[Congressional Record Volume 149, Number 116 (Thursday, July 31, 2003)]
[Senate]
[Pages S10635-S10636]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DODD (for himself and Mr. Lieberman):
  S. 1512. 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. Congressman John 
Larson of Connecticut introduced identical legislation in the House.
  Seventy-five percent of firefighters in our country are volunteers. 
Unfortunately, statistics show that the number of volunteer 
firefighters and emergency responders have been declining in past 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 municipalities throughout the country, including the State of 
Connecticut, offer stipends and property tax abatements of up to $1,000 
per year to volunteer firefighters, emergency medical technicians, 
paramedics, and ambulance drivers. These incentives have helped local 
fire departments in their volunteer recruitment efforts throughout the 
country.
  Last year the IRS ruled that property tax abatements to volunteers 
should be treated as wages and income. This ruling would undermine the 
efforts of localities across the country to recruit more volunteer 
firefighters.
  The bill that Senator Lieberman and I are introducing amends the 
Internal Revenue Code to exclude property tax abatements and stipends 
for volunteer firefighters and emergency medical responders from the 
definition of income and wages. This bill would allow local governments 
around the country to continue providing these incentives to their 
volunteer firefighters and emergency medical responders.
  The President has recently called for Americans to volunteer in their 
communities. 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. They risk their lives for others. The least we can do is 
allow States and towns to offer them modest incentives to serve.
  The IRS 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, 
as a country should do our part and support local efforts to ensure 
that all our communities have adequate protection. And that is what our 
bill will ensure.
  I hope that our colleagues will join us 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.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows

                                S. 1512

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXCLUSION FROM INCOME AND EMPLOYMENT TAXES AND 
                   WAGE WITHHOLDING FOR PROPERTY TAX REBATES AND 
                   OTHER BENEFITS PROVIDED TO VOLUNTEER 
                   FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.

       (a) Exclusion From Gross Income.--
       (1) In general.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to items 
     specifically excluded from gross income) is amended by 
     redesignating section 140 as section 140A and by inserting 
     after section 139 the following new section:

     ``SEC. 140. PROPERTY TAX REBATES AND OTHER BENEFITS PROVIDED 
                   TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL 
                   RESPONDERS.

       ``(a) Exclusion.--Gross income shall not include a 
     qualified property tax rebate or other benefit.
       ``(b) Qualified Property Tax Rebate or Other Benefit.--For 
     purposes of subsection (a)--
       ``(1) In general.--The term `qualified property tax rebate 
     or other benefit' means a rebate of real or personal property 
     taxes, or any other benefit, provided by a State or political 
     subdivision on account of services performed as a member of a 
     qualified volunteer emergency response organization.
       ``(2) Qualified volunteer emergency response 
     organization.--The term `qualified volunteer emergency 
     response organization' means any volunteer organization--
       ``(A) which is organized and operated to provide 
     firefighting or emergency medical services for persons in the 
     State or political subdivision, as the case may be, and
       ``(B) which is required (by written agreement) by the State 
     or political subdivision to furnish firefighting or emergency 
     medical services in such State or political subdivision.''.
       (2) Clerical amendment.--The table of sections for such 
     part is amended by striking the last item and inserting the 
     following new items:

``Sec. 140. Property tax rebates and other benefits provided to 
              volunteer firefighters and emergency medical responders.
``Sec. 140A. Cross references to other Acts.''.
       (b) Exclusion From Employment Taxes.--

[[Page S10636]]

       (1) Social security taxes.--
       (A) Section 3121(a) of the Internal Revenue Code of 1986 
     (relating to definition of wages) is amended by striking 
     ``or'' at the end of paragraph (20), by striking the period 
     at the end of paragraph (21) and inserting ``; or'', and by 
     inserting after paragraph (21) the following new paragraph:
       ``(22) any qualified property tax rebate or other benefit 
     (as defined in section 140(b)).''.
       (B) Section 209(a) of the Social Security Act is amended by 
     striking ``or'' at the end of paragraph (17), by striking the 
     period at the end of paragraph (18) and inserting ``; or'', 
     and by inserting after paragraph (18) the following new 
     paragraph:
       ``(19) Any qualified property tax rebate or other benefit 
     (as defined in section 140(b) of the Internal Revenue Code of 
     1986).''.
       (2) Unemployment taxes.--Section 3306(b) of the Internal 
     Revenue Code of 1986 (relating to definition of wages) is 
     amended by striking ``or'' at the end of paragraph (16), by 
     striking the period at the end of paragraph (17) and 
     inserting ``; or'', and by inserting after paragraph (17) the 
     following new paragraph:
       ``(18) any qualified property tax rebate or other benefit 
     (as defined in section 140(b).''.
       (3) Wage withholding.--Section 3401(a) of such Code 
     (defining wages) is amended by striking ``or'' at the end of 
     paragraph (20), by striking the period at the end of 
     paragraph (21) and inserting ``; or'', and by inserting after 
     paragraph (21) the following new paragraph:
       ``(22) for any qualified property tax rebate or other 
     benefit (as defined in section 140(b).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______