I 
108TH CONGRESS 
1ST SESSION H. R. 1268
To amend the Toxic Substances Control Act, the Internal Revenue Code 
of 1986, and the Public Buildings Act of 1959 to protect human health 
from toxic mold, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 13, 2003
Mr. CONYERS introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committees on 
Financial Services, Ways and Means, and the Judiciary, for a period to 
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend the Toxic Substances Control Act, the Internal 
Revenue Code of 1986, and the Public Buildings Act 
of 1959 to protect human health from toxic mold, and 
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘United States Toxic Mold Safety and Protection Act of 
2003’’ or the ‘‘Melina Bill’’.
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
TITLE I—RESEARCH AND PUBLIC EDUCATION 
Sec. 101. Definitions. 
Sec. 102. Health effects study and report. 
Sec. 103. Standards for preventing, detecting and remediating indoor mold 
growth. 
Sec. 104. Public education program. 
TITLE II—HOUSING AND REAL PROPERTY PROVISIONS 
Sec. 201. Inspection of residential property. 
Sec. 202. Sale or lease of residential property. 
Sec. 203. Inspection requirements for existing public housing. 
Sec. 204. Construction requirements for new public housing. 
Sec. 205. Building codes. 
Sec. 206. Inspection requirement in connection with federally made or insured 
mortgages. 
TITLE III—INDUSTRY STANDARDS DEVELOPMENT 
Sec. 301. Industry Standards Development. 
TITLE IV—INDOOR MOLD HAZARD ASSISTANCE 
Sec. 401. Grants for remediation of public buildings. 
TITLE V—TAX PROVISIONS 
Sec. 501. Tax credit for toxic mold inspection and remediation. 
TITLE VI—NATIONAL TOXIC MOLD HAZARD INSURANCE 
PROGRAM 
Subtitle A—Insurance Program 
Sec. 601. Program authority. 
Sec. 602. Scope of program and priorities. 
Sec. 603. Nature and limitation of insurance coverage. 
Sec. 604. Estimates of premium rates. 
Sec. 605. Establishment of chargeable premium rates. 
Sec. 606. National toxic mold hazard insurance fund. 
Sec. 607. Operating costs and allowances. 
Sec. 608. Payment of claims. 
Sec. 609. Dissemination of insurance information. 
Sec. 610. Coordination with other programs. 
Sec. 611. Reports. 
Subtitle B—Organization and Administration of Insurance Program 
Sec. 621. Implementation. 
PART 1—INDUSTRY PROGRAM WITH FEDERAL FINANCIAL ASSISTANCE
Sec. 631. Industry insurance pool. 
Sec. 632. Agreements with insurance pool. 
Sec. 633. Adjustment and payment of claims and judicial review. 
Sec. 634. Premium equalization payments. 
Sec. 635. Emergency implementation of program. 
PART 2—GOVERNMENT PROGRAM WITH INDUSTRY ASSISTANCE 
Sec. 641. Federal operation of program. 
Sec. 642. Adjustment and payment of claims and judicial review. 
PART 3—PROVISIONS OF GENERAL APPLICABILITY 
Sec. 651. Services by insurance industry. 
Sec. 652. Use of insurance pool, companies, or other private organizations for 
certain payments. 
Sec. 653. Settlement and arbitration. 
Sec. 654. Records and audits. 
Subtitle C—Miscellaneous Provisions 
Sec. 661. Definitions. 
Sec. 662. Payments. 
Sec. 663. Government corporation control act. 
Sec. 664. Finality of certain transactions. 
Sec. 665. Authorization of appropriations. 
TITLE VII—HEALTH CARE PROVISIONS 
Sec. 701. Medicaid waiver.
TITLE I—RESEARCH AND 
PUBLIC EDUCATION 
SEC. 101. DEFINITIONS. 
For purposes of this Act—
(1) the term ‘‘mold’’ means any furry growth of 
minute fungi occurring in moist conditions; 
(2) the term ‘‘toxic mold’’ means any indoor 
mold growth capable of creating toxins that can 
cause pulmonary, respiratory, neurological or other 
major illnesses after minimal exposure, as such ex-
posure is defined by the Environmental Protection 
Agency, Center for Disease Control, National Insti-
tute of Health or other Federal, State or local agen-
cy organized in part to study and/or protect human 
health; 
(3) the term ‘‘toxic mold risk assessor’’ means 
a person who establishes the level of risk to public 
health associated with toxic mold; and 
(4) the term ‘‘mold inspection’’ means an in-
spection of real property that is designed to discover 
indoor mold growth, toxic mold growth, conditions 
that facilitate indoor mold growth and/or indicia of 
conditions that are likely to facilitate indoor mold 
growth. 
SEC. 102. RESEARCH AND REPORTING. 
(a) The Centers for Disease Control and Prevention, 
the Environmental Protection Agency, and the National 
Institutes of Health shall jointly undertake a comprehen-
sive study of the health effects of indoor mold growth and 
toxic mold. The results of the aforementioned study shall 
be submitted to the Congress, the President and the gen-
eral public. The study should ascertain among other 
things—
(1) detailed information about harmful and/or 
toxic strains of mold; 
(2) methods of detecting harmful and/or toxic 
mold;
(3) potential dangers of prolonged exposure to 
indoor mold growth; 
(4) minimum levels of exposure at which indoor 
mold growth is harmful to human health; and 
(5) the hazards involved in mold remediation. 
(b) The Department of Housing and Urban Develop-
ment shall study and report the impact of construction 
standards on indoor mold growth. 
(c) All research and study conducted pursuant to this 
Act shall be ongoing with updated reports published as 
needed to adequately inform the public and protect human 
health. 
SEC. 103. STANDARDS FOR PREVENTING, DETECTING, AND 
REMEDIATING INDOOR MOLD GROWTH. 
(a) After appropriate research and study as required 
by this Act, but not later than one year after the effective 
date of this Act, the Environmental Protection Agency, 
in conjunction with appropriate Federal agencies, shall 
promulgate national standards that include, among other 
things—
(1) standards for mold inspection, mold remedi-
ation, testing the toxicity of mold, and protection of 
mold remediators; 
(2) standards for certification of mold inspec-
tors, mold remediators, mold testing labs, mold risk
assessors and industrial hygienist involved with mold 
remediation planning; and
(3) standards for the design, installation, and 
maintenance of air ventilation and/or air-condi-
tioning systems to prevent mold growth or creation 
of conditions that foster mold growth. 
(b) After appropriate research and study as required 
by this Act, but not later than one year after the effective 
date of this Act, the Department of Housing and Urban 
Development shall promulgate guidelines identifying con-
ditions created prior to and during construction that facili-
tate the growth of indoor mold and recommending appro-
priate means of eliminating those conditions. 
(c) To the maximum extent possible, the standards, 
guidelines and recommendations established under this 
section shall be developed with the assistance of organiza-
tions involved in establishing national building construc-
tion standards representatives of State or local authorities 
responsible for building inspections and issuance of certifi-
cates of occupancy. 
(d) The Environmental Protection Agency and the 
Department of Housing and Urban Development shall 
make drafts of their respective documents available for 
public review and comment 30 days prior to publication. 
The Environmental Protection Agency and the Depart-
ment of Housing and Urban Development shall make final 
model standards and techniques available to the public no 
later than one year after the effective date of this Act. 
(e) The Environmental Protection Agency shall take 
such actions as may be necessary to inform appropriate 
State and local government agencies and authorities of the 
model standards and techniques with the goal of ensuring 
that such agencies and authorities adopt such standards 
and techniques by June 1, 2004. 
(f) All standards and guidelines promulgated pursu-
ant to this Act shall be updated and published as needed 
to adequately inform the public and protect human health. 
SEC. 104. PUBLIC EDUCATION. 
(a) The Environmental Protection Agency, the Cen-
ters for Disease Control and Prevention, the National In-
stitutes of Health, and the Department of Housing and 
Urban Development, and other relevant agencies shall 
sponsor public education programs to promote and in-
crease public awareness of the dangers of indoor mold 
growth or toxic mold. 
(b) The public education programs should include, 
among other things, information regarding the conditions 
that facilitate indoor mold growth; guidelines for remedi-
ating indoor mold growth; dangers of exposure to indoor 
mold growth in public buildings; risk assessment and in-
spection methods for toxic mold; and other necessary in-
formation as determined by—
(1) the public education programs shall provide 
education and information through modes of com-
munication that are commonly utilized and able to 
be easily consumed by relevant individuals or organi-
zations; 
(2) public education programs should be de-
signed to reach health professionals; the general 
public; homeowners, prospective homeowners, land-
lords, and tenants; consumers of home improvement 
products; the real estate industry; the home con-
struction and renovation industry, including the 
heating and air conditioning industry; and other in-
dividuals and organizations with an interest in the 
use and/or occupancy of real property. 
(c) Notwithstanding the foregoing, the Environ-
mental Protection Agency, in consultation with appro-
priate agencies, shall publish, and periodically revise, a 
pamphlet regarding indoor mold hazards. Among other 
things this pamphlet should—
(1) contain information regarding the health 
risks associated with exposure to indoor mold 
growth;
(2) provide information on the hazards of in-
door mold growth in federally assisted and federally 
owned housing; 
(3) describe the risks of mold exposure for per-
sons residing in a dwelling with toxic mold; 
(4) provide information on approved methods 
for evaluating and reducing mold growth and their 
effectiveness in identifying, reducing, eliminating, or 
preventing mold growth; 
(5) advise persons how to obtain a list of per-
sons certified to inspect or remediate mold growth in 
the area in which the pamphlet is to be used; 
(6) state that a risk assessment or inspection 
for mold growth is recommended prior to the pur-
chase, lease, or renovation of target housing; 
(7) state that certain State and local laws im-
pose additional requirements related to mold growth 
in housing and provide a listing of Federal, State, 
and local agencies in each State, including address 
and telephone number, that can provide information 
about applicable laws and available governmental 
and private assistance and financing; and 
(8) provide information deemed appropriate 
and/or necessary to promote awareness of the haz-
ards posed by indoor mold.
(d) There is authorized to be appropriated such sums 
as may be necessary to carry out this section. 
TITLE II—HOUSING PROVISIONS 
FOR INDOOR MOLD HAZARD 
PREVENTION 
AND 
DETEC-
TION 
SEC. 201. INSPECTIONS OF RESIDENTIAL PROPERTY. 
Beginning with the calendar year 2004, the lessor of 
each unit of rental property shall conduct an annual in-
spection of such property in accordance with the model 
standards and techniques set forth in section 103 and 
shall promptly notify the occupants of such property of 
the results of such inspection. 
SEC. 202. SALE OR LEASE OF RESIDENTIAL PROPERTY. 
(a) Not later than 2 years after the date of enactment 
of this Act, the Secretary of Housing and Urban Develop-
ment and the Administrator of the Environmental Protec-
tion Agency shall promulgate regulations under this sec-
tion for the disclosure of mold hazards in housing which 
is offered for sale or lease. 
(b) The regulations shall require that, before the sale 
or lease of real property a mold inspection be conducted 
by a State-certified mold inspector and, within a reason-
able time prior to the effective date of the purchase or 
lease, the seller or lessor shall clearly and accurately dis-
close to the purchaser or lessee the results of the inspec-
tion required under this subsection.
(c) Regulations promulgated under this section shall 
provide that every contract for the sale or lease of any 
interest in housing shall contain a statement signed by 
both the seller or lessor and by the purchaser or lessee 
that acknowledges the result of the mold inspection re-
quired by subsection (b). 
(d)(1) Any person who knowingly misrepresents the 
results of a mold inspection or causes the results of a mold 
inspection to be inaccurate shall be subject to civil money 
penalties in accordance with the provisions of section 102 
of the Department of Housing and Urban Development 
Reform Act of 1989 (42 U.S.C. 3545). 
(2) Any person who knowingly violates the provisions 
of this section shall be jointly and severally liable to the 
purchaser or lessee in an amount equal to 3 times the 
amount of damages incurred by such individual. 
(3) In any civil action brought for damages, the ap-
propriate court may award court costs to the party com-
mencing such action, together with reasonable attorney 
fees and any expert witness fees, if that party prevails. 
(e) The regulations under this section shall take ef-
fect 3 years after the date of the enactment of this Act.
(6) such other measures as the Secretary deems 
appropriate. 
(c) TRANSITIONAL TESTING AND ABATEMENT.—
(1) PUBLIC HOUSING RECEIVING CAPITAL FUND 
ASSISTANCE.—The inspection required under this 
section for public housing assisted with amounts 
from the Capital Fund under section 9(d) of the 
United States Housing Act of 1937 (42 U.S.C. 
1437g(d)) shall be conducted with respect to—
(A) a random sample of dwellings and 
common areas in all public housing projects as-
sisted under such section; and 
(B) each dwelling in any public housing 
project in which there is a dwelling determined 
under subparagraph (A) to have indoor mold 
hazards. 
(2) INSPECTION.—The Secretary shall require 
the inspection of all housing subject to this sub-
section in accordance with the modernization sched-
ule. A public housing agency may elect to test for in-
door mold hazards and may elect to abate such haz-
ards under standards more stringent than those es-
tablished under this section by the Secretary, and 
such abatement shall qualify for assistance from the 
Capital Fund. The Secretary shall require abatement
of indoor mold hazards in housing in which the test 
results equal or exceed the standard established 
under this Act. Final inspection and certification 
after abatement shall be made by a certified mold 
inspector, industrial hygienist, or local public health 
official. 
(d) SCHEDULE.—Three years after the date of enact-
ment of this Act, the Secretary shall require the inspection 
of all housing subject to this section for mold. The Sec-
retary may prioritize, within such period, inspections on 
the basis of vacancy, age of housing, or projected mod-
ernization or rehabilitation. The Secretary shall require 
abatement and final inspection and certification of such 
housing. 
(e) REPORT.—Not later than three and one-half 
years after the enactment of this Act, the Secretary shall 
submit a report to the Congress describing the results of 
the activities under this section. 
(f) FUNDING.—The Secretary shall use amounts 
available under the Capital Fund under section 9(d) of 
the United States Housing Act of 1937 to carry out this 
section. The Secretary shall submit annually to the Con-
gress an estimate of the funds required to carry out the 
provisions of this section.
SEC. 204. CONSTRUCTION REQUIREMENTS FOR NEW PUB-
LIC HOUSING. 
The Secretary of Housing and Urban Development 
shall take such actions and impose such standards and 
conditions as may be necessary or appropriate to ensure 
that public housing constructed after the date of the 
issuance of the model construction standards and tech-
niques established under section 103, is constructed in ac-
cordance with such model standards and techniques. 
SEC. 205. BUILDING CODES. 
(a) IN GENERAL.—The Secretary of Housing and 
Urban Development shall develop model construction 
standards and techniques for preventing and controlling 
mold within new buildings. 
(b) CONTENTS.—The model standards and tech-
niques shall provide for geographic differences in construc-
tion types and materials, geology, weather, and other vari-
ables that may affect mold levels in new buildings. 
(c) DEVELOPMENT AND PUBLICATION.—To the max-
imum extent possible, these standards and techniques 
should be developed with the assistance of organizations 
involved in establishing national building construction 
standards and techniques. The Secretary shall make a 
draft of the document containing the model standards and 
techniques available for public review and comment. The 
Secretary shall make final model standards and techniques
available to the public no later than one year after the 
effective date of this Act. 
SEC. 206. INSPECTION REQUIREMENT IN CONNECTION 
WITH FEDERALLY MADE OR INSURED MORT-
GAGES. 
(a) IN GENERAL.—After December 31, 2003, no 
Federal agency (as such term is defined in section 551 
of title 5, United States Code) may make, insure, or guar-
antee a mortgage or loan for purchase or lease of residen-
tial real property unless—
(1) there has been an inspection of the property 
for the presence of indoor mold growth, toxic mold 
and/or the conditions that facilitate indoor mold 
growth hazards by a mold inspector certified in ac-
cordance with standards promulgated pursuant to 
this Act within a reasonable time prior to the mak-
ing, insuring, or guaranteeing of the mortgage or 
loan and the results of the inspection are clearly and 
accurately disclosed to the purchaser, seller and 
mortgagor; and 
(2) the contract for purchase and sale of an in-
terest in residential real property for which such 
mortgage or loan was made contains a statement 
signed by the seller or lessor and by the purchaser 
or lessee that paragraph (1) has been complied with.
(b) REGULATIONS.—The heads of each of the agen-
cies that make, insure, or guarantee mortgages or loans 
for purchase or lease of residential real property shall, not 
later than September 30, 2003, issue such regulations as 
may be necessary to carry out this section. 
TITLE III—INDUSTRY 
STANDARDS DEVELOPMENT 
SEC. 301. INDUSTRY STANDARDS DEFELOVPMENT. 
(a) DEFINITIONS.—Section 2 of the National Cooper-
ative Research and Production Act of 1993 (15 U.S.C. 
4301) is amended—
(1) in subsection (a) by adding at the end the 
following: 
‘‘(7) The term ‘standards development activity’ 
means any action taken by a standards development 
organization for the purpose of developing, promul-
gating, revising, amending, reissuing, interpreting, 
or otherwise maintaining a voluntary consensus 
standard for building products that are designed to 
retard the development of mold or the storage of 
those products or using such standard in conformity 
assessment activities. 
‘‘(8) The term ‘standards development organi-
zation’ has the same meaning as the terms ‘vol-
untary consensus standards body’ and ‘voluntary,
private sector consensus standards body’ as such 
term are used in section 12(d) of the National Tech-
nology Transfer and Advancement Act of 1995 and 
in Circular Number A–119, as revised February 10, 
1998, of the Office of Management and Budget. 
‘‘(9) The term ‘technical standard’’ has the 
meaning given such term in section 12(d)(4) of the 
National Technology Transfer and Advancement Act 
of 1995. 
‘‘(10) The term ‘voluntary consensus standard’ 
has the meaning given such term in Circular Num-
ber A–119, as revised February 10, 1998, of the Of-
fice of Management and Budget.’’; and 
(2) by adding at the end the following: 
‘‘(c) The term ‘standards development activity’ ex-
cludes the following activities: 
‘‘(1) Exchanging information among competi-
tors relating to cost, sales, profitability, prices, mar-
keting, or distribution of any product, process, or 
service that is not reasonably required for the pur-
pose of developing or promulgating a voluntary con-
sensus standard, or using such standard in con-
formity assessment activities.
‘‘(2) Entering into any agreement or engaging 
in any other conduct that would allocate a market 
with a competitor. 
‘‘(3) Entering into any agreement or conspiracy 
that would set or restrain prices of any good or serv-
ice.’’. 
(b) RULE OF REASON STANDARD.—Section 3 of the 
National Cooperative Research and Production Act of 
1993 (15 U.S.C. 4302) is amended by striking ‘‘of any 
person in making or performing a contract to carry out 
a joint venture shall’’ and inserting the following: 
‘‘of—
‘‘(1) any person in making or performing a con-
tract to carry out a joint venture, or 
‘‘(2) a standards development organization 
while engaged in a standards development activity, 
including a standards development activity for build-
ing products that are designed to retard the develop-
ment of mold or the storage of those products 
shall’’. 
(c) LIMITATION ON RECOVERY.—Section 4 of the 
National Cooperative Research and Production Act of 
1993 (15 U.S.C. 4303) is amended—
(1) in subsections (a)(1), (b)(1), and (c)(1) by 
inserting ‘‘, for a standards development activity en-
gaged in by standards development organization 
against which such claim is made’’ after ‘‘joint ven-
ture’’, and 
(2) in subsection (e)—
(A) by inserting ‘‘, or of a standards devel-
opment activity engaged in by a standards de-
velopment organization’’ before the period at 
the end, and 
(B) by redesignating such subsection as 
subsection (f), and 
(3) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) Subsections (a), (b), and (c) shall not be con-
strued to modify the liability under the antitrust laws of 
any person (other than a standards development organiza-
tion) who—
‘‘(1) directly (or through an employee or agent) 
participates in a standards development activity with 
respect to which a violation of any of the antitrust 
laws is found, 
‘‘(2) is not a fulltime employee of the standards 
development organization that engaged in such ac-
tivity, and 
‘‘(3) is, or is an employee or agent of a person 
who is, engaged in a line of commerce that is likely
to benefit directly from the operation of the stand-
ards development activity with respect to which such 
violation is found.’’. 
(d) ATTORNEY FEES.—Section 5 of the National Co-
operative Research and Production Act of 1993 (15 
U.S.C. 4304) is amended—
(1) in subsection (a) by inserting ‘‘, or of a 
standards development activity engaged in by a 
standards development organization (including an 
organization developing standards for building prod-
ucts that are designed to retard the development of 
mold or the storage of those products)’’ after ‘‘joint 
venture’’, and 
(2) by adding at the end the following: 
‘‘(c) Subsections (a) and (b) shall not apply with re-
spect to any person who—
‘‘(1) directly participates in a standards devel-
opment activity (including developing standards for 
building products that are designed to retard the de-
velopment of mold or the storage of those products) 
with respect to which a violation of any of the anti-
trust laws is found, 
‘‘(2) is not a fulltime employee of a standards 
development organization (including an organization 
developing standards for building products that are
designed to retard the development of mold or the 
storage of those products) that engaged in such ac-
tivity, and 
‘‘(3) is, or is an employee or agent of a person 
who is, engaged in a line of commerce that is likely 
to benefit directly from the operation of the stand-
ards development activity with respect to which such 
violation is found.’’. 
(e) DISCLOSURE OF STANDARDS DEVELOPMENT AC-
TIVITY.—Section 6 of the National Cooperative Research 
and Production Act of 1993 (15 U.S.C. 4305) is amend-
ed—
(1) in subsection (a)—
(A) by redesignating paragraphs (1), (2), 
and (3) as subparagraphs (A), (B), and (C), re-
spectively, 
(B) by inserting ‘‘(1)’’ after ‘‘(a)’’, and 
(C) by adding at the end the following: 
‘‘(2) A standards development organization (includ-
ing an organization developing standards for building 
products that are designed to retard the development of 
mold or the storage of those products) may, not later than 
90 days after commencing a standards development activ-
ity engaged in for the purpose of developing or promul-
gating a voluntary consensus standards or not later than
90 days after the date of the enactment of the Standards 
Development Organization Advancement Act of 2002, 
whichever is later, file simultaneously with the Attorney 
General and the Commission, a written notification dis-
closing—
‘‘(A) the name and principal place of business 
of the standards development organization, and 
‘‘(B) documents showing the nature and scope 
of such activity. 
Any standards development organization (including an or-
ganization developing standards for building products that 
are designed to retard the development of mold or the 
storage of those products) may file additional disclosure 
notifications pursuant to this section as are appropriate 
to extend the protections of section 4 to standards develop-
ment activities that are not covered by the initial filing 
or that have changed significantly since the initial filing.’’, 
(2) in subsection (b)—
(A) in the 1st sentence by inserting ‘‘, or 
a notice with respect to such standards develop-
ment activity that identifies the standards de-
velopment organization engaged in such activity 
and that describes such activity in general 
terms’’ before the period at the end, and
(B) in the last sentence by inserting ‘‘or 
available to such organization, as the case may 
be’’ before the period, 
(3) in subsection (d)(2) by inserting ‘‘, or the 
standards development activity,’’ after ‘‘venture’’, 
(4) in subsection (e)—
(A) by striking ‘‘person who’’ and inserting 
‘‘person or standards development organization 
that’’, and 
(B) by inserting ‘‘or any standards devel-
opment organization (including an organization 
developing standards for building products that 
are designed to retard the development of mold 
or the storage of those products)’’ after ‘‘per-
son’’ the last place it appears, and 
(5) in subsection (g)(1) by inserting ‘‘or stand-
ards development organization (including an organi-
zation developing standards for building products 
that are designed to retard the development of mold 
or the storage of those products)’’ after ‘‘person’’.
TITLE IV—INDOOR MOLD 
HAZARD ASSISTANCE 
SEC. 401. GRANTS FOR REMEDIATION OF PUBLIC BUILD-
INGS AND SEVERELY IMPACTED HOMES. 
The Administrator of the Environmental Protection 
Agency shall make grants available to State and local gov-
ernments to cover—
(1) costs associated with remediating mold 
growth in buildings owned or leased by such govern-
ments, including but not limited to schools and mul-
tifamily dwellings; and 
(2) the costs of temporary housing, food, and 
moving costs for periods not in excess of 6 months 
for individuals severely impacted by toxic mold in 
their residences who are without insurance coverage 
for toxic mold and who do not have financial re-
sources to obtain alternative housing, as determined 
on a case by case basis by the State or local govern-
ment. 
TITLE V—TAX PROVISIONS 
SEC. 501. TAX CREDIT FOR TOXIC MOLD INSPECTION AND 
REMEDIATION. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new 
section:
‘‘SEC. 30B. CREDIT FOR MOLD INSPECTION AND REMEDI-
ATION. 
‘‘(a) GENERAL RULE.—There shall be allowed as a 
credit against the tax imposed by this chapter for the tax-
able year an amount equal to 60 percent of mold inspec-
tion and remediation expenses paid or incurred by the tax-
payer during such taxable year. 
‘‘(b) LIMITATION.—The amount of the credit allowed 
under subsection (a) for any taxable year shall not exceed 
$50,000. 
‘‘(c) MOLD INSPECTION
AND REMEDIATION EX-
PENSES.—For purposes of this section, the term ‘mold in-
spection and remediation expenses’ means expenses paid 
or incurred by the taxpayer (and not reimbursed by insur-
ance or otherwise) to carry out—
‘‘(1) a risk assessment or inspection of housing 
for the presence of indoor mold hazards under sec-
tion 202 of the United States Toxic Mold Safety and 
Protection Act, 
‘‘(2) a risk assessment or inspection of any 
other building for the presence of mold (as defined 
in section 101(2) of the United States Toxic Mold 
Safety and Protection Act), or
‘‘(3) a remediation of mold growth in housing 
or any other building. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 
or credit under any other provision of this chapter shall 
be allowed with respect to mold inspection and remedi-
ation expenses taken into account for the credit under this 
section. 
‘‘(e) CERTAIN RULES MADE APPLICABLE.—All per-
sons treated as one employer under subsection (a) or (b) 
of section 52 shall be treated as 1 taxpayer for purposes 
of this section. 
‘‘(f) APPLICATION WITH OTHER CREDITS.—The 
credit allowed by subsection (a) for any taxable year shall 
not exceed the excess (if any) of—
‘‘(A) the regular tax for the taxable year, 
reduced by the sum of the credits allowable 
under subpart A and the preceding sections of 
this subpart, over 
‘‘(B) the tentative minimum tax for the 
taxable year.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following:
‘‘Sec. 30B. Credit for mold inspection and remediation.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2003. 
TITLE 
VI—NATIONAL 
TOXIC 
MOLD 
HAZARD 
INSURANCE 
PROGRAM 
Subtitle A—Insurance Program 
SEC. 601. PROGRAM AUTHORITY. 
(a) IN GENERAL.—The Director of the Federal 
Emergency Management Agency shall establish and carry 
out a national toxic mold insurance program to enable in-
terested persons to purchase insurance against losses re-
sulting from mold hazards in real properties located in the 
United States. 
(b) PARTICIPATION.—In carrying out the toxic mold 
hazard insurance program under this title, the Director 
shall, to the maximum extent practicable, encourage and 
arrange for—
(1) appropriate financial participation and risk 
sharing in the program by insurance companies and 
other insurers; and 
(2) other appropriate participation on other 
than a risk-sharing basis, by insurance companies 
and other insurers, insurance agents and brokers,
and insurance adjustment organizations, in accord-
ance with the provisions of subtitle B. 
SEC. 602. SCOPE OF PROGRAM AND PRIORITIES. 
(a) PRIORITY OF PROGRAM SCOPE.—In carrying out 
the toxic mold hazard insurance program, the Director 
shall afford a priority to making toxic mold hazard insur-
ance available to cover residential properties which are de-
signed for the occupancy of from one to four families. 
(b) ADDITIONAL SCOPE.—If, pursuant to studies and 
investigations pursuant to section 604 or such other infor-
mation as the Director considers appropriate, the Director 
determines that it would be feasible to extend the insur-
ance program under this title to cover other properties, 
the Director may take such action under this title as may 
be necessary to make insurance available to cover, on such 
basis as may be feasible, any types and classes of—
(1) other residential properties; 
(2) church properties, and business properties 
which are owned or leased and operated by small 
business concerns; 
(3) other business properties; 
(4) properties occupied by private nonprofit or-
ganizations; and 
(5) properties owned by State and local govern-
ments and agencies thereof;
and any such extensions of the program to any types and 
classes of these properties shall from time to time be pre-
scribed in regulations. 
SEC. 603. NATURE AND LIMITATION OF INSURANCE COV-
ERAGE. 
The Director shall from time to time, after consulta-
tion with interested parties (including the insurance au-
thorities of the States), provide by regulation for general 
terms and conditions of insurability which shall be applica-
ble to properties eligible for toxic mold hazard insurance 
coverage under section 602, including— 
(1) the types, classes, and locations of any such 
properties which shall be eligible for such insurance; 
(2) the nature and limits of loss or damage that 
may be covered by such insurance, which shall in-
clude costs of property damage and loss, remedi-
ation, relocation (during remediation or perma-
nently), and rental of an alternative dwelling during 
remediation; 
(3) the classification, limitation, and rejection 
of any risks that may be appropriate; 
(4) appropriate minimum premiums; 
(5) appropriate loss-deductibles;
(6) appropriate limits on aggregate liability 
under such coverage, based on the type of property 
insured; and 
(7) any other terms and conditions relating to 
insurance coverage or exclusion which may be nec-
essary to carry out the purposes of this title.
SEC. 604. ESTIMATES OF PREMIUM RATES. 
The Director shall undertake and carry out such 
studies and investigations and receive or exchange such 
information as may be necessary to estimate, and shall 
from time to time estimate the following premium rates 
for toxic mold hazard insurance coverage under this title: 
(1) ACTUARIAL
RATES.—The risk premium 
rates that would be required to make such insurance 
available on an actuarial basis for any types and 
classes of properties for which insurance coverage is 
available under section 602 and which—
(A) are based on consideration of the risk 
involved and accepted actuarial principles; 
(B) include the applicable operating costs 
and allowances set forth in the schedules pre-
scribed under section 607 and reflected in such 
rates; and
(C) include any administrative expenses of 
carrying out the insurance program under this 
title. 
(2) SUBSIDIZED
RATES.—The risk premium 
rates that—
(A) are less than the rates estimated under 
paragraph (1); 
(B) would be reasonable; 
(C) would encourage prospective insureds 
to purchase toxic mold hazard insurance cov-
erage; 
(D) would be consistent with the purposes 
of this title; and 
(E) include any administrative expenses in-
curred in carrying out the insurance program 
under this title. 
SEC. 605. ESTABLISHMENT OF CHARGEABLE PREMIUM 
RATES. 
(a) IN GENERAL.—On the basis of estimates made 
under section 604 and such other information as may be 
necessary, the Director shall from time to time, after con-
sultation with the interested parties (including the insur-
ance authorities of the States), prescribe by regulation—
(1) chargeable premium rates for any types and 
classes of properties for which insurance coverage
shall be available under section 602 (at less than the 
estimated risk premium rates under section 604(1), 
where necessary), and 
(2) the terms and conditions under which, and 
the areas within which, such rates shall apply. 
(b) FACTORS.—Such rates shall, insofar as prac-
ticable, be—
(1) based on a consideration of the respective 
risks involved, including differences in risks due to 
construction types and materials, building systems, 
geology, climate, and other factors that may affect 
mold levels in buildings; 
(2)(A) adequate, on the basis of accepted actu-
arial principles, to provide reserves for anticipated 
losses; or 
(B) if less than such amount consistent with 
the objective of making toxic mold hazard insurance 
coverage available where necessary at reasonable 
rates so as to encourage prospective insureds to pur-
chase such insurance and with the purposes of this 
title; 
(3) adequate to provide for any administrative 
expenses of the insurance programs under this title; 
and
(4) stated so as to reflect the basis for such 
rates, including the differences (if any) between the 
estimated actuarial risk premium rates under section 
604(1) and the estimated subsidized risk premium 
rates under section 604(2). 
(c) FULL ACTUARIAL RATES FOR COMMUNITIES NOT 
IN COMPLIANCE WITH BUILDING INSPECTION, CERTIFI-
CATE OF OCCUPANCY, AND PUBLIC DISCLOSURE PROVI-
SIONS.—Subject only to the limitation under subsection 
(d), the chargeable rate with respect to any property that 
is located within a jurisdiction that the Director deter-
mines has not adopted adequate toxic mold control meas-
ures, with effective enforcement provisions, that the Direc-
tor determines are consistent with the model standards 
and techniques for inspection and certification of occu-
pancy issued under section 201 and with the model stand-
ards for public disclosure issued under section 202, shall 
not be less than the applicable estimated risk premium 
rate for such area (or subdivision thereof) under section 
604(1), except that such premium rate for such properties 
shall be affordable and reasonably priced. 
(d) 
ANNUAL
LIMITATION
ON
PREMIUM
IN-
CREASES.—Notwithstanding any other provision of this 
title, the chargeable risk premium rates for toxic mold 
hazard insurance under this title for any properties within
any single risk classification may not be increased by an 
amount that would result in the average of such rate in-
creases for properties within the risk classification during 
any 12-month period exceeding 10 percent of the average 
of the risk premium rates for properties within the risk 
classification upon the commencement of such 12-month 
period. 
(e) $200 MAXIMUM PREMIUM FOR SINGLE FAMILY 
DWELLINGS.—The chargeable risk premium rate for toxic 
mold hazard insurance under this title for a single family 
dwelling shall be affordable and reasonably priced. 
SEC. 606. NATIONAL TOXIC MOLD HAZARD INSURANCE 
FUND. 
(a) ESTABLISHMENT AND USES.—To carry out the 
toxic mold hazard insurance program under this title, the 
Director shall establish in the Treasury of the United 
States a National Toxic Mold Hazard Insurance Fund, 
which shall be an account separate from any other ac-
counts or funds available to the Director and shall be 
available as described in subsection (f), without fiscal year 
limitation (except as otherwise provided in this section)—
(1) for making such payments as may, from 
time to time, be required under section 634;
(2) to repay to the Secretary of the Treasury 
such sums as may be borrowed (together with inter-
est) pursuant to subsection (e); 
(3) to the extent approved in appropriation 
Acts, to pay any administrative expenses of the toxic 
mold hazard insurance program; and 
(4) for the purposes specified in subsection (d) 
under the conditions provided therein. 
(b) CREDITS.—The Fund shall be credited with—
(1) any amounts borrowed under subsection (e); 
(2) any amounts as may be appropriated for 
the Fund; 
(3) interest which may be earned on invest-
ments of the Fund pursuant to subsection (c); 
(4) receipts from any other operations under 
this title (including premiums under the conditions 
specified in subsection (d)); and 
(5) such other amounts as may be credited to 
the Fund. 
(c) INVESTMENT.—If the Director determines that 
the amounts in the Fund are in excess of current needs, 
the Director may request the investment of such amounts 
as the Director deems advisable by the Secretary of the 
Treasury in obligations issued or guaranteed by the 
United States.
(d) FEDERAL OPERATION
OF PROGRAM.—In the 
event the Director makes a determination under section 
641 that operation of the toxic mold hazard insurance pro-
gram, in whole or in part, should be carried out through 
the facilities of the Federal Government, the Fund shall 
be available for all purposes incident thereto, including—
(1) costs incurred in the adjustment and pay-
ment of any claims for losses, and 
(2) payment of applicable operating costs set 
forth in the schedules prescribed under section 607, 
for so long as the program is so carried out, and in such 
event any premiums paid shall be deposited by the Direc-
tor to the credit of the Fund. 
(e) BORROWING.—
(1) AUTHORITY.—To the extent that the 
amounts in the Fund are insufficient to pay claims 
and expenses under the toxic mold hazard insurance 
program, the Director may issue such obligations of 
the Fund as may be necessary to cover the insuffi-
ciency and the Secretary of the Treasury shall pur-
chase any such obligations issued. 
(2) PUBLIC DEBT TRANSACTION.—For the pur-
pose of purchasing any such obligations, the Sec-
retary may use as a public debt transaction the pro-
ceeds from the sale of any securities issued under
chapter 31 of title 31, United States Code, and the 
purposes for which securities are issued under such 
chapter are hereby extended to include any purchase 
by the Secretary of such obligations under this sub-
section. 
(3) CHARACTERISTICS OF OBLIGATIONS.—Obli-
gations issued under this subsection shall be in such 
forms and denominations, bear such maturities, bear 
interest at such rate, and be subject to such other 
terms and conditions, as the Secretary shall deter-
mine. 
(4) TREATMENT.—All redemptions, purchases, 
and sales by the Secretary of obligations under this 
subsection shall be treated as public debt trans-
actions of the United States. 
(f) AVAILABILITY.—The Fund shall be available, with 
respect to any fiscal year only to the extent approved in 
appropriation Acts; except that the Fund shall be available 
for the purpose described in subsection (d)(1) without 
such approval. 
SEC. 607. OPERATING COSTS AND ALLOWANCES. 
(a) IN GENERAL.—The Director shall from time to 
time negotiate with appropriate representatives of the in-
surance industry for the purpose of establishing—
(1) a current schedule of operating costs appli-
cable both to risk-sharing insurance companies and 
other insurers and to insurance companies and other 
insurers, insurance agents and brokers, and insur-
ance adjustment organizations participating on other 
than a risk-sharing basis, and 
(2) a current schedule of operating allowances 
applicable to risk-sharing insurance companies and 
other insurers, 
which may be payable in accordance with the provisions 
of subtitle B, and such schedules shall from time to time 
be prescribed in regulations. 
(b) DEFINITIONS.—For purposes of subsection (a), 
the following definitions shall apply: 
(1) OPERATING ALLOWANCES.—The term ‘‘op-
erating allowances’’ includes amounts for profit and 
contingencies that the Director determines are rea-
sonable and necessary to carry out the purposes of 
this title. 
(2) OPERATING COSTS.—The term ‘‘operating 
costs’’ includes—
(A) expense reimbursements covering the 
direct, actual, and necessary expenses incurred 
in connection with selling and servicing toxic 
mold hazard insurance coverage;
(B) reasonable compensation payable for 
selling and servicing such coverage, or commis-
sions or service fees paid to producers; 
(C) loss adjustment expenses; and 
(D) other direct, actual, and necessary ex-
penses which the Director finds are incurred in 
connection with selling or servicing such insur-
ance coverage. 
SEC. 608. PAYMENT OF CLAIMS. 
The Director shall prescribe regulations establishing 
the general method or methods by which proved and ap-
proved claims for losses may be adjusted and paid for any 
losses or damages covered by toxic mold hazard insurance 
made available under this title. 
SEC. 609. DISSEMINATION OF INSURANCE INFORMATION. 
The Director shall from time to time take such action 
as may be necessary in order to make information avail-
able to the public, and to any State or local agency or 
official, with regard to—
(1) the toxic mold hazard insurance program, 
its coverage, and objectives; and 
(2) estimated and chargeable insurance pre-
mium rates under the program, including the basis 
for and differences between such rates in accordance 
with the provisions of this subtitle.
SEC. 610. COORDINATION WITH OTHER PROGRAMS. 
In carrying out this title, the Director shall consult 
with other departments and agencies of the Federal Gov-
ernment, and with interstate, State, and local agencies 
having responsibilities for toxic mold inspection and pre-
vention, in order to ensure that the programs of such 
agencies and the program under this title are mutually 
consistent.
SEC. 611. REPORTS. 
The Director shall annually submit a report of oper-
ations under this title to the Congress. 
Subtitle B—Organization and Ad-
ministration of Insurance Pro-
gram 
SEC. 621. IMPLEMENTATION. 
Following such consultation with representatives of 
the insurance industry as may be necessary, the Director 
shall implement the toxic mold hazard insurance program 
under subtitle A in accordance with the provisions of part 
1 of this subtitle, and, if a determination is made by the 
Director under section 641, under part 2 of this subtitle. 
PART 1—INDUSTRY PROGRAM WITH 
FEDERAL FINANCIAL ASSISTANCE 
SEC. 631. INDUSTRY INSURANCE POOL. 
(a) FORMATION.—The Director may encourage and 
otherwise assist any insurance companies and other insur-
ers that meet the requirements prescribed under sub-
section (b) to form, as associate, or otherwise join together 
in a pool—
(1) in order to provide the insurance coverage 
authorized under subtitle A; and 
(2) for the purpose of assuming, on such terms 
and conditions as may be agreed upon, such finan-
cial responsibility as will enable such companies and 
other insurers, with the Federal financial and other 
assistance available under this title, to assure a rea-
sonable proportion of responsibility for the adjust-
ment and payment of claims for losses under the 
toxic mold hazard insurance program. 
(b) REQUIREMENTS.—To promote the effective ad-
ministration of the toxic mold hazard insurance program 
under this part, and to ensure that the objectives of this 
title are furthered, the Director may prescribe appropriate 
requirements for insurance companies and other insurers 
participating in such pool, including minimum require-
ments for capital or surplus or assets. 
SEC. 632. AGREEMENTS WITH INSURANCE POOL. 
(a) AUTHORITY.—The Director may enter into such 
agreements with the pool formed or otherwise created 
under this part as the Director deems necessary to carry 
out the purposes of this title.
(b) CONTENTS.—Such agreements shall specify—
(1) the terms and conditions under which risk 
capital will be available for the adjustment and pay-
ments of claims; 
(2) the terms and conditions under which the 
pool (and the companies and other insurers partici-
pating therein) shall participate in premiums re-
ceived and profits or losses realized or sustained; 
(3) the maximum amount of profit, established 
by the Director and set forth in the schedules pre-
scribed under section 607, which may be realized by 
such pool (and the companies and other insurers 
participating therein); 
(4) the terms and conditions under which oper-
ating costs and allowances set forth in the schedules 
prescribed under section 607 may be paid; and 
(5) the terms and conditions under which pre-
mium equalization payments under section 634 will 
be made. 
(c) PARTICIPATION.—In addition, such agreements 
shall contain such provisions as the Director finds nec-
essary to ensure that—
(1) no insurance company or other insurer that 
meets the requirements prescribed under section 
631(b) and has indicated an intention to participate
in the toxic mold hazard insurance program on a 
risk-sharing basis, will be excluded from partici-
pating in the pool; 
(2) the insurance companies and other insurers 
participating in the pool will take whatever action 
may be necessary to provide continuity of toxic mold 
hazard insurance coverage by the pool; and 
(3) any insurance companies and other insur-
ers, insurance agents, and brokers and insurance ad-
justment organizations will be permitted to cooper-
ate with the pool as fiscal agents or otherwise, on 
other than a risk-sharing basis, to the maximum ex-
tent practicable. 
SEC. 633. ADJUSTMENT AND PAYMENT OF CLAIMS AND JU-
DICIAL REVIEW. 
The insurance companies and other insurers that 
form, associate, or otherwise join together in the pool 
under this part may adjust and pay all claims for proved 
and approved losses covered by toxic mold hazard insur-
ance in accordance with the provisions of this title and, 
upon the disallowance by any such company or other in-
surer of any such claim, or upon the refusal of the claim-
ant to accept the amount allowed upon any such claim, 
the claimant, within one year after the date of mailing 
of notice of disallowance or partial disallowance of the
claim, may institute an action on such claim against such 
company or other insurer in the United States district 
court for the district in which the insured property or the 
major part thereof shall have been situated, and original 
exclusive jurisdiction is hereby conferred upon such court 
to hear and determine such action without regard to the 
amount in controversy. 
SEC. 634. PREMIUM EQUALIZATION PAYMENTS. 
(a) PAYMENTS.—The Director, on such terms and 
conditions as the Director may from time to time pre-
scribe, shall make periodic payments to the pool formed 
or otherwise created under section 631, in recognition of 
such reductions in chargeable premium rates under section 
605 below estimated premium rates under section 604(1) 
as are required in order to make toxic mold hazard insur-
ance available on reasonable terms and conditions. 
(b) PERIODS AND METHODS.—Designated periods 
under this section and the methods for determining the 
sum of premiums paid or payable during such periods 
shall be established by the Director. 
SEC. 635. EMERGENCY IMPLEMENTATION OF PROGRAM. 
(a) AUTHORITY.—Notwithstanding any other provi-
sions of this title, for the purpose of providing toxic mold 
hazard insurance coverage at the earliest possible time, 
the Director may carry out the insurance program under
subtitle A during the period ending September 30, 2004, 
in accordance with the provisions of this part and the 
other provisions of this title insofar as they relate to this 
part, but subject to the modifications made by or under 
subsection (b). 
(b) PREMIUM RATES AND PROCEDURES.—In car-
rying out the toxic mold hazard insurance program pursu-
ant to subsection (a), the Director—
(1) shall provide insurance coverage without re-
gard to any estimated risk premium rates which 
would otherwise be determined under section 604; 
and 
(2) shall utilize the provisions and procedures 
contained in or prescribed by this part (other than 
section 634) and sections 651 and 652 to such ex-
tent and in such manner as the Director may con-
sider necessary or appropriate to carry out the pur-
pose of this section. 
PART 2—GOVERNMENT PROGRAM WITH 
INDUSTRY ASSISTANCE 
SEC. 641. FEDERAL OPERATION OF PROGRAM. 
(a) AUTHORITY.—If at any time, after consultation 
with representatives of the insurance industry, the Direc-
tor determines that operation of the toxic mold hazard in-
surance program as provided under part 1 cannot be car-
ried out, or that such operation, in itself, would be assisted 
materially by the Federal Government’s assumption, in 
whole or in part, of the operational responsibility for toxic 
mold insurance under this title (on a temporary or other 
basis), the Director shall promptly undertake any nec-
essary arrangements to carry out the program of toxic 
mold hazard insurance under subtitle A through the facili-
ties of the Federal Government, utilizing, for purposes of 
providing such insurance coverage—
(1) insurance companies and other insurers, in-
surance agents and brokers, and insurance adjust-
ment organizations, as fiscal agents of the United 
States; 
(2) such other officers and employees of any ex-
ecutive agency (as defined in section 105 of title 5 
of the United States Code) as the Director and the 
head of any such agency may from time to time, 
agree upon, on a reimbursement or other basis; or 
(3) both the alternatives specified in paragraphs 
(1) and (2). 
(b) REPORT.—Upon making the determination re-
ferred to in subsection (a), the Director shall make a re-
port to the Congress and, at the same time, to the private 
insurance companies participating in the toxic mold haz-
ard insurance program under this title. Such report 
shall—
(1) state the reason for such determinations; 
(2) include findings that support such deter-
mination; 
(3) indicate the extent to which it is anticipated 
that the insurance industry will be utilized in pro-
viding toxic mold hazard insurance coverage under 
the program; and 
(4) contain such recommendations as the Direc-
tor considers appropriate. 
The Director shall not implement the program of toxic 
mold hazard insurance under subtitle A through the facili-
ties of the Federal Government before the expiration of 
the 9-month period beginning upon the date of submission 
of the report under this subsection unless it would be im-
possible to continue to effectively carry out the program 
operations during such period. 
SEC. 642. ADJUSTMENT AND PAYMENT OF CLAIMS AND JU-
DICIAL REVIEW. 
If the program is carried out as provided in section 
1341, the Director may adjust and make payment of any 
claims for proved and approved losses covered by toxic 
mold hazard insurance, and upon the disallowance by the 
Director of any such claims, or upon the refusal of the
claimant to accept the amount allowed upon any such 
claim, the claimant, within one year after the date of mail-
ing of notice of disallowance or partial disallowance by the 
Director, may institute an action against the Director on 
such claim in the United States district court for the dis-
trict in which the insured property or the major part 
thereof shall have been situated, and original exclusive ju-
risdiction is hereby conferred upon such court to hear and 
determine such action without regard to the amount in 
controversy. 
PART 3—PROVISIONS OF GENERAL 
APPLICABILITY 
SEC. 651. SERVICES BY INSURANCE INDUSTRY. 
(a) CONTRACTS
AND
AGREEMENTS.—In admin-
istering the toxic mold hazard insurance program under 
this subtitle, the Director may enter into any contracts, 
agreements, or other appropriate arrangements which 
may, from time to time, be necessary for the purpose of 
utilizing, on such terms and conditions as may be agreed 
upon, the facilities and services of any insurance compa-
nies or other insurers, insurance agents and brokers, or 
insurance adjustment organizations; and such contracts, 
agreements, or arrangements may include provision for 
payment of applicable operating costs and allowances for
such facilities and services as set forth in the schedules 
prescribed under section 607. 
(b) EXEMPTION FROM COMPETITIVE BIDDING RE-
QUIREMENTS.—Any such contracts, agreements, or other 
arrangements may be entered into without regard to the 
provisions of section 3709 of the Revised Statutes (41 
U.S.C. 5) or any other provisions of law requiring competi-
tive bidding and without regard to the provisions of the 
Federal Advisory Committee Act (5 U.S.C. App.). 
(c) LIABILITY.—The Director of the Federal Emer-
gency Management Agency shall hold any agent or broker 
selling or undertaking to sell toxic mold insurance cov-
erage under this title harmless from any judgment for 
damages against such agent or broker as a result of any 
court action by a policyholder or applicant arising out of 
an error or omission on the part of the Federal Emergency 
Management Agency, and shall provide any such agent or 
broker with indemnification, including court costs and rea-
sonable attorney fees, arising out of and caused by an 
error or omission on the part of the Federal Emergency 
Management Agency and its contractors. The Director of 
the Federal Emergency Management Agency may not hold 
harmless or indemnify an agent or broker for his or her 
error or omission.
SEC. 652. USE OF INSURANCE POOL, COMPANIES, OR 
OTHER PRIVATE ORGANIZATIONS FOR CER-
TAIN PAYMENTS. 
(a) AUTHORITY.—To provide for maximum efficiency 
in the administration of the toxic mold hazard insurance 
program and to facilitate the expeditious payment of any 
Federal funds under such program, the Director may 
enter into contracts with a pool formed or otherwise cre-
ated under section 631, or any insurance company or 
other private organization, for the purpose of securing per-
formance by such pool, company, or organization or any 
or all of the following responsibilities: 
(1) Estimating and later determining any 
amounts of payments to be made. 
(2) Receiving from the Director, disbursing, 
and accounting for funds in making such payments. 
(3) Making such audits of the records of any 
insurance company or other insurer, insurance agent 
or broker, or insurance adjustment organization as 
may be necessary to assure that proper payments 
are made. 
(4) Otherwise assisting in such manner as the 
contract may provide to further the purposes of this 
title. 
(b) TERMS AND CONDITIONS.—Any contract with the 
pool or an insurance company or other private organiza-
tion under this section may contain such terms and condi-
tions at the Director finds necessary or appropriate for 
carrying out responsibilities under subsection (a), and may 
provide for payment of any costs which the Director deter-
mines are incidental to carrying out such responsibilities 
which are covered by the contract. 
(c) EXEMPTION FROM COMPETITIVE BIDDING RE-
QUIREMENTS.—Any contract entered into under sub-
section (a) may be entered into without regard to section 
3709 of the Revised Statutes (41 U.S.C. 5) or any other 
provision of law requiring competitive bidding. 
(d) EFFICIENCY AND EFFECTIVENESS.—No contract 
may be entered into under this section unless the Director 
finds that the pool, company, or organization will perform 
its obligations under the contract efficiently and effec-
tively, and will meet such requirements as to financial re-
sponsibility, legal authority, and other matters as the Di-
rector finds appropriate. 
(e) CERTIFICATION OF PAYMENTS.—
(1) BONDING.—Any such contract may require 
the pool, company, or organization or any of its offi-
cers or employees certifying payments or disbursing 
funds pursuant to the contract, or otherwise partici-
pating in carrying out the contract, to give surety
bond to the United States in such amount as the Di-
rector may deem appropriate. 
(2) LIABILITY.—
(A) No individual designated pursuant to a 
contract under this section to certify payments 
shall, in the absence of gross negligence or in-
tent to defraud the United States, be liable with 
respect to any payment certified by such indi-
vidual under this section. 
(B) No officer disbursing funds shall in 
the absence of gross negligence or intent to de-
fraud the United States, be liable with respect 
to any payment by such officer under this sec-
tion if it was based upon a voucher signed by 
an individual designated to certify payments as 
provided in paragraph (2) of this subsection. 
(f) CONTRACT TERM.—Any contract entered into 
under this section shall be for a term of one year, and 
may be made automatically renewable from term to term 
in the absence of notice by either party of an intention 
to terminate at the end of the current term; except that 
the Director may terminate any such contract at any time 
(after reasonable notice to the pool, company, or organiza-
tion involved) if the Director finds that the pool, company, 
or organization has failed substantially to carry out the
contract, or is carrying out the contract in a manner in-
consistent with the efficient and effective administration 
of the toxic mold hazard insurance program under this 
title. 
SEC. 653. SETTLEMENT AND ARBITRATION. 
(a) AUTHORITY.—The Director may make final set-
tlement of any claims or demands which may arise as a 
result of any financial transactions that the Director is 
authorized to carry out under this subtitle, and may, to 
assist the Director in making any such settlement, refer 
any disputes relating to such claims or demands to arbi-
tration, with the consent of the parties concerned. 
(b) ARBITRATION.—Such arbitration shall be advi-
sory in nature, and any award, decision, or recommenda-
tion which may be made shall become final only upon the 
approval of the Director. 
SEC. 654. RECORDS AND AUDITS. 
(a) MAINTENANCE
OF RECORDS.—The insurance 
pool formed or otherwise created under part 1 of this sub-
title, and any insurance company or other private organi-
zation executing any contract, agreement, or other appro-
priate arrangement with the Director under part 2 or this 
part, shall keep such records as the Director shall pre-
scribe, including records which fully disclose the total costs
of the program undertaken or the services being rendered, 
and such other records as will facilitate an effective audit. 
(b) ACCESS TO RECORDS.—The Director and the 
Comptroller General of the United States, or any of their 
duly authorized representatives, shall have access for the 
purpose of audit and examination to any books, docu-
ments, papers and any such insurance company or other
private organization that are pertinent to the costs of the 
program undertaken or the services being rendered. 
Subtitle C—Miscellaneous 
Provisions 
SEC. 661. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Emergency Management 
Agency. 
(2) FUND.—The term ‘‘Fund’’ means the Na-
tional Toxic Mold Hazard Insurance Fund estab-
lished under section 606. 
(3) INSURANCE ADJUSTMENT ORGANIZATION.—
The term ‘‘insurance adjustment organization’’ in-
cludes any organizations and persons engaged in the 
business of adjusting loss claims arising under insur-
ance policies issued by any insurance company or 
other insurer. 
(4) INSURANCE COMPANY; OTHER INSURER; IN-
SURANCE AGENT OR BROKER.—The terms ‘‘insur-
ance company’’, ‘‘other insurer’’ and ‘‘insurance 
agent or broker’’ include any organizations and per-
sons authorized to engage in the insurance business 
under the laws of any State. 
SEC. 662. PAYMENTS. 
Any payments under this title may be made (after 
necessary adjustment on account of previously made un-
derpayments or overpayments) in advance or by way of 
reimbursement, and in such installments and on such con-
ditions, as the Director may determine. 
SEC. 663. GOVERNMENT CORPORATION CONTROL ACT. 
The provisions of chapter 91 of title 31, United 
States Code, shall apply to the program under this title 
to the same extent that such provisions apply to wholly 
owned Government corporations. 
SEC. 664. FINALITY OF CERTAIN TRANSACTIONS. 
Notwithstanding any other provisions of law—
(1) any financial transaction authorized to be 
carried out under this title, and