GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 1999

SESSION LAW 1999-393
SENATE BILL 941

AN ACT TO UPDATE THE MANUFACTURED HOUSING BOARD STATUTES, TO PROVIDE FOR CONTINUING EDUCATION FOR LICENSEES, TO IMPROVE THE BUYER CANCELLATION LAW, AND TO UPDATE THE LAW ON MANUFACTURED HOME STANDARDS TO COMPLY WITH FEDERAL LAWS AND REGULATIONS.

The General Assembly of North Carolina enacts:

Section 1.  Article 9A of Chapter 143 of the General Statutes reads as rewritten:
"ARTICLE 9A.
"North Carolina Manufactured Housing Board –
Manufactured Home Warranties.
"§ 143-143.8.  Purpose.
The General Assembly finds that manufactured homes have become a primary housing resource for many of the citizens of North Carolina. The General Assembly finds further that it is the responsibility of the manufactured home industry to provide homes which are of reasonable quality and safety and to offer warranties to buyers that provide a means of remedying quality and safety defects in manufactured homes. The General Assembly also finds that it is in the public interest to provide a means for enforcing such warranties.
Consistent with these findings and with the legislative intent to promote the general welfare and safety of manufactured home residents in North Carolina, the General Assembly finds that the most efficient and economical way to assure safety, quality and responsibility is to require the licensing and bonding of all segments of the manufactured home industry. The General Assembly also finds that it is reasonable and proper for the manufactured home industry to cooperate with the Commissioner of Insurance, through the establishment of the North Carolina Manufactured Housing Board, to provide for a comprehensive framework for industry regulations.
"§ 143-143.9.  Definitions.
The following definitions apply in this Article:
(1)	Board. – The North Carolina Manufactured Housing Board.
(2)	Buyer. – A person who purchases at retail from a dealer or manufacturer a manufactured home for personal use as a residence or other related use.
(3)	Code. – Engineering standards adopted by the Commissioner.
(4)	Commissioner. – The Commissioner of Insurance of the State of North Carolina.
(5)	Department. – The Department of Insurance of the State of North Carolina.
(5a)	License. – A license issued under this Article.
(5b)	Licensee. – A person who has been issued a license under this Article by the North Carolina Manufactured Housing Board.
(6)	Manufactured home. – A structure, transportable in one or more sections, which, in the travelling mode, is eight feet or more in width or is 40 feet or more in length, or when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning and electrical systems contained therein.
(7)	Manufactured home dealer or dealer. – Any person engaged in the business of buying or selling manufactured homes or offering or displaying manufactured homes for sale in North Carolina. Any person who buys or sells three or more manufactured homes in any 12-month period, or who offers or displays for sale three or more manufactured homes in any 12-month period shall be presumed to be a manufactured home dealer. The terms 'selling' and 'sale' include lease-purchase transactions. The term 'manufactured home dealer' does not include banks and finance companies that acquire manufactured homes as an incident to their regular business.
(8)	Manufactured home manufacturer or manufacturer. – Any person, resident or nonresident, who manufactures or assembles manufactured homes for sale to dealers in North Carolina.
(9)	Manufactured home salesperson or salesperson. – Any person employed by a manufactured home dealer to sell  manufactured homes to buyers.
(10)	Person. – Any individual, natural persons, firm, partnership, association, corporation, legal representative or other recognized legal entity.
(11)	Responsible party. –  A manufacturer, dealer, supplier, or set-up contractor.
(12)	Setup. – The operations performed at the occupancy site which render a manufactured home fit for habitation. 
(13)	Set-up contractor. – A person who engages in the business of performing setups for compensation in North Carolina.
(14)	Substantial defect. – Any substantial deficiency in or damage to materials or workmanship occurring in a manufactured home which has been reasonably maintained and cared for in normal use. The term also means any structural element, utility system or component part of the manufactured home which fails to comply with the Code. 
(15)	Supplier. – The original producer of completed components, including refrigerators, stoves, hot water heaters, dishwashers, cabinets, air conditioners, heating units, and similar components, and materials such as floor coverings, panelling, siding, trusses, and similar materials, which are furnished to a manufacturer or dealer for installation in the manufactured home prior to sale to a buyer.
"§ 143-143.10.  Manufactured Housing Board created; membership; terms; meetings.
(a)	There is created the North Carolina Manufactured Housing Board within the Department. The Board shall be composed of nine members as follows:
(1)	The Commissioner of Insurance or his designee.
(2)	A manufactured home manufacturer.
(3)	A manufactured home dealer.
(4)	A representative of the banking and finance business.
(5)	A representative of the insurance industry.
(6)	A manufactured home supplier.
(7)	A set-up contractor.
(8)	Two representatives of the general public.
The Commissioner or his designee shall chair the Board. The Governor shall appoint to the Board the manufactured home manufacturer and the manufactured home dealer. The General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121 shall appoint the representative of the banking and finance industry and the representative of the insurance industry. The General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121 shall appoint the manufactured home supplier and set-up contractor. The Commissioner shall appoint two representatives of the general public. Except for the representatives from the general public and the persons appointed by the General Assembly, each member of the Board shall be appointed by the appropriate appointing authority from a list of nominees submitted to the appropriate appointing authority by the Board of Directors of the North Carolina Manufactured Housing Institute. At least three nominations shall be submitted for each position on the Board. The members of the Board shall be residents of the State.
The members of the Board shall serve for terms of three years.  In the event of any vacancy of a position appointed by the Governor or Commissioner, the appropriate appointing authority shall appoint a replacement in the same manner as provided for the original appointment to serve the remainder of the unexpired term. Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120-122. In the event of any vacancy, the appropriate appointing authority shall appoint a replacement to serve the remainder of the unexpired term. Such appointment shall be made in the same manner as provided for the original appointment. No member of the Board shall serve more than two consecutive, three-year terms.
The member of the Board representing the general public shall have no financial interest connected with the manufactured housing industry. No member of the Board shall participate in any proceeding before the Board involving that member's own business.
Each member of the Board, except the Commissioner and any other State employee, shall receive per diem and allowances as provided with respect to occupational licensing boards by G.S. 93B-5. All per diem and travel expenses shall be paid exclusively out of the fees received by the Board as authorized by this Article. In no case shall any salary, expense, or other obligation of the Board be charged against the General Fund of the State of North Carolina. All moneys and receipts shall be kept in a special fund by and for the use of the Board for the exclusive purpose of carrying out the provisions of this Article.  At the end of the fiscal year, the Board shall retain fifteen percent (15%) of the unexpended funds collected and received during that year.  The remaining eighty-five percent (85%) of these funds shall be credited to the General Fund.
(b)	In accordance with the provisions of this Article, the Board shall have the following powers and duties:
(1)	To issue licenses to manufacturers, dealers, salespersons, and set-up contractors.
(2)	To require that an adequate bond or other security be posted  by all licensees, except manufactured housing salespersons.
(3)	To receive and resolve complaints from buyers of manufactured homes and from persons in the manufactured housing industry, in connection with the warranty, warranty service, licensing requirements or any other provision under this Article.
(4)	To adopt rules in accordance with Chapter 150B of the General Statutes as are necessary to carry out the provisions of this Article.
(5)	To file against the bond posted by a licensee for warranty repairs and service on behalf of a buyer.
"§ 143-143.11.  License required; application for license.
(a)	It shall be unlawful for any manufactured home manufacturer, dealer, salesperson, or set-up contractor to engage in business as such in this State without first obtaining a license from the Board, as provided in this Article.  The fact that a person is licensed by the Board as a set-up contractor or a dealer does not preempt any other licensing boards' applicable requirements for that person.
(b)	Application for the license shall be made to the Board at such time, in such form, and contain information the Board requires, and shall be accompanied by the fee established by the Board.  The fee shall not exceed three hundred dollars ($300.00) for any license.
(c)	In the application, the Board shall require information relating to the matters set forth in G.S. 143-143.13 as grounds for refusal of a license, and information relating to other pertinent matters consistent with safeguarding the public interest. All of this information shall be considered by the Board in determining the fitness of the applicant.
(d)	All licenses shall expire, unless revoked or suspended, on June 30 of each year following the date of issue.
(e)	Every licensee shall, on or before the first day of July of each year, obtain a renewal of a license for the next year, by application, accompanied by the required fee. Upon failure to renew, a license automatically expires. The license may be renewed at any time within one year upon payment of the renewal fee.
(f)	Supplemental licenses shall be issued for each place of business, operated or proposed to be operated by the licensee, that is not contiguous to other premises for which a license is issued.  The fee for a supplemental license shall be established by the Board and shall not exceed three hundred dollars ($300.00), provided that no supplemental license shall be required for a place of business operated by a licensee that is used exclusively for storage.
(g)	Notwithstanding the provisions of subsection (a), the Board may provide by rule that a manufactured home salesperson will be allowed to engage in business during the time period after making application for a license but before such license is granted.
(h)	As a prerequisite to obtaining a license under this Article, a person may be required to pass an examination prescribed by the Board that is based on the Code, this Article, and any other subject matter considered relevant by the Board.
"§ 143-143.11A.  Notification of change of address; service of notice.
(a)	Every applicant for a license shall inform the Board of the applicant's business address.  Every licensee shall give written notification to the Board of any change in the licensee's business address, for whatever reason, within 10 business days after the licensee moves to a new address or a change in the address takes place.  A violation of this subsection shall not constitute grounds for revocation, suspension, or non-renewal of a license or for the imposition of any other penalty by the Board.
(b)	Notwithstanding any other provision of law, whenever the Board is authorized or required to give notice to a licensee under this Article, the notice may be delivered personally to the licensee or sent by first-class mail to the licensee at the address provided to the Board under subsection (a) of this section. Notice shall be deemed given four days after mailing, and any Department employee may certify that notice has been given.
"§ 143-143.11B.  Continuing education.
(a)	The Board may establish programs and requirements of continuing education for licensees, but shall not require licensees to complete more than eight credit hours of continuing education.  Prior to the renewal of a license, a licensee shall present evidence to the Board that he or she has completed the required number of continuing education hours in courses approved by the Board during the two months immediately preceding the expiration of his or her license.
(b)	The Board may establish nonrefundable fees for the purpose of providing staff and resources to administer continuing education programs, and may establish nonrefundable course application fees, not to exceed one hundred fifty dollars ($150.00), for the Board's review and approval of proposed continuing education courses.  The Board may charge the sponsor of an approved course a nonrefundable fee not to exceed seventy-five dollars ($75.00) for the annual renewal of course approval.  The Board may also require a course sponsor to pay a fee, not to exceed five dollars ($5.00) per credit hour per licensee, for each licensee completing an approved continuing education course conducted by the sponsor.  The Board may award continuing education credit for a course that has not been approved by the Board or for related educational activity and may prescribe the procedures for a licensee to submit information on the course or related educational activity for continuing education credit.  The Board may charge the licensee a fee not to exceed fifty dollars ($50.00) for each course or activity submitted.
(c)	The Board may adopt any reasonable rules not inconsistent with this Article to give purpose and effect to the continuing education requirement, including rules that govern:
(1)	The content and subject matter of continuing education courses.
(2)	The criteria, standards, and procedures for the approval of courses, course sponsors, and course instructors.
(3)	The methods of instruction.
(4)	The computation of course credit.
(5)	The ability to carry forward course credit from one year to another.
(6)	The waiver of or variance from the continuing education requirement for hardship or other reasons.
(7)	The procedures for compliance and sanctions for noncompliance.
(d)	The license of any person who fails to comply with the continuing education requirements under this section shall lapse.  The Board may, for good cause shown, grant extensions of time to licensees to comply with these requirements.  Any licensee who, after obtaining an extension, offers evidence satisfactory to the Board that he or she has satisfactorily completed the required continuing education courses shall be deemed in compliance with this section.
(e)	A manufactured home manufacturer or manufacturer is exempt from the requirements of this section.
"§ 143-143.12.  Bond required.
(a)	A person licensed as a manufactured home salesperson shall not be required to furnish a bond, but each applicant approved by the Board for license as a manufacturer, dealer, or set-up contractor shall furnish a corporate surety bond, cash bond or fixed value equivalent in the following amounts:
(1)	For a manufacturer, two thousand dollars ($2,000) per manufactured home manufactured in the prior license year, up to a maximum of one hundred thousand dollars ($100,000). When no manufactured homes were produced in the prior year, the amount required shall be based on the estimated number of manufactured homes to be produced during the current year.
(2)	For a dealer who has four or less places of business, the amount shall be twenty-five thousand dollars ($25,000).
(3)	For a dealer who has more than four places of business, the amount shall be fifty thousand dollars ($50,000).
(4)	For a set-up contractor, the amount shall be five thousand dollars ($5,000).
(b)	A corporate surety bond shall be approved by the Board as to form and shall be conditioned upon the obligor faithfully conforming to and abiding by the provisions of this Article. A cash bond or fixed value equivalent shall be approved by the Board as to form and terms of deposits in order to secure the ultimate beneficiaries of the bond. A corporate surety bond shall be for a one-year period, and a new bond or a proper continuation certificate shall be delivered to the Board at the beginning of each subsequent one-year period.
(c)	Any buyer of a manufactured home who suffers any loss or damage by any act of a licensee that constitutes a violation of this Article may institute an action to recover against the licensee and the surety.
(d)	The Board may adopt rules to assure satisfaction of claims.
"§ 143-143.13.  Grounds for denying, suspending, or revoking licenses; civil penalties.
(a)	A license may be denied, suspended or revoked by the Board on any one or more of the following grounds:
(1)	Making a material misstatement in application for license.
(2)	Failing to post an adequate corporate surety bond, cash bond or fixed value equivalent.
(3)	Engaging in the business of manufactured home manufacturer, dealer, salesperson, or set-up contractor without first obtaining a license from the Board.
(4)	Failing to comply with the warranty service obligations and claims procedure established by this Article.
(5)	Failing to comply with the set-up requirements established by this Article.
(6)	Failing or refusing to account for or to pay over moneys or other valuables belonging to others that have come into licensee's possession arising out of the sale of manufactured homes.
(7)	Using unfair methods of competition or committing unfair or deceptive acts or practices.
(8)	Failing to comply with any provision of this Article.
(9)	Failing to appear for a hearing before the Board or for a prehearing conference with a person or persons designated by the Board after proper notice or failing to comply with orders of the Board issued pursuant to this Article.
(10)	Employing unlicensed salespersons.
(11)	Offering for sale manufactured homes manufactured or assembled by unlicensed manufacturers or selling manufactured homes to unlicensed dealers for sale to buyers in this State.
(12)	Conviction of a felony or any crime involving moral turpitude.
(13)	Having had a license revoked, suspended or denied by the Board; or having had a license revoked, suspended or denied by a similar entity in another state; or engaging in conduct in another state which conduct, if committed in this State, would have been a violation under this Article.
(14)	Employing or contracting with any person to perform setups who is not licensed by the Board as a set-up contractor.
(b)	Repealed by Session Laws 1985, c. 666, s. 38.
(c)	In addition to the authority to deny, suspend, or revoke a license under this Article, the Board may impose a civil penalty upon any person violating the provisions of this Article. Upon a finding by the Board of a violation of this Article, the Board shall order the payment of a penalty of not less than one hundred dollars ($100.00) nor more than five hundred dollars ($500.00).  In determining the amount of the penalty, the Board shall consider the degree and extent of harm caused by the violation, the amount of money that inured to the benefit of the violator as a result of the violation, whether the violation was committed willfully, and the prior record of the violator in complying or failing to comply with laws, rules, or orders applicable to the violator.  Each day during which a violation occurs shall constitute a separate offense.  The penalty shall be payable to the Board. The Board shall remit the clear proceeds of penalties provided for in this subsection to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.
Payment of the civil penalty under this section shall be in addition to payment of any other penalty for a violation of the criminal laws of this State.  Nothing in this subsection shall prevent the Board from negotiating a mutually acceptable agreement with any person as to the status of the person's license or certificate or as to any civil penalty.
"§ 143-143.14.  Hearings; rules.
(a)	License suspensions, revocations, and renewal refusals are subject to the provisions of Chapter 150B of the General Statutes.
(b)	If the Board finds that an applicant has not met the requirements for licensure, the Board shall refuse to issue the applicant a license and shall notify the applicant in writing of the denial and the grounds for the denial.  The application may also be denied for any reason for which a license may be suspended or revoked or not renewed under G.S. 143-143.13.  Within 30 days after receipt of a notification that an application for a license has been denied, the applicant may make a written request for a review by a member of the Department staff designated by the chair of the Board to determine the reasonableness of the Board's action. The review shall be completed without undue delay, and the applicant shall be notified promptly in writing as to the outcome of the review. Within 30 days after service of the notification as to the outcome, the applicant may make a written request for a hearing under Article 3A of Chapter 150B of the General Statutes if the applicant disagrees with the outcome.
(c)	The Board may adopt rules for hearings and prehearing conferences under this Article, and the rules may include provisions for prefiled evidence, the use of evidence, testimony of parties, prehearing statements, prehearing conference procedures, settlement conference procedures, discovery, subpoenas, sanctions, motions, intervention, consolidation of cases, continuances, and the rights and responsibilities of parties and witnesses.
"§ 143-143.15.   Set-up requirements. 
(a)	Manufactured homes shall be set up in accordance with the standards adopted by the Commissioner.
(b)	If a manufactured home is insured against damage caused by windstorm and subsequently sustains windstorm damage that indicates the manufactured home was not set up in the manner required by this section, the insurer issuing the insurance policy on the manufactured home shall not be relieved from meeting the obligations specified in the insurance policy with respect to such damage on the basis that the manufactured home was not properly set up.
"§ 143-143.16.  Warranties.
Each manufacturer, dealer and supplier of manufactured homes shall warrant each new manufactured home sold in this State in accordance with the warranty requirements prescribed by this section for a period of at least 12 months, measured from the date of delivery of the manufactured home to the buyer. The warranty requirements for each manufacturer, dealer, supplier and set-up contractor of manufactured homes are as follows:
(1)	The manufacturer warrants that all structural elements, plumbing systems, heating, cooling and fuel burning systems, electrical systems, and any other components included by the manufacturer are manufactured and installed free from substantial defects.
(2)	The dealer warrants:
a.	That any modifications or alterations made to the manufactured home by the dealer or authorized by the dealer are free from substantial defects. Alterations or modifications made by a dealer shall relieve the manufacturer of warranty responsibility as to the item altered or modified and any resulting damage.
b.	That a setup performed by the dealer on the manufactured home is performed in compliance with the Code.
c.	That the setup and transportation of the manufactured home by the dealer did not result in substantial defects.
(3)	The supplier warrants that any warranties generally offered in the ordinary sale of his product to consumers shall be extended to buyers of manufactured homes. The manufacturer's warranty shall remain in effect notwithstanding the existence of a supplier's warranty.
(4)	The set-up contractor warrants that the manufactured home is set up in compliance with the Code and that the setup did not result in any substantial defects.
"§ 143-143.17.  Presenting claims for warranties and substantial defects.
(a)	Whenever a claim for warranty service or about a substantial defect is made to a licensee, it shall be handled as provided in this Article. The licensee shall make a record of the name and address of each claimant and the date, substance, and disposition of each claim about a substantial defect. The licensee may request that a claim be in writing, but must nevertheless record it as provided above, and may not delay service pending receipt of the written claim.
(b)	When the licensee notified is not the responsible party, he shall in writing immediately notify the claimant and the responsible party of the claim. When a responsible party is asked to remedy defects, it may not fail to remedy those defects because another party may also be responsible. Nothing in this section prevents a party from obtaining compensation by way of contribution or subrogation from another responsible party in accordance with any other provision of law or contract.
(c)	Within the time limits provided in this Article, the licensee shall either resolve the claim or determine that it is not justified. At any time a licensee determines that a claim for warranty service is not justified in whole or in part he shall immediately notify the claimant in writing that the claim or part of the claim is rejected and why, and shall inform the claimant that he is entitled to complain to the Board, for which a complete mailing address shall be provided. 
"§ 143-143.18.  Warranty service.
(a)	When a service agreement exists between or among a manufacturer, dealer and supplier to provide warranty service, the agreement shall specify which party is to remedy warranty defects. Every service agreement shall be in writing. Nothing contained in such an agreement shall relieve the responsible party, as provided by this Article, of responsibility to perform warranty service. However, any licensee undertaking by such agreement to perform the warranty service obligations of another shall thereby himself become responsible both to that other licensee and to the buyer for his failure adequately to  perform as agreed.
(b)	When no service agreement exists for warranty service, the responsible party as designated by this Article is responsible for remedying the warranty defect.
(c)	A substantial defect shall be remedied within 45 days after the receipt of written notification from the claimant.  If no written notification is given, the defect shall be remedied within 45 days after the mailing of notification by the Board, unless the claim is unreasonable or bona fide reasons exist for not remedying the defect within the 45-day period. The responsible party shall respond to the claimant in writing with a copy to the Board stating its reasons for not promptly remedying the defect and stating what further action is contemplated by the responsible party. Notwithstanding the foregoing provisions of this subsection, defects, which constitute an imminent safety hazard to life and health shall be remedied within five working days of receipt of the written notification of the warranty claim. An imminent safety hazard to life and health shall include but not be limited to (i) inadequate heating in freezing weather; (ii) failure of sanitary facilities; (iii) electrical shock, leaking gas; or (iv) major structural failure. The Board may suspend this five-day time period in the event of widespread defects or damage resulting from adverse weather conditions or other natural catastrophes.
(d)	When the person remedying the defect is not the responsible party as designated by the provisions of this Article, he shall be entitled to reasonable compensation paid to him by the responsible party. Conduct that coerces or requires a nonresponsible party to perform warranty service is a violation of this Article.
(e)	Warranty service shall be performed at the site at which the manufactured home is initially delivered to the buyer, except for components which can be removed for service without substantial expense or inconvenience to the buyer.
(f)	Any dealer, manufacturer or supplier may complain to the Board when warranty service obligations under this Article are not being enforced.
"§ 143-143.19.  Dealer alterations.
(a)	No alteration or modification shall be made to a manufactured home by a dealer after shipment from the manufacturer's plant, unless such alteration or modification is authorized by this Article or the manufacturer. The dealer shall ensure that all authorized alterations and modifications are performed, if so required, by qualified persons as defined in subsection (d). An unauthorized alteration or modification performed by a dealer or his agent or employee shall place primary warranty responsibility for the altered or modified item upon the dealer. If the manufacturer fulfills or is required to fulfill the warranty on the altered or modified item, he shall be entitled to recover damages in the amount of his cost and attorney's fee from the dealer.
(b)	An unauthorized alteration or modification of a manufactured home by the owner or his agent shall relieve the manufacturer of responsibility to remedy defects caused by such alteration or modification. A statement to this effect, together with a warning specifying those alterations or modifications which should be performed only by qualified personnel in order to preserve warranty protection, shall be displayed clearly and conspicuously on the face of the warranty. Failure to display such statement shall result in warranty responsibility on the manufacturer.
(c)	The Board is authorized to adopt rules in accordance with Chapter 150B of the General Statutes that define the alterations or modifications which must be made by qualified personnel. The Board may require qualified personnel only for those alterations and modifications which could substantially impair the structural integrity or safety of the manufactured home.
(d)	In order to be designated as a person qualified to alter or modify a manufactured home, a person must comply with State licensing or competency requirements in skills relevant to performing alterations or modifications on manufactured homes.
"§ 143-143.20.  Disclosure of manner used in determining length of manufactured homes.
In any advertisement or other communication regarding the length of a manufactured home, a manufacturer or dealer shall not include the coupling mechanism in describing the length of the home.
"§ 143-143.21:  Repealed by Session Laws 1993, c. 409, s. 6, and applicable to purchase agreements executed on or after that date.
"§ 143-143.21A.  Purchase agreements; buyer cancellations.
(a)	A purchase agreement for a manufactured home shall include all of the following:
(1)	A description of the manufactured home and all accessories included in the purchase.
(2)	The purchase price for the home and all accessories.
(3)	The amount of deposit or other payment toward or payment of the purchase price of the manufactured home and accessories that is made by the buyer.
(4)	The date the retail purchase agreement is signed.
(5)	The estimated terms of financing the purchase, if any, including the estimated interest rate, number of years financed, and monthly payment.
(6)	The buyer's signature.
(7)	The dealer's signature.
(b)	The purchase agreement shall contain, in immediate proximity to the space reserved for the signature of the buyer and in at least ten point, all upper-case Gothic type, the following statement:
'I UNDERSTAND THAT I HAVE THE RIGHT TO CANCEL THIS PURCHASE BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE THAT I HAVE SIGNED THIS AGREEMENT.  I UNDERSTAND THAT THIS CANCELLATION MUST BE IN WRITING.  IF I CANCEL THE PURCHASE AFTER THE THREE-DAY PERIOD, I UNDERSTAND THAT THE DEALER MAY NOT HAVE ANY OBLIGATION TO 'GIVE ME BACK ALL OF THE MONEY THAT I PAID THE DEALER.'
(c)	At the time the deposit or other payment toward or payment for the purchase price is received by the dealer, the dealer shall give the buyer a copy of the purchase agreement and a completed form in duplicate, captioned 'Notice of Cancellation,' which shall be attached to the purchase agreement, be easily detachable, and explain the buyer's right to cancel the purchase and how that right can be exercised.
(d)	The dealer shall return the deposit or other payment toward or payment for the purchase price to the buyer if the buyer cancels the purchase before midnight of the third business day after the date the buyer signed the purchase agreement.  To make the cancellation effective, the buyer shall give the dealer written notice of the buyer's cancellation of the purchase.  The dealer shall return the deposit or other payment toward or payment for the purchase price to the buyer within 15 business days after receipt of the notice of cancellation.  For purposes of this section, 'business day' means any day except Sunday and legal holidays.
(e)	If the buyer cancels the purchase after the three-day cancellation period, but before the sale is completed, and if:
(1)	The manufactured home is in the dealer's inventory, the dealer may retain from the deposit or other payment received from the buyer actual damages up to a maximum of ten percent (10%) of the purchase price; or
(2)	The manufactured home is specially ordered from the manufacturer for the buyer, the dealer may retain actual damages up to the full amount of the buyer's deposit or other payment received from the buyer.
"§ 143-143.22.  Inspection of service records.
The Board may inspect the service records of a manufacturer, dealer, supplier or set-up contractor relating to a written warranty claim or complaint made to the Board against the manufacturer, dealer, supplier, or set-up contractor. Every licensee shall send to the Board upon request within 10 days a copy of every document or record pertinent to any complaint or claim for service.
"§ 143-143.23.  Other remedies not excluded.
Nothing in this Article, rules adopted by the Board, or any action of the Board shall limit any right or remedy available to the buyer or any power or duty of the Attorney General.
"§ 143-143.24.  Engaging in business without license a Class 1 misdemeanor.
If any person shall unlawfully act as a manufactured home manufacturer, dealer, salesperson, or set-up contractor without first obtaining a license from the Board, as provided in this Article, he shall be guilty of a Class 1 misdemeanor.
"§ 143-143.25.  Staff support for Board.
The Manufactured Building Division of the Department shall provide clerical and other staff services required by the Board; and shall administer and enforce all provisions of this Article and all rules adopted under this Article, subject to the direction of the Board; except for powers and duties delegated by this Article to local units of government, other State agencies, or to any persons."
Section 2.  Article 9B of Chapter 143 of the General Statutes reads as rewritten:
"ARTICLE 9B.
"Uniform Standards Code for Manufactured Homes. 
"§ 143-144.  Short title.
This Article shall be known and may be cited as 'The Uniform Standards for Manufactured Homes Act.'
"§ 143-145.  Definitions.
The following definitions apply in this Article:
cribed to them in this section:
…
(1)	
					
Act. – The National Manufactured Housing Construction and Safety Standards Act of 1974, 42 U.S.C. § 5401, et seq., federal regulations adopted under the Act, and any laws enacted by the United States Congress that supersede or supplement the Act.
(2)	Commissioner. – The Commissioner of Insurance of the State of North Carolina or an authorized designee of the Commissioner.
	(4)	HUD. – The United States Department of Housing and Urban Development or any successor agency.
(5)	Inspection department. – A North Carolina city or county building inspection department authorized by Chapter 160A or Chapter 153A of the General Statutes.
(6)	
			
Label. – The form of certification required by HUD to be permanently affixed to each transportable section of each manufactured home manufactured for sale to a purchaser in the United States to indicate that the manufactured home conforms to all applicable federal construction and safety standards.
(7)	Manufactured home. – A structure, transportable in one or more sections, which in the traveling mode is eight body feet or more in width, or 40 body feet or more in length, or, when erected on site, is 320 or more square feet; and which is built on a permanent chassis and designed to be used as a dwelling, with or without permanent foundation when connected to the required utilities, including the plumbing, heating, air conditioning and electrical systems contained therein.  'Manufactured home' includes any structure that meets all of the requirements of this subsection except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the Secretary of HUD and complies with the standards established under the Act.
For manufactured homes built before June 15, 1976, 'manufactured home' means a portable manufactured housing unit designed for transportation on its own chassis and placement on a temporary  or semipermanent foundation having a measurement of over 32 feet in length and over eight feet in width.  'Manufactured home' also means a double-wide manufactured home, which is two or more portable manufactured housing units designed for transportation on their own chassis that connect on site for placement on a temporary or semipermanent foundation having a measurement of over 32 feet in length and over eight feet in width.
	
"§ 143-146.  Statement of policy; rule-making power.
(a)	Manufactured homes, because of the manner of their construction, assembly and use and that of their systems, components and appliances (including heating, plumbing and electrical systems) like other finished products having concealed vital parts may present hazards to the health, life and safety of persons and to the safety of property unless properly manufactured. In the sale of manufactured homes, there is also the possibility of defects not readily ascertainable when inspected by purchasers. It is the policy and purpose of this State to provide protection to the public against those possible hazards, and for that purpose to forbid the manufacture and sale of new manufactured homes, which are not so constructed as to provide reasonable safety and protection to their owners and users.  This Article provides to the Commissioner all necessary authority to enable the State to obtain approval as a State Administrative Agency under the provisions of the Act.
			(e)	The Commissioner may adopt rules to carry out the provisions of the Act and this Article, including rules for consumer complaint procedures and rules for the enforcement of the standards and regulations established and adopted by HUD under the Act.
"§ 143-147.  Structures built under previous standards.

	
			
The legal status of any structure built before the effective date of the Act shall not be affected by any changes made in this Article by the General Assembly.
"§ 143-148.  Certain structures excluded from coverage.
The Commissioner may by rule provide for the exclusion of certain structures by certification in accordance with the Act.
"§ 143-149.  Necessity for obtaining label for purposes of sale.
No person shall sell or offer for sale any manufactured home in this State that does not have a label. It is a defense to any prosecution for a violation of this section if a person shows that a certificate of title for the manufactured home as required by G.S. 20-52 was obtained before June 15, 1976, or produces other satisfactory evidence on file with the North Carolina Division of Motor Vehicles that the manufactured home was manufactured before June 15, 1976.
"§ 143-150.  No electricity to be furnished units not in compliance.
It is unlawful for any person to furnish electricity for use in any manufactured home without first ascertaining that the manufactured home and its electrical supply has been inspected pursuant to G.S. 143-139 by the inspection authority having jurisdiction and found to comply with the requirements of the State Electrical Code.  The certificate of compliance issued by the inspection jurisdiction shall be accepted as evidence of compliance.
"§ 143-151.  Penalties.
(a)	Any person who is found by the Commissioner to have violated the provisions of the Act, this Article, or any rules adopted under this Article, shall be liable for a civil penalty not to exceed one thousand dollars ($1,000) for each violation.   Each violation shall constitute a separate violation for each manufactured home or for each failure or refusal to allow or perform an act required by the Act, this Article, or any rules adopted under this Article.  The maximum civil penalty may not exceed one million dollars ($1,000,000) for any related series of violations occurring within one year after the date of the first violation.  In determining the amount of the penalty, the Commissioner shall consider the degree and extent of harm caused by the violation, the amount of money that inured to the benefit of the violator as a result of the violation, whether the violation was willful, and the prior record of the violator in complying or failing to comply with laws, rules, or orders applicable to the violator.  The clear proceeds of civil penalties provided for in this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.
(b)	Any individual, or a director, officer or agent of a corporation who knowingly and willfully violates the Act, this Article, or any rules adopted under this Article in a manner that threatens the health or safety of any purchaser is guilty of a Class I felony.
"§ 143-151.1. Enforcement.
The Commissioner may initiate any appropriate action or proceeding to prevent, restrain, or correct any violation of the Act, this Article, or any rules adopted under this Article. The Commissioner, or any of his deputies or employees, upon showing proper credentials and in the discharge of their duties under this Article, or the Act, is authorized at reasonable hours and without advance notice to enter and inspect all factories, warehouses, or establishments in this State in which manufactured homes are manufactured, stored or held for sale.
"§ 143-151.2.  Fees.
(a)	The Commissioner shall establish a monitoring inspection fee in an amount required by the Secretary of HUD. This monitoring inspection fee shall be an amount paid by each manufactured home manufacturer in this State for each manufactured home produced by the manufacturer in this State.
(b)	The monitoring inspection fee shall be paid by the manufacturer to the Secretary of HUD or the Secretary's agent.
"§ 143-151.3.  Reports.
Each manufacturer, distributor, and dealer of manufactured homes shall establish and maintain such records, make such reports, and provide such information as the Commissioner or the Secretary of HUD may reasonably require to be able to determine whether the manufacturer, distributor, or dealer has acted or is acting in compliance with this Article, or the Act and shall, upon request of a person designated by the Commissioner or the Secretary of HUD, permit the person to inspect appropriate books, papers, records and documents relevant to determining whether the manufacturer, distributor, or dealer has acted or is acting in compliance with this Article or the Act, and any rules adopted by the Commissioner under this Article.
"§ 143-151.4.  Notification of defects and correction procedures.
Every manufacturer of manufactured homes shall provide for notification and correction procedures in any manufactured home produced by the manufacturer in accordance with the Act, this Article, and any rules adopted by the Commissioner.
"§ 143-151.5.  Prohibited acts.
(a)	No person shall:
(1)	Manufacture for sale, lease, sell, offer for sale or lease, or  introduce or deliver, or import into the United States, any manufactured home that is manufactured on or after the effective date of any applicable manufactured home construction and safety standard under the Act or this Article and that does not comply with the standard, except as provided in subsections (b), (c), and (d) of this section.
(2)	Fail or refuse to permit access to or copying of records, or fail to make reports or provide information, or fail or refuse to permit entry or inspection, as required under the Act or this Article.
(3)	Fail to furnish notification of any defect as required by the Act or this Article.
(4)	Fail to issue a label or issue a label if the person in the exercise of due care has reason to know that the label is false or misleading in a material respect.
(5)	Fail to comply with a rule adopted or an order issued by the Commissioner under this Article.
(6)	Issue a certification pursuant to G.S. 143-148 if the person in the exercise of due care has reason to know that the certification is false or misleading in a material respect.
(b)	(1)	Subdivision (a)(1) of this section does  not apply to the sale, the offer for sale, or the introduction or delivery of any manufactured home after the first purchase of it in good faith for purposes other than resale.
(2)	Subdivision (a)(1) of this section does not apply to any person who establishes that he did not have reason to know in the exercise of due care that the manufactured home was not in conformity with applicable manufactured home construction and safety standards. 
(c)	Subdivision (a)(1) of this section shall not apply to any person who, before the first purchase, holds a certificate of compliance issued by the manufacturer or importer of the manufactured home to the effect that the manufactured home conforms to all applicable manufactured home construction and safety standards, unless the person knows that the manufactured home does not so conform.
"§§ 143-151.6, 143-151.7: Reserved for future codification purposes."
Section 3.  Article 9D of Chapter 143 of the General Statutes is repealed.
Section 4.  G.S. 58-2-55 reads as rewritten:
"§ 58-2-55.  Designated hearing officers.
In any contested case under this Chapter or Article 9A or Article 9B of Chapter 143 of the General Statutes, the Commissioner may designate a member of his staff to serve as a hearing officer.  When the Commissioner is unable or elects not to hear a contested case and elects not to designate a hearing officer to hear a contested case, he shall apply to the director of the Office of Administrative Hearings for the designation of an administrative law judge to preside at the hearing of a contested case.  Upon receipt of the application, the Director shall, without undue delay, assign an administrative law judge to hear the case."
Section 5.  Structures built before the effective date of the Act shall not be affected by any changes made in this Article.
Section 6.  G.S. 143-143.21A, as amended in Section 1 of this act, becomes effective January 1, 2000.  The remainder of this act is effective when it becomes law.
In the General Assembly read three times and ratified this the 15th day of July, 1999.

s/	Dennis A. Wicker
President of the Senate

s/	James B. Black
Speaker of the House of Representatives

s/	James B. Hunt, Jr.
Governor

Approved 10:20 p.m. this 4th day of August, 1999