(1)    The department shall include in the compilation and certification of fire department dues under sub. (3) 2 percent of the premiums paid to the state fire fund for the insurance of any public property, other than state property. The department shall notify the secretary of administration of the amount certified under this subsection and the secretary of administration shall charge the amount to the state fire fund.

   (3)   

      (a)    On or before May 1 in each year, the department shall compile the fire department dues paid by all insurers under s. 601.93 and the dues paid by the state fire fund under sub. (1) and funds remaining under par. (b), withhold .5 percent and certify to the secretary of administration the proper amount to be paid from the appropriation under s. 20.165 (2) (L) to each city, village, or town entitled to fire department dues under s. 101.575. Annually, on or before August 1, the secretary of administration shall pay the amounts certified by the department to the cities, villages and towns eligible under s. 101.575.

      (b)    The amount withheld under par. (a) shall be disbursed to correct errors of the department or the commissioner of insurance or for payments to cities, villages, or towns which are first determined to be eligible for payments under par. (a) after May 1. The department shall certify to the secretary of administration, as near as is practical, the amount which would have been payable to the municipality if payment had been properly disbursed under par. (a) on or prior to May 1, except the amount payable to any municipality first eligible after May 1 shall be reduced by 1.5 percent for each month or portion of a month which expires after May 1 and prior to the eligibility determination. The secretary of administration shall pay the amount certified to the city, village, or town. The balance of the amount withheld in a calendar year under par. (a) which is not disbursed under this paragraph shall be included in the total compiled by the department under par. (a) for the next calendar year. If errors in payments exceed the amount set aside for error payments, adjustments shall be made in the distribution for the next year.

   (4)   The department shall transmit to the treasurer of each city, village, and town entitled to fire department dues, a statement of the amount of dues payable to it, and the commissioner of insurance shall furnish to the secretary of administration, upon request, a list of the insurers paying dues under s. 601.93 and the amount paid by each.

   (5)   The department shall promulgate a rule defining “administrative expenses” for purposes of s. 20.165 (2) (La).