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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 -- Local Laws (preemption)
LOCAL LAWS -- Preemption (foreign fire insurance taxes)

INSURANCE LAW, §§9104(g), 9105(e); MUNICIPAL HOME RULE LAW, §10[1][i]: Pre-existing city charter provisions governing the distribution and use of foreign fire insurance tax moneys remain operative following the effective date of Chapter 293 of the Laws of 1988.

You ask whether certain city charter provisions governing the distribution and use of foreign fire insurance tax moneys remain effective following the amendment of Insurance Law, §§9104 and 9105 by Chapter 293 of the Laws of 1988. Chapter 293, among other things, added language to these statutes that provides that neither section shall be changed, modified or amended by charter, local law, ordinance, resolution or regulation. The city charter provisions in question were enacted first by the State Legislature and then were amended by local laws adopted prior to the enactment of Chapter 293. These charter provisions have the effect of precluding the city's paid firefighters from sharing in some of the foreign fire insurance tax moneys.

The distribution and use of foreign fire insurance tax moneys are governed generally by Insurance Law, §§9104 and 9105. These sections, as amended by Chapter 293 of the Laws of 1988, provide that except as provided in a "special law", 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 authorities 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 treasurer or fiscal officer receiving the foreign fire insurance tax moneys must, in turn, distribute the amount received to the companies constituting the fire department (Insurance Law, §§9104[a][4]; 9105[d][2][E]). Each fire department or fire company which receives foreign fire insurance tax moneys must use them for the benefit of the department or company, as determined by the membership of the department or company (Insurance Law, §§9104[f][1]; 9105[d][3]), but a fire company in a multi-company fire department is not precluded from paying all or part of its foreign fire insurance tax moneys to the fire department of which it is part (see Insurance Law, §§9104[f][2]; 9105[d][3][B]). In the absence of an express legislative enactment precluding paid firefighters from sharing such moneys, sections 9104 and 9105 have been interpreted to require paid firefighters to receive a share of the foreign fire insurance tax moneys (see Renn v Kimbark, 51 NY2d 189, 433 NYS2d 71; 1989 Opns St Comp No. 89-53, p 120).

As noted, Chapter 293 added new subdivisions (g) and (e) to sections 9104 and 9105, respectively, which provide that "[t]he provisions of this section shall not be changed, modified or amended by any charter, local law, ordinance, resolution or regulation". Prior to the enactment of these provisions, the courts had held that a city, by local law, could supersede a special act of the State Legislature with respect to the recipient of foreign fire insurance tax moneys because cities are authorized to enact local laws inconsistent with special laws relating to their property, affairs and government (see Municipal Home Rule Law, §10[1][i]), and designation of the recipient of foreign fire insurance tax moneys is related to a city's property, affairs and government (Fire Department of the City of Rochester v City of Rochester, 23 AD2d 183, 259 NYS2d 517, affd 16 NY2d 933, 264 NYS2d 291; Grumet v Goodbody, 1 Misc 2d 222, 150 NYS2d 141, affd 309 NY 956). For similar reasons, the courts had also held that a city, by local law, could supersede a special act of the State Legislature with respect to the beneficiaries of the foreign fire insurance tax to expand the class of beneficiaries to include paid firefighters (see Exempt Volunteer Firemen's Association of Lockport v City of Lockport, 31 AD2d 311, 297 NYS2d 365) or to restrict the class of beneficiaries to exclude paid firefighters (see Van Orman v Slade, 126 AD2d 282, 513 NYS2d 867). Although it is clear that Insurance Law, §§9104(g) and 9105(e) now prohibit the provisions of sections 9104 and 9105 from being changed, modified or amended by, inter alia, any local law or charter adopted after the effective date of Chapter 293 (January 1, 1989), the issue raised by this inquiry is whether these new provisions also render ineffective pre-existing city charter provisions which differ from sections 9104 and 9105.

The provisions of Insurance Law, §§9104 and 9105, as amended by Chapter 293, are applicable except as provided by "special law" (see Insurance Law, §§9104[a][3],[f], 9105[d][2][D],[d][3]). A "special law" is defined as "[a] state statute which in terms and in effect applies to one or more, but not all ... cities ..." (Municipal Home Rule Law, §2[12]; see also N.Y. Const., Article IX, §3[d][4]). Thus, a city charter provision enacted by the State Legislature is a "special law" because it is a State statute which in terms and in effect applies only to one city. Therefore, it appears that the exception for "special laws" in sections 9104 and 9105 preserves pre-existing city charter provisions enacted by the State Legislature.

In reaching the above conclusion, we are aware that Insurance Law, §§9104(g) and 9015(e) prohibit the provisions of sections 9104 and 9105 from being changed, modified or amended by any "charter". Read literally, the term "charter" could be construed to include a city charter provision enacted by the State Legislature (see Municipal Home Rule Law, §2[1],[2]). Such a construction of the term "charter", however, would be inconsistent with the express exceptions for "special laws" contained in sections 9104 and 9105 and, thus, would create an anomalous distinction between special laws which amend city charters and those which do not, based solely on form, not substance. Further, such a construction would ignore the State Legislature's authority to enact special laws relating to the property, affairs or government of a city which are inconsistent with general laws (N.Y. Const., Art IX, §2[b][2]; see also Municipal Home Rule Law, §40; Legislative Law, §§55, 56). Therefore, we believe that the term "charter" as used in sections 9104(g) and 9105(e) does not refer to a city charter provision enacted by the State Legislature.

With respect to whether Insurance Law, §§9104(g) and 9105(e) supersede a city charter provision which was enacted by local law prior to the effective date of Chapter 293 of the Laws of 1988 and which is inconsistent with the distributional scheme currently contained in sections 9104 and 9105, we note that, generally, statutes are presumed to operate prospectively and not retroactively unless either the statutory language or legislative intent requires a retroactive construction (see McKinney's Statutes, §51). Even if a State statute operates prospectively, however, a local law adopted prior to the statute's effective date may be superseded if it is demonstrated that the State has clearly evinced a desire to preempt an entire field thereby precluding any further local regulation (see Jancyn Manufacturing Corp v County of Suffolk, 71 NY2d 91, 524 NYS2d 8).

Where State legislation is adopted preempting a field, a local law regulating the same subject matter is deemed inconsistent with the State's transcendent interest, whether or not the terms of the local law actually conflict with a State-wide statute, because the local law would tend to inhibit the operation of the State's general law and thereby thwart the operation of the State's overriding policy concerns (Albany Area Builders Association v Town of Guilderland, 74 NY2d 372, 547 NYS2d 627). Where, however, a State statute expressly preempts local legislation, but the scope of the preemption is unclear from the face of the statute, the scope of the preemption is a matter of statutory construction requiring consideration of the plain meaning of the statute, the relevant legislative history and the underlying purposes of the supersession clause as part of the statutory scheme (see Frew Run Gravel Products Inc.v Carroll, 71 NY2d 126, 524 NYS2d 25).

With respect to the plain meaning of Insurance Law, §§9104(g) and 9105(e), as noted, each of these statutes provides that "[t]he provisions of this section shall not be changed, modified or amended by any charter, local law, ordinance, resolution or regulation" (emphasis added). In this regard, we note that the courts have construed the word "shall", when used as a command, to necessarily indicate the future as to performance (Stisser v New York Cent. & H. R. R. Co., 32 App Div 98, 52 NYS 861, mot den, 35 App Div 625, 55 NYS 1149; see also Huttlinger v Royal Dutch West India Mail, 180 App Div 114, 167 NYS 158; Seventy-Eighth St. & Broadway Co. v Rosenbaum, 111 Misc 577, 182 NYS 505). Therefore, it appears that the words "shall not be changed, modified or amended" refer only to the future adoption of local laws.

Further, Insurance Law, §§9104(g) and 9105(e), on their face, do not purport to repeal or supersede any pre-existing local enactment (cf. Radich v Council of City of Lackawanna, 93 AD2d 559, 462 NYS2d 498 affd 61 NY2d 652, 472 NYS2d 82). Thus, the language of these provisions is in contrast to other statements of preemption which clearly express an intent to supersede pre-existing local laws. For example, Local Finance Law, §176.00 provides that "... all statutes, local laws, ordinances, rules and regulations, insofar as they relate to the matters herein contained, are hereby superseded...". (also see, e.g., Real Property Tax Law, §332, relating to assessors and assessor training, which provides that "[p]rovisions of any general, special, local or other laws which are inconsistent with the provisions of this title shall be inapplicable ..." and Environmental Conservation Law, §23-0303[2], relating to the regulation of mining, which states that "[t]he provisions of this article shall supersede all local laws and ordinances relating to the regulation of the oil, gas and solution mining industries..."). Therefore, "reading the language in its natural and most obvious sense" (see Frew Run Gravel Products Inc., supra), we believe that the plain meaning of sections 9104(g) and 9105(e) is not to supersede pre-existing local laws, but instead, to prohibit local legislative action on and after January 1, 1989, the effective date of Chapter 293 of the Laws of 1988.

The legislative history of Chapter 293 of the Laws of 1988, including the sponsor's memorandum in support of the bill, makes no specific mention of an intent to supersede pre-existing local enactments. Further, although that memorandum states that Chapter 293 was enacted for the purpose of providing a clear, definite and "uniform" process for distributing foreign fire insurance tax moneys "to be followed state-wide", there is no indication that the uniformity to be achieved by this amendment encompassed the supersession of existing local laws. Rather, we believe that the reference to uniformity reflects those changes made by Chapter 293 which eliminated a number of inconsistencies between sections 9104 and 9105. In that respect, Chapter 293 established a uniform, State-wide procedure for the distribution and use of foreign fire insurance tax moneys governed by those sections.

We further believe that Chapter 293 was not intended to establish a single procedure applicable to all local governments because that enactment retained the language in sections 9104 and 9105 which provides that those statutes shall govern the distribution and use of foreign fire tax insurance moneys except as provided by "special law". There are many special laws which vary the distribution and use of foreign fire insurance taxes, such as those which authorize exempt volunteer firemen's benevolent associations to receive and expend such moneys (see, e.g., L 1989 ch 256). Moreover, the sponsor's memorandum states that the bill will not result in any "substantial change in ... the ultimate recipient of the funds". In our view, this statement in the sponsor's memorandum, together with the retention of the exception for special laws, suggests that the legislature did not intend for Chapter 293 to have fiscal consequences for beneficiaries entitled to foreign fire insurance tax moneys, including those receiving such moneys pursuant to a local law.

Thus, because neither the language nor legislative history of Chapter 293 of the Laws of 1988 clearly indicate that the addition of sections 9104(g) and 9105(e) was intended to supersede pre-existing local enactments providing different procedures, it is our opinion that pre-existing city charter provisions governing the distribution and use of foreign fire insurance tax moneys remain operative following the effective date of Chapter 293 of the Laws of 1988. We do not believe that it would be appropriate to infer an intent on the part of the Legislature to supersede preexisting local enactments where the Legislature itself has failed to expressly so provide.

March 30, 1990
Ralph W. Nash, Esq., City Attorney
City of Ithaca