Requestor: John L. Rizzo, Genesee County Attorney Genesee County Building No. 1 Batavia, New York 14020
Written by: James D. Cole, Assistant Attorney General in Charge of Opinions
You have asked whether a county is authorized to indemnify and defend the members and employees of an industrial development agency (IDA) created for its benefit pursuant to Article 18-A of the General Municipal Law.
Section 18 of the Public Officers Law establishes a procedure for defense and indemnification of local employees and officers by local public entities (Public Officers Law, § 18[1]).* The provisions of section 18 apply if the local governing body elects to confer the section's benefits upon its employees and to be held liable for any costs incurred under the section (id., § 18[2][a]). Additionally, the benefits of section 18 may be conferred upon the employees of a public entity "where the governing body of a municipality, for whose benefit the public entity has been established", has agreed to confer the benefits of section 18 upon that public entity (id., § 18[2][b]). The municipality must agree to be held liable for costs incurred under these provisions.
Thus, under section 18(2)(b), a municipality may agree to defend and indemnify a "public entity" formed for its benefit. The term "public entity" includes a separate, corporate instrumentality (id., § 18[1][a]).
Industrial Development Agencies are established through special act of the State Legislature and under State law are defined as corporate governmental agencies constituting public benefit corporations (General Municipal Law, § 856). The State enabling legislation for IDAs specifically provides that an IDA is established for the benefit of "the governing body of the municipality" (id., § 856[1][a]). "Municipality" is defined to mean a county, city, village, town or Indian reservation in this State (id., § 854[3]). The purposes and powers of an IDA are established by law (id., § 858).
Thus, an IDA is a "public entity" as defined in section 18(1)(a) of the Public Officers Law. Further, State law provides that IDAs are established for the benefit of municipalities. Thus, under the provisions of section 18(2)(b) of the Public Officers Law, a county governing body may agree to defend and indemnify the officers and employees of an IDA formed for its benefit (see 1987 Op Atty Gen 32).
We conclude that a county legislative body may provide for the defense and indemnification of the officers and employees of an industrial development agency formed for its benefit.
The Attorney General renders formal opinions only to officers and departments of the State government. This perforce is an informal and unofficial expression of views of this office.
* We note that in prior opinions of this office we concluded that a municipality may also provide for defense and indemnification by local law (1987 Op Atty Gen [Inf] 82).