Opinion 2002 - 13


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 (funding fire department sports or recreational teams); (paying expenses of fire departments' annual fund-raising drive)

INSURANCE LAW 9104, 9105: Unless otherwise provided by special act, the members of a volunteer fire department may determine to use foreign fire insurance tax monies to make reasonable expenditures to fund the fire department softball, billiard and bowling teams, and to pay for expenses for the department's annual fund-raising drive.

You ask whether foreign fire insurance tax monies received by a fire district treasurer may be used to pay expenses of softball, billiard and bowling teams of the fire district fire department, and to pay for expenses in connection with the fire department's annual fund-raising drive (see General Municipal Law 204-a).

The distribution and use of foreign fire insurance tax monies is governed by sections 9104 and 9105 of the Insurance Law, unless a special law enacted by the State Legislature provides otherwise.1 In general, these sections of the Insurance Law provide that foreign fire insurance tax monies 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 treasurer or other fiscal officer of the authority having jurisdiction and control of the fire department which, in the case of a fire district fire department, will generally be the fire district (Insurance Law 9104[a][1]-[3]; 9105[d][2][B]-[D]; Not-For-Profit Corporations Law 1402[e]; Town Law 176[10],[11], 177). In a multi-company fire department, the initial recipient of the foreign fire insurance tax monies 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).

Sections 9104 and 9105 provide that the foreign fire insurance tax monies of a fire department or fire company must be used for the benefit of the department or company as determined by the members thereof (Insurance Law 9104[f]; 9105[d][3]).2 This Office has expressed the opinion that, except as otherwise provided by special act, foreign fire insurance tax monies may be expended for any purpose, other than an illegal purpose or a purpose contrary to public policy, that the members of the fire department or company, as the case may be, determine to be for the use and benefit of the department or company (see, e.g., 2000 Opns St Comp No. 2000-6, p 16; 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 No. 81-49, p 51; 1981 Opns St Comp No. 81-146, p 151; 1979 Opns St Comp No. 79-627, p 120). We have also concluded that the treasurer having custody of foreign fire insurance tax monies should not permit such monies 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 monies for an illegal or improper purpose (see, e.g., 1997 Opns St Comp No. 97-20, p 38).

In prior opinions, we have concluded that the membership of a fire department or fire company may decide to expend foreign fire insurance tax monies for, among other things, the purchase of ball hats, jackets, sweatshirts, T-shirts and other items of clothing for themselves (1979 Opns St Comp No. 79-84, unreported), as well as for a trophy case for a fire department's meeting room (1997 Opns St Comp No. 97-14, p 26). We have also previously concluded that the membership may also authorize expenditures of such monies in connection with firefighter fund-raising activities (see 1979 Opns St Comp No. 79-627, p 120).

Based on the foregoing, with respect to the expenditure of foreign fire insurance tax monies 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 monies are to be used for the benefit of the department or company. Should the members decide to use these monies to fund the fire department softball, billiard and bowling teams, and to pay for expenses for the department's annual fund-raising drive, it is our opinion that reasonable expenditures may be made for those purposes, since we believe they are not illegal or contrary to public policy.

October 28, 2002

Dan McInerney, Treasurer
Suffern Fire Department

1.  Typically, such special laws incorporate an exempt volunteer firefighters' benevolent association and authorize that association to receive and expend foreign fire insurance tax monies. For purposes of this opinion, we assume no special act is applicable here.

2.  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 (see Insurance Law 9104[f][1], 9105[d][3][A]).