Opinion ID: 1789963
Heading Depth: 1
Heading Rank: 1

Heading: kentec's dereliction.

Text: From May 1996 through November 1996, the Cabinet's reclamation inspector issued six MIRs to Kentec notifying it of its need to revise its reclamation permit to reflect that a residence was being constructed on property that had previously been designated for reclamation as forestry. Kentec did not respond to any of these MIRs. On November 22, 1996, the inspector issued a Notice of Non-Compliance for failure to take action to revise the permit. Again, Kentec did not respond. On December 27, 1996, a Cessation Order was entered. Again, Kentec did not respond. On January 24, 1997, Kentec, by counsel, filed a petition for review of the fact of violation. On February 12, 1997, the Cabinet served Kentec with a Notice of Proposed Assessment in the amount of $29,700.00, representing $7,200.00 for the noncompliance and $22,500.00 for failure to abate the violation listed in the Cessation Order (the statutory minimum of $750.00 per day for a maximum of thirty days, per KRS 350.990(1)). However, because it had filed a petition for review of the fact of violation, Kentec had no immediate obligation to pay the assessment. 405 KAR 7:092 § 3(4)(a)3. On February 21, 1997, Kentec, by counsel, filed a request for an assessment conference. 405 KAR 7:092 § 3(4)(b). The Cabinet appointed an assessment conference officer who scheduled the assessment conference for April 17, 1997. When Kentec failed to appear at the conference, the officer, as required by 405 KAR 7:092 § 4(7), issued a report recommending that the Secretary of the Cabinet impose the proposed penalty assessment. On June 19, 1997, Kentec, through counsel, filed a petition for a formal administrative review of the proposed assessment. 405 KAR 7:092 § 6(1). However, it did not prepay the proposed penalty assessment as required by KRS 350.0301(5) and 405 KAR 7:092 § 6(2)(b). Instead, the unverified petition contained the following statement: Petitioner does not have sufficient funds by which to pay this large and excessive proposed assessment. Further the terms and conditions of Section 15 of 405 KAR 7:092 for obtaining a waiver of the prepayment requirement are so strict and unreasonable as to preclude Petitioner's qualification for use thereof. (Emphasis added.) The emphasized language in Kentec's petition is, of course, essentially an admission that Kentec could not qualify for the waiver even if it were an individual instead of a corporation. 405 KAR 7:092 § 15 provides in pertinent part: Section 15. Determinations as to Inability to Prepay. (1) Inability to pay. Notwithstanding the provisions of Section 6(2) of this administrative regulation, an individual, upon filing a petition for review pursuant to Section 6 of this administrative regulation, may, in lieu of paying into the cabinet's escrow account the amount of the proposed assessment, simultaneously submit a petition and affidavit requesting the office to accord the individual a waiver of the requirement to prepay. (2) Contents of petition. The petition for waiver of prepayment requirements shall set forth: (a) A statement of facts underlying the request for a determination that the individual is unable to comply with Section 6(2) of this administrative regulation; and (b) An affidavit, subject to penalties for perjury, setting forth the applicant's income, property owned, outstanding obligations, the number and age of dependents, and a copy of his most recent Kentucky and federal income tax returns. ... (4) Interim report. Within thirty (30) days of filing of the petition, the hearing officer shall issue an interim report accepting or denying the petition for waiver. If the waiver is accepted, it shall be so noted in the record and shall remain in effect, subject to review upon proper motion.... (5) Presumptions. (a) It shall be prima facie evidence that the individual is unable to comply with Section 6(2) of this administrative regulation if the petition is accompanied by a certified copy of a petition for bankruptcy or the individual is receiving or is eligible to receive public assistance payments at the time a petition for waiver is filed. (b) It shall be prima facie evidence a person is not eligible for a waiver if he owns real property; is not receiving, or is not eligible to receive, public assistance payments at the time the affidavit is submitted; or owns more than one (1) motor vehicle. (Emphasis added.) In addition to ignoring the six MIRs, the Notice of Non-Compliance, the Cessation Order, the assessment conference, and the requirements of Section 15 of 405 KAR 7:092, Kentec has yet to present one shred of evidence that it is indigent or otherwise unable to prepay the proposed penalty assessment in order to obtain formal review of the amount of the assessment. Nor has it offered any proof that it would qualify for a waiver under Section 15 of the regulation even if it were an individual instead of a corporation. Nevertheless, because Kentec was entitled to an administrative hearing regarding the fact of violation, payment of the proposed assessment was abated until resolution of that issue. 405 KAR 7:092 § (3)(4)(a)3. A two-day formal hearing was held on that issue on July 16-17, 1997, at which Kentec was represented by counsel. On April 1, 1998, the Secretary of the Cabinet affirmed the fact of violation and entered an order imposing the proposed penalty assessment. The ensuing seven years have been consumed by judicial appeals.