Section 1949-B. Tax exemption and tax contract by the state

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  of  New  York  and is a public purpose. Accordingly, the
  authority shall be regarded  as  performing  an  essential  governmental
  function  in the exercise of the powers conferred upon it by this title,
  and the authority shall not be required to pay any fees, taxes,  special
  ad  valorem  levies  or assessments of any kind, whether state or local,
  including but not limited to fees, taxes, special ad valorem  levies  or
  assessments  on  real  property,  franchise  taxes, sales taxes or other
  taxes, upon or with respect to any property owned by  it  or  under  its
  jurisdiction,  control or supervision, or upon the uses thereof, or upon
  or with respect to its activities or operations in  furtherance  of  the
  powers  conferred  upon  it by the title, or upon or with respect to any
  fares, tolls, rentals, rates, charges, fees, revenues  or  other  income
  received  by  the  authority. Notwithstanding the previous sentence, the
  authority shall be required to pay water and pure water fees or  charges
  as  may  be negotiated by any public corporation. The construction, use,
  occupation or possession of any property owned by the authority  or  the
  county,   including  improvements  thereon,  by  any  person  or  public
  corporation under a lease, lease and sublease  or  any  other  agreement
  shall  not  operate  to  abrogate  or  limit  the  foregoing  exemption,
  notwithstanding that the lessee, user, occupant or person in  possession
  shall claim ownership for federal income tax purposes.
    2.  Any  bonds  issued pursuant to this title together with the income
  therefrom shall at all times be exempt from taxation.
    3. The state hereby  convenants  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 and  all  revenues,  monies,  and
  other  property  pledged  to  pay or to secure the payment of such bonds
  shall at all times be free from taxation.