IGFOA Technical Accounting Review Committee (TARC) Whitepaper: Foreign Fire Program Amendment
Posted May 16, 2023 in TARC updates
Background
In May 2022, the Illinois General Assembly passed Public Act 102-0740 (full text accessible at https://www.ilga.gov/legislation/publicActs/fulltext.asp?Name=102-0740&GA=102) which amended the Foreign Fire program, including municipal involvement in the program. The act took effect on January 1, 2023. The act further limits municipal involvement and oversight of the program for both home-rule and non-home-rule communities. Notable changes include:
• Municipalities no longer set the rate of the license fee; the state has set a rate of 2%. The Foreign Fire Insurance Board (the board) also has the exclusive authority to collect the license fees or may select an agent to collect the fees.
• The act makes regulation of the board exclusive powers of the state and specifically states that a municipality may not regulate the foreign fire insurance board and its fees.
• Allows the foreign fire board to sue in Circuit Court to cure a violation of the statutes.
• Clarifies that members of the board must be sworn.
• No longer requires boards to post bonds with municipalities.
• Gives the authority to boards to contract for services such as audit and legal services in addition to those that support the administration, use and functions of the fire department.
• Allows the boards to maintain bank accounts for foreign fire funds.
Recommended Application of Change in Statue
Given the reduction in municipal authority outlined above, some municipalities may be concerned that the foreign fire funds should be excluded from the municipality’s or the fire protection district’s audited financial statements. TARC has reviewed the changes in the statutes and is not recommending that the foreign fire boards be removed from the audited financial statements of either unit of government.
A special thank you to Christina Coyle, City of Elmhurst and TARC Chair, for drafting the Whitepaper and to the entire TARC for volunteering their time and expertise to deliberate this issue.
A list of TARC members can be found here on the IGFOA website.