(a) Except as provided by Subsection (c) or (c-1), a state agency shall refer an uncollected and delinquent obligation that meets the referral guidelines established by the attorney general to the attorney general for further collection efforts. The state agency must refer the obligation on or before the 90th day after the date the obligation becomes past due or delinquent.
(b) The attorney general:
(1) may provide legal services for collection of the obligation;
(2) may authorize the requesting state agency to employ, retain, or contract with, subject to approval by the attorney general and subject to the agency’s compliance with applicable guidelines established by the attorney general, one or more persons to collect the obligation; or
(3) if the attorney general determines it to be economical and in the best interest of the state, may contract on behalf of the state agency with one or more persons to collect the obligation.

(c) The comptroller may employ, retain, or contract with a person other than a full-time state employee to collect delinquent obligations that are owed the comptroller in the comptroller’s official capacity, are not collected through normal collection procedures, and do not meet the referral guidelines adopted for collection by the attorney general. A proposed contract under this subsection shall be reviewed by the attorney general. A person contracting with the comptroller under this subsection is entitled to a collection fee, as provided under the contract, in an amount not to exceed 30 percent of the full amount of the obligation.
(c-1) The comptroller may also contract with one or more persons to collect delinquent obligations that have been referred to the attorney general and that the attorney general has returned to the comptroller after exhausting all reasonable collection efforts. A proposed contract under this subsection shall be reviewed by the attorney general. A person contracting with the comptroller under this subsection is entitled to a collection fee equal to 30 percent of the full amount of the obligation collected.
(d) The agency contracting under Subsection (b) or (c) is entitled to recover from the obligor, in addition to the amount of the obligation, reasonable costs incurred in undertaking the collection, including the costs of a contract under this section, in an amount not to exceed 30 percent of the total amount of the obligation.
(e) A person awarded a contract under Subsection (b), (c), or (c-1) may not file suit or otherwise pursue judicial action to collect the obligation owed in a court of this state or another state on behalf of the contracting state agency.
(f) Except as provided by Subsection (b)(3), a state agency may determine in its sole discretion which obligations to refer to a private collection firm for collection.
(g) The contracting state agency may provide a person contracting under Subsection (b), (c), or (c-1) any information, including confidential information, that the agency is not prohibited from sharing with another state or with the United States and that is:
(1) in the custody of the agency owed the obligation; and
(2) necessary to the collection of the obligation.
(h) A person acting under a contract formed under Subsection (b), (c), or (c-1) and each employee or agent of that person is subject to all statutory prohibitions against the wrongful disclosure of confidential information that the contracting state agency and its employees are subject to. A contractor’s employee is subject to the same penalties for wrongful disclosure of confidential information as would apply to the employees of the contracting agency.
(i) The contracting agency shall require a person who contracts under Subsection (b), (c), or (c-1) to obtain and maintain insurance adequate to provide reasonable coverage for damages negligently, recklessly, or intentionally caused by the contractor or the contractor’s employee or agent in the course of collecting an obligation under the contract.
(j) A person who contracts with a state agency under this section is subject to Chapter 392, Finance Code.