When the department has an interest in property in the form of a lien arising under the provisions of K.S.A. 44-717(e) and the department receives money through seizure, surrender or sale of the property, or by redemption of the property prior to its sale by the department, the money realized by these actions shall:

1. (a) First, be applied toward the expenses of the proceedings;
2. (b) Second, be applied toward the employer's liability; and
3. (c) Third, be refunded or credited by the secretary upon written application. The application shall state there is a surplus remaining in the hands of the secretary and the applicant is legally entitled to receive it.

(Authorized by K.S.A. 1985 Supp. 44-714 as amended by L. 1986, Ch. 191, Sec. 4; implementing K.S.A. 1985 Supp. 44-717 as amended by L. 1986, Ch. 191, Sec. 5; effective, T-87-40, Dec. 8, 1986; effective May 1, 1987.)