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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 (reimbursement for expenses in operating personal vehicles)
INSURANCE LAW §§9104, 9105: Foreign fire tax monies may not be expended to make cash reimbursement to firefighters for out-of-pocket expenses in operating their personal vehicles in performing firemanic duties.
You ask whether a volunteer fire department may expend foreign fire insurance tax monies to reimburse active members of the department for mileage expenses incurred in performing firemanic duties.
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 (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 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).
Since it has been held that, under sections 9104 and 9105, foreign fire insurance tax monies may not be made available for the personal use of individual firefighters ( Wilcox v Schenck, 52 AD2d 349, 383 NYS2d 918; see also Opn No. 2000-6, supra; but see MacIsaac v City of Poughkeepsie, 158 AD2d 140, 558 NYS2d 667, appeal denied 76 NY2d 714, 564 NYS2d 717, appeal dismissed 80 NY2d 891, 587 NYS2d 901), we have concluded that it would be improper to use these monies to make direct cash payments to firefighters (Opn No. 2000-6, supra; Opn No. 87-88, supra; 1982 Opns St Comp No. 82-10, p 12). We have also concluded that foreign fire insurance tax monies may not be used to pay for personal expenses of firefighters, such as automobile registration (1963 Opns St Comp No. 63-886, unreported) and meals during on-duty hours (29 Opns St Comp, 1973, p 91).
Based on the foregoing, since the purpose of the proposed payments is to provide a direct cash reimbursement to firefighters for out-of-pocket expenses in operating their personal vehicles, it is our opinion that it would not be proper to expend foreign fire insurance tax monies for that purpose.
March 8, 2005
David Leonardo, Chairman Board of Directors
Shaker Road/Loudonville 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]).