Journal of the House of Representatives
of the Second Session of the 110th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 11, 1994

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| Printed Page 6990, May 17 | Printed Page 7010, May 17 |
Printed Page 7000 . . . . . Tuesday, May 17, 1994
Q. And, on the average, how many hearings every month are you involved in? Or every week?
A. It would be -- it would be about two every other -- or two or three every other week. That would be the easiest way for me to put it.
Q. This position of ALJ Number Three is a bit unique. How would you describe it?
A. By unique you mean --
Q. Well, it's a little different --
A. -- only one year?
Q. Yes.
A. I would think that it would -- obviously, if someone wants this job they would want it for one -- more than one year. So it would be unique in that hopefully you would do a quality service of one year and, therefore, come back before this body of the legislator -- legislators and demonstrate that you've done good work and should be renominated again or be reelected.
Q. How would you prepare yourself for those areas that you are not very familiar with? Let's say DHEC or let's say those kinds of contested cases.
A. Get the law down, read it, research it. Especially when you know a case is coming before you and you know the subject matter, research that particular area, make sure that you're knowledgeable on the law.

I think the best approach would obviously be -- we, the Administrative Law Division needs to get together and develop training that encompasses the whole wide area of all the administrative law judges and -- a CLE type concept. And then for specific matters that come before you, then that's where you need to specifically get the statutes and case law down concerning that particular matter.
Q. Will you tell this committee about your work habits, your work ethics?
A. I think my work habits are, I work long hours, I take very few vacations and I take my work very seriously.
Q. Why do you want to be an ALJ at this point in your career?
A. As a committee attorney for employee grievance cases, I enjoy that. I act as a judge. It equates out in a judicial capacity because I rule on evidence and all the motions, and I enjoy administrative law.
Q. How do you separate your job with the state government from this effort?
A. I have -- anytime that I've worked on the ALJ position I've done it at home. I've even tried to avoid using the phone at the office at all. I may have used it two or three times at the office during a lunch hour type

Printed Page 7001 . . . . . Tuesday, May 17, 1994
period, but I've even avoided receiving or using the phone at all -- the state phones at all.
Q. Have you ever been held in contempt or sanctioned by any court?
A. No.
Q. Have you ever been the subject of a disciplinary action arising out of your public employment?
A. I had one fellow file a letter against me, a Charles Rouse (phonetic), but that letter was dismissed by Doctor
-- or Dan Byrd (phonetic), as Chairman, before it went any further.
Q. In your work at the Attorney General's Office, has there ever been an occasion for you to be disciplined in that work?
A. No.
THE CHAIRMAN: Thank you.
THE CHAIRMAN: Yes. Senator Moore.
EXAMINATION BY SENATOR MOORE:
Q. Have you ever been disciplined by a judge any time during your life?
A. By my father.
THE CHAIRMAN: Other questions? Thank you very much, Mr. Anderson.

END OF PRIOR TESTIMONY OF MR. ANDERSON.

REPRESENTATIVE ALEXANDER: Yes, sir. Ray? Ray Stevens.
RAY NELSON STEVENS, having been duly sworn, testified as follows:
REPRESENTATIVE ALEXANDER: Have you had a chance to review the Personal Data Questionnaire Summary?
MR. STEVENS: Yes, I have.
REPRESENTATIVE ALEXANDER: Is it correct?
MR. STEVENS: Yes, sir.
REPRESENTATIVE ALEXANDER: Does it need any clarification, I don't suspect?
MR. STEVENS: No, sir.
REPRESENTATIVE ALEXANDER: Is there any objection to making this Summary a part of the record of your sworn testimony?
MR. STEVENS: No objection.
REPRESENTATIVE ALEXANDER: It shall be done at this point in the transcript.

Printed Page 7002 . . . . . Tuesday, May 17, 1994
PERSONAL DATA QUESTIONNAIRE SUMMARY

1. Ray Nelson Stevens
Home Address: Business Address:
77 Middle Creek Road S. C. Attorney General's Office
Irmo, SC 29063 Tax Division
P. O. Box 125
Columbia, SC 29214

2. He was born in Toccoa, Georgia on October 7, 1949. He is presently 44 years old.

4. He was married to Janice Louise Shapiro on December 22, 1973. He has three children: Ryan Nelson, age 16; Alan Austin, age 12; and Leah Suzanne, age 5.

5. Military Service: N/A

6. He attended the University of South Carolina-Aiken, 1967-1969, Associate Degree in Business; the University of South Carolina, 1969-1971, B.S. in Accounting; the University of South Carolina, Engineering Graduate School, 1971-1972 (left for full-time employment with Internal Revenue Service); the University of South Carolina, graduate school (part-time), 1973-1975, M.B.A.; the University of South Carolina School of Law, 1975-1978, J.D.; and William and Mary School of Law, 1979-1980, Master of Law in Taxation.

8. Legal/Judicial education during the past five years:
June, 1989; Federation of Tax Administrators; General review of state and local tax litigation and legislation; 12.25
October, 1989; National Institute on State and Local Taxation; Review of state and local litigation and legislation; 11.5
January, 1990; Keys to Effective Trial Advocacy; Trial techniques; 6.0
May, 1990; Appellate Practice in South Carolina; Review of appellate practice and techniques; 6.5
January, 1991; Supreme Court Practice Seminar; United States Supreme Court practice and techniques; 9.75
March, 1991; Legal Ethics; Ethics in advertising, solicitation, and conflicts of interest; 6.0

Printed Page 7003 . . . . . Tuesday, May 17, 1994
March, 1992; Civil and Criminal Litigation; Review of civil and criminal litigation in state and local taxation; 2.5
August, 1993; Government Duties; Restructured state government and the state of administrative law; 6.0
September, 1993; Civil Law Update; Administrative Procedures update, 1993 Restructuring Act; 3.0
October, 1993; Southeastern Attorneys Conference; Tax cases and legislation of concern for southeastern states; 8.0

9. Taught or Lectured:
A. Law Related Courses Taught
1. Taught Fundamental of Federal Tax at Midlands Technical College for one semester; basic course in taxation of partnerships, corporations, and estates
2. Guest lectures at USC Law School in Professor Quirk's State and Local Tax classes:
a. Duties and functions of county officials in property taxation;
b. Taxation of railroads under Federal A-R Act
B. Lecturer at Bar Associations
Presentations to the Greenville County Tax Bar:
1. Remedies and Procedures for Suits Against State Officials
2. Administrative Procedures Before the South Carolina Tax Commission
C. Continued Legal Education Lectures
1. Federation of Tax Administrators:Lecture on the use of the Civil Rights Statute of 42 USC Section 1983 in state court to recover tax funds
2. Southeastern Association of Tax Attorneys:
a. Lecture on problems with collecting taxes while a party is in bankruptcy under an automatic stay of collection
b. Lecture on nexus and jurisdiction of South Carolina over businesses incorporated as Delaware Holding Companies

10. Published Books and Articles:
"Unwanted Assets Spun Off Prior to Acquisition of Wanted Assets," 1980 South Carolina Bar publication
"The Use of Title 42 USC Section 1983 in State Tax Litigation," 1988 REVENUE ADMINISTRATION, page 63

Printed Page 7004 . . . . . Tuesday, May 17, 1994
"Delaware Subsidiaries Can Still Reduce Tax But More Planning Needed," March/April 1992 THE JOURNAL OF MULTISTATE TAXATION, page 4

12. Legal experience since graduation from law school:
1978; Stophel, Caldwell, Heggie (Chattanooga, TN; now known as Caldwell, Heggie & Helton); General corporate practice with emphasis on taxation
1979; United States Internal Revenue Service; Examination of Federal estate and gift tax returns as an Estate and Gift Tax Attorney
1980 to present; Chief Deputy Attorney General, Director of Tax Division of SC Attorney General's Office; Issuance of Attorney General opinions; advise Commissioners of Dept. of Revenue on all administrative hearings in tax and ABC; advise county and municipal officials on budget, school and finance matters; litigation and defense of State at all levels from administrative hearings to trial in state and federal courts including S. C. Supreme Court and U. S. Supreme Court

13. Rating in Martindale-Hubbell:not rated; not in private practice

14. Frequency of appearances in court:
Federal Court Appearances from 1989 to present
1. Federal District Court - two times
2. U. S. Supreme Court - three times; once on brief in chief; twice on brief in Opposition to Petition for Writ of Certiorari
State Court Appearances from 1989 to present
1. Trial Court - 21 times; 10 appearances with case settled before trial; 11 appearances with trial conducted
2. S. C. Court of Appeals - 3 times; once as primary attorney; twice as secondary attorney
3. S. C. Supreme Court - 12 times; 8 times as primary attorney; 4 times as secondary attorney
Other: Administrative Hearings from 1989 to present
1. S. C. Tax Board of Review - twice
2. South Carolina Tax Commission - 75 (average 15 a year) as advisor to the Commissioners; one time representing a party

Printed Page 7005 . . . . . Tuesday, May 17, 1994
15. Percentage of litigation:
Civil - 100%
Criminal -
Domestic -

16. Percentage of cases in trial courts:
Jury -
Non-jury - 100%
Sole counsel with other attorneys in office listed in name only on the pleadings

17. Five (5) of the most significant litigated matters in either trial or appellate court:
(a) Spencer v. South Carolina Tax Commission, 316 S.E.2d 386 (South Carolina Supreme Court May 15, 1984). This case determined that 42 USC Section 1983 could not be used in state court to recover taxes paid and correspondingly denied attorney fees normally available under 42 USC Section 1988.
(b) Reyelt v. State of South Carolina (United States District Court 6:93-1491-3). This suit will determine the constitutionality of the regulation of video poker in South Carolina with the attacks based upon vagueness, free speech, involuntary taking, impairment of contract, equal protection, commerce clause and privileges and immunity claims.
(c) Geoffrey v. South Carolina Tax Commission (South Carolina Supreme Court
July 6, 1993). This suit determined that the use of an intangible (trademark) in South Carolina subjected the owner of the intangible to income taxation even though the owner has no physical presence in South Carolina. Further, such taxation does not violate Due Process or the Commerce Clause.
(d) Lowenstein v. South Carolina Tax Commission, 378 S.E.2d 272 (South Carolina Court of Appeals May 12, 1989). This suit determined that the payee of interest income is taxable on such interest income where the income is part of the taxpayer's unitary business. Accordingly, Due Process is not violated by such taxation.
(e) Gaston Copper v. South Carolina Tax Commission (trial level; Lexington County, Case No. 92-DP-32-0503). This case determined that the FOIA does not prevent disclosure of

Printed Page 7006 . . . . . Tuesday, May 17, 1994
confidential contract documents and pollution investigation documents when such are given to the South Carolina Tax Commission as part of an attempt to reduce a property tax assessment.

18. Five (5) civil appeals:
(a) Geoffrey v. South Carolina Tax Commission, ___ SC ___, ___S.E.2d ___ (South Carolina Supreme Court July 6, 1993)
(b) South Carolina Tax Commission v. South Carolina Tax Board of Review and Collins Music Company, 305 SC 183, 407 S.E.2d 627 (South Carolina Supreme Court May 6, 1991)
(c) Thayer v. South Carolina Tax Commission, 307 SC 6, 413 S.E.2d 810 (South Carolina Supreme Court January 13, 1992)
(d) NCR v. South Carolina Tax Commission, 304 SC 1, 403 S.E.2d 666 (South Carolina Supreme Court May 6, 1991)
(e) Lowenstein v. South Carolina Tax Commission, 298 SC 93, 378 S.E.2d 272 (South Carolina Court of Appeals March 13, 1989)

25. Occupation, business or profession other than the practice of law:
1972-1975; Internal Revenue Service; Revenue Agent; Greenville, South Carolina; examined individual, partnership and corporate tax returns

39. Expenditures Relating to Candidacy:
None to date

44. Bar Associations and Professional Organizations:
Member of Tax Section of South Carolina Bar; Past Chairman of the Attorneys & Appeals Section of the Federation of Tax Administrators, 1989; Member of South Carolina Association of Auditors, Treasurers and Tax Collectors

45. Civic, charitable, educational, social and fraternal organizations:
Past President and past Vice-President of Chapin Elementary PTO; Past Co-Chairman of the Budget Advisory Committee to School District Five of Lexington and Richland Counties; Past Vice-President of Shadowood Cove Civic Association

46. Deacon at First Baptist Church of Columbia, South Carolina; Sunday School teacher of an adult class; service, as an officer and as a

Printed Page 7007 . . . . . Tuesday, May 17, 1994
member, on numerous committees such as Endowment Committee, Revival Committee, Budget Planning Committee and Stewardship Committee

47. Five (5) letters of recommendation:
(a) Shirley Hightower, Branch Manager
Southern National
P. O. Box 687, Columbia, SC 29202
251-3184
(b) Joe L. Allen, Jr., Esquire
109 Windsor Point Road, Columbia, SC 29223
788-3888
(c) Dr. Wendell R. Estep
First Baptist Church of Columbia
P. O. Box 1000, Columbia, SC 29202
256-4251
(d) S. Hunter Howard, Jr.
South Carolina Chamber of Commerce
Suite 1810, 1201 Main Street, Columbia, SC 29201
799-4601
(e) Honorable Robert E. McNair
McNair & Sanford
P. O. Box 11390, Columbia, SC 29211
799-9800

The Board of Commissioners of Grievances and Discipline reports no formal complaints or charges of any kind have ever been filed against you. The records of the applicable law enforcement agencies: Richland County Sheriff's Office are negative; Columbia City Police Department are negative; SLED and FBI records are negative. The Judgement Rolls of Richland County are negative. Federal court records are negative. No complaints or statements were received. No witnesses are present to testify. Would you care to make a statement?
MR. STEVENS: I'd like to just make a short one.
REPRESENTATIVE ALEXANDER: Proceed, please.
MR. STEVENS: Thank you very much. As this body certainly knows, as the General Assembly is well aware, the Department of Revenue's hearings functions are going to disappear come February, it's the first of next year. It is my intent to offer myself in Seat Number 6 because of that expertise.

Printed Page 7008 . . . . . Tuesday, May 17, 1994
I certainly recognize that the Administrative Law judges will carry on other functions in addition to taxes, but with a new entity being created with little or no expertise in the tax area, it would be my belief that it would be beneficial both to the state as well to as to the citizens to have someone with that expertise.

And just by way of example, and I will not belabor this point, we have numerous cases that come before the Department of Revenue that involve some rather complicated tax matters. I will give you only one example as an issue. Recently we've had a matter come before the Department of Revenue which involved a purchase of a -- purchase price of three billion dollars. The transaction involved 90 corporations. The issued turned on the interpretation of some complicated rules dealing with consolidated returns. The taxes that the taxpayer claims it does not owe is around four million dollars. That is for a single transaction. Those are the kinds of cases that the Administrative Law judge is going to be faced with. My background is in that area.

I have a master's degree in Tax Law. I have a master's degree in Business Administration. Obviously, I have my Law degree and I have a bachelor's degree in Accounting. In summary, I think I am a courtroom veteran. I have been in every court almost in this state, in the Federal District Court, Court of Appeals, the South Carolina Supreme Court, our Court of Appeals in our state and have argued in the United States Supreme Court. I think the ALJ needs to have the ability to communicate well.

I hope that I have those attributes and I have argued cases before a lot of judges. We have been fortunate enough to have been successful more often than not. I leave that with you as a summary and am happy to answer any questions that you may have.
REPRESENTATIVE ALEXANDER: Proceed.
MR. STEVENS - EXAMINATION BY MS. MCNAMEE:
Q. Mr. Stevens, good afternoon.
A. How are you?
Q. Is it all right with you if we -- aside from this statement incorporate your transcript from the previous screening --
A. No objection.
Q. -- at this point?
A. No objection.
Q. And to, I guess, elaborate on a couple of points that I don't think I covered with you previously, what is your philosophy of the question of ex parte communication?

Printed Page 7009 . . . . . Tuesday, May 17, 1994
A. I think other statements you've heard are accurate today. Ex parte communications are prohibited. It -- even under the best of circumstances -- for instance, when an individual comes in unrepresented by counsel and that individual wishes to get some advice or guidance, even about general procedures, it gives the appearance of impropriety if the judge is discussing an ongoing case with an unrepresented litigant, even if they're talking about procedural matters that could hypothetically be construed as not pertaining to the case that may come before the judge.

I think you have to be very careful about the appearance of impropriety and, therefore, I would think ex parte communications would be prohibited in almost all cases.
Q. Would that carry over into procedural questions as well as substantive questions?
A. So long as it was an ongoing case before that judge, yes, it would. If you had a member of the citizenry to call up who did not have a case, but who, in fact, may have anticipated a case coming and they're wanting to know if I end up before an Administrative Law judge, what procedures do I follow, I think can you answer that question by sending them a copy of the Rules and I don't believe there is any problem with that.

The line that I would draw would be a case which has already begun, no communication should be made with either side without the presence of the other side.
Q. And while we have talked about this previously, let me ask you now since you bought up the case which involves four million dollars worth of income for the state, what would you do in that case if you were elected ALJ and more of those proceedings were before you?
A. All right. Well, if it was matter for which I had substantial involvement in while I was advising the Department of Revenue, obviously, a recusal would be necessary. I do not believe that information that an individual has derived by way of his practice, I do not believe that you should recuse yourself from all cases in which those issues may come before you. That would be tantamount to asking a person to dismiss their knowledge simply on the basis that there may be an improper administration.

In other words, a recusal should not be used to the detriment of the parties. Recusal should be used for the benefit of the parties.
Q. Are you still maintaining the same wall between your work for the State and your campaigning for this?
A. Yes, any opinion requests that come to the Attorney General which I normally would answer, I do not answer those. Those go to other parties.

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