A BILL TO BE ENTITLED
AN ACT to Promote local sawmills by allowing the use of ungraded lumber in certain circumstances.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 9 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑138.2.  Use of ungraded lumber in certain residential construction.
(a)	Definitions. – The following definitions apply in this section:
(1)	Ungraded lumber. – Lumber that is not identified by a grade mark of an accredited lumber grading or inspection agency and not otherwise accompanied by a certificate of inspection as permitted under the North Carolina Residential Code for One‑ and Two‑Family Dwellings.
(2)	Local mill certification. – A written certification that ungraded lumber meets the requirements of the North Carolina Residential Code for One‑ and Two‑Family Dwellings, other than the requirement that only grade marked or otherwise certified lumber be used in residential construction, issued by the person who milled the lumber or that person's authorized representative.
(b)	Qualifications. – Prior to milling and offering ungraded lumber for sale in the State for use in the construction of one‑ and two‑family dwellings, a person shall (i) successfully complete a sawmill operation and lumber manufacturing training program approved by the Department of Insurance and (ii) register with the Department of Insurance. The training program may be based inside or outside the State, provided that the training program issues a certificate upon successful completion providing evidence of successful completion of the training program. The certificate shall be valid for purposes of this act for a period of seven years, but a person may complete the same or another approved training program and obtain a new certificate. The registration shall remain effective for as long as the person has a valid certificate.
(c)	Registration Fee. – The Department of Insurance shall charge a registration fee of two hundred dollars ($200.00).
(d)	Use of Ungraded Lumber in Certain Residential Construction. – Ungraded lumber may be used in the construction of one‑ and two‑family dwellings when that use meets all of the following requirements:
(1)	The ungraded lumber is milled at the request of the person owning the source logs for use in the construction of the dwelling, and the dwelling will be inhabited by that person.
(2)	The operator of the sawmill that milled the ungraded lumber is registered with the Department of Insurance and has a valid certificate of successful completion of an approved training program pursuant to subsection (b) of this section.
(3)	The source logs were harvested from private property owned by the owner of the dwelling to be constructed, or otherwise acquired by the owner through a private transaction not involving a seller or retailer engaged in the regular sale of building products.
(4)	The ungraded lumber is sold directly by the owner or employee of the sawmill that milled the ungraded lumber to the owner of the dwelling to be constructed or that person's authorized representative.
(5)	The ungraded lumber is milled so that it meets or exceeds the requirements of the North Carolina Residential Code for One‑ and Two‑Family Dwellings other than the requirement that only grade marked or otherwise certified lumber be used in residential construction.
(6)	The sawmill supplying the ungraded lumber provides a local mill certification, of a form and contents that the Building Code Council may specify, to the owner of the dwelling to be constructed or that person's authorized representative.
(7)	The appropriate code enforcement official reviews the local mill certification and the framing of the dwelling in which the ungraded lumber is used to ensure that it meets the requirements of the North Carolina Residential Code for One‑ and Two‑Family Dwellings in all respects other than the requirements that only grade marked or otherwise certified lumber be used in residential construction. The code enforcement official shall not be liable for any structural failure that occurs as a result of the use of ungraded lumber rather than grade marked or otherwise certified lumber.
(e)	Sale of Residences Built With Ungraded Lumber. – The owner of a one‑ or two‑family residence built with ungraded lumber may not sell or lease the residence until the owner has occupied the home for a period of not less than one year from the date of the issuance of the Certificate of Occupancy. If title to the property passes to another party within the one‑year occupancy period for reasons other than sale of the property, a statement shall be included in the closing documents disclosing that the property was built using ungraded lumber."
SECTION 2.  The Building Code Council shall amend the North Carolina Residential Code for One‑ and Two‑Family Dwellings consistent with Section 1 of this act. The Department of Insurance shall adopt rules consistent with Section 1 of this act.
SECTION 3.  Section 1 of this act becomes effective on the effective date that rules required to be adopted by Section 2 of this act become effective. The remainder of this act is effective when it becomes law.