CMC Licensing & Permit Administration 3 — Questions and Answers
Question 1: When calculating license fees, municipalities must ensure the fees are:
- High enough to generate a profit for the general fund
- Reasonably related to the cost of administering the licensing program (Correct answer)
- Uniform across all types of businesses regardless of size
- Approved by the state legislature annually
Correct answer: Reasonably related to the cost of administering the licensing program
License fees must be reasonably related to regulatory costs; fees designed primarily for revenue generation rather than cost recovery may be legally challenged as taxes.
Question 2: Which document formally establishes the requirements and procedures for municipal licensing programs?
- Executive order
- Municipal ordinance or code (Correct answer)
- Administrative memorandum
- State proclamation
Correct answer: Municipal ordinance or code
Municipal ordinances or codes are the legal instruments that establish licensing requirements, fees, procedures, and enforcement authority.
Question 3: An applicant for an itinerant vendor license fails to appear for a required hearing. The clerk should:
- Automatically grant the license
- Issue a temporary license pending rescheduling
- Follow the ordinance's default procedure, which may include denial or rescheduling (Correct answer)
- Waive the hearing requirement
Correct answer: Follow the ordinance's default procedure, which may include denial or rescheduling
The clerk must follow the procedural rules established in the ordinance, which typically specify the consequence of an applicant's failure to appear.
Question 4: What does 'ministerial' mean in the context of issuing a permit?
- The permit is issued by a religious official
- The official has no discretion and must issue the permit if requirements are met (Correct answer)
- The permit requires city council approval
- The permit is limited to government buildings
Correct answer: The official has no discretion and must issue the permit if requirements are met
A ministerial act requires the official to perform a specific duty without exercising personal judgment once all legal requirements are satisfied.
Question 5: A permit applicant who is denied a license has the right to appeal. Where is the first level of appeal typically heard?
- The state supreme court
- A federal district court
- A local board of adjustment or appeal board (Correct answer)
- The U.S. Department of Commerce
Correct answer: A local board of adjustment or appeal board
Most municipalities establish a local board of adjustment, appeals board, or city council as the first administrative level for license or permit appeals.
Question 6: Which of the following best describes a 'license by right' (also called an 'over-the-counter permit')?
- A permit requiring council vote and public hearing
- A permit issued immediately when all objective criteria are met (Correct answer)
- A license granted only to property owners
- A permit that expires at midnight
Correct answer: A permit issued immediately when all objective criteria are met
A license by right is issued immediately upon demonstration that all objective requirements are satisfied, with no discretionary review required.
Question 7: A municipal clerk discovers that a licensee has provided fraudulent information on their application. The appropriate first step is to:
- Immediately revoke the license without notice
- Refer the matter to legal counsel and initiate due process procedures (Correct answer)
- Issue a warning letter and allow 90 days to correct
- Transfer the matter to the state licensing board
Correct answer: Refer the matter to legal counsel and initiate due process procedures
Even when fraud is suspected, due process requires proper notice and a hearing before revocation; legal counsel should be consulted to ensure proper procedures are followed.
CMC Licensing & Permit Administration 3
When calculating license fees, municipalities must ensure the fees are: