Section 1685. Exemptions from taxation

It is hereby found, determined and
  declared 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, for the improvement of their  education,  welfare
  and prosperity, and is a public purpose, and that the dormitories of the
  authority  are an essential part of the state education system, and that
  the authority will be performing an essential governmental  function  in
  the  exercise  of  the  powers  conferred upon it by this title, and the
  state of New York covenants with the  holders  of  the  bonds  that  the
  authority  shall  be required to pay no taxes or assessments upon any of
  the  property  acquired  by  it  or  under  its  jurisdiction,  control,
  possession  or  supervision  or upon its activities in the operation and
  maintenance of such dormitories or any moneys, revenues or other  income
  received  by  the  authority and that the bonds of the authority and the
  income therefrom shall at all times be exempt from taxation, except  for
  transfer and estate taxes.