N.Y. Comp. Codes R. & Regs. tit. 15 § 29.10
The appropriate fiscal officer of the county shall indemnify and save harmless the commissioner (State of New York) from and against any and all liability, damage, expense, cause of action, suits, claims, penalties or judgments arising from the administration and collection of the tax as required by this agreement. The appropriate fiscal officer of the county shall, at the county's cost and expense, defend any and all suits and actions which may be brought against the commissioner, or in which the commissioner may be impleaded with others, arising from the administration and collection of the tax. In the event of the failure of the appropriate fiscal officer of the county to do so, the commissioner may, at the cost and expense of the appropriate fiscal officer of the county, and upon prior written notice to the appropriate fiscal officer of the county, defend any and all such suits or actions, and the appropriate fiscal officer of the county shall satisfy, pay and discharge any and all judgments that may be recovered against the commissioner in any such suits or actions which may be brought against the commissioner or in which the commissioner may be impleaded with others. In the event the appropriate fiscal officer of the county fails to pay the amount or amounts for which the commissioner shall become liable, the commissioner may pay the same, and the amount or amounts so paid, with any interest and costs that may be due thereon, shall be reimbursed to the commissioner from the vehicle use tax proceeds received by the commissioner, and shall be deducted from any quarterly payment or payments to be made to the appropriate fiscal officer of the county in accordance with this agreement.
N.Y. Comp. Codes R. & Regs. Tit. 15 § 29.10