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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 -- Exempt Volunteer Firemen's Benevolent Associations (use of tax moneys to rent meeting room)

INSURANCE LAW, §§9104, 9105; Laws Of 1975, Chapter 543: The Montgomery Fire Department Volunteer Exempt Firemen's Benevolent Association may expend foreign fire insurance tax moneys to rent a room in which to meet, if the meetings are for the purpose of providing care and relief to disabled or indigent volunteer firemen and their families.

You ask whether the Montgomery Fire Department Volunteer Exempt Firemen's Benevolent Association may expend foreign fire insurance tax moneys to rent a room to be used for meetings of the Association and its trustees. Some of these meetings will be devoted to discussing the care and relief of disabled or indigent volunteer firemen and their families.

Sections 9104 and 9105 of the Insurance Law, as amended by chapter 293 of the Laws of 1988, govern the use of foreign fire insurance tax moneys "except as otherwise provided in any special law". Sections 9104 and 9105 provide that the foreign fire insurance tax moneys of a fire department consisting of a single 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. A company in a multi-company fire department may also pay all or a portion of the tax to the department of which it is part.

As previously noted, however, sections 9104 and 9105 of the Insurance Law apply only "except as otherwise provided in any special law." Therefore, where an exempt firemen's benevolent association has been created by special act of the State Legislature and is authorized to receive direct payment of the foreign fire insurance tax moneys, the moneys may only be expended in the manner prescribed by the special act (1983 Opns St Comp No. 83-120, p 151; 1981 Opns St Comp No. 81-328, p 357).

The Montgomery Fire Department Volunteer Firemen's Benevolent Association was incorporated by chapter 543 of the Laws of 1975. Section 3 of that legislation sets forth the several purposes of the Association and provides as follows:

The purposes of such corporation shall be the maintenance of suitable headquarters for, and the promotion of fraternal intercourse among the members of such corporation, the relief, aid and assistance of such members and their families who are disabled or indigent, and the promotion of the welfare of the volunteer fire service within the village of Montgomery and the territory provided with fire protection by contract with the town of Montgomery.

In furtherance of these purposes, section 5 of that act provides that the Association shall have all of the powers of a not-for-profit corporation, which include the power to rent real property and all powers necessary to effect any or all of the purposes for which the corporation is formed (Not-For-Profit Corporation Law, §202[a][4],[16]).

Section 7 of chapter 543, however, specifically governs the receipt and expenditure of foreign fire insurance tax moneys. This section authorizes the Association to receive these moneys and provides, in part, as follows:

Such taxes shall only be used for the care and relief of disabled or indigent volunteer firemen and their families.

Thus, although the Association has the power to rent a meeting room in furtherance of its general corporate purposes, the expenditure of foreign fire insurance tax moneys by the Association is limited by section 7 of the act to the care and relief of disabled or indigent volunteer firemen and their families. We believe, however, that the care and relief of disabled or indigent volunteer firemen and their families by the Association necessarily requires at least occasional meetings of the Association or its trustees for this purpose. Therefore, in our opinion, foreign fire insurance tax moneys may be expended to rent a meeting room if the purpose of the meeting is the care and relief of disabled or indigent volunteer firemen and their families.

Finally, we recommend adoption of by-laws or rules and regulations setting forth reasonable standards or guidelines for the expenditure of foreign fire insurance tax moneys (see Opn No. 81-328, supra). Such standards should reflect the original intent of the special act and bear a close relationship to the commonly understood meaning of the language used in that act.

April 4, 1989
Earle B. Monroe, Recording Secretary
Montgomery Fire Department