{"data":{"id":"us-ky/krs-131.565","jurisdiction":"us-ky","citation":"KRS 131.565","heading":"Definition of \"state agency\" -- Establishment of claim by state agency","body":"pursuant to statutory provision, administrative regulation, or ordinance --\nRequests to withhold individual income tax refund.\n(1) For purposes of KRS 131.560 to 131.595, \"state agency\" or \"state agencies\" shall\ninclude the Court of Justice and any local government, as those terms are defined in\nKRS 45.241.\n(2) No state agency shall request the withholding of any individual income tax refund\nunless there is specific provision in statute, administrative regulation, or, in the case\nof a local government, ordinance, for debtor appeal and hearing rights for that\nparticular debt.\n(3) State agencies having the statutory, regulatory, or other legal provisions described in\nsubsection (2) o f this section shall establish claims against Kentucky individual\nincome tax refunds by notifying the commissioner of revenue in writing by a date\nestablished by the department and, by dates agreed to by the department and each\nstate agency, shall furnish a list of all liquidated debts due the agency for which\nwithholding is required for individual income tax refunds due to be paid to the\ndebtor of the claimant agency. This list shall be submitted in such form and contain\nsuch information as may be required  by the commissioner of revenue to facilitate\nidentification of the refunds to be withheld. As used in this section the term\n\"liquidated debt\" means a legal debt for a sum certain, which has been certified by\nthe claimant agency as final due and owing. The  claimant agency must have made\nreasonable efforts to collect such debt, and must have provided the debtor the\nopportunity for appeal and formal hearing as provided by statute, administrative\nregulation, or local ordinance. The claimant agency shall send t hirty (30) days' prior\nwritten notification to the debtor of the intention to submit the claim to the\ndepartment for setoff as provided in KRS 131.570.\n(4) The individual income tax refund withholding procedures provided in KRS 131.560\nto 131.595 shall be in lieu of the procedures set forth in KRS 427.130 and 44.030\nonly with regard to sums due to a debtor from the department.\n(5) No state agency shall request the withholding of any individual income tax refund\nunless the debt for which withholding is requested is in a liquidated amount.\n(6) Each state agency requesting the withholding of any individual income tax refund\nshall indemnify the department against any and all damages, court costs, attorneys\nfees, and any other expenses related to litigation which  arises concerning the\nadministration of KRS 131.560 to 131.595 as it pertains to a refund withholding\naction requested by such agency.\n(7) Those state agencies requesting the withholding of individual income tax refunds\nshall, on a per unit cost or other equitable basis determined by the department,\nreimburse the department for all development, implementation, and administration\ncosts incurred but not otherwise funded under the provisions of KRS 131.560 to\n131.595.\n(8) The department may decline the withholding of individual income tax refunds from\nagencies if the request would adversely impact the operation of the department.","path":["KRS Chapter 131"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=42340","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:22Z","sha256":"1032668437191eaf6b2b86c5e7049d3d1a76dc83b6eb0b563f6294a295decd71","source_id":"us-ky","stale":false,"prev":"us-ky/krs-131.560","next":"us-ky/krs-131.570"},"notice":"GroundRules: Original legal text. Not legal advice."}