Sens. Susan Collins (R-Maine) and Charles Schumer (D-N.Y.) have reintroduced the Volunteer Emergency Services Recruitment and Retention Act (S. 1911), a bill that clarifies the treatment of length-of-service award programs (LOSAPs) by amending the Internal Revenue Code.

LOSAPs are similar to pensions, and nearly 20% of the nation’s 800,000 volunteer firefighters participate in some form of the program, said Philip Stittleburg, chairman of the National Volunteer Fire Council. The Volunteer Emergency Services Recruitment and Retention Act would make it easier for communities to provide such financial incentives to emergency- service volunteers and would change the way the tax law is written for government retirement programs, Stittleburg said.

The law in its current form has several problems, including limiting the contribution amount to that of the current wage offered to the government employee, Stittleburg said. As a result, many departments decide against LOSAPs, opting instead to create a general fund from which to pay benefits. However, general funds do not designate benefits for any individual member and may cause a problem for the volunteer, he said. For example, if the organization goes bankrupt, general funds are not protected because they are not categorized as retirement funds. In addition, general funds are non-transferable because they are not designated to an individual person.

“Say the volunteer decides to leave the department,” Stittleburg said. “They may want to take their contribution with them and roll it into an IRA or a LOSAP in another department. They can’t do it because it’s not designated for him or her. There’s an issue of non-portability. So the first concern is guaranteeing the security of the payments and then the portability of it.”

Another concern is the maximum amount volunteer departments can contribute to the LOASP. The current cap is $3,000 a year, which was set in 1996. Stittleburg said the bill would increase that amount to $5,500 and would include an inflation adjustment clause.

In addition, S. 1911 addresses LOSAPs as they relate to nonprofit EMS agencies, meaning those that are not municipally organized. These are more common on the East Coast, Stittleburg said. These nonprofits often are individual organizations that contract with government agencies to provide EMS protection. The way the law is written currently, it is unclear how they are designated under LOSAPs.

“So we are asking that they be treated the same as a government agency,” he said.

The fact the bill has been introduced in the Senate is a “good sign” but whether or not it will be passed is anyone’s guess, Stittleburg said.

“I think it’s fair to say anything going on in Congress right now is a tough battle because of the economic climate,” he said. “But since 80% of volunteers don’t have LOSAP programs, there’s a good opportunity here to change the law in order to have a useful retention tool and, at the same time, provide some sort of benefit to our nation’s volunteers.”

The senators previously introduced the bill in May 2010. The treatment of LOSAPs in the existing tax structure has not been updated legislatively since 1996.