What's happening
This bill requires foreign and alien fire insurance premium tax funds to be distributed to fire companies based on their number of active members.
Why it matters
Directs fire insurance tax funds to be distributed based on the number of active members in each fire company. , rather than equally or by another method, potentially shifting funding among companies within the same department.
Defines "active member" specifically as someone who participates in firefighting and is subject to duty. , which may encourage departments to more rigorously track and report member participation and duties.
Could incentivize fire companies to maintain or increase their roster of active, participating members. , possibly affecting recruitment, retention, and the internal management of volunteer or paid fire companies.
May impact the financial stability and operational capabilities of smaller or less active companies. , as those with fewer active members could see a reduction in their share of these critical funds.
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Who cares
Headline styles
Distribute Fire Tax by Members
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Print number 2950a
- Amend and recommit to insurance
- Referred to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Distribute Fire Tax by Members
In Assembly Committee · Insurance · Sponsor Amy Paulin
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2950--A
2019-2020 Regular Sessions
IN SENATE
January 31, 2019
Introduced by Sens. BRESLIN, SKOUFIS -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -recommitted to the Committee on Insurance in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the insurance law, in relation to the distribution of the foreign and alien fire insurance premium tax
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 4 of subsection (a) of section 9104 of the insurance law, as amended by chapter 293 of the laws of 1988, is amended to read as follows:
(4) if such payment is made to the treasurer or other fiscal officer of a fire department or fiscal officer of authorities having jurisdiction and control of such fire department, such treasurer or fiscal officer shall on or before the fifteenth day of March in each year distribute the amount so received to the fire companies constituting the fire department if such fire department is constituted of more than one fire company. Beginning on the effective date of the chapter of the laws of two thousand twenty which amended this paragraph, the amount so received shall be distributed to the fire companies in proportion to the number of active members within each company. For the purposes of this paragraph, the term "active member" shall mean a member who participates in firefighting and is subject to call for whatever duties may be assigned to him or her under the rules and regulations of the fire department or company of which he or she is a member.
§ 2. Subparagraph (E) of paragraph 2 of subsection (d) of section 9105 of the insurance law, as amended by chapter 293 of the laws of 1988, is amended to read as follows:
(E) if such payment is received by the treasurer or other fiscal officer of a fire department or fiscal officer of authorities having juris-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01664-03-0
S. 2950--A 2
diction and control of such fire department, such treasurer or fiscal officer shall on or before the fifteenth day of July in each year distribute the amount so received to the fire companies constituting the fire department if such fire department is constituted of more than one fire company. Beginning on the effective date of the chapter of the laws of two thousand twenty which amended this subparagraph, the amount so received shall be distributed to the fire companies in proportion to the number of active members within each company. For the purposes of this subparagraph, the term "active member" shall mean a member who participates in firefighting and is subject to call for whatever duties may be assigned to him or her under the rules and regulations of the fire department or company of which he or she is a member.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to the distribution of the foreign and alien fire insurance premium tax
Purpose
To provide that fire insurance money for fire departments, companies, and volunteer benevolent associations be distributed in proportion to the number of active members within each company.
Summary of provisions
Sections one and two amend sections 9104 and 9105 of the insurance law to provide that beginning on the effective date of the chapter of the laws of 2020 which amended these sections, the monies received by fire companies shall be distributed to the companies in proportion to the number of active members within each company. The term 'active member' shall mean a member who participates in firefighting and is subject to call for whatever duties may be assigned to him or her under the rules and regulations of the fire department or company of which he or she is a member.
Read the full memo (623 words)
Section three provides the effective date.
Justification
Sections 9104 and 9105 of the Insurance Law establish a tax on all out- of-state insurance companies selling policies to protect against loss or damage by fire of properties within New York. These funds are colloqui- ally referred to as "2% funds" because the percentage of the tax obli- gated under the Insurance Law are 2% of the premiums. The tax is paid by insurers to the New York State Insurance Department and dispensed to fire departments, fire companies, fire department benevolent associ- ations, and the Firemen's Association of the State of New York (FASNY).
The overwhelming majority of entities receiving 2% monies spend them appropriately on approved uses and are in compliance with State law, their individual charters or enabling legislation, and guidelines put out by FASNY, DFS, and the State Comptroller. However, a number of prob- lems have surfaced over the last two decades which, although represent- ing a tiny fraction of entities receiving 2% monies, have received sufficient press attention to suggest areas where the program could be improved.
There have been some high profile disputes in municipalities, where both an existing voluntary benevolent association and a professional fire department or fire company co-exist, as to which entity is entitled to which percentage of the money. Most notably, Eastchester had a Volunteer Benevolent Association which had for decades received the 2% monies when the town established a professional Fire Department as well. Because there was no clarity in the insurance law on how to distribute the money where multiple entities existed and had active members, the current formula for distribution was arrived at through the negotiated settle- ment of a lawsuit. Because of the adversarial way the formula was estab-
lished, this has resulted in continued strained relations between the two entities.
The Office of General Counsel for the Department of Financial Services has issued opinions and guidance on how fire districts that contain multiple fire companies ought to distribute 2% monies for those compa- nies. The standard set by both the General Counsel's most recent opinion and court cases over the previous decades have held that the money should be distributed pro rata on the basis of the number of active members in each company. They have come to the same decision often, as there is nothing in the relevant sections of the insurance law to deter- mine how the money is to be allocated between multiple overlapping companies, or between a paid and voluntary organization covering the same fire district. Codifying the "active member" standard would help resolve or perhaps even avoid future disputes.
Legislative history
2018: A.11027, referred to Insurance in the Assembly. 2019: This is a new bill in the Senate.
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.