Senate committee substitute makes the following changes to the 2nd edition.

Amends the long title.

Amends proposed GS 147-86.81 (Prohibitions on State investment). Directs the State Treasurer, upon completion of the initial list of restricted companies, to identify any restricted companies in which the NC Retirement System has investments (was, in which the NC Retirement System owns direct holdings and indirect holdings). Amends the timeline for divestment to require divestment within 180 days of the adoption of the list (was, within 180 days of the adoption of the policy).

Amends GS 147-86.42, defining terms with regard to GS Chapter 147, Article 6D (Sudan (Darfur) Divestment Act). Deletes active business operations, direct holdings, inactive business operations, and indirect holdings. Adds the term investment. Amends the definition of substantial action. Amends terminology to replace the termsscrutinized business operationsandscrutinized companywithrestricted business operationsandrestricted company, respectively. Makes technical and conforming changes.

Amends GS 147-86.43 (Identification of companies). Replaces existing provisions with the following. Directs the public fund, within 90 days of August 30, 2007, to develop and make publicly available a list of companies it determines to be engaged inrestricted business activities, using specified sources of information, including other state lists of restricted companies under similar laws, and to make every effort to avoid erroneously including a company on the list. Provides notice and comment requirements to the companies that will be included on the list, and provides that if a company demonstrates that it is not engaged in restricted activities, it shall not be included on the list. Directs the public fund to update the list on an annual basis based on evolving information from the listed sources.

Amends GS 147-86.44 (Required actions). Replaces existing provisions with the following. Prohibits the public fund from investing with companies on the list created under GS 147-86.43. Requires existing investments with companies on the list to be divested within 180 days of the adoption of the list. Exempts companies which the US government affirmatively declares to be excluded from its present or future Sudan-related federal sanctions regime from the divestment and investment prohibitions. Does not require the NC Retirement Systems or the State Treasurer to take action, unless it is determined in good faith by the Treasurer, that the action is consistent with the fiduciary responsibilities of the Retirement Systems and the State Treasurer.

Amends GS 147-86.45 (Reporting). Replaces existing provisions with the following. Directs the public fund to report to the Joint Legislative Commission on Governmental Operations annually on October 1 on information regarding investments sold, redeemed, divested, or withdrawn under this Article.

Repeals GS 147-86.47 and GS 147-86.48 (regarding other legal obligations, and reinvestment).

Amends GS 147-86.56. Amends the legislative findings to state that effectively addressing the need for the State to respond to the policies of Iran in a uniform fashion requires prohibiting contracts withcompanies(was, persons) engaged in investment activities in Iran's energy sector on a statewide basis.

Amends GS 147-86.57, defining terms with regard to GS Chapter 147, Article 6E (Iran Divestment Act), to define company and make conforming changes.

Amends GS 147-86.58 (Prohibitions on State investment). Directs the State Treasurer, in making the list of companies that engage in investment activities in Iran, to use any other state lists of restricted companies under similar law, and several other listed sources. Directs the State Treasurer to update the list annually (was, every 180 days). Requires existing investments in a company on the list to be divested within 180 days of the company being placed on the list (was, within 180 days of the adoption of the policy). Makes technical and conforming changes.

Repeals GS 147-86.59 (Certification required).

Makes conforming changes to GS 147-86.60.

Amends GS 147-86.61 (Exceptions). Provides that a company engaged in investment activities in Iran may not be placed on the list if the State Treasurer determines, as currently specified, that the company's investments were made before October 1, 2015, and other currently listed requirements (current law allows the company to contract with the State or a political subdivision, but does not prohibit placing the company on the list). Directs the State Treasurer to update the list annually (was, every 180 days). Makes conforming changes.

Amends GS 147-86.62 (Report; application). Replaces existing text with the following. Directs the State Treasurer to report to the Joint Legislative Commission on Governmental Operations annually by October 1 on information regarding investments sold, redeemed, divested, or withdrawn under this Article.

Makes conforming changes to GS 147-86.63.

Except as otherwise provided, the act is effective October 1, 2017.