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This Bill

VIEWS: 1 PAGES: 40

									BIL:     3626
TYP:     Joint Resolution JR
INB:     House
IND:     19990302
PSP:     Ways and Means Committee HWM 30
SPO:     Ways and Means Committee
DDN:     l:\council\bills\gjk\20307htc99.doc
RBY:     Senate
COM:     Finance Committee 06 SF
LAD:     19990303
SUB:     Video game with free play feature, Revenue Department to promulgate
         regulations on operation of; Gambling, Coin-operated


HST:

Body     Date       Action Description                        Com     Leg Involved
______   ________   _______________________________________   _______ ____________
Senate   20000112   Recommitted to Committee                  06 SF
Senate   19990601   Made Special Order
Senate   19990601   Read second time, with notice of
                    general amendments, carrying
                    over all amendments to third
                    reading
Senate   19990324   Committee report: Favorable with          06 SF
                    amendment
Senate   19990309   Introduced, read first time,              06 SF
                    referred to Committee
House    19990304   Read third time, sent to Senate
House    19990303   Amended, read second time
House    19990303   Set by Special Order under H.3664
House    19990302   Introduced, read first time


Printed Versions of This Bill


Ordered Printed on 19990302
Ordered Printed on 19990303
Ordered Printed on 19990324



TXT:
 1   Indicates Matter Stricken
 2   Indicates New Matter
 3
 4   COMMITTEE REPORT
 5   March 24, 1999
 6
 7                                                        H. 3626
 8
 9              Introduced by Ways and Means Committee
10
11   S. Printed 3/24/99--S.
12   Read the first time March 9, 1999.
13
14
15                 THE COMMITTEE ON FINANCE
16     To whom was referred a Joint Resolution (H. 3626), to direct the
17   Department of Revenue to promulgate strict and comprehensive
18   regulations necessary to regulate the operation of video game
19   machines, etc., respectfully
20                                REPORT:
21     That they have duly and carefully considered the same, and
22   recommend that the same do pass with amendment:
23
24      Amend the resolution, as and if amended, by striking all after
25   the enacting words and inserting in lieu thereof the following:
26                                  / Part I
27      SECTION 1. (A) A statewide referendum must be conducted
28   at the time of the general election in 2000 to ascertain whether or
29   not video game machine payouts will continue to be allowed in
30   this State. The State Election Commission must place the exact
31   question contained in subsection (B) of this section on the
32   referendum ballot. The state election laws shall apply to the
33   referendum, mutatis mutandis. The State Board of Canvassers
34   shall publish the results of the referendum and certify them to the
35   Secretary of State, the Speaker of the House of Representatives,
36   the President Pro Tempore of the Senate, and the Code
37   Commissioner.
38      (B) The question put before the qualified electors in the
39   referendum shall read:
40      “Shall cash payoffs for credits earned on video game machines
41   continue to be allowed after December 31, 2000?
42                                   Yes

     [3626-1]
 1                                   No
 2      Those voting in favor of the question shall deposit a ballot with
 3   a check or cross mark in the square after the word ‘Yes’, and those
 4   voting against the question shall deposit a ballot with a check or
 5   cross mark in the square after the word ‘No’.”
 6                                   Part II
 7      SECTION 2. Section 12-21-2710 of the 1976 Code, as
 8   amended by Act 155 of 1997, is further amended to read:
 9      “Section 12-21-2710. It is unlawful for any person to keep on
10   his premises or operate or permit to be kept on his premises or
11   operated within this State any vending or slot machine, or any
12   video game machine with a free play feature operated by a slot in
13   which is deposited a coin or thing of value, or other device
14   operated by a slot in which is deposited a coin or thing of value for
15   the play of poker, blackjack, keno, lotto, bingo, or craps, or any
16   machine or device licensed pursuant to Section 12-21-2720 and
17   used for gambling or any punch board, pull board, or other device
18   pertaining to games of chance of whatever name or kind, including
19   those machines, boards, or other devices that display different
20   pictures, words, or symbols, at different plays or different
21   numbers, whether in words or figures or, which deposit tokens or
22   coins at regular intervals or in varying numbers to the player or in
23   the machine, but the provisions of this section do not extend to
24   coin-operated nonpayout pin tables, in-line pin games, and video
25   games with free play feature which meet the technical
26   requirements provided for in Section 12-21-2782 and Section
27   12-21-2783, or to automatic weighing, measuring, musical, and
28   vending machines which are constructed as to give a certain
29   uniform and fair return in value for each coin deposited and in
30   which there is no element of chance.
31      Any person violating the provisions of this section is guilty of a
32   misdemeanor and, upon conviction, must be fined not more than
33   five hundred dollars or imprisoned for a period of not more than
34   one year, or both.”
35      SECTION 3. Section 12-21-2712 of the 1976 Code is amended
36   to read:
37      “Section 12-21-2712. Any vending or slot machine, punch
38   board, or other device pertaining to games of chance prohibited by
39   Section 12-21-2710 must be seized by any officer of the law law
40   enforcement officer and at once taken before any magistrate of the
41   county in which the machine, board, or device is seized who shall
42   immediately examine it, and if he is satisfied that it is in violation


     [3626-2]
 1   of Section 12-21-2710 or any other law of this State, he shall direct
 2   that it be immediately destroyed.”
 3      SECTION 4. (A) Section 12-21-2720(A)(3) of the 1976 Code,
 4   as last amended by Section 148, Act 181 of 1993, is further
 5   amended to read:
 6      “(3) a machine of the nonpayout type, or in-line pin game, or
 7   video game with free play feature operated by a slot in which is
 8   deposited a coin or thing of value except machines of the
 9   nonpayout pin table type with levers or `flippers’ operated by the
10   player by which the course of the balls may be altered or changed.”
11      (B) Section 12-21-2720(C) of the 1976 Code, as last amended
12   by Act 145 of 1995, is further amended to read:
13      “(C) The owner or operator of any coin-operated device which is
14   exempt from Section 16-19-60 and is subject to licensing under
15   Section 12-21-2720(A)(3) and which has multi-player stations,
16   shall purchase a separate license for each such station and any such
17   multi-player station counts as a machine when determining the
18   number of machines authorized for licensure under Section
19   12-21-2804(A).”
20      (C) Section 12-21-2720 of the 1976 Code, as last amended by
21   Act 155 of 1997, is further amended by deleting subsections (E)
22   and (F), which read:
23      “(E) The department shall not issue a license for the operation of
24   a video game with a free play feature which is located or intended
25   to be located on a watercraft or vessel plying the territorial waters
26   of this State.
27      (F) Four hundred dollars of the four thousand dollar license fee
28   imposed in subsection (A) may be retained by the department and
29   expended in budgeted operations for the implementation and
30   ongoing operation of the monitoring system required by law or in
31   other programs and services as the director may determine
32   necessary and appropriate.”
33      SECTION 5. Section 12-21-2726 of the 1976 Code, as last
34   amended by Act 164 of 1993, is further amended to read:
35      “Section 12-21-2726. Every person who maintains for use or
36   permits the use of, on a place or premises occupied by him, a
37   machine subject to the license imposed by this article by way of
38   proof of licensing must have a current license displayed
39   conspicuously on the front of the machine. Except for the
40   provisions of Sections 12-21-2774 and 12-21-2776, each machine
41   licensed pursuant to this section must be operated in a stand-alone
42   fashion and may not be linked in any way to another coin-operated
43   machine or device.”

     [3626-3]
 1      SECTION 6. Section 12-54-40 of the 1976 Code, as last
 2   amended by Act 155 of 1997, is further amended by deleting
 3   subsection (g) which reads:
 4      “(g) A machine owner or distributor, as defined in Article 20,
 5   Chapter 21 of this title, who allows or causes a machine to be
 6   operated without a metering device, or who wilfully places a
 7   machine on location or who wilfully allows or causes a machine to
 8   be operated with a metering device that does not accurately record
 9   the information required under Article 20, Chapter 21 of this title
10   is guilty of a felony and, upon conviction, must be imprisoned for
11   not less than one year nor more than ten years, without benefit of
12   probation, parole, or suspension of sentence, and in addition may
13   be fined not more than twenty-five thousand dollars.”
14      SECTION 7. Section 16-19-40 of the 1976 Code is amended to
15   read:
16      “Section 16-19-40. If any person shall play at any tavern, inn,
17   store for the retailing of spirituous liquors or in any house used as a
18   place of gaming, barn, kitchen, stable or other outhouse, street,
19   highway, open wood, race field or open place at (a) any game with
20   cards or dice, (b) any gaming table, commonly called A, B, C, or
21   E, O, or any gaming table known or distinguished by any other
22   letters or by any figures, (c) any roley-poley table, (d) rouge et
23   noir, (e) any faro bank or (f) any other table or bank of the same or
24   the like kind under any denomination whatsoever or (g) any
25   machine or device licensed pursuant to Section 12-21-2720 and
26   used for gambling purposes, except the games of billiards, bowls,
27   backgammon, chess, draughts, or whist when there is no betting on
28   any such game of billiards, bowls, backgammon, chess, draughts,
29   or whist or shall bet on the sides or hands of such as do game,
30   upon being convicted thereof, before any magistrate, shall be
31   imprisoned for a period of not over thirty days or shall suffer a fine
32   of fined not over one hundred dollars, and every person so keeping
33   such tavern, inn, retail store, public place, or house used as a place
34   for gaming or such other house shall, upon being convicted
35   thereof, upon indictment, be imprisoned for a period not exceeding
36   twelve months and forfeit a sum not exceeding two thousand
37   dollars, for each and every offense.”
38      SECTION 8. Section 16-19-50 of the 1976 Code is amended to
39   read:
40      “Section 16-19-50. Any person who shall set up, keep, or use
41   any (a) gaming table, commonly called A, B, C, or E, O, or any
42   gaming table known or distinguished by any other letters or by any
43   figures, (b) roley-poley table, (c) table to play at rouge et noir, (d)

     [3626-4]
 1   faro bank or (e) any other gaming table or bank of the like kind or
 2   of any other kind for the purpose of gaming, or (f) any machine or
 3   device licensed pursuant to Section 12-21-2720 and used for
 4   gambling purposes except the games of billiards, bowls, chess,
 5   draughts, and backgammon, upon being convicted thereof, upon
 6   indictment, shall forfeit a sum not exceeding five hundred dollars
 7   and not less than two hundred dollars.”
 8      SECTION 9. Sections 12-21-2703 and 16-19-60 and Article
 9   20, Chapter 21 of Title 12, all of the 1976 Code, are repealed.
10                                   Part III
11      SECTION 10. Title 12 of the 1976 Code is amended by
12   adding:
13                              “CHAPTER 22
14                                 Article 1
15                                  General
16      Section 12-22-100. As used in this chapter, unless the context
17   indicates otherwise:
18      (1) `Director’ means the director of the department.
19      (2) `Chief’ means the chief of the division.
20      (3) `Division’ means the South Carolina State Law
21   Enforcement Division.
22      (4) `Associated equipment’ means a device, machine,
23   replacement part, or part used in the manufacture, operation, or
24   maintenance of a machine including, but not limited to, integrated
25   circuit chips, printed wired assembly, printed wired boards,
26   printing mechanisms, video display monitors, and metering
27   devices.
28      (5) `Background investigation’ means the investigation
29   conducted in accordance with Article 5 of this chapter.
30      (6) `Central computer monitoring system’ or similar term
31   means the computing system administered by the department for
32   communicating with and retrieving information from machines,
33   and activating and disabling machines.
34      (7) `Contraband machine’, or ‘contraband device’, means a
35   machine, location controller or its modem, the computer chips of a
36   machine or location controller, or any other part of the machine,
37   location controller or modem not meeting the requirements of this
38   chapter. A `machine’ that does not meet the requirements of this
39   chapter is a `contraband machine’ regardless of whether the
40   machine issues winnings tickets redeemable for cash.
41      (8) `Disable’ or ‘disabling’ means the process of executing a
42   command from the central computer monitoring system or the
43   location controller which causes a machine to cease functioning.

     [3626-5]
 1      (9) `Distributor’ means any person who sells, buys and sells, or
 2   leases machines or associated equipment. A distributor may also
 3   own, operate, service, or repair machines in this State.
 4      (10) `Establishment’ or ‘location’ means premises with
 5   machines.
 6      (11) `Gross machine income’ means the amount of money that
 7   goes into the machine.
 8      (12) `Gross profits’ means the amount of money that goes into
 9   the machine less winnings.
10      (13) `Machine’ means a nonpayout electronic machine with a
11   free play feature that, upon insertion of cash or coin, is available to
12   play or simulate the play of games utilizing a video display and
13   microprocessors in which the player may receive free games or
14   credits that may be redeemed for cash. Each player station of a
15   multi-player unit is a separate machine.
16      (14) `Machine owner’ means any person, other than a
17   distributor, who owns one or more machines.
18      (15) `Machine operator’ means any person who owns, operates,
19   or manages an establishment with one or more machines.
20      (16) `Manufacturer’ means any person that manufactures,
21   assembles, or programs machines, controllers, or associated
22   equipment for sale or use in this State.
23      (17) `Player’ means a person who participates in the playing of a
24   machine.
25      (18) `Principal’ means every person; association; all partners of
26   a partnership; trust and its beneficiaries; corporation, its directors,
27   officers, and stockholders with a ten percent or more direct or
28   beneficial interest; or other entity who has or will have a direct or
29   indirect ownership interest in the applicant, the machines, or the
30   establishment for which license is sought.
31      (19) `Records’ means all paper or electronic accounts, bank
32   account records, financial statements, business records, contracts,
33   reports and returns, including tax information and returns, and
34   other information the department or division reasonably considers
35   necessary to administer and enforce the provisions of this chapter.
36      (20) `Video Game Machine Identification Number’ or
37   ‘VGMID’ means the permanently assigned unique number issued
38   by the department to identify a specific machine from first delivery
39   in this State until destruction or removal from this State.
40      (21) `Winnings’ means amounts printed on validated tickets
41   from a licensed machine which may be paid to a player.
42      Section 12-22-110. (A) Unless specifically granted to the
43   division, the department has all powers necessary and proper to

     [3626-6]
 1   fully and effectively execute the provisions of this chapter
 2   including, but not limited to, the power:
 3         (1) notwithstanding Section 12-54-240, to enter into
 4   agreements with any department, agency, or instrumentality of the
 5   United States or this State for the purpose of regulating and
 6   controlling coin-operated devices and to enforce the provisions of
 7   this chapter and may disclose information to the division and to
 8   other governmental entities in and outside South Carolina;
 9         (2) to investigate applicants for any license authorized to be
10   issued under this chapter and to determine the eligibility of
11   applicants for licenses;
12         (3) to exercise jurisdiction over and to supervise all
13   coin-operated devices;
14         (4) to inspect and conduct investigations by entering the
15   offices, facilities, or other places of business of a licensee where
16   evidence of the compliance or noncompliance with the provisions
17   of this chapter is likely to be found and to be present through its
18   inspectors and agents any time gaming operations are conducted
19   for the purpose of certifying the revenue thereof, receiving
20   complaints from the public, and conducting other investigations
21   into the conduct of the games and the maintenance of machines;
22         (5) to review any licenses issued under the provisions of this
23   chapter and to investigate alleged violations of this chapter and to
24   take appropriate disciplinary action against any licensee including
25   the imposition of penalties for a violation, disabling of machines,
26   suspension of licenses, or revocation of licenses, or the institution
27   of appropriate legal action for enforcement;
28         (6) to require that the records of any licensee must be kept in
29   the manner prescribed by the department. All records shall be
30   retained for at least the period for which taxes may be assessed
31   under Section 12-54-85;
32         (7) to require of applicants and their principals access for the
33   department and division to all of the applicant’s financial records
34   pertaining to the financing of the applicant in order to evaluate
35   statements and documentation supplied with the application in
36   connection with background investigations;
37         (8) to require any person to submit any information
38   necessary to effectively administer and enforce the provisions of
39   this chapter;
40         (9) to issue subpoenas for the attendance of witnesses and
41   subpoenas duces tecum for the production of books, records, and
42   other pertinent documents in accordance with Chapter 4 of Title


     [3626-7]
 1   12, to administer oaths and affirmations to witnesses, and receive
 2   and weigh testimony;
 3        (10) to prescribe the forms which must be used by any
 4   licensee involved in the ownership or operation of coin-operated
 5   devices;
 6        (11) to issue, deny the issuance of, suspend, or revoke any
 7   license authorized by this chapter, so long as the department’s
 8   action is in compliance with the provisions of this Chapter 60 of
 9   Title 12;
10        (12) to suspend any license authorized by this chapter without
11   notice or hearing upon a determination that the safety or health of
12   patrons or employees is jeopardized by the licensee or the
13   condition of the licensee’s facilities; any suspension must remain
14   in effect until the department determines that the cause for the
15   suspension has been abated; a license may be revoked upon a
16   determination that the licensee has not made satisfactory progress
17   toward abating the hazard;
18        (13) to delegate the execution of any of its powers under this
19   chapter for the purpose of administering and enforcing this
20   chapter;
21        (14) to establish hours of operation for enrollment and
22   support of machines connected to the central computer monitoring
23   system and to charge reasonable fees for services provided outside
24   the hours of 8:30 a.m. to 5:00 p.m., Monday through Friday;
25        (15) to adopt regulations in accordance with the
26   Administrative Procedures Act; and
27        (16) to take any other action as may be reasonable or
28   appropriate to enforce this chapter.
29      (B) Notwithstanding subsection (A), any law enforcement
30   officer has the authority to enforce any criminal provision of this
31   chapter.
32      Section 12-22-120. The director, the employees of the
33   department, the chief, and the employees of the division, may not
34   directly or indirectly, individually, or as a member of a partnership,
35   or as a shareholder of a corporation, have a financial or ownership
36   interest in any machine, machine owner, manufacturer, distributor,
37   or establishment.
38      Section 12-22-125. Any person who would otherwise be
39   subject to the provisions of this chapter, but who claims the benefit
40   of an exemption from certain of its requirements in any manner
41   must, on or before September 1, 1999, notify the department in a
42   statement made under penalties of perjury that he is claiming the
43   benefits of a specific provision, must state all reasons for claiming

     [3626-8]
 1   the benefits of the provision, and must identify all licenses claimed
 2   to be related to that exemption. The person claiming the benefit of
 3   such a provision shall have the burden of proof and must establish
 4   by clear and convincing evidence that he is entitled to the benefits
 5   claimed.
 6                                  Article 3
 7                                  Licenses
 8      Section 12-22-300. (A) Before a machine or associated
 9   equipment is manufactured, distributed, sold, or placed for use in
10   this State, the machine owner, machine operator, manufacturer,
11   establishment, and distributor shall be licensed by the department
12   as provided for in this chapter.
13      (B) Before placement or operation, a machine shall be licensed.
14      Section 12-22-310. (A) At the time provided for in Section
15   12-22-345, a manufacturer, distributor, machine owner, machine
16   operator, and establishment, engaging in business in this State,
17   shall apply for and obtain from the department a license for the
18   privilege of engaging in the business and shall pay the fee levied at
19   the time of license application. The fee is two thousand dollars.
20      (B) Except as provided in Article 5, a license authorized in this
21   section shall not be issued unless and until the department has
22   completed its background investigation.
23      Section 12-22-315. (A) The department may issue licenses
24   authorized under this chapter to qualifying applicants.
25      (B) If application is made for a license under this chapter, all
26   principals are deemed to be the applicants under this chapter.
27      (C) The department may not issue a license under this chapter
28   to any applicant unless the applicant and all principals meet the
29   requirements this chapter.
30      Section 12-22-320. (A) Every person who owns, or maintains
31   for use, or permits the use of on a place or premises occupied by
32   him, one or more of the following machines or devices shall apply
33   for and procure from the department a license effective for two
34   years for the privilege of making use of the machine in South
35   Carolina and shall pay for the license a tax of fifty dollars for each
36   machine in item (1), two hundred dollars for each machine in item
37   (2), and four thousand dollars for each machine in item (3):
38         (1) a machine for the playing of music or kiddy rides
39   operated by a slot or mechanical amusement devices and juke
40   boxes in which is deposited a coin or thing of value. A machine on
41   which an admissions tax is imposed is exempt from the coin
42   operated device license provisions of this section;


     [3626-9]
 1         (2) a machine for the playing of amusements or video
 2   games, without free play feature, or machines of the crane type
 3   operated by a slot in which is deposited a coin or thing of value
 4   and a machine for the playing of games or amusements, which has
 5   a free play feature, operated by a slot in which is deposited a coin
 6   or thing of value, and the machine is of the nonpayout pin table
 7   type with levers or ‘flippers’ operated by the player by which the
 8   course of the balls may be altered or changed. A machine required
 9   to be licensed under this item is exempt from the license fee if an
10   admissions tax is imposed; and
11         (3) a machine of the nonpayout type, in-line pin game, or
12   video game with free play feature operated by a slot in which is
13   deposited a coin or thing of value except machines of the
14   nonpayout pin table type with levers or ‘flippers’ operated by the
15   player by which the course of the balls may be altered or changed.
16      (B) The owner or operator of any coin-operated device which is
17   exempt by Section 16-19-60 which has multi-player stations, shall
18   purchase a separate license for each such station and any such
19   multi-player station counts as a machine when determining the
20   number of machines authorized for licensure under Section
21   12-22-800(A).
22      (C) Failure to obtain a license as required by this article makes
23   the person liable for the penalties imposed in this chapter.
24      (D) Failure to remit taxes to the State is justification for the
25   cancellation of the license provided in this section.
26      (E) The department shall not issue a license for the operation of
27   a video game with a free play feature which is located or intended
28   to be located on a watercraft or vessel plying the territorial waters
29   of this State.
30      (F) A license for a machine included in Section
31   12-22-320(A)(3) shall be issued only to a person who has been
32   licensed pursuant to Section 12-22-300 for use at a licensed
33   establishment. No machine included in Section 12-22-320(A)(3)
34   may be operated without a license.
35      (G) No machine licensed under the provisions of Section
36   12-22-320(A)(3) may be operated at an establishment unless the
37   establishment is licensed pursuant to the provisions of Chapter 36
38   of Title 12.
39      Section 12-22-325. (A) Every person owning or operating a
40   billiard or pocket billiard table, foosball table, bowling lane table,
41   or skeeball table for profit shall apply for and procure from the
42   department a license for the privilege of operating the table and


     [3626-10]
 1   pay for the license a biennial tax of fifty dollars for each table
 2   owned or operated.
 3      (B) Every person who maintains for use, or permits the use, on
 4   any place or premises occupied by him, any machines subject to
 5   the license imposed by subsection (A) of this section shall see that
 6   the proper state license is attached to a permanent, nontransferable
 7   part of the machine before its operation is commenced.
 8      Section 12-22-330. (A) In addition to all other licenses
 9   required by this chapter, a person who owns devices described in
10   Sections 12-22-320(A)(1), (A)(2), and 12-22-325 shall obtain an
11   owner’s license biennially as follows:
12         (1) fifty dollars for devices in Sections 12-22-320(A)(1) and
13   12-22-325; and
14         (2) two hundred dollars for devices in Section
15   12-22-320(A)(2).
16      (B) Only one license is required pursuant to this section
17   regardless of the number or type of devices owned or operated, and
18   the cost of that license is the highest fee enumerated in this section
19   for a device owned.
20      (C) The licenses provided by this section are subject to Section
21   12-22-345 and are a condition precedent to engaging in or the
22   continuing operation of machines described in this chapter.
23      Section 12-22-335. Every person required to obtain a license
24   required under Sections 12-22-320 (A)(3) shall maintain records
25   showing the manufacturers’ serial number, model, or type of
26   machine and the VGMID.
27      Section 12-22-340. In lieu of the license required under
28   Sections 12-22-320(A)(1) and (2), 12-22-325, and 12-22-330 the
29   department may issue a temporary license to persons making
30   application to operate machines defined in Sections 12-22-320
31   (A)(1) and (A)(2) and 12-22-335 at a recognized county or state
32   fair. The temporary license is the total amount of license fees
33   required on all machines for which application is made, based
34   upon one-twenty-fourth of the biennial license required under
35   Sections 12-22-320(A)(1) and(A)(2), 12-22-325 and 12-22-330.
36   The license is valid for the specific location designated on the
37   license and the number of machines for which application was
38   made and expires when the designated fair officially ends.
39      Section 12-22-345. (A) Every person subject to payment of
40   tax under Sections 12-22-320 and 12-22-325, in advance on or
41   before the first day of June every two years or before doing an act
42   taxable under this article, shall apply for and obtain from the
43   department a license for the privilege of engaging in the business

     [3626-11]
 1   and shall pay the tax levied for it. All licenses expire May
 2   thirty-first the second year of which the license is valid following
 3   the date of issue.
 4      (B) As an alternative to the license required in subsection (A), a
 5   person may be granted a nonrefundable license beginning April
 6   first and to expire September thirtieth, following the date of issue,
 7   which may not be prorated. The fee for this six-month license is
 8   one-fourth the biennial license fee.
 9      (C) If a license required in subsection (A) is purchased after
10   June thirtieth, the license tax must be prorated on a twenty-four
11   month basis with each month representing one twenty-fourth of the
12   license fee imposed under Sections 12-22-320 and 12-22-325.
13      (D) Biennial licenses for machine owners, machine operators,
14   distributors, manufacturers, or establishments issued under this
15   chapter expire according to the county where the principal place of
16   business, as determined by the department, of the machine owner,
17   machine operator, distributor, or manufacturer is situated or, in the
18   case of an establishment license, the county where the
19   establishment is situated. The expiration dates are the last day of:
20         (1) February in years which end in an:
21            (a) odd number for Allendale, Bamberg, Barnwell,
22   Beaufort, and Berkeley Counties;
23            (b) even number for Charleston, Clarendon, Colleton,
24   Dorchester, Georgetown, Hampton, Jasper, and Williamsburg
25   Counties;
26         (2) May in years which end in an:
27            (a) odd number for Cherokee, Chester, Chesterfield,
28   Darlington, Dillon, Fairfield, Florence, and Horry Counties;
29            (b) even number for Lancaster, Marion, Marlboro, Union,
30   and York Counties;
31         (3) August in years which end in an:
32            (a) odd number for Calhoun, Kershaw, Lee, Orangeburg,
33   and Sumter Counties;
34            (b) even number for Richland County;
35         (4) November in years which end in an:
36            (a) odd number for Abbeville, Aiken, Anderson,
37   Edgefield, Greenville, and Greenwood Counties;
38            (b) even number for Laurens, Lexington, McCormick,
39   Newberry, Oconee, Pickens, Saluda, and Spartanburg Counties.
40      If a license purchased will be for less than twenty-three months
41   because of this section, the license tax must be prorated on a
42   twenty-four month basis with each month representing one


     [3626-12]
 1   twenty-fourth of the license fee imposed under Sections 12-22-310
 2   and 12-22-330.
 3      (E) The department, at its discretion and for the efficient
 4   administration of the law, may prorate licenses in any manner to
 5   implement or change the expiration date established in this section
 6   and to stagger the issuances of the licenses by county or by any
 7   other method deemed appropriate by the department.
 8                                  Article 5
 9                        Background Investigations
10      Section 12-22-500. (A) The department shall issue the
11   license required by Section 12-22-300 to the applicant upon a
12   determination by the department that the applicant is eligible for
13   the license pursuant to the provisions of this chapter.
14      (B) The application must be made on forms provided by the
15   department and the applicant must submit any information
16   required by this chapter. An application which contains material
17   omissions or misrepresentations is cause for denial, suspension, or
18   revocation of a license and disabling of all machines of that owner.
19      (C) The applicant for a license must provide detailed
20   information regarding:
21         (1) the ownership and management, including information
22   on all principals;
23         (2) a detailed history and explanation of gambling activities
24   and licenses in other jurisdictions of the applicant and all
25   principals;
26         (3) federal registration with respect to gambling devices; and
27         (4) any other information deemed necessary by the
28   department for the proper administration and enforcement of this
29   chapter.
30      (D)(1) In addition to the information contained on the
31   department’s application form as provided in subsection (C), if not
32   contained on the form, the applicant for a license must disclose, at
33   the time of filing the application form, the identity and address of
34   every principal.
35         (2) When the applicant has principals it must disclose any
36   information required by the department to obtain fingerprints and
37   criminal background checks for the principals so that an applicant
38   may not circumvent the purpose of this section. Failure to comply
39   with a reasonable request of the department is grounds to deny or
40   revoke a license.
41      (E) A person applying for a license or required under this
42   article to undergo a criminal history background check shall
43   undergo a state fingerprint review to be conducted by the division

     [3626-13]
 1   to determine any state criminal history and a fingerprint review to
 2   be conducted by the Federal Bureau of Investigation to determine
 3   any other criminal history. The fingerprint reviews required by
 4   this subsection may be required upon subsequent applications.
 5      (F) A person with a license issued pursuant to this chapter has
 6   an affirmative duty to maintain on file with the department a
 7   current and correct disclosure of the identity of and updated
 8   information on all those persons and principals required to be
 9   disclosed in subsections (C) and (D).
10      (G) At the time of filing the application for a license, the
11   applicant must pay the fee imposed pursuant to Section 12-22-310.
12      Section 12-22-505. (A) Upon receipt of a timely and
13   complete application for a license required by Section 12-22-300,
14   the department or its designee must begin a background
15   investigation using the information in the application as a basis for
16   a thorough investigation which the department must conduct with
17   respect to each applicant.
18      (B) The department may request the assistance of the division
19   in conducting the background investigation on an applicant.
20      (C) The department must not issue, or must revoke, a license
21   pursuant to Sections 12-22-300 and 12-22-310 if the person,
22   applicant, or principal of the applicant:
23         (1) has been convicted within the last fifteen years of a state
24   or federal felony; gambling offense; criminal fraud; or a crime
25   with a sentence of two or more years; or
26         (2) has had a gambling license in another jurisdiction
27   revoked; or
28         (3) has submitted an application which contains material
29   information which is false; or
30         (4) the person was determined to be liable for, or agreed that
31   he was liable for, a civil judgment based in whole or in part upon
32   criminal conduct which carries a penalty of imprisonment for two
33   or more years, or violations of gambling laws, or consumer fraud;
34   or
35         (5) has any outstanding tax or fee liability with the
36   department; or
37         (6) the applicant for a machine license under Section
38   12-22-320(A)(3) has not been a resident of the State for two years.
39      (D) The applicant for a license required by this chapter, and all
40   principals of the applicant, must file with the application a sworn
41   statement, under penalties of perjury, affirming that:
42         (1) the person is not attempting to obtain a license on behalf
43   of any undisclosed person or entity;

     [3626-14]
 1         (2) the person is of good character, honesty, and integrity;
 2   and
 3         (3) the person’s prior activities, criminal record, if any,
 4   reputation, habits, and associations do not pose a threat to the
 5   public interest of this State or to the effective regulation and
 6   control of video gaming.
 7      Section 12-22-510. The department must make its decision on
 8   whether to issue a license to the applicant not later than sixty days
 9   after the completion of the background investigation, including the
10   fingerprint reviews, and the recommendation, if any, of the
11   division, or not later than one hundred eighty days from the date a
12   complete application is filed with the department, whichever
13   occurs first. The department must inform each applicant of the
14   department’s decision. A person must be issued a provisional
15   license upon receipt and review of the results of the division
16   fingerprint review if the results show no convictions of the crimes
17   referenced in Section 12-22-505(C)(1) for either the applicant or
18   the persons subject to disclosure pursuant to Section 12-22-500(D).
19   Pending receipt of the results of the Federal Bureau of
20   Investigation fingerprint review, the department must obtain from
21   the prospective licensee a written affirmation on a form provided
22   by the department that neither the prospective licensee nor any
23   person subject to disclosure pursuant to this section has been
24   convicted of any crime referenced in Section 12-22-505(C)(1).
25      Section 12-22-515. (A) The department must be given within
26   ten business days written notice of termination of a business,
27   transfer of a business, or a change of ownership, possession, or
28   control of an interest in a business holding a license or an
29   establishment licensed under this chapter. The transfer of
30   twenty-five percent or more of corporate stock is considered a
31   change in ownership. Anyone whose interest in the business has
32   ended must immediately surrender to the department any licenses
33   in his possession related to that business. Failure to surrender a
34   license as required by this subsection is justification for revocation
35   of any and all licenses issued by the department and held by the
36   licensee.
37      (B) A person who acquires an interest in a business which
38   holds licenses issued under this chapter, upon initiating the
39   application process for a biennial license issued under Section
40   12-22-310, may be issued a temporary license by the department at
41   the time of the acquisition if the applicant or location for which the
42   temporary license is sought is not considered by the department to
43   be ineligible under the provisions of this chapter or the applicant

     [3626-15]
 1   currently holds a valid license previously issued pursuant to this
 2   chapter, or the applicant has had a criminal history background
 3   check conducted by the division within the past thirty days.
 4      (C) A temporary license issued pursuant to subsection (B) is
 5   valid until a biennial or regular license is approved or disapproved
 6   by the department, but in no case is it valid for more than one
 7   hundred eighty days from the date of issuance. The department
 8   may revoke a temporary license if the applicant fails to pursue the
 9   biennial license in a timely manner. The department shall collect a
10   fee of twenty-five dollars for each temporary license.
11                                  Article 7
12                          Video Game Restrictions
13      Section 12-22-700. Every person who maintains for use or
14   permits the use of, on a place or premises occupied by him, a
15   machine subject to the license imposed by this chapter by way of
16   proof of licensing must have a current license displayed
17   conspicuously on the front of the machine. Each machine licensed
18   pursuant to this chapter must be operated in a stand-alone fashion
19   and may not be linked in any way to another coin-operated
20   machine or device.
21      Section 12-22-705. Any person who owns or operates devices
22   described in Sections 12-22-320 and 12-22-325 must have attached
23   to the machine information identifying the owner of the machine.
24   The identification must be placed on an area of the machine which
25   is visible for inspection purposes. This identification is a condition
26   precedent before the machines may be operated on location.
27   Intentional or willful failure to comply with this requirement
28   subjects the violator to the penalty and enforcement provisions of
29   this chapter.
30      Section 12-22-710. Every person required to obtain a license
31   pursuant to Sections 12-22-320 and 12-22-325 shall maintain
32   records showing the manufacturers’ serial number; model and type
33   of machine; the VGMID; the license number; the location’s name,
34   address, and telephone number; the machine operator; the date the
35   machine entered the State; the date it entered the location; and the
36   date the machine went on-line. The taxpayer shall maintain
37   information relating to the payment of any monies or
38   compensation made to any persons as part of a lease or contractual
39   agreement to operate the machine on the premises of the person.
40   Information required by this section must be available on demand
41   for inspection by a representative of the department. The licensee
42   shall be provided a reasonable time in which to provide the
43   information demanded.

     [3626-16]
 1      Section 12-22-715. Before a machine may be connected, or
 2   remain connected, to the central computer monitoring system, the
 3   machine shall have a current and valid machine license. The
 4   machine owner and the machine operator and the establishment
 5   shall have current and valid licenses as required by this chapter.
 6      Section 12-22-720. (A) All machines, location controllers
 7   and associated modems, computer chips, and any other part of a
 8   machine shall be verifiably of a make, model, and software
 9   version, certified by the department or a testing lab selected by the
10   department before such items may be possessed, owned, operated,
11   or allowed to operate at any place within this State.
12      (B) A person may not possess, own, operate, or allow the
13   operation of a contraband machine or device at any place within
14   this State.
15      Section 12-22-725. (A) Within 90 days from enactment, all
16   machines shall meet the following standards, and machine owners
17   shall certify to the department, under oath and in a form prescribed
18   by the department, that the machines are prepared for connection
19   to the central computer monitoring system:
20         (1) have games that are random and have games which have
21   minimum payout of between ninety and ninety-nine percent,
22   within standard rounding, in which the theoretical payout
23   percentage is determined using standard methods of probability
24   theory at optimal play;
25         (2) be secure and accountable;
26         (3) not operate in a misleading or deceptive manner;
27         (4) not have any means of manipulation that affect the
28   random probabilities of winning a game;
29         (5) have one or more mechanisms that accept only coins or
30   cash in the form of bills. The mechanisms shall be designed to
31   prevent obtaining credits without paying by stringing, slamming,
32   drilling, or other means;
33         (6) have one or more metering devices that keep a record of:
34   all cash inserted or deposited into the machine; credits played;
35   credits won; validated cash ticket amounts; and other information
36   prescribed by the department. Cash records shall include total
37   coins and bills accepted and total credit generated by coin and bill
38   acceptors;
39         (7) shall be capable of being accessed on demand by
40   telecommunication through a location controller from the central
41   computer monitoring system for purposes of polling or reading
42   device activities and for central computer remote enabling or
43   disabling of machine operations;

     [3626-17]
 1        (8) be capable of interfacing with a central computer
 2   monitoring system through a location controller;
 3        (9) when requested by the department after certification, be
 4   connected to the central computer monitoring system through a
 5   location controller; and
 6        (10) meet the standards set by the department.
 7      (B)(1) Machines not meeting the standards of this chapter, or
 8   the standards of the department, shall not be licensed. The license
 9   of any machine which fails to maintain the standards of this
10   chapter shall be revoked.
11        (2) The department shall connect licensed machines at
12   licensed establishments meeting the requirements of this section as
13   soon as is practicable after receipt of certification from the
14   machine owner that a machine meets the standards of subsection
15   (A) within 150 days after enactment but no later than December 1,
16   1999.
17      (C) When the department approves the software and logic
18   board of a machine, the division may use a prescribed security seal
19   process to guard against any unauthorized tampering or changes to
20   the erasable programmable read only memory (EPROM) chip or
21   chips, or future, similar such technology. Any repair, replacement,
22   or adjustment to the machine’s EPROM chips or similar such
23   technology must be done in the presence of an employee of the
24   division.
25      (D) The department is authorized to revise technical standards
26   as is necessary providing sufficient time for compliance by
27   licensees. The technical standards established by the department
28   must, to the extent possible within the limitations of this chapter,
29   maximize competition among manufacturers.
30      Section 12-22-730. The department is authorized to set
31   standards for machines, modems, location controllers, the central
32   computer monitoring system, and associated equipment, including,
33   but not limited to, technical standards, hardware specifications,
34   software specifications, and standards relating to multi-player
35   units. Applicants must meet these standards before any license
36   may be issued.
37      Section 12-22-735. The burden of proof that a machine, game,
38   location controller, modem, or any part of a machine meets the
39   required standards and requirements, is the responsibility of the
40   manufacturer or machine owner. The department may require the
41   manufacturer or machine owner to obtain a certification from an
42   approved laboratory indicating that the machine, game, location
43   controller, modem, or any part of a machine meets the required

     [3626-18]
 1   standards and requirements. The cost of this certification is the
 2   responsibility of the manufacturer or machine owner. The
 3   department shall provide a list of approved laboratories. The
 4   department may also review a laboratory to determine if the
 5   laboratory should be added or removed from the department’s list
 6   of approved laboratories. The department may contract with a
 7   testing laboratory to ensure and certify that a machine, game,
 8   location controller, modem, or any part of a machine meets the
 9   required standards and requirements. Payment of the cost of
10   testing by the laboratory is the responsibility of the manufacturer
11   or machine owner.
12      Section 12-22-740. (A) Each location controller must be
13   programmed so as to automatically disable the play of all machines
14   connected to the location controller, if the location controller has
15   not been polled by the central computer monitoring system for the
16   purpose of collecting meter and event data, for a period to be
17   determined by the department of not less than seventy-two hours.
18   The machine shall be enabled when communication has been
19   restored.
20      (B) Whenever a machine is disabled during play of a game, the
21   following shall occur:
22         (1) A message will appear on the screen warning the player
23   that the machine is about to be disabled and the player will be
24   informed that one minute remains to complete the game.
25         (2) A count down timer will be displayed.
26         (3) If the player completes the game, all credits will be
27   reported on a winnings ticket and no other games will be allowed
28   to be played on that machine.
29         (4) If the player has not completed the game in the minute
30   allotted, then the machine will complete the hand according to the
31   manufacturer’s recommended play strategy, all credits will be
32   reported on a winnings ticket, and the machine will be disabled.
33      Section 12-22-745. Each machine placed in operation in the
34   State shall have, affixed by the manufacturer, a VGMID assigned
35   by the department. Each machine owner shall notify the
36   department in writing of the receipt of a machine. Manufacturers,
37   distributors, and machine owners shall make machines and
38   associated equipment available for inspection by the department or
39   division. No machine may be transported out-of-state until the
40   VGMID has been removed. No one other than an authorized
41   department or division employee shall remove the VGMID. For
42   qualifying machines already located in the State, the department
43   shall assign, and the machine owner shall affix, the VGMID. The

     [3626-19]
 1   VGMID shall be programmed into the machine and shall serve as
 2   the machine’s unique identifier for purposes of logging events and
 3   reporting play statistics.
 4      Section 12-22-750. A machine shall be disposed of in a
 5   manner that makes it incapable of use or operation in any video
 6   game or other gaming or amusement activity. A machine may not
 7   be disposed of until such notice has been given to the department.
 8   An owner desiring to dispose of an unsaleable or damaged
 9   machine shall notify the department in writing prior to disposal
10   and provide the following information in a manner as directed by
11   the department:
12        (1) the full name, address, and license number of the person
13   or entity disposing of the machine;
14        (2) the manufacturer’s serial number of the machine;
15        (3) the model number and description of the machine;
16        (4) the manufacturer of the machine;
17        (5) the VGMID of the machine;
18        (6) the hard meter readings of the machine;
19        (7) the licensed establishment at which the machine was
20   located;
21        (8) the proposed manner, time, and place of disposal.
22      Section 12-22-755. A machine shall not simulate bingo.
23      Section 12-22-760. Each machine shall contain a single
24   printing mechanism capable of printing an original ticket and
25   retaining an exact copy. Tickets shall contain any information the
26   department determines to be reasonable for the efficient
27   administration of this chapter. The department shall provide
28   manufacturers information as to the information needed on a ticket
29   and the placement of information on the ticket.
30      Section 12-22-765. All machines, location controllers, and the
31   central computer monitoring system selected by the department
32   shall perform correctly before, during, and after the Year 2000,
33   with no error in functioning or data caused by failure to correctly
34   interpret and utilize data contained within date fields within the
35   system.
36      Section 12-22-770. The department, in its discretion, may
37   approve alternative technical provisions provided that the
38   technology maintains the security, account information, and
39   integrity of the machines, location controllers, and central
40   computer monitoring system.
41      Section 12-22-775. (A) As part of the central computer
42   monitoring system required under this article, each location
43   operating machines licensed under Section 12-22-320 (A)(3) must

     [3626-20]
 1   provide a location controller and modem meeting requirements set
 2   forth by this section and by the department. Each location
 3   controller must be capable of receiving, storing, and transmitting to
 4   the department’s central computer monitoring system all
 5   information received from, and required of, machines as set forth
 6   in Section 12-22-725. Each location controller must be capable of
 7   supporting at least five video game machines. This section applies
 8   to those location controllers which participate in the central
 9   computer monitoring system as separate hardware entities, and any
10   ‘head of string’ location controller which meets the specifications
11   of this section. The cost for purchasing or leasing, as well as the
12   cost of installing, the location controller is the responsibility of the
13   establishment in which the machines are located.
14      (B) In addition to the above requirement, each location
15   controller must be able to perform the following functions:
16        (1) communicate with machines in an on-line environment;
17        (2) when authorized parties open machine game door, store a
18   log entry of this event;
19        (3) when authorized parties open machine coin or currency
20   door, store a log entry of this event;
21        (4) authorize machine to be taken off-line from the location
22   controller;
23        (5) disable machine and store a log entry under the following
24   circumstances:
25             (a) unauthorized game door open; and
26             (b) unauthorized coin door open;
27        (6) store a log entry if machine is off-line from the location
28   controller without prior authorization;
29        (7) store a log entry if machine tampering is detected.
30   Detection of tampering occurs if the signal received from the
31   machine is discontinuous or corrupted in such a manner as to
32   constitute more than spurious noise in the central computer
33   monitoring system;
34        (8) re-enable a machine which has been disabled and store a
35   log entry of this event;
36        (9) log entries which include a unique identification number
37   for each machine and date/time stamp;
38        (10) have capability for communicating to the central
39   computer monitoring system the information which has been
40   gathered from the machines and log any entries stored during the
41   period;
42        (11) have sufficient storage capacity to maintain at least five
43   days of data generated from the maximum playing sessions from

     [3626-21]
 1   the maximum number of associated machines linked to the
 2   location controller. The data must be stored immediately in a
 3   manner that allows on demand, real time access by the central
 4   computer monitoring system. Access to data stored in the location
 5   controller must be restricted to authorized entry from the central
 6   computer monitoring system and other authorized inquiry only
 7   access that has been preapproved by the department, provided that
 8   the department must allow access by the owner or operator of the
 9   machine to retrieve information for record keeping and related
10   legitimate business purposes;
11         (12) have an internal clock;
12         (13) be protected from unauthorized interference or tampering
13   by any person or external device or force, such as to corrupt or
14   alter data or corrupt or suspend communication signals or
15   transmitted data from the machines or to the central computer
16   monitoring system, and this requirement extends to the location
17   controller as well as its associated communication device, cabling
18   between the controller and the machines, and communication
19   device;
20         (14) be constructed of materials and protected in such a
21   manner as to allow it to operate in suboptimal environments such
22   as nonregulated temperature, dusty, tobacco-smoke filled, and
23   humid conditions; and
24         (15) be capable of validating tickets printed by a machine.
25      Section 12-22-780. Any machine licensed pursuant to Section
26   12-22-320(A)(3) which provides payouts authorized pursuant to
27   Section 16-19-60 shall limit the amount bet or wagered on any
28   single hand or single play to credits equal to not more than ten
29   dollars. Any location violating this section shall be subject to
30   revocation of the license of the machine and may be fined an
31   amount not to exceed one thousand dollars.
32      Section 12-22-785. (A)      The department shall disable
33   machines via the central computer monitoring system for the
34   following reasons:
35         (1) the establishment license at the establishment where the
36   machines are located has been revoked;
37         (2) the license of the machine has been revoked;
38         (3) the machine owner’s license has been revoked;
39         (4) the machine operator’s license has been revoked;
40         (5) the establishment license, machine license, machine
41   owner’s license, or machine operator’s license has expired;
42         (6) the central computer monitoring system has registered a
43   violation of system integrity by a machine. A machine disabled

     [3626-22]
 1   for this reason will be enabled again as soon as the problem has
 2   been resolved;
 3         (7) the machine owner or the machine operator has
 4   requested that the machine be disabled for any reason, such as
 5   relocation, upgrading, or repair;
 6         (8) the bank account from which taxes are paid has
 7   insufficient funds to pay the entire tax due upon the due date.
 8      (B) All persons who have notified the department of an
 9   ownership or lien interest in a machine shall be notified of a
10   proceeding to revoke licenses that may result in disabling under
11   this section. A machine, and any part of the machine, disabled for
12   reasons in (A)(1), (A)(2), (A)(3), or (A)(4) shall not operate in this
13   State for five years from the date of revocation. The machine shall
14   be sold for use out-of-state, or stored or destroyed in a manner
15   approved by the department.
16      (C) All persons who have notified the department of an
17   ownership interest in an establishment shall be notified of a
18   proceeding to revoke licenses that may result in disabling under
19   Section (A)(1). If machines are disabled at an establishment for the
20   reason in (A)(1), the establishment may not operate, or allow the
21   operation of, machines for five years from the date of the
22   revocation or suspension.
23      Section 12-22-790. (A) A person in possession of, or
24   operating, or allowing the operation of a contraband machine,
25   contraband device, or contraband associated equipment at any
26   place within this State, is subject to a civil penalty of not more than
27   ten thousand dollars a machine or piece of associated equipment.
28      (B) When the department or division deems it necessary in
29   connection with subsection (A), it may require the owner of a
30   machine, device, or associate equipment to obtain a certification
31   from an approved laboratory that the machine or a game or
32   associate equipment meets the standards and requirements of this
33   chapter. The cost of this certification is the responsibility of the
34   owner of the machine, device, or associated equipment.
35      (C) Contraband machines, contraband devices, or contraband
36   associate equipment may be seized by any law enforcement officer
37   of the State or any of its political subdivisions who shall appear
38   before any magistrate of the county in which the machine, device,
39   or associated equipment was seized. If the magistrate is satisfied
40   that the item is contraband, the magistrate shall direct that it be
41   destroyed. The magistrate, at his discretion, may order an
42   examination of the item, in person before the magistrate or by an


     [3626-23]
 1   approved laboratory, to assist in the determination as to whether
 2   the item is contraband.
 3      Section 12-22-793. A person who knowingly possesses, owns,
 4   operates, or allows the operation, of a contraband machine,
 5   contraband device, or contraband associated equipment at any
 6   place within this State is guilty of a felony and, upon conviction,
 7   the person must be fined not more than twenty-five thousand
 8   dollars or imprisoned for not more than five years, or both.
 9      Section 12-22-795. (A) Each machine licensed under this
10   chapter must have a prominently displayed sign citing the penalties
11   provided by Sections 12-22-935, 12-22-940, and 12-22-945 on the
12   wall above the machine or affixed prominently to the machine.
13   The department may provide sample language for these signs.
14      (B) A licensed establishment shall have posted and visible to
15   the public at least one sign with the following words printed
16   thereon:
17         (1) ‘A person shall be twenty-one years of age to receive
18   winnings from a video game machine.’
19         (2) ‘It is illegal to offer inducements to a person to play
20   video game machines.’
21         (3) ‘All games are random. Games are set to issue a
22   minimum theoretical payout of between ninety and ninety-nine
23   percent.’
24         (4) `This establishment maintains a copy of the video game
25   machine laws on the premises for review by players at their
26   request.’
27         (5) `Validated tickets may be redeemed for cash.’
28         (6) `Violations are subject to civil and criminal penalties.’
29         (7) `Violations may be reported to S.C. State Law
30   Enforcement Division or your local law enforcement agency.’
31      (C) The sign required by subsection (B) shall be visible and
32   readable by the person playing the machine. Each letter on the
33   sign shall be a minimum of two inches high.
34      Section 12-22-800. (A) A licensed establishment may not
35   and the department shall not issue a license to an establishment if it
36   does:
37         (1) maintain, possess, or otherwise allow on its premises
38   more than five machines, except as provided in Section 12-22-815;
39         (2) advertise, or allow advertising, in any manner for the
40   playing of the machines except as provided in Section 12-22-810;
41         (3) offer or allow to be offered any inducement as prohibited
42   in Section 12-22-805 to a person to play machines or for the
43   playing of machines;

     [3626-24]
 1         (4) allow anyone under the age of twenty-one to receive
 2   winnings as a result of playing machines;
 3         (5) operate machines between the hours of two o’clock
 4   Sunday morning and six o’clock a.m. Monday morning;
 5         (6) violate valid local zoning ordinances;
 6         (7) be located within five hundred feet, or within three
 7   hundred feet in a municipality, of any of these locations: a public
 8   or private elementary, middle, or secondary school; a public or
 9   private kindergarten or daycare; a public playground or park; a
10   public vocational or trade school or technical educational center; a
11   public or private college or university; or house of worship; or
12         (8) make loans or extend credit to a player for the purpose of
13   playing machines.
14      (B) The distances in this article shall be computed by
15   determining the shortest distance between the nearest property line
16   of the licensed establishment and the nearest property line of the
17   location in (A)(7).
18      (C) The distance requirements set forth in this section do not
19   apply to establishments which operated or allowed the operation of
20   machines and were licensed under former Section 12-21-2784 as
21   of July 1, 1999, provided the establishment is operated by the
22   same person who held the license on July 1, 1999.
23      (D) The department may revoke the licenses of establishments,
24   machine owners, machine operators, and machines used in the
25   establishment and impose a monetary penalty of not less than one
26   thousand dollars and not more than ten thousand dollars on each of
27   the owners of such licenses for each failure to comply with a
28   provision of this section, or any provision of a regulation
29   pertaining to this section.
30      (E) Any establishment violating a provision of this section or
31   any provision of a regulation pertaining to this section may have its
32   privilege for operating or allowing the operation of video game
33   machines suspended as follows:
34         (1) upon the first violation, the privilege for operating or
35   allowing the operation of machines is suspended for a period of up
36   to six months;
37         (2) upon the second violation, the privilege for operating or
38   allowing the operation of machines is suspended for a period of up
39   to one year;
40         (3) upon the third or subsequent violation, the privilege for
41   operating or allowing the operation of machines is suspended for a
42   period of up to eighteen months.


     [3626-25]
 1      (F) The department, upon a determination that the violation is
 2   wilful, may refer the violation to the Attorney General or to the
 3   appropriate circuit solicitor for criminal prosecution, and, upon
 4   conviction, the person must be fined not more than ten thousand
 5   dollars or imprisoned not more than two years, or both.
 6      (G) Each violation or each day in violation of a provision of
 7   this chapter or any provision of a regulation pertaining to this
 8   chapter constitutes a separate offense.
 9      Section 12-22-805. (A) No person may offer or allow to be
10   offered any special inducement to a person for the playing of
11   machines.
12      (B) A licensed establishment that engages in activities other
13   than the operation of machines shall not offer any inducement
14   unless the licensed establishment is able to prove that the
15   inducements offered are not directed at machine players and that
16   the offerings are part of the normal practice of similar business
17   activities in the State.
18      Section 12-22-810. (A) A licensed establishment may
19   advertise, or allow the advertising of, the playing of machines by
20   utilizing a single green square not exceeding four by four feet
21   which may be placed alone on any side of the building in which
22   the licensed establishment is located.
23      (B) Nothing in this section prevents a licensed establishment
24   from advertising other goods and services except as otherwise
25   prohibited by law.
26      (C) No person may advertise in a misleading or deceptive
27   manner.
28      (D) To protect the public from misleading, deceptive, or
29   aggressive sales practices, no person shall advertise the playing of
30   machines or a business regulated under this chapter in any manner
31   that suggests winning, money, or wealth.
32      (E) Due to the pervasiveness of the medium and the children in
33   the audience, no person may advertise the playing of machines in
34   any broadcast medium between the hours of 5:00 a.m. and 11:00
35   p.m.
36      (F) No person shall advertise in any manner for the playing of
37   machines within one thousand feet of a public or private school,
38   daycare center, kindergarten, residence, park, playground, or
39   church.
40      (G) Signs and non-broadcast advertising in existence on the
41   date of enactment are not subject to the provisions of this section
42   until July 1, 2001, provided notice is given to the department as
43   required in this chapter.

     [3626-26]
 1      Section 12-22-815. (A) Except as provided in subsection (B),
 2   machines shall not be operated or continue to operate at any
 3   casino, casino-style gaming operations, video gaming mall, or
 4   combination of ‘single place or premises’ as that term was applied
 5   in Regulation 117-190. In determining whether an establishment
 6   violates this section, the department shall consider whether more
 7   than one licensed establishment operates within a single structure,
 8   unless the distance between such licensed establishments exceeds
 9   one hundred feet and the licensed establishments are not owned by
10   the same person, do not have any of the same principals, and the
11   owner of one is not a principal of another licensed establishment.
12   Licenses denied under this section are subject to review under
13   Section 12-60-1310.
14      (B) All establishments which conducted business as a casino or
15   otherwise within a structure which prior to April 1, 1999,
16   contained more than one ‘single place or premises’ in accordance
17   with department Regulation 117-190 must:
18        (1) on or before April 1, 1999, conduct business as a single
19   operation and be licensed as a single licensed establishment to
20   maintain on the premises more than five licensed machines;
21        (2) advise the department of the machine and establishment
22   licenses currently issued for the structure and return the
23   establishment licenses to the department at the time the new
24   license for the single licensed establishment is approved by the
25   department and issued;
26        (3) once licensed as a single establishment, never have
27   licenses for any number of machines greater than the total number
28   of machines licensed in the structure as of April 1, 1999, as
29   asserted in the statement required in (6);
30        (4) never increase the number of machines permitted by this
31   section after any reduction in the number of machines at the
32   licensed establishment; provided, that a reduction, as that term is
33   used in this subsection, does not include the routine removal and
34   replacement of machines for maintenance, repair, service, or
35   similar purpose;
36        (5) not allow the operation of an automated teller machine or
37   any similar machine that dispenses money on the premises of the
38   licensed establishment; and
39        (6) on or before April 1, 1999, file with the department a
40   sworn statement asserting any and all reasons why it is entitled to
41   the benefits conferred by this subsection (B).
42      (C) Any person claiming the provisions of subsection (B) shall
43   have the burden of proof and must establish by clear and

     [3626-27]
 1   convincing evidence that he is entitled to operate the structure as a
 2   single licensed establishment with more than five licensed
 3   machines. Any transferee of an interest in such an establishment
 4   shall be subject to all limitations of this section.
 5      (D)(1) No entity or entities of whatever description or kind
 6   which, prior to April 1, 1999, conducted business as a casino or
 7   otherwise through and by a combination, confederation, or
 8   aggregation of ‘single place or premises’ as that term prior to April
 9   1, 1999, was interpreted and applied by the Department of
10   Revenue in regulation may operate or continue to operate except as
11   provided in this subsection.
12         (2) After April 1, 1999, entities as described in this
13   subsection shall be permitted to re-apply for and may be granted
14   renewal of a license for a maximum of one biennial licensure
15   period. After completing that period, a new license shall not be
16   issued.
17                                   Article 9
18                           Illegal Devices and Acts
19      Section 12-22-900. (A) It is unlawful for any person to keep
20   on his premises or operate or permit to be kept on his premises or
21   operated within this State any vending or slot machine, punch
22   board, pull board, or other device pertaining to games of chance of
23   whatever name or kind, including those machines, boards, or other
24   devices that display different pictures, words, or symbols, at
25   different plays or different numbers, whether in words or figures
26   or, which deposit tokens or coins at regular intervals or in varying
27   numbers to the player or in the machine, but the provisions of this
28   section do not extend to coin-operated nonpayout pin tables,
29   in-line pin games, and any video game with a free play feature
30   which meet the technical requirements provided for in Section
31   12-22-725 and Section 12-22-775, or to automatic weighing,
32   measuring, musical, and vending machines which are constructed
33   as to give a certain uniform and fair return in value for each coin
34   deposited and in which there is no element of chance.
35      (B) Any person violating the provisions of this section shall be
36   tried before the magistrate and is guilty of a misdemeanor and,
37   upon conviction, must be fined not more than five hundred dollars
38   or imprisoned for a period of not more than one year, or both.
39      Section 12-22-905. (A) Any machine, board, or other device
40   prohibited by Section 12-22-900 must be seized by any law
41   enforcement officer of the law and at the option of the magistrate
42   taken before any magistrate of the county in which the machine,
43   board, or device is seized who may examine it, take testimony, and

     [3626-28]
 1   if satisfied that it is in violation of Section 12-22-900 or any other
 2   law of this State, direct that it be immediately destroyed.
 3      (B) Coin-operated machines or devices licensed pursuant to
 4   Section 12-22-320 are not subject to confiscation under this section
 5   due to any violation of Sections 16-19-30, 16-19-40, 16-19-50, or
 6   16-19-130.
 7      Section 12-22-910. (A) It is unlawful for a person to operate,
 8   cause to operate, or attempt to operate an automatic vending
 9   machine, slot machine, coin-box telephone, or other receptacle
10   designed to receive lawful coin of the United States of America in
11   connection with the sale, use, or enjoyment of property or service
12   by means of a slug or any false, counterfeited, mutilated, sweated,
13   or foreign coin, or by any means not lawfully authorized by the
14   owner, lessee, or licensee of the receptacle.
15      (B) It is unlawful for a person to take, obtain, or receive from
16   or in connection with any receptacle designed to receive lawful
17   coin of the United States of America in connection with the sale,
18   use, or enjoyment of property or service any goods, wares,
19   merchandise, gas, electric current, or other article of value or the
20   use or enjoyment of any telephone or telegraph facilities, or
21   service, or of any musical instrument, phonograph, or other
22   property, without depositing in and surrendering to the receptacle
23   lawful coin of the United States of America in the amount required
24   by the owner, lessee, or licensee of the receptacle.
25      (C) A person who violates the provisions of this section shall
26   be tried before the magistrate and is guilty of a misdemeanor and,
27   upon conviction, must be fined in the discretion of the court or
28   imprisoned not more than two years.
29      Section 12-22-915. A person who, with intent to cheat or
30   defraud the owner, lessee, licensee, or other person entitled to the
31   contents of an automatic vending machine, slot machine, coin-box
32   telephone, or other receptacle, depository, or contrivance designed
33   to receive lawful coin of the United States of America in
34   connection with the sale, use, or enjoyment of property or service
35   or who, knowing that the same is intended for unlawful use,
36   manufactures for sale, or sells or gives away any slug, device, or
37   substance intended or calculated to be placed or deposited in the
38   automatic vending machine, slot machine, coin-box telephone, or
39   other receptacle, depository, or contrivance is guilty of a felony
40   and, upon conviction, must be fined in the discretion of the court
41   or imprisoned not more than five years.
42      Section 12-22-920. The issuance of a license under the
43   provisions of this chapter by the department does not make lawful

     [3626-29]
 1   the operation of any gambling machine or device, the operation of
 2   which is made unlawful under the laws of this State.
 3      Section 12-22-925. A person who fails, neglects, or refuses to
 4   comply with the terms and provisions of this chapter or who fails
 5   to attach the required license to any machine, apparatus, billiard, or
 6   pocket billiard table, as herein required, is subject to a penalty of
 7   fifty dollars for each failure, and the penalty must be assessed and
 8   collected by the department. If the violation under this section
 9   relates to a machine licensed pursuant to Section 12-22-320(A)(3),
10   the applicable penalty amount is two thousand five hundred
11   dollars. This penalty must be deposited in the same manner as
12   other monies collected pursuant to this chapter.
13      Section 12-22-930. (A) In addition to the penalties above
14   provided, any machine, apparatus, billiard, or pocket billiard table
15   not having attached thereto the required license, or which is
16   improperly licensed, must be seized and confiscated by the
17   department, its agents or employees, and sold at public auction
18   after thirty days’ advertisement. Upon payment of the license
19   required, the department may, within its discretion, return any
20   property so seized and confiscated and compromise any penalty
21   assessed.
22      (B) The owner or person from whom the property is seized may
23   at any time within five days after the seizure repossess the property
24   by filing with the department a bond in cash or a bond executed by
25   a surety company authorized to do business in this State in double
26   the amount of the tax and penalties due. Within ten days thereafter
27   the person must bring action in a court of competent jurisdiction to
28   have the seizure set aside; otherwise, the bond so filed must be
29   declared forfeited by the department.
30      Section 12-22-935. It is unlawful to tamper with a machine
31   with intent to interfere with its proper operation. A person who
32   violates this section is guilty of a felony and, upon conviction,
33   must be imprisoned not more than one year or fined not more than
34   five thousand dollars, or both.
35      Section 12-22-940. Skimming of machine proceeds is the
36   intentional excluding or the taking of any action in an attempt to
37   exclude anything or its value from the deposit, counting,
38   collection, or computation of revenues from machines. Whoever
39   commits skimming of machine proceeds is guilty of a felony and,
40   upon conviction, must be imprisoned for not less than one year nor
41   more than ten years, without benefit of probation, parole, or
42   suspension of sentence, and may be fined not more than
43   twenty-five thousand dollars.

     [3626-30]
 1      Section 12-22-945. A person who, with intent to manipulate
 2   the outcome, payoff, or operation of a machine by physical
 3   tampering or any other means is guilty of a felony and, upon
 4   conviction, must be imprisoned not less than one year nor more
 5   than five years or fined not more than one thousand dollars, or
 6   both.
 7      Section 12-22-950. Upon application being made for a license
 8   to operate any machine or apparatus under this chapter, the
 9   department may presume that the operation of the machine or
10   apparatus is lawful and when a license has been issued for the
11   operation thereof, the sum paid for the license may not be refunded
12   notwithstanding that the operation of the machine or apparatus is
13   prohibited.
14                                  Article 11
15                                   Taxation
16      Section 12-22-1100.        (A) In addition to license fees, there is
17   imposed on the machine owner for each machine licensed under
18   Section 12-22-320(A)(3), a tax of ten percent (10%) of the gross
19   machine income. A player will receive credits on the machine
20   equal to ninety percent (90%) of the number of credits allowed
21   according to the amount of money that goes into the machine.
22      (B) The tax imposed by this section must be collected and
23   remitted to the department by the machine owner. The machine
24   owner shall be responsible for collecting and remitting any portion
25   of the tax imposed by this section which is agreed in any manner to
26   be paid by any other person, including the machine operator,
27   distributor, or the owner, lessee, or manager of a place of business
28   at which the machine is operated or offered for operation.
29      (C) On or before the twentieth day of the month following the
30   end of each month, every person subject to the tax imposed by this
31   section shall render to the department, on a form or in a manner
32   prescribed by it, the tax due and payable and a true and correct
33   statement showing the sum of all gross profits for the reporting
34   period together with other information the department may require.
35   A return is timely filed if the return is mailed and postmarked on or
36   before the due date.
37      (D) The tax imposed by this section is effective beginning on
38   the first day of the first month following enactment.
39      (E) Revenues derived from the tax imposed in this section must
40   be credited as provided in Section 12-22-1110.
41      (F) All fees, taxes, and penalties imposed in this chapter are a
42   first lien upon any and all property of the person charged
43   therewith.

     [3626-31]
 1      (G) Failure to remit taxes imposed under this chapter shall
 2   result in immediate disabling of the machines and is justification
 3   for the revocation of the machine license and machine owner’s
 4   license.
 5      Section 12-22-1105.      (A) For any person owing twenty
 6   thousand dollars or more in connection with any return or
 7   reporting period, the tax imposed by this chapter shall be paid to
 8   the department through electronic transfer of funds.
 9      (B)The taxpayer shall furnish the department all information and
10   bank authorization required to facilitate the timely payment of
11   taxes due. The taxpayer shall provide the department with thirty
12   days’ advance notice of any proposed bank account changes to
13   ensure the uninterrupted electronic transfer of funds. The taxpayer
14   shall maintain a balance in the account sufficient to cover the
15   amount of the tax on the due dates. The failure to maintain an
16   adequate balance authorizes the department to find the tax in
17   jeopardy and to disable all machines licensed to that taxpayer.
18   Appeals from a jeopardy assessment shall be governed by Title 12,
19   Chapter 60.
20      (C) After notice to taxpayers, the department may draw upon
21   the designated account to satisfy the tax indebtedness under this
22   chapter.
23      (D) The taxpayer shall report to the department any
24   discrepancies the department’s statement of taxes based on a
25   machine’s mechanical and electronic meter readings, or otherwise.
26   Until a discrepancy is resolved, the department shall not make
27   credit adjustments. Electronic accounting meters shall not be
28   cleared outside the presence of an authorized department or
29   division employee. Any discrepancies that cannot be resolved
30   because of unauthorized meter clearing shall be resolved in favor
31   of the State. The burden of proving a discrepancy is upon the
32   taxpayer.
33      (E) A licensed establishment may return to a player money
34   which the player deposited into the machine for which the machine
35   did not permit play and would not print a validated winnings
36   ticket; and in such event shall obtain record the date, time, amount,
37   and licensed machine number of the refund, and the name,
38   addresses, telephone number, social security number, and driver’s
39   license identification number and state of that player. Thereafter
40   the taxpayer may file a claim for refund for any taxes paid under
41   this chapter on the amount returned to the player in accordance
42   with Title 12, Chapter 60, but in addition to the information
43   required by Section 12-60-470 the taxpayer shall file the

     [3626-32]
 1   information required to be maintained by the licensed
 2   establishment under this subsection.
 3      Section 12-22-1110.     All revenue derived from the fees and
 4   taxes imposed pursuant to this chapter must be credited as
 5   provided by the General Assembly.
 6      Section 12-22-1120.     Unless and until the department
 7   determines that such reports are unnecessary, each machine owner,
 8   machine operator, and licensed establishment shall report to the
 9   department for each calendar quarter, by the twentieth of the
10   month following end of the quarter, the following information for
11   each machine:
12        (1) name and address of location of the machine;
13        (2) denomination, whether five cents, etc. of the game;
14        (3) the name of the game;
15        (4) the name of the individual(s) collecting money from the
16   machine and the owner of the machine;
17        (5) the date(s) of collection;
18        (6) the date of previous collection;
19        (7) income number at commencement of the reporting
20   period;
21        (8) income number at the end of the reporting period;
22        (9) beginning payout number;
23        (10) ending payout number;
24        (11) payout to players;
25        (12) gross profit;
26        (13) the percentage of net profits divided between owner and
27   the location and the formula by which those figures are calculated;
28        (14) the name, address, social security number, payout, and
29   date of all payouts to players exceeding $500 per session,
30   regardless of when the payout is delivered to the player; and
31        (15) the name, address, social security number, and
32   information regarding any refunds to players.
33                                Article 13
34                              Miscellaneous
35      Section 12-22-1300.     (A) No municipality may limit the
36   number of machines within the boundaries of the municipality. A
37   municipality may by ordinance impose a license fee on machines
38   licensed pursuant to Section 12-22-320(A)(3) in an amount not
39   exceeding ten percent of three thousand six hundred dollars of the
40   license fee imposed pursuant to Section 12-22-320(A) for the
41   equivalent license period.
42      (B) No county may limit the number of machines within the
43   boundaries of a county. A county may by ordinance impose a

     [3626-33]
 1   license fee on machines licensed pursuant to Section
 2   12-22-320(A)(3) located in an unincorporated area of the county in
 3   an amount not exceeding ten percent of three thousand six hundred
 4   dollars of the license fee imposed pursuant to Section
 5   12-22-320(A) for the equivalent license period.
 6      Section 12-22-1305.        Municipalities and counties may levy a
 7   license tax on the business taxed under this article, but in no case
 8   may a tax so levied exceed one-half of the amount levied by the
 9   State before March 28, 1956.”
10      SECTION 11. Articles 19 and 20, Chapter 21, Title 12 are
11   repealed. To the extent that regulations promulgated pursuant to
12   the authority of Articles 19 and 20, Chapter 21, Title 12 are not
13   inconsistent with Section 10, those regulations remain in effect
14   until and unless otherwise modified or repealed pursuant to the
15   Administrative Procedures Act.
16                                    Part IV
17      SECTION 12. Section 16-19-60 of the 1976 Code is amended
18   to read:
19      “Section 16-19-60. Nothing in Section 16-19-40 or 16-19-50
20   shall extend to coin-operated nonpayout machines with a free play
21   feature; provided, that nothing herein shall authorize the licensing,
22   possession, or operation of any machine which disburses money to
23   the player. Nothing in this section prohibits regulation of video
24   games pursuant to Article 20, Chapter 21 of Title 12, the Video
25   Games Machines Act, including the prohibition on payoffs and
26   location of these machines in counties where such payouts and
27   machines are prohibited under the local option provisions of that
28   article.”
29      SECTION 13. Section 12-54-40(H) of the 1976 Code is
30   amended to read:
31      “(H) A person who:
32         (1) must obtain a license or purchase stamps for
33   identification purposes and fails to obtain or display the license
34   properly, or fails to affix the stamps properly; or
35         (2) must comply with statutory provisions and fails to do so,
36   is subject to a penalty of not less than fifty dollars nor more than
37   five hundred dollars for each failure. For failure to obtain or
38   display a license as prescribed in Sections 12-22-320 and
39   12-22-325, the penalty is two hundred dollars for each failure to
40   comply.”
41      SECTION 14. Section 12-54-40(M) of the 1976 Code is
42   amended to read:


     [3626-34]
 1      “(M) A machine owner or distributor, as defined in Article 20,
 2   Chapter 21 of this title, who allows or causes a machine to be
 3   operated without a metering device, or who wilfully places a
 4   machine on location or who wilfully allows or causes a machine to
 5   be operated with a metering device that does not accurately record
 6   the information required under Article 20, Chapter 21 of this title
 7   is guilty of a felony and, upon conviction, must be imprisoned for
 8   not less than one year nor more than ten years, without benefit of
 9   probation, parole, or suspension of sentence, and in addition may
10   be fined not more than twenty-five thousand dollars. A machine
11   owner or distributor, as defined in Chapter 22 of this title, who
12   wilfully places a machine on location, or who wilfully allows or
13   causes a machine to be operated, that does not accurately record
14   the information required under Chapter 22 of this title is guilty of a
15   felony and, upon conviction, must be imprisoned for not less than
16   one year nor more than ten years, without benefit of probation,
17   parole, or suspension of sentence, and in addition may be fined not
18   more than twenty-five thousand dollars.”
19      SECTION 15. Section 12-54-240(A) of the 1976 Code is
20   amended to read:
21      “(A) Except in accordance with proper judicial order or as
22   otherwise provided by law it is unlawful for a person to divulge or
23   make known in any manner any particulars set forth or disclosed in
24   any report or return required under Chapters 6, 8, 11, 13, 16, 20,
25   22, or 36 of this title. A person violating the provisions of this
26   section is guilty of a misdemeanor and, upon conviction, must be
27   punished by a fine of not more than one thousand dollars or by
28   imprisonment for not more than one year, or both. If the offender
29   is an officer or an employee of the State, he must be dismissed
30   from office and is disqualified from holding any public office in
31   this State for a period of five years thereafter. If the offender is an
32   officer or employee of a company retained by the State on an
33   independent contract basis under subsection (B)(3) of this section
34   or Section 12-4-350, the contract is immediately terminated and
35   the company is not eligible to contract with the State for this
36   purpose for a period of five years thereafter.”
37      SECTION 16. Article 1, Chapter 1, Title 32 of the 1976 Code
38   is amended by adding:
39      “Section 32-1-60.      The provisions of Sections 32-1-10,
40   32-1-20, and 32-1-30 do not apply to losses arising from the play
41   of machines licensed pursuant to Section 12-22-320 (A)(3).”
42      SECTION 17. Sub-item (3) of Section 61-4-580 of the 1976
43   Code is amended to read:

     [3626-35]
 1        “(3) permit gambling or games of chance which is not
 2   authorized by Chapter 22 of Title 12.”
 3      SECTION 18. The provisions of Chapter 22 of Title 12 as
 4   added by this act apply to any and all licenses to be issued on or
 5   after July 1, 1999. All persons who are licensed pursuant to
 6   Section 12-21-2728(A)(3) to own devices described in Section
 7   12-21-2720(A)(3) on the effective date of this act are considered
 8   licensed under the provisions of Chapter 22 of Title 12 as added by
 9   this act until the time when the license would have expired as
10   originally issued. Thereafter, the person shall apply for new
11   licenses to be issued in accordance with Articles 3 and 5, Chapter
12   22, Title 12 as added by this act.
13      SECTION 19. If any section, subsection, paragraph,
14   subparagraph, sentence, clause, phrase, or word of this act is for
15   any reason held to be unconstitutional or invalid, such holding
16   shall not affect the constitutionality or validity of the remaining
17   portions of this act, the General Assembly hereby declaring that it
18   would have passed this chapter, and each and every section,
19   subsection, paragraph, subparagraph, sentence, clause, phrase, and
20   word thereof, irrespective of the fact that any one or more other
21   sections, subsections, paragraphs, subparagraphs, sentences,
22   clauses, phrases, or words hereof may be declared to be
23   unconstitutional, invalid, or otherwise ineffective.
24      SECTION 20. Except as may be otherwise provided in this
25   act, this act takes effect upon approval by the Governor except
26   that: (a) Part II takes effect December 31, 2000, only if the State
27   Election Commission certifies, as provided in Section 2(A), that a
28   majority of the qualified electors voting in the referendum voted
29   “no”. If Part II of this act takes effect, the South Carolina
30   Department of Revenue, upon application, shall issue pro rata
31   refunds of license fees on machines licensed pursuant to Section
32   12-21-2720(A)(3) as of December 31, 2000; and (b) Sections 10
33   and 11 are effective July 1, 1999, provided, however, Sections 10
34   and 11 are repealed December 31, 2000, if the State Election
35   Commission certifies, as provided in Section 2(A), that a majority
36   of the qualified electors voting in the referendum voted “no”./
37      Renumber sections to conform.
38      Amend title to conform.
39
40   JOHN W. DRUMMOND, for Committee.
41
42


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 1
 2
 3
 4
 5
 6
 7
 8
 9                  A JOINT RESOLUTION
10
11   TO DIRECT THE DEPARTMENT OF REVENUE TO
12   PROMULGATE      STRICT    AND    COMPREHENSIVE
13   REGULATIONS NECESSARY TO REGULATE THE
14   OPERATION OF VIDEO GAME MACHINES WITH A FREE
15   PLAY FEATURE INCLUDING A RECOMMENDATION FOR
16   THE IMPOSITION OF A TAX RATE AND REGULATIONS TO
17   IMPOSE FEES ON SUCH MACHINES OR ON THE OWNERS,
18   DISTRIBUTORS, OR OPERATORS THEREOF IN AN
19   AMOUNT NECESSARY TO GENERATE REVENUE IN THE
20   AGGREGATE OF AT LEAST TWO HUNDRED MILLION
21   DOLLARS ANNUALLY, AND TO PROVIDE FOR THE
22   PROCEDURES UNDER WHICH THE REGULATIONS MUST
23   BE PROMULGATED INCLUDING A PROVISION THAT
24   THEY MUST BE SUBMITTED TO THE GENERAL
25   ASSEMBLY BY APRIL 1, 1999, AND ARE DEEMED
26   APPROVED ON JUNE 3, 1999, IF THE GENERAL
27   ASSEMBLY HAS NOT ENACTED A JOINT RESOLUTION
28   PRIOR TO THIS DATE APPROVING OR DISAPPROVING
29   SUCH REGULATIONS.
30
31   Be it enacted by the General Assembly of the State of South
32   Carolina:
33
34   SECTION 1. (A) Notwithstanding any other provision of law,
35   the Department of Revenue is directed to promulgate strict and
36   comprehensive regulations necessary to regulate the operation of
37   video game machines with a free play feature licensed pursuant to
38   Section 12-21-2720(A)(3) of the 1976 Code including a
39   recommendation for the imposition of a tax rate and regulations to
40   impose fees on such machines or on the owners, distributors, and
41   operators thereof in an amount necessary to generate, in addition to
42   those fees and taxes already provided by law, revenue in the

     [3626]                           1
 1   aggregate of at least $300,000,000 annually. These regulations
 2   must include, but are not limited to, the following:
 3      (1) a requirement for background checks for video gaming
 4   industry employees, owners, distributors, and operators and any
 5   person having a financial interest in the business;
 6      (2) a requirement for a minimum payout percentage for such
 7   machines as a function of the amount of money inserted into the
 8   machine;
 9      (3) limitations on video gaming industry advertising of
10   whatever form;
11      (4) a requirement for the electronic collection of the taxes so
12   generated;
13      (5) any other regulations the department deems necessary for
14   the proper regulation, supervision, and taxation of the video
15   gaming industry, including, but not limited to, criteria by which
16   licenses will be denied or revoked on the basis of information
17   obtained in background checks as provided in item (1);
18      (6) no person under the age of twenty-one is allowed to play
19   the machines or receive any compensation or pay-out from the
20   machines.
21      (B) Notwithstanding the provisions of the Administrative
22   Procedures Act, the following procedures apply with regard to the
23   promulgation of the regulations required by subsection (A). The
24   drafting notice and public notice requirements of the
25   Administrative Procedures Act are waived and the department is
26   directed to promulgate these regulations and submit them to the
27   General Assembly for approval on or before April 1, 1999. If a
28   committee to which the regulations are assigned determines that
29   any changes are necessary in these regulations, the department
30   must withdraw and resubmit the amended regulations within
31   twenty days. These regulations are deemed to be approved on
32   June 3, 1999, unless the General Assembly enacts a Joint
33   Resolution approving these regulations at an earlier date or a Joint
34   Resolution disapproving these regulations is introduced in the
35   General Assembly on or before June 3, 1999, by the committee to
36   which the regulations are assigned. In promulgating these
37   regulations the department shall stipulate that these regulations
38   shall have an effective date of July 1, 1999. All other provisions of
39   the Administrative Procedures Act shall apply to the promulgation
40   of these regulations mutatis mutandis.
41      (C) The Department of Revenue is directed to implement not
42   later than May 31, 1999, the monitoring requirements for video
43   games with a free play feature.

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1
2 SECTION 2. This joint resolution takes effect upon approval by
3 the Governor.
4                          ----XX----




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