I. State agencies and departments may refer any uncollected debt owed to the state to the attorney general for collection after determining that a debt owed to the state cannot be collected through means other than an action in court. All debts collected pursuant to this section shall be credited to the debt recovery fund established in paragraph IV.
   II. No debt may be referred to the attorney general unless:
      (a) There have been at least 2 documented attempts in writing to notify the debtor of the existence of the debt and of the fact that the debt may be assigned to the attorney general for collection if it is not paid;
      (b) At least 30 days have elapsed from the last notice attempt; and
      (c) All applicable administrative remedies have been exhausted.
   III. The attorney general may:
      (a) Compromise the claim.
      (b) Extend for a reasonable period the time for payment of the debt by agreeing to accept monthly or other periodic payments.
      (c) Cancel the debt or cause it to be cancelled if the attorney general finds, after investigation, that any debt due and owing to the state cannot be reasonably collected.
   IV. (a) There is established in the office of the state treasurer a nonlapsing fund to be known as the debt recovery fund which shall be kept distinct and separate from all other funds. The debt recovery fund is established to receive all recoveries of debts paid to the state under this section.
      (b) A percentage of each amount collected under this section shall be retained in the debt recovery fund for the purpose of funding the costs of all debt collection. The percentage shall be set annually by the attorney general in consultation with the commissioner of the department of administrative services at 150 percent of the total costs and expenses of the debt collection during the prior fiscal year divided by the total debt collected. Any amount remaining in the fund at the end of a fiscal year in excess of 200 percent of the costs and expenses of debt collection during the fiscal year shall be paid in a proportional amount to the accounts for which they were collected.
      (c) The treasurer shall deposit in the debt recovery fund all amounts collected by the department of justice under this section. The attorney general is authorized to accept, budget, and expend moneys in the debt recovery fund received from any party without the approval of the governor and council for the purposes of:
         (1) After deducting the amounts authorized in subparagraph IV(b), transferring on a quarterly basis a proportional amount recovered to the accounts for which they were collected; and
         (2) Recruitment, training, administration, overhead, and supervision of such assistant attorneys general and support staff as necessary for the purposes of this section.
      (d) All moneys in the debt recovery fund shall be continually appropriated to the department of justice and shall not lapse.
      (e) The state treasurer, upon approval of the attorney general, shall pay the expenses of recruitment, training, administration, and supervision of assistant attorneys general and support staff as necessary for the purposes of this section, and transfer a proportional amount of unretained funds recovered to the accounts for which they were collected.
   V. For purposes of this section, the term ""debt'' shall include fines and other debts or amounts owed to the state.
   VI. Notwithstanding any other provision of this section, and subject to the supervision of the attorney general as to matters of law, state agencies and departments may seek collection of debts in small claims court without referring the debt to the attorney general. The authorization granted to seek collection of debts in small claims court under this paragraph shall not be construed to constitute a waiver of the sovereign immunity of the state, or any other defense, right, immunity, or other protection under law, including any statutory provision.
Source. 2007, 346:1, eff. July 1, 2007.