N.Y. Public Authorities Law § 1114-m*2: Exemption from taxes, assessments and certain fees; payments in lieu of taxes

* § 1114-m. Exemption from taxes, assessments and certain fees;

payments in lieu of taxes. 1. It is hereby determined that the creation

of the authority and the carrying out of its corporate purposes is in

all respects for the benefit of the people of the state and is a public

purpose, and the authority shall be regarded as performing a

governmental function in the exercise of the powers conferred upon it by

this title and shall not be required to pay any taxes, special ad

valorem levies or special assessments upon any real property owned by it

or any filing, recording or transfer fees or taxes in relation to

instruments filed, recorded or transferred by it or on its behalf.

2. The authority may pay, or may enter into agreements with any

municipality to pay, a sum or sums annually or otherwise or to provide

other considerations to such municipality with respect to real property

owned by the authority located within such municipality and constituting

a part of its water system.

3. Any bonds issued pursuant to this title together with the income

therefrom shall be exempt from taxation except for transfer and estate

taxes. The revenues, moneys and all other property and all activities of

the authority shall be exempt from all taxes and governmental fees or

charges, whether imposed by the state or any municipality, including

without limitation real estate taxes, income taxes, franchise taxes,

sales taxes or other excise taxes.

4. The state hereby covenants with the purchasers and with all

subsequent holders and transferees of bonds issued by the authority

pursuant to this title, in consideration of the acceptance of and

payment for the bonds, that the bonds of the authority issued pursuant

to this title and the income therefrom shall be exempt from such

taxation, as stated in subdivision three of this section, and that all

revenues, moneys, and other property pledged to secure the payment of

such bonds shall at all times be free from such taxes as stated in such

subdivision.

5. Notwithstanding the provisions of subdivisions one through four of

this section, nothing herein shall prevent the state from assessing a

tax or surcharge against the water customers based on their water

consumption, provided, however, that all such taxes and surcharges and

the authority's obligation to collect and pay such taxes and surcharges

shall be subordinate to the rights of holders of all of the authority's

bonds and notes and to the payment of principal, premiums if any, and

interest thereon.

* NB There are 2 § 1114-m's