My local guy a very knowledgeable  class 2 mfr and class 3 dealer with lots of cool toys said the romainan AK's were not legal with folding stocks.  Is this correct??  Where do I find specific legal reference?   Is it just if it's a non US part?  

He is correct if.... the Romanian rifle has more than 10 imported parts. A Romanian AK rifle has 15 imported parts. If it has only 10 imported parts and 5 US made parts a folding stock is legal to add to it.
www.access.gpo.gov/nara/cfr/waisidx_02/27cfr178_02.html
For the law check 178.39

Is that any 5 U.S. made parts or do they have to make up a certain percentage or the firearm?

Any 5 parts can be US made parts as there in no percentage but the acutal number of imported parts allowed(10).
The list of parts of a imported rifle is
(1) Frames, receivers, receiver castings, forgings or
         stampings
         (2) Barrels
         (3) Barrel extensions
         (4) Mounting blocks (trunions)
         (5) Muzzle attachments
         (6) Bolts
         (7) Bolt carriers
         (8) Operating rods
         (9) Gas pistons
         (10) Trigger housings
         (11) Triggers
         (12) Hammers
         (13) Sears
         (14) Disconnectors
         (15) Buttstocks
         (16) Pistol grips
         (17) Forearm handguards
         (18) Magazine bodies
         (19) Followers
         (20) Floorplates

A stamped reciever AK rifle doesn't have parts 3,5,8,10,or 14. So it only has 15 of the 20 listed parts.
A milled receiver AK rifle doesn't have parts 3,4,5,8,10,or 14. So it only has 14 of the 20 listed parts.  
If a muzzle nut is welded on the barrel it is not considered a muzzle device.  

+1

Thanks for the info!

The simple answer is this:

The SAR-2 uses Romanian furniture; swapping a Romanian wood stock for a Romanian folding stock does not change the parts count or legality of the configuration.

Quoted: The simple answer is this: The SAR-2 uses Romanian furniture; swapping a Romanian wood stock for a Romanian folding stock does not change the parts count or legality of the configuration.

So does this mean that if I add a side folding Romainian stock to my 02 SAR2 Romy it is legal?

R....

Yes Ma'am.. You can add a Romy folder with no problem...

Jicky is correct, put that sucker on!!  

Quoted: The simple answer is this: The SAR-2 uses Romanian furniture; swapping a Romanian wood stock for a Romanian folding stock does not change the parts count or legality of the configuration.

Yep......he is correct.

Swap it out and fold 'till you heart's content

I was actually concerned for my SAR-1 I have a Tapco side folder and dont want BATFE parking a bradley on top of my pickup as they seize my rifle.  

How do you like the TAPCO?

The fact that it folds might make some worry that it is illegal... Maybe that is what the gunshop owner was worried about...? For me it is still hard to believe that the ban is over and I still feel a little worried about putting a folding stock on... Even though I know I can.

Sounds like the shop owner was full of shit up to his ears.

Quoted: Sounds like the shop owner was full of shit up to his ears.

Sadly, he's not the only one.

Had the same thing happen to me when trying to trade one off at a gun show Sept 17th...

"Oh, that's contr-ban and would jeapordize my FFL".

I'm sure the next time I run into this particular dealer he'll be eating crow.

Sly