(a) The State of Arkansas shall pay actual, but not punitive, damages adjudged by a state or federal court, or entered by such a court as a result of a compromise settlement approved and recommended by the Attorney General, against officers or employees of the State of Arkansas, or against the estate of such an officer or employee, based on an act or omission by the officer or employee while acting without malice and in good faith within the course and scope of his or her employment and in the performance of his or her official duties.
(b)
(1)
(A) When it has been determined by the Attorney General's office that a conflict of interest for the civil litigation division or any division of the Attorney General's office exists and that therefore the Attorney General's office must decline representation of the officer or employee, the state agency for which the officer or employee is employed is authorized to enter into a contract to hire special counsel to represent the officer or employee under the same conditions that are set out under the provisions of this subchapter and § 21-9-304.
(B) The agency will be responsible for the payment of the contract with funds from its maintenance and general operation accounts.
(2) When situations arise in which the Attorney General feels that a conflict of interest exists and therefore must decline representation of the officer or employee, the Attorney General shall prepare a report that he or she shall submit to the House Committee on Judiciary and Senate Committee on Judiciary, in which he or she shall recite the reasons for the conflict of interest and the reasons his or her office declined representation.
(c) Upon the recommendation of the Attorney General, the State of Arkansas shall have authority to pay damages based on an act or omission by an officer or employee of the State of Arkansas while acting without malice and in good faith within the course and scope of his or her employment and in the performance of his or her official duties, where the amount of damages is determined by negotiated settlement before or after an action has been commenced.