STATE ALLOWS CHALLENGE TO $1 MILLION POT FINE

FRANKFORT, Ky. -- The state has agreed to allow a Breathitt County man to
challenge a $1 million tax bill for 517 marijuana plants found near his
trailer home.

The state Revenue Cabinet has dropped a requirement that Charles Thomas
Jr., who denies having anything to do with the plants, first post a $1
million bond.

Thomas did not own the land where the marijuana grew. And, after being
questioned by the Kentucky State Police, he was not charged with any crime
in connection with the plants.

But because he was identified as the "dealer" of the marijuana in a notice
the state police sent to the Revenue Cabinet, he was assessed $1,038,079.38
in tax and penalties in October 1999 under the state's 1994 Marijuana and
Controlled Substance Tax.

And the law required him to post a bond in the amount of the tax -- an
impossibility for Thomas, a 27-year-old college dropout who works part time.

Thomas filed suit in Franklin Circuit Court last fall claiming the bond
requirement violates his constitutional right of due process.

The Revenue Cabinet, however, decided this week that it would allow Thomas
to make his case without posting bond.

"We've agreed to give him his chance to protest and present evidence
through the normal protest process here in the cabinet," said Dana Mayton,
commissioner of the cabinet's Department of Law. She said the cabinet has
the authority to effectively waive certain requirements to avoid the risk
of a case going to trial.

"We get all kinds of tax protests, but this is very unusual," Mayton said.

Thomas said in a phone interview yesterday, "I guess it's good news that
I'm getting a hearing. . . . But I still don't see why I have to prove I
don't owe this tax. They need to change this law, it's crazy."

Mayton said details of the agreement with Thomas were yet to be worked out,
but she expected Thomas and the cabinet would agree to settle the lawsuit soon.

Mayton said a "protest officer" from the cabinet will review records from
Thomas and his lawyers and probably arrange a meeting with them. That
officer will make a recommendation to Mayton, who said she will decide
whether the tax is due. For large and unusual cases such as this, Mayton
said she makes the decisions after consulting Cabinet Secretary Mike Haydon.

If Thomas loses, he could appeal to the Kentucky Board of Tax Appeals.

The Kentucky General Assembly passed the Marijuana and Controlled Substance
Tax as a way to get tough on drug dealers. It requires persons who possess
controlled substances to pay an annual tax. The tax is $1,000 per marijuana
plant. If plants are discovered and the tax has not been paid, a fine of
$1,000 per plant is added to the tax bill.

Thomas got his tax bill, state Police records show, after investigators
concluded that Thomas was growing the marijuana, because of its proximity
to his trailer home. The records list Thomas as the only suspect in the
case. During the investigation, Trooper Kenneth Fuson of the State Police
Marijuana Strike Force sent the Revenue Cabinet the notice identifying
Thomas as the dealer.

However, a Breathitt County grand jury later concluded that evidence
presented by the state police was insufficient to justify any indictment of
Thomas.

Fuson did not return phone messages.

Revenue Cabinet officials said they had no choice but to send out the tax
bill after they got the notice.

When Thomas originally failed to pay his tax bill, the Revenue Cabinet
attempted to seize his bank accounts -- but Thomas had none. Thomas said he
has been working for family-owned businesses for the past year and is
reluctant to apply for a job for fear the cabinet will go after his wages.

"I'm afraid this thing will be hanging over my head the rest of my life,"
he said.