[Congressional Record (Bound Edition), Volume 148 (2002), Part 12]
[Extensions of Remarks]
[Page 17366]
[From the U.S. Government Publishing Office, www.gpo.gov]




 THE INTRODUCTION OF AN ACT 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

                                 ______
                                 

                          HON. JOHN B. LARSON

                             of connecticut

                    in the house of representatives

                      Thursday, September 19, 2002

  Mr. LARSON of Connecticut. Mr. Speaker, I rise today to introduce 
bipartisan legislation that would exclude tax abatements and other 
qualified incentives provided by local governments to volunteer 
firefighters and emergency medical responders from being considered 
part of an individual's gross income, and allow states and communities 
around the country to provide these important recruiting and retention 
incentives to their volunteer firefighters and emergency medical 
responders.
  Studies conducted by the United States Fire Administration show that 
73 percent of all fire departments in the United States are volunteer 
departments. These volunteer departments account for protecting 38 
percent of America's population, in both rural and urban areas. 
However, statistics have shown that the ranks of volunteer fire 
companies are shrinking at an alarming rate. The number of volunteer 
firefighters around the country has declined 5 to 10 percent since the 
1980s, while emergency service calls have steadily increased over the 
same period.
  To help localities recruit and retain volunteer firefighters, the 
State of Connecticut enacted a law allowing among other things, the 
legislative body of any municipality to establish, by ordinance, a 
program to abate property taxes due for any fiscal year for a resident 
of the municipality who volunteers his or her services as a 
firefighter, emergency medical technician, or ambulance driver in the 
municipality. Many other states have passed similar initiatives.
  However, when cities and towns seeking to pass local ordinances 
providing the abatements or other incentives under the state law, the 
IRS ruled in a similar property tax abatement inquiry, that under 
current federal law the amount of property tax abated for volunteers 
was considered income.
  Also, since the workers do not actually receive ``cash'' for these 
``wages,'' the ``employer'' (i.e. localities) would be required to pay 
both portions of the FICA tax on the amount of property tax abated. 
Further, if the localities do not seek reimbursement from the 
volunteers for their portion of the FICA tax, then that portion would 
be considered wages for FICA tax purposes subject to an additional FICA 
tax.
  Clearly, this confusing ruling undermines the intention of providing 
incentives to recruit and retain enough volunteer firefighters and 
emergency medical responders to keep our communities safe and puts an 
enormous economic burden on localities.
  In today's fast paced economy where men and women must work longer 
hours or multiple jobs just to break even, time to volunteer is 
becoming a thing of the past. These types of creative incentives help 
encourage new volunteers to strengthen the ranks of the men and women 
who already safeguard our community. If our cities and towns are 
willing to forgo their local tax revenues in order to ensure they have 
enough volunteer firefighters and emergency medical responders to 
protect their communities, then Washington DC and the IRS should not be 
allowed to swoop in and take the money for themselves.
  I urge my colleagues to support this legislation and insure that 
state and local governments have the flexibility to design and 
implement the type of recruiting and retention incentive programs that 
most adequately reflect the needs of their communities and volunteers.

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