, Koon, Fleming, Martin, Mason, Gilham, Emory, McCraw, Edge, Robinson and W. McLeod: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 16-19-170, ENACTING THE GAMBLING CRUISE PROHIBITION ACT, SO AS TO PROHIBIT GAMBLING ON A CRAFT THAT EMBARKS AND DISEMBARKS FROM ANY POINT IN THIS STATE AND TO MAKE THIS PROHIBITION APPLY WHETHER OR NOT THE GAMBLING ACTIVITIES ARE CONDUCTED WITHIN THE WATERS OF THIS STATE, AND TO PROVIDE A PENALTY.
Very respectfully,
President

Received as information.

MESSAGE FROM THE SENATE

The following was received.

Columbia, S.C., June 29, 1999
Mr. Speaker and Members of the House:

The Senate respectfully informs your Honorable Body that it has adopted the Second Free Conference Report on H. 3002:
H. 3002 (Word version)-- Reps. Wilkins, Hawkins, Altman, J. Brown, Loftis, Leach, Kelley, Harvin, Walker, D. Smith, Campsen, Stille, Davenport, Rice, Barrett, Cotty, Lanford, Wilder, Sharpe, Delleney, Littlejohn, Tripp, Witherspoon, Harris, Carnell, Kirsh, Vaughn, Webb, McKay, Riser, Sandifer, Cato, Simrill, Allison, Harrison, Barfield, McGee, Meacham, Hamilton, Koon, Fleming, Martin, Mason, Gilham, Emory, McCraw, Edge, Robinson and W. McLeod: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 16-19-170, ENACTING THE GAMBLING CRUISE PROHIBITION ACT, SO AS TO PROHIBIT GAMBLING ON A CRAFT THAT EMBARKS AND DISEMBARKS FROM ANY POINT IN THIS STATE AND TO MAKE THIS PROHIBITION APPLY WHETHER OR NOT THE GAMBLING ACTIVITIES ARE CONDUCTED WITHIN THE WATERS OF THIS STATE, AND TO PROVIDE A PENALTY.
Very respectfully,
President

Received as information.

CONCURRENT RESOLUTION

The following was introduced:

H. 4270 (Word version) -- Reps. Robinson and Campsen: A CONCURRENT RESOLUTION TO DIRECT THE DEPARTMENT OF REVENUE AND THE SOUTH CAROLINA LAW ENFORCEMENT DIVISION TO IMMEDIATELY REQUIRE ALL VIDEO POKER MACHINE OWNERS AND OPERATORS IN SOUTH CAROLINA WHO HOLD LICENSES ISSUED BY THE STATE OF SOUTH CAROLINA TO COMPLY WITH THE RECENT ORDER AND RULINGS BY FEDERAL DISTRICT JUDGE JOSEPH F. ANDERSON, JR., IN REGARD TO VIDEO POKER MACHINE PAYOUTS, LOG BOOKS, AND RELATED REQUIREMENTS.
The Concurrent Resolution was ordered referred to the Committee on Invitations and Memorial Resolutions.

INTRODUCTION OF BILLS

The following Bills and Joint Resolution were introduced, read the first time, and referred to appropriate committees:

H. 4271 (Word version) -- Rep. Cato: A BILL TO AMEND SECTION 56-31-30, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE RENTAL OF PRIVATE PASSENGER AUTOMOBILES, RENTAL RATES, AND PERMITTED AND PROHIBITED CHARGES, SO AS, AMONG OTHER THINGS, TO ELIMINATE THE PROHIBITION UPON A RENTAL COMPANY OF CHARGING AN ADDITIONAL FEE AS A CONDITION OF RENTING, INCLUDING, BUT NOT LIMITED TO, FUEL SURCHARGES, TO ELIMINATE THE REQUIREMENT THAT THE MEANS OF AVOIDING AIRPORT SURCHARGES MUST BE DISCLOSED CLEARLY AND CONSPICUOUSLY IN ALL ADVERTISEMENTS OF A RENTAL RATE TO WHICH AIRPORT SURCHARGES MAY APPLY, AND TO PROVIDE THAT ONLY AIRPORT FEES THAT ARE REMITTED TO THE AIRPORT MANAGEMENT ARE PERMITTED TO BE SEPARATELY STATED AND COLLECTED.
Referred to Committee on Labor, Commerce and Industry

H. 4272 (Word version) -- Rep. Davenport: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-9-120 SO AS TO PROHIBIT A HEALTH CARE PROVIDER FROM PERFORMING A SPINAL ADJUSTMENT OR MANIPULATION UNLESS THE HEALTH CARE PROVIDER HAS MET THE MINIMUM REQUIREMENTS OF CLINICAL TRAINING AND CLASSROOM INSTRUCTION AS REQUIRED BY A CHIROPRACTIC ACCREDITING AGENCY, AND TO PROVIDE A PENALTY FOR VIOLATIONS.
Referred to Committee on Medical, Military, Public and Municipal Affairs

H. 4273 (Word version) -- Reps. Scott, Stuart and Townsend: A JOINT RESOLUTION TO CREATE A COMMITTEE TO STUDY THE FEASIBILITY OF IMPLEMENTING A MASS TRANSPORTATION SYSTEM FOR THE STATE, AND TO PROVIDE FOR THE COMPOSITION AND PURPOSE OF THE COMMITTEE.
Referred to Committee on Education and Public Works

H. 4274 (Word version) -- Rep. Martin: A BILL TO AMEND SECTION 8-11-83, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PAYROLL DEDUCTIONS FOR DUES OF VARIOUS MEMBERSHIPS FROM THE COMPENSATION PAID STATE EMPLOYEES FOR DUES FOR SPECIFIC MEMBERSHIP ORGANIZATIONS AND THE RESTRICTIONS IN THESE ORGANIZATIONS RECEIVING THE AMOUNTS WITHHELD, SO AS TO ADD A REQUIREMENT THAT NO PAYROLL DEDUCTION IS ALLOWED UNLESS THE MEMBER RECEIVES SPECIFIC AND TANGIBLE BENEFITS FROM MEMBERSHIP NOT AVAILABLE TO NONMEMBER STATE EMPLOYEES AND TO REQUIRE THE COMPTROLLER GENERAL ANNUALLY TO MAKE A WRITTEN DETERMINATION THAT MEMBERSHIP ORGANIZATIONS ARE IN COMPLIANCE WITH THE REQUIREMENT FOR PAYROLL DEDUCTIONS TO CONTINUE.
Referred to Committee on Ways and Means

S. 772 (Word version) -- Senators Hutto and Washington: A BILL TO REPEAL ACT 453 OF 1998, RELATING TO ADDITIONAL MEMBERS OF THE ALLENDALE COUNTY BOARD OF EDUCATION.
Referred to Allendale Delegation

ROLL CALL

The roll call of the House of Representatives was taken resulting as follows:

Allen                  Altman                 Askins
Bales                  Barfield               Barrett
Beck                   Bowers                 Breeland
Brown G.               Brown J.               Campsen
Carnell                Cato                   Chellis
Clyburn                Cobb-Hunter            Cooper
Dantzler               Davenport              Delleney
Easterday              Edge                   Emory
Fleming                Frye                   Gamble
Gilham                 Gourdine               Harrell
Haskins                Hawkins                Hayes
Hines J.               Hinson                 Hosey
Howard                 Inabinett              Keegan
Kelley                 Kennedy                Kirsh
Klauber                Knotts                 Koon
Law                    Leach                  Lee
Littlejohn             Loftis                 Lourie
Lucas                  Martin                 McCraw
McGee                  McMahand               Meacham
Neal                   Neal J.M.              Ott
Parks                  Phillips               Pinckney
Quinn                  Rhoad                  Rice
Riser                  Robinson               Rodgers
Rutherford             Sandifer               Scott
Sharpe                 Sheheen                Simrill
Smith D.               Smith F.               Smith J.
Smith R.               Stuart                 Taylor
Trotter                Vaughn                 Webb
Whatley                Whipper                Wilder
Wilkes                 Wilkins                Witherspoon
Young-Brickell

STATEMENT OF ATTENDANCE

I came in after the roll call and was present for the Session on Wednesday, June 30.

Rita Allison                                George Bailey
James Battle                                Henry Brown
Ralph Canty                                 Bill Cotty
Jerry Govan                                 Glenn Hamilton
Anthony Harris                              Alex Harvin
Douglas Jennings                       Steve Lanford
H.B. "Chip" Limehouse        Walter Lloyd
E.B. "Mac" McLeod            David Mack
Bessie Moody-Lawrence             Vida Miller
Denny Neilson                               Lynn Seithel
Harry Stille                                Theodore Brown
Ronald Townsend                        Daniel Tripp
Walton McLeod
Total Present-116

LEAVE OF ABSENCE

The SPEAKER granted Rep. ALLISON a temporary leave of absence due to a family member having surgery.

LEAVE OF ABSENCE

The SPEAKER granted Rep. H. BROWN a temporary leave of absence.

LEAVE OF ABSENCE

The SPEAKER granted Rep. M. HINES a leave of absence for the day due to illness.

LEAVE OF ABSENCE

The SPEAKER granted Rep. WALKER a leave of absence.

ORDERED TO THIRD READING

The following Bill was taken up, read the second time, and ordered to a third reading:

H. 4267 (Word version) -- Rep. D. Smith: A BILL TO AMEND ACT 856 OF 1964, AS AMENDED, RELATING TO THE WHITNEY AREA FIRE DISTRICT IN SPARTANBURG COUNTY, SO AS TO INCREASE THE AMOUNT OF FUNDS WHICH MAY BE BORROWED BY THE DISTRICT BOARD FROM ONE HUNDRED TO FIVE HUNDRED THOUSAND DOLLARS.

S. 493 -- DEBATE ADJOURNED

Rep. ROBINSON moved to adjourn debate upon the following Bill, which was adopted:

S. 493 (Word version) -- Senator Moore: A BILL TO AMEND SECTIONS 40-13-5, 40-13-10, 40-13-20, 40-13-30, 40-13-110, 40-13-230, 40-13-240, AND 40-13-250, AS AMENDED, AND SECTION 40-13-310, CODE OF LAWS OF SOUTH CAROLINA, 1976, ALL RELATING TO THE LICENSURE AND REGULATION OF COSMETOLOGISTS, MANICURISTS, AND ESTHETICIANS, SO AS TO CHANGE THE TERM "MANICURIST" TO "NAIL TECHNICIAN"; TO PROVIDE MILEAGE, SUBSISTENCE, AND PER DIEM TO THE MEMBERS OF THE ADVISORY COMMITTEE TO THE BOARD OF COSMETOLOGY; TO REVISE THE DEFINITIONS OF "COSMETOLOGY" AND "ESTHETICIAN" AND TO DEFINE "APPROVED SCHOOL"; TO REQUIRE A TRADE OR INDUSTRIAL SCHOOL TO BE LICENSED; TO ESTABLISH CRIMINAL PENALTIES FOR FAILURE TO NOTIFY THE BOARD OF A SCHOOL CLOSING OR TO PROVIDE THE BOARD STUDENT RECORDS; TO REVISE EDUCATIONAL REQUIREMENTS FOR ESTHETICIANS AND NAIL TECHNICIANS; TO PROVIDE FOR BIENNIAL LICENSE RENEWAL RATHER THAN ANNUAL; AND TO PROVIDE RENEWAL AND REINSTATEMENT PROCEDURES FOR INACTIVE LICENSES.

H. 3903 -- DEBATE ADJOURNED

Rep. EDGE moved to adjourn debate upon the following Bill, which was adopted:

H. 3903 (Word version) -- Reps. Edge and Kelley: A BILL TO AMEND CHAPTER 7, TITLE 5, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE POWERS, FUNCTIONS, AND RESPONSIBILITIES OF MUNICIPALITIES, SO AS TO ADD SECTION 5-7-145, PROVIDING THAT COASTAL MUNICIPALITIES HAVE THE AUTHORITY TO PROVIDE LIFEGUARD AND OTHER RELATED SAFETY SERVICES ALONG THE PUBLIC BEACHES WITHIN THEIR CORPORATE LIMITS, TO PROVIDE THAT THE MUNICIPALITIES MAY CONTRACT WITH PRIVATE BEACH SAFETY COMPANIES TO PROVIDE THESE SERVICES, TO PROVIDE CONDITIONS TO BE SATISFIED IN THE CONTRACTING PROCESS, TO AMEND SECTION 4-9-30, AS AMENDED, RELATING TO THE AUTHORITY OF COUNTY GOVERNMENT, SO AS TO PROVIDE THAT ITS AUTHORITY TO GRANT FRANCHISES IN AREAS OUTSIDE THE CORPORATE LIMITS OF MUNICIPALITIES WITHIN THE COUNTY IN THE MANNER PROVIDED BY LAW FOR MUNICIPALITIES AND SUBJECT TO THE SAME LIMITATIONS INCLUDES THE AUTHORITY TO GRANT FRANCHISES FOR THE USE OF PUBLIC BEACHES; AND TO AMEND SECTION 5-7-30, AS AMENDED, RELATING TO THE POWERS OF THE MUNICIPALITIES, SO AS TO PROVIDE THE AUTHORITY TO GRANT FRANCHISES FOR THE USE OF PUBLIC BEACHES.

S. 226 -- DEBATE ADJOURNED

Rep. ROBINSON moved to adjourn debate upon the following Bill, which was adopted:

S. 226 (Word version) -- Senator McConnell: A BILL TO AMEND SECTION 5-1-30, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PREREQUISITES TO ISSUANCE OF A CORPORATE CERTIFICATE TO A PROPOSED MUNICIPALITY, SO AS TO REQUIRE THE AREA SEEKING TO BE INCORPORATED TO BE CONTIGUOUS, AND PROVIDE THAT CONTIGUITY IS NOT DESTROYED BY AN INTERVENING NAVIGABLE WATERWAY, MARSHLAND, OR LOWLAND WHETHER OR NOT IT HAS BEEN PREVIOUSLY INCORPORATED OR ANNEXED, AND PROVIDE THAT THE NAVIGABLE WATERWAY, MARSHLAND, OR LOWLAND DOES NOT PRECLUDE IT FROM BEING USED BY ANOTHER MUNICIPALITY TO ESTABLISH CONTIGUITY FOR PURPOSES OF AN INCORPORATION OR ANNEXATION PROVIDED THE DISTANCE FROM HIGHLAND TO HIGHLAND OF THE AREA BEING INCORPORATED OR ANNEXED IS NOT GREATER THAN ONE MILE.

S. 640 -- DEBATE ADJOURNED

Rep. D. SMITH moved to adjourn debate upon the following Joint Resolution, which was adopted:

S. 640 (Word version) -- Education Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE BOARD OF EDUCATION, RELATING TO RENEWAL OF CREDENTIALS, DESIGNATED AS REGULATION DOCUMENT NUMBER 2397, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.

S. 491 -- DEBATE ADJOURNED

Rep. ROBINSON moved to adjourn debate upon the following Bill, which was adopted:

S. 491 (Word version) -- Senator Cork: A BILL TO AMEND SECTION 50-21-136, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO NO WAKE ZONES ON CERTAIN CREEKS AND COVES ON HILTON HEAD ISLAND AND ON THE NEW RIVER IN BEAUFORT COUNTY, SO AS TO CORRECT A DIRECTIONAL REFERENCE.

S. 118 -- DEBATE ADJOURNED

Rep. ROBINSON moved to adjourn debate upon the following Bill, which was adopted:

S. 118 (Word version) -- Senators Mescher and Reese: A BILL TO AMEND SECTION 47-5-50, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PROHIBITION ON THE SALE OF WILD CARNIVORES AS PETS, SO AS TO DELETE THE REFERENCE TO FERRETS, EXEMPT THEM FROM THE PROHIBITION, AND TO PROVIDE FOR NOTICES THAT FERRETS HAVE A PROPENSITY TO MAKE UNPROVOKED ATTACKS THAT CAUSE BODILY INJURY TO A HUMAN BEING.

S. 181 -- DEBATE ADJOURNED

Rep. RICE moved to adjourn debate upon the following Bill, which was adopted:

S. 181 (Word version) -- Senators Washington and Elliott: A BILL TO AMEND SUBARTICLE 1, CHAPTER 7, TITLE 20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DOMESTIC RELATIONS, BY ADDING SECTION 20-7-2275 SO AS TO ESTABLISH A KINSHIP FOSTER CARE PROGRAM TO ENCOURAGE THE PLACEMENT OF CHILDREN REMOVED FROM THEIR HOMES INTO THE HOMES OF RELATIVES FOR KINSHIP FOSTER CARE.

S. 764 -- DEBATE ADJOURNED

Rep. RICE moved to adjourn debate upon the following Joint Resolution, which was adopted:

S. 764 (Word version) -- Judiciary Committee: A JOINT RESOLUTION TO ESTABLISH A TASK FORCE TO STUDY AND MAKE RECOMMENDATIONS AND REPORT ON THE STATUTORY AND CONSTITUTIONAL RAMIFICATIONS OF VARIOUS METHODS FOR IMPROVING AND ASSURING THE SPEEDY DISPOSITION OF CIVIL CASES IN CIRCUIT COURTS AND MAGISTRATES COURTS.

S. 703 -- DEBATE ADJOURNED

Rep. ROBINSON moved to adjourn debate upon the following Bill, which was adopted:

S. 703 (Word version) -- Senator Hayes: A BILL TO AMEND SECTION 50-3-410, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO USE OF AN OFFICIAL SUMMONS BY ENFORCEMENT OFFICERS OF THE DEPARTMENT OF NATURAL RESOURCES, SO AS TO AUTHORIZE USE OF THE OFFICIAL SUMMONS BY ANY OFFICER DEPUTIZED BY THE DEPARTMENT PURSUANT TO SECTION 27-16-70(C)(2); AND TO AMEND SECTION 50-3-420, AS AMENDED, RELATING TO IMMUNITY FROM PROSECUTION, SO AS TO PROVIDE FOR THE IMMUNITY FOR DEPUTY ENFORCEMENT OFFICERS OF THE DEPARTMENT OF NATURAL RESOURCES.

H. 4266 -- DEBATE ADJOURNED

Rep. RICE moved to adjourn debate upon the following Bill, which was adopted:

H. 4266 (Word version) -- Reps. Law, Dantzler, Hinson, Gourdine and H. Brown: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 50-21-136, SO AS TO ESTABLISH A NO WAKE ZONE AT PIMLICO BOAT LANDING IN BERKELEY COUNTY.

RULE 3.9 NOT INVOKED

Rep. KNOTTS moved that Rule 3.9 be invoked, which was rejected.

H. 3834 -- RULED OUT OF ORDER ON POINT OF ORDER AND RETURNED TO THE SENATE

The Senate amendments to the following Bill were taken up for consideration:

H. 3834 (Word version) -- Rep. Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.

POINT OF ORDER

Rep. CAMPSEN raised a Point of Order that the Bill was out of order in that it was in violation of Code Section 2-1-180.

SPEAKER WILKINS stated that H. 3834 was amended and passed by the Senate on June 24, 1999, during the continuation of the regular 1999 Legislative Session. He stated further that Code Section 2-1-180 states that during the time between 5:00 p.m. on the first Thursday in June and the extended sine die adjournment date, as set forth herein, no legislation or other business may be considered except the General Appropriation Bill and any matters approved for consideration by a Concurrent Resolution adopted by two-thirds vote in both houses. He stated that H. 3834 was not listed on the Sine Die Resolution and the Senate's consideration of this bill was clearly in violation of the resolution. He stated that, although the Speaker is typically limited to constitutional issues concerning actions of the Senate, the Senate's action could possibly cause this legislation to be subject to judicial scrutiny. He, therefore, sustained the Point of Order and ordered that the Bill be returned to the Senate.

HOUSE STANDS AT EASE

The House stood at ease subject to the call of the Chair.

THE HOUSE RESUMES

At 12:55 P.M. the House resumed, the SPEAKER in the Chair.

H. 3834 -- SENATE AMENDMENTS AMENDED AND RETURNED TO THE SENATE

The Senate returned to the House with amendments the following:

H. 3834 (Word version) -- Rep. Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.

Rep. SHARPE proposed the following Amendment No. 1A (Doc Name COUNCIL\NBD\AMEND\11491MM99), which was tabled.
Amend the bill, as and if amended, Part III, SECTION 10, Article 3, Section 12-22-340, page 16, beginning at line 11, by deleting the section in its entirety and inserting:
/Section 12-22-340.         (A)     No municipality may limit the number of machines within the boundaries of the municipality. A municipality may by ordinance impose a license fee on machines, other than those referred to in Article 15.

(B)     No county may limit the number of machines within the boundaries of a county. A county may by ordinance impose a license fee on machines, other than those referred to in Article 15, located in an unincorporated area of the county./
Amend title to conform.

Rep. SHARPE explained the amendment.
Rep. ROBINSON spoke against the amendment.
Rep. SHARPE spoke in favor of the amendment.

Rep. ROBINSON moved to table the amendment.

Rep. SHARPE demanded the yeas and nays, which were taken, resulting as follows:

Yeas 73; Nays 32

Those who voted in the affirmative are:

Allen                  Askins                 Bailey
Bales                  Barfield               Barrett
Battle                 Bowers                 Breeland
Brown J.               Campsen                Cato
Chellis                Cobb-Hunter            Cooper
Dantzler               Easterday              Edge
Fleming                Gamble                 Gilham
Harrell                Harvin                 Haskins
Hawkins                Hayes                  Hines J.
Hinson                 Hosey                  Howard
Jennings               Keegan                 Kelley
Kennedy                Knotts                 Law
Leach                  Lee                    Limehouse
Littlejohn             Lloyd                  Loftis
Lourie                 Mack                   Martin
McGee                  McLeod M.              Neilson
Ott                    Parks                  Pinckney
Quinn                  Rhoad                  Rice
Riser                  Robinson               Rodgers
Rutherford             Sandifer               Scott
Seithel                Sharpe                 Smith D.
Smith J.               Smith R.               Stuart
Taylor                 Trotter                Vaughn
Whatley                Wilkes                 Wilkins
Young-Brickell

Total--73

Those who voted in the negative are:

Altman                 Beck                   Brown G.
Canty                  Clyburn                Cotty
Davenport              Delleney               Emory
Frye                   Gourdine               Govan
Hamilton               Harris                 Inabinett
Kirsh                  Klauber                Koon
Lanford                Lucas                  McLeod W.
Meacham                Moody-Lawrence         Neal J.M.
Phillips               Sheheen                Simrill
Stille                 Townsend               Tripp
Wilder                 Witherspoon

Total--32

So, the amendment was tabled.

Reps. SHEHEEN and DELLENEY proposed the following Amendment No. 5A (Doc Name B21\3834.4):
Amend the bill, as and if amended, by adding a new section to read as follows:
All licenses issued licenses for the manufacture or operation of video gaming machines in the State of South Carolina are subject to the court's orders in case number 3-97-3126-17 as to the operation and manufacture of those machines within the State of South Carolina.
Renumber sections to conform.
Amend totals and title to conform.

Rep. SHEHEEN explained the amendment.

Rep. ROBINSON moved to adjourn debate on the amendment.

Rep. SHEHEEN demanded the yeas and nays, which were taken, resulting as follows:

Yeas 68; Nays 33

Those who voted in the affirmative are:

Allen                  Altman                 Askins
Bailey                 Barrett                Battle
Breeland               Brown G.               Brown J.
Carnell                Chellis                Clyburn
Cobb-Hunter            Cotty                  Dantzler
Edge                   Emory                  Gourdine
Harrell                Harvin                 Hayes
Hines J.               Hinson                 Hosey
Howard                 Inabinett              Jennings
Keegan                 Kelley                 Kennedy
Knotts                 Leach                  Lee
Limehouse              Lloyd                  Lourie
Mack                   Martin                 McGee
McLeod M.              McLeod W.              Moody-Lawrence
Neal                   Neal J.M.              Ott
Parks                  Pinckney               Rhoad
Riser                  Robinson               Rodgers
Rutherford             Sandifer               Scott
Seithel                Sharpe                 Smith D.
Smith J.               Smith R.               Stuart
Tripp                  Webb                   Whatley
Whipper                Wilder                 Wilkes
Wilkins                Young-Brickell

Total-68

Those who voted in the negative are:

Bales                  Beck                   Campsen
Canty                  Cato                   Davenport
Delleney               Frye                   Gamble
Gilham                 Hamilton               Harris
Hawkins                Kirsh                  Klauber
Koon                   Lanford                Littlejohn
Loftis                 Lucas                  McCraw
McMahand               Meacham                Neilson
Phillips               Quinn                  Rice
Sheheen                Simrill                Stille
Taylor                 Trotter                Vaughn

Total--33

So, the motion to adjourn debate was agreed to.

Reps. DELLENEY, SHEHEEN and CAMPSEN proposed the following Amendment No. 6A (Doc Name AMEND\20709SD99), which was ruled out of order.
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/SECTION     1.     Title 12 of the 1976 Code is amended by adding:

"CHAPTER 22
Coin-Operated Machines and Other Devices
Article 1
General Provisions

Section 12-22-10.     As used in this chapter, unless the context clearly requires otherwise:

(1)     'Director' means the Director of the Department of Revenue.

(2)     'Chief' means the Chief of the South Carolina State Law Enforcement Division.

(3)     'Division' means the South Carolina State Law Enforcement Division.

(4)     'Associated equipment' means a device, machine, replacement part, or part used in the manufacture, operation, or maintenance of a machine including, but not limited to, integrated circuit chips, printed wired assembly, printed wired boards, printing mechanisms, video display monitors, and metering devices.

(5)     'Background investigation' means the investigation conducted in accordance with Article 13 of this chapter.

(6)     'Central computer monitoring system' or similar term means the computing system administered by the department for communicating with and retrieving information from machines, and activating and disabling machines.

(7)     'Contraband machine,' or 'contraband device,' means a machine, location controller or its modem, the computer chips of a machine or location controller, or any other part of the machine, location controller or modem not meeting the requirements of this chapter. A 'machine' that does not meet the requirements of this chapter is a 'contraband machine' regardless of whether the machine issues payout tickets redeemable for cash.

(8)     'Disable' or 'disabling' means the process of executing a command from the central computer monitoring system or the location controller which causes a machine to cease functioning.

(9)     'Distributor' means any person who sells, buys and sells, or leases machines or associated equipment. A distributor may also own, operate, service, or repair machines in this State.

(10)     'Establishment' or 'location' means premises with machines.

(11)     'Machine' means a nonpayout electronic machine with a free play feature that, upon insertion of cash is available to play or simulate the play of games utilizing a video display and microprocessors in which the player may receive free games or credits that may be redeemed for cash. Each player station of a multi-player unit is a separate machine.

(12)     'Machine owner' means any person, other than a distributor, who owns one or more machines.

(13)     'Machine operator' means any person who owns or manages an establishment with one or more machines.

(14)     'Manufacturer' means any person that manufactures, assembles, or programs machines, controllers, or associated equipment for sale or use in this State.

(15)     'Net machine income' means the amount of money that goes into the machine less payouts.

(16)     'Payout' means the total amount a player is paid at the end of play, regardless of the amount the player has deposited in the machine.

(17)     'Play' means the period of time from when money is put into the machine until cash out.

(18)     'Player' means a person who participates in the playing of a machine.

(19)     'Principal' of a business or entity means:

(a)     a person who is an officer of the business or entity which owns the business;

(b)     a partner, other than a limited partner who cannot exercise any management control;

(c)     a manager of a limited liability company which is managed by managers;

(d)     a member of a limited liability company which is managed by members;

(e)     a fiduciary, including personal representatives, trustees, guardians, committees and receivers, who manages, holds or controls title to or who is otherwise in direct or indirect control of the business;

(f)     a person who owns five percent or more of the total combined voting power of the business or entity;

(g)     a person who owns ten percent or more of the value of the business or entity; or

(h)     an employee who has day-to-day operational management responsibilities for the business or entity.

(20)     'Records' means all paper or electronic accounts, bank account records, financial statements, business records, contracts, reports and returns, including tax information and returns, and other information the department or division considers necessary to administer and enforce the provisions of this chapter.

(21)     'Type I Technician' means a person qualified to perform basic service, maintenance, and repair on machines.

(22)     'Type II Technician' means a person qualified to perform major machine repairs, configurations, communication, and diagnostic testing of machines.

(23)     'Video Game Machine Identification Number' or 'VGMID' means the permanently assigned unique number issued by the department to identify a specific machine from first delivery in this State until destruction or removal from this State.

Section 12-22-20.     Unless specifically granted to the division, the functions, duties, and powers set forth in this chapter are vested in the department. The department shall administer and enforce the provisions of this chapter, and may enter agreements with any agency or the division to execute the provisions of this chapter.

Section 12-22-30.     Except as provided in Section 12-54-240, any information obtained by the department or division in the administration and enforcement of the provisions of this chapter is public information, except for proprietary information of the central computer monitoring system. The department may disclose information to the division and to other governmental entities in and outside of this State.

Section 12-22-40.     The department has sole and exclusive power to issue all licenses provided for in this chapter. The department has exclusive authority to establish the conditions or restrictions necessary for issuing, suspending, or revoking a license.

Section 12-22-50.     The department or the division may issue subpoenas requiring the attendance of witnesses and the production of records, memoranda, papers, and other documents and administer oaths and take testimony thereunder.

Section 12-22-60.     The license fees, taxes, and penalties provided for in this chapter are a first preferred lien upon all property of the person charged. The department may execute on the lien.

Section 12-22-70.     The only forms of gambling which are legal in this State are bingo, played in accordance with Article 24 of Chapter 21 of Title 12, and games played on licensed machines operated in accordance with this chapter.

Section 12-22-80.     The department and the division have the right to examine all records of an applicant and the applicant's principals, those records under their control, and those records in which they have an interest to evaluate statements and documentation supplied with the application. All records must be retained for at least the period for which taxes may be assessed under Section 12-54-85.

Section 12-22-90.     Any person otherwise subject to the provisions of this chapter, but who claims the benefit of an exemption from certain of its requirements in any manner, on or before September 1, 1999, shall notify the department in a statement made under penalty of perjury that he is claiming the benefits of a specific provision, shall state all reasons for claiming the benefits of the provision, and shall identify all licenses claimed to be related to that exemption. The person claiming the benefit of such a provision has the burden of proof and shall establish by clear and convincing evidence that he is entitled to the benefits claimed.

Section 12-22-100.     If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this chapter for any reason is held to be unconstitutional or invalid, the holding does not affect the constitutionality or validity of the remaining portions of this chapter, the General Assembly declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or word hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

Section 12-22-110.     (A)     The department shall require that every location and owner of each machine licensed therein maintain a log of payoffs for at least three years that shall include, at a minimum, the following:

(1)     a separate form or record of each person receiving a payoff;

(2)     the name and address of the person receiving the payoff;

(3)     the social security number of the person receiving the payoff;

(4)     a statement of the amount of the payoff;

(5)     the driver's license number or other official identification number of the person receiving the payoff, which must be independently verified by the operator prior to any payoff being made;

(6)     a signed certification by the machine operator or owner and the player, under penalty of perjury, that the information provided is complete and accurate; and

(7)     attachment to the log all validated tickets related to the payoffs.

(B)     The department by regulation may prescribe the form or format of the log required in subsection (A).

Article 3
Licensure

Section 12-22-310.     (A)     Before a machine or associated equipment is manufactured, distributed, sold, or placed for use in this State, the machine owner, machine operator, manufacturer, distributor, and establishment must be licensed by the department as provided for in this chapter.

(B)     Before placement or operation, a machine must be licensed.

(C)     Licenses issued as provided for in this chapter are the property of the department and must not be transferred, assigned to another person, or pledged as collateral, except as provided in Section 12-22-330(K).

Section 12-22-320.     (A)     Every two years a manufacturer, distributor, machine owner, machine operator, establishment, type I technician, and type II technician, engaging in business in this State, shall apply for and obtain from the department a license for the privilege of engaging in the business and shall pay the nonrefundable fee levied at the time of license application. The fees are as follows:

(1)     Manufacturer         $10,000

(2)     Distributor         $15,000

(3)     Machine Owner         $2,000

(4)     Machine Operator         $2,000

(5)     Licensed Establishment         $1,000

(6)     Type I and Type II Technicians $500

(B)     Biennial licenses for machine owners, machine operators, distributors, manufacturers, or establishments issued under this chapter expire according to the county where the principal place of business, as determined by the department, of the machine owner, machine operator, distributor, or manufacturer is situated or, in the case of an establishment license, the county where the establishment is situated. The expiration dates are the last day of:

(1)     February in years which end in an:

(a)     odd number for Allendale, Bamberg, Barnwell, Beaufort, and Berkeley counties;

(b)     even number for Charleston, Clarendon, Colleton, Dorchester, Georgetown, Hampton, Jasper, and Williamsburg counties;

(2)     May in years which end in an:

(a)     odd number for Cherokee, Chester, Chesterfield, Darlington, Dillon, Fairfield, Florence, and Horry counties;

(b)     even number for Lancaster, Marion, Marlboro, Union, and York counties;

(3)     August in years which end in an:

(a)     odd number for Calhoun, Kershaw, Lee, Orangeburg, and Sumter counties;

(b)     even number for Richland County;

(4)     November in years which end in an:

(a)     odd number for Abbeville, Aiken, Anderson, Edgefield, Greenville, and Greenwood counties;

(b)     even number for Laurens, Lexington, McCormick, Newberry, Oconee, Pickens, Saluda, and Spartanburg counties.

(5) If a license purchased is for less than twenty-three months because of this section, the license tax must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under this section and Section 12-22-340.

(C)     The department, at its discretion and for the efficient administration of the law, may prorate licenses in any manner to implement or change the expiration date established in this section and to stagger the issuances of the licenses by county or by any other method considered appropriate by the department.

(D)     A license authorized in this section must not be issued until the department receives a completed background investigation showing that the standards provided for in Article 13 have been met by the applicant.

(E)     An application for a license may be denied or a license may be revoked if the applicant or licensee fails to pay any tax or fee administered by the department.

(F)     A license issued under this chapter is a privilege personal to the person to whom it was issued and is not a legal right.

(G)     All licenses described in subsection (A) issued before the effective date of this chapter expire May 31, 2000.

Section 12-22-330.     (A)(1)     Every machine owner making a machine available for play shall apply for and procure a license from the department for the privilege of making use of the machine in this State. The machine owner shall pay a first time nonrefundable biennial fee of four thousand dollars for each machine license and thereafter on all renewals shall pay a nonrefundable fee for each machine license as follows:

Net Income of Machine in Twelve

Months Preceding License Date                 Biennial License Fee

Not more than $12,000             $3,000

More than $12,000 but not more than $24,000     $4,000

More than $24,000 but not more than $48,000     $6,000

More than $48,000             $8,000.

(2)     Except as provided in subsections (C) and (D) below, all licenses begin on June first and, except as provided in subsection (D), all licenses expire May thirty-first of the second year that the license is valid following the date of issue.

(B)     The machine owner shall purchase a separate license for each station in a multi-player unit and each station counts as a separate machine when determining the number of machines.

(C)     If the license required in subsection (A) is purchased after June thirtieth, the license fee must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(D)     As an alternative to the license required in subsection (A), a machine owner may be granted a nonrefundable seasonal license effective April first and expiring September thirtieth, following the date of issue. This license must not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(E)     A municipality, by ordinance, may impose a license fee on machines in an amount not to exceed three hundred sixty dollars for the equivalent license period. A municipality may not limit the number of machines within the boundaries of the municipality.

(F)     A county, by ordinance, may impose a license fee on machines located in an unincorporated area of the county in an amount not to exceed three hundred sixty dollars for the equivalent license period.

(G)     A license may not be issued for the operation of a machine that is located, or intended to be located, on a watercraft or vessel plying the territorial waters of this State.

(H)     A machine licensed under the provisions of subsection (A) must not be operated at an establishment unless the establishment is licensed pursuant to the provisions of this chapter and Chapter 36 of Title 12.

(I)     Upon application for a license to operate any machine, the department may presume that the operation of the machine is lawful. The issuance of a license by the department does not make lawful the operation of any machine, the operation of which is unlawful under the laws of this State. When a license has been issued, the sum paid for the license must not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(J)     Failure to obtain a machine license as required by this chapter makes the machine owner liable for the penalties imposed in this chapter.

(K)(1)     A licensed machine owner may transfer a machine with its machine license only to another licensed machine owner. Notification for the transfer of the machine must be made to the department at least thirty days before the transfer. The notification of transfer must include a notarized statement of both parties identifying the machine by VGMID.

(2)     A licensed machine owner may transfer a machine license required by this section to any other machine owned by the machine owner if the department is notified before the transfer.

(L)     The machine owner shall notify the department within thirty days of any change in its principals. Any addition to the machine owner's principals of a person not already determined to have met the qualifications of this chapter voids the license unless the addition has been approved in advance by the department. The department shall develop forms and procedures for notification and approval of any change.

(M)     Four hundred dollars of the license fee imposed in subsection (A) must be retained by the department and expended for the implementation and ongoing operation of the monitoring system, administration, enforcement of this chapter, or other programs and services as the department may determine necessary and appropriate.

(N)     No distributor, owner, or operator must be issued a license unless the distributor, owner, or operator has been a resident of the State for two years before the date of application.

Section 12-22-340.     The department may issue an initial temporary license pending the approval of the application to any license applicant who has operated machines before the effective date of this chapter if the applicant signs a statement under penalty of perjury that he has no knowledge of any reason for denial of a license. The temporary license may be revoked.

Section 12-22-350.     Appeals of department decisions, including appeals of penalties, or of denied, suspended, or revoked licenses, must be conducted in accordance with the South Carolina Revenue Procedures Act in Chapter 60 of this title.

Article 5
Imposition of Tax on Net Machine Income

Section 12-22-510.     (A)     In addition to the license fees, a tax of thirty percent of the net machine income of every machine is imposed on the machine owner.

(B)     In addition to the license fees and the tax in subsection (A), an additional tax is levied on the net machine income of every machine within an establishment which is within five hundred feet of another establishment in the same structure, and both establishments have machines with a same owner or principal. The tax is as follows:

(1)     five percent of net machine income beginning June 1, 2000; and

(2)     ten percent of net machine income beginning June 1, 2001; and

(3)     fifteen percent of net machine income beginning June 1, 2002.

(C)     The tax imposed by this section is effective beginning on the first day of the first month following the effective date of this chapter.

Section 12-22-520.     (Reserved).

Section 12-22-530.     (A)     Unless the department exempts a taxpayer from this requirement, the taxes in this article must be paid to the department by the machine owner through electronic transfer of funds. The machine owner shall furnish the department all information and bank authorization required to facilitate the timely payment of taxes due to the State. Machine owners shall provide the department thirty days' advance notice of any proposed bank account changes to ensure the uninterrupted electronic transfer of funds.

(B)     After notice to taxpayers, the department may draw upon the designated account to satisfy the tax indebtedness under this chapter on the twentieth day of the month following the month for which taxes accrued. The machine owner shall maintain an account balance in an amount sufficient to cover the amount drawn by the department. The failure to maintain an adequate balance in the account as required in this section authorizes the department to find the tax in jeopardy and to disable all licensed machines of the machine owner. Appeals are governed by the jeopardy assessment appeals procedures in Sections 12-60-910 and 12-60-920.

(C)     Unless the department determines that such reports are unnecessary, each machine owner, machine operator, and licensed establishment shall report to the department for each calendar quarter, by the twentieth of the month following end of the quarter, the following information for each machine:

(1)     name and address of location of the machine;

(2)     denomination, whether five cents, etc. of the game;

(3)     the name of the game;

(4)     the name of the individual or individuals collecting money from the machine and the owner of the machine;

(5)     the date or dates of collection;

(6)     the date of previous collection;

(7)     income number at commencement of the reporting period;

(8)     income number at the end of the reporting period;

(9)     beginning payout number;

(10)     ending payout number;

(11)     payout to players;

(12)     gross profit; and

(13)     the percentage of net profits divided between owner and the location and the formula by which those figures are calculated.

(D)     For machines connected to the central computer monitoring system, the department shall determine the tax on net machine income as of the last day of each month. The department shall notify the machine owner in the form of a billing statement of the amount of tax the department shall draw from the designated account to satisfy the net machine income tax.

Section 12-22-540.     As an interim procedure to collect the taxes in this article between the effective date of this chapter and when a machine is connected to the central computer monitoring system, the department shall develop forms and procedures to facilitate the return and payment of these taxes. This interim procedure also must be used during any period when the central computer monitoring system is unable to determine taxes as provided in Section 12-22-530. The taxes are due and payable and the return is due on or before the twentieth day of the month following the month in which the taxes accrue.

Section 12-22-550.     An owner shall report to the department any discrepancies in tax between the department's statement and each machine's mechanical and electronic meter readings.

Section 12-22-560.     (A)     Until a discrepancy under Section 12-22-550 is resolved, the department may not make credit adjustments. The owner shall submit to the department the maintenance log that includes current mechanical meter readings and the audit ticket that contains electronic meter readings generated by the machine's software for each machine that reflects a discrepancy. Electronic accounting meters must not be cleared without an authorized department or division employee present. Any discrepancies that cannot be resolved because the meter was cleared in an unauthorized manner must be resolved in favor of the State.

(B)     A licensed establishment may return to a player money which the player deposited into the machine for which the machine did not permit play and would not print a validated payout ticket; and in this event shall obtain and record the date, time, amount, and licensed machine number of the refund, and the name, addresses, telephone number, social security number, and driver's license identification number and state, of that player. Thereafter, the taxpayer may file a claim for refund for any taxes paid under this chapter on the amount returned to the player in accordance with Chapter 60 of this title, but in addition to the information required by Section 12-60-470, the taxpayer shall file the information required to be maintained by the licensed establishment under this subsection.

Section 12-22-570.         The State Treasurer shall create a designated account for the deposit of the tax, penalties, and interest imposed by this article. However, before depositing revenues to this account, the department shall retain its costs and the costs of the division. The department and the division may retain, carry forward, and expend the funds withheld for the enforcement and administration costs of this chapter. All interest earned on revenues placed into the account remain with the account and must be distributed as provided by the General Assembly.

Section 12-22-580.     Machine operators may only redeem tickets for credits awarded on licensed machines located in that licensed establishment. A ticket must be validated by the location controller before any payout is made.

Section 12-22-590.     Each county or municipality, by ordinance, may determine the zoning of locations for the operation of machines. The zoning restrictions may not be less restrictive than this chapter.

Article 7
Location Restrictions, Public Notice, and Signage

Section 12-22-810.     (A)     An establishment license must not be issued until the department determines that the location is proper. In determining whether a location is a proper one, the following factors may be considered:

(1)     the location's proximity to residences;

(2)     the location's proximity to houses of worship, schools, playgrounds, parks, and daycare centers;

(3)     the likelihood that large crowds will gather from time to time with attendant breaches of the peace;

(4)     the location of automatic teller machines as provided for in Section 12-22-840(6);

(5)     the adequacy of law enforcement protection;

(6)     the concentration in the area of other licensed establishments;

(7)     compliance with Section 12-22-840; and

(8)     all other pertinent information the department and division consider appropriate, or other information submitted for consideration.

(B)     An establishment license must not be issued if the location is within one hundred feet of another licensed establishment. However, an existing location which operates machines before March 31, 1999, is not governed by the provisions of this subsection while the location continues to be operated in accordance with the single place or premise regulation and the operation of the location continues in the name of the current licensed machine operator. Notwithstanding the provisions of this subsection, the department may issue an establishment license after notice and the procedures in this section if the department otherwise determines that the location is a proper one.

(C)     The person applying for the establishment license closer than permitted under subsection (B) shall place a notice at least once a week for three consecutive weeks in a newspaper or newspapers most likely to provide notice to interested citizens of the county, city, or community in which the person seeks to locate the proposed establishment. The department shall determine which newspaper or newspapers meet the requirements of this section based on available circulation figures. If a newspaper is published within the county and historically has been the newspaper where legal notices are published, the advertisements published in that newspaper meet the requirements of this section. Notice also must be given by displaying a sign for fifteen consecutive days at the site of the proposed establishment. The sign shall:

(1)     state that a license for the operation of machines is being sought and that the establishment will be able to issue cash payouts from these machines;

(2)     tell an interested person where and when to send a written protest of the application;

(3)     be in bold print; and

(4)     cover a space at least eleven inches wide and eight and one-half inches high.

(D)     The department shall determine whether the location is a proper one. Any protestor or the applicant may appeal the department's determination.

(E)     The provisions of this section apply to all applications. However, establishments in existence on the effective date of this chapter are not subject to the distance restrictions of subsection (B) of this section and Section 12-22-840 while the license is held by the same person who held the license on March 31, 1999, and the licensee complies with Section 12-22-90.

Section 12-22-820.     (A)     Except as provided in subsection (B), machines must not be operated, or continue to operate, at any casino, casino-style gaming operations, video gaming mall, or combination of single place or premises, as that term was applied in Regulation 117-190 of the South Carolina Code of Regulations. In determining whether an establishment violates this section, the department shall consider whether more than one licensed establishment operates within a single structure, unless the distance between the licensed establishments exceeds one hundred feet and the licensed establishments are not owned by the same person, do not have any of the same principals, and the owner of one is not a principal of another licensed establishment. Licenses denied under this section are subject to review under Section 12-60-1310.

(B)     All establishments which conducted business as a casino or otherwise within a structure which before March 15, 1999, contained more than one single place or premise in accordance with Regulation 117-190 must:

(1)     on or before September 1, 1999, conduct business as a single operation and be licensed as a single licensed establishment to maintain on the premises more than five licensed machines;

(2)     advise the department of the machine and establishment licenses currently issued for the structure, and return the establishment licenses to the department at the time the new license for the single licensed establishment is approved by the department and issued;

(3)     once licensed as a single establishment, never have licenses for any number of machines greater than the total number of machines licensed in the structure as of March 15, 1999, as provided in the statement required in item (5);

(4)     never increase the number of machines permitted by this section after any reduction in the number of machines at the licensed establishment. However a reduction, as that term is used in this subsection, does not include the routine removal and replacement of machines for maintenance, repair, service, or similar purpose;

(5)     not allow the operation of an automated teller machine or similar machine that dispenses money on the premises of the licensed establishment; and

(6)     on or before August 1, 1999, file with the department a sworn statement stating the reasons why it is entitled to the benefits conferred by this subsection and the number of existing machine licenses.

(C)     Any person claiming the provisions of subsection (B) has the burden of proof and must establish by clear and convincing evidence that he is entitled to operate the structure as a single licensed establishment with more than five licensed machines. Any transferee of an interest in such an establishment is subject to all limitations of this section.

(D)(1)     No entity or entities of whatever description or kind which, before March 15, 1999, conducted business as a casino or otherwise through and by a combination, confederation, or aggregation of 'single place or premises' as that term before March 15, 1999, was interpreted and applied by the Department of Revenue in regulation may operate or continue to operate except as provided in this subsection.

(2)     After September 1, 1999, entities as described in this subsection are permitted to re-apply for, and may be granted renewal of a license for a maximum of one biennial licensure period. After completing that period, a new license must not be issued.

Section 12-22-830.     (A)     A person residing in the county in which an establishment license is requested to be granted, or a person residing within five miles of the establishment for which an establishment license is requested, may, before seven days after the last published notice, protest the issuance of the license if a written protest is filed with the department setting forth:

(1)     the name, address, and telephone number of the person filing the protest;

(2)     the name of the applicant for the establishment license and the address of the establishment sought to be licensed;

(3)     the specific reasons why the application should be denied; and

(4)     whether he wishes to attend and offer testimony before a contested case hearing before the Administrative Law Judge Division.

(B)     Upon receipt of a timely filed protest, seeking a contested hearing before the Administrative Law Judge Division, the department may not issue the establishment license but shall forward the file and its determination to the Administrative Law Judge Division.

(C)     If the protestant expresses no desire to attend a contested hearing and offer testimony, the protest is considered invalid, and the department shall continue to process the application and make its determination of whether all other statutory requirements for the license are met.

Section 12-22-840.     (A)     A licensed establishment, including its employees and agents, may not:

(1)     maintain, possess, or otherwise allow on its premises more than five machines;

(2)     advertise, or allow advertising, in any manner for the playing of the machines except as provided in Section 12-22-860;

(3)     offer or allow to be offered any inducement to a person for the playing of machines;

(4)     allow anyone under the age of twenty-one to receive payouts as a result of playing machines;

(5)     operate machines between the hours of two o'clock a.m. and six o'clock a.m. and between two o'clock a.m. Sunday and six o'clock a.m. Monday.

(6)     cash any business, personal, or employment checks of any individual or business;

(7)     make loans to any individual or business;

(8)     accept a credit card or debit card from a player for the exchange or purchase of game credits or for advancement of coins or currency;

(9)     extend credit, in any manner, to a player;

(10)     be located within five hundred feet within a county, or within three hundred feet in a municipality, of a public or private elementary, middle, or secondary school; a public or private kindergarten; a public playground or park; a public vocational or trade school or technical educational center; a public or private college or university; or house of worship; or

(11)     allow playing of machines by a person in an intoxicated condition.

(B)     The distances in this article must be computed by determining the shortest distance between the nearest property line of the licensed establishment and the nearest property line of the public or private elementary, middle, or secondary school; a public or private kindergarten; a public playground or park; a public vocational or trade school or technical educational center; a public or private college or university; house of worship; or other establishments with machines.

(C)     No establishment which holds a minibottle license or an on premises consumption beer and wine permit may be a licensed establishment under this chapter unless machines located in such an establishment are in a separate room surrounded by finished, permanent walls. Consumption of alcoholic liquor, beer, or wine in this separate room is prohibited and is grounds for revocation of the license issued the establishment under this chapter and its license or permit issued under Title 61.

Section 12-22-850.         (A)     The offering of an inducement as prohibited in Section 12-22-840 means any attempt to influence a person to play machines including, but not limited to:

(1)     free or discounted food or beverages;

(2)     free or discounted games other than credits won through authorized play;

(3)     prizes, either at the doors or through drawings or other means;

(4)     coupons offering any of the above; or

(5)     cash other than authorized payouts.
These specified inducements are not exclusive. Other attempts to influence a person to play a machine are prohibited.

(B)     A licensed establishment that engages in activities other than the operation of machines may not offer any inducement unless the licensed establishment is able to prove that the inducements offered are not directed at machine players and that the offerings are part of the normal business practice of similar activities in this State.

Section 12-22-860.     (A)     A licensed establishment may only advertise, or allow the advertising of, the playing of machines by utilizing a single green square not exceeding four by four feet which may be placed alone on any side of the building in which the licensed establishment is located.

(B)     Nothing in this section prevents a licensed establishment from advertising other goods and services except as otherwise prohibited by law.

(C)     No person may advertise in a misleading or deceptive manner.

(D)     To protect the public from misleading, deceptive, or aggressive sales practices, no person shall advertise the playing of machines or a business regulated under this chapter in any manner that suggests winning, money, or wealth.

(E)     Due to the pervasiveness of the medium and the children in the audience, no person may advertise the playing of machines in any broadcast medium between the hours of 5:00 a.m. and 11:00 p.m.

(F)     No person shall advertise in any manner for the playing of machines within one thousand feet of a public or private school, daycare center, kindergarten, residence, park, playground, or church.

(G)     Signs and nonbroadcast advertising in existence on the effective date of this chapter are not subject to the provisions of this section until July 1, 2000, if notice is given to the department as required in this chapter.

Section     12-22-870.     (A)     A licensed establishment must have posted and visible to the public at least one sign with the following words printed on it:

(1)     'A person must be twenty-one years of age to receive payouts from a video game machine.'

(2)     'It is illegal to offer inducements to a person to play video game machines.'

(3)     'All games are random. Games are set to issue a minimum theoretical payout of at least ninety percent.'

(4)     'This establishment maintains a copy of the video game machine laws on the premises for review by players at their request.'

(5)     'Validated tickets may be redeemed for cash.'

(6)     'Violators are subject to civil and criminal penalties.'

(7)     'Violations may be reported to South Carolina Law Enforcement Division or your local law enforcement agency.'

(8)     'No payout of greater than one hundred twenty-five dollars per player per location during any twenty-four hour period is allowed, regardless of the amount deposited in the machine.'

(B)     The sign required by subsection (A) must be placed on the wall behind the machine, but must be visible and readable by the person playing the machine. Each letter on the sign must be at least two inches high.

(C)     Each machine licensed under this article must have a prominently displayed sign citing the penalties provided for tampering, skimming, and intentional manipulation as provided for in this article. The sign must be displayed on the wall above the machine or affixed prominently to the machine.

(D)     In addition to all other signs required under this section, a white warning label must be prominently and permanently affixed to each machine. The label must contain the phrase 'WARNING: GAMBLING CAN BE ADDICTIVE' in capital black letters not less than two and one-half inches in height and one and one-half inches in width, followed by the phrase 'CALL 1-XXX-XXX-XXXX FOR HELP WITH GAMBLING ADDICTION' in capital black letters not less than one inch in height and one-half inch in width. The toll free number to be inserted on the label must be provided by the South Carolina Department of Alcohol and Other Drug Abuse Services.

Section 12-22-880.     (A)     A licensed establishment may not derive the primary and substantial portion of its proceeds from machines. A licensed establishment which receives more than fifty percent of its total gross proceeds from machines violates this prohibition. This fifty percent requirement must be maintained each calendar quarter of the calendar year. The department may require reports to be filed as to the amount of gross proceeds at the licensed establishment that are from activities other than machines. Each licensed establishment must maintain records on the premises that show compliance with this section including, but not limited to, gross machine income by months, gross proceeds by month from all other sources, invoices for purchases, cash payouts by month, bank deposits, and all checking, savings, and similar account records.

(B)     The department shall revoke the establishment's license and all machine licenses in the establishment if the establishment is in violation of this section.

Section 12-22-890.     Each licensed establishment shall maintain on the premises a copy of this chapter for review by the public upon request.

Article 9
Machine Requirements

Section 12-22-1010.     Before a machine may be connected or remain connected to the central computer monitoring system, the machine must have a current and valid machine license. The machine owner and machine operator, and the establishment at which the machine is located must have current and valid licenses as required by this chapter.

Section 12-22-1020.     (A)     All machines, location controllers and associated modems, computer chips, and any other part of a machine must be verifiably of a make, model, and software version certified by the department or a testing lab selected by the department before the items may be possessed, owned, operated, or allowed to operate at any place within this State.

(B)     A person may not possess, own, operate, or allow the operation of a contraband machine or device at any place within this State.

Section 12-22-1030.     (A)     Within ninety days after the effective date of this chapter, all machines must meet the following standards, and machine owners shall certify to the department, under oath, and in a form prescribed by the department, that the machines are prepared for connection to the central computer monitoring system. All machines must:

(1)     have games that are random and have a minimum payout of between ninety percent and ninety-nine percent, within standard rounding, in which the theoretical payout percentage is determined using standard methods of probability theory at optimal play;

(2)     be secure and accountable;

(3)     not operate in a misleading or deceptive manner;

(4)     not have any means of manipulation that affect the random probabilities of winning a game;

(5)     have one or more mechanisms that accept only coins or cash in the form of bills. The mechanisms must be designed to prevent obtaining credits without paying by stringing, slamming, drilling, or other means;

(6)     have one or more metering devices that keep a record of (a) all cash inserted or deposited into the machine; (b) credits played, (c) credits won, (d) validated cash ticket amounts, and (e) other information prescribed by the department. Cash records must include total coins and bills accepted and total credit generated by coin and bill acceptors;

(7)     be capable of being accessed on demand by telecommunication through a location controller from the central computer monitoring system for purposes of polling or reading device activities and for central computer remote enabling or disabling of machine operations;

(8)     be capable of interfacing with a central computer monitoring system through a location controller;

(9)     when requested by the department after certification, be connected to the central computer monitoring system through a location controller;

(10)     meet the standards set by the department and those set forth in this chapter; and

(11)     not offer on the face of the machine or in any pay table the possibility of receiving a payout greater than one hundred twenty-five dollars per player per location during any twenty-four hour period.

(B)     Machines not meeting the standards of this chapter, or the standards of the department, must not be licensed. The license of any machine which fails to maintain the standards of this chapter, or any standards of the department, must be revoked.

(C)     When the department approves the software and logic board of a machine, the division may use a prescribed security seal process to guard against any unauthorized tampering or changes to the erasable programmable read only memory (EPROM) chip or chips, or future, similar such technology. Any repair, replacement, or adjustment to the machine's EPROM chips or similar technology must be done in the presence of a division employee.

Section 12-22-1040.     (A)     As part of the central computer monitoring system, each location operating machines must provide a location controller and modem meeting department requirements. Each location controller must be capable of receiving, storing, and transmitting to the central computer monitoring system all information received from and required of machines. Each location controller shall be capable of supporting at least five machines.

(B)     This section applies to those location controllers which participate in the system as separate hardware entities and any head of string location controller which meets the specifications of this section.

(C)     The cost for purchasing, leasing, and installing, the location controller is the responsibility of the licensed establishment in which the machines are located.

(D)     Each location controller must be able to perform the following functions:

(1)     communicate with machines in an on-line environment;

(2)     store log entries of openings of machine game doors;

(3)     store log entries of openings of machine coin or currency doors;

(4)     authorize a machine to be taken off-line from the location controller and store a log of this event;

(5)     disable a machine and store a log entry upon a game door open, and a coin door open;

(6)     store a log entry if machine is off-line from the location controller;

(7)     store a log entry for machine tampering if the signal received from the machine is discontinuous or corrupted in such a manner as to constitute more than spurious noise in the system;

(8)     store a log entry of reenabling a machine that has been disabled;

(9)     log entries which include a VGMID for each machine and date/time stamp;

(10)     communicate to the central computer system the information which has been gathered from the machines and any log entries stored during the period using a protocol provided by the department or designated agent;

(11)     have sufficient storage capacity to maintain at least five days of data generated from the maximum playing sessions from the maximum number of associated machines linked to the location controller. The data must be stored immediately in a manner that allows, on demand, real time access by the central computer monitoring system. Access to data stored in the location controller must be restricted to authorized entry from the central computer monitoring system and other authorized inquiry only access that has been preapproved by the department;

(12)     have an internal clock;

(13)     be protected from unauthorized interference or tampering by any person or external device or force, such as to corrupt or alter data or corrupt or suspend communication signals or transmitted data from the machines or to the central computer monitoring system. This requirement extends to the location controller as well as its associated communication device, and cabling between the controller, the machines, and communication device;

(14)     be constructed of materials and protected in such a manner as to allow it to operate in suboptimal environments such as nonregulated temperature, dusty, tobacco-smoke filled, and humid conditions. Locations using a location controller that is not constructed so as to operate in these environments and that fail to operate properly are not allowed to operate machines until the location controller is repaired or replaced so as to operate in such a suboptimal environment;

(15)     be capable of validating tickets printed by a machine.

Section 12-22-1050.     The department may set standards for machines, modems, location controllers, the central computer monitoring system, and associated equipment including, but not limited to, technical standards, hardware specifications, software specifications, and standards relating to multiplayer units. Applicants must meet these standards before any license may be issued. The department may revise technical standards as is necessary providing sufficient time for compliance by licensees. The technical standards established by the department must, to the extent possible, within the limitation of this chapter, maximize competition among manufacturers.

Section 12-22-1060.     The burden of proof that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements is the responsibility of the manufacturer or machine owner. The department may require the manufacturer or machine owner to obtain a certification from an approved laboratory indicating that the machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The cost of this certification is the responsibility of the manufacturer or machine owner. The department shall provide a list of approved laboratories. The department may also review a laboratory to determine if the laboratory should be added or removed from the department's list of approved laboratories. The department may contract with a testing laboratory to ensure and certify that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The department may also establish a state testing laboratory. Payment of the cost of testing by the laboratory is the responsibility of the manufacturer or machine owner.

Section 12-22-1070.     A machine owner shall notify the department before a machine is added, moved, replaced, or disconnected.

Section 12-22-1080.     The licensed establishment or machine owner shall notify the department before a location controller is added, moved, or disconnected.

Section 12-22-1090.     (A)     Each location controller must be programmed automatically to disable the play of all machines connected to the location controller, if the location controller has not been polled by the central computer monitoring system for the purpose of collecting meter and event data, for a period to be determined by the department, but not less than seventy-two hours. The machine must be enabled when communication has been restored.

(B)     Whenever a machine is disabled during play of a game, the following must occur:

(1)     a message must appear on the screen warning the player that the machine is about to be disabled and the player must be informed that one minute remains to complete the game;

(2)     a count-down timer must be displayed; and

(3)     if the player completes the game, all payouts must be reported on a payouts ticket and no other games are allowed to be played on that machine;

(4)     if the player has not completed the game in the minute allotted, then the machine shall complete the hand according to the manufacturer's recommended play strategy, all payouts must be reported on a payouts ticket, and the machine then disabled.

Section 12-22-1100.     (A)     Each machine placed in operation in this State must have affixed by the manufacturer a VGMID assigned by the department. Each machine owner shall notify the department in writing of the receipt of a machine. Manufacturers, distributors, and machine owners shall make machines and associated equipment available for inspection by the department or division. No machine may be transported out-of-state until the VGMID has been removed. No one other than an authorized department or division employee shall remove the VGMID. For qualifying machines already located in the State, the department shall assign, and the division shall affix, the VGMID. The VGMID must be programmed into the machine and serves as the machine's unique identifier for purposes of logging events and reporting play statistics.

Section 12-22-1110.     (A)     Every machine owner shall maintain records for each machine showing the manufacturers' serial number; model and type of machine; the VGMID; the license number; the location's name, address, and telephone number; the machine operator; the date the machine entered this State; the date it entered the location; the date the machine went on-line; and the bank account from which the taxes are withdrawn.

(B)     The machine owner shall maintain information relating to the payment of any money or compensation paid to any persons to operate the machine. Information required by this section must be available on demand for inspection by a representative of the department or division.

Section 12-22-1120.     (A)     No person may possess, own, operate, maintain for use or operation, or allow the operation of, any machines that:

(1)     allow more than two dollars to be risked, wagered, or played on any one play or hand;

(2)     issue payouts of more than one hundred twenty-five dollars per player per location during any twenty-four hour period;

(3)     require any minimum number of credits before issuance of a validated payouts ticket;

(4)     permit any player to receive a payout greater than one hundred twenty-five dollars per player per location during any twenty-four hour period, regardles of the amount of money deposited into the machine;

(5)     produce validated tickets worth more than one hundred twenty-five dollars per player per location during any twenty-four hour period regardless of the amount deposited in the machine;

(6)     allow the production of multiple tickets with a collective value of greater than one hundred twenty-five dollars per player per location during any twenty-four hour period or any other schemes to evade the one hundred twenty-five dollars per player per location during any twenty-four hour period limitation; or

(7)     offer on the face of the machine or in any pay table the possibility of receiving a payout of greater than one hundred twenty-five dollars per player per location during any twenty-four hour period.

(B)     The department shall revoke for five years all licenses of the machine owner, machine operator, machines, and the establishment, where any machine violating subsection (A) is found.

Section 12-22-1130.     A machine must be disposed of in a manner that makes it incapable of use or operation in any video game or other gaming or amusement activity. A machine may not be disposed of until notice has been given to the department as provided in this section. An owner desiring to dispose of an unsaleable or damaged machine shall notify the department in writing before disposal and provide the following information in a manner as directed by the department:

(1)     the full name, address, and license number of the person or entity disposing of the machine;

(2)     the manufacturer's serial number of the machine;

(3)     the model number and description of the machine;

(4)     the manufacturer of the machine;

(5)     the VGMID of the machine;

(6)     the hard meter readings of the machine;

(7)     the licensed establishment at which the machine was located;

(8)     the proposed manner, time, and place of disposal.

Section 12-22-1140.     A machine must not simulate bingo or a slot machine.

Section 12-22-1150.     Each machine must contain a single printing mechanism capable of printing an original ticket and retaining an exact copy which is subject to inspection by the department. Tickets must contain any information the department determines to be reasonable for the efficient administration of this chapter. The department shall provide manufacturers information as to the information needed on a ticket and the placement of information on the ticket.

Section 12-22-1160.     All machines, location controllers, and the central computer monitoring system selected by the department must perform correctly before, during, and after the year 2000, with no error in functioning or data caused by failure to correctly interpret and utilize data contained within date fields within the system.

Section 12-22-1170.     The department, in its discretion, may approve alternative technical provisions provided that the technology maintains the security, account information, and integrity of the machines, location controllers, and central computer monitoring system.

Section 12-22-1180.     The central computer monitoring system shall delete prior to the completion of play and the printing of validated tickets all credits or their equivalents with a value of greater than one hundred twenty-five dollars.

Article 13

Background Investigations

Section 12-22-1310.         (A)     The division shall conduct background investigations on those persons associated with the operation of machines as provided in this chapter. A background investigation is defined as a security, criminal, and credit investigation of a person associated with the operation of machines or a principal connected to that business. The division shall conduct the investigations and inspections it considers necessary to fulfill its responsibilities under this chapter.

(B)     The division shall:

(1)     promptly and in a reasonable order, investigate all applications, enforce the provisions of this chapter, and provide to the department all information to allow the department to issue or deny the license;

(2)     provide the department with all information necessary for all actions under this chapter and for all proceedings involving enforcement of the provisions of this chapter or any regulations;

(3)     investigate violations under this chapter and any regulations;

(4)     conduct continuing review of machine operations through on-site observation and other reasonable means, to assure compliance with this chapter;

(5)     receive and take appropriate action on any referral from any law enforcement agency or the department relating to any evidence of a violation of this chapter and regulations;

(6)     exchange fingerprint data with, and receive criminal history information from, the Federal Bureau of Investigation or other law enforcement agencies;

(7)     have the authority to request and receive information, materials, and any other data from any person; and

(8)     report to the department any recommendations that promote more efficient operations of the division or the department.

(C)     In connection with the responsibilities under this chapter, the division or the department and their employees and agents may:

(1)     inspect and examine all establishments where machines are operated;

(2)     inspect and examine where machines or equipment are manufactured, sold, distributed, or serviced;

(3)     inspect all equipment and supplies in, about, upon, or around the establishment;

(4)     seize and remove from such establishments and impound any machines, equipment, or supplies for the purposes of examination and inspection;

(5)     inspect, examine, and audit all records pertaining to an applicant's operation;

(6)     seize, impound or assume physical control of any book, record, ledger, machine, and boxes and their contents.

(D)     The division may obtain warrants for the inspection and seizure of any property possessed, controlled, or otherwise held by any applicant or principal.

(E)     The division may inspect any applicant or licensee for compliance with the provisions of this chapter and regulations and to investigate any violations.

Section 12-22-1320.         (A)     Investigations must be conducted on manufacturers, distributors, establishment owners, machine owners, machine operators, service technicians, and their principals.

(B)     As a condition of receiving a license under the provisions of this chapter, each applicant and principal shall agree that the division and the department have unrestricted access and the right to inspect any premises under the control of the applicant or principal in which occurs any activity related to the provisions of this chapter.

(C)     Each applicant and principal, by signature of his application, grants the division the authority to access state, national, and international information for validation of information contained on the application. Any information found at the state, national, or international level which would prevent the applicant from obtaining any license required under this chapter must be used to do so.

(D)     Each applicant and principal shall cooperate with the division and the department in the performance of their duties.

(E)     Each applicant with submission of an application shall submit a valid fingerprint card for every principal or others affiliated with the operation of the licensed business.

Section 12-22-1340.     (A)     The department shall deny a license if a background investigation of any applicant or principal of an applicant reveals any of the following:

(1)     a conviction within fifteen years before the date of the application in any jurisdiction for any of the following offenses:

(a)     any offense punishable by imprisonment for two or more years;

(b)     any gambling offense;

(c)     theft or any crime involving false statements or declarations.

(2)     a determination of liability for, or an agreement that he was liable for, a civil judgment based in whole or in part upon conduct described in item (1) of this subsection;

(3)     omission of any material facts to the division or the department during initial or subsequent background investigations or a misstatement, or untrue statements, of material facts with respect to such investigation;

(4)     association with persons or businesses of known criminal background, or persons of disreputable character, that may adversely affect the general credibility, security, integrity, honesty, fairness, or reputation of the State or to the effective regulation of video poker;

(5)     failure to cooperate with any legislative investigative committees or other officially constituted body acting on behalf of the United States or any state, county, or municipality which seeks to investigate crimes related to gambling, corruption of public officials, or any organized criminal activities;

(6)     that the applicant owes any federal or state delinquent taxes, penalties, or interest.

(B)     The department or division may require any person to appear and testify before the department's or division's agents with regard to any manner within their jurisdiction. This testimony must be under oath and may embrace any matters which the department or the division considers relevant to the discharge of their official duties. Any person required to appear and testify has the right to be represented by counsel. Any testimony taken may be used by the department as evidence in any proceeding or matter then before the division or the department. Failure to appear and testify, unless excused, constitutes grounds for termination of application and may constitute revocation of current licenses.

Section 12-22-1350.     (A)     Each applicant shall bear all risks of unintentional adverse public notice, embarrassment, criticism, damages, or financial loss which may result from any disclosure or publication of any material or information obtained by the department or division pursuant to action on an application.

(B)     Distributors, principals, machine owners, machine operators, and technicians, and any other persons the division or the department considers necessary have an affirmative duty to maintain on file with the department and the division current and correct disclosure of all principals and all material facts required for licensure.

Section 12-22-1360.         (A)     The applicant for a license shall provide detailed information regarding:

(1)     the ownership and management, including information on all principals;

(2)     a detailed history and explanation of gambling activities and licenses in other jurisdictions of the applicant and all principals;

(3)     federal registration with respect to gambling devices; and

(4)     any other information considered necessary by the department for the proper administration and enforcement of this chapter.

(B)     The department and the division are authorized to develop applications and other forms.

(C)     The forms must require the applicant to disclose any present or previous experience or involvement with machines as a manufacturer, distributor, machine owner, machine operator, technicians, or employees. Present or previous experience or involvement includes the control of gambling devices as a machine owner or machine operator; employment with the machine owner or machine operator gambling devices; employment in establishments where gambling is offered to the public; and conviction of violation of federal, state, or local gaming laws in any jurisdiction.

(D)     The applicant shall submit proof with the application that he does not owe any federal or state delinquent taxes, penalties, or interest.

(E)     As a condition of receiving a license under the provisions of this chapter, each licensee shall agree that the division, the department, and their agents and employees, shall have unrestricted access and the right to inspect any premises under the control of the licensee in which any activity relating to the provisions of this chapter is conducted.

Section 12-22-1370.         (A)     The applicant shall provide the local governing authority information related to the application for any license issued under this chapter.

(B)     Each applicant shall immediately make available for inspection, by any department or division employee, all records and the establishments where machines are placed or operated, or where machines, devices, or equipment are manufactured, sold, serviced, or distributed.

Section 12-22-1380.         (A)     The applicant shall file a duplicate application with the department. The department shall forward one of the applications to the division. No time limit is imposed on the division for completion of its investigation. The division shall return the background investigation to the department.

(B)     The department shall determine whether the applicant owes any delinquent taxes, fines, penalties, or interest.

(C)     The department may not issue any license until the background investigations are concluded. The department shall make affirmative determination that the applicant is qualified and the applicable license or associated fees have been paid before issuing any license.

(D)     The department or division shall notify the applicant by mail if an application is incomplete. The notification must be sent to the address on the application. The notification must state the deficiencies in the application. If after the second notice of an incomplete application the applicant has not responded, the department shall consider the application withdrawn.

Article 15
Penalties

Section 12-22-1510.     (A)     The department may revoke licenses required under this chapter held by any person who fails to comply with any provision of this chapter or any provision of a regulation pertaining to this chapter. In lieu of revocation of licenses, the department may suspend licenses. In addition, the department may impose a monetary penalty of not more than five thousand dollars for each failure to comply with a provision of this chapter or any provision of a regulation pertaining to this chapter. Each violation and each day in violation of a provision of this chapter or any provision of a regulation pertaining to this chapter constitutes a separate offense.

(B)     With respect to any failure to comply with any provisions of this chapter occurring at a licensed establishment, the machine operator and the machine owner are both liable for any penalty and are both subject to revocation and suspensions as provided in this section.

Section 12-22-1520.     (A)     A person is guilty of a felony and, upon conviction, the person must be fined not more than twenty-five thousand dollars or imprisoned not more than five years, or both, if:

(1)     the person wilfully tampers with a machine, location controller, or associated equipment with intent to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     the person wilfully excludes, or takes any action in an attempt to exclude, anything or its value from the deposit, counting, collection, or computation of revenues, free games, or credits from machines;

(3)     the person wilfully manipulates the outcome, payoff, or operation of a machine;

(4)     the person wilfully launders or knowingly allows another to launder money through one or more machines;

(5)     the person knowingly possesses, owns, operates, or allows the operation of, a contraband machine, or contraband device, at any place within this State;

(6)     on or after September 1, 1999, or the ninetieth day following the effective date of this chapter, whichever is later, the person operates, or allows the operation of, machines that are not connected to the central computer monitoring system in accordance with this chapter;

(7)     the person intentionally skims or excludes, or takes any action, in an attempt to exclude anything or its value from the deposit, counting, collection, or computation of revenues from machines;

(8)     the person operates an establishment in this State for the playing of machines without having a license;

(9)     the person conducts business in this State as a machine or location controller manufacturer, a machine owner, or a distributor without having a license;

(10)     the person operates machines without having a machine license; or

(11)     the person managing or otherwise having the charge or care of a licensed establishment, or the owner of a video game machine, wilfully violates items (1), (2), (3), (4), (5), (6), (7), (8), (9), or (11) of Section 12-22-840(A), each being a separate offense under this section.

Section 12-22-1525.     Conspiring to subvert the provisions of this chapter is a conspiracy as defined and punished in Section 16-17-410.

Section 12-22-1530.     (A)     The following activities are criminal violations of this chapter:

(1)     refusing or otherwise preventing the inspection or examination by the department, the division, or any law enforcement officer, of any establishment, and any premises used for the manufacture, distribution, or storage of machines within this State;

(2)     refusing or otherwise preventing the examination by the department or division of revenue, payouts, or net machine income, records or equipment of any licensed or unlicensed machine owner, machine operator, manufacturer, distributor, or establishment.

(B)     A violator is guilty of a misdemeanor and, upon conviction, must be punished by a fine of not more than five hundred dollars or imprisonment of not more than thirty days, or both. Each failure to have a license required under this chapter constitutes a separate offense. Offenses under this item are triable in magistrate's court.

Section 12-22-1540.     (A)     The following activities are additional civil violations of this chapter subject to the penalties in Section 12-22-1510:

(1)     tampering with a machine, location controller, or any other part, device, or system to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     excluding, or take any action in an attempt to exclude, anything or its value from the deposit, counting, collection, or computation of revenues, free games, or credits from machines;

(3)     manipulating the outcome, payoff, or operation of a machine;

(4)     possessing, owning, operating, or allowing the operation of, a contraband machine or device at any place within this State;

(5)     operating, or allowing the operation of, machines that are not connected to the central computer monitoring system in accordance with this chapter; or

(6)     conspiring to subvert the provisions of this chapter.

Section 12-22-1550.     In addition to all other civil and criminal penalties, any person operating a contraband machine must be assessed a civil penalty in an amount equal to the statewide average of cash placed into a machine for the longer of its time of operation or twelve months.

Section 12-22-1560.     (A)     The department shall disable machines via the central computer monitoring system for the following reasons:

(1)     The establishment at which the machines are located has had its establishment license or retail sales tax license revoked or suspended.

(2)     The license assigned to the machine has been revoked or suspended.

(3)     The machine owner has had his machine owner's license revoked or suspended.

(4)     The machine license has expired and no new license has been issued by the expiration date.

(5)     The central computer monitoring system has registered a violation of system integrity by a machine. A machine disabled for this reason must be enabled again as soon as the problem has been resolved.

(6)     The central computer monitoring system has disabled a machine, upon request, in order for it to be moved or relocated.

(B)     A machine disabled for revocation of licenses as set forth in item (1), (2), or (3) of subsection (A) of this section must not operate in this State for a period of five years from the date of the revocation. The five-year prohibition also applies to any part of the machine. Any machine, to include its parts, which is not allowed to operate in this State under the provisions of this section, must be stored by the owner in a facility approved by the department or division.

Section 12-22-1570.     (A)     Any person may bring a civil action for any violation of any of the provisions of this chapter. The case must be brought in the name of the State, and may be filed in any state court of competent jurisdiction. The person bringing the case may seek any fine or penalty that the State may seek.

(B)     A copy of the complaint must be served on the Attorney General and the director, by the person bringing the action, either of whom may elect to join any action brought by the person.

(C)     If the State joins with an action brought by a person under this section, the State, in addition to other fines or penalties, may request the suspension or revocation of licenses. The person shall receive at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to litigating the action. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorney's fees and costs, to be paid by the defendant.

(D)     If the State does not join with the action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and revocation. The amount must not be less than twenty-five percent and must not be more than forty percent of the proceeds of the action or settlement, and must be paid out of the proceeds. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorney's fees and costs, to be paid by the defendant.

(E)     The State is not liable for expenses which a person incurs in bringing an action under this section.

(F)     No settlement may be entered without approval by the department.

(G)     Any determination in an action under this section that a licensee has violated a provision of this chapter is grounds for revocation of those licenses and the department may bring a subsequent action for suspension or revocation.

Section 12-22-1580.     The penalties authorized by this chapter are effective immediately upon imposition and may not be stayed by any administrative or judicial action.

Section 12-22-1590.     In any action under this chapter, no person may raise as a defense that he acted on the advice of his certified public accountant, unless he proves that he supplied that accountant with a copy of this chapter and all relevant regulations.

Article 17
Arcade Game Machines and Other Devices

Section 12-22-1710.     Cash payouts are not permitted with respect to the games played on machines and other devices licensed under this article. The provisions of the other articles do not apply to the machines and devices licensed under this article.

Section 12-22-1720.     Every person required to obtain a license for any machine or device described in Section 12-22-1730 shall maintain records showing the manufacturer's serial number, model or type of machine, and the location of the machine. The taxpayer shall maintain information relating to the payment of any monies or compensation made to any persons as part of a lease or contractual agreement to operate the machine on the premises of the person. Information required by this section must be available on demand for inspection by a representative of the department.

Section 12-22-1730.     (A)     Every person who owns and operates, or places for use in another person's place or premises for a share of any revenue, one or more of the following machines or devices shall apply for and procure from the department a license effective for two years for the privilege of making use of the machine or device in this State. The person shall pay for the license a nonrefundable fee of fifty dollars for each machine or device in items (1) and (4), two hundred dollars for each machine or device in item (2), and two thousand dollars for each machine or device in item (3):

(1)     a machine for the playing of music or kiddy rides operated by a slot or mechanical amusement devices and juke boxes in which is deposited a coin or thing of value. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(2)     a machine for the playing of amusements or video games, without free play feature, or machines of the crane type operated by a slot in which is deposited a coin or thing of value and a machine for the playing of games or amusements, which has a free play feature, operated by a slot in which is deposited a coin or thing of value, and the machine is of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(3)     a machine of the nonpayout type, in-line pin game operated by a slot in which is deposited a coin or thing of value except machines of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed;

(4)     billiard or pocket billiard table, foosball table, bowling lane table, or skeeball table operated for profit.

(B)     The license must be purchased in advance on or before the first day of June every two years or before making a machine available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(C)     Machines which have multiplayer stations must have a separate license for each such station.

(D)     As an alternative to the license required in subsection (A), a person may be granted a nonrefundable seasonal license beginning April first and expiring September thirtieth, following the date of issue, which must not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(E)     If the license required in subsection (A) is purchased after June thirtieth, the license fee must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(F)     Upon application being made for a license to operate any machine, the department may presume that the operation of the machine is lawful, but the issuance by the department of a license does not make lawful the operation of any machine which is unlawful under the laws of this State. When a license has been issued, the sum paid for the license must not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(G)     Failure to obtain a license as required by this article makes the person liable for the penalties imposed in this article.

(H)     The department, upon notification by the licensee purchasing machines from another licensee, shall allow for the transfer of the license issued pursuant to subsection (A) upon sale of the machine and license to the new owner. Notification for the transfer of the machine must be made to the department at least five days before transfer of the machine. This notification of sale must include a notarized statement of both the purchaser and seller identifying the machine by serial identification number and machine license number.

(I)     The license issued pursuant to this section must be displayed conspicuously on the front of the machine on a permanent, nontransferable part of the machine before its operation commences. The license must always be a current and valid license.

Section 12-22-1740.     (A)     In addition to all other licenses required by this article, a person required to obtain a license for any machine or device described in Section 12-22-1730 shall obtain an owner's license biennially as follows:

(1)     fifty dollars for devices in Section 12-22-1730(A)(1) and (A)(4);

(2)     two hundred dollars for devices in Sections 12-22-1730(A)(2) and 12-22-1730(A)(3).

(B)     Only one license is required regardless of the number or type of devices owned or operated, and the cost of that license is the highest fee enumerated in this section for a device owned or operated.

(C)     The license may be purchased in advance on or before the first day of June every two years or before making a machine or device available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(D)     Failure to pay taxes to the State is grounds for the cancellation of the license provided in this section.

(E)     The provisions of this section do not apply to any person with a current and valid machine owner's license issued under Article 3 of this chapter.

Section 12-22-1750.     In lieu of the licenses required under Sections 12-22-1730 and 12-22-1740, the department may issue a temporary license to persons making application to operate machines or devices required to be licensed under this article at a recognized county or state fair. The temporary license fee is the total amount of license fees required on all machines or devices for which application is made, based upon one-twenty-fourth of the biennial license required under Sections 12-22-1730 and 12-22-1740. The license is valid for the specific location designated on the license and the number of machines for which application was made and expires when the designated fair officially ends.

Section 12-22-1760.     Machines or devices licensed pursuant to Section 12-22-1730(A)(1), (A)(2), and (A)(4) are not subject to confiscation for a violation of Section 16-19-30, 16-19-40, 16-19-50, or 16-19-130.

Section 12-22-1770.     A person who fails, neglects, or refuses to comply with the provisions of this article, or who fails to attach the required license to any machine or device as required under this article, is subject to a penalty of five hundred dollars for each failure, and the penalty may be assessed and collected by the department. This penalty may be deposited to the credit of the general fund of the State.

Section 12-22-1780.     In addition to the penalties provided in Section 12-22-1770, any machine or device not having the required license attached, or which is improperly licensed, may be seized and confiscated by the division, its agents or employees, and sold at public auction after thirty days' advertisement. Upon payment of the license required, the department may return the property seized and confiscated.

Section 12-22-1790.     Municipalities and counties may levy a license tax on the business tax taxed under this article but in no case may the tax exceed twelve dollars and fifty cents.

Section 12-22-1800.     A person required to obtain a license for any machine or device described in Section 12-22-1730 must have attached to the machine or device information identifying the owner or operator of the machine or device. The identification must be placed on a part of the machine or device which is visible for inspection purposes. This identification is a condition precedent before the machine or device may be operated on location. Failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of this chapter and of Chapter 54 as applicable.

Section 12-22-1810.     If an unlicensed machine is seized by law enforcement as a prohibited machine under the laws of this State, the department shall assess a penalty equal to the amount of the license fee."
SECTION     2.         Section 12-60-3370 of the 1976 Code, as added by Act 60 of 1995, is amended to read:

"Section 12-60-3370.     (A)     Except as provided below, a taxpayer shall pay, or post a bond for, all taxes, including interest, penalties, and other amounts determined to be due by the Administrative Law Judge or DMV hearing officer before appealing the decision to the circuit court. For property tax cases covered by Section 12-60-2140 or 12-60-2550, the taxpayer need only pay the amount assessed under the appropriate section.

(B)     If the revocation or suspension of any license required under Chapter 22 of this title for the disabling of any video game machines via the central computer monitoring system is upheld by a decision of the Administrative Law Judge Division, then the person appealing the decision to the circuit court shall post a cash or surety bond with the department equal to three times the net machine income of the last two calendar quarters for the video game machines in question or in operation at the licensed establishment. As an alternative, the person appealing the decision may pay twice a month, to the department as a cash bond, the net machine income from the video game machines in question or in operation at the licensed establishment. A cash bond must be held by the State Treasurer, without interest, as surety conditioned upon prompt payment of any amount determined by the court to be due.

(C)     If the revocation or suspension of licenses or the disabling of machines is upheld upon appeal, the person subject to the revocation, suspension, or disabling is liable for and shall pay to the department an amount equal to the net machine income from the date of the decision by the Administrative Law Judge Division to the date of the final court order."
SECTION     3.         Section 61-4-580(3) of the 1976 Code, as added by Act 415 of 1996, is amended to read:

"(3)     permit gambling or games of chance not authorized by Chapter 22 of Title 12;"
SECTION     4.         Chapter 19, Title 16 of the 1976 Code is amended by adding:

"Section 16-19-65.     (A)     It is unlawful for any person to keep on his premises or operate or permit to be kept on his premises or operated within this State any vending or slot machine, punch board, pull board, or other device pertaining to games or chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, and video games with free play feature which meet the technical requirements provided for in Article 9, Chapter 22 of Title 12, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance.

(B)     Any person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned for a period of not more than one year, or both.

(C)     Any vending or slot machine, punch board, or other device pertaining to games of chance prohibited by this section must be seized by any law enforcement officer and at once taken before any magistrate of the county in which the machine, board, or device is seized who shall immediately examine it, and if satisfied that it is in violation of this section or any other law of this State, shall direct that it be immediately destroyed.

Section 16-19-66.     (A)     It is unlawful for a person to operate, cause to operate, or attempt to operate an automatic vending machine, slot machine, coin-box telephone, or other receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service by means of a slug or any false, counterfeited, mutilated, sweated, or foreign coin, or by any means not lawfully authorized by the owner, lessee, or licensee of the receptacle.

(B)     It is unlawful for a person to take, obtain, or receive from or in connection with any receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service any goods, wares, merchandise, gas, electric current, or other article of value or the use or enjoyment of any telephone or telegraph facilities, or service, or of any musical instrument, phonograph, or other property, without depositing in and surrendering to the receptacle lawful coin of the United States of America in the amount required by the owner, lessee, or licensee of the receptacle.

(C)     A person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined in the discretion of the court or imprisoned not more than two years.

Section 16-19-67.     A person who, with intent to cheat or defraud the owner, lessee, licensee, or other person entitled to the content of an automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service or who, knowing that the same is intended for unlawful use, manufactures for sale, or sells or gives away any slug, device, or substance intended or calculated to be placed or deposited in the automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance is guilty of a felony and, upon conviction, must be fined in the discretion of the court or imprisoned not more than five years."
SECTION     5.         In accordance with Article 9, Chapter 22, Title 12 of the 1976 Code, the Department of Revenue may set the standards for video game machines, modems, location controllers, software, hardware, the central computer monitoring system, and associated equipment. Failure to comply with these standards subjects the violator to the civil and criminal penalties, including fines, suspensions, and revocations established in Chapter 22 of that title including the provisions of Section 12-22-1580 of the 1976 Code relating to the time such penalties apply without regard to stays. Until the department adopts such standards, the standards provided in Parts 1 through 4 of this section must apply and must be met before issuance of a license. The definitions provided in Section 12-22-10 of the 1976 Code apply for purposes of this section.

Part I

Technical standards for Machines and Location Controllers

(A)     Each machine must be able to connect to a monitoring system via a serial communications port to a location controller meeting the requirements set forth by the department and using a communications protocol provided by the department or its designated agent.

(B)     Each machine must be capable of monitoring and storing the following items:

(1)     The cumulative total of the following for each twenty-four hour period, from 12:00 a.m. to 12:00 a.m., which may be recorded as a "snapshot" of the specified counters at the beginning and ending of each twenty-four hour period:

(a)     cash in, defined as money in dollars and cents;

(b)     credits purchased;

(c)     credits earned or won;

(d)     credits played;

(e)     credits paid;

(f)     cash paid.

(2)     The following security events and the time and date of such events:

(a)     game door open;

(b)     coin-bill/drop door open;

(c)     power off/on;

(d)     off line/on line to the location controller;

(e)     game control board access (logic area).

(C)     Each machine must contain Erasable Programmable Read Only Memory (EPROM) containing all game logic, and contain RAM (Random Access Memory) containing all counters and meters in electronic format, or such other technology as may later be designated by the department.

(D)     Each machine is not allowed to operate if it is not connected in on-line mode to a location controller meeting the requirements set forth by the department.

(E)     A machine must collect the data required in Section 12-22-1040(C) of the 1976 Code and communicate this information to a location controller for storage until requested by the central computer monitoring system. Each security event required in Section 12-22-1040(C) of the 1976 Code may reflect a time and date stamp and the VGMID of the machine.

(F)     A machine automatically must disable itself if communication is lost from the location controller. A machine must store this event. A machine must report a disabling event to the location controller when communication is restored.

(G)     A machine must be capable of being disabled by the central computer monitoring system or the location controller.

(H)     A machine must be capable of being enabled by the central computer monitoring system or by location controller once it has been enabled by the central computer monitoring system.

(I)     A machine must be protected from unauthorized interference or tampering by any person or external device so as to not corrupt or suspend the communication signals or transmitted data required for the proper functioning of the machine and the associated location controller.

(J)     Each machine must have a surge protector installed on the line that feeds power to the machine and must meet the requirements of the department.

Part II
Hardware Specifications

(A)     A machine must have electrical and mechanical parts and design principles that do not subject a player to physical hazards.

(B)     A machine must have a battery backup or an equivalent for the electronic meters and be capable of maintaining accurate information required by law and regulation for one hundred eighty days after power is discontinued from the machine. The backup device must be kept within the locked logic board compartment of the machine.

(C)     A machine must have an on/off switch that controls the electrical current used in the operation of the machine and must be in an accessible place within the interior of the machine.

(D)     The operation of each machine must not be adversely affected by static discharge or other electromagnetic interference.

(E)     Each machine must have one coin acceptor, either electronic or mechanical, one bill acceptor, either electronic or mechanical, or one of each. Approval letters and test reports of the coin and bill acceptors from other state or federal jurisdictions must be submitted to the department. All coin and bill acceptors are subject to approval by the department.

(F)     The internal space of a machine must not be readily accessible when the front door is closed or sealed.

(G)     Logic boards and software EPROMs and RAM must be in a separate, locked and sealed area within the machine and must only be accessible only in accordance with guidelines established by the department. The area must be sealed by, and accessible to, the division.

(H)     The cash and coin compartment must be contained in a locked area within or attached to the machine. This compartment must be accessible by the machine owner or machine operator.

(I)     No switches of any kind, to include but not limited to hardware and software switches, must be installed that alter the pay tables or payout percentages in the operation of a game below the minimum payback of ninety percent, within standard rounding, in which the theoretical payout percentage is determined using standard methods of probability theory. Switches or other devices may be installed to control graphic routines, speed of play, and sound.

(J)     A single printing mechanism must be capable of printing an original ticket and retaining an exact, legible copy within the machine. The ticket must record the number of credits, the value of the credit, and a validation number, when credits accrued are printed on a ticket for validation.

(K)     The printed ticket is the only allowable method for issuing payouts. Hoppers are prohibited.

(L)     A clearly visible identification plate must appear on the front exterior of the machine that contains the manufacturer, the manufacturer's serial number, the model number, the VGMID, and the name of the machine owner. This plate must not be removed. This identification is a condition precedent before the machines may be operated on location. Failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of Chapter 22 of Title 12 of the 1976 Code including the provision of Section 12-22-1580 relating to the time such penalties apply without regard to stays.

(M)     Equipment must be installed in a manner that enables a machine to communicate with the department's central computer monitoring system via the location controller using a communications protocol provided to each manufacturer of machines and location controllers provided by the department or its designated agent.

Part III

Software Requirements

(A)     Each machine must maintain electronic accounting meters at all times, regardless of whether the machine is being supplied with power. Each meter must be capable of maintaining totals no less than eight digits in length for the information required by the law and by regulation of the department.

(B)     Electronic meters must record the cumulative total of cash in, credits purchased, credits paid, credits earned/won, cash paid, and credits played, per each twenty-four hour period, from 12:00 a.m. to 12:00 a.m. This information may be recorded as a snapshot of the specified counters at the beginning and ending of each twenty-four hour period.

(C)     Electronic meters also must record security events, with the time and dates, to include game door open, coin-bill/drop door open, power off/on, off line/on line to the location controller, and game control board access.

(D)     No machine may have a mechanism that an error will cause the electronic accounting meters to automatically clear. Clearing of the electronic accounting meters may be completed only after notification and approval by the department and supervised by the division.

(E)     Each machine must have a random number generator that determines the occurrence of a specific card or a specific number to be displayed on the video screen. A selection process is considered random if it meets all the following requirements:

(1)     each card position or each number position satisfies the ninety-nine percent confidence limit using the standard chi-squared analysis;

(2)     each card or number position does not produce a significant statistic with regard to producing patterns of occurrences. Each card or number position is considered random if it meets the ninety-nine percent confidence level with regard to the runs test or any similar pattern testing statistic;

(3)     each card or number position is independently chosen without regard to any other card or number drawn within that game play. This test is the "correlation test". Each pair of card or number positions is considered random if they meet the ninety-nine percent confidence level using standard correlation analysis; and

(4)     each card or number position meets the serial correlation test, meaning that it is independently chosen without reference to the same card or number position in the previous game. Each card or number position is considered random if it meets the ninety-nine percent confidence level using standard serial correlation analysis.

(F)     All costs associated with the machines, to include upgrades or retrofits, in order for such machines to meet the requirements of the laws and regulations of this State are the responsibility of the machine owner.

Part IV
Multiplayer Unit Requirements

(A)     For purposes of this part, multiplayer units are divided into two general groups:

(1)     units that share some common components (Group I); and

(2)     units that share most components (Group II).

(B)     Group I and Group II units are based on the common principal that they both try to accurately mimic live table play. Both groups may consist of a number of player stations, generally either three or five player units per machine, and some type of dealer display. Both groups of games allow the players to wager on the next hand to be played and the object of the game, and the payout table is based on the player beating the dealer's hand. The player stations and dealer draw from a common deck of cards. Neither of these groups contains any program routines that allow the player or device to gain an unfair advantage or to cheat the device or player.

(C)     Group I and Group II units share common elements. The following define the difference in the two groups of multiplayer units:

(1)     Group I Units: Group I units have individual logic boards containing player station EPROMs and RAM containing all meter and event information for the individual station, as well as master logic boards in the dealer station containing master meters and the random number generation software used commonly by all of the player stations.

(2)     Group II Units: Group II units often do not have any game or logic boards in the individual player stations. The program and game memory are stored in the dealer's station. The player's stations are generally "Dumb Terminals" containing player input buttons and coin or bill acceptors. This group of terminals sends and receives all information directly from the dealer's station. Generally, these stations do not have separate power switches. All electrical leads are fed from the dealer's station to the individual player's station and all game display information is shown on the common video display. The dealer's station controls the operation of the game including the random number generator, all meter information, all display functions, all communications with the central system, all event detection and storage logic, and all processor units and EPROMs used for the game. Individual terminals are not in "direct" communication with the central system, but rather use the dealer's station as a "head of string" device for each of the individual stations. The dealer's station contains all individual station meters as well as master meters for the entire group.

(D)     A multiplayer unit must be handled in one of two ways, depending on whether it is a Group I machine or a Group II machine. Implementation of either method does not require modifications of the communications protocol or operational changes for either the department or the individual locations. Both methods may be handled entirely in the program code of the individual machines.

(1)     Group I unit stations as described above must be wired as if they are separate machines. Each player station must have an optical connection and each station is responsible for its own communications. All meter and event data must be stored on the individual stations and be transmitted to the system on demand. EPROM signature calculations must include the dealer's station code, but each station must perform individual calculations and transmit the results independently of each other. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(2)     Group II games must be set up with a dedicated phone line and location controller in the same manner as every other licensed establishment in the State. The fiber optics must leave the location controller and go directly to the dealer's station and then back to the location controller. All communications must be sent from the central system and the site controller exactly as detailed in the communications protocol. The dealer's station is responsible for handling all of the communications for the player stations. If the system asked for meters for station number one, the dealer's station is responsible for collecting and sending that data to the central system. The central system must behave exactly as if there are five separate machines. EPROM signature calculations must be performed over the dealer's station program code and transmitted back five times just as if there are five machines all running the same game code. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(E)     The department may handle on an individual basis, any type of multiplayer units that does not fit in either category Group I or Group II. Other multiplayer units are required to meet all applicable programming, communications, and security rules and regulations.
SECTION     6.         Articles 19 and 20, Chapter 21, Title 12 of the 1976 Code are repealed.
SECTION     7.     (1)     This section may be cited as the "Gambling Cruise Prohibition Act". It is the intent of the General Assembly in enacting this section to reenforce long-standing prohibitions on gambling by reiterating that the gambling offenses provided under the Constitution and laws of this State extend to any United States or foreign documented vessel where voyages begin and end in the waters of this State, consistent with the standards specified in 15 U.S.C. 1175(b)(2)(A), commonly referred to as the Johnson Act Amendments of 1992.
(2)     Chapter 19 of Title 16 of the 1976 Code is amended by adding:

"Section 16-19-170.     (A)     It is unlawful for a person to:

(1)     violate any provision of this chapter or any other provision of the laws or Constitution of this State prohibiting gambling, however described, on a United States or foreign documented vessel that embarks from any point within the State, and disembarks at the same or another point within the State, during which time the person intentionally causes or knowingly permits gambling activity to be conducted, whether within or without the waters of the State;

(2)     manage, supervise, control, operate, or own any United States or foreign documented vessel that embarks from any point within the State, and disembarks at the same or another point within the State, during which time the person intentionally causes or knowingly permits gambling activity which would violate any provision of this chapter or any other provisions of the laws or Constitution of this State prohibiting gambling, however described;

(3)     repair a gambling device on a United States or foreign documented vessel described in item (1) or (2) of this subsection, regardless of the location of the United States or foreign documented vessel when the repairs are made.

(B)     A person who violates any provision of this section is guilty of a felony and, upon conviction, must be imprisoned for not more than five years or fined not more than twenty-five thousand dollars, or both. A violation under this section is a separate offense, and nothing in this section precludes prosecution for any other gambling offense."
(3)     If any provision of this section, including the provisions of Section 16-19-170 of the 1976 Code added by it, or the application of these provisions to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this section which can be given effect without the invalid provision or application, and to this end, the provisions of this section are severable.
SECTION     8.         The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION     9.         Except where otherwise provided, this act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend totals to conform.
Amend title to conform.

Rep. SHEHEEN explained the amendment.

POINT OF ORDER

Rep. ROBINSON raised a Point of Order that Amendment No. 6A was out of order under Rule 9.3 in that the amendment rewrites the Bill in its entirety and therefore was not germane to the original title of the Bill.

SPEAKER WILKINS stated that a similar Point of Order was raised in February of 1997 which was sustained. He therefore sustained the Point of Order and ruled the amendment out of order.

SPEAKER PRO TEMPORE IN CHAIR
SPEAKER IN CHAIR

Reps. HASKINS, BARRETT, HAMILTON, CAMPSEN, EASTERDAY, CATO, QUINN, HAWKINS, LEACH, ROBINSON and LOFTIS proposed the following Amendment No. 22A (Doc Name COUNCIL\BBM\AMEND\9448HTC99), which was adopted.
Amend the bill, as and if amended, in Part II, SECTION 9(3), page 6, beginning on line 36, by striking /, with an increase in the legal payout to $500 per payout and with additional taxes and regulation/.
Amend further, as and if amended, by striking Parts III, IV, V, and VI and inserting:

/ PART III
Miscellaneous

SECTION     10.     If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION     11.     The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.

PART IV
Effective Dates

SECTION     12.     Parts II and III of this act takes effect upon approval of the Governor. Part I takes effect July 1, 2000, except that if a majority "yes" vote is certified by the State Board of Canvassers in the referendum provided in Part II of this act, Part I of this act does not take effect./
Amend title to conform.

Rep. HASKINS explained the amendment.

Rep. KNOTTS moved to table the amendment.

Rep. LEACH demanded the yeas and nays, which were taken, resulting as follows:

Yeas 31; Nays 68

Those who voted in the affirmative are:

Askins                 Bailey                 Battle
Bowers                 Breeland               Brown G.
Carnell                Cobb-Hunter            Cotty
Dantzler               Harvin                 Hayes
Hinson                 Hosey                  Jennings
Kennedy                Knotts                 Lee
Lloyd                  Mack                   McLeod M.
Miller                 Ott                    Parks
Rhoad                  Rutherford             Seithel
Stuart                 Whatley                Wilkes
Young-Brickell

Total--31

Those who voted in the negative are:

Altman                 Bales                  Barfield
Barrett                Beck                   Campsen
Canty                  Cato                   Chellis
Clyburn                Davenport              Delleney
Easterday              Edge                   Emory
Fleming                Frye                   Gamble
Gilham                 Gourdine               Hamilton
Harrell                Harris                 Haskins
Hawkins                Inabinett              Keegan
Kelley                 Kirsh                  Klauber
Koon                   Lanford                Law
Leach                  Limehouse              Littlejohn
Loftis                 Lourie                 Lucas
McCraw                 McGee                  McLeod W.
McMahand               Meacham                Neal J.M.
Neilson                Phillips               Quinn
Rice                   Riser                  Robinson
Sandifer               Scott                  Sharpe
Sheheen                Simrill                Smith D.
Smith J.               Smith R.               Stille
Taylor                 Tripp                  Trotter
Vaughn                 Webb                   Wilder
Wilkins                Witherspoon

Total--68

So, the House refused to table the amendment.

The question then recurred to the adoption of the amendment, which was agreed to.

RECORD FOR VOTING

Regarding the vote on tabling Amendment 22A on House Bill 3834, I was present in the House Chamber but in a telephone conversation and missed the vote; however, I would have voted to table Amendment 22A.

Rep. WHIPPER

RECORD FOR VOTING

I, Leon Howard, would have voted yes to table Amendment No. 22A, to House Bill 3834. I was not on the House floor when the vote came up.

Rep. HOWARD

Reps. SHEHEEN and DELLENEY proposed the following Amendment No. 5A (Doc Name B21\3834.4), which was tabled.
Amend the bill, as and if amended, by adding a new section to read as follows:
All licenses issued licenses for the manufacture or operation of video gaming machines in the State of South Carolina are subject to the court's orders in case number 3-97-3126-17 as to the operation and manufacture of those machines within the State of South Carolina.
Renumber sections to conform.
Amend totals and title to conform.

Rep. SHEHEEN moved to table the amendment, which was agreed to.

Rep. MEACHAM proposed the following Amendment No. 17A (Doc Name COUNCIL\PT\AMEND\1656DW99), which was tabled.
Amend the bill, as and if amended, by adding an appropriately numbered SECTION to read:
/ SECTION     ____.     Notwithstanding any other provision of law, the playing of a machine as defined in Section 12-22-100(13) of the 1976 Code is prohibited in those counties which voted to ban video poker payouts in local referendums held prior to the enactment of this chapter, except that:

(1)     a violation of this section gives rise only to civil penalties;

(2)     a county described in this section may not receive allocations of state or local revenues attributable to video poker, by way of license fees, taxes, or otherwise; and

(3)     the results of a prior local referendum described in this section are superceded by a statewide ban on video poker payouts enacted pursuant to the statewide referendum provided for in Part II of this act. /
Renumber sections to conform.
Amend title to conform.

Rep. MEACHAM explained the amendment.

Rep. D. SMITH moved to table the amendment.

Rep. MEACHAM demanded the yeas and nays, which were not ordered.

The amendment was then tabled by a division vote of 48 to 21.

LEAVE OF ABSENCE

The SPEAKER granted Rep. CANTY a leave of absence for the remainder of the day.

Reps. EASTERDAY and CATO proposed the following Amendment No. 23A (Doc Name NBD\AMEND\11503SOM99), which was adopted.
Amend the amendment bearing Document Number BBM\Amend\9448HTC99, as and if amended, by adding a new section to read:
/SECTION ___.     Title 12 of the 1976 Code is amended by adding:

"Section 12-21-2805.     (A)(1) Except as provided in subsection (B), machines shall not be operated or continue to operate at any casino. For purposes of this chapter, the term 'casino' shall mean both of the following:
(a) any two or more "single places or premises", as that term was defined, applied, and interpreted in Regulation 117-190 on or before May 31, 1999, that are located within a single structure; and

(b) beginning December 1, 1999, any two or more establishments located within one hundred feet of each other that have establishment licenses issued to the same person or a person who has the same principals.

(2) In determining whether an establishment violates this section, the department shall consider whether more than one licensed establishment operates within a single structure, unless the distance between the licensed establishments exceeds one hundred feet and the licensed establishments are not owned by the same person, do not have any of the same principals, and the owner of one is not a principal of another licensed establishment. Licenses denied under this section are subject to review under Section 12-60-1310.

(B)(1) A casino shall not operate or continue to operate except as provided in this subsection. No casino shall continue to operate as a casino unless on May 31, 1999:

(a) machines were both licensed and in operation within each 'single place or premises' as that term was defined, applied, and interpreted in Regulation 117-190 on or before May 31, 1999; and

(b) each single place or premises within the casino met the qualifications of Regulation 117-190 and a certificate of occupancy, if otherwise required by law, has been issued for the structure within which two or more single places or premises are located.

(2) After December 1, 1999, each casino authorized to operate after May 31, 1999 shall be permitted to re-apply for and may be granted renewal of licenses that, notwithstanding any other provision of the law, must expire and may not be renewed after June 1, 2001. Pursuant to Sections 1, 9, and 11 of Article V, the General Assembly provides that the Magistrate, Circuit and Appellate Courts do not have jurisdiction to extend the termination date of June 1, 2001, and may not enjoin the enforcement of this subsection by the department or the division. Nothing in this subsection shall be construed to affect the jurisdiction of the state courts regarding other provisions of this chapter.

(C)     All casinos authorized to operate after May 31, 1999:

(1)     on or before January 1, 2000, conduct business as a single operation and be licensed as a single licensed establishment to maintain on the premises more than five licensed machines;

(2)     advise the department of the machine licenses currently issued and the licenses currently issued for each single place or premises within the structure and return the licenses for each single place or premises to the department at the time the new license for the single licensed establishment is approved by the department and issued;

(3)     once licensed as a single establishment, never have licenses for any number of machines greater than the total number of machines licensed in the structure as of May 31, 1999, as asserted in the statement required in item (5);

(4)     never increase the number of machines permitted by this section after any reduction in the number of machines at the licensed establishment; provided, that a reduction, as that term is used in this subsection, does not include the routine removal and replacement of machines for maintenance, repair, service, or similar purpose; and

(5)     on or before January 1, 2000, file with the department a sworn statement asserting any and all reasons why it is entitled to the benefits conferred by this subsection (B).

(D)     Any person claiming the benefits of subsection (B) shall have the burden of proof and must establish by clear and convincing evidence that he is entitled to operate the structure as a single licensed establishment with more than five licensed machines. Any transferee of an interest in such an establishment shall be subject to all limitations of this section.

(E)     'Machine' means a nonpayout electronic machine with a free play feature that, upon insertion of cash or coin, is available to play or simulate the play of games utilizing a video display and microprocessors, in which the player may receive free games or credits that are redeemed for cash except as prohibited by this chapter. Each player station of a multi-player unit is a separate machine.
Renumber sections to conform.
Amend totals and title to conform.

Rep. EASTERDAY explained the amendment.

Rep. ALTMAN moved to table the amendment, which was rejected.

The question then recurred to the adoption of the amendment.

Rep. COBB-HUNTER demanded the yeas and nays, which were taken, resulting as follows:

Yeas 64; Nays 27

Those who voted in the affirmative are:

Altman                 Barfield               Barrett
Beck                   Campsen                Cato
Chellis                Cooper                 Cotty
Dantzler               Davenport              Delleney
Easterday              Edge                   Emory
Fleming                Frye                   Gamble
Gilham                 Hamilton               Harrell
Harris                 Haskins                Hawkins
Keegan                 Kelley                 Kirsh
Klauber                Koon                   Lanford
Leach                  Lee                    Limehouse
Littlejohn             Loftis                 Lourie
Lucas                  McGee                  McLeod M.
McLeod W.              Meacham                Miller
Neal J.M.              Neilson                Phillips
Quinn                  Rice                   Riser
Robinson               Sandifer               Seithel
Sharpe                 Sheheen                Simrill
Smith J.               Smith R.               Stille
Taylor                 Vaughn                 Whatley
Wilder                 Wilkins                Witherspoon
Young-Brickell

Total--64

Those who voted in the negative are:

Askins                 Bailey                 Battle
Bowers                 Breeland               Brown G.
Carnell                Clyburn                Cobb-Hunter
Gourdine               Harvin                 Hayes
Hines J.               Hosey                  Howard
Inabinett              Kennedy                Lloyd
Mack                   McMahand               Moody-Lawrence
Neal                   Ott                    Parks
Pinckney               Whipper                Wilkes

Total--27

So, the amendment was adopted.

RECORD FOR VOTING

On adoption of Amendment No. 23A, the voting bell was not sounded by mistake in the chamber informing the body a vote was in process. Therefore, I was not afforded a chance to vote.

Rep. KNOTTS

AMENDMENT NO. 22A -- MOTION TO RECONSIDER TABLED

Rep. CHELLIS moved to reconsider the vote whereby Amendment No. 22A was adopted.

Rep. EASTERDAY moved to table the motion to reconsider.

Rep. SEITHEL demanded the yeas and nays, which were taken, resulting as follows:

Yeas 93; Nays 14

Those who voted in the affirmative are:

Altman                 Bales                  Barrett
Beck                   Bowers                 Breeland
Brown G.               Brown J.               Campsen
Cato                   Clyburn                Cobb-Hunter
Cotty                  Davenport              Delleney
Easterday              Edge                   Emory
Fleming                Frye                   Gamble
Gilham                 Gourdine               Govan
Hamilton               Harrell                Harris
Harvin                 Haskins                Hawkins
Hines J.               Hosey                  Howard
Inabinett              Jennings               Keegan
Kelley                 Kirsh                  Klauber
Knotts                 Koon                   Lanford
Leach                  Lee                    Limehouse
Littlejohn             Lloyd                  Loftis
Lourie                 Lucas                  Mack
Martin                 McCraw                 McGee
McLeod M.              McLeod W.              McMahand
Meacham                Miller                 Moody-Lawrence
Neal                   Neal J.M.              Neilson
Parks                  Phillips               Pinckney
Quinn                  Rice                   Riser
Robinson               Rodgers                Rutherford
Sandifer               Scott                  Sharpe
Sheheen                Simrill                Smith D.
Smith J.               Smith R.               Stille
Stuart                 Taylor                 Townsend
Tripp                  Trotter                Vaughn
Webb                   Whatley                Whipper
Wilder                 Wilkins                Witherspoon

Total--93

Those who voted in the negative are:

Allen                  Askins                 Bailey
Battle                 Carnell                Chellis
Dantzler               Hayes                  Hinson
Kennedy                Law                    Ott
Seithel                Young-Brickell

Total--14

So, the motion to reconsider was tabled.

LEAVE OF ABSENCE

The SPEAKER granted Rep. TOWNSEND a temporary leave of absence.

Rep. SHEHEEN moved cloture on the entire matter.

Rep. STUART demanded the yeas and nays, which were taken, resulting as follows:

Yeas 98; Nays 4

Those who voted in the affirmative are:

Allen                  Altman                 Askins
Bailey                 Bales                  Barfield
Barrett                Battle                 Beck
Bowers                 Breeland               Brown G.
Brown J.               Campsen                Cato
Chellis                Clyburn                Cobb-Hunter
Cooper                 Dantzler               Delleney
Easterday              Edge                   Emory
Fleming                Frye                   Gamble
Hamilton               Harrell                Harris
Harvin                 Haskins                Hawkins
Hines J.               Hinson                 Hosey
Howard                 Inabinett              Jennings
Keegan                 Kelley                 Kennedy
Kirsh                  Klauber                Knotts
Koon                   Lanford                Law
Leach                  Lee                    Littlejohn
Lloyd                  Lourie                 Lucas
Mack                   Martin                 McCraw
McGee                  McLeod M.              McLeod W.
McMahand               Meacham                Miller
Moody-Lawrence         Neal                   Neal J.M.
Neilson                Ott                    Parks
Pinckney               Quinn                  Rhoad
Rice                   Riser                  Robinson
Rodgers                Rutherford             Sandifer
Scott                  Seithel                Sharpe
Sheheen                Simrill                Smith J.
Smith R.               Stille                 Stuart
Taylor                 Trotter                Vaughn
Webb                   Whatley                Whipper
Wilder                 Wilkes                 Wilkins
Witherspoon            Young-Brickell

Total--98

Those who voted in the negative are:

Carnell                Cotty                  Davenport
Tripp

Total--4

So, cloture was ordered.

Reps. JENNINGS, CARNELL, SEITHEL, KNOTTS, HARVIN and WHATLEY proposed the following Amendment No. 25A (Doc Name COUNCIL\DKA\AMEND\3625AC99), which was ruled out of order.
Amend the bill, as and if amended, by striking all after the enacting words and inserting:

//Part I
Prohibition on Payouts

SECTION     1.     Section 12-21-2710 of the 1976 Code, as amended by Act 155 of 1997, is further amended to read:

"Section 12-21-2710.     It is unlawful for any person to keep on his premises or operate or permit to be kept on his premises or operated within this State any vending or slot machine, or any video game machine with a free play feature operated by a slot in which is deposited a coin or thing of value, or other device operated by a slot in which is deposited a coin or thing of value for the play of poker, blackjack, keno, lotto, bingo, or craps, or any machine or device licensed pursuant to Section 12-21-2720 and used for gambling or any punch board, pull board, or other device pertaining to games of chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, and video games with free play feature which meet the technical requirements provided for in Section 12-21-2782 and Section 12-21-2783, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance.

Any person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned for a period of not more than one year, or both."
SECTION     2.     Section 12-21-2712 of the 1976 Code is amended to read:

"Section 12-21-2712.     Any vending or slot machine, punch board, or other device pertaining to games of chance prohibited by Section 12-21-2710 must be seized by any officer of the law law enforcement officer and at once taken before any magistrate of the county in which the machine, board, or device is seized who shall immediately examine it, and if he is satisfied that it is in violation of Section 12-21-2710 or any other law of this State, he shall direct that it be immediately destroyed."
SECTION     3.     A. Section 12-21-2720(A)(3) of the 1976 Code, as last amended by Section 148, Act 181 of 1993, is further amended to read:

"(3)     a machine of the nonpayout type, or in-line pin game, or video game with free play feature operated by a slot in which is deposited a coin or thing of value except machines of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed."
B.     Section 12-21-2720(C) of the 1976 Code, as last amended by Act 145 of 1995, is further amended to read:

"(C)     The owner or operator of any coin-operated device which is exempt from Section 16-19-60 and is subject to licensing under Section 12-21-2720(A)(3) and which has multi-player stations, shall purchase a separate license for each such station and any such multi-player station counts as a machine when determining the number of machines authorized for licensure under Section 12-21-2804(A)."

C.     Section 12-21-2720 of the 1976 Code, as last amended by Act 155 of 1997, is further amended by deleting subsections (E) and (F), which read:

"(E)     The department shall not issue a license for the operation of a video game with a free play feature which is located or intended to be located on a watercraft or vessel plying the territorial waters of this State.

(F)     Four hundred dollars of the four thousand dollar license fee imposed in subsection (A) may be retained by the department and expended in budgeted operations for the implementation and ongoing operation of the monitoring system required by law or in other programs and services as the director may determine necessary and appropriate."
SECTION     4.     Section 12-21-2726 of the 1976 Code, as last amended by Act 164 of 1993, is further amended to read:

"Section 12-21-2726.     Every person who maintains for use or permits the use of, on a place or premises occupied by him, a machine subject to the license imposed by this article by way of proof of licensing must have a current license displayed conspicuously on the front of the machine. Except for the provisions of Sections 12-21-2774 and 12-21-2776, each machine licensed pursuant to this section must be operated in a stand-alone fashion and may not be linked in any way to another coin-operated machine or device."
SECTION     5.     Section 16-19-40 of the 1976 Code is amended to read:

"Section 16-19-40.     If any person shall play at any tavern, inn, store for the retailing of spirituous liquors or in any house used as a place of gaming, barn, kitchen, stable or other outhouse, street, highway, open wood, race field or open place at (a) any game with cards or dice, (b) any gaming table, commonly called A, B, C, or E, O, or any gaming table known or distinguished by any other letters or by any figures, (c) any roley-poley table, (d) rouge et noir, (e) any faro bank or (f) any other table or bank of the same or the like kind under any denomination whatsoever or (g) any machine or device licensed pursuant to Section 12-21-2720 and used for gambling purposes, except the games of billiards, bowls, backgammon, chess, draughts, or whist when there is no betting on any such game of billiards, bowls, backgammon, chess, draughts, or whist or shall bet on the sides or hands of such as do game, upon being convicted thereof, before any magistrate, shall be imprisoned for a period of not over thirty days or shall suffer a fine of fined not over one hundred dollars, and every person so keeping such tavern, inn, retail store, public place, or house used as a place for gaming or such other house shall, upon being convicted thereof, upon indictment, be imprisoned for a period not exceeding twelve months and forfeit a sum not exceeding two thousand dollars, for each and every offense."
SECTION     6.     Section 12-54-40 of the 1976 Code, as last amended by Act 155 of 1997, is further amended by deleting subsection (M) which reads:

"(M)     A machine owner or distributor, as defined in Article 20, Chapter 21 of this title, who allows or causes a machine to be operated without a metering device, or who wilfully places a machine on location or who wilfully allows or causes a machine to be operated with a metering device that does not accurately record the information required under Article 20, Chapter 21 of this title is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years, without benefit of probation, parole, or suspension of sentence, and in addition may be fined not more than twenty-five thousand dollars."
SECTION     7.     Section 16-19-50 of the 1976 Code is amended to read:

"Section 16-19-50.     Any person who shall set up, keep, or use any (a) gaming table, commonly called A, B, C, or E, O, or any gaming table known or distinguished by any other letters or by any figures, (b) roley-poley table, (c) table to play at rouge et noir, (d) faro bank or (e) any other gaming table or bank of the like kind or of any other kind for the purpose of gaming, or (f) any machine or device licensed pursuant to Section 12-21-2720 and used for gambling purposes except the games of billiards, bowls, chess, draughts, and backgammon, upon being convicted thereof, upon indictment, shall forfeit a sum not exceeding five hundred dollars and not less than two hundred dollars."
SECTION     8.     Section 12-21-2703 and 16-19-60 and Article 20, Chapter 21 of Title 12, all of the 1976 Code, are repealed.

PART II
Referendum

SECTION     9.     (1) A statewide referendum must be conducted November 2, 1999, to ascertain whether or not video game machine payouts will continue to be allowed in this State. The State Election Commission shall place the exact question contained in item (2) of this subsection on the referendum ballot. The state election laws shall apply to the referendum, mutatis mutandis. The State Board of Canvassers shall publish the results of the referendum and certify them to the Secretary of State, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the Code Commissioner.
(2) The question put before the qualified electors in the referendum shall read:

"Shall cash payouts for credits earned on video game machines continue to be allowed after June 30, 2000?

Yes     []
No     []

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."

(3) The State Election Commission shall place the following explanation of the referendum question on the ballot:

"A majority 'yes' vote shall mean that cash payouts for credits earned on video game machines shall continue to be allowed.

A majority 'no' vote shall mean that cash payouts for credits earned on video game machines shall not be allowed after June 30, 2000."

(4)     In addition to all license taxes and fees imposed by the State on video games with a free play feature pursuant to Section 12-21-2720(A)(3) of the 1976 Code imposing such licenses and fees, there is imposed a one-time surcharge license fee of fifty dollars for each such licensed machine due and payable to the Department of Revenue on or before September 1, 1999. Failure to remit the surcharge in a timely manner is deemed failure to pay the license tax imposed pursuant to Section 12-21-2720(A)(3). The revenues of this fee shall be used to defray the expenses of the statewide referendum required by this act.

PART III
Coin-Operated Machines Regulation, Taxation and Enforcement

SECTION     10.     Title 12 of the 1976 Code is amended by adding:

"CHAPTER 22
Coin-Operated Machines and Other Devices
Article 1
General Provisions

Section 12-22-10. As used in this chapter, unless the context clearly requires otherwise:

(1)     'Director' means the Director of the Department of Revenue.

(2)     'Chief' means the Chief of the South Carolina State Law Enforcement Division.

(3)     'Division' means the South Carolina State Law Enforcement Division.

(4)     'Associated equipment' means parts and components that affect win and loss or that communicate, display, or affect the number of credits won, lost, or played.

(5)     'Background investigation' means the investigation conducted in accordance with Article 13 of this chapter.

(6)     'Central computer monitoring system' or similar term means the computing system administered by the department for communicating with and retrieving information from machines, and activating and disabling machines.

(7)     'Contraband machine,' or 'contraband device,' means a machine, location controller or its modem, the computer chips of a machine or location controller, or any other part of the machine, location controller or modem not meeting the requirements of this chapter. A 'machine' that does not meet the requirements of this chapter is a 'contraband machine' regardless of whether the machine issues payout tickets redeemable for cash.

(8)     'Disable' or 'disabling' means the process of executing a command from the central computer monitoring system or the location controller which causes a machine to cease functioning.

(9)     'Distributor' means any person who sells, buys and sells, gives, loans, or is the lessee or the lessor of machines. A distributor may also:

(a)     service or repair machines in this State;

(b)     own machines which are not placed into operation in an establishment without obtaining a machine owner's license;

(c)     own machines which are placed into operation in an establishment only if a machine owner's license is obtained; and

(d)     operate machines which are placed into operation in an establishment only if a machine operator's license is obtained.

(10)     'Establishment' or 'location' means premises with machines.

(11)     'Gross machine income' means the amount of money that goes into the machine.

(12)     'Machine' means a nonpayout electronic machine with a free play feature that, upon insertion of cash or coin, is available to play or simulate the play of games utilizing a video display and microprocessors, in which the player may receive free games or credits that are redeemed for cash except as prohibited by this chapter. Each player station of a multi-player unit is a separate machine.

(13)     'Machine owner' means any person, other than a distributor, who owns one or more machines.

(14)     'Machine operator' means any person who owns, operates, or manages an establishment with one or more machines.

(15)     'Manufacturer' means any person that manufactures, assembles, or programs machines or controllers for sale or use in this State.

(16)     'Net machine income' means the amount of money that goes into the machine less payouts.

(17)     'Payback' means the theoretical percentage of return to a player.

(18)     'Payout' means the total amount a player is paid at the end of a play period, regardless of the amount the player has deposited in the machine.

(19)     'Person' means any individual, partnership, corporation, association, entity, or organization of any type.

(20) 'Play period' means the period of time from when money is put into the machine until payout.

(21)     'Player' means a person who participates in the playing of a machine.

(22)(a)     'Principal' means:

(i)         every person;

(ii)         an association;

(iii)         all partners of a partnership, limited partnership, or limited liability partnership;

(iv)         all members of a limited liability company, or if the company is a manager-managed company, all members and managers;

(v)         trust and its beneficiaries;

(vi)         corporation, its directors, officers, and stockholders with a ten percent or more direct or beneficial interest or any person or entity that receives more than ten percent of the net income; or

(vii)     an employee who has day-to-day operational management responsibilities for the business or entity;
which has or will have a direct or indirect ownership interest in a machine or machines, a manufacturer, a machine owner, distributor, a machine operator or the establishment for which the applicant seeks a new or renewal license.

(b)     'Indirect ownership interest' includes, but is not limited to, a loan or extension of credit or forgiving of a loan of ten thousand dollars or more, made to or for the benefit of an applicant or licensee. 'Indirect ownership interest' does not include a loan or extension of credit made by a state or federally chartered financial institution or a restricted or supervised lender licensed under South Carolina law. Multiple loans of less than ten thousand dollars may not be used to evade the requirements of this chapter and such activity is grounds for revocation of any and all licenses issued pursuant to Section 12-22-320 held by the applicant.

(c)     If a corporation is a member of a controlled group of corporations, as defined in 26 U.S.C. 1563, or a member of an affiliated group of corporations, as defined in 26 U.S.C 1504, and at least one member of the group of corporations is a publicly-held corporation, then only the corporation which engages in the business or activity required to be licensed pursuant to this chapter is considered a principal for purposes of this chapter, along with its directors, officers, and stockholders as described in subitem (a)(vi).

(d)     For purposes of item (c) of this subsection, 'publicly held corporation' means a corporation:

(i)         whose shares are traded on a national exchange; and

(ii)     whose total assets at the end of the corporation's most recent fiscal quarter exceeded one billion dollars.

(23)     'Records' means all paper or electronic accounts, bank account records, financial statements, business records, contracts, reports and returns, including tax information and returns, and other information the department or division reasonably considers necessary to administer and enforce the provisions of this chapter.

(24)     'Video Game Machine Identification Number' or 'VGMID' means the permanently assigned unique number issued by the department to identify a specific machine from first delivery in this State until destruction or removal from this State.

Section 12-22-20.     (A)     Unless specifically granted to the division, the department has all powers necessary and proper to execute fully and effectively the provisions of this chapter including, but not limited to, the power:

(1)     to require any person to submit any information necessary to effectively administer and enforce the provisions of this chapter;

(2)     to prescribe the forms which must be used by any licensee involved in the manufacturing, ownership, distribution or operation of machines or an establishment or other coin-operated devices licensed pursuant to this chapter;

(3)     to suspend any license authorized by this chapter without notice or hearing upon a determination that a licensee is willfully violating the provisions of this chapter, prima facie evidence of which is sufficient after written notice by the department has been sent to the licensee regarding a violation of this chapter and the violation has not been cured within a reasonable time as directed by the department in that written communication; any suspension must remain in effect until the department determines that the cause for the suspension has been cured or abated; a license may be revoked upon a determination that the licensee has not made satisfactory progress to implement necessary corrective measures;

(4)     to suspend any license authorized by this chapter without notice or hearing upon a determination that the safety or health of patrons or employees is jeopardized by the licensee or the condition of the licensee's facilities; any suspension must remain in effect until the department determines that the cause for the suspension has been abated; a license may be revoked upon a determination that the licensee has not made satisfactory progress toward abating the hazard;

(5) to adopt regulations in accordance with the Administrative Procedures Act; and

(6)     to take any other action as may be reasonable or appropriate to enforce this chapter.

(B) Notwithstanding subsection (A), any law enforcement officer has the authority to enforce any criminal provision of this chapter.

Section 12-22-30.     Except as provided in Section 12-54-240, any information obtained by the department or division in the administration and enforcement of the provisions of this chapter is public information, except for proprietary information. The department may disclose information to the division and to other governmental entities in and outside of this State.

Section 12-22-40. The department has sole and exclusive power to issue all licenses provided for in this chapter. The department has exclusive authority to establish the conditions or restrictions necessary for issuing, suspending, or revoking a license.

Section 12-22-50. The department may issue subpoenas requiring the attendance of witnesses and the production of records, memoranda, papers, and other documents and administer oaths and take testimony thereunder.

Section 12-22-60. All fees, taxes, and penalties imposed in this chapter are a first lien upon any and all property of the person charged therewith.

Section 12-22-70. All records of a licensee must be kept in the manner prescribed by the department. All records shall be retained for at least the period for which taxes may be assessed under Section 12-54-85.

Section 12-22-80. All applicants and their principals shall provide access for the department and division to all of the applicant's financial records pertaining to the financing of the applicant in order to evaluate statements and documentation supplied with the application in connection with background investigations.

Section 12-22-90. (A) The director, the employees of the department, the chief, and the employees of the division, may not directly or indirectly, individually, or as a member of a partnership, or as a shareholder with a one percent or more direct or beneficial interest in a corporation, have a financial or ownership interest in:

(1) a testing laboratory chosen by the department pursuant to this chapter Section 12-22-960;

(2) a machine;

(3) a machine owner;

(4) a machine operator;

(5) a manufacturer;

(6) a distributor; or

(7) an establishment.

(B) The director, the employees of the department, the chief, and the employees of the division may not directly or indirectly receive income from, receive a loan fund from, or be forgiven from repaying any loan from a testing laboratory or any person or business entity issued a license pursuant to Section 12-22-320.

Article 3
Licensure

Section 12-22-310. (A)     Before a machine or associated equipment is manufactured, distributed, sold, or placed for use in this State, the machine owner, machine operator, manufacturer, distributor, and establishment must be licensed by the department as provided for in this chapter.

(B)     Before placement or operation, a machine must be licensed.

(C)     Licenses issued as provided for in this chapter are the property of the department and must not be transferred, assigned to another person, or pledged as collateral, except as otherwise provided in this chapter. Any transfer of a business, or a change of ownership, possession, or control of an interest in a business holding a license issued under Section 12-22-320 must be conducted in accordance with Section 12-22-350. Any transfer of a machine, or a change of ownership, possession, or control of a machine licensed under Section 12-22-330 must be conducted in accordance with Section 12-22-350.

Section 12-22-320. (A)(1) Every two years a manufacturer, distributor, machine owner, machine operator, and establishment, engaging in business in this State, shall apply for and obtain from the department a license for the privilege of engaging in the business and shall pay the nonrefundable fee levied at the time of license application. The fees are as follows:

(a)     manufacturer, ten thousand dollars;

(b)     distributor, ten thousand dollars; and

(c)     owner, two thousand dollars.

(2)     There is no licensing fee imposed upon:

(a)     a person licensed as a machine operator; or

(b)     an establishment.

(B)(1)     A licensed manufacturer who is also engaged in business as a machine owner, distributor, or machine operator, shall obtain a separate license for each activity for which a license is required.

(2)     A licensed machine owner who is also engaged in business as a manufacturer, distributor, or machine operator, shall obtain a separate license for each activity for which a license is required.

(3)     A licensed distributor who is also engaged in business as a manufacturer, machine owner, or machine operator, shall obtain a separate license for each activity for which a license is required.

(4)     A machine operator may operate more than one establishment under the same machine operator's license but shall obtain a separate establishment license for each establishment in which machines are maintained.

(5)     Each licensed establishment shall have a licensed machine operator.

(C)     At the time of filing the application for a license, the applicant must pay the fee imposed pursuant to subsection (A).

(D)     Biennial licenses issued under this chapter for machine owners, machine operators, distributors, and manufacturers expire according to the county of the licensee's principal place of business. For nonresident licensees, licenses expire according to the county where the licensee's registered agent is located. For establishments, the license expires according to the county where the establishment is located. The expiration dates are the last day of:

(1)     February in years which end in an:

(a)     odd number for Allendale, Bamberg, Barnwell, Beaufort, and Berkeley counties;

(b)     even number for Charleston, Clarendon, Colleton, Dorchester, Georgetown, Hampton, Jasper, and Williamsburg counties;

(2)     May in years which end in an:

(a)     odd number for Cherokee, Chester, Chesterfield, Darlington, Dillon, Fairfield, Florence, and Horry counties;

(b)     even number for Lancaster, Marion, Marlboro, Union, and York counties;

(3)     August in years which end in an:

(a)     odd number for Calhoun, Kershaw, Lee, Orangeburg, and Sumter counties;

(b)     even number for Richland County;

(4)     November in years which end in an:

(a)     odd number for Abbeville, Aiken, Anderson, Edgefield, Greenville, and Greenwood counties;

(b)     even number for Laurens, Lexington, McCormick, Newberry, Oconee, Pickens, Saluda, and Spartanburg counties.

If a license purchased will be for less than twenty-three months because of this section, the license tax must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(E)     The department, at its discretion and for the efficient administration of the law, may prorate licenses in any manner to implement or change the expiration date established in this section and to stagger the issuance of the licenses by county or by any other method considered appropriate by the department.

(F)     A license authorized in this section shall not be issued unless and until the department has completed its background investigation.

(G)     An application for a license may be denied or a license may be revoked if the applicant or licensee fails to pay any tax or fee administered by the department.

(H)     A license issued under this chapter is a privilege personal to the person to whom it was issued and is not a legal right.

Section 12-22-330. (A) (1) Every machine owner making a machine available for play shall apply for and procure a license from the department for the privilege of making use of the machine in this State.

(2)     The machine owner shall pay a biennial fee of four thousand dollars for each machine license. The machine owner shall apply for and obtain from the department the license required by this section before the first day of June every two years or before doing an act taxable under this chapter. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(3)     A license for a machine shall be issued only to a person who has been licensed pursuant to Section 12-22-320 for use at a licensed establishment. No machine may be operated without a license.

(B)     As an alternative to the license required in subsection (A), a person may be granted a nonrefundable license beginning April first and to expire September thirtieth, following the date of issue, which may not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(C)     If a license required in subsection (A) is purchased after June thirtieth, the license tax must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(D)     The owner or operator of any machine which has multi-player stations shall purchase a separate license for each such station and any such multi-player station counts as a machine or device when determining the number of machines or devices authorized for licensure under this chapter.

(E)     A license may not be issued for the operation of a machine that is located, or intended to be located, on a watercraft or vessel plying the territorial waters of this State.

(F)     No machine may be operated at an establishment unless the establishment is licensed pursuant to the provisions of Chapter 36 of Title 12.

(G)     Upon application being made for a license to operate any machine or apparatus under this chapter, the department may presume that the operation of the machine or apparatus is lawful and when a license has been issued for the operation thereof, the sum paid for the license may not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(H)     The issuance of a license under the provisions of this chapter by the department does not make lawful the operation of any gambling machine or device, the operation of which is made unlawful under the laws of this State.

(I)     Failure to obtain a machine license as required by this chapter makes the machine owner liable for the penalties imposed in this chapter.

(J)     A person with a license issued pursuant to this chapter shall notify the department within thirty days of any change in its principals. Any addition to the machine owner's principals of a person not already determined to have met the qualifications of this chapter voids the license unless the addition has been approved in advance by the department. The department shall develop forms and procedures for notification and approval of any change.

(K)     No distributor, owner, or operator must be issued a license unless the distributor, owner, or operator has been a resident of the State for two years before the date of application. If the distributor, owner, or operator has more than one principal, then only the principal in whose name the license is issued as provided in Section 12-22-1110(A)(2) must be a resident of the State for two years before the date of application.

Section 12-22-340. (A)     No municipality may limit the number of machines within the boundaries of the municipality. A municipality may by ordinance impose a license fee on machines, other than those referred to in Article 15, in an amount not exceeding ten percent of three thousand six hundred dollars of the license fee imposed pursuant to Section 12-22-330(A) for the equivalent license period.

(B)     No county may limit the number of machines within the boundaries of a county. A county may by ordinance impose a license fee on machines, other than those referred to in Article 15, located in an unincorporated area of the county in an amount not exceeding ten percent of three thousand six hundred dollars of the license fee imposed pursuant to Section 12-22-330(A) for the equivalent license period.

Section 12-22-350. (A)     (1) The department and the division must be given within ten business days written notice of:

(a)     any termination of a business, transfer of a business, or a change of ownership, possession, or control of an interest in a business holding a license issued under Section 12-22-320; and

(b)     any transfer of a machine, or a change of ownership, possession, or control of a machine licensed pursuant to Section 12-22-330.

(2)     The transfer of ten percent or more of a sole proprietorship, partnership interest, limited partnership interest, or corporate stock is considered a change in ownership. An indirect ownership interest that would compel the disclosure and background information required of a principal for an initial application must be disclosed to the department pursuant to this provision.

(3)     Anyone whose interest in the business has ended must immediately surrender to the department any licenses in his possession related to that business or machine. Failure to surrender a license as required by this subsection is justification for revocation of any and all licenses issued by the department and held by the licensee.

(B)(1) A person who acquires an interest in a business which holds licenses issued under this chapter, upon initiating the application process for a biennial license issued under 12-22-330, may be issued a temporary license by the department at the time of the acquisition if the applicant or location for which the temporary license is sought is not considered by the department to be ineligible under the provisions of this chapter or the applicant currently holds a valid license previously issued pursuant to this chapter, or the applicant has had a criminal history background check conducted by the division within the past thirty days.

(2) A temporary license issued pursuant to item (1) of this subsection is valid until a biennial license is approved or disapproved by the department, but in no case is it valid for more than one hundred eighty days from the date of issuance. The department may revoke a temporary license if the applicant fails to pursue the biennial license in a timely manner. The department shall collect a fee of twenty-five dollars for each temporary license.

(C) (1) Following notice as provided in subsection (A), a machine license issued pursuant to Section 12-22-330 may be transferred from one person licensed pursuant to Section 12-22-320 to another person licensed pursuant to Section 12-22-320. Any machine license transferred in accordance with this subsection shall remain in effect for the remainder of the period for which the license was issued to the transferor. All records relating to the ownership of the machine shall be revised to the reflect the identity of the new owner.

(2) A machine license shall not be transferred to any person who is not licensed pursuant to Section 12-22-320.

(3) If a machine is proposed to be transferred to a person who is not licensed pursuant to this chapter, then the machine shall not be used in an establishment until the transferee is licensed as a machine owner pursuant to this chapter.

Section 12-22-360. Appeals of department decisions, including appeals of penalties, or of denied, suspended, or revoked licenses, must be conducted in accordance with the South Carolina Revenue Procedures Act in Chapter 60 of this title.

Article 5
Imposition of Tax on Net Machine Income

Section 12-22-510.     (A) In addition to the license fees, a tax of twenty-five percent of the net machine income of every machine is imposed on the machine owner.

(B)     The tax imposed by this section must be collected and remitted to the department by the machine owner. The machine owner shall be responsible for collecting and remitting any portion of the tax imposed by this section which is agreed in any manner to be paid by any other person, including the machine operator, distributor, or the owner, lessee, or manager of an establishment at which the machine is operated or offered for operation.

(C)     The tax imposed by this section is effective beginning on the first day of the first month following the effective date of this chapter.

Section 12-22-520.     (A) Unless the department exempts a taxpayer from this requirement, the taxes in this article must be paid to the department by the machine owner through electronic transfer of funds. The machine owner shall furnish the department all information and bank authorization required to facilitate the timely payment of taxes due to the State. Machine owners shall provide the department thirty days' advance notice of any proposed bank account changes to ensure the uninterrupted electronic transfer of funds.

(B)     After notice to taxpayers, the department may draw upon the designated account to satisfy the tax indebtedness under this chapter on the twentieth day of the month following the month for which taxes accrued. The machine owner shall maintain an account balance in an amount sufficient to cover the amount drawn by the department. The failure to maintain an adequate balance in the account as required in this section authorizes the department to find the tax in jeopardy and to disable all licensed machines of the machine owner. Appeals are governed by the jeopardy assessment appeals procedures in Sections 12-60-910 and 12-60-920.

(C) Each machine owner, machine operator, and licensed establishment shall report to the department for each calendar quarter, by the twentieth of the month following end of the quarter, the following information for each machine:

(1)     name and address of location of the machine;

(2)     denomination, whether five cents, etc. of the game;

(3)     the name of the game;

(4)     the name of the individual(s) collecting money from the machine and the owner of the machine;

(5)     the date(s) of collection;

(6)     the date of previous collection;

(7)     income number at commencement of the reporting period;

(8)     income number at the end of the reporting period;

(9)     beginning payout number;

(10)     ending payout number;

(11)     payout to players;

(12)     gross profit;

(13)     the percentage of net profits divided between owner and the location and the formula by which those figures are calculated; and

(14)     the name, address, telephone number, and information regarding any refunds to players.

(D)     For purposes of the reporting requirements of this section, a person who has a security interest, lease agreement, or similar financing arrangement in a machine is not considered a machine owner.

(E)     For machines connected to the central computer monitoring system, the department shall determine the tax on net machine income as of the last day of each month. The department shall notify the machine owner in the form of a billing statement of the amount of tax the department shall draw from the designated account to satisfy the net machine income tax.

Section 12-22-530. (A)     On or before the twentieth day of the month following the end of each month, every person subject to the tax imposed by this section shall render to the department, on a form or in a manner prescribed by it, the tax due and payable and a true and correct statement showing the net machine income for the reporting period together with other information the department may require. A return is timely filed if the return is mailed and postmarked on or before the due date.

(B)     As an interim procedure to collect the taxes in this article between the effective date of this chapter and when a machine is connected to the central computer monitoring system, the department shall develop forms and procedures to facilitate the return and payment of these taxes. This interim procedure also must be used during any period when the central computer monitoring system is unable to determine taxes as provided in Section 12-22-520. The taxes are due and payable and the return is due on or before the twentieth day of the month following the month in which the taxes accrue.

Section 12-22-540. (A) The taxpayer shall report to the department any discrepancies in the department's statement of taxes based on a machine's mechanical and electronic meter readings, or otherwise. The owner shall submit to the department the maintenance log that includes current mechanical meter readings and the audit ticket that contains electronic meter readings generated by the machine's software for each machine that reflects a discrepancy. Until a discrepancy is resolved, the department shall not make credit adjustments. Electronic accounting meters shall not be cleared outside the presence of an authorized department or division employee. Any discrepancies that cannot be resolved because of unauthorized meter clearing shall be resolved in favor of the State. The burden of proving a discrepancy is upon the taxpayer.

(B)     A licensed establishment may return to a player money which the player deposited into the machine for which the machine did not permit play and would not print a validated payout ticket; and in this event shall obtain and record the date, time, amount, and licensed machine number of the refund, and the name, addresses, telephone number, social security number, and driver's license identification number and state, of that player. Thereafter, the taxpayer may file a claim for refund for any taxes paid under this chapter on the amount returned to the player in accordance with Chapter 60 of this title, but in addition to the information required by Section 12-60-470, the taxpayer shall file the information required to be maintained by the licensed establishment under this subsection.

Section 12-22-550. Failure to remit taxes imposed under this chapter shall result in immediate disabling of the machines and is justification for the revocation of the machine license and machine owner's license.

Section 12-22-560. (A)         All revenue derived from the tax imposed pursuant to Section 12-22-510, except as herein provided, must be credited to a fund separate and distinct in the general fund to be known as the Video Machine Income Fund. No appropriations credited to this fund may be authorized prior to July 1, 2000.

(B)     Until June 30, 2000, the department may retain six hundred dollars per machine license fee to be expended as follows: four hundred dollars per machine license fee shall be expended by the department and used exclusively for administration and enforcement of this chapter, and two hundred dollars per machine license fee shall be transferred to the division and used exclusively for administration and enforcement of this chapter. Beginning July 1, 2000 and effective beginning with the general appropriation act for the fiscal year 2000-2001, the General Assembly in the annual general appropriation act shall appropriate to the department funds in an amount not to exceed four hundred dollars per machine license fee to be used exclusively for administration and enforcement of this chapter.

Article 7
Location Restrictions, Public Notice, and Signage

Section 12-22-710. (A)     A licensed establishment, including its employees and agents, may not:

(1)     maintain, possess, or otherwise allow on its premises more than five machines, except as provided in section 12-22-740 ;

(2)     advertise, or allow advertising, in any manner for the playing of the machines, except as provided in Section 12-22-760;

(3)     offer or allow to be offered any inducement to a person for the playing of machines;

(4)     allow anyone under the age of twenty-one to play machines;

(5)     allow anyone under the age of twenty-one to receive payouts as a result of playing machines;

(6)     operate machines between the hours of two o'clock Sunday morning and six o'clock a.m. Monday morning;

(7)     violate valid local zoning ordinances

(8)     cash any business, personal, or employment checks of any individual or business;

(9)     make loans to any individual or business;

(10)     accept a credit card or debit card from a player for the exchange or purchase of game credits or for advancement of coins or currency;

(11)     be located within five hundred feet, or within three hundred feet in a municipality, of any of these locations: a public or private elementary, middle, or secondary school; a public or private kindergarten or daycare; a public playground or park; a public vocational or trade school or technical educational center; a public or private college or university; or house of worship; or a subdivision which has a covenant that prohibits the location of a commercial enterprise within the subdivision;

(12)     knowingly allow playing of machines by a person in an intoxicated condition; or

(13)     extend credit, in any manner, to a player. A machine operator or licensed establishment shall not allow an agent or any employee of the operator or establishment to provide a loan or extension of credit to a player.

(B)     A machine owner or operator or any other person shall not at the location of the licensed establishment:

(1)     engage in business as a Level I or Level II check cashing service, as defined in Section 34-41-10;

(2)     engage in business as a deferred presentment service, as defined in Section 34-39-120;

(3)     make restricted loans, as defined in Section 37-3-501(3);

(4)     make supervised loans, as defined in Section 37-3-501(1); or

(5)     make loans on the security of a motor vehicle certificate of title.

(C)     The distances in this article shall be measured in a straight line, without regard to intervening structures or objects, from the nearest property line of the lot on which a building or structure is used as a licensed establishment to the nearest property line of the location in subsection (A)(11) of this section or Section 12-22-720(B).

(D)     Except as otherwise provided herein, the provisions of this section apply to all applicants and licensees. However, the distance requirements set forth in this subsection (A) do not apply to:

(1)     an establishment which operated or allowed the operation of machines for which licenses were issued before May 30, 1993; or

(2)     an establishment which:

(a)     operated or allowed the operation of machines for which licenses were issued on or after May 30, 1993 and which were in operation on the effective date of this chapter; and

(b)     was in compliance with the distance requirements in effect prior to the enactment of this chapter.

(E)     Each county or municipality, by ordinance, may determine the zoning of locations for the operation of machines. The zoning restrictions may not be less restrictive than this chapter.

Section 12-22-720.     (A)     An establishment license must not be issued until the department determines that the location is in compliance with Section 12-22-710.

(B)(1)     The department shall not issue an establishment license to a new establishment that is closer than one hundred feet to an existing establishment even if the applicant has different principals than the existing licensed establishment(s) or where a licensure application for another establishment is pending.

(2)     For purposes of this section:

(a)     'new establishment' means an establishment which did not have machines on May 31, 1999; and

(b)     an 'existing establishment' means:

(i)         an establishment which is licensed at the time of the application for a license for a new establishment; or

(ii)     an establishment which had machines on May 31, 1999 and which is under the control of the same person who was licensed for the location under the provisions of Chapter 36, Title 12 on May 31, 1999.

(3)     Notwithstanding the provisions of item (1) of this subsection, the department may issue an establishment license after notice and the procedures in this section if the department otherwise determines that the location is a proper one.

(C)(1)     The person applying for the establishment license closer than permitted under subsection (B)(1) shall place a notice at least once a week for three consecutive weeks in a newspaper or newspapers most likely to provide notice to interested citizens of the county, city, or community in which the person seeks to locate the proposed establishment. The department shall determine which newspaper or newspapers meet the requirements of this section based on available circulation figures. If a newspaper is published within the county and historically has been the newspaper where legal notices are published, the advertisements published in that newspaper meet the requirements of this section. Notice also must be given by displaying a sign for fifteen consecutive days at the site of the proposed establishment. The sign shall:

(a)     state that a license for the operation of machines is being sought and that the establishment will be able to issue cash payouts from these machines;

(b)     tell an interested person where and when to send a written protest of the application;

(c)     be in bold print; and

(d)     cover a space at least eleven inches wide and eight and one-half inches high.

(2)     A person residing in the county in which an establishment license is requested to be granted pursuant to subsection (B)(3), or a person residing within five miles of the establishment for which an establishment license is requested pursuant to subsection (B)(3), may, before seven days after the last published notice, protest the issuance of the license if a written protest is filed with the department setting forth:

(a)     the name, address, and telephone number of the person filing the protest;

(b)     the name of the applicant for the establishment license and the address of the establishment sought to be licensed;

(c)     the specific reasons why the application should be denied; and

(d)     whether the protestant wishes to attend and offer testimony before a contested case hearing before the Administrative Law Judge Division.

(3)     Upon receipt of a timely filed protest, seeking a contested hearing before the Administrative Law Judge Division, the department may not issue the establishment license but shall forward the file and its determination to the Administrative Law Judge Division.

(4)     If the protestant expresses no desire to attend a contested hearing and offer testimony, the protest is considered invalid, and the department shall continue to process the application and make its determination of whether all other statutory requirements for the license are met.

(5)     The department shall determine whether the location is a proper one. Any protestor or the applicant may appeal the department's determination.

Section 12-22-730. The department must issue regulations to strictly enforce the provisions of this chapter so as to prevent the licensure of an establishment or establishments that would allow machine operators to circumvent the prohibition against more than five machines being located on any premises. Nothing in this section, and the terms as they are defined in this chapter, shall be construed to be unenforceable because of the pendency of, or the failure to issue, any regulations by the department. This chapter must be liberally construed to supercede any regulation in existence after the effective date of this act that would impede the department in any way from strictly enforcing the provisions of this chapter regarding the prohibition against more than five machines being licensed on the same premises.

Section 12-22-740. (A)(1) Except as provided in subsection (B), machines shall not be operated or continue to operate at any casiNo. For purposes of this chapter, the term 'casino' shall mean both of the following:
(a) any two or more "single places or premises", as that term was defined, applied, and interpreted in Regulation 117-190 on or before May 31, 1999, that are located within a single structure; and

(b) beginning December 1, 1999, any two or more establishments located within one hundred feet of each other that have establishment licenses issued to the same person or a person who has the same principals.

(2) In determining whether an establishment violates this section, the department shall consider whether more than one licensed establishment operates within a single structure, unless the distance between the licensed establishments exceeds one hundred feet and the licensed establishments are not owned by the same person, do not have any of the same principals, and the owner of one is not a principal of another licensed establishment. Licenses denied under this section are subject to review under Section 12-60-1310.

(B)(1) A casino shall not operate or continue to operate except as provided in this subsection. No casino shall continue to operate as a casino unless on May 31, 1999:

(a) machines were both licensed and in operation within each 'single place or premises' as that term was defined, applied, and interpreted in Regulation 117-190 on or before May 31, 1999; and

(b) each single place or premises within the casino met the qualifications of Regulation 117-190 and a certificate of occupancy, if otherwise required by law, has been issued for the structure within which two or more single places or premises are located.

(2) After December 1, 1999, each casino authorized to operate after May 31, 1999 shall be permitted to re-apply for and may be granted renewal of licenses that, notwithstanding any other provision of the law, must expire and may not be renewed after July 1, 2004. Pursuant to Sections 1, 9, and 11 of Article V, the General Assembly provides that the Magistrate, Circuit and Appellate Courts do not have jurisdiction to extend the termination date of July 1, 2004, and may not enjoin the enforcement of this subsection by the department or the division. Nothing in this subsection shall be construed to affect the jurisdiction of the state courts regarding other provisions of this chapter.

(3)(a)     After July 1, 2004, casinos may continue to operate within a county if the county governing body, prior to July 1, 2004, adopts an ordinance authorizing the operation of casinos.

(b) An ordinance adopted pursuant to this item may not authorize the operation of a casino if the casino was not in operation on May 31, 1999.

(4)     If the provisions of item (3) are declared unconstitutional by a final order of a court of competent jurisdiction, then the provisions of Section 12-22-710(A)(1) shall apply in the entire state.

(C)     All casinos authorized to operate after May 31, 1999:

(1)     on or before January 1, 2000, conduct business as a single operation and be licensed as a single licensed establishment to maintain on the premises more than five licensed machines;

(2)     advise the department of the machine licenses currently issued and the licenses currently issued for each single place or premises within the structure and return the licenses for each single place or premises to the department at the time the new license for the single licensed establishment is approved by the department and issued;

(3)     once licensed as a single establishment, never have licenses for any number of machines greater than the total number of machines licensed in the structure as of May 31, 1999, as asserted in the statement required in item (5);

(4)     never increase the number of machines permitted by this section after any reduction in the number of machines at the licensed establishment; provided, that a reduction, as that term is used in this subsection, does not include the routine removal and replacement of machines for maintenance, repair, service, or similar purpose; and

(5)     on or before January 1, 2000, file with the department a sworn statement asserting any and all reasons why it is entitled to the benefits conferred by this subsection (B).

(D)     Any person claiming the benefits of subsection (B) shall have the burden of proof and must establish by clear and convincing evidence that he is entitled to operate the structure as a single licensed establishment with more than five licensed machines. Any transferee of an interest in such an establishment shall be subject to all limitations of this section.

Section 12-22-750.         (A)     The offering of an inducement as prohibited in Section 12-22-710(A)(3) means any attempt to influence a person to play machines including, but not limited to:

(1)     free or discounted food or beverages;

(2)     free or discounted games other than credits won through authorized play;

(3)     prizes, either at the doors or through drawings or other means;

(4)     coupons offering any of the above;

(5)     cash other than authorized payouts; or

(6)     jackpots or other progressive winnings schemes.

These specified inducements are not exclusive. Other attempts to influence a person to play a machine are prohibited.

(B)     A licensed establishment that engages in activities other than the operation of machines may not offer any inducement unless the licensed establishment is able to prove that the inducements offered are not directed at machine players and that the offerings are part of the normal business practice of similar activities in this State.

Section 12-22-760. (A) A licensed establishment or licensed machine operator or any employee or agent of the licensee, may only advertise, or allow the advertising of, the playing of machines by utilizing a single green square not exceeding four by four feet which may be placed on any side or sides of the building in which the licensed establishment is located.

(B)     Nothing in this section prevents a licensed establishment from advertising goods and services, other than the playing of machines, except as otherwise prohibited by law.

(C)     No person may advertise in a misleading or deceptive manner.

(D)     To protect the public from misleading, deceptive, or aggressive sales practices, no person shall advertise the playing of machines or a business regulated under this chapter in any manner that suggests winning, money, or wealth.

(E)     Due to the pervasiveness of the medium and the children in the audience, no person may advertise the playing of machines in any electronic, broadcast or print medium.

(F)     No person shall advertise in any manner for the playing of machines within one thousand feet of a public or private school, daycare center, kindergarten, residence, park, playground, or church

(G)     Signs and nonbroadcast advertising in existence on the effective date of this chapter are not subject to the provisions of this section until July 1, 2000, if notice is given to the department as required in this chapter.

(H)     A machine owner, manufacturer, or distributor may advertise his enterprise but may not sponsor, promote, or otherwise advertise the playing of games and may not advertise on behalf of a machine operator or licensed establishment.

Section 12-22-770. (A) A licensed establishment must have posted and visible to the public at least one sign with the following words printed on it:

(1)     'A person must be twenty-one years of age to play a video game machine or receive payouts from a video game machine.'

(2)     'It is illegal to offer inducements to a person to play video game machines.'

(3)     'All games are random. Games are set to issue a minimum theoretical payout of between ninety and ninety-nine percent.'

(4)     'This establishment maintains a copy of the video game machine laws on the premises for review by players at their request.'

(5)     'Validated tickets may be redeemed for cash.'

(6)     'Violators are subject to civil and criminal penalties.'

(7)     'Violations may be reported to South Carolina Law Enforcement Division or your local law enforcement agency.'

(8)     'No payout of greater than five hundred dollars is allowed, regardless of the amount deposited in the machine.'

(B)     The sign required by subsection (A) must be placed behind the machine, but must be visible and readable by the person playing the machine. Each letter on the sign must be at least two inches high.

(C)     Each machine licensed under this chapter must have a prominently displayed sign citing the penalties provided for violations of Sections 12-22-1330(1), 12-22-1330(2), and 12-22-1360 on the wall above the machine or affixed prominently to the machine. The department may provide sample language for these signs.

(D)     In addition to all other signs required under this section, a white warning label must be prominently and permanently affixed to each machine. The label must contain the phrase 'WARNING: GAMBLING CAN BE ADDICTIVE' in capital black letters not less than two and one-half inches in height and one and one-half inches in width, followed by the phrase 'CALL 1-XXX-XXX-XXXX FOR HELP WITH GAMBLING ADDICTION' in capital black letters not less than one inch in height and one-half inch in width. The toll free number to be inserted on the label must be provided by the South Carolina Department of Alcohol and Other Drug Abuse Services.

Section 12-22-780. (A) Any person who would otherwise be subject to the restrictions of this chapter but who seeks to use the provisions of Sections 12-22-710(D), 12-22-710(E)(2), 12-22-740(B), or 12-22-760(G), must, on or before January 1, 2000:

(1)     notify the department in a statement made under penalties of perjury that he is eligible to use the provision;

(2)     state the specific and detailed reasons for claiming the privileges of the specific provision claimed; and

(3)     identify all licenses associated with the claim.

(B)     The person claiming the benefit of Sections 12-22-710(D), 12-22-710(E)(2), 12-22-740(B), or 12-22-760(G)shall have the burden of proof and must establish by clear and convincing evidence that he is entitled to the benefits claimed.

Article 9
Machine Requirements

Section 12-22-910. (A) Before a machine may be connected or remain connected to the central computer monitoring system, the machine must have a current and valid machine license. The machine owner and machine operator, and the establishment at which the machine is located must have current and valid licenses as required by this chapter.

(B)     Each machine or device licensed pursuant to this chapter must be operated in a stand-alone fashion and may not be linked in any way to another machine, except as otherwise provided in this chapter.

(C)     Any machine which is not connected to the central computer monitoring system after February 1, 2000 shall be considered to be illegal and a contraband machine.

Section 12-22-920.     (A)     All machines, location controllers and associated modems, and computer chips must be verifiably of a make, model, and software version certified by the department or a testing lab selected by the department before the items may be possessed, owned, operated, or allowed to operate at any place within this State.

(B)     A person may not possess, own, operate, or allow the operation of a contraband machine or device at any place within this State.

Section 12-22-930. (A) Not later than December 1, 1999:

(1) each machine must meet standards provided in subsection (B) of this section and the machine owner shall certify to the department, under oath and in a form prescribed by the department, that the machines are prepared for connection to the central computer monitoring system; or

(2) each machine owner must certify to the department, under oath and in a form prescribed by the department, that he has ordered all location controllers and associated modems, computer chips, associated equipment, software, hardware, and any other equipment required by this chapter in order for his machines to be connected to the central computer monitoring system.

(B) Not later than December 1, 1999 and subject to the provisions of subsection (A)(2), all machines and equipment must:

(1)     have games that are random and have a minimum theoretical payback of between ninety percent and ninety-nine percent, within standard rounding, in which the theoretical payback percentage is determined using standard methods of probability theory at optimal play;

(2)     be secure and accountable;

(3)     not operate in a misleading or deceptive manner;

(4)     not have any means of manipulation that affect the random probabilities of winning a game;

(5)     have one or more mechanisms that accept only coins or cash in the form of bills. The mechanisms must be designed to prevent obtaining credits without paying by stringing, slamming, drilling, or other means;

(6)     have one or more metering devices that keep a record of (a) all cash inserted or deposited into the machine; (b) credits played, (c) credits won, (d) validated cash ticket amounts, and (e) other information prescribed by the department. Cash records must include total coins and bills accepted and total credit generated by coin and bill acceptors;

(7)     be capable of being accessed on demand by telecommunication through a location controller from the central computer monitoring system for purposes of polling or reading device activities and for central computer remote enabling or disabling of machine operations;

(8)     be capable of interfacing with a central computer monitoring system through a location controller;

(9)     when required by the department after certification, be connected to the central computer monitoring system through a location controller; and

(10)     meet the standards set by the department and those set forth in this chapter.

(C)(1)     Machines not meeting the standards of this chapter, or the standards of the department, shall not be licensed. The license of any machine which fails to maintain the standards of this chapter shall be revoked.

(2)     The department shall connect licensed machines at licensed establishments meeting the requirements of this section to the central computer monitoring system as soon as is practicable after receipt of certification from the machine owner that a machine meets the standards of this section, no later than February 1, 2000. A machine owner who provides the certification provided in subsection(A) may provide payouts as provided in Section 12-22-1020 beginning on December 1, 1999. A machine owner who provides the certification provided in subsection (A)(2) shall provide the certification provided in subsection (A)(1) by February 1, 2000; if the certification is not provided on that date, the machine shall be disabled and the machine owner shall be subject to the penalties provided in this chapter.

(D)     When the department approves the software and logic board of a machine, the division must require the use of a prescribed security seal process to guard against any unauthorized tampering or changes to the erasable programmable read only memory (EPROM) chip or chips, or future, similar such technology. Any repair, replacement, or adjustment to the machine's EPROM chips or similar such technology must be done in the presence of an employee of the division.

Section 12-22-940.     (A)     As part of the central computer monitoring system, each establishment operating machines must provide a location controller and modem meeting department requirements. Each location controller must be capable of receiving, storing, and transmitting to the central computer monitoring system all information received from and required of machines. Each location controller shall be capable of supporting at least five machines.

(B)     This section applies to those location controllers which participate in the system as separate hardware entities and any head of string location controller which meets the specifications of this section.

(C)     The cost for purchasing, leasing, and installing, the location controller is the responsibility of the licensed establishment in which the machines are located.

(D)     Each location controller must be able to perform the following functions:

(1)     communicate with machines in an on-line environment;

(2)     store log entries of openings of machine game doors;

(3)     store log entries of openings of machine coin or currency doors;

(4)     authorize a machine to be taken off-line from the location controller and store a log of this event;

(5)     disable a machine and store a log entry upon a game door open, and a coin door open;

(6)     store a log entry if machine is off-line from the location controller;

(7)     store a log entry for machine tampering if the signal received from the machine is discontinuous or corrupted in such a manner as to constitute more than spurious noise in the system;

(8)     store a log entry of reenabling a machine that has been disabled;

(9)     log entries which include a VGMID for each machine and date/time stamp;

(10)     communicate to the central computer system the information which has been gathered from the machines and any log entries stored during the period using a protocol provided by the department or designated agent;

(11)     have sufficient storage capacity to maintain at least five days of data generated from the maximum playing sessions from the maximum number of associated machines linked to the location controller. The data must be stored immediately in a manner that allows, on demand, real time access by the central computer monitoring system. Access to data stored in the location controller must be restricted to authorized entry from the central computer monitoring system and other authorized inquiry only access that has been preapproved by the department;

(12)     have an internal clock;

(13)     be protected from unauthorized interference or tampering by any person or external device or force, such as to corrupt or alter data or corrupt or suspend communication signals or transmitted data from the machines or to the central computer monitoring system. This requirement extends to the location controller as well as its associated communication device, and cabling between the controller, the machines, and communication device;

(14)     be constructed of materials and protected in such a manner as to allow it to operate in suboptimal environments such as nonregulated temperature, dusty, tobacco-smoke filled, and humid conditions. Locations using a location controller that is not constructed so as to operate in these environments and that fail to operate properly are not allowed to operate machines until the location controller is repaired or replaced so as to operate in such a suboptimal environment; and

(15) be capable of validating tickets printed by a machine.

Section 12-22-950.     The department may set standards for machines, modems, location controllers, the central computer monitoring system, and associated equipment including, but not limited to, technical standards, hardware specifications, software specifications, and standards relating to multiplayer units. Applicants must meet these standards before any license may be issued. The department may revise technical standards as is necessary providing sufficient time for compliance by licensees. The technical standards established by the department must, to the extent possible, within the limitation of this chapter, maximize competition among manufacturers.

Section 12-22-960.     The burden of proof that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements is the responsibility of the manufacturer or machine owner. The department may require the manufacturer or machine owner to obtain a certification from an approved laboratory indicating that the machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The cost of this certification is the responsibility of the manufacturer or machine owner. The department shall provide a list of approved laboratories. The department may also review a laboratory to determine if the laboratory should be added or removed from the department's list of approved laboratories. The department may contract with a testing laboratory to ensure and certify that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The department may also establish a state testing laboratory. Payment of the cost of testing by the laboratory is the responsibility of the manufacturer or machine owner. Approval of the machine by the department is prima facie evidence that the machine meets the required standards and requirements.

Section 12-22-970. A machine owner shall notify the department before a machine is added, replaced, disconnected, or transferred to another establishment.

Section 12-22-980.     The licensed establishment or machine owner shall notify the department before a location controller is added, disconnected, or transferred to another establishment.

Section 12-22-990.     (A)     Each location controller must be programmed automatically to disable the play of all machines connected to the location controller, if the location controller has not been polled by the central computer monitoring system for the purpose of collecting meter and event data, for a period to be determined by the department, but not less than seventy-two hours. The machine must be enabled when communication has been restored.

(B)     Whenever a machine is disabled during play of a game, the following must occur:

(1)     a message must appear on the screen warning the player that the machine is about to be disabled and the player must be informed that one minute remains to complete the game;

(2)     a count-down timer must be displayed;

(3)     if the player completes the game, all payouts must be reported on a payout ticket and no other games are allowed to be played on that machine; and

(4)     if the player has not completed the game in the minute allotted, then the machine shall complete the hand according to the manufacturer's recommended play strategy, all payouts must be reported on a payout ticket, and the machine then disabled.

Section 12-22-1000.     Each machine placed in operation in this State must have affixed by the manufacturer a VGMID assigned by the department. Each machine owner shall notify the department in writing of the receipt of a machine. Manufacturers, distributors, and machine owners shall make machines and associated equipment available for inspection by the department or division. No machine may be transported out-of-state until the VGMID has been removed. No one other than an authorized department or division employee shall remove the VGMID. For qualifying machines already located in the State, the department shall assign, and the division shall affix, the VGMID. The VGMID must be programmed into the machine and serves as the machine's unique identifier for purposes of logging events and reporting play statistics.

Section 12-22-1010.         (A)     Every machine owner shall maintain records for each machine showing the manufacturers' serial number; model and type of machine; the VGMID; the license number; the location's name, address, and telephone number; the machine operator; the date the machine entered this State; the date it entered the location; the date the machine went on-line; and the bank account from which the taxes are withdrawn.

(B)     The machine owner shall maintain information relating to the payment of any money or compensation paid to any persons to operate the machine. Information required by this section must be available on demand for inspection by a representative of the department or division.

Section 12-22-1020.     (A)     No person may possess, own, operate, maintain for use or operation, or allow the operation of, any machines that:

(1)     allow more than three dollars in credits to be bet, risked, wagered, or played on any hand;

(2)     issue payouts of more than five hundred dollars to a player, regardless of the amount of money deposited into the machine;

(3)     require any minimum number of credits before issuance of a validated payout ticket;

(4)     permit any player to receive a payout greater than five hundred dollars, regardless of the amount of money deposited into the machine;

(5)     produce at the completion of the play period validated tickets worth more than five hundred dollars regardless of the amount deposited in the machine;

(6)     allow at the completion of the play period the production of multiple tickets with a collective value of greater than five hundred dollars or engage in any other schemes to evade the five hundred dollars payout limitation; or

(7)     offer on the face of the machine or in any pay table the possibility of receiving a payout of greater than five hundred dollars at the completion of the play period.

(B)(1) Any licensed machine that provides payouts must limit the amount bet, risked, wagered or played on any hand to three dollars and the payout must be limited to credits equal to five hundred dollars.

(2)     When a player earns credits equaling or exceeding five hundred dollars:

(a) the machine must: temporarily disable that player station, immediately delete all credits or their equivalents with a value greater than five hundred dollars, immediately report on a payout ticket payable to that player or player station, reset to zero or 'game over'; and

(b) that player or another player at that player station may not continue to play until more cash or coin is deposited into the machine.

(3)     The machine must be programmed so that other players of a multi-player unit are not affected if one or more players is issued a payout ticket pursuant to this provision.

(4)     The central computer monitoring system shall monitor the deletion prior to the completion of the play period and the printing of validated payout tickets all credits or their equivalents with a value of greater than five hundred dollars.

(C)     A machine operator may only redeem tickets for credits awarded on licensed machines located in that licensed establishment. A ticket must be validated by the location controller before any payout is made.

(D)     At the time the player presents a payout ticket to the machine operator or his agent for a cash payout, the machine operator or his agent shall require the person presenting the payout ticket to write or otherwise have placed on the payout ticket the person's name, address, and telephone number. Upon the provision of the payout ticket with the above required information, and upon presentation of a form of verifiable identification as approved by the department, the machine operator or his agent may make a cash payout. The payout tickets redeemed by the machine operator or his agent shall be retained by the machine operator or his agent in the same manner and for the same period as other records are required by this chapter.

(E)     Any person offering money, prize, bonus or anything of value for earning credits above what is printed on a payout ticket is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years and may be fined not more than twenty-five thousand dollars.

(F)     A person licensed pursuant to this chapter violating this section shall also be subject to a civil penalty of revocation of the establishment, operator, or owner license for five years and may be fined an amount not to exceed one thousand dollars per violation.

Section 12-22-1030.         A machine must be disposed of in a manner that makes it incapable of use or operation in any video game or other gaming or amusement activity. A machine may not be disposed of until notice has been given to the department as provided in this section. An owner desiring to dispose of an unsaleable or damaged machine shall notify the department in writing before disposal and provide the following information in a manner as directed by the department:

(1)     the full name, address, and license number of the person or entity disposing of the machine;

(2)     the manufacturer's serial number of the machine;

(3)     the model number and description of the machine;

(4)     the manufacturer of the machine;

(5)     the VGMID of the machine;

(6)     the hard meter readings of the machine;

(7)     the licensed establishment at which the machine was located; and

(8)     the proposed manner, time, and place of disposal.

Section 12-22-1040.     A machine must not simulate bingo or a slot machine.

Section 12-22-1050.     Each machine must contain a single printing mechanism capable of printing an original ticket and retaining an exact copy which is subject to inspection by the department. Tickets must contain any information the department determines to be reasonable for the efficient administration of this chapter. The department shall provide manufacturers information as to the information needed on a ticket and the placement of information on the ticket.

Section 12-22-1060. All machines, location controllers, and the central computer monitoring system selected by the department must perform correctly before, during, and after the year 2000, with no error in functioning or data caused by failure to correctly interpret and utilize data contained within date fields within the system.

Section 12-22-1070. (A)     The department shall disable machines via the central computer monitoring system for the following reasons:

(1)     the establishment license or retail sales tax license at the establishment where the machines are located has been revoked or suspended;

(2)     the license of the machine has been revoked or suspended;

(3)     the machine owner's license has been revoked or suspended;

(4)     the machine operator's license has been revoked or suspended;

(5)     the establishment license, machine license, machine owner's license, or machine operator's license has expired;

(6)     the central computer monitoring system has registered a violation of system integrity by a machine. A machine disabled for this reason will be enabled again as soon as the problem has been resolved;

(7)     the machine owner or the machine operator has requested that the machine be disabled for any reason, such as relocation, upgrading, or repair; or

(8)     the bank account from which taxes are paid has insufficient funds to pay the entire tax due upon the due date.

(B)(1)     All persons who have notified the department of an ownership or lien interest in a machine shall be notified of a proceeding to revoke licenses that may result in disabling under this section. A licensee whose machine, and any part of the machine, is disabled for reasons in (A)(1), (A)(2), (A)(3), or (A)(4) shall not be licensed or permitted to operate in this State for five years from the date of revocation.

(2)     A machine, and any part of the machine, shall not operate in this State for five years from the date of revocation, if the machine is disabled for the reasons stated in:

(a)     subsection (A)(1)or (A)(4), if the machine owner and the person holding the establishment license are the same person; or

(b)     subsections (A) (2) or (A)(3).

(C)     All persons who have notified the department of an ownership interest in an establishment shall be notified of a proceeding to revoke licenses that may result in disabling under Section (A)(1). If machines are disabled at an establishment for the reason in (A)(1), the establishment may not operate, or allow the operation of, machines for five years from the date of the revocation or suspension.

Section 12-22-1080. The department, in its discretion, may approve, effective upon publication in the State Register, alternative technical provisions provided that the technology maintains the security, account information, and integrity of the machines, location controllers, and central computer monitoring system.

Article 11

License Applications and Background Investigations

Section 12-22-1110. (A)(1) The department may issue licenses only to qualifying persons. Licenses may be issued only to a person who is a principal of the business seeking the license.

(2)     If the applicant for a license has more than one principal, the entity shall designate a principal of good moral character, over the age of twenty-one, and a resident of this State for two years, who is deemed the applicant under this article and in whose name the license must be held on behalf of the business. The business entity may substitute a principal if the individual is of good moral character, over the age of twenty-one, and a resident of this State for two years, upon notice in writing of the substitution to the department.

(B)     On a form provided by the department and in a manner provided by the department, the applicant for a license must provide detailed information regarding:

(1)     the ownership and management of the entity seeking the license, including the name, address, and social security number of each principal as defined in Section 12-22-10(22);

(2)     a detailed history and explanation of gambling activities and licenses in other jurisdictions of the applicant and all principals;

(3)     federal registration with respect to gambling devices;

(4)     the information compelled to be disclosed pursuant to this chapter;

(5)     licenses currently held pursuant to this chapter and those licenses held pursuant to Chapter 21 of Title 12 within one year of the date that the application is filed;

(6)     information that may be required by the department, such as voter registration, to prove the two-year residency requirement;

(7)     in the case of an application for a machine operator or establishment license, the street address and name of any business containing machines that are within a one hundred foot radius of where the applicant intends to locate its machines, if the address and name are reasonably ascertainable to the applicant; and

(8)     any other information deemed necessary by the department for the proper administration and enforcement of this chapter.

(C)     The department and the division are authorized to develop applications and other forms.

(D)     The forms must require the applicant to disclose any present or previous experience or involvement with machines as a manufacturer, distributor, machine owner, machine operator, technicians, or employees. Present or previous experience or involvement includes the control of gambling devices as a machine owner or machine operator; employment with the machine owner or machine operator gambling devices; employment in establishments where gambling is offered to the public; and conviction of violation of federal, state, or local gaming laws in any jurisdiction.

(E)     The applicant shall submit proof with the application that he does not owe any federal or state delinquent taxes, penalties, or interest.

(F)     As a condition of receiving a license under the provisions of this chapter, each licensee shall agree that the division, the department, and their agents and employees, shall have unrestricted access and the right to inspect any premises under the control of the licensee in which any activity relating to the provisions of this chapter is conducted.

(G)     An application which contains material omissions or misrepresentations is cause for denial, suspension, or revocation of a license and disabling of all machines of that licensee.

(H)     Failure to comply with a reasonable request of the department is grounds to deny or revoke a license.

Section 12-22-1120.         Each applicant shall immediately make available for inspection, by any department or division employee, all records and the establishments where machines are placed or operated, or where machines, devices, or equipment are manufactured, sold, serviced, or distributed.

Section 12-22-1130.         (A)     The applicant shall file a duplicate application with the department. The department shall forward one of the applications to the division. The division shall return the background investigation to the department.

(B)     Unless the time requirements for issuing a license are waived by the applicant, the department must make its decision on whether to issue a license to the applicant not later than sixty days after the completion of the background investigation, including the fingerprint reviews, and the recommendation, if any, of the division, or not later than one hundred eighty days from the date a complete application is filed with the department, whichever occurs first. The department must inform each applicant of the department's decision.

(C)     The department shall determine whether the applicant owes any delinquent state taxes, fines, penalties, or interest.

(D)     The department may not issue any license until the background investigations are concluded. The department shall make affirmative determination that the applicant is qualified and the applicable license or associated fees have been paid before issuing any license.

(E)     The department shall notify the applicant by mail if an application is incomplete. The notification must be sent to the address on the application. The notification must state the deficiencies in the application. If after the second notice of an incomplete application the applicant has not responded, the department shall consider the application withdrawn.

Section 12-22-1140.         (A)     The division shall conduct background investigations on those persons associated with the operation of machines as provided in this chapter. A background investigation is defined as a security, criminal, and credit investigation of a principal connected to that business. The division shall conduct the investigations and inspections it considers necessary to fulfill its responsibilities under this chapter.

(B)     The division shall:

(1)     promptly and in a reasonable order, investigate all applications, enforce the provisions of this chapter, and provide to the department all information to allow the department to issue or deny the license;

(2)     provide the department with all information necessary for all actions under this chapter and for all proceedings involving enforcement of the provisions of this chapter or any regulations;

(3)     investigate violations under this chapter and any regulations;

(4)     conduct continuing review of machine operations through on-site observation and other reasonable means, to assure compliance with this chapter;

(5)     receive and take appropriate action on any referral from any law enforcement agency or the department relating to any evidence of a violation of this chapter and regulations;

(6)     exchange fingerprint data with, and receive criminal history information from, the Federal Bureau of Investigation or other law enforcement agencies; and

(7)     have the authority to request and receive information, materials, and any other data from any person.

(C)(1)     A person applying for a license or required under this article to undergo a criminal history background check shall undergo a state fingerprint review to be conducted by the division to determine any state criminal history and a fingerprint review to be conducted by the Federal Bureau of Investigation to determine any other criminal history. The fingerprint reviews required by this subsection may be required upon subsequent applications.

(2)     When the applicant has principals it must disclose any information required by the department to obtain fingerprints and criminal background checks for the principals so that an applicant may not circumvent the purpose of this section.

(3)     Each applicant with submission of an application shall submit a valid fingerprint card for every principal of the business seeking to be licensed.

(4)     At the time of filing the application, the applicant must include certified checks for the fees imposed by the State Law Enforcement Division and the Federal Bureau of Investigation, respectively, for the purpose of conducting fingerprint reviews required by item (1) of this subsection.

(D)     In connection with the responsibilities under this chapter, the division or the department and their employees and agents may:

(1)     inspect and examine all establishments where machines are operated;

(2)     inspect and examine where machines or equipment are manufactured, sold, distributed, or serviced;

(3)     inspect all equipment and supplies in, about, upon, or around the establishment;

(4)     seize and remove from such establishments and impound any machines, equipment, or supplies for the purposes of examination and inspection;

(5)     inspect, examine, and audit all records pertaining to an applicant's operation; and

(6)     seize, impound or assume physical control of any book, record, ledger, machine, and boxes and their contents.

(E)     The division may obtain warrants for the inspection and seizure of any property possessed, controlled, or otherwise held by any applicant or principal.

(F)     The division may inspect any applicant or licensee for compliance with the provisions of this chapter and regulations and to investigate any violations.

Section 12-22-1150.     (A)     Investigations must be conducted on manufacturers, distributors, establishment owners, machine owners, machine operators, and their principals.

(B)     As a condition of receiving a license under the provisions of this chapter, each applicant and principal shall agree that the division and the department have unrestricted access and the right to inspect any premises under the control of the applicant or principal in which occurs any activity related to the provisions of this chapter.

(C)     Each applicant and principal, by signature of his application, grants the division the authority to access state, national, and international information for validation of information contained on the application. Any information found at the state, national, or international level which would prevent the applicant from obtaining any license required under this chapter must be used to do so.

(D)     Each applicant and principal shall cooperate with the division and the department in the performance of their duties.

Section 12-22-1160.         (A)     The department shall deny a license if a background investigation of any applicant or principal of an applicant reveals any of the following:

(1)         a conviction within fifteen years before the date of the application in any jurisdiction for any of the following offenses:

(a)     any offense punishable by imprisonment for two or more years;
(b) any gambling offense;
(c) theft or any crime involving false statements or declarations;
(d) a criminal offense involving fraudulent activity or defined as a fraud; (e)

(2)     a determination of liability for, or an agreement that he was liable for, a civil judgment based in whole or in part upon conduct described in item (1) of this subsection;

(3)     omission of any material facts to the division or the department during initial or subsequent background investigations or a misstatement, or untrue statements, of material facts with respect to such investigation;

(4)     association with persons or businesses of known criminal background, or persons of disreputable character, that may adversely affect the general credibility, security, integrity, honesty, fairness, or reputation of the State or to the effective regulation of video poker;

(5)     failure to cooperate with any legislative investigative committees or other officially constituted body acting on behalf of the United States or any state, county, or municipality which seeks to investigate crimes related to gambling, corruption of public officials, or any organized criminal activities;

(6)     that the applicant owes any federal, state, or local delinquent taxes, penalties, or interest; or

(7)     except for a manufacturer, the applicant has not been a resident of the State for two years.

(B)     The applicant for a license required by this chapter, and all principals of the applicant, must file with the application a sworn statement, under penalties of perjury, affirming that:

(1)     the person is not attempting to obtain a license on behalf of any undisclosed person or entity;

(2)     the person is of good character, honesty, and integrity;

(3)     the person's prior activities, criminal record, if any, reputation, habits, and associations do not pose a threat to the public interest of this State or to the effective regulation and control of video gaming; and

(4)     all information provided in the application is true.

Section 12-22-1170.         Distributors, principals, machine owners, and machine operators, and any other persons the division or the department considers necessary have an affirmative duty to maintain on file with the department and the division current and correct disclosure of all principals and all material facts required for licensure.

Section 12-22-1180.         Each applicant shall bear all risks of unintentional adverse public notice, embarrassment, criticism, damages, or financial loss which may result from any disclosure or publication of any material or information obtained by the department or division pursuant to action on an application.

Article 13
Penalties

Section 12-22-1310.     (A) A person who fails, neglects, or refuses to comply with the terms and provisions of this chapter or who fails to attach the required license to any machine or device, is subject to a penalty of two thousand five hundred dollars for each failure, and the penalty must be assessed and collected by the department. This penalty must be deposited in the same manner as other monies collected pursuant to this chapter.

(B)     Except as provided in Section 12-22-1320, with respect to any failure to comply with any provisions of this chapter occurring at a licensed establishment, the machine operator and the machine owner are both liable for any penalty and are both subject to revocation and suspensions as provided in this chapter.

Section 12-22-1320.     (A)(1) Except as provided in item (2) of this subsection, the department may revoke the licenses of establishments, machine owners, machine operators, and machines used in the establishment and impose a monetary penalty of not less than one thousand dollars and not more than ten thousand dollars on each of the owners of such licenses for each failure to comply with a provision of Section 12-22-710, or any provision of a regulation pertaining to Section 12-22-710.

(2) With respect to violations of Section 12-22-710(A)(4), the department may revoke the license of the establishment where the violation occurred.

(B)     Any establishment violating a provision of Section 12-22-710 or any provision of a regulation pertaining to Section 12-22-710 may have its privilege for operating or allowing the operation of video game machines suspended as follows:

(1)     upon the first violation, the privilege for operating or allowing the operation of machines is suspended for a period of up to six months;

(2)     upon the second violation, the privilege for operating or allowing the operation of machines is suspended for a period of up to one year;

(3)     upon the third or subsequent violation, the privilege for operating or allowing the operation of machines is suspended for a period of up to eighteen months.

(C)(1)     The department, upon a determination that the violation is willful, may refer the violation to the Attorney General or to the appropriate circuit solicitor for criminal prosecution, and, upon conviction of a willful violation, the person must be fined not more than ten thousand dollars or imprisoned not more than two years, or both.

(2)     Beginning on July 1, 2004, this subsection shall not apply to violations of Section 12-22-710(A)(1).

Section 12-22-1330.         A person is guilty of a felony and, upon conviction, the person must be fined not more than twenty-five thousand dollars or imprisoned not more than five years, or both, if the person willfully:

(1)     tampers with a machine, location controller, or associated equipment with intent to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     manipulates the outcome, payoff, or operation of a machine;

(3)     launders or knowingly allows another to launder money through one or more machines;

Section 12-22-1340. The following activities are additional civil violations of this chapter subject to the penalties in Section 12-22-1310:

(1)     tampering with a machine, location controller, or any other part, device, or system to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     operating, or allowing the operation of, machines that are not connected to the central computer monitoring system in accordance with this chapter;

(3)     refusing or otherwise preventing the inspection or examination by the department, the division, or any law enforcement officer, of any establishment, and any premises used for the manufacture, distribution, or storage of machines within this State; and

(4)     refusing or otherwise preventing the examination by the department or division of revenue, payouts, or net machine income, records or equipment of any licensed or unlicensed machine owner, machine operator, manufacturer, distributor, or establishment.

Section 12-22-1350.     (A)     A person in possession of, or operating, or allowing the operation of a contraband machine or contraband device at any place within this State is subject to a civil penalty of not more than ten thousand dollars per machine or piece of associated equipment.

(B)     When the department or division deems it necessary in connection with subsection (A), it may require the owner of a machine, device, or associate equipment to obtain a certification from an approved testing laboratory that the machine or a game or associate equipment meets the standards and requirements of this chapter. The cost of this certification is the responsibility of the owner of the machine, device, or associated equipment.

(C)     Contraband machines, contraband devices, or contraband associate equipment may be seized by any law enforcement officer of the State or any of its political subdivisions who shall appear before any magistrate of the county in which the machine, device, or associated equipment was seized. If the magistrate is satisfied that the item is contraband, the magistrate shall direct that it be destroyed. The magistrate, at his discretion, may order an examination of the item, in person before the magistrate or by an approved testing laboratory, to assist in the determination as to whether the item is contraband.

Section 12-22-1360. Skimming of machine proceeds is the intentional excluding or the taking of any action in an attempt to exclude anything or its value from the deposit, counting, collection, or computation of revenues from machines. Whoever commits skimming of machine proceeds is guilty of a felony and, upon conviction, must be imprisoned for not more than ten years, and must be fined not more than twenty-five thousand dollars, or both.

Section 12-22-1370.     No machine owner, manufacturer, distributor, machine operator, or any principal may have any financial interest whatsoever or any loans or business relationship with a testing laboratory or any contractual relationship with a testing laboratory except for a contract for the providing of testing services. Any person who violates the provisions of this section is guilty of a felony and upon conviction must be imprisoned for not more than ten years, and in addition may be fined not more than twenty-five thousand dollars.

Section 12-22-1380.         (A)     In addition to any other penalties, any machine or device not having attached thereto the required license, or which is improperly licensed, must be seized and confiscated by the department, its agents or employees, and sold at public auction after thirty days' advertisement. Upon payment of the license required, the department may, within its discretion, return any property so seized and confiscated and compromise any penalty assessed.

(B)     The owner or person from whom the property is seized may at any time within five days after the seizure repossess the property by filing with the department a bond in cash or a bond executed by a surety company authorized to do business in this State in double the amount of the tax and penalties due. Within ten days thereafter the person must bring action in a court of competent jurisdiction to have the seizure set aside; otherwise, the bond so filed must be declared forfeited by the department.

Section 12-22-1390. (A) When the department or the division is notified in writing that an establishment, owner or distributor is or has been in violation of this chapter and that one or more persons have notice or knowledge of a violation, the department or division shall have thirty days from the date of the receipt of the notice to initiate and enforcement action consistent with this chapter.

(B) If the department or division affirmatively declines to act or fails to initiate an enforcement action for the alleged violation within thirty days, the person or persons who have knowledge of the alleged violation may serve written notice upon the department of their intention to file a request for a proceeding to enforce the provisions of this chapter in the name of the department or division.

(C) Within thirty days of the receipt of the notice from the person or persons with knowledge of the alleged violation, the department or division shall forward the notice of intent to file a request for a proceeding to the Office of the Attorney General who shall determine:

(1) if the person or persons with knowledge of the violation has sufficient knowledge, expertise and experience to adequately represent the interests of the State, the department and the division in the action;

(2) if the person or persons with knowledge of the violation are willing to advance all costs and expenses to be incurred in the proceeding; and

(3) that the Office of the Attorney General will not pursue the enforcement of the alleged violation.

Upon written certification of Office of Attorney General that these conditions have been met, the person or persons with knowledge of the alleged violation may proceed to commence a civil action for any violation of any of the provisions of this chapter.

(D) If the Office of the Attorney General denies certification and fails to pursue enforcement within sixty days of notice or fails to act on a person's notice within thirty days of receipt, the person or persons with knowledge of a violation of this chapter may move to commence a civil action as provided herein.

(E) The civil action must be brought in the name of the State, and may be filed in any state court of competent jurisdiction. The person bringing the civil action may seek any fine or penalty that the State may seek.

(F) A copy of the complaint must be served on the Attorney General if he is not bringing the action, and the director, by the person bringing the action, either of whom may elect to join any action brought by the person.

(G) If the State, as determined by the Attorney General and the Governor acting together, joins with an action brought by a person under this section, the State, in addition to other fines or penalties, may request the suspension or revocation of licenses. The person shall receive at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to litigating the action. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(H) If the State, as determined by the Attorney General and the Governor acting together, does not join with the action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and revocation. The amount must not be less than twenty-five percent and must not be more than forty percent of the proceeds of the action or settlement, and must be paid out of the proceeds. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(I) The State is not liable for expenses which a person incurs in bringing an action under this section.

(J) No settlement may be entered without approval by the department.

(K) Any determination in an action under this section that a licensee has violated a provision of this chapter is grounds for revocation of those licenses and the department may bring a subsequent action for suspension or revocation.

Section 12-22-1400.     Conspiring to subvert the provisions of this chapter is a conspiracy as defined and punished in Section 16-17-410.

Section 12-22-1410. Each violation or each day in violation of a provision of this chapter or any provision of a regulation pertaining to this chapter constitutes a separate offense.

Section 12-22-1420.     The penalties authorized by this chapter are effective immediately upon imposition and may not be stayed by any administrative or judicial action.

Section 12-22-1430.     In any action under this chapter, no person may raise as a defense that he acted on the advice of his certified public accountant, unless he proves that he supplied that accountant with a copy of this chapter and all relevant regulations.

Article 15
Arcade Game Machines and Other Devices

Section 12-22-1510. Cash payouts are not permitted with respect to the games played on machines and other devices licensed under this article. The provisions of the other articles do not apply to the machines and devices licensed under this article.

Section 12-22-1520.     Every person required to obtain a license for any machine or device described in Section 12-22-1530 shall maintain records showing the manufacturer's serial number, model or type of machine, and the location of the machine. The taxpayer shall maintain information relating to the payment of any monies or compensation made to any persons as part of a lease or contractual agreement to operate the machine on the premises of the person. Information required by this section must be available on demand for inspection by a representative of the department.

Section 12-22-1530.     (A)     Every person who owns and operates, or places for use in another person's place or premises for a share of any revenue, one or more of the following machines or devices shall apply for and procure from the department a license effective for two years for the privilege of making use of the machine or device in this State. The person shall pay for the license a nonrefundable fee of fifty dollars for each machine or device in items (1) and (4), two hundred dollars for each machine or device in item (2), and two thousand dollars for each machine or device in item (3):

(1)     a machine for the playing of music or kiddy rides operated by a slot or mechanical amusement devices and juke boxes in which is deposited a coin or thing of value. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(2)     a machine for the playing of amusements or video games, without free play feature, or machines of the crane type operated by a slot in which is deposited a coin or thing of value and a machine for the playing of games or amusements, which has a free play feature, operated by a slot in which is deposited a coin or thing of value, and the machine is of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(3)     a machine of the nonpayout type, in-line pin game operated by a slot in which is deposited a coin or thing of value except machines of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed;

(4)     billiard or pocket billiard table, foosball table, bowling lane table, or skeeball table operated for profit.

(B)     The license must be purchased in advance on or before the first day of June every two years or before making a machine available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(C)     Machines which have multiplayer stations must have a separate license for each such station.

(D)     As an alternative to the license required in subsection (A), a person may be granted a nonrefundable seasonal license beginning April first and expiring September thirtieth, following the date of issue, which must not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(E)     If the license required in subsection (A) is purchased after June thirtieth, the license fee must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(F)     Upon application being made for a license to operate any machine, the department may presume that the operation of the machine is lawful, but the issuance by the department of a license does not make lawful the operation of any machine which is unlawful under the laws of this State. When a license has been issued, the sum paid for the license must not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(G)     Failure to obtain a license as required by this article makes the person liable for the penalties imposed in this article.

(H)     Every person who maintains for use, or permits the use, on any place or premises occupied by him, any devices subject to the license imposed by subsection (A) of this section must attach the proper state license to a permanent, nontransferable part of the machine before its operation is commenced.

Section 12-22-1540.     (A)     In addition to all other licenses required by this article, a person required to obtain a license for any machine or device described in Section 12-22-1530 shall obtain an owner's license biennially as follows:

(1)     fifty dollars for devices in Section 12-22-1530(A)(1) and (A)(4);

(2)     two hundred dollars for devices in Sections 12-22-1530(A)(2) and 12-22-1530(A)(3).

(B)     Only one license is required regardless of the number or type of devices owned or operated, and the cost of that license is the highest fee enumerated in this section for a device owned or operated.

(C)     The license may be purchased in advance on or before the first day of June every two years or before making a machine or device available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(D)     Failure to pay taxes to the State is grounds for the cancellation of the license provided in this section.

(E)     The provisions of this section do not apply to any person with a current and valid machine owner's license issued under Article 3 of this chapter.

Section 12-22-1550.     In lieu of the licenses required under Sections 12-22-1530 and 12-22-1540, the department may issue a temporary license to persons making application to operate machines or devices required to be licensed under this article at a recognized county or state fair. The temporary license fee is the total amount of license fees required on all machines or devices for which application is made, based upon one-twenty-fourth of the biennial license required under Sections 12-22-1530 and 12-22-1540. The license is valid for the specific location designated on the license and the number of machines for which application was made and expires when the designated fair officially ends.

Section 12-22-1560.     Machines or devices licensed pursuant to Section 12-22-1530(A)(1), (A)(2), and (A)(4) are not subject to confiscation for a violation of Section 16-19-30, 16-19-40, 16-19-50, or 16-19-130.

Section 12-22-1570.     A person who fails, neglects, or refuses to comply with the provisions of this article, or who fails to attach the required license to any machine or device as required under this article, is subject to a penalty of five hundred dollars for each failure, and the penalty may be assessed and collected by the department. This penalty may be deposited to the credit of the general fund of the State.

Section 12-22-1580. In addition to the penalties above provided, any machine, apparatus, billiard, or pocket billiard table not having attached thereto the required license, or which is improperly licensed, must be seized and confiscated by the department, its agents or employees, and sold at public auction after thirty days' advertisement. Upon payment of the license required, the department may, within its discretion, return any property so seized and confiscated and compromise any penalty assessed.

Section 12-22-1590.     Municipalities and counties may levy a license tax on the business tax taxed under this article but in no case may the tax exceed twenty-five dollars.

Section 12-22-1600.     Any person who owns or operates machines or devices described in Section 12-22-1530 must have attached to the machine or device information identifying the owner of the machine or device. The identification must be placed on an area of the machine or device which is visible for inspection purposes. This identification is a condition precedent must be attached before the machines or devices may be operated on location or in an establishment. Intentional or willful failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of this chapter.

Section 12-22-1610.     If an unlicensed machine is seized by law enforcement as a prohibited machine under the laws of this State, the department shall assess a penalty equal to the amount of the license fee.

Article 17
Transitional Provisions

Section 12-22-1700. In accordance with this chapter, the department may set the standards for video game machines, modems, location controllers, software, hardware, the central computer monitoring system, and associated equipment. Failure to comply with these standards subjects the violator to the civil and criminal penalties, including fines, suspensions, and revocations established in this chapter including the provisions relating to the time such penalties apply without regard to stays. Until the department adopts such standards, the standards provided in Parts A through D of this section must apply and must be met before issuance of a license. The definitions provided in Section 12-22-10 apply for purposes of this section.

Part A
Technical standards for Machines and Location Controllers

(A)     Each machine must be able to connect to a monitoring system via a serial communications port to a location controller meeting the requirements set forth by the department and using a communications protocol provided by the department or its designated agent.

(B)     Each machine must be capable of monitoring and storing the following items:

(1)     The cumulative total of the following for each twenty-four hour period, from 12:00 a.m. to 12:00 a.m., which may be recorded as a "snapshot" of the specified counters at the beginning and ending of each twenty-four hour period:

(a)     cash in, defined as money in dollars and cents;

(b)     credits purchased;

(c)     credits earned or won;

(d)     credits played;

(e)     credits paid;

(f)     cash paid.

(2)     The following security events and the time and date of such events:

(a)     game door open;

(b)     coin-bill/drop door open;

(c)     power off/on;

(d)     off line/on line to the location controller;

(e)     game control board access (logic area).

(C)     Each machine must contain Erasable Programmable Read Only Memory (EPROM) containing all game logic, and contain RAM (Random Access Memory) containing all counters and meters in electronic format, or such other technology as may later be designated by the department.

(D)     Each machine is not allowed to operate if it is not connected in on-line mode to a location controller meeting the requirements set forth by the department.

(E)     A machine must collect the data required in this chapter and communicate this information to a location controller for storage until requested by the central computer monitoring system. Each security event listed in this chapter may reflect a time and date stamp and the VGMID of the machine.

(F)     A machine automatically must disable itself if communication is lost from the location controller. A machine must store this event. A machine must report a disabling event to the location controller when communication is restored.

(G)     A machine must be capable of being disabled by the central computer monitoring system or the location controller.

(H)     A machine must be capable of being enabled by the central computer monitoring system or by location controller once it has been enabled by the central computer monitoring system.

(I)     A machine must be protected from unauthorized interference or tampering by any person or external device so as to not corrupt or suspend the communication signals or transmitted data required for the proper functioning of the machine and the associated location controller.

(J)     Each machine must have a surge protector installed on the line that feeds power to the machine and must meet the requirements of the department.

Part B
Hardware Specifications

(A)     A machine must have electrical and mechanical parts and design principles that do not subject a player to physical hazards.

(B)     A machine must have a battery backup or an equivalent for the electronic meters and be capable of maintaining accurate information required by law and regulation for one hundred eighty days after power is discontinued from the machine. The backup device must be kept within the locked logic board compartment of the machine.

(C)     A machine must have an on/off switch that controls the electrical current used in the operation of the machine and must be in an accessible place within the interior of the machine.

(D)     The operation of each machine must not be adversely affected by static discharge or other electromagnetic interference.

(E)     Each machine must have one coin acceptor, either electronic or mechanical, one bill acceptor, either electronic or mechanical, or one of each. Approval letters and test reports of the coin and bill acceptors from other state or federal jurisdictions must be submitted to the department. All coin and bill acceptors are subject to approval by the department.

(F)     The internal space of a machine must not be readily accessible when the front door is closed or sealed.

(G)     Logic boards and software EPROMs and RAM must be in a separate, locked and sealed area within the machine and must only be accessible only in accordance with guidelines established by the department. The area must be sealed by, and accessible to, the division.

(H)     The cash and coin compartment must be contained in a locked area within or attached to the machine. This compartment must be accessible by the machine owner or machine operator.

(I)     No switches of any kind, to include but not limited to hardware and software switches, must be installed that alter the pay tables or payout percentages in the operation of a game below the minimum payback of ninety percent, within standard rounding, in which the theoretical payout percentage is determined using standard methods of probability theory. Switches or other devices may be installed to control graphic routines, speed of play, and sound.

(J)     A single printing mechanism must be capable of printing an original ticket and retaining an exact, legible copy within the machine. The ticket must record the number of credits, the value of the credit, and a validation number, when credits accrued are printed on a ticket for validation.

(K)     The printed ticket is the only allowable method for issuing payouts. Hoppers are prohibited.

(L)     A clearly visible identification plate must appear on the front exterior of the machine that contains the manufacturer, the manufacturer's serial number, the model number, the VGMID, and the name of the machine owner. This plate must not be removed. This identification is a condition precedent before the machines may be operated on location. Failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of Chapter 22 of Title 12 of the 1976 Code including the provision of Section 12-22-1380 relating to the time such penalties apply without regard to stays.

(M)     Equipment must be installed in a manner that enables a machine to communicate with the department's central computer monitoring system via the location controller using a communications protocol provided to each manufacturer of machines and location controllers provided by the department or its designated agent.

Part C

Software Requirements

(A)     Each machine must maintain electronic accounting meters at all times, regardless of whether the machine is being supplied with power. Each meter must be capable of maintaining totals no less than eight digits in length for the information required by the law and by regulation of the department.

(B)     Electronic meters must record the cumulative total of cash in, credits purchased, credits paid, credits earned/won, cash paid, and credits played, per each twenty-four hour period, from 12:00 a.m. to 12:00 a.m. This information may be recorded as a snapshot of the specified counters at the beginning and ending of each twenty-four hour period.

(C)     Electronic meters also must record security events, with the time and dates, to include game door open, coin-bill/drop door open, power off/on, off line/on line to the location controller, and game control board access.

(D)     No machine may have a mechanism that an error will cause the electronic accounting meters to automatically clear. Clearing of the electronic accounting meters may be completed only after notification and approval by the department and supervised by the division.

(E)     Each machine must have a random number generator that determines the occurrence of a specific card or a specific number to be displayed on the video screen. A selection process is considered random if it meets all the following requirements:

(1)     each card position or each number position satisfies the ninety-nine percent confidence limit using the standard chi-squared analysis;

(2)     each card or number position does not produce a significant statistic with regard to producing patterns of occurrences. Each card or number position is considered random if it meets the ninety-nine percent confidence level with regard to the runs test or any similar pattern testing statistic;

(3)     each card or number position is independently chosen without regard to any other card or number drawn within that game play. This test is the "correlation test". Each pair of card or number positions is considered random if they meet the ninety-nine percent confidence level using standard correlation analysis; and

(4)     each card or number position meets the serial correlation test, meaning that it is independently chosen without reference to the same card or number position in the previous game. Each card or number position is considered random if it meets the ninety-nine percent confidence level using standard serial correlation analysis.

(F)     All costs associated with the machines, to include upgrades or retrofits, in order for such machines to meet the requirements of the laws and regulations of this State are the responsibility of the machine owner.

Part D
Multiplayer Unit Requirements

(A)     For purposes of this part, multiplayer units are divided into two general groups:

(1)     units that share some common components (Group I); and

(2)     units that share most components (Group II).

(B)     Group I and Group II units are based on the common principal that they both try to accurately mimic live table play. Both groups may consist of a number of player stations, generally either three or five player units per machine, and some type of dealer display. Both groups of games allow the players to wager on the next hand to be played and the object of the game, and the payout table is based on the player beating the dealer's hand. The player stations and dealer draw from a common deck of cards. Neither of these groups contains any program routines that allow the player or device to gain an unfair advantage or to cheat the device or player.

(C)     Group I and Group II units share common elements. The following define the difference in the two groups of multiplayer units:

(1)     Group I Units: Group I units have individual logic boards containing player station EPROMs and RAM containing all meter and event information for the individual station, as well as master logic boards in the dealer station containing master meters and the random number generation software used commonly by all of the player stations.

(2)     Group II Units: Group II units often do not have any game or logic boards in the individual player stations. The program and game memory are stored in the dealer's station. The player's stations are generally "Dumb Terminals" containing player input buttons and coin or bill acceptors. This group of terminals sends and receives all information directly from the dealer's station. Generally, these stations do not have separate power switches. All electrical leads are fed from the dealer's station to the individual player's station and all game display information is shown on the common video display. The dealer's station controls the operation of the game including the random number generator, all meter information, all display functions, all communications with the central system, all event detection and storage logic, and all processor units and EPROMs used for the game. Individual terminals are not in "direct" communication with the central system, but rather use the dealer's station as a "head of string" device for each of the individual stations. The dealer's station contains all individual station meters as well as master meters for the entire group.

(D)     A multiplayer unit must be handled in one of two ways, depending on whether it is a Group I machine or a Group II machine. Implementation of either method does not require modifications of the communications protocol or operational changes for either the department or the individual locations. Both methods may be handled entirely in the program code of the individual machines.

(1)     Group I unit stations as described above must be wired as if they are separate machines. Each player station must have an optical connection and each station is responsible for its own communications. All meter and event data must be stored on the individual stations and be transmitted to the system on demand. EPROM signature calculations must include the dealer's station code, but each station must perform individual calculations and transmit the results independently of each other. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(2)     Group II games must be set up with a dedicated phone line and location controller in the same manner as every other licensed establishment in the State. The fiber optics must leave the location controller and go directly to the dealer's station and then back to the location controller. All communications must be sent from the central system and the site controller exactly as detailed in the communications protocol. The dealer's station is responsible for handling all of the communications for the player stations. If the system asked for meters for station number one, the dealer's station is responsible for collecting and sending that data to the central system. The central system must behave exactly as if there are five separate machines. EPROM signature calculations must be performed over the dealer's station program code and transmitted back five times just as if there are five machines all running the same game code. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(E)     The department may handle on an individual basis, any type of multiplayer units that does not fit in either category Group I or Group II. Other multiplayer units are required to meet all applicable programming, communications, and security rules and regulations."

SECTION     11.     Section 12-54-40(H) of the 1976 Code is amended to read:

"(H)         A person who:

(1)     must obtain a license or purchase stamps for identification purposes, and who fails to obtain or display the license properly, or fails to affix the stamps properly; or

(2)     to must comply with statutory provisions and fails to do so, is subject to a penalty of not less than fifty dollars nor more than five hundred dollars for each failure. For failure to obtain or display a license as prescribed in Sections 12-21-2720 and 12-21-2730 12-22-320, the penalty is fifty two hundred dollars for each failure to comply."
SECTION     12.     Section 12-54-40(M) of the 1976 Code is amended to read:

"(M)     A machine owner or distributor, as defined in Article 20, Chapter 21 of this title, who allows or causes a machine to be operated without a metering device, or who wilfully places a machine on location or who wilfully allows or causes a machine to be operated with a metering device that does not accurately record the information required under Article 20, Chapter 21 of this title is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years, without benefit of probation, parole, or suspension of sentence, and in addition may be fined not more than twenty-five thousand dollars. A machine owner or distributor, as defined in Chapter 22 of this title, who willfully places a machine on location, or who willfully allows or causes a machine to be operated, that does not accurately record the information required under Chapter 22 of this title is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years, without benefit of probation, parole, or suspension of sentence, and in addition may be fined not more than twenty-five thousand dollars."
SECTION     13.     Section 16-19-60 of the 1976 Code is amended to read:

"Section 16-19-60. Nothing in Section 16-19-40 or 16-19-50 shall extend to coin-operated nonpayout machines with a free play feature; provided, that nothing herein shall authorize the licensing, possession, or operation of any machine which disburses money to the player. Nothing in this section prohibits regulation of video games pursuant to Article 20, Chapter 21 of Title 12, the Video Games Machines Act, including the prohibition on payoffs and location of these machines in counties where such payouts and machines are prohibited under the local option provisions of that article."
SECTION     14.     Chapter 19, Title 16 of the 1976 Code is amended by adding:

"Section 16-19-65.         (A)     It is unlawful for any person to keep or operate on his premises or permit to be kept or operated on his premises within this State any vending or slot machine, punch board, pull board, or other device pertaining to games or chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, and video games with free play feature which meet the technical requirements provided for in Article 9, Chapter 22 of Title 12, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance.

(B)     Any person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned for a period of not more than one year, or both.

(C)     Any vending or slot machine, punch board, or other device pertaining to games of chance prohibited by this section must be seized by any law enforcement officer and at once taken before any magistrate of the county in which the machine, board, or device is seized who shall immediately examine it, and if satisfied that it is in violation of this section or any other law of this State, shall direct that it be immediately destroyed.

Section 16-19-66.     (A)     It is unlawful for a person to operate, cause to operate, or attempt to operate an automatic vending machine, slot machine, coin-box telephone, or other receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service by means of a slug or any false, counterfeited, mutilated, sweated, or foreign coin, or by any means not lawfully authorized by the owner, lessee, or licensee of the receptacle.

(B)     It is unlawful for a person to take, obtain, or receive from or in connection with any receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service any goods, wares, merchandise, gas, electric current, or other article of value or the use or enjoyment of any telephone or telegraph facilities, or service, or of any musical instrument, phonograph, or other property, without depositing in and surrendering to the receptacle lawful coin of the United States of America in the amount required by the owner, lessee, or licensee of the receptacle.

(C)     A person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined in the discretion of the court or imprisoned not more than two years.

Section 16-19-67.     A person who, with intent to cheat or defraud the owner, lessee, licensee, or other person entitled to the content of an automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance designed to receive lawful coin or currency of the United States of America in connection with the sale, use, or enjoyment of property or service or who, knowing that the same is intended for unlawful use, manufactures for sale, or sells or gives away any slug, device, or substance intended or calculated to be placed or deposited in the automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance is guilty of a felony and, upon conviction, must be fined in the discretion of the court or imprisoned not more than five years."
SECTION     15.     Section 61-4-580(3) of the 1976 Code, as last amended by Act 52 of 1999, is further amended to read:
"(3)     permit gambling or games of chance which is not authorized by Chapter 22 of Title 12 except game promotions including contests, games of chance, or sweepstakes in which the elements of chance and prize are present and which comply with the following:

(a)     the game promotion is conducted or offered in connection with the sale, promotion, or advertisement of a consumer product or service, or to enhance the brand or image of a supplier of consumer products or services;

(b)     no purchase payment, entry fee, or proof of purchase is required as a condition of entering the game promotion or receiving a prize; and

(c)     all materials advertising the game promotion clearly disclose that no purchase or payment is necessary to enter and provide details on the free method of participation."
SECTION     16.     (A)     The provisions of Chapter 22, Title 12 as added by this act apply to any and all licenses to be issued on or after December 1, 1999.

(B)(1)     By January 31, 2000, a person who is licensed pursuant to Section 12-21-2728(A)(3) on November 30, 1999, for a license period which expires on May 31, 2000, shall apply for a new license to be issued in accordance with Chapter 22, Title 12. The person may continue to do business under the license issued under Section 12-21-2728(A)(3) until the Department of Revenue makes a determination regarding whether the person should be licensed under the provisions of Chapter 22, Title 12.

(2)(a)     Upon a favorable licensing determination, the department shall issue a new license with an expiration date in the year 2002 established in accordance with the provisions of Section 12-22-320(D).

(b)     The license fees shall be prorated based upon the expiration date for the new license and any unused portion of the license fee for the license which expires on May 31, 2000 shall be applied towards payment of the fee for the new license.

(C)(1)     By July 31, 2000, a person who is licensed pursuant to Section 12-21-2728(A)(3) on November 30, 1999, for a license period which expires on May 31, 2001, shall apply for a new license to be issued in accordance with Chapter 22, Title 12. The person may continue to do business under the license issued under Section 12-21-2728(A)(3) until the Department of Revenue makes a determination regarding whether the person should be licensed under the provisions of Chapter 22, Title 12.

(2)(a)     Upon a favorable licensing determination, the department shall issue a new license with an expiration date in the year 2003 established in accordance with the provisions of Section 12-22-320(D).

(b)     The license fees shall be prorated based upon the expiration date for the new license and any unused portion of the license fee for the license which expires on May 31, 2001 shall be applied towards payment of the fee for the new license.

(3)     Upon an unfavorable licensing determination, the department shall revoke the license issued pursuant to Section 12-21-2728(A)(3) and shall issue a prorated refund to the person for the remainder of the license period.

(D)     By December 31, 1999, a person who is required to be licensed as a machine operator and who is engaged in business at a location that is licensed pursuant to Chapter 36, Title 12 on November 30, 1999, shall apply for a machine operator's license issued pursuant to the provisions of Chapter 22, Title 12.

(E)     By December 31, 1999, a person who is required to be licensed as a machine operator shall apply for an establishment license issued pursuant to the provisions of Chapter 22, Title 12 for a location that is licensed pursuant to Chapter 36, Title 12 on November 30, 1999.

(F)     A machine license issued pursuant to Section 12-22-21-2720(A)(3) shall continue in effect until the expiration of the original license period provided a machine must meet all requirements imposed by Chapter 22 of Title 12 when these requirements take effect.

(G) The department, at its discretion and for the efficient administration of the law, may prorate licenses in any manner to implement or change the expiration date established in this section and to stagger the issuances of the licenses by county or by any other method considered appropriate by the department.
SECTION     17.     A.     The application of Articles 19 and 20, Chapter 21, Title 12 is suspended prospectively, except as provided in Section 16. To the extent that regulations promulgated pursuant to the authority of Articles 19 and 20, Chapter 21, Title 12 are not inconsistent with Section 10, those regulations remain in effect until and unless otherwise modified or repealed pursuant to the Administrative Procedures Act.
B.     Articles 19 and 20, Chapter 21, Title 12 are repealed effective December 31, 2000.

PART IV
Gambling Losses and Civil Actions

SECTION     18.     Article 1, Chapter 1, Title 32 of the 1976 Code is amended by adding:

"Section 32-1-60.     Beginning on the effective date of this section, the provisions of Sections 32-1-10, 32-1-20, and 32-1-30 apply only to those gambling activities not authorized by law."
SECTION     19.     Article 20, Chapter 21, Title 12 of the 1976 Code is amended by adding:

"Section 12-21-2805. (A) When the department or the division is notified in writing that an establishment, owner or distributor is or has been in violation of this article or Article 19 of this chapter and that one or more persons have notice or knowledge of a violation, the department or division shall have thirty days from the date of the receipt of the notice to initiate and enforcement action consistent with this chapter.

(B) If the department or division affirmatively declines to act or fails to initiate an enforcement action for the alleged violation within thirty days, the person or persons who have knowledge of the alleged violation may serve written notice upon the department of their intention to file a request for a proceeding to enforce the provisions of this chapter in the name of the department or division.

(C) Within thirty days of the receipt of the notice from the person or persons with knowledge of the alleged violation, the department or division shall forward the notice of intent to file a request for a proceeding to the Office of the Attorney General who shall determine:

(1) if the person or persons with knowledge of the violation has sufficient knowledge, expertise and experience to adequately represent the interests of the State, the department and the division in the action;

(2) if the person or persons with knowledge of the violation are willing to advance all costs and expenses to be incurred in the proceeding; and

(3) that the Office of the Attorney General will not pursue the enforcement of the alleged violation.

Upon written certification of Office of Attorney General that these conditions have been met, the person or persons with knowledge of the alleged violation may proceed to commence a civil action for any violation of any of the provisions of this chapter.

(D) If the Office of the Attorney General denies certification and fails to pursue enforcement within sixty days of notice or fails to act on a person's notice within thirty days of receipt, the person or persons with knowledge of a violation of this chapter may move to commence a civil action as provided herein.

(E) The civil action must be brought in the name of the State, and may be filed in any state court of competent jurisdiction. The person bringing the civil action may seek any fine or penalty that the State may seek.

(F) A copy of the complaint must be served on the Attorney General if he is not bringing the action, and the director, by the person bringing the action, either of whom may elect to join any action brought by the person.

(G) If the State, as determined by the Attorney General and the Governor acting together, joins with an action brought by a person under this section, the State, in addition to other fines or penalties, may request the suspension or revocation of licenses. The person shall receive at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to litigating the action. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(H) If the State, as determined by the Attorney General and the Governor acting together, does not join with the action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and revocation. The amount must not be less than twenty-five percent and must not be more than forty percent of the proceeds of the action or settlement, and must be paid out of the proceeds. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(I) The State is not liable for expenses which a person incurs in bringing an action under this section.

(J) No settlement may be entered without approval by the department.

(K) Any determination in an action under this section that a licensee has violated a provision of this chapter is grounds for revocation of those licenses and the department may bring a subsequent action for suspension or revocation."

PART V
Miscellaneous

SECTION     20.     If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION     21.     The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION     22.     (A) It is the intent of the General Assembly in providing for the statewide referendum required by this act to allow an affirmative vote of the qualified electors of this State to serve as a trigger for the operation of an effective clause, as contained in this act, duly passed by the General Assembly. The result of the referendum is a contingency that is certain, based on the result of a referendum, and will thereby cause some parts of this act to take effect and others not to take effect. All provisions in this act are enactments of the General Assembly that meet the formalities of an act required under Article III of the Constitution of this State which provides for the legislative power in the government of this State. While Article III does not provide for a referendum as part of the legislative process, neither does it prohibit a referendum in which the result is a certain contingency that determines which parts of an act take effect. As the legislative power of the General Assembly is limited only by that which is specifically prohibited in the Constitution of this State and the Constitution of the United States, the General Assembly finds that the referendum required pursuant to this act is a valid exercise of the legislative power of this State.

(B) The General Assembly by enactment of this act has no intent to enact any provision allowed by 15 U.S.C. 1175, commonly referred to as the Johnson Act, or to create any state enactment authorized by the Johnson Act.

(C) It is the intent of the General Assembly that the provisions of this act shall not be construed to:

(1) affect any pending lawsuit, as prescribed in SECTION 21; or
(2) affect any provision of current law, unless or until it is specifically modified or expressly repealed as provided in this act.

PART VI
Effective Dates

SECTION     23.     Upon approval by the Governor, this act shall take effect in the following manner:

(A)     Parts II, IV, V, and VI take effect upon approval by the Governor;

(B)     Article 9 of Chapter 22, Title 12, as added in PART III, SECTION 10, takes effect July 1, 1999 except that Sections 12-22-1020 and 12-22-1030 take effect when the remaining provisions of PART III take effect as provided in subsection (E). If the remaining provisions of PART III do not take effect as provided in subsection (E), then Article 9 of Chapter 22, Title 12 is repealed on the date that the State Board of Canvassers certifies a majority "no" vote in the referendum provided in Part II of this act. Sections 12-22-730 and 12-22-740 and subsections (19) and (22) of Section 12-22-10, as added in Part III, SECTION 10, take effect June 1, 1999. If the remaining provisions of Part III do not take effect, then Sections 12-22-730 and 12-22-740 and subsections (19) and (22) of Section 12-22-10 are repealed on the date that the State Board of Canvassers certifies a majority "no" vote in the referendum provided in Part II of this act;

(C)     Part I takes effect July 1, 2000;

(D)     If Part I takes effect, the South Carolina Department of Revenue, upon application, shall refund to any person holding a license for the operation of video game machines, on a pro rata basis, the portion of any license fee previously paid to the department for licenses that extend beyond June 30, 2000;

(E)     If the State Board of Canvassers certifies a majority "yes" vote in the referendum provided in Part II of this act, then Part I does not take effect, and the remaining provisions of Part III take effect on December 1, 1999 and SECTION 19 OF PART IV is repealed, except that the provisions of SECTION 21 shall apply to any pending civil actions brought under Section 12-21-2805. /
Amend title to read:
/TO AMEND SECTIONS 12-21-2710, AS AMENDED, 12-21-2712, 12-21-2720, AS AMENDED, AND 12-21-2726, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO COIN-OPERATED MACHINES OR DEVICES, SO AS TO EXTEND THE PROHIBITION ON SLOT MACHINES AND OTHER MACHINES OR DEVICES PERTAINING TO GAMES OF CHANCE TO VIDEO GAMES WITH A FREE PLAY FEATURE OR ANY OTHER COIN-OPERATED MACHINE OR DEVICE USED FOR GAMBLING, TO EXTEND THE SEIZURE AND DESTRUCTION PROVISIONS APPLICABLE TO GAMES OF CHANCE TO THESE EXPANDED PROHIBITIONS, TO CONFORM EXISTING LICENSING REQUIREMENTS FOR COIN-OPERATED MACHINES AND DEVICES TO THESE EXPANDED PROHIBITIONS AND TO DELETE REFERENCES TO PROVISIONS OF LAW REPEALED BY THIS SECTION; TO AMEND SECTION 12-54-40, AS AMENDED, RELATING TO TAX CRIMES AND PENALTIES, SO AS TO DELETE THE OFFENSE OF OPERATING AN UNMETERED VIDEO GAME WITH A FREE PLAY FEATURE; TO AMEND SECTIONS 16-19-40 AND 16-19-50, RELATING TO THE OFFENSE OF GAMBLING, SO AS TO EXTEND THESE OFFENSES SPECIFICALLY TO PLAYING OR MAINTAINING ANY LICENSED COIN-OPERATED MACHINE OR DEVICE USED FOR GAMBLING PURPOSES; AND TO REPEAL SECTIONS 12-21-2703, 16-19-60, AND ARTICLE 20, CHAPTER 21 OF TITLE 12 RELATING RESPECTIVELY TO THE RETAIL LICENSE REQUIREMENT FOR A LOCATION WITH VIDEO GAMES WITH A FREE PLAY FEATURE, THE EXEMPTION OF VIDEO GAMES WITH A FREE PLAY FEATURE FROM THE GAMBLING OFFENSES, AND THE VIDEO GAMES MACHINES ACT, ALL OF THE ABOVE ENACTED FOR THE PURPOSE OF PROHIBITING CASH PAYOUTS FOR CREDITS EARNED ON VIDEO GAME MACHINES ON AND AFTER JULY 1, 2000; TO PROVIDE FOR A STATEWIDE REFERENDUM ON NOVEMBER 2, 1999, TO ASCERTAIN WHETHER OR NOT THE QUALIFIED ELECTORS OF THIS STATE DESIRE THAT CASH PAYOUTS FOR CREDITS EARNED ON VIDEO GAME MACHINES SHALL CONTINUE TO BE ALLOWED AFTER JUNE 30, 2000, AND TO PROVIDE A LICENSE FEE SURCHARGE ON EXISTING MACHINES TO PAY FOR THIS REFERENDUM, TO PROVIDE THAT IF THE QUALIFIED ELECTORS VOTE TO CONTINUE TO PERMIT SUCH CASH PAYOUTS, THE ABOVE ENACTED PROVISIONS PROHIBITING PAYOUTS SHALL NOT TAKE EFFECT AND INSTEAD THAT TITLE 12 OF THE 1976 CODE RELATING TO TAXATION SHALL BE AMENDED BY ADDING CHAPTER 22 SO AS TO PROVIDE FOR THE REGULATION, LICENSING, TAXATION, AND CIVIL AND CRIMINAL ENFORCEMENT OF VIDEO GAME MACHINES WITH A FREE PLAY FEATURE, ARCADE GAME MACHINES, AND OTHER DEVICES INCLUDING PROVISIONS TO VEST PRIMARY ENFORCEMENT AND REGULATORY POWERS IN THE DEPARTMENT OF REVENUE AND THE SOUTH CAROLINA LAW ENFORCEMENT DIVISION, TO PROVIDE FOR LICENSE FEES ON MACHINE MANUFACTURERS, DISTRIBUTORS, AND OWNERS TO PROVIDE LICENSE FEES FOR MACHINES AND FOR THE LICENSING OF OPERATORS AND ESTABLISHMENTS, TO PROVIDE FOR AN IMPOSITION OF TAXES ON NET MACHINE INCOME, TO PROVIDE FOR THE USE OF REVENUES GENERATED BY THIS CHAPTER, TO PROVIDE FOR LOCATION AND OTHER RESTRICTIONS, NEW CASINO PROHIBITIONS AND THE PHASING OUT OR CONTINUATION OF EXISTING CASINOS UNDER CERTAIN CONDITIONS, TO PROVIDE FOR PUBLIC NOTICE AND OTHER NOTIFICATION PROVISIONS, TO PROVIDE FOR THE MANNER IN WHICH AND REQUIREMENTS UNDER WHICH THESE MACHINES MAY BE PLAYED INCLUDING PROHIBITING THE OFFERING OF INDUCEMENTS, THE REGULATION OF ADVERTISING, AND CERTAIN LIMITATIONS ON BETS AND PAYOUTS, TO PROVIDE FOR TECHNICAL STANDARDS AND SPECIFICATIONS FOR THESE MACHINES AND THEIR EQUIPMENT INCLUDING TEMPORARY STANDARDS UNTIL THE DEPARTMENT OF REVENUE ADOPTS PERMANENT STANDARDS UNDER THIS CHAPTER, TO PROVIDE FOR BACKGROUND INVESTIGATIONS AND THE ACTIONS THAT MAY BE TAKEN AS A RESULT OF THE BACKGROUND INVESTIGATIONS, TO PROVIDE CIVIL AND CRIMINAL PENALTIES AND REMEDIES FOR CERTAIN VIOLATIONS INCLUDING LICENSE REVOCATIONS, TO PROVIDE FOR THE MANNER IN WHICH COUNTIES AND MUNICIPALITIES MAY ALSO IMPOSE LICENSE FEES AND ZONING RESTRICTIONS ON THESE MACHINES, AND TO PROVIDE FOR SEPARATE REQUIREMENTS FOR THE REGULATION, LICENSING, AND ENFORCEMENT OF ARCADE GAME MACHINES AND OTHER AMUSEMENT DEVICES INCLUDING A PROVISION THAT PROHIBITS CASH PAYOUTS, THAT SECTION 12-54-40 SHALL BE AMENDED RELATING TO TAX CRIMES AND PENALTIES SO AS TO FURTHER PROVIDE FOR PENALTIES IN REGARD TO CERTAIN ACTIONS REQUIRED OR PROHIBITED UNDER CHAPTER 22 OF TITLE 12, THAT SECTION 16-19-60 SHALL BE AMENDED RELATING TO CERTAIN GAMBLING OFFENSES SO AS TO DELETE REFERENCES TO THE REGULATION OF VIDEO GAME MACHINES AND PAYOUTS, THAT SECTION 61-4-580 SHALL BE AMENDED, RELATING TO PROHIBITED ACTS REGARDING BEER AND WINE, SO AS TO PROVIDE THAT ACTIVITIES AUTHORIZED BY CHAPTER 22 OF TITLE 12 ON THE PREMISES OF ESTABLISHMENTS LICENSED TO SELL BEER AND WINE ARE NOT A PROHIBITED ACT, THAT SECTIONS 16-19-65, 16-19-66, AND 16-19-67 SHALL BE ADDED SO AS TO MAKE IT UNLAWFUL FOR ANY PERSON TO KEEP CERTAIN TYPES OF GAME OR SLOT MACHINES ON HIS PREMISES, TO MAKE IT UNLAWFUL FOR ANY PERSON TO OPERATE SUCH MACHINES, TO MAKE IT UNLAWFUL FOR ANY PERSON TO CHEAT OR DEFRAUD THE OWNER OF A LAWFUL MACHINE OF ITS CONTENTS, TO PROVIDE PENALTIES FOR VIOLATIONS AND AUTHORIZE THE SEIZURE OF UNLAWFUL MACHINES, AND THAT ARTICLE 19, CHAPTER 21 OF TITLE 12 RELATING TO COIN-OPERATED MACHINES, DEVICES, AND OTHER AMUSEMENTS AND ARTICLE 20, CHAPTER 21 OF TITLE 12 RELATING TO THE VIDEO GAME MACHINES ACT SHALL BE REPEALED; TO PROVIDE THAT CERTAIN VIDEO GAME MACHINE STANDARDS AND REQUIREMENTS CONTAINED IN CHAPTER 22 OF TITLE 12 TAKE EFFECT JULY 1, 1999, AND CERTAIN CASINO PROVISIONS CONTAINED IN CHAPTER 22 OF TITLE 12 TAKE EFFECT JUNE 1, 1999; TO PROVIDE FOR THE MANNER IN WHICH EXISTING VIDEO GAME MACHINE LICENSE FEES SHALL BE PHASED INTO THE PROPOSED NEW LICENSE STRUCTURE; TO ADD SECTION 12-21-2805 SO AS TO AUTHORIZE ENFORCEMENT ACTIONS FOR VIOLATIONS OF SPECIFIED VIDEO GAME MACHINE LAWS BY THE DEPARTMENT OF REVENUE, STATE LAW ENFORCEMENT DIVISION, OR THE ATTORNEY GENERAL OR BY A PERSON WITH KNOWLEDGE OF THE VIOLATION IF THE DEPARTMENT, DIVISION, OR ATTORNEY GENERAL DECLINES, AND TO PROVIDE THE PROCEDURES FOR AND REMEDIES FOR SUCH VIOLATIONS; AND TO ADD SECTION 32-1-60 SO AS TO PROVIDE THAT EXISTING PROVISIONS OF LAW ALLOWING PERSONS TO SUE TO RECOVER GAMBLING LOSSES ONLY APPLY TO GAMBLING ACTIVITIES NOT AUTHORIZED BY LAW./
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS explained the amendment.

POINT OF ORDER

Rep. EASTERDAY raised a Point of Order that Amendment No. 25A was out of order under Rule 9.3 in that the amendment rewrites the Bill in its entirety and therefore was not germane to the original title of the Bill.

Rep. JENNINGS argued contra.

Rep. SCOTT argued contra.

SPEAKER WILKINS stated that based on similar Points of Order which were sustained and Rule 9.3, he sustained the Point of Order and ruled the amendment out of order.

Reps. DELLENEY, SHEHEEN and CAMPSEN proposed the following Amendment No. 26A (Doc Name AMEND\20709SD99), which was tabled.
Amend the bill, as and if amended, by restoring the original House version and adding:
/SECTION     1.     Title 12 of the 1976 Code is amended by adding:

"CHAPTER 22
Coin-Operated Machines and Other Devices
Article 1
General Provisions

Section 12-22-10.     As used in this chapter, unless the context clearly requires otherwise:

(1)     'Director' means the Director of the Department of Revenue.

(2)     'Chief' means the Chief of the South Carolina State Law Enforcement Division.

(3)     'Division' means the South Carolina State Law Enforcement Division.

(4)     'Associated equipment' means a device, machine, replacement part, or part used in the manufacture, operation, or maintenance of a machine including, but not limited to, integrated circuit chips, printed wired assembly, printed wired boards, printing mechanisms, video display monitors, and metering devices.

(5)     'Background investigation' means the investigation conducted in accordance with Article 13 of this chapter.

(6)     'Central computer monitoring system' or similar term means the computing system administered by the department for communicating with and retrieving information from machines, and activating and disabling machines.

(7)     'Contraband machine,' or 'contraband device,' means a machine, location controller or its modem, the computer chips of a machine or location controller, or any other part of the machine, location controller or modem not meeting the requirements of this chapter. A 'machine' that does not meet the requirements of this chapter is a 'contraband machine' regardless of whether the machine issues payout tickets redeemable for cash.

(8)     'Disable' or 'disabling' means the process of executing a command from the central computer monitoring system or the location controller which causes a machine to cease functioning.

(9)     'Distributor' means any person who sells, buys and sells, or leases machines or associated equipment. A distributor may also own, operate, service, or repair machines in this State.

(10)     'Establishment' or 'location' means premises with machines.

(11)     'Machine' means a nonpayout electronic machine with a free play feature that, upon insertion of cash is available to play or simulate the play of games utilizing a video display and microprocessors in which the player may receive free games or credits that may be redeemed for cash. Each player station of a multi-player unit is a separate machine.

(12)     'Machine owner' means any person, other than a distributor, who owns one or more machines.

(13)     'Machine operator' means any person who owns or manages an establishment with one or more machines.

(14)     'Manufacturer' means any person that manufactures, assembles, or programs machines, controllers, or associated equipment for sale or use in this State.

(15)     'Net machine income' means the amount of money that goes into the machine less payouts.

(16)     'Payout' means the total amount a player is paid at the end of play, regardless of the amount the player has deposited in the machine.

(17)     'Play' means the period of time from when money is put into the machine until cash out.

(18)     'Player' means a person who participates in the playing of a machine.

(19)     'Principal' of a business or entity means:

(a)     a person who is an officer of the business or entity which owns the business;

(b)     a partner, other than a limited partner who cannot exercise any management control;

(c)     a manager of a limited liability company which is managed by managers;

(d)     a member of a limited liability company which is managed by members;

(e)     a fiduciary, including personal representatives, trustees, guardians, committees and receivers, who manages, holds or controls title to or who is otherwise in direct or indirect control of the business;

(f)     a person who owns five percent or more of the total combined voting power of the business or entity;

(g)     a person who owns ten percent or more of the value of the business or entity; or

(h)     an employee who has day-to-day operational management responsibilities for the business or entity.

(20)     'Records' means all paper or electronic accounts, bank account records, financial statements, business records, contracts, reports and returns, including tax information and returns, and other information the department or division considers necessary to administer and enforce the provisions of this chapter.

(21)     'Type I Technician' means a person qualified to perform basic service, maintenance, and repair on machines.

(22)     'Type II Technician' means a person qualified to perform major machine repairs, configurations, communication, and diagnostic testing of machines.

(23)     'Video Game Machine Identification Number' or 'VGMID' means the permanently assigned unique number issued by the department to identify a specific machine from first delivery in this State until destruction or removal from this State.

Section 12-22-20.     Unless specifically granted to the division, the functions, duties, and powers set forth in this chapter are vested in the department. The department shall administer and enforce the provisions of this chapter, and may enter agreements with any agency or the division to execute the provisions of this chapter.

Section 12-22-30.     Except as provided in Section 12-54-240, any information obtained by the department or division in the administration and enforcement of the provisions of this chapter is public information, except for proprietary information of the central computer monitoring system. The department may disclose information to the division and to other governmental entities in and outside of this State.

Section 12-22-40.     The department has sole and exclusive power to issue all licenses provided for in this chapter. The department has exclusive authority to establish the conditions or restrictions necessary for issuing, suspending, or revoking a license.

Section 12-22-50.     The department or the division may issue subpoenas requiring the attendance of witnesses and the production of records, memoranda, papers, and other documents and administer oaths and take testimony thereunder.

Section 12-22-60.     The license fees, taxes, and penalties provided for in this chapter are a first preferred lien upon all property of the person charged. The department may execute on the lien.

Section 12-22-70.     The only forms of gambling which are legal in this State are bingo, played in accordance with Article 24 of Chapter 21 of Title 12, and games played on licensed machines operated in accordance with this chapter.

Section 12-22-80.     The department and the division have the right to examine all records of an applicant and the applicant's principals, those records under their control, and those records in which they have an interest to evaluate statements and documentation supplied with the application. All records must be retained for at least the period for which taxes may be assessed under Section 12-54-85.

Section 12-22-90.     Any person otherwise subject to the provisions of this chapter, but who claims the benefit of an exemption from certain of its requirements in any manner, on or before September 1, 1999, shall notify the department in a statement made under penalty of perjury that he is claiming the benefits of a specific provision, shall state all reasons for claiming the benefits of the provision, and shall identify all licenses claimed to be related to that exemption. The person claiming the benefit of such a provision has the burden of proof and shall establish by clear and convincing evidence that he is entitled to the benefits claimed.

Section 12-22-100.     If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this chapter for any reason is held to be unconstitutional or invalid, the holding does not affect the constitutionality or validity of the remaining portions of this chapter, the General Assembly declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or word hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

Section 12-22-110.     (A)     The department shall require that every location and owner of each machine licensed therein maintain a log of payoffs for at least three years that shall include, at a minimum, the following:

(1)     a separate form or record of each person receiving a payoff;

(2)     the name and address of the person receiving the payoff;

(3)     the social security number of the person receiving the payoff;

(4)     a statement of the amount of the payoff;

(5)     the driver's license number or other official identification number of the person receiving the payoff, which must be independently verified by the operator prior to any payoff being made;

(6)     a signed certification by the machine operator or owner and the player, under penalty of perjury, that the information provided is complete and accurate; and

(7)     attachment to the log all validated tickets related to the payoffs.

(B)     The department by regulation may prescribe the form or format of the log required in subsection (A).

Article 3
Licensure

Section 12-22-310.     (A)     Before a machine or associated equipment is manufactured, distributed, sold, or placed for use in this State, the machine owner, machine operator, manufacturer, distributor, and establishment must be licensed by the department as provided for in this chapter.

(B)     Before placement or operation, a machine must be licensed.

(C)     Licenses issued as provided for in this chapter are the property of the department and must not be transferred, assigned to another person, or pledged as collateral, except as provided in Section 12-22-330(K).

Section 12-22-320.     (A)     Every two years a manufacturer, distributor, machine owner, machine operator, establishment, type I technician, and type II technician, engaging in business in this State, shall apply for and obtain from the department a license for the privilege of engaging in the business and shall pay the nonrefundable fee levied at the time of license application. The fees are as follows:

(1)     Manufacturer         $10,000

(2)     Distributor         $15,000

(3)     Machine Owner         $2,000

(4)     Machine Operator         $2,000

(5)     Licensed Establishment         $1,000

(6)     Type I and Type II Technicians $500

(B)     Biennial licenses for machine owners, machine operators, distributors, manufacturers, or establishments issued under this chapter expire according to the county where the principal place of business, as determined by the department, of the machine owner, machine operator, distributor, or manufacturer is situated or, in the case of an establishment license, the county where the establishment is situated. The expiration dates are the last day of:

(1)     February in years which end in an:

(a)     odd number for Allendale, Bamberg, Barnwell, Beaufort, and Berkeley counties;

(b)     even number for Charleston, Clarendon, Colleton, Dorchester, Georgetown, Hampton, Jasper, and Williamsburg counties;

(2)     May in years which end in an:

(a)     odd number for Cherokee, Chester, Chesterfield, Darlington, Dillon, Fairfield, Florence, and Horry counties;

(b)     even number for Lancaster, Marion, Marlboro, Union, and York counties;

(3)     August in years which end in an:

(a)     odd number for Calhoun, Kershaw, Lee, Orangeburg, and Sumter counties;

(b)     even number for Richland County;

(4)     November in years which end in an:

(a)     odd number for Abbeville, Aiken, Anderson, Edgefield, Greenville, and Greenwood counties;

(b)     even number for Laurens, Lexington, McCormick, Newberry, Oconee, Pickens, Saluda, and Spartanburg counties.

(5) If a license purchased is for less than twenty-three months because of this section, the license tax must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under this section and Section 12-22-340.

(C)     The department, at its discretion and for the efficient administration of the law, may prorate licenses in any manner to implement or change the expiration date established in this section and to stagger the issuances of the licenses by county or by any other method considered appropriate by the department.

(D)     A license authorized in this section must not be issued until the department receives a completed background investigation showing that the standards provided for in Article 13 have been met by the applicant.

(E)     An application for a license may be denied or a license may be revoked if the applicant or licensee fails to pay any tax or fee administered by the department.

(F)     A license issued under this chapter is a privilege personal to the person to whom it was issued and is not a legal right.

(G)     All licenses described in subsection (A) issued before the effective date of this chapter expire May 31, 2000.

Section 12-22-330.     (A)(1)     Every machine owner making a machine available for play shall apply for and procure a license from the department for the privilege of making use of the machine in this State. The machine owner shall pay a first time nonrefundable biennial fee of four thousand dollars for each machine license and thereafter on all renewals shall pay a nonrefundable fee for each machine license as follows:

Net Income of Machine in Twelve

Months Preceding License Date                     Biennial License Fee

Not more than $12,000             $3,000

More than $12,000 but not more than $24,000     $4,000

More than $24,000 but not more than $48,000     $6,000

More than $48,000             $8,000.

(2)     Except as provided in subsections (C) and (D) below, all licenses begin on June first and, except as provided in subsection (D), all licenses expire May thirty-first of the second year that the license is valid following the date of issue.

(B)     The machine owner shall purchase a separate license for each station in a multi-player unit and each station counts as a separate machine when determining the number of machines.

(C)     If the license required in subsection (A) is purchased after June thirtieth, the license fee must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(D)     As an alternative to the license required in subsection (A), a machine owner may be granted a nonrefundable seasonal license effective April first and expiring September thirtieth, following the date of issue. This license must not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(E)     A municipality, by ordinance, may impose a license fee on machines in an amount not to exceed three hundred sixty dollars for the equivalent license period. A municipality may not limit the number of machines within the boundaries of the municipality.

(F)     A county, by ordinance, may impose a license fee on machines located in an unincorporated area of the county in an amount not to exceed three hundred sixty dollars for the equivalent license period.

(G)     A license may not be issued for the operation of a machine that is located, or intended to be located, on a watercraft or vessel plying the territorial waters of this State.

(H)     A machine licensed under the provisions of subsection (A) must not be operated at an establishment unless the establishment is licensed pursuant to the provisions of this chapter and Chapter 36 of Title 12.

(I)     Upon application for a license to operate any machine, the department may presume that the operation of the machine is lawful. The issuance of a license by the department does not make lawful the operation of any machine, the operation of which is unlawful under the laws of this State. When a license has been issued, the sum paid for the license must not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(J)     Failure to obtain a machine license as required by this chapter makes the machine owner liable for the penalties imposed in this chapter.

(K)(1)     A licensed machine owner may transfer a machine with its machine license only to another licensed machine owner. Notification for the transfer of the machine must be made to the department at least thirty days before the transfer. The notification of transfer must include a notarized statement of both parties identifying the machine by VGMID.

(2)     A licensed machine owner may transfer a machine license required by this section to any other machine owned by the machine owner if the department is notified before the transfer.

(L)     The machine owner shall notify the department within thirty days of any change in its principals. Any addition to the machine owner's principals of a person not already determined to have met the qualifications of this chapter voids the license unless the addition has been approved in advance by the department. The department shall develop forms and procedures for notification and approval of any change.

(M)     Four hundred dollars of the license fee imposed in subsection (A) must be retained by the department and expended for the implementation and ongoing operation of the monitoring system, administration, enforcement of this chapter, or other programs and services as the department may determine necessary and appropriate.

(N)     No distributor, owner, or operator must be issued a license unless the distributor, owner, or operator has been a resident of the State for two years before the date of application.

Section 12-22-340.     The department may issue an initial temporary license pending the approval of the application to any license applicant who has operated machines before the effective date of this chapter if the applicant signs a statement under penalty of perjury that he has no knowledge of any reason for denial of a license. The temporary license may be revoked.

Section 12-22-350.     Appeals of department decisions, including appeals of penalties, or of denied, suspended, or revoked licenses, must be conducted in accordance with the South Carolina Revenue Procedures Act in Chapter 60 of this title.

Article 5
Imposition of Tax on Net Machine Income

Section 12-22-510.     (A)     In addition to the license fees, a tax of thirty percent of the net machine income of every machine is imposed on the machine owner.

(B)     In addition to the license fees and the tax in subsection (A), an additional tax is levied on the net machine income of every machine within an establishment which is within five hundred feet of another establishment in the same structure, and both establishments have machines with a same owner or principal. The tax is as follows:

(1)     five percent of net machine income beginning June 1, 2000; and

(2)     ten percent of net machine income beginning June 1, 2001; and

(3)     fifteen percent of net machine income beginning June 1, 2002.

(C)     The tax imposed by this section is effective beginning on the first day of the first month following the effective date of this chapter.

Section 12-22-520.     (Reserved).

Section 12-22-530.     (A)     Unless the department exempts a taxpayer from this requirement, the taxes in this article must be paid to the department by the machine owner through electronic transfer of funds. The machine owner shall furnish the department all information and bank authorization required to facilitate the timely payment of taxes due to the State. Machine owners shall provide the department thirty days' advance notice of any proposed bank account changes to ensure the uninterrupted electronic transfer of funds.

(B)     After notice to taxpayers, the department may draw upon the designated account to satisfy the tax indebtedness under this chapter on the twentieth day of the month following the month for which taxes accrued. The machine owner shall maintain an account balance in an amount sufficient to cover the amount drawn by the department. The failure to maintain an adequate balance in the account as required in this section authorizes the department to find the tax in jeopardy and to disable all licensed machines of the machine owner. Appeals are governed by the jeopardy assessment appeals procedures in Sections 12-60-910 and 12-60-920.

(C)     Unless the department determines that such reports are unnecessary, each machine owner, machine operator, and licensed establishment shall report to the department for each calendar quarter, by the twentieth of the month following end of the quarter, the following information for each machine:

(1)     name and address of location of the machine;

(2)     denomination, whether five cents, etc. of the game;

(3)     the name of the game;

(4)     the name of the individual or individuals collecting money from the machine and the owner of the machine;

(5)     the date or dates of collection;

(6)     the date of previous collection;

(7)     income number at commencement of the reporting period;

(8)     income number at the end of the reporting period;

(9)     beginning payout number;

(10)     ending payout number;

(11)     payout to players;

(12)     gross profit; and

(13)     the percentage of net profits divided between owner and the location and the formula by which those figures are calculated.

(D)     For machines connected to the central computer monitoring system, the department shall determine the tax on net machine income as of the last day of each month. The department shall notify the machine owner in the form of a billing statement of the amount of tax the department shall draw from the designated account to satisfy the net machine income tax.

Section 12-22-540.     As an interim procedure to collect the taxes in this article between the effective date of this chapter and when a machine is connected to the central computer monitoring system, the department shall develop forms and procedures to facilitate the return and payment of these taxes. This interim procedure also must be used during any period when the central computer monitoring system is unable to determine taxes as provided in Section 12-22-530. The taxes are due and payable and the return is due on or before the twentieth day of the month following the month in which the taxes accrue.

Section 12-22-550.     An owner shall report to the department any discrepancies in tax between the department's statement and each machine's mechanical and electronic meter readings.

Section 12-22-560.     (A)     Until a discrepancy under Section 12-22-550 is resolved, the department may not make credit adjustments. The owner shall submit to the department the maintenance log that includes current mechanical meter readings and the audit ticket that contains electronic meter readings generated by the machine's software for each machine that reflects a discrepancy. Electronic accounting meters must not be cleared without an authorized department or division employee present. Any discrepancies that cannot be resolved because the meter was cleared in an unauthorized manner must be resolved in favor of the State.

(B)     A licensed establishment may return to a player money which the player deposited into the machine for which the machine did not permit play and would not print a validated payout ticket; and in this event shall obtain and record the date, time, amount, and licensed machine number of the refund, and the name, addresses, telephone number, social security number, and driver's license identification number and state, of that player. Thereafter, the taxpayer may file a claim for refund for any taxes paid under this chapter on the amount returned to the player in accordance with Chapter 60 of this title, but in addition to the information required by Section 12-60-470, the taxpayer shall file the information required to be maintained by the licensed establishment under this subsection.

Section 12-22-570.         The State Treasurer shall create a designated account for the deposit of the tax, penalties, and interest imposed by this article. However, before depositing revenues to this account, the department shall retain its costs and the costs of the division. The department and the division may retain, carry forward, and expend the funds withheld for the enforcement and administration costs of this chapter. All interest earned on revenues placed into the account remain with the account and must be distributed as provided by the General Assembly.

Section 12-22-580.     Machine operators may only redeem tickets for credits awarded on licensed machines located in that licensed establishment. A ticket must be validated by the location controller before any payout is made.

Section 12-22-590.     Each county or municipality, by ordinance, may determine the zoning of locations for the operation of machines. The zoning restrictions may not be less restrictive than this chapter.
Article 7
Location Restrictions, Public Notice, and Signage

Section 12-22-810.     (A)     An establishment license must not be issued until the department determines that the location is proper. In determining whether a location is a proper one, the following factors may be considered:

(1)     the location's proximity to residences;

(2)     the location's proximity to houses of worship, schools, playgrounds, parks, and daycare centers;

(3)     the likelihood that large crowds will gather from time to time with attendant breaches of the peace;

(4)     the location of automatic teller machines as provided for in Section 12-22-840(6);

(5)     the adequacy of law enforcement protection;

(6)     the concentration in the area of other licensed establishments;

(7)     compliance with Section 12-22-840; and

(8)     all other pertinent information the department and division consider appropriate, or other information submitted for consideration.

(B)     An establishment license must not be issued if the location is within one hundred feet of another licensed establishment. However, an existing location which operates machines before March 31, 1999, is not governed by the provisions of this subsection while the location continues to be operated in accordance with the single place or premise regulation and the operation of the location continues in the name of the current licensed machine operator. Notwithstanding the provisions of this subsection, the department may issue an establishment license after notice and the procedures in this section if the department otherwise determines that the location is a proper one.

(C)     The person applying for the establishment license closer than permitted under subsection (B) shall place a notice at least once a week for three consecutive weeks in a newspaper or newspapers most likely to provide notice to interested citizens of the county, city, or community in which the person seeks to locate the proposed establishment. The department shall determine which newspaper or newspapers meet the requirements of this section based on available circulation figures. If a newspaper is published within the county and historically has been the newspaper where legal notices are published, the advertisements published in that newspaper meet the requirements of this section. Notice also must be given by displaying a sign for fifteen consecutive days at the site of the proposed establishment. The sign shall:

(1)     state that a license for the operation of machines is being sought and that the establishment will be able to issue cash payouts from these machines;

(2)     tell an interested person where and when to send a written protest of the application;

(3)     be in bold print; and

(4)     cover a space at least eleven inches wide and eight and one-half inches high.

(D)     The department shall determine whether the location is a proper one. Any protestor or the applicant may appeal the department's determination.

(E)     The provisions of this section apply to all applications. However, establishments in existence on the effective date of this chapter are not subject to the distance restrictions of subsection (B) of this section and Section 12-22-840 while the license is held by the same person who held the license on March 31, 1999, and the licensee complies with Section 12-22-90.

Section 12-22-820.     (A)     Except as provided in subsection (B), machines must not be operated, or continue to operate, at any casino, casino-style gaming operations, video gaming mall, or combination of single place or premises, as that term was applied in Regulation 117-190 of the South Carolina Code of Regulations. In determining whether an establishment violates this section, the department shall consider whether more than one licensed establishment operates within a single structure, unless the distance between the licensed establishments exceeds one hundred feet and the licensed establishments are not owned by the same person, do not have any of the same principals, and the owner of one is not a principal of another licensed establishment. Licenses denied under this section are subject to review under Section 12-60-1310.

(B)     All establishments which conducted business as a casino or otherwise within a structure which before March 15, 1999, contained more than one single place or premise in accordance with Regulation 117-190 must:

(1)     on or before September 1, 1999, conduct business as a single operation and be licensed as a single licensed establishment to maintain on the premises more than five licensed machines;

(2)     advise the department of the machine and establishment licenses currently issued for the structure, and return the establishment licenses to the department at the time the new license for the single licensed establishment is approved by the department and issued;

(3)     once licensed as a single establishment, never have licenses for any number of machines greater than the total number of machines licensed in the structure as of March 15, 1999, as provided in the statement required in item (5);

(4)     never increase the number of machines permitted by this section after any reduction in the number of machines at the licensed establishment. However a reduction, as that term is used in this subsection, does not include the routine removal and replacement of machines for maintenance, repair, service, or similar purpose;

(5)     not allow the operation of an automated teller machine or similar machine that dispenses money on the premises of the licensed establishment; and

(6)     on or before August 1, 1999, file with the department a sworn statement stating the reasons why it is entitled to the benefits conferred by this subsection and the number of existing machine licenses.

(C)     Any person claiming the provisions of subsection (B) has the burden of proof and must establish by clear and convincing evidence that he is entitled to operate the structure as a single licensed establishment with more than five licensed machines. Any transferee of an interest in such an establishment is subject to all limitations of this section.

(D)(1)     No entity or entities of whatever description or kind which, before March 15, 1999, conducted business as a casino or otherwise through and by a combination, confederation, or aggregation of 'single place or premises' as that term before March 15, 1999, was interpreted and applied by the Department of Revenue in regulation may operate or continue to operate except as provided in this subsection.

(2)     After September 1, 1999, entities as described in this subsection are permitted to re-apply for, and may be granted renewal of a license for a maximum of one biennial licensure period. After completing that period, a new license must not be issued.

Section 12-22-830.     (A)     A person residing in the county in which an establishment license is requested to be granted, or a person residing within five miles of the establishment for which an establishment license is requested, may, before seven days after the last published notice, protest the issuance of the license if a written protest is filed with the department setting forth:

(1)     the name, address, and telephone number of the person filing the protest;

(2)     the name of the applicant for the establishment license and the address of the establishment sought to be licensed;

(3)     the specific reasons why the application should be denied; and

(4)     whether he wishes to attend and offer testimony before a contested case hearing before the Administrative Law Judge Division.

(B)     Upon receipt of a timely filed protest, seeking a contested hearing before the Administrative Law Judge Division, the department may not issue the establishment license but shall forward the file and its determination to the Administrative Law Judge Division.

(C)     If the protestant expresses no desire to attend a contested hearing and offer testimony, the protest is considered invalid, and the department shall continue to process the application and make its determination of whether all other statutory requirements for the license are met.

Section 12-22-840.     (A)     A licensed establishment, including its employees and agents, may not:

(1)     maintain, possess, or otherwise allow on its premises more than five machines;

(2)     advertise, or allow advertising, in any manner for the playing of the machines except as provided in Section 12-22-860;

(3)     offer or allow to be offered any inducement to a person for the playing of machines;

(4)     allow anyone under the age of twenty-one to receive payouts as a result of playing machines;

(5)     operate machines between the hours of two o'clock a.m. and six o'clock a.m. and between two o'clock a.m. Sunday and six o'clock a.m. Monday.

(6)     cash any business, personal, or employment checks of any individual or business;

(7)     make loans to any individual or business;

(8)     accept a credit card or debit card from a player for the exchange or purchase of game credits or for advancement of coins or currency;

(9)     extend credit, in any manner, to a player;

(10)     be located within five hundred feet within a county, or within three hundred feet in a municipality, of a public or private elementary, middle, or secondary school; a public or private kindergarten; a public playground or park; a public vocational or trade school or technical educational center; a public or private college or university; or house of worship; or

(11)     allow playing of machines by a person in an intoxicated condition.

(B)     The distances in this article must be computed by determining the shortest distance between the nearest property line of the licensed establishment and the nearest property line of the public or private elementary, middle, or secondary school; a public or private kindergarten; a public playground or park; a public vocational or trade school or technical educational center; a public or private college or university; house of worship; or other establishments with machines.

(C)     No establishment which holds a minibottle license or an on premises consumption beer and wine permit may be a licensed establishment under this chapter unless machines located in such an establishment are in a separate room surrounded by finished, permanent walls. Consumption of alcoholic liquor, beer, or wine in this separate room is prohibited and is grounds for revocation of the license issued the establishment under this chapter and its license or permit issued under Title 61.

Section 12-22-850.         (A)     The offering of an inducement as prohibited in Section 12-22-840 means any attempt to influence a person to play machines including, but not limited to:

(1)     free or discounted food or beverages;

(2)     free or discounted games other than credits won through authorized play;

(3)     prizes, either at the doors or through drawings or other means;

(4)     coupons offering any of the above; or

(5)     cash other than authorized payouts.
These specified inducements are not exclusive. Other attempts to influence a person to play a machine are prohibited.

(B)     A licensed establishment that engages in activities other than the operation of machines may not offer any inducement unless the licensed establishment is able to prove that the inducements offered are not directed at machine players and that the offerings are part of the normal business practice of similar activities in this State.

Section 12-22-860.     (A)     A licensed establishment may only advertise, or allow the advertising of, the playing of machines by utilizing a single green square not exceeding four by four feet which may be placed alone on any side of the building in which the licensed establishment is located.

(B)     Nothing in this section prevents a licensed establishment from advertising other goods and services except as otherwise prohibited by law.

(C)     No person may advertise in a misleading or deceptive manner.

(D)     To protect the public from misleading, deceptive, or aggressive sales practices, no person shall advertise the playing of machines or a business regulated under this chapter in any manner that suggests winning, money, or wealth.

(E)     Due to the pervasiveness of the medium and the children in the audience, no person may advertise the playing of machines in any broadcast medium between the hours of 5:00 a.m. and 11:00 p.m.

(F)     No person shall advertise in any manner for the playing of machines within one thousand feet of a public or private school, daycare center, kindergarten, residence, park, playground, or church.

(G)     Signs and nonbroadcast advertising in existence on the effective date of this chapter are not subject to the provisions of this section until July 1, 2000, if notice is given to the department as required in this chapter.

Section     12-22-870.     (A)     A licensed establishment must have posted and visible to the public at least one sign with the following words printed on it:

(1)     'A person must be twenty-one years of age to receive payouts from a video game machine.'

(2)     'It is illegal to offer inducements to a person to play video game machines.'

(3)     'All games are random. Games are set to issue a minimum theoretical payout of at least ninety percent.'

(4)     'This establishment maintains a copy of the video game machine laws on the premises for review by players at their request.'

(5)     'Validated tickets may be redeemed for cash.'

(6)     'Violators are subject to civil and criminal penalties.'

(7)     'Violations may be reported to South Carolina Law Enforcement Division or your local law enforcement agency.'

(8)     'No payout of greater than one hundred twenty-five dollars per player per location during any twenty-four hour period is allowed, regardless of the amount deposited in the machine.'

(B)     The sign required by subsection (A) must be placed on the wall behind the machine, but must be visible and readable by the person playing the machine. Each letter on the sign must be at least two inches high.

(C)     Each machine licensed under this article must have a prominently displayed sign citing the penalties provided for tampering, skimming, and intentional manipulation as provided for in this article. The sign must be displayed on the wall above the machine or affixed prominently to the machine.

(D)     In addition to all other signs required under this section, a white warning label must be prominently and permanently affixed to each machine. The label must contain the phrase 'WARNING: GAMBLING CAN BE ADDICTIVE' in capital black letters not less than two and one-half inches in height and one and one-half inches in width, followed by the phrase 'CALL 1-XXX-XXX-XXXX FOR HELP WITH GAMBLING ADDICTION' in capital black letters not less than one inch in height and one-half inch in width. The toll free number to be inserted on the label must be provided by the South Carolina Department of Alcohol and Other Drug Abuse Services.

Section 12-22-880.     (A)     A licensed establishment may not derive the primary and substantial portion of its proceeds from machines. A licensed establishment which receives more than fifty percent of its total gross proceeds from machines violates this prohibition. This fifty percent requirement must be maintained each calendar quarter of the calendar year. The department may require reports to be filed as to the amount of gross proceeds at the licensed establishment that are from activities other than machines. Each licensed establishment must maintain records on the premises that show compliance with this section including, but not limited to, gross machine income by months, gross proceeds by month from all other sources, invoices for purchases, cash payouts by month, bank deposits, and all checking, savings, and similar account records.

(B)     The department shall revoke the establishment's license and all machine licenses in the establishment if the establishment is in violation of this section.

Section 12-22-890.     Each licensed establishment shall maintain on the premises a copy of this chapter for review by the public upon request.

Article 9
Machine Requirements

Section 12-22-1010.     Before a machine may be connected or remain connected to the central computer monitoring system, the machine must have a current and valid machine license. The machine owner and machine operator, and the establishment at which the machine is located must have current and valid licenses as required by this chapter.

Section 12-22-1020.     (A)     All machines, location controllers and associated modems, computer chips, and any other part of a machine must be verifiably of a make, model, and software version certified by the department or a testing lab selected by the department before the items may be possessed, owned, operated, or allowed to operate at any place within this State.

(B)     A person may not possess, own, operate, or allow the operation of a contraband machine or device at any place within this State.

Section 12-22-1030.     (A)     Within ninety days after the effective date of this chapter, all machines must meet the following standards, and machine owners shall certify to the department, under oath, and in a form prescribed by the department, that the machines are prepared for connection to the central computer monitoring system. All machines must:

(1)     have games that are random and have a minimum payout of between ninety percent and ninety-nine percent, within standard rounding, in which the theoretical payout percentage is determined using standard methods of probability theory at optimal play;

(2)     be secure and accountable;

(3)     not operate in a misleading or deceptive manner;

(4)     not have any means of manipulation that affect the random probabilities of winning a game;

(5)     have one or more mechanisms that accept only coins or cash in the form of bills. The mechanisms must be designed to prevent obtaining credits without paying by stringing, slamming, drilling, or other means;

(6)     have one or more metering devices that keep a record of (a) all cash inserted or deposited into the machine; (b) credits played, (c) credits won, (d) validated cash ticket amounts, and (e) other information prescribed by the department. Cash records must include total coins and bills accepted and total credit generated by coin and bill acceptors;

(7)     be capable of being accessed on demand by telecommunication through a location controller from the central computer monitoring system for purposes of polling or reading device activities and for central computer remote enabling or disabling of machine operations;

(8)     be capable of interfacing with a central computer monitoring system through a location controller;

(9)     when requested by the department after certification, be connected to the central computer monitoring system through a location controller;

(10)     meet the standards set by the department and those set forth in this chapter; and

(11)     not offer on the face of the machine or in any pay table the possibility of receiving a payout greater than one hundred twenty-five dollars per player per location during any twenty-four hour period.

(B)     Machines not meeting the standards of this chapter, or the standards of the department, must not be licensed. The license of any machine which fails to maintain the standards of this chapter, or any standards of the department, must be revoked.

(C)     When the department approves the software and logic board of a machine, the division may use a prescribed security seal process to guard against any unauthorized tampering or changes to the erasable programmable read only memory (EPROM) chip or chips, or future, similar such technology. Any repair, replacement, or adjustment to the machine's EPROM chips or similar technology must be done in the presence of a division employee.

Section 12-22-1040.     (A)     As part of the central computer monitoring system, each location operating machines must provide a location controller and modem meeting department requirements. Each location controller must be capable of receiving, storing, and transmitting to the central computer monitoring system all information received from and required of machines. Each location controller shall be capable of supporting at least five machines.

(B)     This section applies to those location controllers which participate in the system as separate hardware entities and any head of string location controller which meets the specifications of this section.

(C)     The cost for purchasing, leasing, and installing, the location controller is the responsibility of the licensed establishment in which the machines are located.

(D)     Each location controller must be able to perform the following functions:

(1)     communicate with machines in an on-line environment;

(2)     store log entries of openings of machine game doors;

(3)     store log entries of openings of machine coin or currency doors;

(4)     authorize a machine to be taken off-line from the location controller and store a log of this event;

(5)     disable a machine and store a log entry upon a game door open, and a coin door open;

(6)     store a log entry if machine is off-line from the location controller;

(7)     store a log entry for machine tampering if the signal received from the machine is discontinuous or corrupted in such a manner as to constitute more than spurious noise in the system;

(8)     store a log entry of reenabling a machine that has been disabled;

(9)     log entries which include a VGMID for each machine and date/time stamp;

(10)     communicate to the central computer system the information which has been gathered from the machines and any log entries stored during the period using a protocol provided by the department or designated agent;

(11)     have sufficient storage capacity to maintain at least five days of data generated from the maximum playing sessions from the maximum number of associated machines linked to the location controller. The data must be stored immediately in a manner that allows, on demand, real time access by the central computer monitoring system. Access to data stored in the location controller must be restricted to authorized entry from the central computer monitoring system and other authorized inquiry only access that has been preapproved by the department;

(12)     have an internal clock;

(13)     be protected from unauthorized interference or tampering by any person or external device or force, such as to corrupt or alter data or corrupt or suspend communication signals or transmitted data from the machines or to the central computer monitoring system. This requirement extends to the location controller as well as its associated communication device, and cabling between the controller, the machines, and communication device;

(14)     be constructed of materials and protected in such a manner as to allow it to operate in suboptimal environments such as nonregulated temperature, dusty, tobacco-smoke filled, and humid conditions. Locations using a location controller that is not constructed so as to operate in these environments and that fail to operate properly are not allowed to operate machines until the location controller is repaired or replaced so as to operate in such a suboptimal environment;

(15)     be capable of validating tickets printed by a machine.

Section 12-22-1050.     The department may set standards for machines, modems, location controllers, the central computer monitoring system, and associated equipment including, but not limited to, technical standards, hardware specifications, software specifications, and standards relating to multiplayer units. Applicants must meet these standards before any license may be issued. The department may revise technical standards as is necessary providing sufficient time for compliance by licensees. The technical standards established by the department must, to the extent possible, within the limitation of this chapter, maximize competition among manufacturers.

Section 12-22-1060.     The burden of proof that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements is the responsibility of the manufacturer or machine owner. The department may require the manufacturer or machine owner to obtain a certification from an approved laboratory indicating that the machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The cost of this certification is the responsibility of the manufacturer or machine owner. The department shall provide a list of approved laboratories. The department may also review a laboratory to determine if the laboratory should be added or removed from the department's list of approved laboratories. The department may contract with a testing laboratory to ensure and certify that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The department may also establish a state testing laboratory. Payment of the cost of testing by the laboratory is the responsibility of the manufacturer or machine owner.

Section 12-22-1070.     A machine owner shall notify the department before a machine is added, moved, replaced, or disconnected.

Section 12-22-1080.     The licensed establishment or machine owner shall notify the department before a location controller is added, moved, or disconnected.

Section 12-22-1090.     (A)     Each location controller must be programmed automatically to disable the play of all machines connected to the location controller, if the location controller has not been polled by the central computer monitoring system for the purpose of collecting meter and event data, for a period to be determined by the department, but not less than seventy-two hours. The machine must be enabled when communication has been restored.

(B)     Whenever a machine is disabled during play of a game, the following must occur:

(1)     a message must appear on the screen warning the player that the machine is about to be disabled and the player must be informed that one minute remains to complete the game;

(2)     a count-down timer must be displayed; and

(3)     if the player completes the game, all payouts must be reported on a payouts ticket and no other games are allowed to be played on that machine;

(4)     if the player has not completed the game in the minute allotted, then the machine shall complete the hand according to the manufacturer's recommended play strategy, all payouts must be reported on a payouts ticket, and the machine then disabled.

Section 12-22-1100.     (A)     Each machine placed in operation in this State must have affixed by the manufacturer a VGMID assigned by the department. Each machine owner shall notify the department in writing of the receipt of a machine. Manufacturers, distributors, and machine owners shall make machines and associated equipment available for inspection by the department or division. No machine may be transported out-of-state until the VGMID has been removed. No one other than an authorized department or division employee shall remove the VGMID. For qualifying machines already located in the State, the department shall assign, and the division shall affix, the VGMID. The VGMID must be programmed into the machine and serves as the machine's unique identifier for purposes of logging events and reporting play statistics.

Section 12-22-1110.     (A)     Every machine owner shall maintain records for each machine showing the manufacturers' serial number; model and type of machine; the VGMID; the license number; the location's name, address, and telephone number; the machine operator; the date the machine entered this State; the date it entered the location; the date the machine went on-line; and the bank account from which the taxes are withdrawn.

(B)     The machine owner shall maintain information relating to the payment of any money or compensation paid to any persons to operate the machine. Information required by this section must be available on demand for inspection by a representative of the department or division.

Section 12-22-1120.     (A)     No person may possess, own, operate, maintain for use or operation, or allow the operation of, any machines that:

(1)     allow more than two dollars to be risked, wagered, or played on any one play or hand;

(2)     issue payouts of more than one hundred twenty-five dollars per player per location during any twenty-four hour period;

(3)     require any minimum number of credits before issuance of a validated payouts ticket;

(4)     permit any player to receive a payout greater than one hundred twenty-five dollars per player per location during any twenty-four hour period, regardles of the amount of money deposited into the machine;

(5)     produce validated tickets worth more than one hundred twenty-five dollars per player per location during any twenty-four hour period regardless of the amount deposited in the machine;

(6)     allow the production of multiple tickets with a collective value of greater than one hundred twenty-five dollars per player per location during any twenty-four hour period or any other schemes to evade the one hundred twenty-five dollars per player per location during any twenty-four hour period limitation; or

(7)     offer on the face of the machine or in any pay table the possibility of receiving a payout of greater than one hundred twenty-five dollars per player per location during any twenty-four hour period.

(B)     The department shall revoke for five years all licenses of the machine owner, machine operator, machines, and the establishment, where any machine violating subsection (A) is found.

Section 12-22-1130.     A machine must be disposed of in a manner that makes it incapable of use or operation in any video game or other gaming or amusement activity. A machine may not be disposed of until notice has been given to the department as provided in this section. An owner desiring to dispose of an unsaleable or damaged machine shall notify the department in writing before disposal and provide the following information in a manner as directed by the department:

(1)     the full name, address, and license number of the person or entity disposing of the machine;

(2)     the manufacturer's serial number of the machine;

(3)     the model number and description of the machine;

(4)     the manufacturer of the machine;

(5)     the VGMID of the machine;

(6)     the hard meter readings of the machine;

(7)     the licensed establishment at which the machine was located;

(8)     the proposed manner, time, and place of disposal.

Section 12-22-1140.     A machine must not simulate bingo or a slot machine.

Section 12-22-1150.     Each machine must contain a single printing mechanism capable of printing an original ticket and retaining an exact copy which is subject to inspection by the department. Tickets must contain any information the department determines to be reasonable for the efficient administration of this chapter. The department shall provide manufacturers information as to the information needed on a ticket and the placement of information on the ticket.

Section 12-22-1160.     All machines, location controllers, and the central computer monitoring system selected by the department must perform correctly before, during, and after the year 2000, with no error in functioning or data caused by failure to correctly interpret and utilize data contained within date fields within the system.

Section 12-22-1170.     The department, in its discretion, may approve alternative technical provisions provided that the technology maintains the security, account information, and integrity of the machines, location controllers, and central computer monitoring system.

Section 12-22-1180.     The central computer monitoring system shall delete prior to the completion of play and the printing of validated tickets all credits or their equivalents with a value of greater than one hundred twenty-five dollars.

Article 13

Background Investigations

Section 12-22-1310.         (A)     The division shall conduct background investigations on those persons associated with the operation of machines as provided in this chapter. A background investigation is defined as a security, criminal, and credit investigation of a person associated with the operation of machines or a principal connected to that business. The division shall conduct the investigations and inspections it considers necessary to fulfill its responsibilities under this chapter.

(B)     The division shall:

(1)     promptly and in a reasonable order, investigate all applications, enforce the provisions of this chapter, and provide to the department all information to allow the department to issue or deny the license;

(2)     provide the department with all information necessary for all actions under this chapter and for all proceedings involving enforcement of the provisions of this chapter or any regulations;

(3)     investigate violations under this chapter and any regulations;

(4)     conduct continuing review of machine operations through on-site observation and other reasonable means, to assure compliance with this chapter;

(5)     receive and take appropriate action on any referral from any law enforcement agency or the department relating to any evidence of a violation of this chapter and regulations;

(6)     exchange fingerprint data with, and receive criminal history information from, the Federal Bureau of Investigation or other law enforcement agencies;

(7)     have the authority to request and receive information, materials, and any other data from any person; and

(8)     report to the department any recommendations that promote more efficient operations of the division or the department.

(C)     In connection with the responsibilities under this chapter, the division or the department and their employees and agents may:

(1)     inspect and examine all establishments where machines are operated;

(2)     inspect and examine where machines or equipment are manufactured, sold, distributed, or serviced;

(3)     inspect all equipment and supplies in, about, upon, or around the establishment;

(4)     seize and remove from such establishments and impound any machines, equipment, or supplies for the purposes of examination and inspection;

(5)     inspect, examine, and audit all records pertaining to an applicant's operation;

(6)     seize, impound or assume physical control of any book, record, ledger, machine, and boxes and their contents.

(D)     The division may obtain warrants for the inspection and seizure of any property possessed, controlled, or otherwise held by any applicant or principal.

(E)     The division may inspect any applicant or licensee for compliance with the provisions of this chapter and regulations and to investigate any violations.

Section 12-22-1320.         (A)     Investigations must be conducted on manufacturers, distributors, establishment owners, machine owners, machine operators, service technicians, and their principals.

(B)     As a condition of receiving a license under the provisions of this chapter, each applicant and principal shall agree that the division and the department have unrestricted access and the right to inspect any premises under the control of the applicant or principal in which occurs any activity related to the provisions of this chapter.

(C)     Each applicant and principal, by signature of his application, grants the division the authority to access state, national, and international information for validation of information contained on the application. Any information found at the state, national, or international level which would prevent the applicant from obtaining any license required under this chapter must be used to do so.

(D)     Each applicant and principal shall cooperate with the division and the department in the performance of their duties.

(E)     Each applicant with submission of an application shall submit a valid fingerprint card for every principal or others affiliated with the operation of the licensed business.

Section 12-22-1340.     (A)     The department shall deny a license if a background investigation of any applicant or principal of an applicant reveals any of the following:

(1)     a conviction within fifteen years before the date of the application in any jurisdiction for any of the following offenses:

(a)     any offense punishable by imprisonment for two or more years;

(b)     any gambling offense;

(c)     theft or any crime involving false statements or declarations.

(2)     a determination of liability for, or an agreement that he was liable for, a civil judgment based in whole or in part upon conduct described in item (1) of this subsection;

(3)     omission of any material facts to the division or the department during initial or subsequent background investigations or a misstatement, or untrue statements, of material facts with respect to such investigation;

(4)     association with persons or businesses of known criminal background, or persons of disreputable character, that may adversely affect the general credibility, security, integrity, honesty, fairness, or reputation of the State or to the effective regulation of video poker;

(5)     failure to cooperate with any legislative investigative committees or other officially constituted body acting on behalf of the United States or any state, county, or municipality which seeks to investigate crimes related to gambling, corruption of public officials, or any organized criminal activities;

(6)     that the applicant owes any federal or state delinquent taxes, penalties, or interest.

(B)     The department or division may require any person to appear and testify before the department's or division's agents with regard to any manner within their jurisdiction. This testimony must be under oath and may embrace any matters which the department or the division considers relevant to the discharge of their official duties. Any person required to appear and testify has the right to be represented by counsel. Any testimony taken may be used by the department as evidence in any proceeding or matter then before the division or the department. Failure to appear and testify, unless excused, constitutes grounds for termination of application and may constitute revocation of current licenses.

Section 12-22-1350.     (A)     Each applicant shall bear all risks of unintentional adverse public notice, embarrassment, criticism, damages, or financial loss which may result from any disclosure or publication of any material or information obtained by the department or division pursuant to action on an application.

(B)     Distributors, principals, machine owners, machine operators, and technicians, and any other persons the division or the department considers necessary have an affirmative duty to maintain on file with the department and the division current and correct disclosure of all principals and all material facts required for licensure.

Section 12-22-1360.         (A)     The applicant for a license shall provide detailed information regarding:

(1)     the ownership and management, including information on all principals;

(2)     a detailed history and explanation of gambling activities and licenses in other jurisdictions of the applicant and all principals;

(3)     federal registration with respect to gambling devices; and

(4)     any other information considered necessary by the department for the proper administration and enforcement of this chapter.

(B)     The department and the division are authorized to develop applications and other forms.

(C)     The forms must require the applicant to disclose any present or previous experience or involvement with machines as a manufacturer, distributor, machine owner, machine operator, technicians, or employees. Present or previous experience or involvement includes the control of gambling devices as a machine owner or machine operator; employment with the machine owner or machine operator gambling devices; employment in establishments where gambling is offered to the public; and conviction of violation of federal, state, or local gaming laws in any jurisdiction.

(D)     The applicant shall submit proof with the application that he does not owe any federal or state delinquent taxes, penalties, or interest.

(E)     As a condition of receiving a license under the provisions of this chapter, each licensee shall agree that the division, the department, and their agents and employees, shall have unrestricted access and the right to inspect any premises under the control of the licensee in which any activity relating to the provisions of this chapter is conducted.

Section 12-22-1370.         (A)     The applicant shall provide the local governing authority information related to the application for any license issued under this chapter.

(B)     Each applicant shall immediately make available for inspection, by any department or division employee, all records and the establishments where machines are placed or operated, or where machines, devices, or equipment are manufactured, sold, serviced, or distributed.

Section 12-22-1380.         (A)     The applicant shall file a duplicate application with the department. The department shall forward one of the applications to the division. No time limit is imposed on the division for completion of its investigation. The division shall return the background investigation to the department.

(B)     The department shall determine whether the applicant owes any delinquent taxes, fines, penalties, or interest.

(C)     The department may not issue any license until the background investigations are concluded. The department shall make affirmative determination that the applicant is qualified and the applicable license or associated fees have been paid before issuing any license.

(D)     The department or division shall notify the applicant by mail if an application is incomplete. The notification must be sent to the address on the application. The notification must state the deficiencies in the application. If after the second notice of an incomplete application the applicant has not responded, the department shall consider the application withdrawn.

Article 15
Penalties

Section 12-22-1510.     (A)     The department may revoke licenses required under this chapter held by any person who fails to comply with any provision of this chapter or any provision of a regulation pertaining to this chapter. In lieu of revocation of licenses, the department may suspend licenses. In addition, the department may impose a monetary penalty of not more than five thousand dollars for each failure to comply with a provision of this chapter or any provision of a regulation pertaining to this chapter. Each violation and each day in violation of a provision of this chapter or any provision of a regulation pertaining to this chapter constitutes a separate offense.

(B)     With respect to any failure to comply with any provisions of this chapter occurring at a licensed establishment, the machine operator and the machine owner are both liable for any penalty and are both subject to revocation and suspensions as provided in this section.

Section 12-22-1520.     (A)     A person is guilty of a felony and, upon conviction, the person must be fined not more than twenty-five thousand dollars or imprisoned not more than five years, or both, if:

(1)     the person wilfully tampers with a machine, location controller, or associated equipment with intent to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     the person wilfully excludes, or takes any action in an attempt to exclude, anything or its value from the deposit, counting, collection, or computation of revenues, free games, or credits from machines;

(3)     the person wilfully manipulates the outcome, payoff, or operation of a machine;

(4)     the person wilfully launders or knowingly allows another to launder money through one or more machines;

(5)     the person knowingly possesses, owns, operates, or allows the operation of, a contraband machine, or contraband device, at any place within this State;

(6)     on or after September 1, 1999, or the ninetieth day following the effective date of this chapter, whichever is later, the person operates, or allows the operation of, machines that are not connected to the central computer monitoring system in accordance with this chapter;

(7)     the person intentionally skims or excludes, or takes any action, in an attempt to exclude anything or its value from the deposit, counting, collection, or computation of revenues from machines;

(8)     the person operates an establishment in this State for the playing of machines without having a license;

(9)     the person conducts business in this State as a machine or location controller manufacturer, a machine owner, or a distributor without having a license;

(10)     the person operates machines without having a machine license; or

(11)     the person managing or otherwise having the charge or care of a licensed establishment, or the owner of a video game machine, wilfully violates items (1), (2), (3), (4), (5), (6), (7), (8), (9), or (11) of Section 12-22-840(A), each being a separate offense under this section.

Section 12-22-1525.     Conspiring to subvert the provisions of this chapter is a conspiracy as defined and punished in Section 16-17-410.

Section 12-22-1530.     (A)     The following activities are criminal violations of this chapter:

(1)     refusing or otherwise preventing the inspection or examination by the department, the division, or any law enforcement officer, of any establishment, and any premises used for the manufacture, distribution, or storage of machines within this State;

(2)     refusing or otherwise preventing the examination by the department or division of revenue, payouts, or net machine income, records or equipment of any licensed or unlicensed machine owner, machine operator, manufacturer, distributor, or establishment.

(B)     A violator is guilty of a misdemeanor and, upon conviction, must be punished by a fine of not more than five hundred dollars or imprisonment of not more than thirty days, or both. Each failure to have a license required under this chapter constitutes a separate offense. Offenses under this item are triable in magistrate's court.

Section 12-22-1540.     (A)     The following activities are additional civil violations of this chapter subject to the penalties in Section 12-22-1510:

(1)     tampering with a machine, location controller, or any other part, device, or system to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     excluding, or take any action in an attempt to exclude, anything or its value from the deposit, counting, collection, or computation of revenues, free games, or credits from machines;

(3)     manipulating the outcome, payoff, or operation of a machine;

(4)     possessing, owning, operating, or allowing the operation of, a contraband machine or device at any place within this State;

(5)     operating, or allowing the operation of, machines that are not connected to the central computer monitoring system in accordance with this chapter; or

(6)     conspiring to subvert the provisions of this chapter.

Section 12-22-1550.     In addition to all other civil and criminal penalties, any person operating a contraband machine must be assessed a civil penalty in an amount equal to the statewide average of cash placed into a machine for the longer of its time of operation or twelve months.

Section 12-22-1560.     (A)     The department shall disable machines via the central computer monitoring system for the following reasons:

(1)     The establishment at which the machines are located has had its establishment license or retail sales tax license revoked or suspended.

(2)     The license assigned to the machine has been revoked or suspended.

(3)     The machine owner has had his machine owner's license revoked or suspended.

(4)     The machine license has expired and no new license has been issued by the expiration date.

(5)     The central computer monitoring system has registered a violation of system integrity by a machine. A machine disabled for this reason must be enabled again as soon as the problem has been resolved.

(6)     The central computer monitoring system has disabled a machine, upon request, in order for it to be moved or relocated.

(B)     A machine disabled for revocation of licenses as set forth in item (1), (2), or (3) of subsection (A) of this section must not operate in this State for a period of five years from the date of the revocation. The five-year prohibition also applies to any part of the machine. Any machine, to include its parts, which is not allowed to operate in this State under the provisions of this section, must be stored by the owner in a facility approved by the department or division.

Section 12-22-1570.     (A)     Any person may bring a civil action for any violation of any of the provisions of this chapter. The case must be brought in the name of the State, and may be filed in any state court of competent jurisdiction. The person bringing the case may seek any fine or penalty that the State may seek.

(B)     A copy of the complaint must be served on the Attorney General and the director, by the person bringing the action, either of whom may elect to join any action brought by the person.

(C)     If the State joins with an action brought by a person under this section, the State, in addition to other fines or penalties, may request the suspension or revocation of licenses. The person shall receive at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to litigating the action. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorney's fees and costs, to be paid by the defendant.

(D)     If the State does not join with the action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and revocation. The amount must not be less than twenty-five percent and must not be more than forty percent of the proceeds of the action or settlement, and must be paid out of the proceeds. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorney's fees and costs, to be paid by the defendant.

(E)     The State is not liable for expenses which a person incurs in bringing an action under this section.

(F)     No settlement may be entered without approval by the department.

(G)     Any determination in an action under this section that a licensee has violated a provision of this chapter is grounds for revocation of those licenses and the department may bring a subsequent action for suspension or revocation.

Section 12-22-1580.     The penalties authorized by this chapter are effective immediately upon imposition and may not be stayed by any administrative or judicial action.

Section 12-22-1590.     In any action under this chapter, no person may raise as a defense that he acted on the advice of his certified public accountant, unless he proves that he supplied that accountant with a copy of this chapter and all relevant regulations.

Article 17
Arcade Game Machines and Other Devices

Section 12-22-1710.     Cash payouts are not permitted with respect to the games played on machines and other devices licensed under this article. The provisions of the other articles do not apply to the machines and devices licensed under this article.

Section 12-22-1720.     Every person required to obtain a license for any machine or device described in Section 12-22-1730 shall maintain records showing the manufacturer's serial number, model or type of machine, and the location of the machine. The taxpayer shall maintain information relating to the payment of any monies or compensation made to any persons as part of a lease or contractual agreement to operate the machine on the premises of the person. Information required by this section must be available on demand for inspection by a representative of the department.

Section 12-22-1730.     (A)     Every person who owns and operates, or places for use in another person's place or premises for a share of any revenue, one or more of the following machines or devices shall apply for and procure from the department a license effective for two years for the privilege of making use of the machine or device in this State. The person shall pay for the license a nonrefundable fee of fifty dollars for each machine or device in items (1) and (4), two hundred dollars for each machine or device in item (2), and two thousand dollars for each machine or device in item (3):

(1)     a machine for the playing of music or kiddy rides operated by a slot or mechanical amusement devices and juke boxes in which is deposited a coin or thing of value. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(2)     a machine for the playing of amusements or video games, without free play feature, or machines of the crane type operated by a slot in which is deposited a coin or thing of value and a machine for the playing of games or amusements, which has a free play feature, operated by a slot in which is deposited a coin or thing of value, and the machine is of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(3)     a machine of the nonpayout type, in-line pin game operated by a slot in which is deposited a coin or thing of value except machines of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed;

(4)     billiard or pocket billiard table, foosball table, bowling lane table, or skeeball table operated for profit.

(B)     The license must be purchased in advance on or before the first day of June every two years or before making a machine available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(C)     Machines which have multiplayer stations must have a separate license for each such station.

(D)     As an alternative to the license required in subsection (A), a person may be granted a nonrefundable seasonal license beginning April first and expiring September thirtieth, following the date of issue, which must not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(E)     If the license required in subsection (A) is purchased after June thirtieth, the license fee must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(F)     Upon application being made for a license to operate any machine, the department may presume that the operation of the machine is lawful, but the issuance by the department of a license does not make lawful the operation of any machine which is unlawful under the laws of this State. When a license has been issued, the sum paid for the license must not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(G)     Failure to obtain a license as required by this article makes the person liable for the penalties imposed in this article.

(H)     The department, upon notification by the licensee purchasing machines from another licensee, shall allow for the transfer of the license issued pursuant to subsection (A) upon sale of the machine and license to the new owner. Notification for the transfer of the machine must be made to the department at least five days before transfer of the machine. This notification of sale must include a notarized statement of both the purchaser and seller identifying the machine by serial identification number and machine license number.

(I)     The license issued pursuant to this section must be displayed conspicuously on the front of the machine on a permanent, nontransferable part of the machine before its operation commences. The license must always be a current and valid license.

Section 12-22-1740.     (A)     In addition to all other licenses required by this article, a person required to obtain a license for any machine or device described in Section 12-22-1730 shall obtain an owner's license biennially as follows:

(1)     fifty dollars for devices in Section 12-22-1730(A)(1) and (A)(4);

(2)     two hundred dollars for devices in Sections 12-22-1730(A)(2) and 12-22-1730(A)(3).

(B)     Only one license is required regardless of the number or type of devices owned or operated, and the cost of that license is the highest fee enumerated in this section for a device owned or operated.

(C)     The license may be purchased in advance on or before the first day of June every two years or before making a machine or device available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(D)     Failure to pay taxes to the State is grounds for the cancellation of the license provided in this section.

(E)     The provisions of this section do not apply to any person with a current and valid machine owner's license issued under Article 3 of this chapter.

Section 12-22-1750.     In lieu of the licenses required under Sections 12-22-1730 and 12-22-1740, the department may issue a temporary license to persons making application to operate machines or devices required to be licensed under this article at a recognized county or state fair. The temporary license fee is the total amount of license fees required on all machines or devices for which application is made, based upon one-twenty-fourth of the biennial license required under Sections 12-22-1730 and 12-22-1740. The license is valid for the specific location designated on the license and the number of machines for which application was made and expires when the designated fair officially ends.

Section 12-22-1760.     Machines or devices licensed pursuant to Section 12-22-1730(A)(1), (A)(2), and (A)(4) are not subject to confiscation for a violation of Section 16-19-30, 16-19-40, 16-19-50, or 16-19-130.

Section 12-22-1770.     A person who fails, neglects, or refuses to comply with the provisions of this article, or who fails to attach the required license to any machine or device as required under this article, is subject to a penalty of five hundred dollars for each failure, and the penalty may be assessed and collected by the department. This penalty may be deposited to the credit of the general fund of the State.

Section 12-22-1780.     In addition to the penalties provided in Section 12-22-1770, any machine or device not having the required license attached, or which is improperly licensed, may be seized and confiscated by the division, its agents or employees, and sold at public auction after thirty days' advertisement. Upon payment of the license required, the department may return the property seized and confiscated.

Section 12-22-1790.     Municipalities and counties may levy a license tax on the business tax taxed under this article but in no case may the tax exceed twelve dollars and fifty cents.

Section 12-22-1800.     A person required to obtain a license for any machine or device described in Section 12-22-1730 must have attached to the machine or device information identifying the owner or operator of the machine or device. The identification must be placed on a part of the machine or device which is visible for inspection purposes. This identification is a condition precedent before the machine or device may be operated on location. Failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of this chapter and of Chapter 54 as applicable.

Section 12-22-1810.     If an unlicensed machine is seized by law enforcement as a prohibited machine under the laws of this State, the department shall assess a penalty equal to the amount of the license fee."
SECTION     2.         Section 12-60-3370 of the 1976 Code, as added by Act 60 of 1995, is amended to read:

"Section 12-60-3370.     (A)     Except as provided below, a taxpayer shall pay, or post a bond for, all taxes, including interest, penalties, and other amounts determined to be due by the Administrative Law Judge or DMV hearing officer before appealing the decision to the circuit court. For property tax cases covered by Section 12-60-2140 or 12-60-2550, the taxpayer need only pay the amount assessed under the appropriate section.

(B)     If the revocation or suspension of any license required under Chapter 22 of this title for the disabling of any video game machines via the central computer monitoring system is upheld by a decision of the Administrative Law Judge Division, then the person appealing the decision to the circuit court shall post a cash or surety bond with the department equal to three times the net machine income of the last two calendar quarters for the video game machines in question or in operation at the licensed establishment. As an alternative, the person appealing the decision may pay twice a month, to the department as a cash bond, the net machine income from the video game machines in question or in operation at the licensed establishment. A cash bond must be held by the State Treasurer, without interest, as surety conditioned upon prompt payment of any amount determined by the court to be due.

(C)     If the revocation or suspension of licenses or the disabling of machines is upheld upon appeal, the person subject to the revocation, suspension, or disabling is liable for and shall pay to the department an amount equal to the net machine income from the date of the decision by the Administrative Law Judge Division to the date of the final court order."
SECTION     3.         Section 61-4-580(3) of the 1976 Code, as added by Act 415 of 1996, is amended to read:

"(3)     permit gambling or games of chance not authorized by Chapter 22 of Title 12;"
SECTION     4.         Chapter 19, Title 16 of the 1976 Code is amended by adding:

"Section 16-19-65.     (A)     It is unlawful for any person to keep on his premises or operate or permit to be kept on his premises or operated within this State any vending or slot machine, punch board, pull board, or other device pertaining to games or chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, and video games with free play feature which meet the technical requirements provided for in Article 9, Chapter 22 of Title 12, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance.

(B)     Any person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned for a period of not more than one year, or both.

(C)     Any vending or slot machine, punch board, or other device pertaining to games of chance prohibited by this section must be seized by any law enforcement officer and at once taken before any magistrate of the county in which the machine, board, or device is seized who shall immediately examine it, and if satisfied that it is in violation of this section or any other law of this State, shall direct that it be immediately destroyed.

Section 16-19-66.     (A)     It is unlawful for a person to operate, cause to operate, or attempt to operate an automatic vending machine, slot machine, coin-box telephone, or other receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service by means of a slug or any false, counterfeited, mutilated, sweated, or foreign coin, or by any means not lawfully authorized by the owner, lessee, or licensee of the receptacle.

(B)     It is unlawful for a person to take, obtain, or receive from or in connection with any receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service any goods, wares, merchandise, gas, electric current, or other article of value or the use or enjoyment of any telephone or telegraph facilities, or service, or of any musical instrument, phonograph, or other property, without depositing in and surrendering to the receptacle lawful coin of the United States of America in the amount required by the owner, lessee, or licensee of the receptacle.

(C)     A person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined in the discretion of the court or imprisoned not more than two years.

Section 16-19-67.     A person who, with intent to cheat or defraud the owner, lessee, licensee, or other person entitled to the content of an automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service or who, knowing that the same is intended for unlawful use, manufactures for sale, or sells or gives away any slug, device, or substance intended or calculated to be placed or deposited in the automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance is guilty of a felony and, upon conviction, must be fined in the discretion of the court or imprisoned not more than five years."
SECTION     5.         In accordance with Article 9, Chapter 22, Title 12 of the 1976 Code, the Department of Revenue may set the standards for video game machines, modems, location controllers, software, hardware, the central computer monitoring system, and associated equipment. Failure to comply with these standards subjects the violator to the civil and criminal penalties, including fines, suspensions, and revocations established in Chapter 22 of that title including the provisions of Section 12-22-1580 of the 1976 Code relating to the time such penalties apply without regard to stays. Until the department adopts such standards, the standards provided in Parts 1 through 4 of this section must apply and must be met before issuance of a license. The definitions provided in Section 12-22-10 of the 1976 Code apply for purposes of this section.

Part I
Technical Standards for Machines and Location Controllers

(A)     Each machine must be able to connect to a monitoring system via a serial communications port to a location controller meeting the requirements set forth by the department and using a communications protocol provided by the department or its designated agent.

(B)     Each machine must be capable of monitoring and storing the following items:

(1)     The cumulative total of the following for each twenty-four hour period, from 12:00 a.m. to 12:00 a.m., which may be recorded as a "snapshot" of the specified counters at the beginning and ending of each twenty-four hour period:

(a)     cash in, defined as money in dollars and cents;

(b)     credits purchased;

(c)     credits earned or won;

(d)     credits played;

(e)     credits paid;

(f)     cash paid.

(2)     The following security events and the time and date of such events:

(a)     game door open;

(b)     coin-bill/drop door open;

(c)     power off/on;

(d)     off line/on line to the location controller;

(e)     game control board access (logic area).

(C)     Each machine must contain Erasable Programmable Read Only Memory (EPROM) containing all game logic, and contain RAM (Random Access Memory) containing all counters and meters in electronic format, or such other technology as may later be designated by the department.

(D)     Each machine is not allowed to operate if it is not connected in on-line mode to a location controller meeting the requirements set forth by the department.

(E)     A machine must collect the data required in Section 12-22-1040(C) of the 1976 Code and communicate this information to a location controller for storage until requested by the central computer monitoring system. Each security event required in Section 12-22-1040(C) of the 1976 Code may reflect a time and date stamp and the VGMID of the machine.

(F)     A machine automatically must disable itself if communication is lost from the location controller. A machine must store this event. A machine must report a disabling event to the location controller when communication is restored.

(G)     A machine must be capable of being disabled by the central computer monitoring system or the location controller.

(H)     A machine must be capable of being enabled by the central computer monitoring system or by location controller once it has been enabled by the central computer monitoring system.

(I)     A machine must be protected from unauthorized interference or tampering by any person or external device so as to not corrupt or suspend the communication signals or transmitted data required for the proper functioning of the machine and the associated location controller.

(J)     Each machine must have a surge protector installed on the line that feeds power to the machine and must meet the requirements of the department.

Part II
Hardware Specifications

(A)     A machine must have electrical and mechanical parts and design principles that do not subject a player to physical hazards.

(B)     A machine must have a battery backup or an equivalent for the electronic meters and be capable of maintaining accurate information required by law and regulation for one hundred eighty days after power is discontinued from the machine. The backup device must be kept within the locked logic board compartment of the machine.

(C)     A machine must have an on/off switch that controls the electrical current used in the operation of the machine and must be in an accessible place within the interior of the machine.

(D)     The operation of each machine must not be adversely affected by static discharge or other electromagnetic interference.

(E)     Each machine must have one coin acceptor, either electronic or mechanical, one bill acceptor, either electronic or mechanical, or one of each. Approval letters and test reports of the coin and bill acceptors from other state or federal jurisdictions must be submitted to the department. All coin and bill acceptors are subject to approval by the department.

(F)     The internal space of a machine must not be readily accessible when the front door is closed or sealed.

(G)     Logic boards and software EPROMs and RAM must be in a separate, locked and sealed area within the machine and must only be accessible only in accordance with guidelines established by the department. The area must be sealed by, and accessible to, the division.

(H)     The cash and coin compartment must be contained in a locked area within or attached to the machine. This compartment must be accessible by the machine owner or machine operator.

(I)     No switches of any kind, to include but not limited to hardware and software switches, must be installed that alter the pay tables or payout percentages in the operation of a game below the minimum payback of ninety percent, within standard rounding, in which the theoretical payout percentage is determined using standard methods of probability theory. Switches or other devices may be installed to control graphic routines, speed of play, and sound.

(J)     A single printing mechanism must be capable of printing an original ticket and retaining an exact, legible copy within the machine. The ticket must record the number of credits, the value of the credit, and a validation number, when credits accrued are printed on a ticket for validation.

(K)     The printed ticket is the only allowable method for issuing payouts. Hoppers are prohibited.

(L)     A clearly visible identification plate must appear on the front exterior of the machine that contains the manufacturer, the manufacturer's serial number, the model number, the VGMID, and the name of the machine owner. This plate must not be removed. This identification is a condition precedent before the machines may be operated on location. Failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of Chapter 22 of Title 12 of the 1976 Code including the provision of Section 12-22-1580 relating to the time such penalties apply without regard to stays.

(M)     Equipment must be installed in a manner that enables a machine to communicate with the department's central computer monitoring system via the location controller using a communications protocol provided to each manufacturer of machines and location controllers provided by the department or its designated agent.

Part III

Software Requirements

(A)     Each machine must maintain electronic accounting meters at all times, regardless of whether the machine is being supplied with power. Each meter must be capable of maintaining totals no less than eight digits in length for the information required by the law and by regulation of the department.

(B)     Electronic meters must record the cumulative total of cash in, credits purchased, credits paid, credits earned/won, cash paid, and credits played, per each twenty-four hour period, from 12:00 a.m. to 12:00 a.m. This information may be recorded as a snapshot of the specified counters at the beginning and ending of each twenty-four hour period.

(C)     Electronic meters also must record security events, with the time and dates, to include game door open, coin-bill/drop door open, power off/on, off line/on line to the location controller, and game control board access.

(D)     No machine may have a mechanism that an error will cause the electronic accounting meters to automatically clear. Clearing of the electronic accounting meters may be completed only after notification and approval by the department and supervised by the division.

(E)     Each machine must have a random number generator that determines the occurrence of a specific card or a specific number to be displayed on the video screen. A selection process is considered random if it meets all the following requirements:

(1)     each card position or each number position satisfies the ninety-nine percent confidence limit using the standard chi-squared analysis;

(2)     each card or number position does not produce a significant statistic with regard to producing patterns of occurrences. Each card or number position is considered random if it meets the ninety-nine percent confidence level with regard to the runs test or any similar pattern testing statistic;

(3)     each card or number position is independently chosen without regard to any other card or number drawn within that game play. This test is the "correlation test". Each pair of card or number positions is considered random if they meet the ninety-nine percent confidence level using standard correlation analysis; and

(4)     each card or number position meets the serial correlation test, meaning that it is independently chosen without reference to the same card or number position in the previous game. Each card or number position is considered random if it meets the ninety-nine percent confidence level using standard serial correlation analysis.

(F)     All costs associated with the machines, to include upgrades or retrofits, in order for such machines to meet the requirements of the laws and regulations of this State are the responsibility of the machine owner.

Part IV
Multiplayer Unit Requirements

(A)     For purposes of this part, multiplayer units are divided into two general groups:

(1)     units that share some common components (Group I); and

(2)     units that share most components (Group II).

(B)     Group I and Group II units are based on the common principal that they both try to accurately mimic live table play. Both groups may consist of a number of player stations, generally either three or five player units per machine, and some type of dealer display. Both groups of games allow the players to wager on the next hand to be played and the object of the game, and the payout table is based on the player beating the dealer's hand. The player stations and dealer draw from a common deck of cards. Neither of these groups contains any program routines that allow the player or device to gain an unfair advantage or to cheat the device or player.

(C)     Group I and Group II units share common elements. The following define the difference in the two groups of multiplayer units:

(1)     Group I Units: Group I units have individual logic boards containing player station EPROMs and RAM containing all meter and event information for the individual station, as well as master logic boards in the dealer station containing master meters and the random number generation software used commonly by all of the player stations.

(2)     Group II Units: Group II units often do not have any game or logic boards in the individual player stations. The program and game memory are stored in the dealer's station. The player's stations are generally "Dumb Terminals" containing player input buttons and coin or bill acceptors. This group of terminals sends and receives all information directly from the dealer's station. Generally, these stations do not have separate power switches. All electrical leads are fed from the dealer's station to the individual player's station and all game display information is shown on the common video display. The dealer's station controls the operation of the game including the random number generator, all meter information, all display functions, all communications with the central system, all event detection and storage logic, and all processor units and EPROMs used for the game. Individual terminals are not in "direct" communication with the central system, but rather use the dealer's station as a "head of string" device for each of the individual stations. The dealer's station contains all individual station meters as well as master meters for the entire group.

(D)     A multiplayer unit must be handled in one of two ways, depending on whether it is a Group I machine or a Group II machine. Implementation of either method does not require modifications of the communications protocol or operational changes for either the department or the individual locations. Both methods may be handled entirely in the program code of the individual machines.

(1)     Group I unit stations as described above must be wired as if they are separate machines. Each player station must have an optical connection and each station is responsible for its own communications. All meter and event data must be stored on the individual stations and be transmitted to the system on demand. EPROM signature calculations must include the dealer's station code, but each station must perform individual calculations and transmit the results independently of each other. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(2)     Group II games must be set up with a dedicated phone line and location controller in the same manner as every other licensed establishment in the State. The fiber optics must leave the location controller and go directly to the dealer's station and then back to the location controller. All communications must be sent from the central system and the site controller exactly as detailed in the communications protocol. The dealer's station is responsible for handling all of the communications for the player stations. If the system asked for meters for station number one, the dealer's station is responsible for collecting and sending that data to the central system. The central system must behave exactly as if there are five separate machines. EPROM signature calculations must be performed over the dealer's station program code and transmitted back five times just as if there are five machines all running the same game code. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(E)     The department may handle on an individual basis, any type of multiplayer units that does not fit in either category Group I or Group II. Other multiplayer units are required to meet all applicable programming, communications, and security rules and regulations.
SECTION     6.         Articles 19 and 20, Chapter 21, Title 12 of the 1976 Code are repealed.
SECTION     7.     (1)     This section may be cited as the "Gambling Cruise Prohibition Act". It is the intent of the General Assembly in enacting this section to reenforce long-standing prohibitions on gambling by reiterating that the gambling offenses provided under the Constitution and laws of this State extend to any United States or foreign documented vessel where voyages begin and end in the waters of this State, consistent with the standards specified in 15 U.S.C. 1175(b)(2)(A), commonly referred to as the Johnson Act Amendments of 1992.
(2)     Chapter 19 of Title 16 of the 1976 Code is amended by adding:

"Section 16-19-170.     (A)     It is unlawful for a person to:

(1)     violate any provision of this chapter or any other provision of the laws or Constitution of this State prohibiting gambling, however described, on a United States or foreign documented vessel that embarks from any point within the State, and disembarks at the same or another point within the State, during which time the person intentionally causes or knowingly permits gambling activity to be conducted, whether within or without the waters of the State;

(2)     manage, supervise, control, operate, or own any United States or foreign documented vessel that embarks from any point within the State, and disembarks at the same or another point within the State, during which time the person intentionally causes or knowingly permits gambling activity which would violate any provision of this chapter or any other provisions of the laws or Constitution of this State prohibiting gambling, however described;

(3)     repair a gambling device on a United States or foreign documented vessel described in item (1) or (2) of this subsection, regardless of the location of the United States or foreign documented vessel when the repairs are made.

(B)     A person who violates any provision of this section is guilty of a felony and, upon conviction, must be imprisoned for not more than five years or fined not more than twenty-five thousand dollars, or both. A violation under this section is a separate offense, and nothing in this section precludes prosecution for any other gambling offense."
(3)     If any provision of this section, including the provisions of Section 16-19-170 of the 1976 Code added by it, or the application of these provisions to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this section which can be given effect without the invalid provision or application, and to this end, the provisions of this section are severable.
SECTION     8.         The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION     9.         Except where otherwise provided, this act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend totals to conform.
Amend title to Conform.

Rep. SHEHEEN moved to table the amendment, which was agreed to.

The Senate amendments, as amended, were then agreed to and the Bill was ordered returned to the Senate.

Rep. F. SMITH moved that the House recede until 3:50 P.M., which was rejected by a division vote of 26 to 38.

HOUSE STANDS AT EASE

The House stood at ease subject to the call of the Chair.

THE HOUSE RESUMES

At 5:15 P.M. the House resumed, the SPEAKER in the Chair.

LEAVE OF ABSENCE

The SPEAKER granted Reps. MCMAHAND and RHOAD a leave of absence for the remainder of the day.

H. 3834 -- COMMITTEE OF CONFERENCE APPOINTED

The following was received from the Senate.

MESSAGE FROM THE SENATE

Columbia, S.C., June 30, 1999
Mr. Speaker and Members of the House:

The Senate respectfully informs your Honorable Body that it nonconcurs in the amendments proposed by the House to H. 3834:
H. 3834 (Word version) -- Rep. Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.
Very respectfully,
President

On motion of Rep. HASKINS, the House insisted upon its amendments.

Whereupon, the Chair appointed Reps. HASKINS, DELLENEY and QUINN to the Committee of Conference on the part of the House and a message was ordered sent to the Senate accordingly.

HOUSE STANDS AT EASE

On motion of Rep. SHEHEEN, the House stood at ease subject to the call of the Chair.

THE HOUSE RESUMES

At 6:40 P.M. the House resumed, the SPEAKER in the Chair.

MESSAGE FROM THE SENATE

The following was received.

Columbia, S.C., June 30, 1999
Mr. Speaker and Members of the House:

The Senate respectfully informs your Honorable Body that it has appointed Senators Moore, Hayes and Passailaigue to the Committee of Conference on the part of the Senate on H. 3834:
H. 3834 (Word version) -- Rep.Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.
Very respectfully,
President

Received as information.

HOUSE STANDS AT EASE

The House stood at ease subject to the call of the Chair.

THE HOUSE RESUMES

At 7:30 P.M. the House resumed, the SPEAKER in the Chair.

Rep. JENNINGS moved that the House resolve itself into a Committee of the Whole.

Rep. VAUGHN moved to table the motion.

Rep. JENNINGS demanded the yeas and nays, which were taken, resulting as follows:

Yeas 47; Nays 60

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Beck                   Campsen                Cato
Davenport              Delleney               Easterday
Fleming                Frye                   Gamble
Gilham                 Hamilton               Harrell
Harris                 Haskins                Hawkins
Kirsh                  Klauber                Koon
Lanford                Leach                  Littlejohn
Loftis                 Lucas                  McCraw
McGee                  Meacham                Phillips
Quinn                  Rice                   Riser
Robinson               Sharpe                 Sheheen
Simrill                Smith D.               Smith F.
Smith R.               Stille                 Taylor
Trotter                Vaughn                 Webb
Wilkins                Witherspoon

Total--47

Those who voted in the negative are:

Allen                  Askins                 Bailey
Bales                  Barfield               Battle
Bowers                 Breeland               Brown G.
Brown T.               Carnell                Chellis
Clyburn                Cobb-Hunter            Cooper
Cotty                  Dantzler               Edge
Emory                  Govan                  Harvin
Hayes                  Hines J.               Hinson
Hosey                  Howard                 Inabinett
Jennings               Keegan                 Kelley
Kennedy                Knotts                 Law
Lee                    Lloyd                  Lourie
Mack                   Martin                 McLeod M.
McLeod W.              Miller                 Moody-Lawrence
Neal                   Neal J.M.              Neilson
Ott                    Parks                  Pinckney
Rodgers                Rutherford             Sandifer
Scott                  Seithel                Smith J.
Stuart                 Whatley                Whipper
Wilder                 Wilkes                 Young-Brickell

Total--60

So, the House refused to table the motion.

Rep. FLEMING moved that the House recede until Wednesday, July 7.

Rep. COBB-HUNTER demanded the yeas and nays, which were taken, resulting as follows:

Yeas 43; Nays 66

Those who voted in the affirmative are:

Altman                 Barrett                Beck
Campsen                Cato                   Cooper
Davenport              Delleney               Easterday
Fleming                Frye                   Gilham
Hamilton               Harrell                Harris
Haskins                Hawkins                Klauber
Koon                   Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McCraw                 McGee
Phillips               Quinn                  Rice
Riser                  Robinson               Sharpe
Sheheen                Simrill                Smith D.
Smith F.               Smith R.               Stille
Trotter                Vaughn                 Wilkins
Witherspoon

Total--43

Those who voted in the negative are:

Allen                  Allison                Askins
Bailey                 Bales                  Barfield
Battle                 Bowers                 Breeland
Brown G.               Brown T.               Carnell
Chellis                Clyburn                Cobb-Hunter
Cotty                  Dantzler               Edge
Emory                  Gamble                 Gourdine
Govan                  Harvin                 Hayes
Hines J.               Hinson                 Hosey
Howard                 Inabinett              Jennings
Keegan                 Kelley                 Kennedy
Kirsh                  Knotts                 Lanford
Law                    Lee                    Lloyd
Lourie                 Mack                   McLeod M.
McLeod W.              Meacham                Miller
Moody-Lawrence         Neal                   Neal J.M.
Neilson                Ott                    Parks
Pinckney               Rodgers                Rutherford
Sandifer               Scott                  Seithel
Smith J.               Stuart                 Taylor
Webb                   Whatley                Whipper
Wilder                 Wilkes                 Young-Brickell

Total--66

So, the House refused to recede.

The question then recurred to the motion that the House resolve itself into the Committee of the Whole.

Rep. HASKINS moved that the House stand at ease subject to the call of the Chair.

Rep. ROBINSON demanded the yeas and nays, which were taken, resulting as follows:

Yeas 47; Nays 60

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Beck                   Campsen                Cato
Cooper                 Davenport              Delleney
Easterday              Fleming                Frye
Gamble                 Gilham                 Hamilton
Harrell                Harris                 Hawkins
Kirsh                  Klauber                Koon
Leach                  Limehouse              Littlejohn
Loftis                 Lucas                  Martin
McCraw                 McGee                  Meacham
Phillips               Quinn                  Rice
Riser                  Robinson               Sharpe
Sheheen                Simrill                Smith D.
Smith F.               Smith R.               Stille
Taylor                 Trotter                Vaughn
Wilkins                Witherspoon

Total--47

Those who voted in the negative are:

Allen                  Askins                 Bailey
Bales                  Barfield               Battle
Bowers                 Breeland               Brown G.
Brown J.               Brown T.               Carnell
Chellis                Clyburn                Cobb-Hunter
Cotty                  Dantzler               Edge
Emory                  Gourdine               Govan
Harvin                 Hayes                  Hines J.
Hinson                 Hosey                  Inabinett
Jennings               Keegan                 Kelley
Kennedy                Knotts                 Law
Lee                    Lloyd                  Lourie
Mack                   McLeod M.              McLeod W.
Miller                 Moody-Lawrence         Neal
Neal J.M.              Neilson                Ott
Parks                  Pinckney               Rodgers
Rutherford             Sandifer               Scott
Seithel                Smith J.               Stuart
Webb                   Whatley                Whipper
Wilder                 Wilkes                 Young-Brickell

Total--60

So, the House refused to stand at ease subject to the call of the Chair.

The question then recurred to the motion that the House resolve itself into the Committee of the Whole.

Rep. HAWKINS demanded the yeas and nays, which were taken, resulting as follows:

Yeas 62; Nays 47

Those who voted in the affirmative are:

Allen                  Askins                 Bailey
Bales                  Barfield               Battle
Bowers                 Breeland               Brown G.
Brown J.               Brown T.               Carnell
Chellis                Clyburn                Cobb-Hunter
Cooper                 Cotty                  Dantzler
Edge                   Emory                  Gamble
Gourdine               Govan                  Harvin
Hayes                  Hines J.               Hinson
Hosey                  Howard                 Inabinett
Jennings               Keegan                 Kelley
Kennedy                Knotts                 Law
Lee                    Lloyd                  Lourie
Mack                   McLeod M.              McLeod W.
Miller                 Moody-Lawrence         Neal J.M.
Neilson                Ott                    Parks
Pinckney               Rodgers                Rutherford
Sandifer               Scott                  Seithel
Smith J.               Stuart                 Webb
Whatley                Whipper                Wilder
Wilkes                 Young-Brickell

Total--62

Those who voted in the negative are:

Allison                Altman                 Barrett
Beck                   Campsen                Cato
Davenport              Delleney               Easterday
Fleming                Frye                   Gilham
Hamilton               Harrell                Harris
Haskins                Hawkins                Kirsh
Klauber                Koon                   Leach
Limehouse              Littlejohn             Loftis
Lucas                  Martin                 McCraw
McGee                  Meacham                Neal
Phillips               Quinn                  Rice
Riser                  Robinson               Sharpe
Sheheen                Simrill                Smith D.
Smith F.               Smith R.               Stille
Taylor                 Trotter                Vaughn
Wilkins                Witherspoon

Total--47

So, the motion to resolve itself into a Committee of the Whole was agreed to.

COMMITTEE OF THE WHOLE

The SPEAKER appointed Rep. CATO chairman of the committee.

THE COMMITTEE RISES

At 11:22 P.M., the committee arose.

SPEAKER IN CHAIR
PARLIAMENTARY INQUIRY

Rep. ALTMAN made a Parliamentary Inquiry as to whether the sense of the House vote taken in the Committee of the Whole was a mandate to the conference committee or merely an advisory vote.

SPEAKER WILKINS stated that any vote taken in the Committee of the Whole was merely advisory and not a mandate to the conferees.
Rep. HASKINS moved that the House resolve itself into a Committee of the Whole.

Rep. COTTY moved to table the motion.

Rep. HASKINS demanded the yeas and nays, which were taken, resulting as follows:

Yeas 59;Nays 51

Those who voted in the affirmative are:

Allen                  Askins                 Bailey
Bales                  Battle                 Bowers
Breeland               Brown G.               Brown H.
Brown J.               Brown T.               Carnell
Chellis                Clyburn                Cobb-Hunter
Cotty                  Dantzler               Edge
Emory                  Gourdine               Govan
Harvin                 Hayes                  Hines J.
Hinson                 Hosey                  Howard
Jennings               Keegan                 Kelley
Kennedy                Knotts                 Law
Lee                    Limehouse              Lloyd
Lourie                 Mack                   McLeod M.
Miller                 Moody-Lawrence         Neal J.M.
Neilson                Ott                    Parks
Pinckney               Rodgers                Rutherford
Scott                  Seithel                Smith J.
Stuart                 Taylor                 Webb
Whatley                Whipper                Wilder
Wilkes                 Young-Brickell

Total--59

Those who voted in the negative are:

Allison                Altman                 Barfield
Barrett                Beck                   Campsen
Cato                   Cooper                 Davenport
Delleney               Easterday              Fleming
Frye                   Gamble                 Gilham
Hamilton               Harrell                Harris
Haskins                Hawkins                Inabinett
Kirsh                  Klauber                Koon
Leach                  Littlejohn             Loftis
Lucas                  Martin                 McCraw
McGee                  McLeod W.              Meacham
Neal                   Phillips               Quinn
Rice                   Riser                  Robinson
Sandifer               Sharpe                 Sheheen
Simrill                Smith D.               Smith F.
Smith R.               Stille                 Trotter
Vaughn                 Wilkins                Witherspoon

Total--51

So, the motion to table was agreed to.

POINT OF ORDER

Rep. VAUGHN raised a Point of Order that in accordance with Section 768 of Mason's Manual the same members could not be appointed to more than one conference or free conference committee on the same subject.

SPEAKER WILKINS stated that the Point came too late and he, therefore, overruled the Point of Order.

STATEMENT BY REP. HASKINS

Rep. HASKINS, with unanimous consent, made a statement relative to the Conference Committee on H. 3834.

RESIGNATION

Mr. Speaker,

While I support the concept of the Free Conference Report presented on H. 3002, and requested approval of the House on a 2/3 vote, I cannot, in good faith, bring the same report before the House procedurally on a majority vote.

The House has instructed the conferees to take such action, which I cannot take.

Therefore, I hereby resign from the Conference Committee on H. 3834.

Reps. HASKINS and QUINN

RESIGNATION

Mr. Speaker Wilkins,

I cannot, in good conscience agree to support the position of the House per the vote taken in the Committee of the Whole. I cannot compromise my convictions and compromise the $125 per day, per location cap embodied in present law S.C. Code 12-21-2791. I must, therefore, resign as a conferee on the Conference Committee for H. 3834.

Rep. DELLENEY

Rep. HASKINS moved that, when the House adjourns, it adjourn to meet in Local Session Tuesday, July 6, and Thursday, July 8, and in Statewide Session on Tuesday, July 13.

POINT OF ORDER

Rep. CARNELL raised a Point of Order that the motion to adjourn with the stipulation of returning on a certain date was out of order.

SPEAKER WILKINS overruled the Point of Order.

Rep. SEITHEL demanded the yeas and nays, which were taken, resulting as follows:

Yeas 36; Nays 71

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Beck                   Campsen                Cato
Davenport              Easterday              Fleming
Frye                   Gilham                 Hamilton
Harrell                Haskins                Hawkins
Klauber                Koon                   Leach
Lee                    Limehouse              Littlejohn
Loftis                 Lucas                  McGee
Quinn                  Rice                   Riser
Robinson               Sharpe                 Simrill
Smith D.               Smith F.               Smith R.
Trotter                Vaughn                 Wilkins

Total--36

Those who voted in the negative are:

Allen                  Askins                 Bailey
Bales                  Barfield               Battle
Bowers                 Breeland               Brown H.
Brown T.               Carnell                Chellis
Clyburn                Cobb-Hunter            Cooper
Cotty                  Dantzler               Delleney
Edge                   Emory                  Gamble
Gourdine               Govan                  Harris
Harvin                 Hayes                  Hines J.
Hinson                 Hosey                  Howard
Inabinett              Jennings               Keegan
Kelley                 Kennedy                Kirsh
Knotts                 Law                    Lloyd
Lourie                 Mack                   Martin
McLeod M.              McLeod W.              Meacham
Miller                 Moody-Lawrence         Neal
Neal J.M.              Neilson                Ott
Parks                  Phillips               Pinckney
Rodgers                Rutherford             Sandifer
Scott                  Seithel                Sheheen
Smith J.               Stille                 Stuart
Taylor                 Webb                   Whatley
Whipper                Wilder                 Wilkes
Witherspoon            Young-Brickell

Total--71

So, the motion was rejected.

LEAVE OF ABSENCE

The SPEAKER granted Reps. D. SMITH and LITTLEJOHN a leave of absence for the remainder of the day.

HOUSE STANDS AT EASE

The House stood at ease subject to the call of the Chair.

THE HOUSE RESUMES

At 11:58 P.M. the House resumed, the SPEAKER in the Chair.

H. 3834 -- CONFERENCE COMMITTEE APPOINTEES

The SPEAKER announced that the new conferees to the Conference Committee on the following Bill are Reps. CARNELL, LAW and RICE:

H. 3834 (Word version) -- Rep. Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.

HOUSE STANDS AT EASE

The House stood at ease subject to the call of the Chair.

THE HOUSE RESUMES

At 1:40 A.M. the House resumed, the SPEAKER in the Chair.

H. 3834 -- CONFERENCE REPORT ADOPTED
CONFERENCE REPORT
H. 3834
The General Assembly, Columbia, South Carolina

The COMMITTEE OF CONFERENCE, to whom was referred:
H. 3834 (Word version) -- Rep. Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.

Beg leave to report that they have duly and carefully considered the same and recommend:

That the same do pass with the following amendments: (Reference is to Printer's Version 06/30/99--H.)

Amend the bill, as and if amended, by striking all after the enacting words and inserting therein the following:

/             PART     I
Prohibition on Payouts

SECTION     1.     Section 12-21-2710 of the 1976 Code, as amended by Act 155 of 1997, is further amended to read:

"Section 12-21-2710.     It is unlawful for any person to keep on his premises or operate or permit to be kept on his premises or operated within this State any vending or slot machine, or any video game machine with a free play feature operated by a slot in which is deposited a coin or thing of value, or other device operated by a slot in which is deposited a coin or thing of value for the play of poker, blackjack, keno, lotto, bingo, or craps, or any machine or device licensed pursuant to Section 12-21-2720 and used for gambling or any punch board, pull board, or other device pertaining to games of chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, and video games with free play feature which meet the technical requirements provided for in Section 12-21-2782 and Section 12-21-2783, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance.

Any person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned for a period of not more than one year, or both."

SECTION     2.     Section 12-21-2712 of the 1976 Code is amended to read:

"Section 12-21-2712.     Any vending or slot machine, punch board, or other device pertaining to games of chance prohibited by Section 12-21-2710 must be seized by any officer of the law law enforcement officer and at once taken before any magistrate of the county in which the machine, board, or device is seized who shall immediately examine it, and if he is satisfied that it is in violation of Section 12-21-2710 or any other law of this State, he shall direct that it be immediately destroyed."

SECTION     3.     A. Section 12-21-2720(A)(3) of the 1976 Code, as last amended by Section 148, Act 181 of 1993, is further amended to read:

"(3)     a machine of the nonpayout type, or in-line pin game, or video game with free play feature operated by a slot in which is deposited a coin or thing of value except machines of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed."

B.     Section 12-21-2720(C) of the 1976 Code, as last amended by Act 145 of 1995, is further amended to read:

"(C)     The owner or operator of any coin-operated device which is exempt from Section 16-19-60 and is subject to licensing under Section 12-21-2720(A)(3) and which has multi-player stations, shall purchase a separate license for each such station and any such multi-player station counts as a machine when determining the number of machines authorized for licensure under Section 12-21-2804(A)."

C.     Section 12-21-2720 of the 1976 Code, as last amended by Act 155 of 1997, is further amended by deleting subsections (E) and (F), which read:

"(E)     The department shall not issue a license for the operation of a video game with a free play feature which is located or intended to be located on a watercraft or vessel plying the territorial waters of this State.

(F)     Four hundred dollars of the four thousand dollar license fee imposed in subsection (A) may be retained by the department and expended in budgeted operations for the implementation and ongoing operation of the monitoring system required by law or in other programs and services as the director may determine necessary and appropriate."

SECTION     4.     Section 12-21-2726 of the 1976 Code, as last amended by Act 164 of 1993, is further amended to read:

"Section 12-21-2726.     Every person who maintains for use or permits the use of, on a place or premises occupied by him, a machine subject to the license imposed by this article by way of proof of licensing must have a current license displayed conspicuously on the front of the machine. Except for the provisions of Sections 12-21-2774 and 12-21-2776, each machine licensed pursuant to this section must be operated in a stand-alone fashion and may not be linked in any way to another coin-operated machine or device."

SECTION     5.     Section 16-19-40 of the 1976 Code is amended to read:

"Section 16-19-40.     If any person shall play at any tavern, inn, store for the retailing of spirituous liquors or in any house used as a place of gaming, barn, kitchen, stable or other outhouse, street, highway, open wood, race field or open place at (a) any game with cards or dice, (b) any gaming table, commonly called A, B, C, or E, O, or any gaming table known or distinguished by any other letters or by any figures, (c) any roley-poley table, (d) rouge et noir, (e) any faro bank or (f) any other table or bank of the same or the like kind under any denomination whatsoever or (g) any machine or device licensed pursuant to Section 12-21-2720 and used for gambling purposes, except the games of billiards, bowls, backgammon, chess, draughts, or whist when there is no betting on any such game of billiards, bowls, backgammon, chess, draughts, or whist or shall bet on the sides or hands of such as do game, upon being convicted thereof, before any magistrate, shall be imprisoned for a period of not over thirty days or shall suffer a fine of fined not over one hundred dollars, and every person so keeping such tavern, inn, retail store, public place, or house used as a place for gaming or such other house shall, upon being convicted thereof, upon indictment, be imprisoned for a period not exceeding twelve months and forfeit a sum not exceeding two thousand dollars, for each and every offense."

SECTION     6.     Section 12-54-40 of the 1976 Code, as last amended by Act 155 of 1997, is further amended by deleting subsection (M) which reads:

"(M)     A machine owner or distributor, as defined in Article 20, Chapter 21 of this title, who allows or causes a machine to be operated without a metering device, or who wilfully places a machine on location or who wilfully allows or causes a machine to be operated with a metering device that does not accurately record the information required under Article 20, Chapter 21 of this title is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years, without benefit of probation, parole, or suspension of sentence, and in addition may be fined not more than twenty-five thousand dollars."

SECTION     7.     Section 16-19-50 of the 1976 Code is amended to read:

"Section 16-19-50.     Any person who shall set up, keep, or use any (a) gaming table, commonly called A, B, C, or E, O, or any gaming table known or distinguished by any other letters or by any figures, (b) roley-poley table, (c) table to play at rouge et noir, (d) faro bank or (e) any other gaming table or bank of the like kind or of any other kind for the purpose of gaming, or (f) any machine or device licensed pursuant to Section 12-21-2720 and used for gambling purposes except the games of billiards, bowls, chess, draughts, and backgammon, upon being convicted thereof, upon indictment, shall forfeit a sum not exceeding five hundred dollars and not less than two hundred dollars."

SECTION     8.     Section 12-21-2703 and 16-19-60 and Article 20, Chapter 21 of Title 12, all of the 1976 Code, are repealed.

PART II
Referendum

SECTION     9.     (1) A statewide referendum must be conducted November 2, 1999, to ascertain whether or not video game machine payouts will continue to be allowed in this State. The State Election Commission shall place the exact question contained in item (2) of this subsection on the referendum ballot. The state election laws shall apply to the referendum, mutatis mutandis. The State Board of Canvassers shall publish the results of the referendum and certify them to the Secretary of State, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the Code Commissioner.
(2) The question put before the qualified electors in the referendum shall read:

"Shall cash payouts for credits earned on video game machines continue to be allowed after June 30, 2000?

Yes     []
No         []

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."

(3) The State Election Commission shall place the following explanation of the referendum question on the ballot:

"A majority 'yes' vote shall mean that cash payouts for credits earned on video game machines shall continue to be allowed, with an increase in the legal payout to $500 per payout and with additional taxes and regulation.

A majority 'no' vote shall mean that cash payouts for credits earned on video game machines shall not be allowed after June 30, 2000."

(4)     In addition to all license taxes and fees imposed by the State on video games with a free play feature pursuant to Section 12-21-2720(A)(3) of the 1976 Code imposing such licenses and fees, there is imposed a one-time surcharge license fee of fifty dollars for each such licensed machine due and payable to the Department of Revenue on or before September 1, 1999. Failure to remit the surcharge in a timely manner is deemed failure to pay the license tax imposed pursuant to Section 12-21-2720(A)(3). The revenues of this fee shall be used to defray the expenses of the statewide referendum required by this act.

PART III
Coin-Operated Machines Regulation, Taxation and Enforcement

SECTION     10.     Title 12 of the 1976 Code is amended by adding:

"CHAPTER 22
Coin-Operated Machines and Other Devices
Article 1
General Provisions

Section 12-22-10. As used in this chapter, unless the context clearly requires otherwise:

(1)     'Director' means the Director of the Department of Revenue.

(2)     'Chief' means the Chief of the South Carolina State Law Enforcement Division.

(3)     'Division' means the South Carolina State Law Enforcement Division.

(4)     'Associated equipment' means parts and components that affect win and loss or that communicate, display, or affect the number of credits won, lost, or played.

(5)     'Background investigation' means the investigation conducted in accordance with Article 13 of this chapter.

(6)     'Central computer monitoring system' or similar term means the computing system administered by the department for communicating with and retrieving information from machines, and activating and disabling machines.

(7)     'Contraband machine,' or 'contraband device,' means a machine, location controller or its modem, the computer chips of a machine or location controller, or any other part of the machine, location controller or modem not meeting the requirements of this chapter. A 'machine' that does not meet the requirements of this chapter is a 'contraband machine' regardless of whether the machine issues payout tickets redeemable for cash.

(8)     'Disable' or 'disabling' means the process of executing a command from the central computer monitoring system or the location controller which causes a machine to cease functioning.

(9)     'Distributor' means any person who sells, buys and sells, gives, loans, or is the lessee or the lessor of machines. A distributor may also:

(a)     service or repair machines in this State;

(b)     own machines which are not placed into operation in an establishment without obtaining a machine owner's license;

(c)     own machines which are placed into operation in an establishment only if a machine owner's license is obtained; and

(d)     operate machines which are placed into operation in an establishment only if a machine operator's license is obtained.

(10)     'Establishment' or 'location' means premises with machines.

(11)     'Gross machine income' means the amount of money that goes into the machine.

(12)     'Machine' means a nonpayout electronic machine with a free play feature that, upon insertion of cash or coin, is available to play or simulate the play of games utilizing a video display and microprocessors, in which the player may receive free games or credits that are redeemed for cash except as prohibited by this chapter. Each player station of a multi-player unit is a separate machine.

(13)     'Machine owner' means any person, other than a distributor, who owns one or more machines.

(14)     'Machine operator' means any person who owns, operates, or manages an establishment with one or more machines.

(15)     'Manufacturer' means any person that manufactures, assembles, or programs machines or controllers for sale or use in this State.

(16)     'Net machine income' means the amount of money that goes into the machine less payouts.

(17)     'Payback' means the theoretical percentage of return to a player.

(18)     'Payout' means the total amount a player is paid at the end of a play period, regardless of the amount the player has deposited in the machine.

(19)     'Person' means any individual, partnership, corporation, association, entity, or organization of any type.

(20) 'Play period' means the period of time from when money is put into the machine until payout.

(21)     'Player' means a person who participates in the playing of a machine.

(22)(a)     'Principal' means:

(i)         every person;

(ii)     an association;

(iii)     all partners of a partnership, limited partnership, or limited liability partnership;

(iv)     all members of a limited liability company, or if the company is a manager-managed company, all members and managers;

(v)     trust and its beneficiaries;

(vi)     corporation, its directors, officers, and stockholders with a ten percent or more direct or beneficial interest or any person or entity that receives more than ten percent of the net income; or

(vii)     an employee who has day-to-day operational management responsibilities for the business or entity; which has or will have a direct or indirect ownership interest in a machine or machines, a manufacturer, a machine owner, distributor, a machine operator or the establishment for which the applicant seeks a new or renewal license.

(b)     'Indirect ownership interest' includes, but is not limited to, a loan or extension of credit or forgiving of a loan of ten thousand dollars or more, made to or for the benefit of an applicant or licensee. 'Indirect ownership interest' does not include a loan or extension of credit made by a state or federally chartered financial institution or a restricted or supervised lender licensed under South Carolina law. Multiple loans of less than ten thousand dollars may not be used to evade the requirements of this chapter and such activity is grounds for revocation of any and all licenses issued pursuant to Section 12-22-320 held by the applicant.

(c)     If a corporation is a member of a controlled group of corporations, as defined in 26 U.S.C. 1563, or a member of an affiliated group of corporations, as defined in 26 U.S.C 1504, and at least one member of the group of corporations is a publicly-held corporation, then only the corporation which engages in the business or activity required to be licensed pursuant to this chapter is considered a principal for purposes of this chapter, along with its directors, officers, and stockholders as described in subitem (a)(vi).

(d)     For purposes of item (c) of this subsection, 'publicly held corporation' means a corporation:

(i)         whose shares are traded on a national exchange; and

(ii)     whose total assets at the end of the corporation's most recent fiscal quarter exceeded one billion dollars.

(23)     'Records' means all paper or electronic accounts, bank account records, financial statements, business records, contracts, reports and returns, including tax information and returns, and other information the department or division reasonably considers necessary to administer and enforce the provisions of this chapter.

(23)     'Video Game Machine Identification Number' or 'VGMID' means the permanently assigned unique number issued by the department to identify a specific machine from first delivery in this State until destruction or removal from this State.

Section 12-22-20.     (A)     Unless specifically granted to the division, the department has all powers necessary and proper to execute fully and effectively the provisions of this chapter including, but not limited to, the power:

(1)     to require any person to submit any information necessary to effectively administer and enforce the provisions of this chapter;

(2)     to prescribe the forms which must be used by any licensee involved in the manufacturing, ownership, distribution or operation of machines or an establishment or other coin-operated devices licensed pursuant to this chapter;

(3)     to suspend any license authorized by this chapter without notice or hearing upon a determination that a licensee is willfully violating the provisions of this chapter, prima facie evidence of which is sufficient after written notice by the department has been sent to the licensee regarding a violation of this chapter and the violation has not been cured within a reasonable time as directed by the department in that written communication; any suspension must remain in effect until the department determines that the cause for the suspension has been cured or abated; a license may be revoked upon a determination that the licensee has not made satisfactory progress to implement necessary corrective measures;

(4)     to suspend any license authorized by this chapter without notice or hearing upon a determination that the safety or health of patrons or employees is jeopardized by the licensee or the condition of the licensee's facilities; any suspension must remain in effect until the department determines that the cause for the suspension has been abated; a license may be revoked upon a determination that the licensee has not made satisfactory progress toward abating the hazard;

(5) to adopt regulations in accordance with the Administrative Procedures Act; and

(6)     to take any other action as may be reasonable or appropriate to enforce this chapter.

(B) Notwithstanding subsection (A), any law enforcement officer has the authority to enforce any criminal provision of this chapter.

Section 12-22-30.     Except as provided in Section 12-54-240, any information obtained by the department or division in the administration and enforcement of the provisions of this chapter is public information, except for proprietary information. The department may disclose information to the division and to other governmental entities in and outside of this State.

Section 12-22-40. The department has sole and exclusive power to issue all licenses provided for in this chapter. The department has exclusive authority to establish the conditions or restrictions necessary for issuing, suspending, or revoking a license.

Section 12-22-50. The department may issue subpoenas requiring the attendance of witnesses and the production of records, memoranda, papers, and other documents and administer oaths and take testimony thereunder.

Section 12-22-60. All fees, taxes, and penalties imposed in this chapter are a first lien upon any and all property of the person charged therewith.

Section 12-22-70. All records of a licensee must be kept in the manner prescribed by the department. All records shall be retained for at least the period for which taxes may be assessed under Section 12-54-85.

Section 12-22-80. All applicants and their principals shall provide access for the department and division to all of the applicant's financial records pertaining to the financing of the applicant in order to evaluate statements and documentation supplied with the application in connection with background investigations.

Section 12-22-90. (A) The director, the employees of the department, the chief, and the employees of the division, may not directly or indirectly, individually, or as a member of a partnership, or as a shareholder with a one percent or more direct or beneficial interest in a corporation, have a financial or ownership interest in:

(1) a testing laboratory chosen by the department pursuant to this chapter Section 12-22-960;

(2) a machine;

(3) a machine owner;

(4) a machine operator;

(5) a manufacturer;

(6) a distributor; or

(7) an establishment.

(B) The director, the employees of the department, the chief, and the employees of the division may not directly or indirectly receive income from, receive a loan fund from, or be forgiven from repaying any loan from a testing laboratory or any person or business entity issued a license pursuant to Section 12-22-320.

Article 3
Licensure

Section 12-22-310. (A)     Before a machine or associated equipment is manufactured, distributed, sold, or placed for use in this State, the machine owner, machine operator, manufacturer, distributor, and establishment must be licensed by the department as provided for in this chapter.

(B)     Before placement or operation, a machine must be licensed.

(C)     Licenses issued as provided for in this chapter are the property of the department and must not be transferred, assigned to another person, or pledged as collateral, except as otherwise provided in this chapter. Any transfer of a business, or a change of ownership, possession, or control of an interest in a business holding a license issued under Section 12-22-320 must be conducted in accordance with Section 12-22-350. Any transfer of a machine, or a change of ownership, possession, or control of a machine licensed under Section 12-22-330 must be conducted in accordance with Section 12-22-350.

Section 12-22-320. (A)(1) Every two years a manufacturer, distributor, machine owner, machine operator, and establishment, engaging in business in this State, shall apply for and obtain from the department a license for the privilege of engaging in the business and shall pay the nonrefundable fee levied at the time of license application. The fees are as follows:

(a)     manufacturer, ten thousand dollars;

(b)     distributor, ten thousand dollars; and

(c)     owner, two thousand dollars.

(2)     There is no licensing fee imposed upon:

(a)     a person licensed as a machine operator; or

(b)     an establishment.

(B)(1)     A licensed manufacturer who is also engaged in business as a machine owner, distributor, or machine operator, shall obtain a separate license for each activity for which a license is required.

(2)     A licensed machine owner who is also engaged in business as a manufacturer, distributor, or machine operator, shall obtain a separate license for each activity for which a license is required.

(3)     A licensed distributor who is also engaged in business as a manufacturer, machine owner, or machine operator, shall obtain a separate license for each activity for which a license is required.

(4)     A machine operator may operate more than one establishment under the same machine operator's license but shall obtain a separate establishment license for each establishment in which machines are maintained.

(5)     Each licensed establishment shall have a licensed machine operator.

(C)     At the time of filing the application for a license, the applicant must pay the fee imposed pursuant to subsection (A).

(D)     Biennial licenses issued under this chapter for machine owners, machine operators, distributors, and manufacturers expire according to the county of the licensee's principal place of business. For nonresident licensees, licenses expire according to the county where the licensee's registered agent is located. For establishments, the license expires according to the county where the establishment is located. The expiration dates are the last day of:

(1)     February in years which end in an:

(a)     odd number for Allendale, Bamberg, Barnwell, Beaufort, and Berkeley counties;

(b)     even number for Charleston, Clarendon, Colleton, Dorchester, Georgetown, Hampton, Jasper, and Williamsburg counties;

(2)     May in years which end in an:

(a)     odd number for Cherokee, Chester, Chesterfield, Darlington, Dillon, Fairfield, Florence, and Horry counties;

(b)     even number for Lancaster, Marion, Marlboro, Union, and York counties;

(3)     August in years which end in an:

(a)     odd number for Calhoun, Kershaw, Lee, Orangeburg, and Sumter counties;

(b)     even number for Richland County;

(4)     November in years which end in an:

(a)     odd number for Abbeville, Aiken, Anderson, Edgefield, Greenville, and Greenwood counties;

(b)     even number for Laurens, Lexington, McCormick, Newberry, Oconee, Pickens, Saluda, and Spartanburg counties.

If a license purchased will be for less than twenty-three months because of this section, the license tax must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(E)     The department, at its discretion and for the efficient administration of the law, may prorate licenses in any manner to implement or change the expiration date established in this section and to stagger the issuance of the licenses by county or by any other method considered appropriate by the department.

(F)     A license authorized in this section shall not be issued unless and until the department has completed its background investigation.

(G)     An application for a license may be denied or a license may be revoked if the applicant or licensee fails to pay any tax or fee administered by the department.

(H)     A license issued under this chapter is a privilege personal to the person to whom it was issued and is not a legal right.

Section 12-22-330. (A) (1) Every machine owner making a machine available for play shall apply for and procure a license from the department for the privilege of making use of the machine in this State.

(2)     The machine owner shall pay a biennial fee of four thousand dollars for each machine license. The machine owner shall apply for and obtain from the department the license required by this section before the first day of June every two years or before doing an act taxable under this chapter. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(3)     A license for a machine shall be issued only to a person who has been licensed pursuant to Section 12-22-320 for use at a licensed establishment. No machine may be operated without a license.

(B)     As an alternative to the license required in subsection (A), a person may be granted a nonrefundable license beginning April first and to expire September thirtieth, following the date of issue, which may not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(C)     If a license required in subsection (A) is purchased after June thirtieth, the license tax must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(D)     The owner or operator of any machine which has multi-player stations shall purchase a separate license for each such station and any such multi-player station counts as a machine or device when determining the number of machines or devices authorized for licensure under this chapter.

(E)     A license may not be issued for the operation of a machine that is located, or intended to be located, on a watercraft or vessel plying the territorial waters of this State.

(F)     No machine may be operated at an establishment unless the establishment is licensed pursuant to the provisions of Chapter 36 of Title 12.

(G)     Upon application being made for a license to operate any machine or apparatus under this chapter, the department may presume that the operation of the machine or apparatus is lawful and when a license has been issued for the operation thereof, the sum paid for the license may not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(H)     The issuance of a license under the provisions of this chapter by the department does not make lawful the operation of any gambling machine or device, the operation of which is made unlawful under the laws of this State.

(I)     Failure to obtain a machine license as required by this chapter makes the machine owner liable for the penalties imposed in this chapter.

(J)     A person with a license issued pursuant to this chapter shall notify the department within thirty days of any change in its principals. Any addition to the machine owner's principals of a person not already determined to have met the qualifications of this chapter voids the license unless the addition has been approved in advance by the department. The department shall develop forms and procedures for notification and approval of any change.

(K)     No distributor, owner, or operator must be issued a license unless the distributor, owner, or operator has been a resident of the State for two years before the date of application. If the distributor, owner, or operator has more than one principal, then only the principal in whose name the license is issued as provided in Section 12-22-1110(A)(2) must be a resident of the State for two years before the date of application.

Section 12-22-340. (A)     No municipality may limit the number of machines within the boundaries of the municipality. A municipality may by ordinance impose a license fee on machines, other than those referred to in Article 15, in an amount not exceeding ten percent of three thousand six hundred dollars of the license fee imposed pursuant to Section 12-22-330(A) for the equivalent license period.

(B)     No county may limit the number of machines within the boundaries of a county. A county may by ordinance impose a license fee on machines, other than those referred to in Article 15, located in an unincorporated area of the county in an amount not exceeding ten percent of three thousand six hundred dollars of the license fee imposed pursuant to Section 12-22-330(A) for the equivalent license period.

Section 12-22-350. (A)     (1) The department and the division must be given within ten business days written notice of:

(a)     any termination of a business, transfer of a business, or a change of ownership, possession, or control of an interest in a business holding a license issued under Section 12-22-320; and

(b)     any transfer of a machine, or a change of ownership, possession, or control of a machine licensed pursuant to Section 12-22-330.

(2)     The transfer of ten percent or more of a sole proprietorship, partnership interest, limited partnership interest, or corporate stock is considered a change in ownership. An indirect ownership interest that would compel the disclosure and background information required of a principal for an initial application must be disclosed to the department pursuant to this provision.

(3)     Anyone whose interest in the business has ended must immediately surrender to the department any licenses in his possession related to that business or machine. Failure to surrender a license as required by this subsection is justification for revocation of any and all licenses issued by the department and held by the licensee.

(B)(1) A person who acquires an interest in a business which holds licenses issued under this chapter, upon initiating the application process for a biennial license issued under Section 12-22-330, may be issued a temporary license by the department at the time of the acquisition if the applicant or location for which the temporary license is sought is not considered by the department to be ineligible under the provisions of this chapter or the applicant currently holds a valid license previously issued pursuant to this chapter, or the applicant has had a criminal history background check conducted by the division within the past thirty days.

(2) A temporary license issued pursuant to item (1) of this subsection is valid until a biennial license is approved or disapproved by the department, but in no case is it valid for more than one hundred eighty days from the date of issuance. The department may revoke a temporary license if the applicant fails to pursue the biennial license in a timely manner. The department shall collect a fee of twenty-five dollars for each temporary license.

(C) (1) Following notice as provided in subsection (A), a machine license issued pursuant to Section 12-22-330 may be transferred from one person licensed pursuant to Section 12-22-320 to another person licensed pursuant to Section 12-22-320. Any machine license transferred in accordance with this subsection shall remain in effect for the remainder of the period for which the license was issued to the transferor. All records relating to the ownership of the machine shall be revised to reflect the identity of the new owner.

(2) A machine license shall not be transferred to any person who is not licensed pursuant to Section 12-22-320.

(3) If a machine is proposed to be transferred to a person who is not licensed pursuant to this chapter, then the machine shall not be used in an establishment until the transferee is licensed as a machine owner pursuant to this chapter.

Section 12-22-360. Appeals of department decisions, including appeals of penalties, or of denied, suspended, or revoked licenses, must be conducted in accordance with the South Carolina Revenue Procedures Act in Chapter 60 of this title.

Article 5
Imposition of Tax on Net Machine Income

Section 12-22-510.     (A) In addition to the license fees, a tax of twenty-five percent of the net machine income of every machine is imposed on the machine owner.

(B)     The tax imposed by this section must be collected and remitted to the department by the machine owner. The machine owner shall be responsible for collecting and remitting any portion of the tax imposed by this section which is agreed in any manner to be paid by any other person, including the machine operator, distributor, or the owner, lessee, or manager of an establishment at which the machine is operated or offered for operation.

(C)     The tax imposed by this section is effective beginning on the first day of the first month following the effective date of this chapter.

Section 12-22-520.     (A) Unless the department exempts a taxpayer from this requirement, the taxes in this article must be paid to the department by the machine owner through electronic transfer of funds. The machine owner shall furnish the department all information and bank authorization required to facilitate the timely payment of taxes due to the State. Machine owners shall provide the department thirty days' advance notice of any proposed bank account changes to ensure the uninterrupted electronic transfer of funds.

(B)     After notice to taxpayers, the department may draw upon the designated account to satisfy the tax indebtedness under this chapter on the twentieth day of the month following the month for which taxes accrued. The machine owner shall maintain an account balance in an amount sufficient to cover the amount drawn by the department. The failure to maintain an adequate balance in the account as required in this section authorizes the department to find the tax in jeopardy and to disable all licensed machines of the machine owner. Appeals are governed by the jeopardy assessment appeals procedures in Sections 12-60-910 and 12-60-920.

(C) Each machine owner, machine operator, and licensed establishment shall report to the department for each calendar quarter, by the twentieth of the month following end of the quarter, the following information for each machine:

(1)     name and address of location of the machine;

(2)     denomination, whether five cents, etc. of the game;

(3)     the name of the game;

(4)     the name of the individual(s) collecting money from the machine and the owner of the machine;

(5)     the date(s) of collection;

(6)     the date of previous collection;

(7)     income number at commencement of the reporting period;

(8)     income number at the end of the reporting period;

(9)     beginning payout number;

(10)     ending payout number;

(11)     payout to players;

(12)     gross profit;

(13)     the percentage of net profits divided between owner and the location and the formula by which those figures are calculated; and

(14)     the name, address, telephone number, and information regarding any refunds to players.

(D)     For purposes of the reporting requirements of this section, a person who has a security interest, lease agreement, or similar financing arrangement in a machine is not considered a machine owner.

(E)     For machines connected to the central computer monitoring system, the department shall determine the tax on net machine income as of the last day of each month. The department shall notify the machine owner in the form of a billing statement of the amount of tax the department shall draw from the designated account to satisfy the net machine income tax.

Section 12-22-530. (A)     On or before the twentieth day of the month following the end of each month, every person subject to the tax imposed by this section shall render to the department, on a form or in a manner prescribed by it, the tax due and payable and a true and correct statement showing the net machine income for the reporting period together with other information the department may require. A return is timely filed if the return is mailed and postmarked on or before the due date.

(B)     As an interim procedure to collect the taxes in this article between the effective date of this chapter and when a machine is connected to the central computer monitoring system, the department shall develop forms and procedures to facilitate the return and payment of these taxes. This interim procedure also must be used during any period when the central computer monitoring system is unable to determine taxes as provided in Section 12-22-520. The taxes are due and payable and the return is due on or before the twentieth day of the month following the month in which the taxes accrue.

Section 12-22-540. (A) The taxpayer shall report to the department any discrepancies in the department's statement of taxes based on a machine's mechanical and electronic meter readings, or otherwise. The owner shall submit to the department the maintenance log that includes current mechanical meter readings and the audit ticket that contains electronic meter readings generated by the machine's software for each machine that reflects a discrepancy. Until a discrepancy is resolved, the department shall not make credit adjustments. Electronic accounting meters shall not be cleared outside the presence of an authorized department or division employee. Any discrepancies that cannot be resolved because of unauthorized meter clearing shall be resolved in favor of the State. The burden of proving a discrepancy is upon the taxpayer.

(B)     A licensed establishment may return to a player money which the player deposited into the machine for which the machine did not permit play and would not print a validated payout ticket; and in this event shall obtain and record the date, time, amount, and licensed machine number of the refund, and the name, addresses, telephone number, social security number, and driver's license identification number and state, of that player. Thereafter, the taxpayer may file a claim for refund for any taxes paid under this chapter on the amount returned to the player in accordance with Chapter 60 of this title, but in addition to the information required by Section 12-60-470, the taxpayer shall file the information required to be maintained by the licensed establishment under this subsection.

Section 12-22-550. Failure to remit taxes imposed under this chapter shall result in immediate disabling of the machines and is justification for the revocation of the machine license and machine owner's license.

Section 12-22-560. (A)(1)     All revenue derived from the tax imposed pursuant to Section 12-22-510, except as herein provided, must be credited to a fund separate and distinct in the general fund to be known as the Video Machine Income Fund. No appropriations credited to this fund may be authorized prior to July 1, 2000.

(B)     Until June 30, 2000, the department may retain six hundred dollars per machine license fee to be expended as follows: four hundred dollars per machine license fee shall be expended by the department and used exclusively for administration and enforcement of this chapter, and two hundred dollars per machine license fee shall be transferred to the division and used exclusively for administration and enforcement of this chapter. Beginning July 1, 2000, and effective beginning with the general appropriation act for the fiscal year 2000-2001, the General Assembly in the annual general appropriation act shall appropriate to the department funds in an amount not to exceed four hundred dollars per machine license fee to be used exclusively for administration and enforcement of this chapter.

Article 7
Location Restrictions, Public Notice, and Signage

Section 12-22-710. (A)     A licensed establishment, including its employees and agents, may not:

(1)     maintain, possess, or otherwise allow on its premises more than five machines, except as provided in Section 12-22-740 ;

(2)     advertise, or allow advertising, in any manner for the playing of the machines, except as provided in Section 12-22-760;

(3)     offer or allow to be offered any inducement to a person for the playing of machines;

(4)     allow anyone under the age of twenty-one to play machines;

(5)     allow anyone under the age of twenty-one to receive payouts as a result of playing machines;

(6)     operate machines between the hours of two o'clock Sunday morning and six o'clock a.m. Monday morning;

(7)     violate valid local zoning ordinances;

(8)     cash any business, personal, or employment checks of any individual or business;

(9)     make loans to any individual or business;

(10)     accept a credit card or debit card from a player for the exchange or purchase of game credits or for advancement of coins or currency;

(11)     be located within five hundred feet, or within three hundred feet in a municipality, of any of these locations: a public or private elementary, middle, or secondary school; a public or private kindergarten or daycare; a public playground or park; a public vocational or trade school or technical educational center; a public or private college or university; or house of worship; or a subdivision which has a covenant that prohibits the location of a commercial enterprise within the subdivision;

(12)     knowingly allow playing of machines by a person in an intoxicated condition; or

(13)     extend credit, in any manner, to a player. A machine operator or licensed establishment shall not allow an agent or any employee of the operator or establishment to provide a loan or extension of credit to a player.

(B)     A machine owner or operator or any other person shall not at the location of the licensed establishment:

(1)     engage in business as a Level I or Level II check cashing service, as defined in Section 34-41-10;

(2)     engage in business as a deferred presentment service, as defined in Section 34-39-120;

(3)     make restricted loans, as defined in Section 37-3-501(3);

(4)     make supervised loans, as defined in Section 37-3-501(1); or

(5)     make loans on the security of a motor vehicle certificate of title.

(C)     The distances in this article shall be measured in a straight line, without regard to intervening structures or objects, from the nearest property line of the lot on which a building or structure is used as a licensed establishment to the nearest property line of the location in subsection (A)(11) of this section or Section 12-22-720(B).

(D)     Except as otherwise provided herein, the provisions of this section apply to all applicants and licensees. However, the distance requirements set forth in this subsection (A) do not apply to:

(1)     an establishment which operated or allowed the operation of machines for which licenses were issued before May 30, 1993; or

(2)     an establishment which:

(a)     operated or allowed the operation of machines for which licenses were issued on or after May 30, 1993, and which were in operation on the effective date of this chapter; and

(b)     was in compliance with the distance requirements in effect prior to the enactment of this chapter.

(E)     Each county or municipality, by ordinance, may determine the zoning of locations for the operation of machines. The zoning restrictions may not be less restrictive than this chapter.

Section 12-22-720.     (A)     An establishment license must not be issued until the department determines that the location is in compliance with Section 12-22-710.

(B)(1)     The department shall not issue an establishment license to a new establishment that is closer than one hundred feet to an existing establishment even if the applicant has different principals than the existing licensed establishment(s) or where a licensure application for another establishment is pending.

(2)     For purposes of this section:

(a)     'new establishment' means an establishment which did not have machines on May 31, 1999; and

(b)     an 'existing establishment' means:

(i)         an establishment which is licensed at the time of the application for a license for a new establishment; or

(ii)     an establishment which had machines on May 31, 1999, and which is under the control of the same person who was licensed for the location under the provisions of Chapter 36, Title 12 on May 31, 1999.

(3)     Notwithstanding the provisions of item (1) of this subsection, the department may issue an establishment license after notice and the procedures in this section if the department otherwise determines that the location is a proper one.

(C)(1)     The person applying for the establishment license closer than permitted under subsection (B)(1) shall place a notice at least once a week for three consecutive weeks in a newspaper or newspapers most likely to provide notice to interested citizens of the county, city, or community in which the person seeks to locate the proposed establishment. The department shall determine which newspaper or newspapers meet the requirements of this section based on available circulation figures. If a newspaper is published within the county and historically has been the newspaper where legal notices are published, the advertisements published in that newspaper meet the requirements of this section. Notice also must be given by displaying a sign for fifteen consecutive days at the site of the proposed establishment. The sign shall:

(a)     state that a license for the operation of machines is being sought and that the establishment will be able to issue cash payouts from these machines;

(b)     tell an interested person where and when to send a written protest of the application;

(c)     be in bold print; and

(d)     cover a space at least eleven inches wide and eight and one-half inches high.

(2)     A person residing in the county in which an establishment license is requested to be granted pursuant to subsection (B)(3), or a person residing within five miles of the establishment for which an establishment license is requested pursuant to subsection (B)(3), may, before seven days after the last published notice, protest the issuance of the license if a written protest is filed with the department setting forth:

(a)     the name, address, and telephone number of the person filing the protest;

(b)     the name of the applicant for the establishment license and the address of the establishment sought to be licensed;

(c)     the specific reasons why the application should be denied; and

(d)     whether the protestant wishes to attend and offer testimony before a contested case hearing before the Administrative Law Judge Division.

(3)     Upon receipt of a timely filed protest, seeking a contested hearing before the Administrative Law Judge Division, the department may not issue the establishment license but shall forward the file and its determination to the Administrative Law Judge Division.

(4)     If the protestant expresses no desire to attend a contested hearing and offer testimony, the protest is considered invalid, and the department shall continue to process the application and make its determination of whether all other statutory requirements for the license are met.

(5)     The department shall determine whether the location is a proper one. Any protestor or the applicant may appeal the department's determination.

Section 12-22-730. The department must issue regulations to strictly enforce the provisions of this chapter so as to prevent the licensure of an establishment or establishments that would allow machine operators to circumvent the prohibition against more than five machines being located on any premises. Nothing in this section, and the terms as they are defined in this chapter, shall be construed to be unenforceable because of the pendency of, or the failure to issue, any regulations by the department. This chapter must be liberally construed to supercede any regulation in existence after the effective date of this act that would impede the department in any way from strictly enforcing the provisions of this chapter regarding the prohibition against more than five machines being licensed on the same premises.

Section 12-22-740. (A)(1) Except as provided in subsection (B), machines shall not be operated or continue to operate at any casino. For purposes of this chapter, the term 'casino' shall mean both of the following:
(a) any two or more 'single places or premises', as that term was defined, applied, and interpreted in Regulation 117-190 on or before May 31, 1999, that are located within a single structure; and

(b) beginning December 1, 1999, any two or more establishments located within one hundred feet of each other that have establishment licenses issued to the same person or a person who has the same principals.

(2) In determining whether an establishment violates this section, the department shall consider whether more than one licensed establishment operates within a single structure, unless the distance between the licensed establishments exceeds one hundred feet and the licensed establishments are not owned by the same person, do not have any of the same principals, and the owner of one is not a principal of another licensed establishment. Licenses denied under this section are subject to review under Section 12-60-1310.

(B)(1) A casino shall not operate or continue to operate except as provided in this subsection. No casino shall continue to operate as a casino unless on May 31, 1999:

(a) machines were both licensed and in operation within each 'single place or premises' as that term was defined, applied, and interpreted in Regulation 117-190 on or before May 31, 1999; and

(b) each single place or premises within the casino met the qualifications of Regulation 117-190 and a certificate of occupancy, if otherwise required by law, has been issued for the structure within which two or more single places or premises are located.

(2) After December 1, 1999, each casino authorized to operate after May 31, 1999, shall be permitted to re-apply for and may be granted renewal of licenses that, notwithstanding any other provision of the law, must expire and may not be renewed after July 1, 2004. Pursuant to Sections 1, 9, and 11 of Article V, the General Assembly provides that the Magistrate, Circuit and Appellate Courts do not have jurisdiction to extend the termination date of July 1, 2004, and may not enjoin the enforcement of this subsection by the department or the division. Nothing in this subsection shall be construed to affect the jurisdiction of the state courts regarding other provisions of this chapter.

(3)(a)     After July 1, 2004, casinos may continue to operate within a county if the county governing body, prior to July 1, 2004, adopts an ordinance authorizing the operation of casinos.

(b) An ordinance adopted pursuant to this item may not authorize the operation of a casino if the casino was not in operation on May 31, 1999.

(4)     If the provisions of item (3) are declared unconstitutional by a final order of a court of competent jurisdiction, then the provisions of Section 12-22-710(A)(1) shall apply in the entire state.

(C)     All casinos authorized to operate after May 31, 1999:

(1)     on or before January 1, 2000, conduct business as a single operation and be licensed as a single licensed establishment to maintain on the premises more than five licensed machines;

(2)     advise the department of the machine licenses currently issued and the licenses currently issued for each single place or premises within the structure and return the licenses for each single place or premises to the department at the time the new license for the single licensed establishment is approved by the department and issued;

(3)     once licensed as a single establishment, never have licenses for any number of machines greater than the total number of machines licensed in the structure as of May 31, 1999, as asserted in the statement required in item (5);

(4)     never increase the number of machines permitted by this section after any reduction in the number of machines at the licensed establishment; provided, that a reduction, as that term is used in this subsection, does not include the routine removal and replacement of machines for maintenance, repair, service, or similar purpose; and

(5)     on or before January 1, 2000, file with the department a sworn statement asserting any and all reasons why it is entitled to the benefits conferred by this subsection (B).

(D)     Any person claiming the benefits of subsection (B) shall have the burden of proof and must establish by clear and convincing evidence that he is entitled to operate the structure as a single licensed establishment with more than five licensed machines. Any transferee of an interest in such an establishment shall be subject to all limitations of this section.

Section 12-22-750.         (A)     The offering of an inducement as prohibited in Section 12-22-710(A)(3) means any attempt to influence a person to play machines including, but not limited to:

(1)     free or discounted food or beverages;

(2)     free or discounted games other than credits won through authorized play;

(3)     prizes, either at the doors or through drawings or other means;

(4)     coupons offering any of the above;

(5)     cash other than authorized payouts; or

(6)     jackpots or other progressive winnings schemes.

These specified inducements are not exclusive. Other attempts to influence a person to play a machine are prohibited.

(B)     A licensed establishment that engages in activities other than the operation of machines may not offer any inducement unless the licensed establishment is able to prove that the inducements offered are not directed at machine players and that the offerings are part of the normal business practice of similar activities in this State.

Section 12-22-760. (A) A licensed establishment or licensed machine operator or any employee or agent of the licensee, may only advertise, or allow the advertising of, the playing of machines by utilizing a single green square not exceeding four by four feet which may be placed on any side or sides of the building in which the licensed establishment is located.

(B)     Nothing in this section prevents a licensed establishment from advertising goods and services, other than the playing of machines, except as otherwise prohibited by law.

(C)     No person may advertise in a misleading or deceptive manner.

(D)     To protect the public from misleading, deceptive, or aggressive sales practices, no person shall advertise the playing of machines or a business regulated under this chapter in any manner that suggests winning, money, or wealth.

(E)     Due to the pervasiveness of the medium and the children in the audience, no person may advertise the playing of machines in any electronic, broadcast or print medium.

(F)     No person shall advertise in any manner for the playing of machines within one thousand feet of a public or private school, daycare center, kindergarten, residence, park, playground, or church.

(G)     Signs and nonbroadcast advertising in existence on the effective date of this chapter are not subject to the provisions of this section until July 1, 2000, if notice is given to the department as required in this chapter.

(H)     A machine owner, manufacturer, or distributor may advertise his enterprise but may not sponsor, promote, or otherwise advertise the playing of games and may not advertise on behalf of a machine operator or licensed establishment.

Section 12-22-770. (A) A licensed establishment must have posted and visible to the public at least one sign with the following words printed on it:

(1)     'A person must be twenty-one years of age to play a video game machine or receive payouts from a video game machine.'

(2)     'It is illegal to offer inducements to a person to play video game machines.'

(3)     'All games are random. Games are set to issue a minimum theoretical payout of between ninety and ninety-nine percent.'

(4)     'This establishment maintains a copy of the video game machine laws on the premises for review by players at their request.'

(5)     'Validated tickets may be redeemed for cash.'

(6)     'Violators are subject to civil and criminal penalties.'

(7)     'Violations may be reported to South Carolina Law Enforcement Division or your local law enforcement agency.'

(8)     'No payout of greater than five hundred dollars is allowed, regardless of the amount deposited in the machine.'

(B)     The sign required by subsection (A) must be placed behind the machine, but must be visible and readable by the person playing the machine. Each letter on the sign must be at least two inches high.

(C)     Each machine licensed under this chapter must have a prominently displayed sign citing the penalties provided for violations of Sections 12-22-1330(1), 12-22-1330(2), and 12-22-1360 on the wall above the machine or affixed prominently to the machine. The department may provide sample language for these signs.

(D)     In addition to all other signs required under this section, a white warning label must be prominently and permanently affixed to each machine. The label must contain the phrase 'WARNING: GAMBLING CAN BE ADDICTIVE' in capital black letters not less than two and one-half inches in height and one and one-half inches in width, followed by the phrase 'CALL 1-XXX-XXX-XXXX FOR HELP WITH GAMBLING ADDICTION' in capital black letters not less than one inch in height and one-half inch in width. The toll free number to be inserted on the label must be provided by the South Carolina Department of Alcohol and Other Drug Abuse Services.

Section 12-22-780. (A) Any person who would otherwise be subject to the restrictions of this chapter but who seeks to use the provisions of Sections 12-22-710(D), 12-22-710(E)(2), 12-22-740(B), or 12-22-760(G), must, on or before January 1, 2000:

(1)     notify the department in a statement made under penalties of perjury that he is eligible to use the provision;

(2)     state the specific and detailed reasons for claiming the privileges of the specific provision claimed; and

(3)     identify all licenses associated with the claim.

(B)     The person claiming the benefit of Sections 12-22-710(D), 12-22-710(E)(2), 12-22-740(B), or 12-22-760(G) shall have the burden of proof and must establish by clear and convincing evidence that he is entitled to the benefits claimed.

Article 9
Machine Requirements

Section 12-22-910. (A) Before a machine may be connected or remain connected to the central computer monitoring system, the machine must have a current and valid machine license. The machine owner and machine operator, and the establishment at which the machine is located must have current and valid licenses as required by this chapter.

(B)     Each machine or device licensed pursuant to this chapter must be operated in a stand-alone fashion and may not be linked in any way to another machine, except as otherwise provided in this chapter.

(C)     Any machine which is not connected to the central computer monitoring system after February 1, 2000, shall be considered to be illegal and a contraband machine.

Section 12-22-920.     (A)     All machines, location controllers and associated modems, and computer chips must be verifiably of a make, model, and software version certified by the department or a testing lab selected by the department before the items may be possessed, owned, operated, or allowed to operate at any place within this State.

(B)     A person may not possess, own, operate, or allow the operation of a contraband machine or device at any place within this State.

Section 12-22-930. (A) Not later than December 1, 1999:

(1) each machine must meet standards provided in subsection (B) of this section and the machine owner shall certify to the department, under oath and in a form prescribed by the department, that the machines are prepared for connection to the central computer monitoring system; or

(2) each machine owner must certify to the department, under oath and in a form prescribed by the department, that he has ordered all location controllers and associated modems, computer chips, associated equipment, software, hardware, and any other equipment required by this chapter in order for his machines to be connected to the central computer monitoring system.

(B) Not later than December 1, 1999, and subject to the provisions of subsection (A)(2), all machines and equipment must:

(1)     have games that are random and have a minimum theoretical payback of between ninety percent and ninety-nine percent, within standard rounding, in which the theoretical payback percentage is determined using standard methods of probability theory at optimal play;

(2)     be secure and accountable;

(3)     not operate in a misleading or deceptive manner;

(4)     not have any means of manipulation that affect the random probabilities of winning a game;

(5)     have one or more mechanisms that accept only coins or cash in the form of bills. The mechanisms must be designed to prevent obtaining credits without paying by stringing, slamming, drilling, or other means;

(6)     have one or more metering devices that keep a record of (a) all cash inserted or deposited into the machine; (b) credits played, (c) credits won, (d) validated cash ticket amounts, and (e) other information prescribed by the department. Cash records must include total coins and bills accepted and total credit generated by coin and bill acceptors;

(7)     be capable of being accessed on demand by telecommunication through a location controller from the central computer monitoring system for purposes of polling or reading device activities and for central computer remote enabling or disabling of machine operations;

(8)     be capable of interfacing with a central computer monitoring system through a location controller;

(9)     when required by the department after certification, be connected to the central computer monitoring system through a location controller; and

(10)     meet the standards set by the department and those set forth in this chapter.

(C)(1)     Machines not meeting the standards of this chapter, or the standards of the department, shall not be licensed. The license of any machine which fails to maintain the standards of this chapter shall be revoked.

(2)     The department shall connect licensed machines at licensed establishments meeting the requirements of this section to the central computer monitoring system as soon as is practicable after receipt of certification from the machine owner that a machine meets the standards of this section, no later than February 1, 2000. A machine owner who provides the certification provided in subsection(A) may provide payouts as provided in Section 12-22-1020 beginning on December 1, 1999. A machine owner who provides the certification provided in subsection (A)(2) shall provide the certification provided in subsection (A)(1) by February 1, 2000; if the certification is not provided on that date, the machine shall be disabled and the machine owner shall be subject to the penalties provided in this chapter.

(D)     When the department approves the software and logic board of a machine, the division must require the use of a prescribed security seal process to guard against any unauthorized tampering or changes to the erasable programmable read only memory (EPROM) chip or chips, or future, similar such technology. Any repair, replacement, or adjustment to the machine's EPROM chips or similar such technology must be done in the presence of an employee of the division.

Section 12-22-940.     (A)     As part of the central computer monitoring system, each establishment operating machines must provide a location controller and modem meeting department requirements. Each location controller must be capable of receiving, storing, and transmitting to the central computer monitoring system all information received from and required of machines. Each location controller shall be capable of supporting at least five machines.

(B)     This section applies to those location controllers which participate in the system as separate hardware entities and any head of string location controller which meets the specifications of this section.

(C)     The cost for purchasing, leasing, and installing, the location controller is the responsibility of the licensed establishment in which the machines are located.

(D)     Each location controller must be able to perform the following functions:

(1)     communicate with machines in an on-line environment;

(2)     store log entries of openings of machine game doors;

(3)     store log entries of openings of machine coin or currency doors;

(4)     authorize a machine to be taken off-line from the location controller and store a log of this event;

(5)     disable a machine and store a log entry upon a game door open, and a coin door open;

(6)     store a log entry if machine is off-line from the location controller;

(7)     store a log entry for machine tampering if the signal received from the machine is discontinuous or corrupted in such a manner as to constitute more than spurious noise in the system;

(8)     store a log entry of reenabling a machine that has been disabled;

(9)     log entries which include a VGMID for each machine and date/time stamp;

(10)     communicate to the central computer system the information which has been gathered from the machines and any log entries stored during the period using a protocol provided by the department or designated agent;

(11)     have sufficient storage capacity to maintain at least five days of data generated from the maximum playing sessions from the maximum number of associated machines linked to the location controller. The data must be stored immediately in a manner that allows, on demand, real time access by the central computer monitoring system. Access to data stored in the location controller must be restricted to authorized entry from the central computer monitoring system and other authorized inquiry only access that has been preapproved by the department;

(12)     have an internal clock;

(13)     be protected from unauthorized interference or tampering by any person or external device or force, such as to corrupt or alter data or corrupt or suspend communication signals or transmitted data from the machines or to the central computer monitoring system. This requirement extends to the location controller as well as its associated communication device, and cabling between the controller, the machines, and communication device;

(14)     be constructed of materials and protected in such a manner as to allow it to operate in suboptimal environments such as nonregulated temperature, dusty, tobacco-smoke filled, and humid conditions. Locations using a location controller that is not constructed so as to operate in these environments and that fail to operate properly are not allowed to operate machines until the location controller is repaired or replaced so as to operate in such a suboptimal environment; and

(15)     be capable of validating tickets printed by a machine.

Section 12-22-950.     The department may set standards for machines, modems, location controllers, the central computer monitoring system, and associated equipment including, but not limited to, technical standards, hardware specifications, software specifications, and standards relating to multiplayer units. Applicants must meet these standards before any license may be issued. The department may revise technical standards as is necessary providing sufficient time for compliance by licensees. The technical standards established by the department must, to the extent possible, within the limitation of this chapter, maximize competition among manufacturers.

Section 12-22-960.     The burden of proof that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements is the responsibility of the manufacturer or machine owner. The department may require the manufacturer or machine owner to obtain a certification from an approved laboratory indicating that the machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The cost of this certification is the responsibility of the manufacturer or machine owner. The department shall provide a list of approved laboratories. The department may also review a laboratory to determine if the laboratory should be added or removed from the department's list of approved laboratories. The department may contract with a testing laboratory to ensure and certify that a machine, game, location controller, modem, or any part of a machine meets the required standards and requirements. The department may also establish a state testing laboratory. Payment of the cost of testing by the laboratory is the responsibility of the manufacturer or machine owner. Approval of the machine by the department is prima facie evidence that the machine meets the required standards and requirements.

Section 12-22-970. A machine owner shall notify the department before a machine is added, replaced, disconnected, or transferred to another establishment.

Section 12-22-980.     The licensed establishment or machine owner shall notify the department before a location controller is added, disconnected, or transferred to another establishment.

Section 12-22-990.     (A)     Each location controller must be programmed automatically to disable the play of all machines connected to the location controller, if the location controller has not been polled by the central computer monitoring system for the purpose of collecting meter and event data, for a period to be determined by the department, but not less than seventy-two hours. The machine must be enabled when communication has been restored.

(B)     Whenever a machine is disabled during play of a game, the following must occur:

(1)     a message must appear on the screen warning the player that the machine is about to be disabled and the player must be informed that one minute remains to complete the game;

(2)     a count-down timer must be displayed;

(3)     if the player completes the game, all payouts must be reported on a payout ticket and no other games are allowed to be played on that machine; and

(4)     if the player has not completed the game in the minute allotted, then the machine shall complete the hand according to the manufacturer's recommended play strategy, all payouts must be reported on a payout ticket, and the machine then disabled.

Section 12-22-1000.     Each machine placed in operation in this State must have affixed by the manufacturer a VGMID assigned by the department. Each machine owner shall notify the department in writing of the receipt of a machine. Manufacturers, distributors, and machine owners shall make machines and associated equipment available for inspection by the department or division. No machine may be transported out-of-state until the VGMID has been removed. No one other than an authorized department or division employee shall remove the VGMID. For qualifying machines already located in the State, the department shall assign, and the division shall affix, the VGMID. The VGMID must be programmed into the machine and serves as the machine's unique identifier for purposes of logging events and reporting play statistics.

Section 12-22-1010.     (A) Every machine owner shall maintain records for each machine showing the manufacturers' serial number; model and type of machine; the VGMID; the license number; the location's name, address, and telephone number; the machine operator; the date the machine entered this State; the date it entered the location; the date the machine went on-line; and the bank account from which the taxes are withdrawn.

(B)     The machine owner shall maintain information relating to the payment of any money or compensation paid to any persons to operate the machine. Information required by this section must be available on demand for inspection by a representative of the department or division.

Section 12-22-1020.     (A) No person may possess, own, operate, maintain for use or operation, or allow the operation of, any machines that:

(1)     allow more than three dollars in credits to be bet, risked, wagered, or played on any hand;

(2)     issue payouts of more than five hundred dollars to a player, regardless of the amount of money deposited into the machine;

(3)     require any minimum number of credits before issuance of a validated payout ticket;

(4)     permit any player to receive a payout greater than five hundred dollars, regardless of the amount of money deposited into the machine;

(5)     produce at the completion of the play period validated tickets worth more than five hundred dollars regardless of the amount deposited in the machine;

(6)     allow at the completion of the play period the production of multiple tickets with a collective value of greater than five hundred dollars or engage in any other schemes to evade the five hundred dollars payout limitation; or

(7)     offer on the face of the machine or in any pay table the possibility of receiving a payout of greater than five hundred dollars at the completion of the play period.

(B)(1) Any licensed machine that provides payouts must limit the amount bet, risked, wagered or played on any hand to three dollars and the payout must be limited to credits equal to five hundred dollars.

(2) When a player earns credits equaling or exceeding five hundred dollars:

(a) the machine must: temporarily disable that player station, immediately delete all credits or their equivalents with a value greater than five hundred dollars, immediately report on a payout ticket payable to that player or player station, reset to zero or 'game over'; and

(b) that player or another player at that player station may not continue to play until more cash or coin is deposited into the machine.

(3) The machine must be programmed so that other players of a multi-player unit are not affected if one or more players is issued a payout ticket pursuant to this provision.

(4)     The central computer monitoring system shall monitor the deletion prior to the completion of the play period and the printing of validated payout tickets all credits or their equivalents with a value of greater than five hundred dollars.

(C)     A machine operator may only redeem tickets for credits awarded on licensed machines located in that licensed establishment. A ticket must be validated by the location controller before any payout is made.

(D)     At the time the player presents a payout ticket to the machine operator or his agent for a cash payout, the machine operator or his agent shall require the person presenting the payout ticket to write or otherwise have placed on the payout ticket the person's name, address, and telephone number. Upon the provision of the payout ticket with the above required information, and upon presentation of a form of verifiable identification as approved by the department, the machine operator or his agent may make a cash payout. The payout tickets redeemed by the machine operator or his agent shall be retained by the machine operator or his agent in the same manner and for the same period as other records are required by this chapter.

(E)     Any person offering money, prize, bonus or anything of value for earning credits above what is printed on a payout ticket is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years and may be fined not more than twenty-five thousand dollars.

(F)     A person licensed pursuant to this chapter violating this section shall also be subject to a civil penalty of revocation of the establishment, operator, or owner license for five years and may be fined an amount not to exceed one thousand dollars per violation.

Section 12-22-1030.     A machine must be disposed of in a manner that makes it incapable of use or operation in any video game or other gaming or amusement activity. A machine may not be disposed of until notice has been given to the department as provided in this section. An owner desiring to dispose of an unsaleable or damaged machine shall notify the department in writing before disposal and provide the following information in a manner as directed by the department:

(1)     the full name, address, and license number of the person or entity disposing of the machine;

(2)     the manufacturer's serial number of the machine;

(3)     the model number and description of the machine;

(4)     the manufacturer of the machine;

(5)     the VGMID of the machine;

(6)     the hard meter readings of the machine;

(7)     the licensed establishment at which the machine was located; and

(8)     the proposed manner, time, and place of disposal.

Section 12-22-1040.     A machine must not simulate bingo or a slot machine.

Section 12-22-1050.     Each machine must contain a single printing mechanism capable of printing an original ticket and retaining an exact copy which is subject to inspection by the department. Tickets must contain any information the department determines to be reasonable for the efficient administration of this chapter. The department shall provide manufacturers information as to the information needed on a ticket and the placement of information on the ticket.

Section 12-22-1060. All machines, location controllers, and the central computer monitoring system selected by the department must perform correctly before, during, and after the year 2000, with no error in functioning or data caused by failure to correctly interpret and utilize data contained within date fields within the system.

Section 12-22-1070. (A)     The department shall disable machines via the central computer monitoring system for the following reasons:

(1)     the establishment license or retail sales tax license at the establishment where the machines are located has been revoked or suspended;

(2)     the license of the machine has been revoked or suspended;

(3)     the machine owner's license has been revoked or suspended;

(4)     the machine operator's license has been revoked or suspended;

(5)     the establishment license, machine license, machine owner's license, or machine operator's license has expired;

(6)     the central computer monitoring system has registered a violation of system integrity by a machine. A machine disabled for this reason will be enabled again as soon as the problem has been resolved;

(7)     the machine owner or the machine operator has requested that the machine be disabled for any reason, such as relocation, upgrading, or repair; or

(8)     the bank account from which taxes are paid has insufficient funds to pay the entire tax due upon the due date.

(B)(1)     All persons who have notified the department of an ownership or lien interest in a machine shall be notified of a proceeding to revoke licenses that may result in disabling under this section. A licensee whose machine, and any part of the machine, is disabled for reasons in (A)(1), (A)(2), (A)(3), or (A)(4) shall not be licensed or permitted to operate in this State for five years from the date of revocation.

(2)     A machine, and any part of the machine, shall not operate in this State for five years from the date of revocation, if the machine is disabled for the reasons stated in:

(a)     subsection (A)(1)or (A)(4), if the machine owner and the person holding the establishment license are the same person; or

(b)     subsections (A) (2) or (A)(3).

(C)     All persons who have notified the department of an ownership interest in an establishment shall be notified of a proceeding to revoke licenses that may result in disabling under Section (A)(1). If machines are disabled at an establishment for the reason in (A)(1), the establishment may not operate, or allow the operation of, machines for five years from the date of the revocation or suspension.

Section 12-22-1080. The department, in its discretion, may approve, effective upon publication in the State Register, alternative technical provisions provided that the technology maintains the security, account information, and integrity of the machines, location controllers, and central computer monitoring system.

Article 11

License Applications and Background Investigations

Section 12-22-1110. (A)(1) The department may issue licenses only to qualifying persons. Licenses may be issued only to a person who is a principal of the business seeking the license.

(2)     If the applicant for a license has more than one principal, the entity shall designate a principal of good moral character, over the age of twenty-one, and a resident of this State for two years, who is deemed the applicant under this article and in whose name the license must be held on behalf of the business. The business entity may substitute a principal if the individual is of good moral character, over the age of twenty-one, and a resident of this State for two years, upon notice in writing of the substitution to the department.

(B)     On a form provided by the department and in a manner provided by the department, the applicant for a license must provide detailed information regarding:

(1)     the ownership and management of the entity seeking the license, including the name, address, and social security number of each principal as defined in Section 12-22-10(22);

(2)     a detailed history and explanation of gambling activities and licenses in other jurisdictions of the applicant and all principals;

(3)     federal registration with respect to gambling devices;

(4)     the information compelled to be disclosed pursuant to this chapter;

(5)     licenses currently held pursuant to this chapter and those licenses held pursuant to Chapter 21 of Title 12 within one year of the date that the application is filed;

(6)     information that may be required by the department, such as voter registration, to prove the two-year residency requirement;

(7)     in the case of an application for a machine operator or establishment license, the street address and name of any business containing machines that are within a one hundred foot radius of where the applicant intends to locate its machines, if the address and name are reasonably ascertainable to the applicant; and

(8)     any other information deemed necessary by the department for the proper administration and enforcement of this chapter.

(C)     The department and the division are authorized to develop applications and other forms.

(D)     The forms must require the applicant to disclose any present or previous experience or involvement with machines as a manufacturer, distributor, machine owner, machine operator, technicians, or employees. Present or previous experience or involvement includes the control of gambling devices as a machine owner or machine operator; employment with the machine owner or machine operator gambling devices; employment in establishments where gambling is offered to the public; and conviction of violation of federal, state, or local gaming laws in any jurisdiction.

(E)     The applicant shall submit proof with the application that he does not owe any federal or state delinquent taxes, penalties, or interest.

(F)     As a condition of receiving a license under the provisions of this chapter, each licensee shall agree that the division, the department, and their agents and employees, shall have unrestricted access and the right to inspect any premises under the control of the licensee in which any activity relating to the provisions of this chapter is conducted.

(G)     An application which contains material omissions or misrepresentations is cause for denial, suspension, or revocation of a license and disabling of all machines of that licensee.

(H)     Failure to comply with a reasonable request of the department is grounds to deny or revoke a license.

Section 12-22-1120.     Each applicant shall immediately make available for inspection, by any department or division employee, all records and the establishments where machines are placed or operated, or where machines, devices, or equipment are manufactured, sold, serviced, or distributed.

Section 12-22-1130. (A)     The applicant shall file a duplicate application with the department. The department shall forward one of the applications to the division. The division shall return the background investigation to the department.

(B)     Unless the time requirements for issuing a license are waived by the applicant, the department must make its decision on whether to issue a license to the applicant not later than sixty days after the completion of the background investigation, including the fingerprint reviews, and the recommendation, if any, of the division, or not later than one hundred eighty days from the date a complete application is filed with the department, whichever occurs first. The department must inform each applicant of the department's decision.

(C)     The department shall determine whether the applicant owes any delinquent state taxes, fines, penalties, or interest.

(D)     The department may not issue any license until the background investigations are concluded. The department shall make affirmative determination that the applicant is qualified and the applicable license or associated fees have been paid before issuing any license.

(E)     The department shall notify the applicant by mail if an application is incomplete. The notification must be sent to the address on the application. The notification must state the deficiencies in the application. If after the second notice of an incomplete application the applicant has not responded, the department shall consider the application withdrawn.

Section 12-22-1140.     (A)     The division shall conduct background investigations on those persons associated with the operation of machines as provided in this chapter. A background investigation is defined as a security, criminal, and credit investigation of a principal connected to that business. The division shall conduct the investigations and inspections it considers necessary to fulfill its responsibilities under this chapter.

(B)     The division shall:

(1)     promptly and in a reasonable order, investigate all applications, enforce the provisions of this chapter, and provide to the department all information to allow the department to issue or deny the license;

(2)     provide the department with all information necessary for all actions under this chapter and for all proceedings involving enforcement of the provisions of this chapter or any regulations;

(3)     investigate violations under this chapter and any regulations;

(4)     conduct continuing review of machine operations through on-site observation and other reasonable means, to assure compliance with this chapter;

(5)     receive and take appropriate action on any referral from any law enforcement agency or the department relating to any evidence of a violation of this chapter and regulations;

(6)     exchange fingerprint data with, and receive criminal history information from, the Federal Bureau of Investigation or other law enforcement agencies; and

(7)     have the authority to request and receive information, materials, and any other data from any person.

(C)(1)     A person applying for a license or required under this article to undergo a criminal history background check shall undergo a state fingerprint review to be conducted by the division to determine any state criminal history and a fingerprint review to be conducted by the Federal Bureau of Investigation to determine any other criminal history. The fingerprint reviews required by this subsection may be required upon subsequent applications.

(2)     When the applicant has principals it must disclose any information required by the department to obtain fingerprints and criminal background checks for the principals so that an applicant may not circumvent the purpose of this section.

(3)     Each applicant with submission of an application shall submit a valid fingerprint card for every principal of the business seeking to be licensed.

(4)     At the time of filing the application, the applicant must include certified checks for the fees imposed by the State Law Enforcement Division and the Federal Bureau of Investigation, respectively, for the purpose of conducting fingerprint reviews required by item (1) of this subsection.

(D)     In connection with the responsibilities under this chapter, the division or the department and their employees and agents may:

(1)     inspect and examine all establishments where machines are operated;

(2)     inspect and examine where machines or equipment are manufactured, sold, distributed, or serviced;

(3)     inspect all equipment and supplies in, about, upon, or around the establishment;

(4)     seize and remove from such establishments and impound any machines, equipment, or supplies for the purposes of examination and inspection;

(5)     inspect, examine, and audit all records pertaining to an applicant's operation; and

(6)     seize, impound or assume physical control of any book, record, ledger, machine, and boxes and their contents.

(E)     The division may obtain warrants for the inspection and seizure of any property possessed, controlled, or otherwise held by any applicant or principal.

(F)     The division may inspect any applicant or licensee for compliance with the provisions of this chapter and regulations and to investigate any violations.

Section 12-22-1150.     (A)     Investigations must be conducted on manufacturers, distributors, establishment owners, machine owners, machine operators, and their principals.

(B)     As a condition of receiving a license under the provisions of this chapter, each applicant and principal shall agree that the division and the department have unrestricted access and the right to inspect any premises under the control of the applicant or principal in which occurs any activity related to the provisions of this chapter.

(C)     Each applicant and principal, by signature of his application, grants the division the authority to access state, national, and international information for validation of information contained on the application. Any information found at the state, national, or international level which would prevent the applicant from obtaining any license required under this chapter must be used to do so.

(D)     Each applicant and principal shall cooperate with the division and the department in the performance of their duties.

Section 12-22-1160.         (A)     The department shall deny a license if a background investigation of any applicant or principal of an applicant reveals any of the following:

(1)     a conviction within fifteen years before the date of the application in any jurisdiction for any of the following offenses:

(a)     any offense punishable by imprisonment for two or more years;

(b)     any gambling offense;
(c) theft or any crime involving false statements or declarations;
(d) a criminal offense involving fraudulent activity or defined as a fraud; (e)

(2)     a determination of liability for, or an agreement that he was liable for, a civil judgment based in whole or in part upon conduct described in item (1) of this subsection;

(3)     omission of any material facts to the division or the department during initial or subsequent background investigations or a misstatement, or untrue statements, of material facts with respect to such investigation;

(4)     association with persons or businesses of known criminal background, or persons of disreputable character, that may adversely affect the general credibility, security, integrity, honesty, fairness, or reputation of the State or to the effective regulation of video poker;

(5)     failure to cooperate with any legislative investigative committees or other officially constituted body acting on behalf of the United States or any state, county, or municipality which seeks to investigate crimes related to gambling, corruption of public officials, or any organized criminal activities;

(6)     that the applicant owes any federal, state, or local delinquent taxes, penalties, or interest; or

(7)     except for a manufacturer, the applicant has not been a resident of the State for two years.

(B)     The applicant for a license required by this chapter, and all principals of the applicant, must file with the application a sworn statement, under penalties of perjury, affirming that:

(1)     the person is not attempting to obtain a license on behalf of any undisclosed person or entity;

(2)     the person is of good character, honesty, and integrity;

(3)     the person's prior activities, criminal record, if any, reputation, habits, and associations do not pose a threat to the public interest of this State or to the effective regulation and control of video gaming; and

(4)     all information provided in the application is true.

Section 12-22-1170. Distributors, principals, machine owners, and machine operators, and any other persons the division or the department considers necessary have an affirmative duty to maintain on file with the department and the division current and correct disclosure of all principals and all material facts required for licensure.

Section 12-22-1180. Each applicant shall bear all risks of unintentional adverse public notice, embarrassment, criticism, damages, or financial loss which may result from any disclosure or publication of any material or information obtained by the department or division pursuant to action on an application.

Article 13
Penalties

Section 12-22-1310. (A) A person who fails, neglects, or refuses to comply with the terms and provisions of this chapter or who fails to attach the required license to any machine or device, is subject to a penalty of two thousand five hundred dollars for each failure, and the penalty must be assessed and collected by the department. This penalty must be deposited in the same manner as other monies collected pursuant to this chapter.

(B)     Except as provided in Section 12-22-1320, with respect to any failure to comply with any provisions of this chapter occurring at a licensed establishment, the machine operator and the machine owner are both liable for any penalty and are both subject to revocation and suspensions as provided in this chapter.

Section 12-22-1320. (A)(1) Except as provided in item (2) of this subsection, the department may revoke the licenses of establishments, machine owners, machine operators, and machines used in the establishment and impose a monetary penalty of not less than one thousand dollars and not more than ten thousand dollars on each of the owners of such licenses for each failure to comply with a provision of Section 12-22-710, or any provision of a regulation pertaining to Section 12-22-710.

(2) With respect to violations of Section 12-22-710(A)(4), the department may revoke the license of the establishment where the violation occurred.

(B)     Any establishment violating a provision of Section 12-22-710 or any provision of a regulation pertaining to Section 12-22-710 may have its privilege for operating or allowing the operation of video game machines suspended as follows:

(1)     upon the first violation, the privilege for operating or allowing the operation of machines is suspended for a period of up to six months;

(2)     upon the second violation, the privilege for operating or allowing the operation of machines is suspended for a period of up to one year;

(3)     upon the third or subsequent violation, the privilege for operating or allowing the operation of machines is suspended for a period of up to eighteen months.

(G)(1)     The department, upon a determination that the violation is willful, may refer the violation to the Attorney General or to the appropriate circuit solicitor for criminal prosecution, and, upon conviction of a willful violation, the person must be fined not more than ten thousand dollars or imprisoned not more than two years, or both.

(2)     Beginning on July 1, 2004, this subsection shall not apply to violations of Section 12-22-710(A)(1).

Section 12-22-1330. A person is guilty of a felony and, upon conviction, the person must be fined not more than twenty-five thousand dollars or imprisoned not more than five years, or both, if the person willfully:

(1)     tampers with a machine, location controller, or associated equipment with intent to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     manipulates the outcome, payoff, or operation of a machine;

(3)     launders or knowingly allows another to launder money through one or more machines;

Section 12-22-1340. The following activities are additional civil violations of this chapter subject to the penalties in Section 12-22-1310:

(1)     tampering with a machine, location controller, or any other part, device, or system to interfere with its proper operation or the proper operation of the central computer monitoring system;

(2)     operating, or allowing the operation of, machines that are not connected to the central computer monitoring system in accordance with this chapter;

(3)     refusing or otherwise preventing the inspection or examination by the department, the division, or any law enforcement officer, of any establishment, and any premises used for the manufacture, distribution, or storage of machines within this State; and

(4)     refusing or otherwise preventing the examination by the department or division of revenue, payouts, or net machine income, records or equipment of any licensed or unlicensed machine owner, machine operator, manufacturer, distributor, or establishment.

Section 12-22-1350.     (A)     A person in possession of, or operating, or allowing the operation of a contraband machine or contraband device at any place within this State is subject to a civil penalty of not more than ten thousand dollars per machine or piece of associated equipment.

(B)     When the department or division deems it necessary in connection with subsection (A), it may require the owner of a machine, device, or associate equipment to obtain a certification from an approved testing laboratory that the machine or a game or associate equipment meets the standards and requirements of this chapter. The cost of this certification is the responsibility of the owner of the machine, device, or associated equipment.

(C)     Contraband machines, contraband devices, or contraband associate equipment may be seized by any law enforcement officer of the State or any of its political subdivisions who shall appear before any magistrate of the county in which the machine, device, or associated equipment was seized. If the magistrate is satisfied that the item is contraband, the magistrate shall direct that it be destroyed. The magistrate, at his discretion, may order an examination of the item, in person before the magistrate or by an approved testing laboratory, to assist in the determination as to whether the item is contraband.

Section 12-22-1360. Skimming of machine proceeds is the intentional excluding or the taking of any action in an attempt to exclude anything or its value from the deposit, counting, collection, or computation of revenues from machines. Whoever commits skimming of machine proceeds is guilty of a felony and, upon conviction, must be imprisoned for not more than ten years, and must be fined not more than twenty-five thousand dollars, or both.

Section 12-22-1370.         No machine owner, manufacturer, distributor, machine operator, or any principal may have any financial interest whatsoever or any loans or business relationship with a testing laboratory or any contractual relationship with a testing laboratory except for a contract for the providing of testing services. Any person who violates the provisions of this section is guilty of a felony and upon conviction must be imprisoned for not more than ten years, and in addition may be fined not more than twenty-five thousand dollars.

Section 12-22-1380.         (A)     In addition to any other penalties, any machine or device not having attached thereto the required license, or which is improperly licensed, must be seized and confiscated by the department, its agents or employees, and sold at public auction after thirty days' advertisement. Upon payment of the license required, the department may, within its discretion, return any property so seized and confiscated and compromise any penalty assessed.

(B)     The owner or person from whom the property is seized may at any time within five days after the seizure repossess the property by filing with the department a bond in cash or a bond executed by a surety company authorized to do business in this State in double the amount of the tax and penalties due. Within ten days thereafter the person must bring action in a court of competent jurisdiction to have the seizure set aside; otherwise, the bond so filed must be declared forfeited by the department.

Section 12-22-1390. (A) When the department or the division is notified in writing that an establishment, owner or distributor is or has been in violation of this chapter and that one or more persons have notice or knowledge of a violation, the department or division shall have thirty days from the date of the receipt of the notice to initiate and enforcement action consistent with this chapter.

(B) If the department or division affirmatively declines to act or fails to initiate an enforcement action for the alleged violation within thirty days, the person or persons who have knowledge of the alleged violation may serve written notice upon the department of their intention to file a request for a proceeding to enforce the provisions of this chapter in the name of the department or division.

(C) Within thirty days of the receipt of the notice from the person or persons with knowledge of the alleged violation, the department or division shall forward the notice of intent to file a request for a proceeding to the Office of the Attorney General who shall determine:

(1) if the person or persons with knowledge of the violation has sufficient knowledge, expertise and experience to adequately represent the interests of the State, the department and the division in the action;

(2) if the person or persons with knowledge of the violation are willing to advance all costs and expenses to be incurred in the proceeding; and

(3) that the Office of the Attorney General will not pursue the enforcement of the alleged violation.

Upon written certification of the Office of the Attorney General that these conditions have been met, the person or persons with knowledge of the alleged violation may proceed to commence a civil action for any violation of any of the provisions of this chapter.

(D) If the Office of the Attorney General denies certification and fails to pursue enforcement within sixty days of notice or fails to act on a person's notice within thirty days of receipt, the person or persons with knowledge of a violation of this chapter may move to commence a civil action as provided herein.

(E) The civil action must be brought in the name of the State, and may be filed in any state court of competent jurisdiction. The person bringing the civil action may seek any fine or penalty that the State may seek.

(F) A copy of the complaint must be served on the Attorney General if he is not bringing the action, and the director, by the person bringing the action, either of whom may elect to join any action brought by the person.

(G) If the State, as determined by the Attorney General and the Governor acting together, joins with an action brought by a person under this section, the State, in addition to other fines or penalties, may request the suspension or revocation of licenses. The person shall receive at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to litigating the action. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(H) If the State, as determined by the Attorney General and the Governor acting together, does not join with the action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and revocation. The amount must not be less than twenty-five percent and must not be more than forty percent of the proceeds of the action or settlement, and must be paid out of the proceeds. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(I) The State is not liable for expenses which a person incurs in bringing an action under this section.

(J) No settlement may be entered without approval by the department.

(K) Any determination in an action under this section that a licensee has violated a provision of this chapter is grounds for revocation of those licenses and the department may bring a subsequent action for suspension or revocation.

Section 12-22-1400.     Conspiring to subvert the provisions of this chapter is a conspiracy as defined and punished in Section 16-17-410.

Section 12-22-1410. Each violation or each day in violation of a provision of this chapter or any provision of a regulation pertaining to this chapter constitutes a separate offense.

Section 12-22-1420.     The penalties authorized by this chapter are effective immediately upon imposition and may not be stayed by any administrative or judicial action.

Section 12-22-1430.     In any action under this chapter, no person may raise as a defense that he acted on the advice of his certified public accountant, unless he proves that he supplied that accountant with a copy of this chapter and all relevant regulations.

Article 15
Arcade Game Machines and Other Devices

Section 12-22-1510. Cash payouts are not permitted with respect to the games played on machines and other devices licensed under this article. The provisions of the other articles do not apply to the machines and devices licensed under this article.

Section 12-22-1520.     Every person required to obtain a license for any machine or device described in Section 12-22-1530 shall maintain records showing the manufacturer's serial number, model or type of machine, and the location of the machine. The taxpayer shall maintain information relating to the payment of any monies or compensation made to any persons as part of a lease or contractual agreement to operate the machine on the premises of the person. Information required by this section must be available on demand for inspection by a representative of the department.

Section 12-22-1530.     (A)     Every person who owns and operates, or places for use in another person's place or premises for a share of any revenue, one or more of the following machines or devices shall apply for and procure from the department a license effective for two years for the privilege of making use of the machine or device in this State. The person shall pay for the license a nonrefundable fee of fifty dollars for each machine or device in items (1) and (4), two hundred dollars for each machine or device in item (2), and two thousand dollars for each machine or device in item (3):

(1)     a machine for the playing of music or kiddy rides operated by a slot or mechanical amusement devices and juke boxes in which is deposited a coin or thing of value. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(2)     a machine for the playing of amusements or video games, without free play feature, or machines of the crane type operated by a slot in which is deposited a coin or thing of value and a machine for the playing of games or amusements, which has a free play feature, operated by a slot in which is deposited a coin or thing of value, and the machine is of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed. A machine on which an admissions tax is imposed is exempt from the license provisions of this section;

(3)     a machine of the nonpayout type, in-line pin game operated by a slot in which is deposited a coin or thing of value except machines of the nonpayout pin table type with levers or 'flippers' operated by the player by which the course of the balls may be altered or changed;

(4)     billiard or pocket billiard table, foosball table, bowling lane table, or skeeball table operated for profit.

(B)     The license must be purchased in advance on or before the first day of June every two years or before making a machine available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(C)     Machines which have multiplayer stations must have a separate license for each such station.

(D)     As an alternative to the license required in subsection (A), a person may be granted a nonrefundable seasonal license beginning April first and expiring September thirtieth, following the date of issue, which must not be prorated. The fee for this six-month license is one-fourth the biennial license fee.

(E)     If the license required in subsection (A) is purchased after June thirtieth, the license fee must be prorated on a twenty-four month basis with each month representing one twenty-fourth of the license fee imposed under subsection (A).

(F)     Upon application being made for a license to operate any machine, the department may presume that the operation of the machine is lawful, but the issuance by the department of a license does not make lawful the operation of any machine which is unlawful under the laws of this State. When a license has been issued, the sum paid for the license must not be refunded notwithstanding that the operation of the machine or apparatus is prohibited.

(G)     Failure to obtain a license as required by this article makes the person liable for the penalties imposed in this article.

(H)     Every person who maintains for use, or permits the use, on any place or premises occupied by him, any devices subject to the license imposed by subsection (A) of this section must attach the proper state license to a permanent, nontransferable part of the machine before its operation is commenced.

Section 12-22-1540.     (A)     In addition to all other licenses required by this article, a person required to obtain a license for any machine or device described in Section 12-22-1530 shall obtain an owner's license biennially as follows:

(1)     fifty dollars for devices in Section 12-22-1530(A)(1) and (A)(4);

(2)     two hundred dollars for devices in Sections 12-22-1530(A)(2) and 12-22-1530(A)(3).

(B)     Only one license is required regardless of the number or type of devices owned or operated, and the cost of that license is the highest fee enumerated in this section for a device owned or operated.

(C)     The license may be purchased in advance on or before the first day of June every two years or before making a machine or device available for play. All licenses expire May thirty-first the second year of which the license is valid following the date of issue.

(D)     Failure to pay taxes to the State is grounds for the cancellation of the license provided in this section.

(E)     The provisions of this section do not apply to any person with a current and valid machine owner's license issued under Article 3 of this chapter.

Section 12-22-1550.     In lieu of the licenses required under Sections 12-22-1530 and 12-22-1540, the department may issue a temporary license to persons making application to operate machines or devices required to be licensed under this article at a recognized county or state fair. The temporary license fee is the total amount of license fees required on all machines or devices for which application is made, based upon one-twenty-fourth of the biennial license required under Sections 12-22-1530 and 12-22-1540. The license is valid for the specific location designated on the license and the number of machines for which application was made and expires when the designated fair officially ends.

Section 12-22-1560.     Machines or devices licensed pursuant to Section 12-22-1530(A)(1), (A)(2), and (A)(4) are not subject to confiscation for a violation of Section 16-19-30, 16-19-40, 16-19-50, or 16-19-130.

Section 12-22-1570.     A person who fails, neglects, or refuses to comply with the provisions of this article, or who fails to attach the required license to any machine or device as required under this article, is subject to a penalty of five hundred dollars for each failure, and the penalty may be assessed and collected by the department. This penalty may be deposited to the credit of the general fund of the State.

Section 12-22-1580. In addition to the penalties above provided, any machine, apparatus, billiard, or pocket billiard table not having attached thereto the required license, or which is improperly licensed, must be seized and confiscated by the department, its agents or employees, and sold at public auction after thirty days' advertisement. Upon payment of the license required, the department may, within its discretion, return any property so seized and confiscated and compromise any penalty assessed.

Section 12-22-1590.     Municipalities and counties may levy a license tax on the business tax taxed under this article but in no case may the tax exceed twenty-five dollars.

Section 12-22-1600.     Any person who owns or operates machines or devices described in Section 12-22-1530 must have attached to the machine or device information identifying the owner of the machine or device. The identification must be placed on an area of the machine or device which is visible for inspection purposes. This identification is a condition precedent must be attached before the machines or devices may be operated on location or in an establishment. Intentional or willful failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of this chapter.

Section 12-22-1610.     If an unlicensed machine is seized by law enforcement as a prohibited machine under the laws of this State, the department shall assess a penalty equal to the amount of the license fee.

Article 17
Transitional Provisions

Section 12-22-1700. In accordance with this chapter, the department may set the standards for video game machines, modems, location controllers, software, hardware, the central computer monitoring system, and associated equipment. Failure to comply with these standards subjects the violator to the civil and criminal penalties, including fines, suspensions, and revocations established in this chapter including the provisions relating to the time such penalties apply without regard to stays. Until the department adopts such standards, the standards provided in Parts A through D of this section must apply and must be met before issuance of a license. The definitions provided in Section 12-22-10 apply for purposes of this section.

Part A
Technical standards for Machines and Location Controllers

(A)     Each machine must be able to connect to a monitoring system via a serial communications port to a location controller meeting the requirements set forth by the department and using a communications protocol provided by the department or its designated agent.

(B)     Each machine must be capable of monitoring and storing the following items:

(1)     The cumulative total of the following for each twenty-four hour period, from 12:00 a.m. to 12:00 a.m., which may be recorded as a "snapshot" of the specified counters at the beginning and ending of each twenty-four hour period:

(a)     cash in, defined as money in dollars and cents;

(b)     credits purchased;

(c)     credits earned or won;

(d)     credits played;

(e)     credits paid;

(f)     cash paid.

(2)     The following security events and the time and date of such events:

(a)     game door open;

(b)     coin-bill/drop door open;

(c)     power off/on;

(d)     off line/on line to the location controller;

(e)     game control board access (logic area).

(C)     Each machine must contain Erasable Programmable Read Only Memory (EPROM) containing all game logic, and contain RAM (Random Access Memory) containing all counters and meters in electronic format, or such other technology as may later be designated by the department.

(D)     Each machine is not allowed to operate if it is not connected in on-line mode to a location controller meeting the requirements set forth by the department.

(E)     A machine must collect the data required in this chapter and communicate this information to a location controller for storage until requested by the central computer monitoring system. Each security event listed in this chapter may reflect a time and date stamp and the VGMID of the machine.

(F)     A machine automatically must disable itself if communication is lost from the location controller. A machine must store this event. A machine must report a disabling event to the location controller when communication is restored.

(G)     A machine must be capable of being disabled by the central computer monitoring system or the location controller.

(H)     A machine must be capable of being enabled by the central computer monitoring system or by location controller once it has been enabled by the central computer monitoring system.

(I)     A machine must be protected from unauthorized interference or tampering by any person or external device so as to not corrupt or suspend the communication signals or transmitted data required for the proper functioning of the machine and the associated location controller.

(J)     Each machine must have a surge protector installed on the line that feeds power to the machine and must meet the requirements of the department.

Part B
Hardware Specifications

(A)     A machine must have electrical and mechanical parts and design principles that do not subject a player to physical hazards.

(B)     A machine must have a battery backup or an equivalent for the electronic meters and be capable of maintaining accurate information required by law and regulation for one hundred eighty days after power is discontinued from the machine. The backup device must be kept within the locked logic board compartment of the machine.

(C)     A machine must have an on/off switch that controls the electrical current used in the operation of the machine and must be in an accessible place within the interior of the machine.

(D)     The operation of each machine must not be adversely affected by static discharge or other electromagnetic interference.

(E)     Each machine must have one coin acceptor, either electronic or mechanical, one bill acceptor, either electronic or mechanical, or one of each. Approval letters and test reports of the coin and bill acceptors from other state or federal jurisdictions must be submitted to the department. All coin and bill acceptors are subject to approval by the department.

(F)     The internal space of a machine must not be readily accessible when the front door is closed or sealed.

(G)     Logic boards and software EPROMs and RAM must be in a separate, locked and sealed area within the machine and must only be accessible only in accordance with guidelines established by the department. The area must be sealed by, and accessible to, the division.

(H)     The cash and coin compartment must be contained in a locked area within or attached to the machine. This compartment must be accessible by the machine owner or machine operator.

(I)     No switches of any kind, to include but not limited to hardware and software switches, must be installed that alter the pay tables or payout percentages in the operation of a game below the minimum payback of ninety percent, within standard rounding, in which the theoretical payout percentage is determined using standard methods of probability theory. Switches or other devices may be installed to control graphic routines, speed of play, and sound.

(J)     A single printing mechanism must be capable of printing an original ticket and retaining an exact, legible copy within the machine. The ticket must record the number of credits, the value of the credit, and a validation number, when credits accrued are printed on a ticket for validation.

(K)     The printed ticket is the only allowable method for issuing payouts. Hoppers are prohibited.

(L)     A clearly visible identification plate must appear on the front exterior of the machine that contains the manufacturer, the manufacturer's serial number, the model number, the VGMID, and the name of the machine owner. This plate must not be removed. This identification is a condition precedent before the machines may be operated on location. Failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of Chapter 22 of Title 12 of the 1976 Code including the provision of Section 12-22-1380 relating to the time such penalties apply without regard to stays.

(M)     Equipment must be installed in a manner that enables a machine to communicate with the department's central computer monitoring system via the location controller using a communications protocol provided to each manufacturer of machines and location controllers provided by the department or its designated agent.

Part C

Software Requirements

(A)     Each machine must maintain electronic accounting meters at all times, regardless of whether the machine is being supplied with power. Each meter must be capable of maintaining totals no less than eight digits in length for the information required by the law and by regulation of the department.

(B)     Electronic meters must record the cumulative total of cash in, credits purchased, credits paid, credits earned/won, cash paid, and credits played, per each twenty-four hour period, from 12:00 a.m. to 12:00 a.m. This information may be recorded as a snapshot of the specified counters at the beginning and ending of each twenty-four hour period.

(C)     Electronic meters also must record security events, with the time and dates, to include game door open, coin-bill/drop door open, power off/on, off line/on line to the location controller, and game control board access.

(D)     No machine may have a mechanism that an error will cause the electronic accounting meters to automatically clear. Clearing of the electronic accounting meters may be completed only after notification and approval by the department and supervised by the division.

(E)     Each machine must have a random number generator that determines the occurrence of a specific card or a specific number to be displayed on the video screen. A selection process is considered random if it meets all the following requirements:

(1)     each card position or each number position satisfies the ninety-nine percent confidence limit using the standard chi-squared analysis;

(2)     each card or number position does not produce a significant statistic with regard to producing patterns of occurrences. Each card or number position is considered random if it meets the ninety-nine percent confidence level with regard to the runs test or any similar pattern testing statistic;

(3)     each card or number position is independently chosen without regard to any other card or number drawn within that game play. This test is the "correlation test". Each pair of card or number positions is considered random if they meet the ninety-nine percent confidence level using standard correlation analysis; and

(4)     each card or number position meets the serial correlation test, meaning that it is independently chosen without reference to the same card or number position in the previous game. Each card or number position is considered random if it meets the ninety-nine percent confidence level using standard serial correlation analysis.

(F)     All costs associated with the machines, to include upgrades or retrofits, in order for such machines to meet the requirements of the laws and regulations of this State are the responsibility of the machine owner.

Part D
Multiplayer Unit Requirements

(A)     For purposes of this part, multiplayer units are divided into two general groups:

(1)     units that share some common components (Group I); and

(2)     units that share most components (Group II).

(B)     Group I and Group II units are based on the common principal that they both try to accurately mimic live table play. Both groups may consist of a number of player stations, generally either three or five player units per machine, and some type of dealer display. Both groups of games allow the players to wager on the next hand to be played and the object of the game, and the payout table is based on the player beating the dealer's hand. The player stations and dealer draw from a common deck of cards. Neither of these groups contains any program routines that allow the player or device to gain an unfair advantage or to cheat the device or player.

(C)     Group I and Group II units share common elements. The following define the difference in the two groups of multiplayer units:

(1)     Group I Units: Group I units have individual logic boards containing player station EPROMs and RAM containing all meter and event information for the individual station, as well as master logic boards in the dealer station containing master meters and the random number generation software used commonly by all of the player stations.

(2)     Group II Units: Group II units often do not have any game or logic boards in the individual player stations. The program and game memory are stored in the dealer's station. The player's stations are generally "Dumb Terminals" containing player input buttons and coin or bill acceptors. This group of terminals sends and receives all information directly from the dealer's station. Generally, these stations do not have separate power switches. All electrical leads are fed from the dealer's station to the individual player's station and all game display information is shown on the common video display. The dealer's station controls the operation of the game including the random number generator, all meter information, all display functions, all communications with the central system, all event detection and storage logic, and all processor units and EPROMs used for the game. Individual terminals are not in "direct" communication with the central system, but rather use the dealer's station as a "head of string" device for each of the individual stations. The dealer's station contains all individual station meters as well as master meters for the entire group.

(D)     A multiplayer unit must be handled in one of two ways, depending on whether it is a Group I machine or a Group II machine. Implementation of either method does not require modifications of the communications protocol or operational changes for either the department or the individual locations. Both methods may be handled entirely in the program code of the individual machines.

(1)     Group I unit stations as described above must be wired as if they are separate machines. Each player station must have an optical connection and each station is responsible for its own communications. All meter and event data must be stored on the individual stations and be transmitted to the system on demand. EPROM signature calculations must include the dealer's station code, but each station must perform individual calculations and transmit the results independently of each other. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(2)     Group II games must be set up with a dedicated phone line and location controller in the same manner as every other licensed establishment in the State. The fiber optics must leave the location controller and go directly to the dealer's station and then back to the location controller. All communications must be sent from the central system and the site controller exactly as detailed in the communications protocol. The dealer's station is responsible for handling all of the communications for the player stations. If the system asked for meters for station number one, the dealer's station is responsible for collecting and sending that data to the central system. The central system must behave exactly as if there are five separate machines. EPROM signature calculations must be performed over the dealer's station program code and transmitted back five times just as if there are five machines all running the same game code. All security, accounting, cash ticket, and event reporting functions must be supported in full.

(E)     The department may handle on an individual basis, any type of multiplayer units that does not fit in either category Group I or Group II. Other multiplayer units are required to meet all applicable programming, communications, and security rules and regulations.

SECTION     11.     Section 12-54-40(H) of the 1976 Code is amended to read:

"(H)         A person who:

(1)     must obtain a license or purchase stamps for identification purposes, and who fails to obtain or display the license properly, or fails to affix the stamps properly; or

(2)     to must comply with statutory provisions and fails to do so, is subject to a penalty of not less than fifty dollars nor more than five hundred dollars for each failure. For failure to obtain or display a license as prescribed in Sections 12-21-2720 and 12-21-2730 12-22-320, the penalty is fifty two hundred dollars for each failure to comply."

SECTION     12.     Section 12-54-40(M) of the 1976 Code is amended to read:

"(M)     A machine owner or distributor, as defined in Article 20, Chapter 21 of this title, who allows or causes a machine to be operated without a metering device, or who wilfully places a machine on location or who wilfully allows or causes a machine to be operated with a metering device that does not accurately record the information required under Article 20, Chapter 21 of this title is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years, without benefit of probation, parole, or suspension of sentence, and in addition may be fined not more than twenty-five thousand dollars. A machine owner or distributor, as defined in Chapter 22 of this title, who willfully places a machine on location, or who willfully allows or causes a machine to be operated, that does not accurately record the information required under Chapter 22 of this title is guilty of a felony and, upon conviction, must be imprisoned for not less than one year nor more than ten years, without benefit of probation, parole, or suspension of sentence, and in addition may be fined not more than twenty-five thousand dollars."

SECTION     13.     Section 16-19-60 of the 1976 Code is amended to read:

"Section 16-19-60. Nothing in Section 16-19-40 or 16-19-50 shall extend to coin-operated nonpayout machines with a free play feature; provided, that nothing herein shall authorize the licensing, possession, or operation of any machine which disburses money to the player. Nothing in this section prohibits regulation of video games pursuant to Article 20, Chapter 21 of Title 12, the Video Games Machines Act, including the prohibition on payoffs and location of these machines in counties where such payouts and machines are prohibited under the local option provisions of that article."

SECTION     14.     Chapter 19, Title 16 of the 1976 Code is amended by adding:

"Section 16-19-65.         (A)     It is unlawful for any person to keep or operate on his premises or permit to be kept or operated on his premises within this State any vending or slot machine, punch board, pull board, or other device pertaining to games or chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, and video games with free play feature which meet the technical requirements provided for in Article 9, Chapter 22 of Title 12, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance.

(B)     Any person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned for a period of not more than one year, or both.

(C)     Any vending or slot machine, punch board, or other device pertaining to games of chance prohibited by this section must be seized by any law enforcement officer and at once taken before any magistrate of the county in which the machine, board, or device is seized who shall immediately examine it, and if satisfied that it is in violation of this section or any other law of this State, shall direct that it be immediately destroyed.

Section 16-19-66.     (A)     It is unlawful for a person to operate, cause to operate, or attempt to operate an automatic vending machine, slot machine, coin-box telephone, or other receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service by means of a slug or any false, counterfeited, mutilated, sweated, or foreign coin, or by any means not lawfully authorized by the owner, lessee, or licensee of the receptacle.

(B)     It is unlawful for a person to take, obtain, or receive from or in connection with any receptacle designed to receive lawful coin of the United States of America in connection with the sale, use, or enjoyment of property or service any goods, wares, merchandise, gas, electric current, or other article of value or the use or enjoyment of any telephone or telegraph facilities, or service, or of any musical instrument, phonograph, or other property, without depositing in and surrendering to the receptacle lawful coin of the United States of America in the amount required by the owner, lessee, or licensee of the receptacle.

(C)     A person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined in the discretion of the court or imprisoned not more than two years.

Section 16-19-67.     A person who, with intent to cheat or defraud the owner, lessee, licensee, or other person entitled to the content of an automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance designed to receive lawful coin or currency of the United States of America in connection with the sale, use, or enjoyment of property or service or who, knowing that the same is intended for unlawful use, manufactures for sale, or sells or gives away any slug, device, or substance intended or calculated to be placed or deposited in the automatic vending machine, slot machine, coin-box telephone, or other receptacle, depository, or contrivance is guilty of a felony and, upon conviction, must be fined in the discretion of the court or imprisoned not more than five years."

SECTION     15.     Subitem (3) of Section 61-4-580 of the 1976 Code is amended to read:

"(3)     permit gambling or games of chance which is not authorized by Chapter 22 of Title 12."

SECTION     16.     (A)     The provisions of Chapter 22, Title 12 as added by this act apply to any and all licenses to be issued on or after December 1, 1999.

(B)(1)     By January 31, 2000, a person who is licensed pursuant to Section 12-21-2728(A)(3) on November 30, 1999, for a license period which expires on May 31, 2000, shall apply for a new license to be issued in accordance with Chapter 22, Title 12. The person may continue to do business under the license issued under Section 12-21-2728(A)(3) until the Department of Revenue makes a determination regarding whether the person should be licensed under the provisions of Chapter 22, Title 12.

(2)(a)     Upon a favorable licensing determination, the department shall issue a new license with an expiration date in the year 2002 established in accordance with the provisions of Section 12-22-320(D).

(b)     The license fees shall be prorated based upon the expiration date for the new license and any unused portion of the license fee for the license which expires on May 31, 2000 shall be applied towards payment of the fee for the new license.

(C)(1)     By July 31, 2000, a person who is licensed pursuant to Section 12-21-2728(A)(3) on November 30, 1999, for a license period which expires on May 31, 2001, shall apply for a new license to be issued in accordance with Chapter 22, Title 12. The person may continue to do business under the license issued under Section 12-21-2728(A)(3) until the Department of Revenue makes a determination regarding whether the person should be licensed under the provisions of Chapter 22, Title 12.

(2)(a)     Upon a favorable licensing determination, the department shall issue a new license with an expiration date in the year 2003 established in accordance with the provisions of Section 12-22-320(D).

(b)     The license fees shall be prorated based upon the expiration date for the new license and any unused portion of the license fee for the license which expires on May 31, 2001, shall be applied towards payment of the fee for the new license.

(3)     Upon an unfavorable licensing determination, the department shall revoke the license issued pursuant to Section 12-21-2728(A)(3) and shall issue a prorated refund to the person for the remainder of the license period.

(D)     By December 31, 1999, a person who is required to be licensed as a machine operator and who is engaged in business at a location that is licensed pursuant to Chapter 36, Title 12 on November 30, 1999, shall apply for a machine operator's license issued pursuant to the provisions of Chapter 22, Title 12.

(E)     By December 31, 1999, a person who is required to be licensed as a machine operator shall apply for an establishment license issued pursuant to the provisions of Chapter 22, Title 12 for a location that is licensed pursuant to Chapter 36, Title 12 on November 30, 1999.

(F)     A machine license issued pursuant to Section 12-21-2720(A)(3) shall continue in effect until the expiration of the original license period provided a machine must meet all requirements imposed by Chapter 22 of Title 12 when these requirements take effect.

(G) The department, at its discretion and for the efficient administration of the law, may prorate licenses in any manner to implement or change the expiration date established in this section and to stagger the issuances of the licenses by county or by any other method considered appropriate by the department.

SECTION     17.     A.     The application of Articles 19 and 20, Chapter 21, Title 12 is suspended prospectively, except as provided in Section 16. To the extent that regulations promulgated pursuant to the authority of Articles 19 and 20, Chapter 21, Title 12 are not inconsistent with Section 10, those regulations remain in effect until and unless otherwise modified or repealed pursuant to the Administrative Procedures Act.

B.     Articles 19 and 20, Chapter 21, Title 12 are repealed effective December 31, 2000.

PART     IV
Gambling Losses and Civil Actions

SECTION     18.     Article 1, Chapter 1, Title 32 of the 1976 Code is amended by adding:

"Section 32-1-60.     Beginning on the effective date of this section, the provisions of Sections 32-1-10, 32-1-20, and 32-1-30 apply only to those gambling activities not authorized by law.

SECTION     19.     Article 20, Chapter 21, Title 12 of the 1976 Code is amended by adding:

"Section 12-21-2805. (A) When the department or the division is notified in writing that an establishment, owner or distributor is or has been in violation of this article or Article 19 of this chapter and that one or more persons have notice or knowledge of a violation, the department or division shall have thirty days from the date of the receipt of the notice to initiate and enforcement action consistent with this chapter.

(B) If the department or division affirmatively declines to act or fails to initiate an enforcement action for the alleged violation within thirty days, the person or persons who have knowledge of the alleged violation may serve written notice upon the department of their intention to file a request for a proceeding to enforce the provisions of this chapter in the name of the department or division.

(C) Within thirty days of the receipt of the notice from the person or persons with knowledge of the alleged violation, the department or division shall forward the notice of intent to file a request for a proceeding to the Office of the Attorney General who shall determine:

(1) if the person or persons with knowledge of the violation has sufficient knowledge, expertise and experience to adequately represent the interests of the State, the department and the division in the action;

(2) if the person or persons with knowledge of the violation are willing to advance all costs and expenses to be incurred in the proceeding; and

(3) that the Office of the Attorney General will not pursue the enforcement of the alleged violation.

Upon written certification of the Office of the Attorney General that these conditions have been met, the person or persons with knowledge of the alleged violation may proceed to commence a civil action for any violation of any of the provisions of this chapter.

(D) If the Office of the Attorney General denies certification and fails to pursue enforcement within sixty days of notice or fails to act on a person's notice within thirty days of receipt, the person or persons with knowledge of a violation of this chapter may move to commence a civil action as provided herein.

(E) The civil action must be brought in the name of the State, and may be filed in any state court of competent jurisdiction. The person bringing the civil action may seek any fine or penalty that the State may seek.

(F) A copy of the complaint must be served on the Attorney General if he is not bringing the action, and the director, by the person bringing the action, either of whom may elect to join any action brought by the person.

(G) If the State, as determined by the Attorney General and the Governor acting together, joins with an action brought by a person under this section, the State, in addition to other fines or penalties, may request the suspension or revocation of licenses. The person shall receive at least fifteen percent but not more than twenty-five percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to litigating the action. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(H) If the State, as determined by the Attorney General and the Governor acting together, does not join with the action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and revocation. The amount must not be less than twenty-five percent and must not be more than forty percent of the proceeds of the action or settlement, and must be paid out of the proceeds. The person also shall receive an additional amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable hourly attorney's fees and costs, to be paid by the defendant.

(I) The State is not liable for expenses which a person incurs in bringing an action under this section.

(J) No settlement may be entered without approval by the department.

(K) Any determination in an action under this section that a licensee has violated a provision of this chapter is grounds for revocation of those licenses and the department may bring a subsequent action for suspension or revocation.

PART V
Miscellaneous

SECTION     20.     If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

SECTION     21.     The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.

SECTION     22.     (A) It is the intent of the General Assembly in providing for the statewide referendum required by this act to allow an affirmative vote of the qualified electors of this State to serve as a trigger for the operation of an effective clause, as contained in this act, duly passed by the General Assembly. The result of the referendum is a contingency that is certain, based on the result of a referendum, and will thereby cause some parts of this act to take effect and others not to take effect. All provisions in this act are enactments of the General Assembly that meet the formalities of an act required under Article III of the Constitution of this State which provides for the legislative power in the government of this State. While Article III does not provide for a referendum as part of the legislative process, neither does it prohibit a referendum in which the result is a certain contingency that determines which parts of an act take effect. As the legislative power of the General Assembly is limited only by that which is specifically prohibited in the Constitution of this State and the Constitution of the United States, the General Assembly finds that the referendum required pursuant to this act is a valid exercise of the legislative power of this State.

(B) The General Assembly by enactment of this act has no intent to enact any provision allowed by 15 U.S.C. 1175, commonly referred to as the Johnson Act, or to create any state enactment authorized by the Johnson Act.

(C) It is the intent of the General Assembly that the provisions of this act shall not be construed to:

(1) affect any pending lawsuit, as prescribed in Section 21; or

(2) affect any provision of current law, unless or until it is specifically modified or expressly repealed as provided in this act.

PART VI
Effective Dates

SECTION     23.     Upon approval by the Governor, this act shall take effect in the following manner:

(A)     Parts II, IV, V, and VI take effect upon approval by the Governor;

(B)     Article 9 of Chapter 22, Title 12, as added in Part III, Section 10, takes effect July 1, 1999, except that Sections 12-22-1020 and 12-22-1030 take effect when the remaining provisions of Part III take effect as provided in subsection (E). If the remaining provisions of Part III do not take effect as provided in subsection (E), then Article 9 of Chapter 22, Title 12 is repealed on the date that the State Board of Canvassers certifies a majority "no" vote in the referendum provided in Part II of this act. Sections 12-22-730 and 12-22-740 and subsections (19) and (22) of Section 12-22-10, as added in Part III, Section 10, take effect June 1, 1999. If the remaining provisions of Part III do not take effect, then Sections 12-22-730 and 12-22-740 and subsections (19) and (22) of Section 12-22-10 are repealed on the date that the State Board of Canvassers certifies a majority "no" vote in the referendum provided in Part II of this act;

(C)     Part I takes effect July 1, 2000;

(D)     If Part I takes effect, the South Carolina Department of Revenue, upon application, shall refund to any person holding a license for the operation of video game machines, on a pro rata basis, the portion of any license fee previously paid to the department for licenses that extend beyond June 30, 2000;

(E)     If the State Board of Canvassers certifies a majority "yes" vote in the referendum provided in Part II of this act, then Part I does not take effect, and the remaining provisions of Part III take effect on December 1, 1999, and Section 19 of Part IV is repealed, except that the provisions of Section 21 shall apply to any pending civil actions brought under Section 12-21-2805./
Amend title to conform.

/s/Thomas Moore                           /s/James Law
/s/Wes Hayes                              Rex Rice
/s/Ernie Passailaigue                     /s/Marion Carnell
On Part of the Senate.                    On Part of the House.

Rep. CARNELL explained the Conference Report.

Rep. ALTMAN spoke against the Conference Report.

The question then recurred to the adoption of the Conference Report.

Rep. LOFTIS demanded the yeas and nays, which were taken, resulting as follows:

Yeas 75; Nays 33

Those who voted in the affirmative are:

Allen                  Allison                Askins
Bailey                 Bales                  Barfield
Barrett                Battle                 Bowers
Breeland               Brown G.               Brown H.
Brown J.               Brown T.               Carnell
Cato                   Chellis                Clyburn
Cobb-Hunter            Cooper                 Cotty
Dantzler               Edge                   Emory
Govan                  Harrell                Harvin
Haskins                Hayes                  Hines J.
Hinson                 Hosey                  Howard
Inabinett              Jennings               Keegan
Kelley                 Kennedy                Knotts
Law                    Lee                    Limehouse
Lloyd                  Lourie                 Mack
McGee                  McLeod M.              McLeod W.
Miller                 Moody-Lawrence         Neal
Neal J.M.              Neilson                Ott
Parks                  Pinckney               Quinn
Riser                  Rodgers                Rutherford
Sandifer               Scott                  Seithel
Smith J.               Stuart                 Taylor
Townsend               Webb                   Whatley
Whipper                Wilder                 Wilkes
Wilkins                Witherspoon            Young-Brickell

Total--75

Those who voted in the negative are:

Altman                 Beck                   Campsen
Delleney               Easterday              Fleming
Frye                   Gamble                 Gilham
Gourdine               Hamilton               Harris
Hawkins                Kirsh                  Klauber
Koon                   Leach                  Loftis
Lucas                  Martin                 McCraw
Meacham                Phillips               Rice
Robinson               Sharpe                 Sheheen
Simrill                Smith F.               Smith R.
Stille                 Trotter                Vaughn

Total--33

So, the Conference Report was adopted and a message was ordered sent to the Senate accordingly.

RECORD FOR VOTING

I inadvertently hit Rep. Neal's voting button and changed his vote from "no" to "yes".

Rep. RUTHERFORD

MESSAGE FROM THE SENATE

The following was received.

Columbia, S.C., June 30, 1999
Mr. Speaker and Members of the House:

The Senate respectfully informs your Honorable Body that it has adopted the report of the Committee of Conference on H. 3834:
H.3834 (Word version) -- Rep.Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.
Very respectfully,
President

Received as information.

MESSAGE FROM THE SENATE

The following was received.

Columbia, S.C., June 30, 1999
Mr. Speaker and Members of the House:

The Senate respectfully informs your Honorable Body that the report of the Committee of Conference having been adopted by both Houses ordered that the title be changed to that of an Act and the Act enrolled for Ratification:
H.3834 (Word version) -- Rep. Robinson: A BILL TO AMEND SECTION 2-7-76, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FISCAL IMPACT STATEMENTS FOR PROPOSED LEGISLATION AFFECTING COUNTIES OR MUNICIPALITIES, SO AS TO REQUIRE THE ACQUISITION OF A FISCAL IMPACT STATEMENT FROM THE "BOARD OF ECONOMIC ADVISORS" INSTEAD OF FROM THE "DEPARTMENT OF REVENUE" AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO ADOPT APPLICATION OF THE INTERNAL REVENUE CODE AS AMENDED THROUGH TAXABLE YEAR 1998; TO AMEND SECTION 12-6-1120, AS AMENDED, RELATING TO COMPUTATION OF GROSS INCOME FOR STATE TAX PURPOSES, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3410, RELATING TO INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO PROVIDE FOR DETERMINING THE PER CAPITA INCOME FOR PURPOSES OF CALCULATING ADDITIONAL TAX CREDIT FOR CREATION OF NEW HEADQUARTERS JOBS BY USING THE MOST RECENT PER CAPITA INCOME DATA AVAILABLE AT THE END OF THE TAXABLE YEAR THE JOBS ARE FILLED; TO AMEND SECTION 12-6-3465, RELATING TO RECYCLING FACILITY TAX CREDITS, SO AS TO UPDATE CODE CROSS REFERENCES; TO AMEND SECTION 12-16-20, RELATING TO DEFINITIONS FOR PURPOSES OF THE ESTATE TAX, SO AS TO DEFINE THE INTERNAL REVENUE CODE AS AMENDED THROUGH 1998; TO AMEND SECTION 12-20-20, RELATING TO FILING OF A CORPORATE ANNUAL REPORT, SO AS TO UPDATE A CROSS REFERENCE; TO AMEND SECTION 12-36-510, AS AMENDED, RELATING TO RETAIL LICENSE REQUIREMENTS, SO AS TO DELETE THE REQUIREMENT THAT A FESTIVAL BE LISTED AS A SPECIAL EVENT WITH THE DEPARTMENT OF PARKS, RECREATION, AND TOURISM; TO AMEND SECTION 12-37-251, AS AMENDED, RELATING TO THE HOMESTEAD EXEMPTION, SO AS TO PROVIDE THAT THE BOARD OF ECONOMIC ADVISORS, INSTEAD OF THE DEPARTMENT OF REVENUE, ESTIMATE THE TOTAL SCHOOL TAX REVENUE LOSS FROM THE EXEMPTION; AND TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES, SO AS TO INCREASE FROM THIRTY TO NINETY THE NUMBER OF DAYS A CORPORATION HAS TO FILE A CLAIM FOR REFUND AFTER AN ADJUSTMENT TO ITS TAXABLE INCOME IS MADE BY THE INTERNAL REVENUE SERVICE.

The Senate has ordered the Bill enrolled for Ratification.
Very respectfully,
President

Received as information.

MESSAGE FROM THE SENATE

The following was received.

Columbia, S.C., June 30, 1999
Mr. Speaker and Members of the House:

The Senate respectfully invites your Honorable Body to attend in the Senate Chamber at 1:50 a.m. for the purpose of Ratifying Acts.

Very respectfully,
President

On motion of Rep. BARFIELD the invitation was accepted.

MOTION ADOPTED

Rep. WEBB moved that pending the Ratification of Acts, the House stand adjourned Sine Die, which was agreed to.

RATIFICATION OF ACTS

At 2:10 A. M. the House attended in the Senate Chamber, where the following Act was duly ratified:

(R212, H. 3834 (Word version)) -- Rep. Robinson: AN ACT TO AMEND SECTIONS 12-21-2710, AS AMENDED, 12-21-2712, 12-21-2720, AS AMENDED, AND 12-21-2726, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO COIN-OPERATED MACHINES OR DEVICES, SO AS TO EXTEND THE PROHIBITION ON SLOT MACHINES AND OTHER MACHINES OR DEVICES PERTAINING TO GAMES OF CHANCE TO VIDEO GAMES WITH A FREE PLAY FEATURE OR ANY OTHER COIN-OPERATED MACHINE OR DEVICE USED FOR GAMBLING, TO EXTEND THE SEIZURE AND DESTRUCTION PROVISIONS APPLICABLE TO GAMES OF CHANCE TO THESE EXPANDED PROHIBITIONS, TO CONFORM EXISTING LICENSING REQUIREMENTS FOR COIN-OPERATED MACHINES AND DEVICES TO THESE EXPANDED PROHIBITIONS AND TO DELETE REFERENCES TO PROVISIONS OF LAW REPEALED BY THIS SECTION; TO AMEND SECTION 12-54-40, AS AMENDED, RELATING TO TAX CRIMES AND PENALTIES, SO AS TO DELETE THE OFFENSE OF OPERATING AN UNMETERED VIDEO GAME WITH A FREE PLAY FEATURE; TO AMEND SECTIONS 16-19-40 AND 16-19-50, RELATING TO THE OFFENSE OF GAMBLING, SO AS TO EXTEND THESE OFFENSES SPECIFICALLY TO PLAYING OR MAINTAINING ANY LICENSED COIN-OPERATED MACHINE OR DEVICE USED FOR GAMBLING PURPOSES; AND TO REPEAL SECTIONS 12-21-2703, 16-19-60, AND ARTICLE 20, CHAPTER 21 OF TITLE 12 RELATING RESPECTIVELY TO THE RETAIL LICENSE REQUIREMENT FOR A LOCATION WITH VIDEO GAMES WITH A FREE PLAY FEATURE, THE EXEMPTION OF VIDEO GAMES WITH A FREE PLAY FEATURE FROM THE GAMBLING OFFENSES, AND THE VIDEO GAMES MACHINES ACT, ALL OF THE ABOVE ENACTED FOR THE PURPOSE OF PROHIBITING CASH PAYOUTS FOR CREDITS EARNED ON VIDEO GAME MACHINES ON AND AFTER JULY 1, 2000; TO PROVIDE FOR A STATEWIDE REFERENDUM ON NOVEMBER 2, 1999, TO ASCERTAIN WHETHER OR NOT THE QUALIFIED ELECTORS OF THIS STATE DESIRE THAT CASH PAYOUTS FOR CREDITS EARNED ON VIDEO GAME MACHINES SHALL CONTINUE TO BE ALLOWED AFTER JUNE 30, 2000, AND TO PROVIDE A LICENSE FEE SURCHARGE ON EXISTING MACHINES TO PAY FOR THIS REFERENDUM, TO PROVIDE THAT IF THE QUALIFIED ELECTORS VOTE TO CONTINUE TO PERMIT SUCH CASH PAYOUTS, THE ABOVE ENACTED PROVISIONS PROHIBITING PAYOUTS SHALL NOT TAKE EFFECT AND INSTEAD THAT TITLE 12 OF THE 1976 CODE RELATING TO TAXATION SHALL BE AMENDED BY ADDING CHAPTER 22 SO AS TO PROVIDE FOR THE REGULATION, LICENSING, TAXATION, AND CIVIL AND CRIMINAL ENFORCEMENT OF VIDEO GAME MACHINES WITH A FREE PLAY FEATURE, ARCADE GAME MACHINES, AND OTHER DEVICES INCLUDING PROVISIONS TO VEST PRIMARY ENFORCEMENT AND REGULATORY POWERS IN THE DEPARTMENT OF REVENUE AND THE SOUTH CAROLINA LAW ENFORCEMENT DIVISION, TO PROVIDE FOR LICENSE FEES ON MACHINE MANUFACTURERS, DISTRIBUTORS, AND OWNERS TO PROVIDE LICENSE FEES FOR MACHINES AND FOR THE LICENSING OF OPERATORS AND ESTABLISHMENTS, TO PROVIDE FOR AN IMPOSITION OF TAXES ON NET MACHINE INCOME, TO PROVIDE FOR THE USE OF REVENUES GENERATED BY THIS CHAPTER, TO PROVIDE FOR LOCATION AND OTHER RESTRICTIONS, NEW CASINO PROHIBITIONS AND THE PHASING OUT OR CONTINUATION OF EXISTING CASINOS UNDER CERTAIN CONDITIONS, TO PROVIDE FOR PUBLIC NOTICE AND OTHER NOTIFICATION PROVISIONS, TO PROVIDE FOR THE MANNER IN WHICH AND REQUIREMENTS UNDER WHICH THESE MACHINES MAY BE PLAYED INCLUDING PROHIBITING THE OFFERING OF INDUCEMENTS, THE REGULATION OF ADVERTISING, AND CERTAIN LIMITATIONS ON BETS AND PAYOUTS, TO PROVIDE FOR TECHNICAL STANDARDS AND SPECIFICATIONS FOR THESE MACHINES AND THEIR EQUIPMENT INCLUDING TEMPORARY STANDARDS UNTIL THE DEPARTMENT OF REVENUE ADOPTS PERMANENT STANDARDS UNDER THIS CHAPTER, TO PROVIDE FOR BACKGROUND INVESTIGATIONS AND THE ACTIONS THAT MAY BE TAKEN AS A RESULT OF THE BACKGROUND INVESTIGATIONS, TO PROVIDE CIVIL AND CRIMINAL PENALTIES AND REMEDIES FOR CERTAIN VIOLATIONS INCLUDING LICENSE REVOCATIONS, TO PROVIDE FOR THE MANNER IN WHICH COUNTIES AND MUNICIPALITIES MAY ALSO IMPOSE LICENSE FEES AND ZONING RESTRICTIONS ON THESE MACHINES, AND TO PROVIDE FOR SEPARATE REQUIREMENTS FOR THE REGULATION, LICENSING, AND ENFORCEMENT OF ARCADE GAME MACHINES AND OTHER AMUSEMENT DEVICES INCLUDING A PROVISION THAT PROHIBITS CASH PAYOUTS, THAT SECTION 12-54-40 SHALL BE AMENDED RELATING TO TAX CRIMES AND PENALTIES SO AS TO FURTHER PROVIDE FOR PENALTIES IN REGARD TO CERTAIN ACTIONS REQUIRED OR PROHIBITED UNDER CHAPTER 22 OF TITLE 12, THAT SECTION 16-19-60 SHALL BE AMENDED RELATING TO CERTAIN GAMBLING OFFENSES SO AS TO DELETE REFERENCES TO THE REGULATION OF VIDEO GAME MACHINES AND PAYOUTS, THAT SECTION 61-4-580 SHALL BE AMENDED, RELATING TO PROHIBITED ACTS REGARDING BEER AND WINE, SO AS TO PROVIDE THAT ACTIVITIES AUTHORIZED BY CHAPTER 22 OF TITLE 12 ON THE PREMISES OF ESTABLISHMENTS LICENSED TO SELL BEER AND WINE ARE NOT A PROHIBITED ACT, THAT SECTIONS 16-19-65, 16-19-66, AND 16-19-67 SHALL BE ADDED SO AS TO MAKE IT UNLAWFUL FOR ANY PERSON TO KEEP CERTAIN TYPES OF GAME OR SLOT MACHINES ON HIS PREMISES, TO MAKE IT UNLAWFUL FOR ANY PERSON TO OPERATE SUCH MACHINES, TO MAKE IT UNLAWFUL FOR ANY PERSON TO CHEAT OR DEFRAUD THE OWNER OF A LAWFUL MACHINE OF ITS CONTENTS, TO PROVIDE PENALTIES FOR VIOLATIONS AND AUTHORIZE THE SEIZURE OF UNLAWFUL MACHINES, AND THAT ARTICLE 19, CHAPTER 21 OF TITLE 12 RELATING TO COIN-OPERATED MACHINES, DEVICES, AND OTHER AMUSEMENTS AND ARTICLE 20, CHAPTER 21 OF TITLE 12 RELATING TO THE VIDEO GAME MACHINES ACT SHALL BE REPEALED; TO PROVIDE THAT CERTAIN VIDEO GAME MACHINE STANDARDS AND REQUIREMENTS CONTAINED IN CHAPTER 22 OF TITLE 12 TAKE EFFECT JULY 1, 1999, AND CERTAIN CASINO PROVISIONS CONTAINED IN CHAPTER 22 OF TITLE 12 TAKE EFFECT JUNE 1, 1999; TO PROVIDE FOR THE MANNER IN WHICH EXISTING VIDEO GAME MACHINE LICENSE FEES SHALL BE PHASED INTO THE PROPOSED NEW LICENSE STRUCTURE; TO ADD SECTION 12-21-2805 SO AS TO AUTHORIZE ENFORCEMENT ACTIONS FOR VIOLATIONS OF SPECIFIED VIDEO GAME MACHINE LAWS BY THE DEPARTMENT OF REVENUE, STATE LAW ENFORCEMENT DIVISION, OR THE ATTORNEY GENERAL OR BY A PERSON WITH KNOWLEDGE OF THE VIOLATION IF THE DEPARTMENT, DIVISION, OR ATTORNEY GENERAL DECLINES, AND TO PROVIDE THE PROCEDURES FOR AND REMEDIES FOR SUCH VIOLATIONS; AND TO ADD SECTION 32-1-60 SO AS TO PROVIDE THAT EXISTING PROVISIONS OF LAW ALLOWING PERSONS TO SUE TO RECOVER GAMBLING LOSSES ONLY APPLY TO GAMBLING ACTIVITIES NOT AUTHORIZED BY LAW.

ADJOURNMENT

At 2:15 A.M. the House in accordance with the motion of Rep. WHIPPER adjourned Sine Die in memory of Calvin Hopkins.

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