Senate committee substitute makes the following changes to the 1st edition.

Further amends GS 135-6 (pertaining to the Retirement System for Teachers and State Employees) and GS 128-28 (pertaining to the Retirement System for Counties, Cities and Towns). Establishes individual civil immunity for a person serving on the medical boards of the Systems, except to the extent covered by insurance, for any act or failure to act arising out of that service. Sets forth five exceptions to civil immunity under these provisions: (1) when the person is not acting within the scope of that person's official duties; (2) when the person was not acting in good faith; (3) when the person committed gross negligence or willful or wanton misconduct that resulted in the damages or injury; (4) when the person derived an improper financial benefit, either directly or indirectly, from the transaction; or (5) when the person incurred the liability from the operation of a motor vehicle. 

Deletes the language of proposed GS 105-259(b)(39a) to instead permit the disclosure of tax information to furnish the Department of State Treasurer, periodically upon request: the State tax return of a beneficiary, or the wage and income statement of a beneficiary, or the NC-3 information of an employer, for the purpose of substantiating the beneficiary's statement required to be submitted under GS 135-5(e)(4), GS 135-109, or GS 128-27(e)(4); or for the purpose of assisting a fraud or compliance investigation in accordance with GS 135-1(7b), GS 135-1(11b), GS 135-6(q), GS 128-21(7b), GS 128-21(11c), and GS 128-28(r); so long as no federal tax information is disclosed under this subdivision unless the disclosure is permitted by section 6103 of the Internal Revenue Code [previously, only permitted disclosure to furnish the Department of State Treasurer with information it requests related to an investigation or audit under GS 135-6(q) or GS 128-28(r)].

Directs the Department of Revenue and the State Treasurer to develop and implement an information exchange system no later than June 30, 2018, as set out above. Directs the departments to enter into a confidential information sharing agreement settling transfer protocols, required security measures, audit mechanisms, and other measures designed to protect confidential information.