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

Amends the long title of the bill.

Amends GS 15A­533(f1). Deletes the reference to aggravating factors in sentencing in the definition of violent felony. Redefines drug offense to mean a violation of GS 90­95, other than a violation of GS 90­95(a)(3) punishable pursuant to GS 90­95(d) (currently the exception is for violation for mere possession of a controlled substance).

Amends the caption for Part IV of the bill. Clarifies that the judicial authorization required for a law enforcement agency to securely transport an alien does not come from the Governor, but that executive authorization does. Deletes Sections 4(b), 4(c), and 4(d) of the bill (instructing the Secretary of Revenue to withhold certain funds from a county or city in violation of the statute).

Adds new part V (Creation of additional incentives for local governments to comply with state laws related to immigration). Enacts new GS Chapter 64, Article 3, Local Government Noncompliance with State Laws Related to Immigration, setting out specific findings of the General Assembly, including that the policy objectives of the General Assembly are frustrated when cities, counties, and law enforcement agencies do not uniformly comply with State law, and that supreme power and complete discretion over State funds appropriations can be used to create additional incentives for compliance. Sets out three definitions in use for the Article, including affected local government, law enforcement agency, and state law related to immigration­­defined as  GS 153A­145.5 (prohibition on adoption of sanctuary ordinances), or GS 160A­205.2 (prohibition on adoption of sanctuary ordinances).

Directs the Attorney General (AG) to create a form upon which individuals can allege that a city, county, or law enforcement agency is currently not in compliance with a State law related to immigration. The form is to be made available on the AG's website and once completed the form should be sent to the AG. No Social Security number or notarization is required on theform. Anonymous statements submitted on a nonprescribed form are not prohibited from consideration, but all complaints orallegations must be made having a good faith belief.

Requires the AG to begin an investigation into the allegations of noncompliance within 45 days of receipt of filed statement, with a final determination and conclusion of the investigation within 60 days of the investigation's commencement. The AG is authorized to ask for assistance from the State Bureau of Investigation in conducting the investigation. Further directs local governments to produce records or documents related to the investigation within 10 business days of request by the AG. Provides that statements, records, reports, and other investigative documents are confidential and not public records until the investigation is complete or 60 days have elapsed since the investigation was commenced. Authorizes local governments to request that confidential documents be made public.

Sets out consequences of a determination that an affected local government is not in compliance with State law related to immigration. The five consequences include ineligibility for specified state distributions for a fiscal year and that the AG will notify the affected local governments, the chairs of the Appropriations Committees of the Senate and House of Representatives, the chairs of the Joint Legislative Commission on Governmental Operations, the Office of State Budget and Management, and the Secretary of Revenue of the non­compliance determination and of the duration of the period of ineligibility to receive funds. Also includes provisions detailing consequences of the AG receiving notification of noncompliance with E­verify. Sets out specific entities to which the consequences of noncompliance with E­Verify regulations apply. No enactment must be construed as an exception to the statute unless it specifically mentions this statute.  Sets out procedures and administrative guidelines for the AG, including reporting requirements. Requires the AG to maintain a database of those entities ineligible for funds and to report to the Joint Legislative Commission on Governmental Operations on a quarterly basis concerning the numbers of statements, investigations, consequences rendered, and the names of those entities found not to be in compliance. Further states that the AG's determination is only appealable to the extent required by the United States and North Carolina Constitutions, and delays the imposition of consequences for noncompliance while the appeal is pursued. Consequences last for the same length of time after an unsuccessful appeal as they would had no appeal been made, regardless of which fiscal years the consequences would occur in. Authorizes the AG to designate an official to carry out the duties of this regulation, and that the AG must promulgate rules needed to implement this Article.

Provides for a private enforcement action against entities that are not in compliance with State law concerning immigration, in the Superior Court of Wake County; an individual can seek relief in the form of declaratory and injunctive relief. Allows prevailing parties to receive attorneys' fees and court costs.

Amends GS 143­133.3 to direct the Commissioner to notify the AG of any violation of GS 143­133.3 by a political subdivision of the state, so that the AG can take action. Further directs the Commissioner to notify the AG if, within 60 days of the Commissioner's determination of a violation, the subdivision fails to demonstrate compliance.

Directs the AG's office to take reasonable steps to notify local governments of the provisions of this act so the local governments can take appropriate steps to comply.

Makes conforming changes to GS 136­41.1, GS 105­113.82, GS 105­164.44F, GS 105­164.44I, GS 105­164.44L, and GS 105­187.19(b)

Amends GS 143B­919 to authorize the State Bureau of Investigation to investigate local government noncompliance with State laws related to immigration, at the request of the AG.

New Part V is effective August 1, 2017.