Subdivision 1.

Generally.

(a) When a debt is determined by a state agency to be
uncollectible, the debt may be written off by the state agency from the state agency's financial
accounting records and no longer recognized as an account receivable for financial reporting
purposes. A debt is considered to be uncollectible when (1) all reasonable collection efforts
have been exhausted, (2) the cost of further collection action will exceed the amount
recoverable, (3) the debt is legally without merit or cannot be substantiated by evidence,
(4) the debtor cannot be located, (5) the available assets or income, current or anticipated,
that may be available for payment of the debt are insufficient, (6) the debt has been
discharged in bankruptcy, (7) the applicable statute of limitations for collection of the debt
has expired, or (8) it is not in the public interest to pursue collection of the debt.

(b) Uncollectible debt must be reported by the state agency as part of its quarterly reports
to the commissioner of management and budget. The basis for the determination of the
uncollectibility of the debt must be maintained by the state agency. If an uncollectible debt
equals or exceeds $100,000, the agency shall notify the chairs and ranking minority members
of the legislative committees with jurisdiction over the state agency's budget at the time the
debt is determined to be uncollectible. The information reported shall contain the entity
associated with the uncollected debt, the amount of the debt, the revenue type, the reason
the debt is considered uncollectible, and the duration the debt has been outstanding. The
commissioner of management and budget shall report to the chairs and ranking minority
members of the legislative committees with jurisdiction over Minnesota Management and
Budget an annual summary of the number and dollar amount of debts determined to be
uncollectible during the previous fiscal year by deleted text begin October 31deleted text end new text begin November 30new text end of each year.
Determining that the debt is uncollectible does not cancel the legal obligation of the debtor
to pay the debt.