(1) Engagement. A public fund shall adhere to the following procedures for companies on the scrutinized companies list:

(a) The public fund shall immediately determine the companies on the scrutinized companies list in which the public fund owns direct or indirect holdings.

(b) For each company identified pursuant to paragraph (a) of this subsection (1) with only inactive business operations, the public fund shall send a written notice informing the company of this part 1 and encouraging it to continue to refrain from initiating active business operations in Sudan until it is able to avoid scrutinized business operations. The public fund shall continue such correspondence on a semi-annual basis.

(c) For each company newly identified pursuant to paragraph (a) of this subsection (1) with active business operations, the public fund shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the public fund. The notice shall offer the company the opportunity to clarify its Sudan-related activities and shall encourage the company, within ninety days, to either cease its scrutinized business operations or convert such operations to inactive business operations in order to avoid qualifying for divestment by the public fund.

(d) If, within ninety days following the public fund's first engagement with a company pursuant to paragraph (c) of this subsection (1), that company ceases scrutinized business operations, the company shall be removed from the scrutinized companies list and the provisions of this section shall cease to apply to it unless it resumes scrutinized business operations. If, within ninety days following the public fund's first engagement, the company converts its scrutinized active business operations to inactive business operations, the company shall be subject to the provisions of paragraph (b) of this subsection (1).

(2) Divestment. (a) If, after ninety days following a public fund's first engagement with a company pursuant to paragraph (c) of subsection (1) of this section, the company continues to have scrutinized active business operations, and only while such company continues to have scrutinized active business operations, the public fund shall sell, redeem, divest, or withdraw all publicly traded securities of the company, except as provided in subsections (4) and (5) of this section, according to the following schedule:

(I) At least fifty percent of such assets shall be removed from the public fund's assets under management by nine months after the company's most recent appearance on the scrutinized companies list.

(II) One hundred percent of such assets shall be removed from the public fund's assets under management within fifteen months after the company's most recent appearance on the scrutinized companies list.

(b) If a company that ceased scrutinized active business operations following engagement pursuant to paragraph (c) of subsection (1) of this section resumes such operations, paragraph (a) of this subsection (2) shall immediately apply, and a public fund shall send a written notice to the company. The company shall also be immediately placed on the scrutinized companies list again.

(3) Prohibition. At no time shall a public fund acquire direct holdings in securities of companies on the scrutinized companies list that have active business operations, except as provided for in subsections (4) and (5) of this section. Public funds shall not undertake investments in an indirect passively managed fund that is not held in the public fund's portfolio as of April 19, 2007, where the passively managed fund contains publicly traded securities of a scrutinized company with active business operations in Sudan.

(4) Exclusion. No company that the United States government affirmatively declares to be excluded from its present or any future federal sanctions regime relating to Sudan shall be subject to divestment or investment prohibition pursuant to subsections (2) and (3) of this section.

(5) Excluded securities. Notwithstanding any other provision of this part 1, subsections (2) and (3) of this section do not apply to indirect holdings in actively managed investment funds. A public fund shall, however, submit letters to the managers of such investment funds containing companies with scrutinized active business operations requesting that they consider removing such companies from the fund or create a similar actively managed fund with indirect holdings devoid of such companies. If the manager creates a similar fund and if the public fund determines investment in the similar fund is consistent with prudent investment standards, the public fund shall replace all applicable investments with investments in the similar fund in an expedited time. In addition, notwithstanding any other provision of this part 1, for passively managed indirect holdings, if the manager does not remove such companies or create a similar fund consistent with prudent investment standards by October 1, 2008, or nine months after the date the public fund first requests the manager to act, whichever is later, then the scrutinized companies with active business operations shall be removed from the indirect passively managed assets of the public fund.

(6) Defined contribution plans. Notwithstanding any other provision of this part 1, public funds, when discharging their responsibility for operation of a defined contribution plan, shall engage the manager of the investment offerings in such plans requesting that they consider removing scrutinized companies from the investment offerings or create an alternative investment offering devoid of scrutinized companies. If the manager creates an alternative investment offering and the offering is deemed consistent with prudent investor standards by the public fund, the public fund shall consider including such investment offering in the plan.

(7) Private equity. Public funds shall annually notify managers of private equity assets of the public fund that public policy in Colorado is to avoid participation in scrutinized companies with active business operations in Sudan and request the managers not undertake any investments that would constitute such operations. Prior to investing in a new private equity fund that is not in the public fund's portfolio as of April 19, 2007, the public fund shall perform due diligence to prevent investment in any private equity fund where the offering memorandum or prospectus identifies the purpose of the private equity fund as investing in scrutinized companies with active business operations in Sudan.