Iowa Alcoholic Beverages Division (Division) on the Notice of Appeal filed by Lisa McDanel on I. STATEMENT OF REVIEW.

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Chester J. Culver Governor of Iowa Patty Judge Lieutenant Governor Lynn M. Walding Administrator IN RE: : The Mint, L.C. : Docket No. A-2009-00022 d/b/a The Mint : DIA No. 09DOCBL072 133 S.

1 Chester J. Culver Governor of Iowa Patty Judge Lieutenant Governor Lynn M. Walding Administrator IN RE: : The Mint, L.C. : Docket No. A d/b/a The Mint : DIA No. 09DOCBL S. Main : Protivin, Iowa : ADMINISTRATOR S FINAL ORDER : Liquor License No. LC : NOW, on this 28 th day of October 2009, this matter comes before the Administrator of the Iowa Alcoholic Beverages Division (Division) on the Notice of Appeal filed by Lisa McDanel on behalf of The Mint, L.C. (Licensee). I. STATEMENT OF REVIEW. The record in the aforementioned docket discloses that on March 4, 2008, the Division denied the application for renewal of liquor license number LC filed by The Mint, L.C. The denial was based on the Licensee s failure to meet the standard of good moral character, as required by Iowa Code Chapter 123. Iowa Code 123.3(26) and (1). A Notice of Hearing, which added delinquent sales tax as an additional reason to deny the application, scheduled the matter for June 22, On that date, an administrative hearing was held before an administrative law judge (ALJ) in accordance with Iowa Code Chapters 17A and 123. Assistant Attorney General John Lundquist appeared and represented the Division. The Licensee appeared pro se. On July 17, 2009, the ALJ issued a Proposed Decision affirming the Division s action to deny the Licensee s license. The Licensee s request for review of the Proposed Decision followed on August 17, A Division of the Department of Commerce 1918 SE Hulsizer Road Ankeny, Iowa PH FAX TOLL FREE 866.IowaABD

2 On August 19, 2009, the Administrator granted the Licensee s request for review and established a schedule for the parties to file exceptions and present briefs in support of their respective positions. The exceptions and brief of the appealing party were due on September 17, Responsive briefs were due on October 3, No briefs or exceptions were filed. The undersigned Administrator has thoroughly considered the issues outlined by the parties and observes that the Findings of Fact and Conclusions of Law, as well as the Decision and Order should be AFFIRMED. II. STATEMENT OF LAW. The Iowa Legislature has declared that the Iowa Alcoholic Beverage Control Act shall be deemed an exercise of the police power of the state, for the protection of the welfare, health, peace, morals, and safety of the people of the state, and all of its provisions shall be liberally construed for the accomplishment of that purpose. Iowa Code Alcoholic beverage sales in Iowa are prohibited except upon the terms, conditions, limitations, and restrictions enumerated in Iowa Code Chapter 123. Iowa Code Moreover, the Iowa Legislature has determined that a liquor license, wine permit or beer permit may be issued only to a person of good moral character. Iowa Code (1). Good moral character is a defined term which, in pertinent part, means that the person has such financial standing and good reputation as will satisfy the Administrator that the person will comply with this chapter and all laws, ordinances, and regulations applicable to the person s operations under this chapter. Iowa Code 123.3(26). The standard of good moral character also means that the applicant is licensed to do business in this state in the case of a corporation. Iowa Code 123.3(26)(c). The Division, by rule, provides guidance in determining whether an applicant possesses the required financial standing for holding a license. The rule contains a nonexclusive list of criterion 2

3 that may be considered by the Administrator and the local authority when determining whether the applicant meets the standard of good moral character. The nonexclusive list includes the applicant s verified sources of financial support and adequate operating capital for the licensed establishment, prompt payment of state and local taxes when due, prompt payment of municipal utilities and services incurred while operating the licensed establishment and prompt payment of administrative penalties imposed under Iowa Code Chapter IAC 4.2(4). The licensing scheme set forth in Chapter 123 requires local authorities to recommend approval or disapproval of a liquor license before forwarding the application to the Division. Iowa Code (2). Upon receipt of an approved application, the Division investigates the application to determine whether or not all licensing requirements are met. Iowa Code (5). When the determination is made that both the applicant and the proposed premises meet all requirements, the Administrator approves issuance of the license. Alternatively, when the determination is made that the requirements are not met, the Administrator formally denies issuance of the license. Id. When an application is denied by either the Division or the local authority, the applicant may appeal the denial to the Division. In the appeal, the applicant is afforded the opportunity to demonstrate in an evidentiary hearing that the applicant complies with all of the requirements for holding the license. Iowa Code 17A.18(3) and (6). III. STATEMENT OF THE ISSUE. The issue in the instant case is whether or not the Licensee s renewal application should be denied for lack of good moral character because the Licensee is no longer licensed to do business in the state and is delinquent in the payment of sales tax. 3

4 IV. STATEMENT OF THE FACTS. The Mint, L.C., d/b/a The Mint, is located at 133 S. Main Street, in Protivin, Iowa. Tom Ward owns 100 percent of The Mint, L.C. On February 10, 2009, the Licensee filed an application for renewal of liquor license number LC The application was approved by the local authority and forwarded to the Division for issuance of the license. While investigating whether or not the Licensee met all requirements for holding the license, the Division determined that the Licensee had been administratively dissolved by the Iowa Secretary of State on August 11, The Secretary of State cited the liability company s failure to deliver its 2008 Biennial Report as required by section 490A.131 as the reason for dissolution. Proposed Decision, page 2; Division Exhibit 1. On March 4, 2009, the Division sent the Licensee a letter stating that the renewal application would be denied for failure to meet the good moral character standard because The Mint, L.C. had been administratively dissolved by the Iowa Secretary of State. Proposed Decision, page 2; Division Exhibit 1. The Licensee timely filed a notice of appeal and was granted timely filing status, pending a hearing and issuance of a written decision. Proposed Decision, page 2; Division Exhibits 2 and 4. Prior to the hearing, an employee of the Division contacted the Iowa Secretary of State s Office and found that the Licensee had filed an application to reinstate the liability company, but the liability company could not be reinstated until the Licensee paid delinquent sales tax. Proposed Decision, page 2; Division Exhibit 3. As of the date of the administrative hearing, The Mint, L.C. had not been reinstated. IV. ANALYSIS. The local authority forwarded the Licensee s renewal application to the Division with the recommendation that the license be issued. Investigations conducted by Division, however, revealed 4

5 that The Mint, L.C. no longer met the standard of good moral character because of the administrative dissolution of the Licensee by the Iowa Secretary of State for failure to file a 2008 Biennial Report. Although the Licensee filed an application to reinstate the liability company with the Iowa Secretary of State, the application was returned because the Licensee is delinquent in the payment of sales tax. Unless the Licensee s liability company is licensed to do business in Iowa through the Iowa Secretary of State, the company cannot meet the standard of good moral character as required by Iowa Code 123.3(26)(c) and (1)(a). Moreover, until the Licensee s sales tax delinquency is paid, the Licensee is ineligible to hold the liquor license due to lack of financial responsibility. At the hearing, the Licensee s bookkeeper Lisa McDanel admitted that the Licensee owes sales tax and stated that the Licensee had applied for a loan to pay the delinquency. Moreover, in the Licensee s appeal dated August 17, 2009, Ms. McDanel stated that the Licensee had obtained the services of Quantum Financial to facilitate resolution of the tax delinquency. The Administrator takes judicial notice that, as of October 20, 2009, The Mint, L.C. is not licensed to do business in Iowa and has not paid the delinquent sales tax due. For the above-stated reasons, the Administrator has determined that the preponderance of the evidence established that The Mint, L.C. does not meet the standard of good moral character and liquor license number LC shall be DENIED. V. ORDER. The Administrator hereby ADOPTS the Findings of Fact and Conclusions of Law, as well as the Decision and Order proposed by the ALJ in the Proposed Decision of July 17, IT IS THEREFORE ORDERED that the Findings of Fact and Conclusions of Law, as well as the Decision and Order are AFFIRMED in their entirety. 5

IT IS FURTHER ORDERED that liquor license number LC0026931, issued to The Mint, L.C., d/b/a The Mint, in Protivin, Iowa is hereby DENIED.

6 IT IS FURTHER ORDERED that liquor license number LC , issued to The Mint, L.C., d/b/a The Mint, in Protivin, Iowa is hereby DENIED. The parties are notified that this Order constitutes final agency action for the purpose of Iowa Code Chapters 17A and 123. The Order becomes final unless a party to the hearing files a petition for judicial review with the Iowa District Court within 30 days from the date of the Final Decision. Iowa Code 17A.19. The parties are further notified that the filing of a petition for judicial review does not automatically stay execution or enforcement of the Division s action. The Division may grant a stay on appropriate terms or other temporary remedies during the pendency of judicial review. If the Division refuses to grant the stay or other temporary remedies, the court may grant the relief. Iowa Code 17A.19(5). DATED this 28 th day of October 2009, in Ankeny, Iowa. IOWA ALCOHOLIC BEVERAGES DIVISION LYNN M. WALDING Administrator 6

7 Copies to: Margaret LaMarche Administrative Law Judge Department of Inspections and Appeals Lucas State Office Building Des Moines, Iowa John Lundquist Assistant Attorney General Department of Justice Hoover State Office Building Des Moines, Iowa Lt. William Hon ISP, District #8 355 S Eisenhower Avenue Mason City, Iowa Sheriff Mike Miner Howard County Sheriff s Department 124 S Park Place Cresco, Iowa Betty Hadacek City Clerk City Hall P. O. Box 68 Protivin, Iowa Beverly Zylstra Deputy Director Department of Inspections and Appeals Lucas State Office Building Des Moines, Iowa Commissioner Gayle Collins Iowa Alcoholic Beverages Commission 1918 SE Hulsizer Road Ankeny, Iowa Karen Freund Manager, Licensing Iowa Alcoholic Beverages Division 1918 SE Hulsizer Road Ankeny, Iowa Tom Ward The Mint, L.C. P. O. Box 311 Protivin, Iowa Pat Neal Iowa Department of Revenue 1305 E Walnut Street Des Moines, Iowa a Chief Investigator John Ellison Iowa Lottery 2323 Grand Avenue Des Moines, Iowa

STATE OF IOWA BEFORE THE DEPARTMENT OF COMMERCE ALCOHOLIC BEVERAGES DIVISION

STATE OF IOWA BEFORE THE DEPARTMENT OF COMMERCE ALCOHOLIC BEVERAGES DIVISION IN RE: DOCKET NO. A-2009-00022 DIA NO. 09DOCBL072 The Mint LC d/b/a The Mint 133 S. Main Street Protivin, Iowa 52163 PROPOSED