Opinion ID: 1676519
Heading Depth: 1
Heading Rank: 1

Heading: Cabinet Approval

Text: A careful review of the statutory law and regulations applicable to the facts presented in this case causes us to conclude that KRS 350.135 requires Cabinet approval of permit transfers by sale. KRS 350.135(5) sets out the circumstances under which the Cabinet shall approve transfers. Both Neace and Gulf Southland were required to file an application to transfer the permit. Gulf Southland had to post a satisfactory bond before the bond of Neace would be released. Such rules require operators to comply with transfer procedures which allow the Commonwealth the opportunity to confirm continuous bond coverage. In addition, the statute closes a loophole by preventing the issuance of new permits to those who have evaded direct enforcement or otherwise have allowed operations under their control to leave unabated violations. KRS 350.135 prohibits a transfer to any person ineligible to obtain a new permit. KRS 350.135(1) states in pertinent part as follows: No surface coal mining permit issued pursuant to this chapter shall be transferred by sale, assignment, lease or otherwise except upon the written approval by the Cabinet of a joint application submitted by both the transferor and the transferee ... The Cabinet shall not approve transfer of a surface coal mining permit to any person who would be ineligible to receive a new permit under this chapter. 405 KAR 8:001, § 1(132) states as follows: Transfer, assignment or sale of permit rights means a change in ownership or other effective control over the rights to conduct surface coal mining operations under a permit issued by the Cabinet. This section was codified as 405 KAR 8:001 § 1(126) at the time of the alleged sale of N.W. to Gulf Southland. The transfer statute and its complementary regulation are necessary elements of the regulatory system enacted by the General Assembly to ensure continuity of bond security and to prevent any circumvention of the permit block statute. The Cabinet cannot approve transfer of a permit to any person who would be ineligible to receive a new permit.