Sidebar: VOLUNTEER FIRE ASSOCIATIONS:
CORPORATE STATUS IS CRITICAL

Fire Departments Must Keep Current

(from Maine Townsman, June 2010)
By Lee Burnett

Volunteer firefighters in an untold number of incorporated fire associations may be personally liable due to lapses in the filing of routine paperwork with the Maine Secretary of State’s Office, according to the Maine Municipal Association.

In some cases, incorporated fire associations have expanded their responsibilities to include emergency medical services without having amended their original articles of incorporation on file with Maine Secretary of State’s office.

In other cases, fire departments failed to file required annual reports and have been administratively dissolved by the Secretary of State’s Office.

In both cases, incorporated fire association members may not be protected by the Maine Tort Claims Act and may be held personally liable in the event of a lawsuit, according to MMA’s Legal Department.

Many volunteer fire departments in Maine organized themselves as private non-profit organizations, independent of town government. But over time, the relationship grew more nebulous. Most volunteer departments now receive town funds but still operate semi-autonomously, electing their own officers and conducting outside fundraising.

MMA is concerned that many fire departments are operating outside their authority, don’t realize it – and that the members of these departments do not realize their personal assets could be at risk.

A few simple papers filed with the Maine Secretary of State’s Office will address the issue. MMA is urging all incorporated fire associations to take care of the paperwork before a grace period expires June 30.

As volunteer fire departments have evolved into combination fire and rescue squads during the past two decades, MMA has tried to make members aware of the need to amend articles incorporation on file with the Secretary of State’s office. If an incorporated fire department changes its purpose it also needs to change their incorporation papers with the state. Amending articles of incorporation can be done for a $20 filing fee.

It is not clear how widespread these problems are, but as many as half the departments in Maine could be exposed. Fire departments in New Sharon, Jefferson and Grand Lake Stream have recently been alerted to the problem and are addressing it.

Both Jefferson and New Sharon have dealt with the problem recently.

“It wasn’t complicated; they were most helpful at the Secretary of State’s office,” said Jefferson Fire Chief Walter Morris. “I don’t know how it impacted our liability. It’s more of an awareness thing. With rules, policies, procedures, you put them on shelf some place and sort of forget about it. It’s very important to periodically review them. This is one more reason to do it.”

This spring, another problem came to light through a routine underwriting audit involving the community of Grand Lake Stream. Grand Lake Stream organized a fire department in 1981 and organized a separate rescue squad in 1987. But both were administratively dissolved because annual reports were not filed and late-filing notices went unanswered, according to the Secretary of State’s Office.

The fire department was dissolved in 2004 while the rescue squad was dissolved in 1990. Cathy Beaudoin at Maine Secretary of State’s office said it is likely that the hand-off of paperwork responsibilities was missed due to turnover in the department.

Normally, filing reinstatement papers entails a $35 fee, a $25 late filing fee and a $25 penalty for every year in arrears. But those fees have been temporarily suspended due to an unrelated law change that created a grace period.

The grace period ends June 30. If reinstatement papers aren’t filed before June 30, then a department would need to file brand new incorporation papers, according to Beaudoin.

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Sidebar: VOLUNTEER FIRE ASSOCIATIONS: CORPORATE STATUS IS CRITICAL

Under Maine law, a volunteer fire association must be incorporated and in good standing in order to receive municipal support. Here’s why:

Only an incorporated association is a legal method of providing fire protection services (see 30-A M.R.S.A. §§ 3151, 3152). (Maintaining a municipal department and contracting with another governmental unit are the other two.)

Also, a municipality may raise or appropriate money only for an incorporated association (see 30-A M.R.S.A. § 5722(4)). (If the total appropriated is more than $1,000, it cannot be paid over in one lump sum; it may be disbursed only on an itemized basis as expenses are incurred.)

And only members of an incorporated association are protected as municipal employees under the Maine Tort Claims Act (see 14 M.R.S.A. § 8102(1)). If members of an unincorporated association cause personal injury or property damage while engaged in firefighting activities, they can be held personally liable and cannot be defended or indemnified at municipal expense.

Finally, only members of an incorporated association are deemed municipal employees for purposes of workers’ compensation (see 39-A M.R.S.A. § 102(11)(A)(2)). If members of an unincorporated association injure themselves while engaged in firefighting activities, they will be ineligible for benefits.

And it’s not enough for an association simply to incorporate. It must also file an annual report with the Secretary of State and maintain a registered agent to remain in good standing. If it does not, it may be dissolved by the Secretary, with no corporate powers other than to wind up its affairs.

To find out if a volunteer fire association is incorporated and in good standing, contact the Secretary of State’s Bureau of Corporations, Elections & Commissions (624-7752) or check out the “corporate name search” feature at https://icrs.informe.org/nei-sos-icrs/ICRS?MainPage=x.

 

Lee Burnett is a freelance writer from Sanford, leeburnett_maine@hotmail.com