A bill to amend the Internal Revenue Code of 1954 to clarify the tax exemption for interest on obligations of volunteer fire departments.

Amends the Internal Revenue Code to provide that bonds issued by a volunteer fire department to finance the acquisition, construction, reconstruction, or improvement of firefighting property shall be treated as the obligation of a political subdivision of a State (interest on such bonds is tax-exempt). Provides that a volunteer fire department qualifies for preferential tax treatment of its bonds if it: (1) is organized and operated to provide firefighting services in an area which does not have any other firefighting services; (2) is required by a local government to furnish firefighting services; (3) receives over half of its funding from local government; and (4) makes no charge for its services.