ALJDEC decisions subject to certification as final

03A-CDH034208-DWR · Department of Water Resources · 2004-02-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 21, 2004 APPEARANCES: Alisa Schiebler, Esq. represented the Arizona Department of Water Resources. Respondent Clarence J. Smith failed to appear. ADMINISTRATIVE LAW JUDGE: Daniel G. Martin _____________________________________________________________________

The question presented by this matter is whether Respondent Clarence J. Smith has violated Title 45, Chapter 2, Arizona Revised Statutes by his failure to have filed an annual Water Withdrawal and Use Report for 2002 with the Arizona Department of Water Resources. Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT 1. Respondent Clarence J. Smith (“Mr. Smith”) is the holder of Groundwater Right No. 58-103771.0000 in the Phoenix Active Management Area. 2. Pursuant to Arizona Revised Statutes (“A.R.S.”) § 45-632(O), Mr. Smith was required to file an annual Water Withdrawal and Use Report with the Arizona Department of Water Resources (the “Department”) not later March 31, 2003 for the 2002 calendar year. 3. Mr. Smith failed to file his 2002 annual report on or before the March 31, 2003 deadline.

4. On April 18, 2003, the Department issued a “First Notice of Violation” to Mr. Smith, advising Mr. Smith that the Department had not yet received Mr. Smith’s 2002 annual report. The First Notice of Violation further advised Mr. Smith that he was subject to late filing fees, late payment fees and potential civil penalties for his failure to have filed his 2002 annual report. [See Exhibit 2] 5. On June 18, 2003, the Department issued a “Second Notice of Violation” to Mr. Smith, again advising Mr. Smith that the Department had not yet received Mr. Smith’s 2002 annual report. The Second Notice of Violation reiterated Mr. Smith’s liability for late filing fees, late payment fees and potential civil penalties for his failure to have filed his 2002 annual report. [See Exhibit 3] 6. On September 15, 2003, the Department issued a “Final Notice of Violation” to Mr. Smith, again advising Mr. Smith that the Department had not yet received Mr. Smith’s 2002 annual report. The Final Notice of Violation assessed late filing fees against Mr. Smith in the amount of $150.00 pursuant to A.R.S. § 45-632(O), plus (as applicable) a penalty equal to 60% of any withdrawal fees due pursuant to A.R.S. § 45-614(E). The Final Notice of Violation warned Mr. Smith: If your report is not received by September 30, 2003, the Department of Water Resources will issue a Citation to you for failure to file the Annual Water Withdrawal and Use Report for calendar year 2002. In addition to late fees already accrued, a civil penalty of $250.00 will be assessed. You are urged to complete and file your Annual Water Withdrawal and Use Report in order to avoid enforcement action.

[Exhibit 4]

7. The foregoing notices notwithstanding, Mr. Smith failed to file his annual report. 8. On October 1, 2003, the Department issued a Citation to Mr. Smith. Pursuant to the Citation, the Department assessed against Mr. Smith a $150.00 late filing fee, a $250.00 civil penalty, and, as applicable, a penalty equal to 60% of any withdrawal fees due. The Department gave Mr. Smith until October 31, 2003 to file his annual report and pay the applicable late fees and penalties. The Department warned

Mr. Smith that failure to pay the assessed fees and penalties might result in increased penalties. [See Exhibit 5] 9. The Department mailed the October 1, 2003 Citation to Mr. Smith by certified mail, return receipt requested. Mr. Smith received the Citation on October 7, 2003. [See Exhibit 5] 10. Mr. Smith failed to file his annual report or pay the assessed fees and penalties by the October 31, 2003 deadline established by the October 1, 2003 Citation. 11. When Mr. Smith failed to file his annual report or pay the assessed fees and penalties by the October 31, 2003 deadline established by the October 1, 2003 Citation, the Department referred this matter to the Office of Administrative Hearings, an independent state agency, for hearing. Thereafter, Mr. Smith submitted his annual report, but failed to pay the outstanding fees and penalties. 12. On November 18, 2003, the Department issued a Notice of Hearing to Show Cause advising Mr. Smith that a hearing would be conducted on January 21, 2004, at which time Mr. Smith had the right to appear and show cause why he should not be found in violation of A.R.S. Title 45, Chapter 2. [See Exhibit 8] 13. The Department served a copy of the Notice of Hearing to Show Cause on Mr. Smith by certified mail, return receipt requested. The return receipt for that mailing indicates that Mr. Smith received the Notice of Hearing on December 19, 2003. [See Exhibit 13] 14. The Administrative Law Judge finds, based on the foregoing, that Mr. Smith received proper notice of the January 21, 2004 hearing. 15. Despite having received proper notice, Mr. Smith failed to appear at the January 21, 2004 hearing. 16. When Mr. Smith continued in his failure to appear after the expiration of a fifteen minute grace period, the Administrative Law Judge convened the hearing and proceeded in Mr. Smith’s absence.

17. Based on the evidence presented at hearing, the Administrative Law Judge finds that Mr. Smith failed to file his 2002 annual report by March 31, 2003, as required by statute, and that no good cause or other valid justification exists for Mr. Smith’s failure to have timely filed his 2002 annual report. 18. The Department requested that the following sanctions be imposed against Mr. Smith for his failure to have timely filed his 2002 annual report: a. A late filing fee in the amount of $150.00 pursuant to A.R.S. § 45-632(O); and b. A civil penalty in the amount of $500.00 pursuant to A.R.S. § 45-635. 19. The Administrative Law Judge finds the foregoing sanctions to be authorized by statute and reasonable under all of the circumstances presented. CONCLUSIONS OF LAW 1. A.R.S. § 45-632 provides, in pertinent part: B. Except as provided in subsections C and D of this section [not applicable to the instant matter], an annual report shall be filed with the director by each person who:

1. Owns or leases a right under this chapter to withdraw, receive or use groundwater in an active management area, . . .

* * * * *

O. The annual report shall be maintained on a calendar year basis and shall be filed with the director no later than March of each year for the preceding calendar year. If a person who is required under this section to file an annual report for calendar year 1985 or any subsequent calendar year fails to file a report for the calendar year in question on or before March 31 of the following year, the director may assess and collect a penalty of twenty-five dollars for each month or portion of a month that the annual report is delinquent. The total penalty assessed under this subsection shall not exceed one hundred fifty dollars.

2. A.R.S. § 45-635 provides, in pertinent part: A. A person who is determined pursuant to section 45-634 to be in violation of this chapter or a permit, rule, regulation or order issued or adopted pursuant to this chapter may be assessed a civil penalty in an amount not exceeding:

1. Except as provided in paragraph 3 of this subsection [not applicable to the instant matter], one hundred dollars per day of violation not directly related to illegal withdrawal, use or transportation of groundwater.

3. A.R.S. § 45-634 provides, in pertinent part: A. Except as provided by subsection B of this section [not applicable to the instant matter], if the director has reason to believe that a person is violating or has violated a provision of this chapter or a permit, rule or order issued or adopted pursuant to this chapter, the director may give the person written notice that the person may appear and show cause at an administrative hearing why the person should not be ordered to cease and desist from the violation.

4. In accordance with A.R.S. § 45-632, Mr. Smith was obligated to file a 2002 annual report with the Department not later than March 31, 2003. Mr. Smith failed to do so, and therefore is subject to late fees and civil penalties as prescribed by A.R.S. §§ 45-632(O) and 45- 635(A)(1). RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: Not later than thirty (30) days after the effective date of the Order entered in this matter, Mr. Smith shall pay to the Department the following fees and penalties: 1. A late filing fee in the amount of $150.00; and 2. A civil penalty in the amount of $500.00.

Done this day, February 5, 2004.

______________________________________ Daniel G. Martin Administrative Law Judge

Original transmitted by mail this _____ day of February, 2004, to:

Herb Guenther, Director Department of Water Resources ATTN: Rose Mae Nokes 500 North 3rd Street Phoenix, AZ 85004

By ___________________________ -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826