[Congressional Record Volume 148, Number 124 (Thursday, September 26, 2002)]
[Senate]
[Pages S9431-S9432]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DODD:
  S. 3012. A bill to amend the Internal Revenue Code of 1986 to exclude 
from income and employment taxes and wage withholding property tax 
rebates and other benefits provided to volunteer firefighters and 
emergency medical responders; to the Committee on Finance.
  Mr. DODD. Mr. President, I am pleased to rise today with my colleague 
Senator Lieberman to introduce legislation that would amend the 
Internal Revenue Code to exclude property tax abatements, provided by 
local governments to volunteer firefighters and emergency medical 
responders, from the definition of income and wages. Last week, 
Congressman John Larson of Connecticut, the chief author of this 
proposal, introduced identical legislation in the House.
  This bill would allow local governments around the country the 
opportunity to provide incentives, such as property tax abatements, to 
their volunteer firefighters and emergency medical responders. These 
incentives will help local governments recruit local volunteer 
firefighters and emergency medical responders in order to ensure their 
communities are adequately prepared to respond to emergencies.
  Police officers, firefighters, and emergency service workers are 
America's front-line defenders in the face of fires, medical 
emergencies, terrorist threats, incidents with hazardous materials and 
other emergencies. Many of them are salaried employees of their 
respective State or local government. Many of them are volunteers, as 
well. Many States and localities lack adequate resources to recruit 
these vital public servants and therefore to fully respond to the full 
range of possible threats this country faces.
  Many small towns cannot afford full-time paid firefighters, therefore 
a majority of municipalities and counties throughout the country depend 
on volunteer firefighters and volunteer emergency service workers to 
cover their front lines. Every day, volunteers throughout the country 
make a commitment, on top of their work schedules, to put their lives 
on the line for their communities. Volunteer firefighters comprise 75 
percent of firefighters in our country. Unfortunately, statistics show 
that the number of volunteer firefighters and emergency responders have 
been declining over the years at an alarming rate. The number of 
volunteer firefighters around the country has declined by 5 to 10 
percent since 1983, while the number of emergency calls made has 
sharply increased.
  Many local governments recruit and retain volunteer firefighters and 
emergency service workers by offering volunteers a property tax 
abatement that directly reduces their property taxes. For example, 
Connecticut enacted a law in 1999 allowing municipalities to offer 
abatements of up to $1,000 per year on local taxes to firefighters, 
emergency medical technicians, paramedics or ambulance drivers. This 
abatement has helped local fire department in their volunteer 
recruitment efforts throughout the state.
  Despite these successful recruitment efforts, the IRS recently ruled 
that property tax abatements to volunteers should be treated as wages 
and income. This ruling would pose real hardship on firefighters and 
the communities where they live and work, in Connecticut and in many 
other States, as well. While State and local governments are working to 
increase incentives to volunteer, this ruling would undermine those 
efforts. Some may argue that volunteering for the community should be 
without any compensation, including abatements. However, the reality is 
that when both heads of household hold full-time employment, it is 
often too difficult for them to take time away from their families 
without some form of compensation. A $1,000 property tax break is not a 
large request for the great service these men and women provide to our 
communities. These men and women risk their lives for others. The least 
we can do is allow states and towns to offer them modest incentives to 
serve. For some, counting this abatement as income may put them in a 
higher tax bracket, therefore forcing them to pay substantially more in 
taxes. Also, because of the extra paperwork required and costs due to 
the IRS decision, some municipalities are having to reconsider 
providing abatement programs. For many towns and municipalities it 
would be entirely too expensive to have to both pay FICA taxes,

[[Page S9432]]

and lose property tax revenues. Municipalities across the nation have 
enough trouble recruiting volunteer firefighters and emergency medical 
personnel without also having to face obstacles from the IRS.
  This ruling undermines the good intentions and creative efforts of 
many localities. If our municipalities are willing to forgo their local 
tax revenues in order to ensure they have enough volunteer firefighters 
and emergency service providers to protect their communities, and if 
members of the community are doing their part by volunteering, then we, 
the Federal government, should do our part and support local efforts to 
ensure that all our communities have adequate protection.
  I hope that my colleagues will join me in supporting this legislation 
so that we can ensure that state and local governments have the 
flexibility to design and implement recruiting and retention programs 
that benefit not only the volunteer firefighters and emergency medical 
providers, but also the communities they protect.
                                 ______