I
107TH CONGRESS
2D SESSION
H. R. 5040
To combat toxic mold, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 27, 2002
Mr. CONYERS (for himself, Mrs. JONES of Ohio, Mr. HONDA, Mr. GORDON,
Mr. WYNN, Ms. KILPATRICK, Mr. HILLIARD, Ms. DELAURO, Mr. WAX-
MAN, Ms. WOOLSEY, Mr. GUTIERREZ, Mr. LIPINSKI, Mr. UNDERWOOD,
Ms. MCCOLLUM, Ms. LEE, Mr. LANTOS, Mr. FROST, and Mr. BONIOR)
introduced the following bill; which was referred to the Committee on En-
ergy and Commerce, and in addition to the Committees on Financial
Services, Ways and Means, and the Judiciary, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To combat 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
2002’’ 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 and Control, the Envi-
ronmental Protection Agency, and the National Institutes
of Health shall jointly undertake a comprehensive 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 general 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 during construction that facilitate the
growth of indoor mold growth 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
(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 educations 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 hazards
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).
(b)(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.
SEC. 203. INSPECTION REQUIREMENTS FOR EXISTING PUB-
LIC HOUSING.
(a) IN GENERAL.—The Secretary of Housing and
Urban Development shall establish procedures to eliminate
as far as practicable the hazards of indoor mold with re-
spect to any existing public housing which may present
such hazards, in accordance with this section. Such proce-
dures shall provide for appropriate measures to conduct
risk assessments, inspections, interim controls, and abate-
ment of indoor mold hazards.
(b) PROCEDURES.—At a minimum, such procedures
shall require—
(1) the provision of indoor mold hazard infor-
mation pamphlets to tenants;
(2) periodic risk assessments and interim con-
trols in accordance with a schedule determined by
the Secretary;
(3) mold inspections;
(4) abatement of indoor mold hazards identi-
fied;
(5) where risk assessment, inspection, or reduc-
tion activities have been undertaken, the provision of
notice to occupants describing the nature and scope
of such activities and the actual risk assessment or
inspection reports; and
(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.
(d) INSPECTION.—The Secretary shall require the in-
spection of all housing subject to this paragraph in accord-
ance with the modernization schedule. A public housing
agency may elect to test for indoor mold hazards and may
elect to abate such hazards under standards more strin-
gent than those established under this section by the Sec-
retary, and such abatement shall qualify for assistance
from the Capital Fund. The Secretary shall require abate-
ment 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 hy-
gienist, or local public health official.
(e) OTHER PUBLIC HOUSING.—
(1) REQUIRED
INSPECTION.—The Secretary
shall require the inspection under this section for—
(A) a random sample of dwellings and
common areas in all public housing that is not
subject to paragraph (1); 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) SCHEDULE.—The Secretary shall require
the inspection of all housing subject to this para-
graph before the June 1, 2004. The Secretary may
prioritize, within such period, inspections on the
basis of vacancy, age of housing, or projected mod-
ernization or rehabilitation. The Secretary shall re-
quire abatement and final inspection and certifi-
cation of such housing in accordance with the last
two sentences of paragraph (1).
(f) REPORT.—Not later than September 1, 2004, the
Secretary shall submit a report to the Congress describing
the results of the activities under this section.
(g) 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 DEVELOPMENT.
(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
amended—
(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
disclosing—
‘‘(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
The Administrator of the Environmental Protection
Agency shall make grants available to State and local gov-
ernments to cover cost associated with remediating mold
growth in buildings owned or leased by such governments,
including but not limited to schools and multifamily dwell-
ings.
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, 2002.
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; and
(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
may not in any case exceed $200 per year (a such amount
may be adjusted annually by the Director for inflation,
in accordance with an appropriate index).
(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.
SEC. 606. NATIONAL TOXIC MOLD HAZARD INSURANCE
FUND.
(a) ESTABLISHMENT AND USES.—To carry out the
toxic mold hazard insurance program under by 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.