§ 1174-N — Exemption from taxes, assessments and certain fees; payments in lieu of taxes

§ 1174-n. Exemption from taxes, assessments and certain fees; payments\nin lieu of taxes. 1. It is hereby determined that the creation of the\nauthority and the carrying out of its corporate purposes is in all\nrespects for the benefit of the people of the state and is a public\npurpose, and the authority shall be regarded as performing a\ngovernmental function in the exercise of the powers conferred upon it by\nthis title and shall not be required to pay any taxes, special ad\nvalorem levies or special assessments upon any real property owned by it\nor any filing, recording or transfer fees or taxes in relation to\ninstruments filed, recorded or transferred by it or on its behalf.\n 2. The authority may pay, or may enter into agreements with any\nmunicipality to pay, a sum or sums annually or otherwise or to provide\nother considerations to such municipality with respect to real property\nowned by the authority located within such municipality and constituting\na part of its water system.\n 3. Any bonds issued pursuant to this title together with the income\ntherefrom shall be exempt from taxation. The revenues, moneys and all\nother property and all activities of the authority shall be exempt from\nall taxes and governmental fees or charges, whether imposed by the state\nor any municipality, including without limitation real estate taxes,\nfranchise taxes, sales taxes or other excise taxes. For purposes of this\nsubdivision, the phrase "exempt from taxation" means exempt from direct\ntaxation in conformity with established judicial interpretation of the\ntax exempt status of the obligations of the state and its agencies,\nentities, authorities and political subdivisions and thus, the meaning\nof such phrase is in conformity with the legislative intent expressed by\nsection twenty-two of chapter one hundred sixty-six of the laws of\nnineteen hundred ninety-one regarding the tax exempt status of\nobligations of the state and its agencies.\n 4. The state hereby covenants with the purchasers and with all\nsubsequent holders and transferees of bonds issued by the authority\npursuant to this title that the interest thereon shall be exempt from\ntaxation. The state further covenants with the holders of such bonds\nthat all revenues, moneys, and other property pledged to secure the\npayment of such bonds shall at all times be free from such taxes. For\npurposes of this subdivision, the phrase "exempt from taxation" means\nexempt from direct taxation in conformity with established judicial\ninterpretation of the tax exempt status of the obligations of the state\nand its agencies, entities, authorities and political subdivisions and\nthus, the meaning of such phrase is in conformity with the legislative\nintent expressed by section twenty-two of chapter one hundred sixty-six\nof the laws of nineteen hundred ninety-one regarding the tax exempt\nstatus of obligations of the state and its agencies.\n 5. Notwithstanding the above, nothing herein shall prevent the state\nfrom assessing a tax or surcharge against the water customers based on\ntheir water consumption, provided, however, that all such taxes and\nsurcharges and the authority's obligation to collect and pay such taxes\nand surcharges shall be subordinate to the rights of holders of all of\nthe authority's bonds and notes and to the payment of principal,\npremiums if any, and interest thereon.\n