The General Assembly created the South Carolina Firemen's Insurance and Inspection Fund, or "1 percent fund," in 1907 to help fire departments improve and maintain their services.
The fund equals 1 percent of homeowners" fire insurance premiums generated in each county. The SC Department of Revenue collects the money and distributes it back to each county. The county treasurer then distributes the funds to each fire department based on the total assessed value of property within its coverage area. After the money is distributed, the South Carolina Firefighters Association ensures departments use 1 percent funds according to state law and regulations.
Each city or town whose fire department receives 1 percent funds must appoint a three or five-member board of trustees that is charged with ensuring the money is spent properly. Three-member boards include the mayor, the chair of the council fire committee and the fire chief. If composed of five, members include the chair of the council fire committee, the fire chief, the city treasurer and two residents appointed by council.
Though not required by law, the SC Firefighters Association and the Municipal Association strongly recommend that 1 percent funds be included in the city's annual audit because the city is the responsible party and can be held liable if funds are misspent.
Neither the board of trustees nor the city council may dictate to the fire department how 1 percent money is spent. By law, those decisions are made by a 51 percent majority of the members of the department.
The members may use 1 percent funds for retirement and insurance, training and education, and recruitment and retention. State law and the SC Firefighter Association regulations provide specific requirements for departments" use of and accounting for 1 percent funds.
Failure to properly spend and account for the funds may subject a department to various sanctions, up to and including exclusion from the program.