GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	2 

SENATE BILL 26*
Pensions and Retirement Committee Substitute Adopted 7/2/92

Short Title:  Modify Fire Relief Funds.	(Public)
─────────────────────────────────────── 
Sponsors:
─────────────────────────────────────── 
Referred to:  
─────────────────────────────────────── 

February 6, 1991

A BILL TO BE ENTITLED
AN ACT TO MODIFY THE STATUTES GOVERNING FIRE RELIEF FUNDS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-84-25 reads as rewritten:
"§ 58-84-25.  Disbursement of funds by Insurance Commissioner.
There is annually appropriated the funds collected pursuant to G.S. 58-84-10 to be distributed in accordance with this section.  The Commissioner of Insurance shall report the funds received pursuant to G.S. 58-84-10 and the disbursements made in accordance with this section as part of his annual budget request and report to the General Assembly.
The Insurance Commissioner shall deduct the sum of three percent (3%) from the money so collected from the insurance companies, corporations, or association, as aforesaid, and pay the same over to the treasurer of the State Firemen's Association for general purposes.  The Insurance Commissioner shall deduct the sum of two percent (2%) from the money so collected from the insurance companies, corporations, or associations, as aforesaid, and retain the same in the budget of the Department of Insurance for the purpose of administering the disbursement of funds by the board of trustees in accordance with the provisions of G.S. 58-84-35.  The remainder of the money so collected from the insurance companies, corporations, or associations, as aforesaid, doing business in the towns and cities in the State having or that may hereafter have organized fire departments as provided in this Article, said Insurance Commissioner shall pay to the treasurer of each town or city to be held by him as a separate and distinct fund, and he shall immediately pay the same to the treasurer of the local board of trustees upon his election and qualification, for the use of the board of trustees of the firemen's local relief fund in each town or city, which board shall be composed of five members, residents of said city or town as hereinafter provided for, to be used by it for the purposes as named in G.S. 58-84-35."
Sec. 2.  G.S. 58-84-30 reads as rewritten:
"§ 58-84-30.  Trustees appointed; organization.
(a)	For each county, town or city complying with and deriving benefits from the provisions of this Article, there shall be appointed a local board of trustees, known as the trustees of the firemen's relief fund, to be composed of five members, two of whom shall be elected by the members of the local fire department or departments who are qualified as beneficiaries of such fund, two of whom shall be elected by the mayor and board of aldermen or other local governing body, and one of whom shall be named by the Commissioner of Insurance. Their selection and term of office shall be as follows:
(1)	The members of the fire department shall hold an election each January to elect their representatives to above board. In January 1950, the firemen shall elect one member to serve for two years and one member to serve for one year, then each year in January thereafter, they shall elect only one member and his term of office shall be for two years.
(2)	The mayor and board of aldermen or other local governing body shall appoint, in January 1950, two representatives to above board, one to hold office for two years and one to hold office for one year, and each year in January thereafter they shall appoint only one representative and his term of office shall be for two years.
(3)	The Commissioner of Insurance shall appoint one representative to serve as trustee and he shall serve at the pleasure of the Commissioner.
All of the above trustees shall hold office for their elected or appointed time, or until their successors are elected or appointed, and shall serve without pay for their services. They shall immediately after election and appointment organize by electing from their members a chairman and a secretary and treasurer, which two last positions may be held by the same person. The treasurer of said board of trustees shall give a good and sufficient surety bond in a sum equal to the amount of moneys in his hand, to be approved by the Commissioner of Insurance. The cost of this bond may be deducted by the Insurance Commissioner from the receipts collected pursuant to G.S. 58-84-10 before distribution is made to local relief funds. If the chief or chiefs of the local fire departments are not named on the board of trustees as above provided, then they shall serve as ex officio members without privilege of voting on matters before the board. 
(b)	Nothing in this section shall prohibit the consolidation of local relief funds in a county, a region, or otherwise.  The State Fire Service Relief Fund Board shall issue rules regulating these consolidations."
Sec. 3.  G.S. 58-84-35 reads as rewritten:
"§ 58-84-35.  Disbursement of funds by trustees.
The board of trustees of the local fire relief funds shall have control of the funds derived from the provisions of this Article, subject to review by the State Fire Service Relief Fund Board, and shall disburse the funds only for 
								purposes authorized by rules issued by the State Fire Service Relief Fund Board.  Existing local bills shall not be changed without the approval of a majority of the members of the local board."
Sec. 4.  G.S. 58-84-40 reads as rewritten:
"§ 58-84-40.  Trustees to keep account and file certified reports.
(a)	Each local board of trustees shall keep a correct account of all moneys received and disbursed by them.  On a form prescribed by the North Carolina State Firemen's Association, each local board shall certify by July 31 of each year the following to the Association: the balance of the local fund and a full accounting of the previous fiscal year's receipts and expenditures.  The annual financial statement shall provide sufficient information to track the tax funds received through to the firemen receiving the funds as direct benefits or to the purchase of insurance or other indirect benefits for the firemen.  Such certification shall be made concurrently with the local unit's statement of Fire Readiness.
(b)	The North Carolina State Firemen's Association shall compile and consolidate the information contained in the required annual financial statements and forward that information to the Department of Insurance by October 31 of each year in the manner prescribed by the Department.  The North Carolina State Firemen's Association shall also furnish this information to the members of the State Fire Service Relief Fund Board.
(c)	In the event that any board of trustees in any of the towns and cities benefited by this Article shall neglect or fail to perform their duties, or shall willfully misappropriate the funds entrusted in their care by obligating or disbursing such funds for any purpose other than those authorized by the rules of the State Fire Service Relief Fund Board, then the Commissioner of Insurance shall withhold any and all further payments to such board of trustees, or their successors, until the matter has been fully investigated by an official of the North Carolina State Firemen's Association, and adjusted to the satisfaction of the Commissioner of Insurance.
(d)	In the event that any local relief fund provided for in this Article becomes impaired, then the State Fire Service Relief Fund Board may assist the local unit administering the fund in providing for relief to injured firemen and their dependents or survivors; provided, however, that any funds so provided to such impaired units shall be repaid in full at the statutory rate of interest from future local unit receipts if the impairment resulted from violations of this Article."
Sec. 5.  G.S. 58-84-45 reads as rewritten:
"§ 58-84-45.  Municipal clerk to certify list of fire companies; effect of failure.
The clerk of any city, town, village, or other municipal corporation having an organized fire department shall, on or before October 31 each year, make and file with the Commissioner of Insurance his certificate, stating the existence of that department together with such other facts as the Commissioner of Insurance may require, on a blank to be furnished by the Commissioner of Insurance.  If the certificate required by this section is not filed with the Commissioner of Insurance on or before October 31 in any year, then the premium tax funds due to the departments listed in that certificate shall be forfeited to the State Fire Service Relief Fund unless the clerk and the affected fire departments file an appeal with the State Fire Service Relief Fund Board pursuant to rules issued by the Board. "
Sec. 6.  G.S. 58-84-50 reads as rewritten:
"§ 58-84-50.  Fire departments to be members of North Carolina State Firemen's Association.
(a)	For the purpose of supervision and as a guaranty that provisions of this Article shall be honestly administered in a businesslike manner, it is provided that every department enjoying the benefits of this law shall be a member of the North Carolina State Firemen's Association and comply with its constitution and bylaws.  The Commissioner of Insurance shall pay over an amount to the treasurer of the North Carolina State Firemen's Association sufficient to pay the dues in the Association for every member of a fire department from the proceeds of the premium tax collected in accordance with G.S. 58-84-10.
(b)	The North Carolina State Firemen's Association shall have supervisory authority for the filing of the annual financial statements to be filed by the local relief fund boards.
(c)	The North Carolina State Firemen's Association shall furnish managerial support to the local fire relief fund boards."
Sec. 7.  G.S. 58-85-1 reads as rewritten:
"§ 58-85-1.  Application of fund.
The money paid into the hands of the State Fire Service Relief Fund Board shall be known and remain as the ‘State Fire Service Relief Fund' of North Carolina, and shall be used as a fund for the relief of firemenwho may be injured or rendered sick by disease contracted in the actual discharge of duty as firemen; to be paid in such manner and in such sums to such individuals as may be provided for and determined by the State Fire Service Relief Fund Board.  No fireman shall be entitled to receive any benefits under this section until the firemen's relief fund of his city or town shall have been exhausted.  "
Sec. 8.  A new section is added to Article 85 of Chapter 58 of the General Statutes to read:
"§ 58-85-5.  State Fire Service Relief Fund Board.
	(a)	There is created a State Fire Service Relief Fund Board for the purpose of managing the State Fire Service Relief Fund and overseeing the management and uses of the various local relief funds and local supplementary relief and pension funds, by whatever name, receiving the proceeds of the fire and lightning insurance premium tax imposed by G.S. 58-84-10.
(b)	Composition. – The State Fire Service Relief Fund Board shall be composed of:
(1)	Voting members:
a.	Three members, of whom one shall be a nonchief member of the North Carolina State Firemen's Association, shall be appointed by the Board of Directors of the North Carolina State Firemen's Association,
b.	Two members shall be appointed by the Board of Directors of the North Carolina Association of Fire Chiefs,
c.	Two nonfire service-related members of the public-at-large appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121,
d.	Two nonfire service-related members of the public-at-large appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121,
e.	The Commissioner of Insurance or his designee, and
f.	The State Treasurer or his designee.
(2)	The Executive Secretary of the North Carolina State Firemen's Association shall serve as an ex officio member of the Board, without a vote, and shall serve as the secretary to the Board.
(3)	Term of office. – Each member shall have one vote and shall serve on the Board for two years.  One of the two public members initially appointed by the General Assembly upon the recommendation of each presiding officer shall serve a term of one year and the other public member initially appointed shall serve a term of two years, thereafter the terms of the public members shall be two years.  Vacancies in the position of public members shall be filled in accordance with G.S. 120-122.
(4)	Board officers. – The members of the Board shall select from among its membership a chairman and a vice-chairman, who shall serve for two years.
	(c)	Staff support, including assistance in the issuance of rules and regulations, legal assistance, and issuance of per diem and travel expense drafts, shall be provided by the Department of Insurance.  Per diem and travel expenses shall be reimbursed in accordance with G.S. 138-5.  Expenses of the Board shall be paid from funds derived from the premium tax collected pursuant to G.S. 58-84-10.
	(d)	Functions. – The Board shall:
(1)	Manage the State Fire Service Relief Fund.
(2)	Issue rules and regulations, pursuant to Chapter 150B of the General Statutes, for the management of the local fire relief funds and any other relief or pension funds, by whatever name, receiving funds derived from the premium tax collected pursuant to G.S. 58-84-10, including:
a.	Reducing restrictions on the use of the funds so that the local relief funds and the State Fire Service Relief Fund can be used to provide the maximum benefits for all firemen in a manner consistent with sound actuarial and business practices.
b.	Providing for consolidation of local funds on a county, regional, or other basis to allow for the pooling of the local funds to provide benefits to covered firemen.  Existing local funds shall not be consolidated without the approval of a majority of the members of the local board.
c.	Providing needed flexibility so that local modifications of the general laws governing the use of relief funds would not be necessary.
d.	Providing for the receipt of annual financial reports from local fire relief funds and all other relief or pension funds, by whatever name, to provide oversight of the use of tax funds for the benefit of firemen.
(3)	Review of the uses of the premium tax funds collected pursuant to G.S. 58-84-10 and currently received or held by local relief, local supplemental relief or pension funds, by whatever name, pursuant to local modifications of the general laws to insure that these funds are being used in the most efficient manner to provide benefits to the covered firemen; make recommendations to the General Assembly if a majority of the members of the local board supports the recommendation concerning any changes or repeal of any local modifications enacted prior to the enactment of this section; and make recommendations to the General Assembly on all local modifications to the general laws regulating the use of relief funds introduced after the enactment of this section.
	(e)  The Board shall meet at least quarterly for the transaction of business, upon the call of the Chairman.  The Board shall report quarterly to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office."
Sec. 9.  G.S. 58-85-10 reads as rewritten:
"§ 58-85-10.  Treasurer of North Carolina State Firemen's Association to file report.
The treasurer of the North Carolina State Firemen's Association shall make a detailed report to the State Treasurer of the yearly expenditures of the funds derived from the premium tax collected pursuant to G.S. 58-84-10 on or before the end of the fiscal year."
Sec. 10.  G.S. 58-85-15 reads as rewritten:
"§ 58-85-15.  Who shall participate in the fund.
The line of duty entitling one to participate in the fund shall mean actual ‘official duties' as defined in G.S. 143-166.2(f).”
Sec. 11.  G.S. 58-85-20 reads as rewritten:
"§ 58-85-20.  Who shall become members.
Any fireman of good moral character in North Carolina, and belonging to an organized fire company, who will comply with the requirements of the constitution and bylaws of the North Carolina State Firemen's Association, shall become a member of said Association."
Sec. 12.  G.S. 58-85-30 is repealed.
Sec. 13.  Sections 1 through 12 become effective October 1, 1992.  Funds in the possession of the Treasurer of the North Carolina State Firemen's Association and designated as the "Firemen's Relief Fund”shall be transferred to the Department of the State Treasurer for the "State Fire Service Relief Fund”on October 1, 1992.  Section 13 of this act is effective upon ratification.