Opinion 95 - 14


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 (personal computer for fire department); (ceremony to dedicate fire house and apparatus)

INSURANCE LAW, §§9104, 9105: Unless otherwise provided by special act, the members of a volunteer fire department or, if the department is comprised of several companies, the members of each company, may determine to use foreign fire insurance tax moneys to purchase a personal computer to be used for department purposes and to pay for a ceremony to dedicate a new fire house and new fire apparatus.

You ask whether a volunteer fire department may expend foreign fire insurance tax moneys to purchase a new personal computer to be used for various department purposes, and to pay for a ceremony to dedicate a new fire house and new fire apparatus.

Sections 9104 and 9105 of the Insurance Law govern the use of foreign fire insurance tax moneys except as otherwise provided in any special law(1). These sections provide that the foreign fire insurance tax moneys of a fire department consisting of a single fire company must be used for the benefit of the department, as determined by the members of the department. Sections 9104 and 9105 also provide that the foreign fire insurance tax moneys of a multi-company fire department must be turned over to the companies comprising the department and used for the benefit of each company, as determined by the members of the company. This requirement, however, does not preclude a company from paying all or a portion of the tax to the fire department of which it is part.

This Office has expressed the opinion that foreign fire insurance tax moneys may not be expended for illegal purposes or purposes contrary to public policy (see e.g., 1989 Opns St Comp No. 89-16, p 34; 1987 Opns St Comp No. 87-88, p 130; 1982 Opns St Comp No. 82-10, p 12; 1981 Opns St Comp Nos. 81-49 and 146, pp 51 and 151, respectively; 1979 Opns St Comp No. 79-627, p 120). We have also concluded that the treasurer having custody of foreign fire insurance tax moneys should not permit such moneys to be expended for a purpose which the treasurer, in good faith, believes to be illegal or improper, even if the expenditure has been approved by a majority of the membership, because the treasurer could be held liable for the expenditure of such moneys for an illegal or improper purpose (Opn No. 89-16, supra; 1981 Opns St Comp No. 81-389, p 426; see also Opn No. 87-88, supra; Opn 82-10, supra; Opn Nos. 81-49 and 146, supra; Opn 79-627, supra; 1979 Opn St Comp No. 680, p 138). Thus, except as provided by special act of the State Legislature, foreign fire insurance tax moneys may be expended for any purpose, other than an illegal purpose or a purpose contrary to public policy, which the members of the fire department or company, as the case may be, determine to be for the benefit of the fire department or company.

Based on the foregoing, with respect to the expenditure of foreign fire insurance tax moneys in this instance, the members of the fire department or, if the fire department is comprised of several companies, the members of each company, must determine how these moneys are to be used for the benefit of the department or company. Should the members decide to use these moneys to purchase a personal computer for department use and/or for payment of the cost of the dedication ceremony, it is our opinion that the moneys may be expended for that purpose.

May 17, 1995
Stephen DeBoer, Treasurer
Tallman Fire Department

1. Typically, such special laws are acts of the State Legislature incorporating an exempt volunteer firemen's benevolent association and authorizing that association to receive and expend foreign fire insurance tax moneys. For purposes of this opinion, we assume no special act is applicable.