HOUSE BILL ANALYSIS

HB 2352

Brief Description:  Funding pre-LEOFF fire fighters' pensions.

Background:  Prior to the creation of the state-administered Law Enforcement Officers= and Fire Fighters= (LEOFF) pension system in 1969, full-time fire fighters were covered under locally-administered systems governed by the Firemen=s Relief and Pension Act.  All full-time fire fighters employed at the time LEOFF was created became members of LEOFF, but all retirees under the Firemen=s Relief and Pension Act continued to receive benefits under the pre-LEOFF systems.  Today, retirees of the pre-LEOFF systems, as well as their widows and widowers, continue to receive benefits under the old systems.  All currently employed full-time fire fighters are members of LEOFF.

Each city, town and fire protection district with benefit obligations under a pre-LEOFF system is required to have a firemen=s pension fund in its treasury from which to pay benefits.  Sources of monies in each firemen=s pension fund include:  bequests, fees and gifts; interest from investments of the funds; contributions by fire fighters; and the city, town or fire district=s share of distributions from 45 percent of the receipts from the state=s fire insurance premiums tax.  Cities with pre-LEOFF system beneficiaries are also required to place certain property tax receipts into this fund.  

Forty-five percent of the receipts from the state=s fire insurance premiums tax is distributed to cities, towns and fire protection districts that have a firemen=s pension fund.  The share of these monies that a city, town or fire district receives is the same percentage that the number of fire fighters currently employed by the city, town or district is of the total number of fire fighters currently employed by all cities, towns and districts.  The distribution formula is: the distribution to an eligible city, town or district equals 45 percent of fire insurance tax premium receipts multiplied by (the number of fire fighters currently employed by the city, town or district, divided by the number of fire fighters currently employed by all eligible cities, towns and districts).

Summary:  The formula for distributing 45 percent of the receipts from the fire insurance premiums tax is altered.  The new distribution formula is based on numbers of enrollees, which are defined as fire fighters, retired fire fighters, and the widows and widowers of retired fire fighters, covered under the Firemen=s Relief and Pension Act.

The share of these monies that a city, town or district receives is the same percentage that the number of its enrollees is of all enrollees. The distribution formula is: the distribution to an eligible city, town or district equals 45 percent of fire insurance tax premium receipts multiplied by (the number of enrollees receiving benefits from the city, town or district, divided by the number of enrollees receiving benefits from all eligible cities, towns and districts).

Any city, town or fire protection district that has received monies from the fire insurance premiums tax for the purposes of the Firemen=s Relief and Pension Act, after it ceased to have any obligations under that act, must return to the State Treasurer any of those monies not used for the legal purposes of the fund.  Any monies returned will be redistributed the following year to eligible cities, towns and fire protection districts.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Fiscal Note:  Requested on January 16, 1998.