KRS 134.551 — Refund to purchaser of certificate of delinquency that is unenforceable or declared void -- Reassessment of property

(1) If a certificate of delinquency or personal property certificate of delinquency held by
an individual is declared void b y a court of competent jurisdiction because of the
irregularity of taxing officers, the amount for which the certificate was issued shall
be refunded by the state, county, and taxing districts on a pro rata basis. If a school
district or county is unable t o make the refund currently when requested, it shall be
given preference from the next year's revenue. The application for refund must be
made within one (1) year after the judgment. The property covered by the void
certificate shall be assessed immediately as omitted property and the tax bill shall be
payable as soon as prepared.
(2) (a) If a certificate of delinquency held by a third -party purchaser who paid the
certificate of delinquency to the county clerk:
1. Is unenforceable because:
a. It is a duplicate certificate of delinquency;
b. The tax liability represented by the certificate of delinquency was
satisfied prior to the purchase of the certificate of delinquency;
c. All or a portion of the certificate of delinquency is exonerated; or
d. The propert y to which the certificate of delinquency applies was
not subject to taxes as a matter of law as certified by the property
valuation administrator; or
2. Should not have been sold because, on the date of the annual sale, the
certificate of delinquency met the requirements for inclusion on the
protected list pursuant to KRS 134.504(10) and it:
a. Was included on the protected list;
b. Was mistakenly left off the protected list; or
c. Became eligible for inclusion on the protected list between the date
the protected list was submitted and the date of sale;
the third-party purchaser may apply to the county clerk for a refund.
(b) The application for refund filed with the county clerk shall include written
proof that one (1) of the situations described in paragraph (a) of this
subsection exists with regard to the certificate of delinquency for which a
refund is sought.
(c) 1. Upon acceptance and approval of the application for refund, the county
clerk shall approve a refund of the amount paid to the county clerk by
the third-party purchaser in satisfaction of the certificate of delinquency.
The refunded amount shall not include any f iling fees paid by the third -
party purchaser to the county clerk.
2. Amounts refunded to the third -party purchaser shall be deducted from
amounts in the hands of the county clerk due to the state, county, taxing
districts, sheriff, county attorney, and the county clerk on a pro rata
basis, if the county clerk has sufficient funds in his or her hands to make
the refund.
3. If the county clerk does not have sufficient funds to make the refund at
the time the refund is approved, the county clerk may either:
a. Retain the approved refund claim in his or her office and make the
refund payment as soon as he or she has sufficient funds in his or
her hands to make the refund payment; or
b. Provide a signed letter to the person to whom payment is due,
which includes the amount due from each taxing jurisdiction or fee
office, and which directs each taxing jurisdiction or fee official to
pay to the person the amount due and owing from that taxing
jurisdiction or fee official as reflected in the letter.
4. Upon the making of a refund to a third -party purchaser, the county clerk
shall issue and file a release of the lien on the property assessed for taxes
as provided in this subparagraph without charge to the third -party
purchaser. The release shall be linked to the encumb rance in the county
clerk's indexing system.
a. The department shall prepare a release form to be used by the
county clerk when a refund is paid under this paragraph. The form
shall include, at a minimum, the following:
i. The name and address of the taxpayer;
ii. The name and address of the third-party purchaser;
iii. The book and page number of the third -party purchaser's lis
pendens filing;
iv. The property address;
v. The applicable tax year; and
vi. The map identification number or tax bill number.
b. The release form shall be signed by the government official
responsible for making the correction.
c. In addition to the signed release form, information filed by the
county clerk shall include a copy of the documentation provided by
the government official and a copy of the refund check or letter of
refund authorization issued to the third -party purchaser. The
county clerk shall record and file this information without a fee.
d. The county clerk shall also make any necessary corrections to the
tax records within the office of the county clerk.
e. The county clerk shall return the release document to the taxpayer
and shall provide a copy of the release document to the third -party
purchaser.
(d) If the county clerk denies the application for refund, or the pr operty valuation
administrator fails to certify that property was not subject to taxes as a matter
of law, the third -party purchaser may appeal the decision of the county clerk
or the property valuation administrator to the Board of Tax Appeals pursuant
to KRS 49.220.