405 KAR 7:092. Administrative hearings and assessment conferences.

 

      RELATES TO: KRS 350.028, 350.0301, 350.070, 350.090, 350.093, 350.130, 350.255, 350.465, 350.990, 30 C.F.R. Parts 730, 731, 732, 733, 735, 917, 30 U.S.C. 1253, 1255

      STATUTORY AUTHORITY: KRS Chapter 13A, 350.020, 350.028, 350.0301, 350.255, 350.465, 350.610, 30 C.F.R. Parts 730, 731, 732, 733, 735, 917, 30 U.S.C. 1253, 1255

      NECESSITY, FUNCTION, AND CONFORMITY: KRS Chapter 350 in pertinent part requires the cabinet to promulgate rules and regulations pertaining to surface coal mining and reclamation operations and coal exploration operations. This administrative regulation sets forth hearing, conference, notice, penalty assessment and other procedural and due process provisions for the permanent regulatory program. This administrative regulation and 405 KAR 7:091 contain the substance of 405 KAR 7:090 which has been repealed.

 

      Section 1. Applicability. This administrative regulation shall govern the conduct by the cabinet of all administrative hearings and conferences arising under KRS Chapter 350, including those pending at the time this administrative regulation becomes effective, and provide for public participation, pertaining to the review of determinations on permits for surface coal mining and reclamation operations and coal exploration operations, including issuance, denial, suspension, revocation, modification, and compliance with the terms of any permit; notices of noncompliance and orders for remedial measures; orders for cessation and immediate compliance issued pursuant to KRS 350.130(1) or (4); determinations of performance bond amount, duration, release, and forfeiture; administrative hearings arising under KRS 224.10-410 on orders to abate or alleviate issued to surface coal mining and reclamation operations; and all other matters including participation in administrative hearings by any person adversely affected by a determination of the cabinet which in the discretion of the cabinet are appropriate for adjudication and determination by the cabinet and arise by virtue of an order or determination of the cabinet pursuant to the permanent regulatory program for surface coal mining and reclamation operations and coal exploration operations as set forth in KRS Chapter 350 and 405 KAR Chapters 7 through 24, except that the provisions pertaining to the payment of proposed assessments into an escrow account as set forth in Sections 3 and 6 of this administrative regulation and the waiver of payments as provided in Section 15 of this administrative regulation shall only be applicable to those notices of noncompliance and orders for remedial measures or orders for cessation and immediate compliance issued on or subsequent to the effective date of this administrative regulation. If requests for formal hearings have been timely filed at the time this administrative regulation takes effect, cases shall not be dismissed for the reason that they do not conform to the new procedural requirements of this administrative regulation for filing administrative complaints and answers.

 

      Section 2. Construction. This administrative regulation shall be construed to achieve just, timely and inexpensive determinations of all questions appropriate for determination pursuant to Section 1 of this administrative regulation.

 

      Section 3. Proposed Penalty Assessment and Request for Assessment Conference and Administrative Hearing. (1) Notification. The cabinet shall notify a person issued a notice of noncompliance and order for remedial measures or an order for cessation and immediate compliance in writing of its proposed penalty assessment. The proposed assessment shall be made by authorized personnel of the department.

      (2) Criteria. In determining the amount of the penalty, consideration shall be given to the permittee's or operator's history of previous violations at the particular surface coal mining and reclamation operation; the seriousness of the violation, including any irreparable harm to the environment and any hazard to the health or safety of the public; whether the permittee, operator, or person was negligent; and the demonstrated good faith of the permittee, operator, or person in attempting to achieve rapid compliance after notification of the violation, except that good faith consideration shall not be applicable to any violation determined not to be correctable. If a violation has been cited against a person conducting coal exploration operations consideration shall be given to the above factors as applicable in determining the amount of the penalty.

      (3) Service.

      (a) Method; time. The notice of proposed penalty assessment shall be served under 405 KAR 7:091, Section 5, together with copies of applicable worksheets, to the person to whom the notice or order was issued within fifteen (15) working days after issuance of the final notice of inspection of noncompliance or final notice of inspection of cessation order.

      (b) Failure to timely serve; substantial prejudice. Failure to serve the proposed assessment within fifteen (15) working days after issuance of the final notice of inspection of noncompliance or final notice of inspection of cessation order shall not be grounds for dismissal of all or part of the assessment unless the person against whom the proposed penalty has been assessed proves actual and substantial prejudice as a result of the delay and makes a timely written objection to the delay. An objection shall be timely only if made on or before the last date to request an assessment conference under subsection (4)(b) of this section.

      (4) Options of person issued notice of proposed assessment.

      (a) Waiver; final order to enter. The person issued the notice of proposed penalty assessment may choose not to contest the assessment and a final order of the secretary shall be entered finding that:

      1. The person to whom the notice or order was issued has waived all rights to an administrative hearing on the amount of the proposed assessment; and

      2. The fact of the violation is deemed admitted; and

      3. The proposed penalty is due and payable within thirty (30) days after the entry of the final order. If a petition requesting an administrative hearing as to the fact of the violation has been timely filed pursuant to Section 7 of this administrative regulation, the finding in subparagraph 2 of this paragraph shall be omitted and the proposed penalty assessment shall be due and payable within thirty (30) days of the mailing of a final order affirming the fact of the violation.

      (b) Assessment conference. Within thirty (30) days of service of the notice of proposed assessment or if the document is returned undeliverable, unclaimed or refused, thirty (30) days from the date of the return, the person to whom the notice of proposed penalty assessment was sent may request review of the penalty assessment by requesting in writing an assessment conference pursuant to Section 4 of this administrative regulation in which case payment of the proposed assessment into the cabinet's escrow account shall not be required; or

      (c) Petition for administrative hearing. The person to whom a notice of noncompliance and order for remedial measures or an order for cessation and immediate compliance was issued may contest the proposed penalty assessment or the fact of the violation or both by submitting a petition for an administrative hearing in accordance with Section 6 of this administrative regulation. If an assessment conference has been held pursuant to Section 4 of this administrative regulation, the person may contest the amount assessed in the conference officer's report or the fact of the violation or both by submitting a petition for an administrative hearing in accordance with Section 6 of this administrative regulation. The fact of the violation may not be contested if it has been adjudicated by a final order of the secretary pursuant to an administrative hearing commenced under Section 7 of this administrative regulation. Nothing in this paragraph shall be construed as infringing upon any person's right to contest the fact of the violation without having to pay the proposed assessment into the cabinet's escrow account if such petition was timely filed in accordance with Section 7 of this administrative regulation.

 

      Section 4. Procedures for Assessment Conference. (1) In general.

      (a) Time for filing. Following issuance by the cabinet of a notice of proposed penalty assessment, the person to whom the notice was sent may request an assessment conference on the proposed penalty assessment. The request for an assessment conference shall be filed with the office within thirty (30) days of the date of receipt of the proposed penalty assessment or, if the document is returned undeliverable, unclaimed, or refused, thirty (30) days from the date of return.

      (b) Waiver; final order to enter. Failure to timely request an assessment conference shall constitute a waiver of the right to a conference. If a petition for review of the proposed penalty assessment has not been timely filed under Section 6 of this administrative regulation a final order shall be entered in conformity with Section 6(1)(c) of this administrative regulation.

      (c) Date of conference; failure to timely schedule; substantial prejudice. If an assessment conference is requested, it shall be scheduled for a date no later than sixty (60) days after the cabinet's receipt of the request. Failure by the cabinet to timely schedule an assessment conference shall not be grounds for dismissal of all or part of an assessment unless the person against whom the proposed penalty has been assessed makes a timely objection on or before the date of the assessment conference and proves actual and substantial prejudice as a result of the delay. The scheduling of the assessment conference shall not operate as a stay of any notice or order.

      (2) Service; public participation. Notice of the assessment conference shall be served under 405 KAR 7:091, Section 5 and a copy of the notice shall also be sent to any person who filed a report which led to the issuance of the notice or order being contested. The cabinet shall post notice of the assessment conference at the department's appropriate regional office at least five (5) days before the conference. Any person shall have the right to attend and participate in the assessment conference.

      (3) Conference officer; requirements for administrative hearings not applicable. The office shall assign a conference officer to hold the assessment conference. The assessment conference shall not be governed by the requirements for administrative hearings or by the provisions of 400 KAR 1:040.

      (4) Report of conference officer. The conference officer shall consider all relevant information pertaining to the proposed assessment. Within thirty (30) days after the conference is held, the conference officer shall issue a report recommending to the secretary to either affirm, raise, lower, or dismiss the proposed penalty assessment.

      (5) Service of report; documentation. The conference officer's report shall be promptly served by mail, postage prepaid, and shall include a worksheet if the penalty has been raised or lowered. The reasons underlying the conference officer's report shall be fully documented.

      (6) Agreed order.

      (a) Waiver of further review. If an agreed order is entered into, the person assessed shall be deemed to have waived all rights to further review of the fact of the violation and penalty in question. The agreed order shall contain a clause that any petition for review of the fact of the violation filed in accordance with Section 7 of this administrative regulation shall be deemed withdrawn.

      (b) Enforcement of agreed order. If full payment of the amount specified in the agreed order is not received by the cabinet within thirty (30) days after the date of the secretary's signature, the cabinet may take necessary steps to enforce the agreed order.

      (7) Failure to attend; report to issue. If the person requesting an assessment conference fails to attend the scheduled conference, the assessment officer shall within thirty (30) days of the date of the scheduled conference issue a report to the secretary recommending that the proposed penalty assessment be affirmed.

      (8) Statements not to be introduced at administrative hearings. In any administrative hearing commenced under Sections 6 or 7 of this administrative regulation no evidence as to statements made by one (1) party at a conference shall be introduced by another party as evidence or to impeach a witness.

      (9) Administrative hearing; who may request. Any person issued a proposed penalty assessment may request under Section 6 of this administrative regulation an administrative hearing to contest the conference officer's recommended penalty. The cabinet may request under Section 5 of this administrative regulation an administrative hearing to contest the conference officer's recommended penalty.

      (10) Failure to timely request; order to enter. If a request for an administrative hearing is not filed with the office within thirty (30) days of mailing of the conference officer's report, an order of the secretary shall be entered and mailed containing the following:

      (a) That the person to whom the notice or order was issued has waived all rights to an administrative hearing on the amount of the proposed assessment;

      (b) That the fact of the violation is deemed admitted; and

      (c) That the penalty assessment contained in the conference officer's report is deemed accepted and is due and payable to the cabinet within thirty (30) days after the entry of the final order. If a petition requesting a hearing as to the fact of the violation has been timely filed pursuant to Section 7 of this administrative regulation, the finding set forth in paragraph (b) of this subsection shall be omitted and the penalty assessment contained in the conference officer's report shall be due and payable within thirty (30) days of the mailing of the final order affirming the fact of a violation.

 

      Section 5. Administrative Hearings Initiated by the Cabinet. (1) Criteria for filing.

      (a) The cabinet may initiate an administrative hearing and may seek revocation of the permit and forfeiture of the bond or suspension of the permit whenever:

      1. It has reason to believe that a violation of KRS Chapter 350; 405 KAR Chapters 7 through 24; or a permit condition has occurred or is occurring; or

      2. A permittee, operator, or person has failed to pay a civil penalty assessed in a final order of the cabinet or to undertake remedial measures mandated by an order of the cabinet or to abate violations it was determined to have committed by a final order of the cabinet; or

      3. The provisions of KRS 350.990(9) apply; or

      4. The cabinet has reason to believe additional remedies should be sought or an order should be entered against any person to protect the environment or the health and safety of the public; or

      5. The criteria of 405 KAR 10:050, Section 3(2) or (3) apply.

      (b) The cabinet may initiate an administrative hearing to contest a conference officer's recommended penalty and seek any combination of the relief set forth in subsection (2) of this section, in which case prepayment of the proposed penalty assessment is not required.

      (c) The cabinet shall initiate an administrative hearing and shall seek revocation of the permit and forfeiture of the bond or suspension of the permit whenever:

      1. The permittee, operator, or person has willfully failed to comply with an order for cessation and immediate compliance; or

      2. The criteria of 405 KAR 10:050, Section 3(1) apply.

      (2) Remedies. In an administrative hearing initiated by the cabinet, the cabinet may seek a combination of the following:

      (a) Permit suspension or revocation;

      (b) Bond forfeiture;

      (c) Civil penalties;

      (d) A determination, pursuant to KRS 350.060, 350.085, and 350.130, that a person or persons shall not be eligible to receive another permit or conduct future operations;

      (e) A determination, pursuant to KRS 350.990(9), that any director, officer, or agent of a corporation willfully and knowingly authorized, ordered, or carried out a violation or failed or refused to comply with any final order; or

      (f) Any other relief to which it may be entitled by KRS Chapter 350.

      (3) Procedures for administrative hearings initiated by the cabinet.

      (a) Filing of administrative complaint. Contents. The cabinet shall initiate an administrative hearing by filing an administrative complaint with the office incorporating the following for each claim for relief:

      1. A statement of facts entitling the cabinet to administrative relief;

      2. A request for specific relief; and

      3. A copy of any notice or order upon which relief is sought.

      (b) Answer or responsive pleading. The person named in an administrative complaint shall file with the office an answer or responsive pleading within thirty (30) days of service of the administrative complaint which shall contain:

      1. A statement specifically admitting or denying the alleged facts stated in the administrative complaint or amended administrative complaint; and

      2. Any defenses to each claim for relief.

      (c) Amendments. An administrative complaint may be amended once as a matter of right prior to the filing of an answer and thereafter by leave of the hearing officer upon proper motion. The person named in the administrative complaint shall have ten (10) days from the filing of an administrative complaint amended as a matter of right or the time remaining for filing an answer to the original complaint, whichever is longer, to file an answer or responsive pleading. If the hearing officer grants a motion to amend the administrative complaint, the time for an answer to be filed shall be set forth in the order granting the motion.

      (4) Burden of proof. If the cabinet initiates an administrative hearing, the cabinet shall have the ultimate burden of persuasion. The responding party shall have the burden of persuasion to establish an affirmative defense. A responding party claiming an exemption shall have the burden of persuasion to establish qualification for the exemption.

      (5) Default.

      (a) In a proceeding where the person against whom the administrative complaint is filed fails to timely comply with a prehearing order of a hearing officer, the hearing officer shall issue an order to show cause why the person should not be deemed to have waived his right to an administrative hearing and why a report and recommended order adverse to the person shall not be referred to the secretary.

      (b) If the order to show cause is not satisfied as required, the hearing officer shall recommend to the secretary the entry of a final order in conformity with the relief requested by the cabinet in its administrative complaint.

      (c) If the person against whom the administrative complaint is filed fails to appear at an administrative hearing, the person shall be deemed to have waived his right to a hearing and the hearing officer shall recommend to the secretary the entry of a final order in conformity with the relief requested by the cabinet in its administrative complaint.

 

      Section 6. Administrative Hearing for Review of Proposed Assessment. (1) Filing petition; waiver. Any person issued a proposed penalty assessment may file with the office a petition for an administrative hearing to review the penalty.

      (a) A petition for review of a proposed penalty assessment shall be filed in the office within thirty (30) days of service of the proposed assessment, or if the notice of proposed penalty assessment is returned undeliverable, unclaimed or refused, within thirty (30) days of the date of return; or

      (b) If a timely request for an assessment conference has been made pursuant to Section 4 of this administrative regulation, a petition for review must be filed in the office within thirty (30) days from mailing of the conference officer's report.

      (c) An extension of time shall not be granted for filing a petition for review of a proposed penalty assessment as required by this section. If a petition for review is not timely filed, the petition, if any, shall be dismissed and a final order shall be entered which contains the following:

      1. That the person to whom the notice or order was issued has waived all rights to an administrative hearing on the amount of the proposed assessment or the assessment as amended by the conference officer;

      2. The fact of the violation is deemed admitted; and

      3. The proposed penalty assessment, or the assessment as amended by the conference officer is deemed admitted and shall be due and payable to the cabinet within thirty (30) days after the entry of the final order. If a petition requesting an administrative hearing on the fact of the violation has been timely filed under Section 7 of this administrative regulation, the finding set forth in subparagraph 2 of this paragraph shall be omitted and the penalty assessment shall be due and payable within thirty (30) days after the entry of a final order affirming the fact of the violation.

      (2) Contents of petition; payment required.

      (a) The petition shall include:

      1. A short and plain statement indicating the reasons why either the amount of the penalty or the fact of the violation or both is being contested;

      2. If the amount of penalty is being contested based upon a misapplication of the penalty formula, a statement indicating how the penalty formula contained in 405 KAR 7:095 was misapplied, along with a proposed penalty utilizing the penalty formula;

      3. Identification by reference to the noncompliance or cessation order number of all violations being contested; and

      4. The identifying number of the cashier's check, certified check, bank draft, or bank money order accompanying the petition.

      (b) The petition shall be accompanied by full payment of the proposed penalty assessment, or the assessment as amended by the conference officer, in the form of a cashier's check, certified check, bank draft, or bank money order made payable to the Kentucky State Treasurer to be placed in an escrow account pending final determination of the assessment; and, on the face of the payment an identification, by reference to the noncompliance or cessation order identification number, of the violations for which payment is being tendered.

      (c) An extension of time shall not be granted for full payment of the proposed assessment. If payment is not timely made, the petition shall be dismissed, and a final order shall be entered in conformity with subsection (1)(c) of this section.

      (3) Answer or responsive pleading. The cabinet shall have thirty (30) days from service of a copy of the petition to file an answer or responsive pleading with the office. An answer shall contain a statement specifically admitting or denying the alleged errors stated in the petition and setting forth other matters to be considered on review.

      (4) Amended petition. A petition may be amended once as a matter of right prior to the filing of an answer and thereafter by leave of the hearing officer upon proper motion. The cabinet shall have ten (10) days from the filing of a petition amended as a matter of right or the time remaining for filing an answer to the original petition, whichever is longer, to file an answer or responsive pleading. If the hearing officer grants a motion to amend a petition, the time for an answer to be filed shall be set forth in the order granting the motion.

      (5) Notice of hearing. The parties and interested persons shall be given written notice of the time and place of the hearing at least twenty-one (21) days prior to the hearing unless the twenty-one (21) day period is waived in writing.

      (6) Burden of proof. In administrative hearings under this section, the cabinet shall have the burden of going forward to establish a prima facie case as to the fact of the violation and the amount of the assessment and the ultimate burden of persuasion as to the amount of the assessment. The person who petitioned for review shall have the ultimate burden of persuasion as to the fact of the violation.

      (7) Default.

      (a) In a proposed penalty assessment proceeding if the person against whom the proposed penalty is assessed fails to timely comply with a prehearing order of a hearing officer, the hearing officer shall issue an order to show cause why the person should not be deemed to have waived his right to an administrative hearing and why the petition should not be dismissed.

      (b) If the order to show cause is not satisfied as required, the hearing officer shall recommend to the secretary the entry of a final order in conformity with subsection 1(c) of this section.

      (c) If the person against whom the proposed penalty is assessed fails to appear at a hearing, the person shall be deemed to have waived his right to a hearing and the hearing officer shall recommend to the secretary the entry of a final order in conformity with subsection 1(c) of this section.

      (8) Hearing officer's report; contents. If an administrative hearing is conducted, the hearing officer shall incorporate in his report and recommended order concerning a civil penalty, findings of fact on each of the four (4), criteria set forth in 405 KAR 7:095, Section 3, and conclusions of law.

 

      Section 7. Administrative Review of Notices of Noncompliance and Orders for Remedial Measures and Orders for Cessation and Immediate Compliance. (1) Who may file. A person issued a notice of noncompliance and order for remedial measures or an order for cessation and immediate compliance by the cabinet pursuant to the provisions of KRS Chapter 350 or administrative regulations or a person having an interest which is or may be adversely affected by such a notice or order may file a petition for review with the office.

      (2) Time for filing.

      (a) A person filing a petition for review under this section shall file in the office a petition within thirty (30) days of the receipt of a notice or order or within thirty (30) days of receipt of notice of modification, vacation, or termination of the notice or order or if any of the foregoing documents is returned as undeliverable, unclaimed or refused within thirty (30) days of the date of the return.

      (b) An extension of time shall not be granted for filing a petition for review. If a petition for review is not timely filed, the petition shall be dismissed.

      (c) Failure to file a petition for review of a notice of noncompliance and order for remedial measures or order for cessation and immediate compliance under this section shall not preclude challenging the fact of violation at an administrative hearing requested under Section 6 of this administrative regulation.

      (3) Contents of petition. A person filing a petition for review shall incorporate in the petition regarding each claim for relief the following:

      (a) A statement of facts entitling that person to administrative relief;

      (b) A request for specific relief;

      (c) A copy of the notice or order sought to be reviewed;

      (d) A statement as to whether the person waives the opportunity for an evidentiary hearing; and

      (e) Other relevant information.

      (4) Answer or responsive pleading. The cabinet and interested parties shall have thirty (30) days from service of a copy of the petition within which to file an answer or other responsive pleading. The answer shall contain a statement specifically admitting or denying the alleged facts stated by the petitioner and setting forth other matters to be considered on review.

      (5) Amended petition. A petition may be amended once as a matter of right prior to the filing of an answer and thereafter by leave of the hearing officer upon proper motion. The cabinet and other interested parties shall have ten (10) days from the filing of a petition amended as a matter of right or the time remaining for filing an answer to the original petition, whichever is longer, to file an answer or responsive pleading. If the hearing officer grants a motion to amend a petition, the time for an answer to be filed shall be set forth in the order granting the motion.

      (6) A petitioner shall file a copy of any subsequent notice or order which modifies, vacates, or terminates the notice or order sought to be reviewed and shall file a copy of any subsequent order for cessation and immediate compliance for failure to timely abate the violation which is the subject to the notice sought to be reviewed within ten (10) days of receipt of the notice or order. If a petitioner desires to challenge a subsequent notice or order, the petitioner must file a separate petition for review. Petitions for review of related notices or orders are subject to consolidation.

      (7) Notice of hearing. The parties and interested persons shall be given written notice of the time and place of the hearing at least twenty-one (21) days prior to the hearing, unless the twenty-one (21) day period is waived in writing.

      (8) Default.

      (a) If the petitioner fails to timely comply with a prehearing order of a hearing officer, the hearing officer shall issue an order to show cause why the person should not be deemed to have waived his right to an administrative hearing and why the petition should not be dismissed.

      (b) If the order to show cause is not satisfied as required, the hearing officer shall recommend to the secretary the entry of a final order affirming the notice or order and dismissing the petition.

      (c) If the person requesting the administrative hearing fails to appear at a hearing, the person shall be deemed to have waived his right to an administrative hearing and the hearing officer shall recommend to the secretary the entry of a final order affirming the notice or order and dismissing the petition.

      (9) Burden of proof. In review of notices of noncompliance and orders for remedial measures or orders for cessation and immediate compliance or the modification, vacation, or termination thereof under this section, the cabinet shall have the burden of going forward to establish a prima facie case as to the propriety of the notice, order, or modification, vacation, or termination thereof. The ultimate burden of persuasion shall rest with the petitioner.

 

      Section 8. Request for Review of Permit Determinations. (1) Who may file. The permit applicant, permittee, or person having an interest which is or may be adversely affected by a permit determination of the cabinet may file a petition for review of the following:

      (a) Applications for new permits;

      (b) Applications for permit revisions and amendments, permit renewals, and the transfer, assignment, or sale of rights granted under permit;

      (c) Permit revisions and amendments ordered by the cabinet, except challenges of permit revisions ordered as a remedial measure in a notice of noncompliance shall be reviewed in an administrative hearing pursuant to Section 6 or 7 of this administrative regulation; and

      (d) Applications for coal exploration permits.

      (2) Time to file; waiver. A petition for review shall be filed with the office within thirty (30) days from the date the person has actual notice of the determination or could reasonably have had notice. Failure to timely file a petition for review shall constitute a waiver of an administrative hearing and the petition shall be dismissed.

      (3) Contents of the petition. The petition for review shall include:

      (a) A clear statement of the facts entitling the one requesting review to administrative relief;

      (b) An explanation of each specific alleged error in the cabinet's decision, including reference to the statutory and regulatory provisions allegedly violated;

      (c) A request for specific relief;

      (d) A statement whether the person requests or waives the opportunity for an evidentiary hearing; and

      (e) Other relevant information.

      (4) Answer or responsive pleading. The cabinet and interested parties shall file an answer or responsive pleading within thirty (30) days of service of the petition. An answer shall contain a statement specifically admitting or denying facts or alleged errors stated in the petition and setting forth other matters to be considered on review.

      (5) Amended petition. A petition may be amended once as a matter of right prior to the filing of an answer and thereafter by leave of the hearing officer upon proper motion. An interested party shall have ten (10) days from the filing of a petition amended as a matter of right or the time remaining for filing an answer to the original petition, whichever is longer, to file an answer or responsive pleading. If the hearing officer grants a motion to amend a petition, the time for an answer to be filed shall be set forth in the order granting the motion.

      (6) Notice of hearing. The parties and interested persons shall be given written notice of the time and place of the administrative hearing at least twenty-one (21) days prior to the hearing unless the twenty-one (21) day period is waived in writing.

      (7) Effect of filing. The filing of a petition for review shall not stay the effectiveness of the cabinet's determination pending completion of administrative review.

      (8) Default.

      (a) If the petitioner fails to timely comply with a prehearing order of a hearing officer, the hearing officer shall issue an order to show cause why the person should not be deemed to have waived his right to an administrative hearing and why the petition should not be dismissed.

      (b) If the order to show cause is not satisfied as required, the hearing officer shall recommend to the secretary the entry of a final order finding that the petitioner has waived his right to an administrative hearing and dismissing the petition.

      (c) If the person requesting the administrative hearing fails to appear at a hearing, the hearing officer shall recommend to the secretary the entry of a final order finding that the petitioner has waived his right to an administrative hearing and dismissing the petition.

      (9) Burden of proof.

      (a) In a proceeding to review a decision on an application for a new permit:

      1. If the permit applicant is seeking review, he shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion that the permit application complies with the requirements of KRS Chapter 350 and administrative regulations or that the permit terms or conditions are improper.

      2. If a person other than the permit applicant is seeking review, the person shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion that the permit application fails to comply with the requirements of KRS Chapter 350 or the administrative regulations, or that the cabinet should have imposed certain terms or conditions on the permit that were not imposed.

      (b) In a proceeding to review the approval or disapproval of an application for a permit renewal, those parties opposing renewal shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion that the renewal application should be disapproved or that the cabinet should have imposed certain terms or conditions on the renewal permit that were not imposed.

      (c) In a proceeding to review the approval or disapproval of an application for a permit revision or amendment, or an application for the transfer, assignment, or sale of rights granted under permit:

      1. If the permit applicant is seeking review, he shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion that the permit application complies with the requirements of KRS Chapter 350 and administrative regulations; and

      2. If a person other than the permit applicant is seeking review, the person shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion that the application fails to comply with the requirements of KRS Chapter 350 or the administrative regulations.

      (d) In a proceeding to review a permit revision or amendment ordered by the cabinet, the cabinet shall have the burden of going forward to establish a prima facie case that the permit should be revised or amended and the permittee shall have the ultimate burden of persuasion that the revision or amendment is not appropriate.

      (e) In a proceeding to review a decision on an application for a coal exploration permit:

      1. If the permit applicant is seeking review, he shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion that the permit application complies with the requirements of KRS Chapter 350 and administrative regulations.

      2. If a person other than the permit applicant is seeking review, the person shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion that the application fails to comply with the requirements of KRS Chapter 350 or the administrative regulations.

 

      Section 9. Review of Cabinet Determinations. (1) Who may file. A person who considers himself aggrieved by a determination of the cabinet for which an administrative hearing is not specifically provided in any other section of this administrative regulation may file a petition for review of the determination pursuant to this section.

      (2) The petition for review shall be filed with the office within thirty (30) days after the petitioner has had actual notice of the determination complained of, or could reasonably have had notice. Failure to timely file a petition for review shall constitute a waiver of an administrative hearing and the petition shall be dismissed.

      (3) Contents of petition. The petition for review shall contain:

      (a) A statement of the facts entitling the one requesting review to administrative relief;

      (b) An explanation of each specific alleged error in the cabinet's determination;

      (c) A request for specific relief; and

      (d) Other relevant information.

      (4) Answer or responsive pleading. The cabinet and interested parties shall file an answer or other responsive pleading within thirty (30) days of service of the petition specifically admitting or denying facts or alleged errors stated in the petition and setting forth any other matters to be considered on review.

      (5) Amended petition. A petition may be amended once as a matter of right prior to the filing of an answer and thereafter by leave of the hearing officer upon proper motion. The cabinet and interested parties shall have ten (10) days from the filing of a petition amended as a matter of right or the time remaining for filing an answer to the original petition, whichever is longer, to file an answer. If the hearing officer grants a motion to amend a petition, the time for an answer to be filed shall be set forth in the order granting the motion.

      (6) Notice of hearing. The parties and interested persons shall be given written notice of the time and place of the administrative hearing at least twenty-one (21) days prior to the hearing unless the twenty-one (21) days period is waived in writing.

      (7) Effect of filing. The filing of a petition for review shall not stay the effectiveness of the cabinet's determination pending completion of administrative review.

      (8) Default.

      (a) If the petitioner fails to timely comply with a prehearing order of a hearing officer, the hearing officer shall issue an order to show cause why that person should not be deemed to have waived his right to an administrative hearing and why his petition should not be dismissed.

      (b) If the order to show cause is not satisfied as required, the hearing officer shall recommend to the secretary the entry of a final order finding that the petitioner has waived his right to an administrative hearing and dismissing the petition.

      (c) If the person requesting the administrative hearing fails to appear at a hearing, the person shall be deemed to have waived his right to a hearing and the hearing officer shall recommend to the secretary the entry of a final order finding that he has waived his right to an administrative hearing and dismissing the petition.

      (9) Burden of proof. The petitioner shall have the burden of going forward to establish a prima facie case and the ultimate burden of persuasion as to the requested relief.

 

      Section 10. Proceedings for Suspension or Revocation of Permits Because of Pattern of Violations. (1) Initiation of proceedings.

      (a) A proceeding on a show cause order issued by the cabinet pursuant to KRS 350.028(4), 350.465(3)(f) and 405 KAR 12:020, Section 8, shall be initiated by the filing of a copy of the show cause order by the cabinet with the office at the same time the order is issued to the permittee.

      (b) A show cause order shall set forth:

      1. A list of the unwarranted or willful violations which contribute to a pattern of violations;

      2. A copy of each order or notice which contains the violations listed as contributing to a pattern of violations;

      3. The basis for determining the existence of a pattern of violations; and

      4. Recommendations whether the permit should be suspended or revoked, including the length and terms of a suspension.

      (2) Answer. The permittee shall have thirty (30) days from service of the show cause order within which to file an answer with the office which shall state:

      (a) The reasons in detail why a pattern of violations, as described in 405 KAR 12:020, Section 8, does not exist or has not existed including all reasons for contesting:

      1. The fact of the violations alleged by the cabinet as constituting a pattern of violations;

      2. The willfulness of the violations; or

      3. Whether the violations were caused by the unwarranted failure of the permittee;

      (b) Mitigating factors the permittee believes exist in determining the terms of the revocation or the length and terms of the suspension;

      (c) Other alleged relevant facts; and

      (d) Whether an evidentiary hearing on the show cause order is desired.

      (3) Burden of proof. In a show cause proceeding, the cabinet shall have the burden of going forward to establish a prima facie case for suspension or revocation of the permit. The ultimate burden of persuasion that the permit should not be suspended or revoked shall rest with the permittee.

      (4) Determination by the hearing officer.

      (a) Upon a determination by the hearing officer pursuant to 405 KAR 12:020, Section 8, that a pattern of violations exists or has existed, the hearing officer shall recommend the permit either be suspended or revoked and the permittee directed to complete necessary remedial measures and reclamation operations. In making such a recommendation, the hearing officer need not find that all the violations listed in the show cause order occurred, but only that sufficient violations occurred to establish a pattern.

      (b) If the permit is suspended, the hearing officer may recommend preconditions to be satisfied prior to the suspension being lifted.

      (5) Default. If the permittee fails to timely file an answer or appear at the administrative hearing, the permittee shall be deemed to have waived his right to an administrative hearing and the hearing officer shall recommend to the secretary the entry of a final order containing the following:

      (a) That each violation listed in the show cause order occurred;

      (b) That the violations were caused by the permittee's unwarranted failure or were willfully caused;

      (c) That a pattern of violations exists;

      (d) That the permit shall be suspended or revoked in accordance with the recommendation contained in the show cause order.

 

      Section 11. Procedures for Abate or Alleviate Orders. (1) In general. If pursuant to KRS 224.10-410, the secretary issues an order to abate or alleviate to a surface coal mining and reclamation operation, the cabinet shall provide the person to whom the order was issued an opportunity to be heard. The holding of an administrative hearing pursuant to this section shall not operate to terminate or stay the order or the affirmative obligations imposed on a person by the order, unless the hearing officer shall find on the record that the obligations have been met or that the order was improper or inappropriate.

      (2) Notice.

      (a) Upon issuance of an order to abate or alleviate under the provisions of KRS 224.10-410, the secretary shall file with the office a copy of the order.

      (b) Upon filing an order to abate or alleviate, the office shall issue an administrative summons pursuant to 405 KAR 7:091, Section 6, and shall set the time and place for an administrative hearing to be held not more than ten (10) days from the date the order to abate or alleviate was signed by the secretary.

      (3) Response.

      (a) The person named in the order to abate or alleviate shall prior to or at the hearing file a response to the order specifically admitting or denying facts alleged in the order, setting forth other matters to be considered on review, and setting forth evidence, if any, that the condition or activity does not violate the provisions of KRS 224.10-410.

      (b) In lieu of a response, the person named in the order to abate or alleviate may contact the office in writing or by other means and state that an administrative hearing is not needed, and that he does not desire to contest the order.

      (4) Hearing procedure. The administrative hearing shall be held in accordance with 405 KAR 7:091, Section 3. In addition the hearing officer may require the parties to submit proposed findings of fact and conclusions of law to be considered at the hearing which may be orally supplemented on the record at the hearing, or if written proposed findings of fact and conclusions of law have not been submitted at the hearing, they may be orally presented for the record at the administrative hearing.

      (5) Burden of proof. The cabinet shall have the burden of going forward to establish a prima facie case as to the propriety of the order to abate or alleviate. The person named in the order to abate or alleviate shall have the ultimate burden of persuasion that the condition or activity does not violate KRS 224.10-410, or that the condition or activity has been discontinued, abated or alleviated.

      (6) Default. Upon notification by the person named in the order to abate or alleviate that a hearing is not needed or upon failure of the person to appear at the administrative hearing, the hearing officer shall promptly prepare a report stating that the hearing has been waived and the order to abate or alleviate stands as issued.

      (7) Effect of proceedings. The scheduling of an administrative hearing pursuant to this section shall not operate to terminate or stay the effect of the order or to relieve the person named in the order from performing the affirmative obligations imposed in the order to abate or alleviate.

 

      Section 12. Temporary Relief. (1)(a) Pending the completion of the investigation and hearings provided for in this administrative regulation, a hearing officer may, subject to review by the secretary, grant temporary relief from a notice or order issued pursuant to KRS Chapter 350 or administrative regulations, or a permit or bond release decision of the cabinet.

      (b) A petition for relief shall be in writing, and filed with the office. The petition shall contain:

      1. A detailed statement setting forth reasons why such relief should be granted;

      2. A showing that there is a substantial likelihood that the person requesting the relief will prevail on the merits of the final determination of the proceeding;

      3. A statement that the relief sought will not adversely affect the health or safety of the public or cause significant, imminent environmental harm to land, air, or water resources;

      4. If the petition relates to an order for cessation and immediate compliance issued pursuant to KRS 350.130(1) or (4) or a decision to release a bond, a statement of whether the requirement for a decision on the petition within five (5) working days is waived; and

      5. A statement of the specific relief requested.

      (c) A hearing officer may grant temporary relief after making a written finding that relief is warranted, and shall state the reasons for the finding. A hearing officer shall grant or deny relief expeditiously; except if the person requests temporary relief from an order for cessation and immediate compliance issued pursuant to KRS 350.130(1) or (4), or from a bond release decision, a hearing officer shall grant or deny temporary relief within five (5) working days of receipt by the office of a request.

      (2) A hearing officer may grant temporary relief from notices and orders of the cabinet issued pursuant to 405 KAR 12:020, Sections 2 and 3 under conditions as is deemed appropriate, if:

      (a) An administrative hearing on the request for temporary relief has been held in the locality of the permit area, or at any other location acceptable to the cabinet and the person to whom the notice or order was issued, in which all parties were given an opportunity to be heard;

      (b) The person requesting relief shows that there is substantial likelihood that the findings on the merits in an administrative hearing conducted by the cabinet will be favorable to the person; and

      (c) The relief will not adversely affect the health or safety of the public or cause significant, imminent environmental harm to land, air, or water resources.

      (3) If a person requests temporary relief from a permit or coal exploration determination, the hearing officer under conditions as may be prescribed pending final determination of the proceeding may grant temporary relief if:

      (a) The parties to the proceeding have been notified and given an opportunity to be heard on a request for temporary relief;

      (b) The person requesting the relief shows that there is a substantial likelihood that he will prevail on the merits of the final determination of the proceeding; and

      (c) The relief will not affect adversely the public health or safety, or cause significant, imminent environmental harm to land, air, or water resources; and

      (d) The relief sought is not the issuance of a permit where a permit has been denied, in whole or in part, by the cabinet, nor release of a bond when a bond release request has been denied.

      (4) Determinations on petitions concerning orders for cessation and immediate compliance issued pursuant to KRS 350.130(1) or (4) or bond release decisions shall be handled as follows:

      (a) If the five (5) day requirement set forth in subsection (1) of this section is waived, the hearing officer shall expeditiously conduct a hearing and render a decision on the petition.

      (b) If a waiver of the five (5) day requirement set forth in subsection (1) is not made, the following shall apply:

      1. The five (5) day time for decision shall not begin to run until the petition for temporary relief is filed with the office;

      2. The petition shall identify the permit number, permittee, the date and number of the noncompliance or cessation order from which relief is requested, if applicable, and the name and telephone number of the petitioner;

      3. In addition to the service requirements of 405 KAR 7:091, Section 5, the petitioner shall serve other parties with a copy of the petition simultaneously with the filing of the application. If service is accomplished by mail, the petitioner shall inform the other parties by telephone at the time of mailing that a petition is being filed and the contents of the petition;

      4. The representative of the Department of Law and other parties may indicate their objection to the application by communicating the objection to the hearing officer and the applicant by telephone. However, ex parte communication as to the merits of the proceeding shall not be conducted with the hearing officer. The representative of Department of Law and other parties may simultaneously reduce their objections to writing. Written objections shall be immediately filed with the hearing officer and immediately served upon the petitioner;

      5. Upon receipt of communication that there is an objection to the petition, the hearing officer shall immediately order a location, time and date for the administrative hearing by communicating the information to the Department of Law, other parties, and the petitioner by telephone. The hearing officer shall reduce the communications to writing in the form of a memorandum to the file;

      6. If an evidentiary hearing is held:

      a. The hearing officer may require the parties to submit proposed findings of fact and conclusions of law to be considered at the evidentiary hearing which may be orally supplemented on the record at the hearing or where written proposed findings of fact and conclusions of law have not been submitted at the hearing, they may be orally presented for the record at the hearing;

      b. The hearing officer shall either rule from the bench on the petition, orally stating the reasons for his decision or shall within twenty-four (24) hours of completion of the hearing issue a written decision. If the hearing officer makes an oral ruling, he shall issue a written decision within three (3) working days; and

      7. If at any time after the initiation of the expedited procedure, the petitioner requests a delay or acts in a manner so as to frustrate the expeditious nature of the proceeding or fails to supply the information required by the hearing officer, the action shall constitute a waiver of the five (5) day requirement.

 

      Section 13. Penalties. (1) Any person who violates any of the provisions of KRS Chapter 350; 405 KAR Chapters 7 through 24; or a permit condition or who fails to perform the duties imposed by these provisions, except the refusal or failure to obtain a permit, exploration approval or other authorization or who violates any determination or order promulgated pursuant to those provisions, may be assessed a civil penalty of not more than $5,000 for each day during which the violation continues. A civil penalty of not more than $5,000 for each day shall be assessed against a person issued an order pursuant to KRS 350.130(4).

      (2) If violation has not been abated during the abatement period set forth in a notice of noncompliance and order for remedial measures or in an order for cessation and immediate compliance, a civil penalty of not less than $750 shall be assessed for each day during which the failure to abate continues, up to a maximum of thirty (30) days, except that:

      (a) A penalty for failure to abate the violation shall not be assessed for more than thirty (30) days for each violation. If the person has not abated the violation within the thirty (30) day period, the cabinet shall take appropriate action pursuant to KRS 350.990(3), (4), (9), or the pattern of violations provisions of KRS 350.028(4) within thirty (30) days to ensure that abatement occurs or to ensure that there will not be a recurrence of the failure to abate; and

      (b) If the person to whom the notice or order was issued initiates review proceedings with respect to the violation, and the abatement requirements are suspended in a temporary relief proceeding pursuant to Section 12 of this administrative regulation, then the abatement period shall be extended until the date a final order concerning the violation in question is issued.

      (3) A person who engages in surface coal mining and reclamation operations or coal exploration operations without first securing a permit or exploration approval according to KRS Chapter 350 and 405 KAR Chapters 7 through 24, shall be assessed a civil penalty of not less than $5,000 nor more than $25,000. Each day shall constitute a separate violation. However, the penalties provided in subsection (1) of this section shall apply in lieu of the penalties provided for in this subsection where a permittee through inadvertence has exceeded the boundaries of the permit in effect at that time.

      (4) Whenever a corporate permittee violates any provision of KRS Chapter 350 or the administrative regulations or fails or refuses to comply with any final order issued by the secretary, any director, officer, or agent of the corporation who willfully and knowingly authorized, ordered, or carried out such violation, failure or refusal shall be subject to the same civil penalties, fines, and imprisonment as may be imposed upon a person pursuant to this section.

      (5) Penalties shall be recoverable in an action brought in the name of the Commonwealth of Kentucky or the Environmental and Public Protection Cabinet by the cabinet's Department of Law, or upon the secretary's request, by the attorney general.

      (6)(a) If any party seeks judicial review of a final order of the cabinet involving a penalty, the proposed penalty shall continue to be held in escrow until completion of the review. If judicial review is not sought, the escrowed funds shall be transferred to the cabinet for payment to the Kentucky State Treasurer as provided by law.

      (b) If a final order of the secretary or final decision of a reviewing court results in the reduction or elimination of the proposed penalty, the cabinet shall within thirty (30) days of receipt of the order refund the appropriate amount with interest at the statutory rate from the date of payment into escrow.

      (c) If a final order of the secretary or final decision of a reviewing court increases the penalty, the person to whom the notice or order was issued shall pay the difference to the cabinet within thirty (30) days after receipt of the order.

 

      Section 14. Costs and Expenses. (1) Who may file. A person may file a petition for award of costs and expenses including attorneys' fees reasonably incurred as a result of the person's participation in a proceeding held pursuant to this administrative regulation which results in an order of the secretary. The petition for an award of costs and expenses, including attorneys' fees, shall be filed with the cabinet within forty-five (45) days of mailing of the final order. Failure to timely file the petition shall constitute a waiver of the right to an award.

      (2) Contents of petition. A petition filed under this section shall include the name of the party from which costs and expenses are sought and the following shall be submitted in support of the petition:

      (a) An affidavit setting forth in detail all costs and expenses including attorneys' fees reasonably incurred for, or in connection with, the person's participation in the proceeding;

      (b) Receipts or other evidence of the costs and expenses; and

      (c) If attorneys' fees are claimed, evidence concerning the hours expended on the case, the customary commercial rate of payment for the services in the area, and the experience, reputation and ability of the individual or individuals performing the services.

      (3) Answer. A person served with a copy of the petition shall have thirty (30) days from service of the petition within which to file an answer or other responsive pleading specifically admitting or denying the allegations stated in the petition and setting forth other matters to be considered.

      (4) Criteria for awarding of costs. Appropriate costs and expenses including attorneys' fees may be awarded as follows:

      (a) To a person from the permittee, if the person initiates an administrative proceeding reviewing an enforcement action, upon a finding that, on or after May 18, 1982, a notice of noncompliance or order for cessation was issued for violations of KRS Chapter 350, 405 KAR or permit conditions or that an imminent hazard existed, or to a person who participates in an enforcement proceeding where such a finding is made, if the hearing officer finds and the secretary concurs that the person made a substantial contribution to the full and fair determination of the issues; or

      (b) To a person other than a permittee or his representative from the cabinet, if the person initiates or participates in any proceeding under KRS Chapter 350 upon a finding that the person made a substantial contribution to a full and fair determination of the issues; or

      (c) To a permittee from the cabinet when the permittee demonstrates that the cabinet issued an order of cessation or a notice of noncompliance or initiated an administrative hearing in bad faith and for the purpose of harassing or embarrassing the permittee; or

      (d) To a permittee from a person where the permittee demonstrates that the person initiated an administrative hearing or conference under this administrative regulation or participated in an administrative hearing or conference in bad faith and for the purpose of harassing or embarrassing the permittee; or

      (e) To the cabinet where it demonstrates that a person applied for review pursuant to this administrative regulation or that a party participated in an administrative hearing or conference in bad faith and for the purpose of harassing or embarrassing the cabinet or the Commonwealth.

      (5) An award under this section may include reimbursement for:

      (a) Costs and expenses, including attorneys' fees and expert witness fees, reasonably incurred as a result of initiation or participation or both in an administrative hearing or conference under this administrative regulation; and

      (b) Costs and expenses, including attorneys' fees and expert witness fees, reasonably incurred in seeking the award before the cabinet.

 

      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.

      (3) Response. Within fifteen (15) days of service of the petition, the cabinet may file an answer or responsive pleading admitting or denying the contents of the petition for waiver. Failure by the cabinet to submit an answer or responsive pleading shall not relieve the office from making an independent determination as to the validity of the contents of the petition for waiver, and whether the waiver should be given.

      (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. If the waiver is denied, the applicant shall be informed in writing and the applicant shall be given thirty (30) days from the mailing of the interim report to pay into the cabinet's escrow account the amount of the assessment as set forth in the notice of proposed assessment or as set forth by the conference officer under the provisions of Section 4 of this administrative regulation.

      (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. (19 Ky.R. 551; Am. 931; 1352; eff. 11-23-92; TAm eff. 8-9-2007.)