SENATE BILL REPORT

SB 5724

BYSenators McDonald, Conner and Johnson; by request of Office of Financial Management

Creating a volunteer firefighter's pension administrative fund.

Senate Committee on Ways & Means

Senate Hearing Date(s):

Senate Staff:Charles Langen (786-7715)

AS OF FEBRUARY 14, 1989

BACKGROUND:

The benefit and administrative funds of the Volunteer Firemen's Relief and Pension Act are maintained in a single fund.  Generally Accepted Accounting Principles (GAAP) standards require that a separation of funds by use be established.

SUMMARY:

The volunteer firemen's relief and pension fund is renamed the volunteer firefighter relief and pension principal fund into which all fees by municipal corporations and all bequests, fees, gifts, emoluments, or donations are deposited.  The principal fund is a trust fund.  The State Investment Board, upon request of the State Treasurer, shall invest these funds in fixed income securities in the same manner as are funds of the Public Employees' Retirement System.  Amounts in the principal fund shall be available for benefit payments.

The volunteer firefighters' relief and pension administrative fund is created.  The 40 percent of all moneys received by the state from fire insurance premium taxes as well as unanticipated receipts shall be credited to the administrative fund.  The administrative fund shall only be expended for either the operating expenses of principal or administrative funds, or transfer to the principal fund.  The State Board for Volunteer Firefighters shall specify the necessary operating funds required from the administrative fund in their biennial budget request.

The State Board for Volunteer Firefighters is authorized to expend from the interest earnings of the principal fund those legal expenses and medical costs required in protecting the trust fund or incurred in compliance with statutes governing the funds.

$100,000 is transferred from the principal fund to the administrative fund.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 27, 1989