TO: Mike Wildgen, City Manager
CC: Dave Corliss, Assistant City Manager/Director of Legal Services
FROM: Frank S. Reeb, Administrative Services Director/City Clerk
DATE: February 10, 2004
RE: Drinking Establishment Licensee in Forfeited Status
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During the Public Comment period of a recent City Commission meeting, a citizen asked the Commission to revoke the Paradise Café City drinking establishment license because Paradise Inc. was in “forfeited” status with the Kansas Secretary of State’s Office for not timely filing an annual report. The Mayor asked staff to provide information on whether the City could initiate revocation proceedings for that reason.
I spoke with Laura Graham, Assistant Attorney General assigned to Alcohol Beverage Control, and asked how ABC would handle the matter. She stated ABC does not typically track the forfeited status of a licensee during the license period although an applicant for a new or renewal license must be in good standing at that time. However, she said it is technically possible to initiate suspension or revocation proceedings because K.S.A. 41-2611(c) provides that “the [ABC] director may revoke or suspend any license” when “the licensee has become ineligible to obtain a license or permit under the act.” She mentioned she could not recall a situation where revocation proceedings were initiated against a licensee because the corporation was in forfeited status. She said typically the administrative actions against licensees involve fines or suspensions and revocation proceedings are rare. Lastly, she mentioned that if this issue were before ABC there would most likely be a “resurrection period” given to allow the corporation to file its necessary reports and to come into good standing with the Secretary of State’s Office.
According to the Secretary of State’s Office, the process to become in good standing is fairly minimal. The corporation would need to file a Reinstatement Form, pay an $85.00 penalty fee and a $35.00 filing fee, and file any annual reports that were due (the 2002 Annual Report is the only annual report Paradise Café would need to file since the 2003 annual report is not due until April).
Because City Code 4-115(B) provides that the City Commission “may revoke or suspend the license” of a drinking establishment for a “violation of any provisions of K.S.A. 41-2601 et seq., it is possible to initiate revocation proceedings against Paradise Inc. for being in violation of K.S.A. 41-2611(c). However, staff recommends that all other similarly situated drinking establishment licensees be treated in like manner. That is, staff would review the forfeited status of other drinking establishment licensees and revocation proceedings initiated against them as well. Like ABC, we currently do not track the forfeited status of licensees and therefore do not know the number of other licensees that may be in forfeited status.
A second option would be to review the forfeited status of all current drinking establishment licensees and request that Alcohol Beverage Control initiate appropriate administrative proceedings against all those licensees that are in forfeited status.
A third option would be allow Paradise Inc. an appropriate “resurrection period” to get back in good standing and indicate that, pursuant to Code Section 4-115(B), the Commission “may” initiate suspension or revocation proceedings if the corporation remains in forfeited status following that resurrection period.
If you have any questions, please let me know.