Opinion 90-20


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


FOREIGN FIRE INSURANCE TAXES -- Particular Uses (donation to firemen's association) -- Recipients (transfer of custody of moneys) -- Treasurer's Powers (transfer of custody of moneys)

INSURANCE LAW, §§9104, 9105: A village treasurer may not transfer custody of foreign fire insurance tax moneys to a firemen's association unless authorized or required by a special law, but the treasurer may pay such moneys to the association if the membership of the village fire department determines that the expenditure is for the use and benefit of the department. 1982 Opns St Comp No. 82-239, p 300 is superseded.

You ask whether a village treasurer, at the request of members of the village fire department, may transfer custody of foreign fire insurance tax moneys to an unincorporated firemen's association. The firemen's association was not created by a special act of the State Legislature which authorizes the association to receive directly foreign fire insurance tax moneys.

Sections 9104 and 9105 of the Insurance Law, as amended by chapter 293 of the Laws of 1988, govern the distribution and use of foreign fire insurance tax moneys unless a special law enacted by the State Legislature provides otherwise. In general, these sections of the Insurance Law provide that foreign fire insurance tax moneys must be paid to the treasurer or other fiscal officer of the fire department, or if the fire department does not have a treasurer or other fiscal officer, to the fiscal officer of the authority having jurisdiction and control of the fire department (Insurance Law, §§9104[a][1]-[3]; 9105[d][2][B]-[D]). In a multi-company fire department, the initial recipient of the foreign fire insurance tax moneys is required, in turn, to distribute the amount received to the fire companies constituting the fire department (Insurance Law, §§9104[a][4]; 9105[D][2],[E]; see also 1989 Opns St Comp No. 89-53, p 120). Each fire department or company receiving foreign fire insurance tax moneys generally must use them for the benefit of the department or company, as determined by the members of the department or company, although a fire company in a multi-company fire department is not precluded from paying all or a part of the tax moneys to the fire department of which it is part (Insurance Law, §§9104[f][1]; 9105[d][3][A]). There is no authority in sections 9104 and 9105, however, for a village treasurer who is the initial recipient of foreign fire insurance tax moneys to transfer custody of the moneys to a firemen's benevolent association.

Sections 9104 and 9105 each further provide that "[t]he provisions of this section shall not be changed, modified or amended by any charter,local law, ordinance, resolution or regulation". These provisions clearly preempt the adoption by a village of a local law providing for payment or distribution of foreign fire insurance moneys in a manner inconsistent with sections 9104 and 9105 (see 1990 Opns St Comp No. 90-8, p 17). Thus, a village may not, by local law, authorize the transfer of custody of foreign fire insurance tax moneys to a firemen's benevolent association. Since, however, sections 9104 and 9105 apply except as provided by "special law", a volunteer firemen's benevolent association may be authorized by special act of the State Legislature to receive and expend such moneys for purposes specified in the special act (see, e.g., L 1989, ch 256; see also 1989 Opns St Comp No. 89-11, p 23).

Based on the foregoing, we believe that where foreign fire insurance tax moneys are paid to a village treasurer pursuant to Insurance Law, §§9104 and 9105, these statutory provisions require the treasurer to retain custody of the moneys for the use and benefit of the fire department or, in the case of a multi-company fire department, to distribute the moneys to the companies comprising the department. Since these provisions may not be superseded by local law, a village treasurer may not transfer custody of foreign fire insurance tax moneys to a firemen's association unless required or authorized by a special law.

Although there is no authority in Insurance Law, §§9104 and 9105 for the transfer of custody of foreign fire insurance tax moneys to a firemen's association, these sections, as noted, require foreign fire insurance tax moneys to be expended for the use and benefit of the fire department or company receiving the same, as determined by the members thereof. In this regard, we have previously concluded that foreign fire insurance tax moneys may be expended for any purpose which the membership determines to be for the use and benefit of the department or company, other than an illegal purpose or a purpose contrary to public policy (see 1989 Opns St Comp No. 89-16, p 34).

We are not aware of the precise purposes for which the unincorporated firemen's association in question was established. It may be possible, however, for a recipient department or company to determine that a donation of its share of foreign fire insurance tax moneys to a firemen's association would be for the use and benefit of the donor department or company. Therefore, in our opinion, if the membership of the fire department or company reasonably determines that a donation of foreign fire insurance tax moneys to a firemen's association is for the use and benefit of the department or company, the person having custody of those moneys may pay the amount specified to the firemen's association.

1982 Opns St Comp No. 82-239, p 300, is hereby superseded to the extent that it is inconsistent with this conclusion.

June 8, 1990
Francis L. Real, Mayor
Village of Green Island