KRS 355.9-516A: Administrative rejection of unauthorized records.

(1) Upon approval of the Secretary of State, a filing office may refuse to accept a record

communicated for filing under this article if it is evident from the contents of the

record, including the described collateral, or from information in a record

accompanying the record communicated for filing, that the person filing the record

is not authorized to do so under KRS 355.9 -509 or 355.9 -708. This section only

applies if all debtors and secured parties indicated on the record are individuals.

(2) If a filing office refuses to accept a record pursuant to subsection (1) of this section,

it shall immediately inform the person attempting to file the record and all persons

identified on the record as secured parties that the record has not been accepted, and

may request additional documentation supporting the filing. The Secretary of State

shall review all documentation received pursuant to a request under this subsection,

and if the Secretary of State concludes that the record is authorized under KRS

355.9-509 or 355 .9-708, the Secretary of State shall direct the filing office to

promptly accept the record.

(3) A person indicated as a secured party of record on a financing statement that is

refused pursuant to subsection (1) of this section may request from the Secret ary of

State an expedited administrative review of the decision to refuse filing.

(4) A person indicated as a secured party of record on a financing statement that is

refused filing pursuant to subsection (1) of this section may bring an action against

the Secretary of State seeking a determination that the financing statement was filed

by a person entitled to do so under KRS 355.9 -509(1) and was authorized. An

action under this subsection shall have priority on the court's calendar and shall

proceed by expedited hearing. If the individual who filed the affidavit resides in this

state, the exclusive venue in this state for the action shall be in the Circuit Court for

the county where the individual principally resides in this state. If the individual

who filed the affidavit does not reside in this state, the exclusive venue in this state

shall be in the Circuit Court for the county where the filing office in which the

financing statement was filed is located.

(5) If the Secretary of State determines in an exp edited administrative review initiated

under subsection (3) of this section, or if a court determines in an action brought

pursuant to subsection (4) of this section, that a rejected record was filed by a

person entitled to do so under KRS 355.9-509(1) and should have been accepted for

filing, upon receipt of a certified copy of that determination the filing office shall

promptly file the record. Upon the filing of a record improperly refused under

subsection (1) of this section, the record shall be treated as if it had been filed and

effective as of the date originally submitted, except against a person that purchased

the collateral in good faith between the date the record was rejected for filing and

the subsequent actual date of the filing, to the extent that the person gave new value

in reliance on the absence of the record from the files.