Section 577. Tax exemptions

1.  (a)  The  local legislative body of any
  municipality in which a project of a housing development fund company is
  or is to be located may exempt the real property in  such  project  from
  local and municipal taxes including school taxes, other than assessments
  for local improvements, to the extent of all or part of the value of the
  property  included  in  the  completed  project. The tax exemption shall
  operate and continue for such period as may be provided  by  such  local
  legislative body, but in no event for a period of more than forty years,
  commencing  in each instance from the date on which the benefits of such
  exemption first became available and effective.
    (b) Where a municipality acts on behalf of another taxing jurisdiction
  in assessing real property for the purpose of taxation,  or  in  levying
  taxes  therefor,  the  action  of  the  local  legislative  body of such
  municipality in granting such tax exemption shall  have  the  effect  of
  exempting  the  real  property  in such project from local and municipal
  taxes  including  school  taxes,  other  than  assessments   for   local
  improvements, levied by or in behalf of both such taxing jurisdictions.
    (c)  The  local  legislative  body  of  any  municipality may grant an
  exemption under paragraph (a) of this subdivision to the  real  property
  of  a  project  of  any  entity to which it is authorized to make a loan
  pursuant to section five hundred seventy-six-c of this article.
    (d) In a city having a population of one million or more,  within  one
  hundred  twenty  days following receipt of a written submission from the
  supervising agency requesting a tax exemption pursuant to paragraph  (a)
  of  this  subdivision  for the real property containing the project of a
  housing development fund  company,  the  local  legislative  body  shall
  approve  or disapprove by resolution the requested tax exemption. If the
  local legislative body fails to take  such  action  within  one  hundred
  twenty  days  following  receipt  of  such  written submission from such
  supervising agency, then the tax exemption requested by the  supervising
  agency  shall  be  deemed  approved  pursuant  to  paragraph (a) of this
  subdivision.
    2. Any inconsistent provision of law to the contrary  notwithstanding,
  mortgages of a housing development fund company shall be exempt from the
  mortgage recording taxes imposed by article eleven of the tax law.
    3.  (a)  Notwithstanding the provisions of subdivision one hereof, the
  real property of a state urban development corporation project acquired,
  owned, constructed,  managed  or  operated  by  a  company  incorporated
  pursuant to the not-for-profit corporation law and this article shall be
  entitled to all the benefits provided by section four hundred twenty-two
  of  the  real  property  tax  law.  The  real  property of a state urban
  development corporation project, other than a  state  urban  development
  corporation project acquired, owned, constructed, managed or operated by
  a  company  incorporated  pursuant to the not-for-profit corporation law
  and this article, shall be exempt from all local  and  municipal  taxes,
  other  than  assessments  for  local  improvements, to the extent of the
  value of the property included in such project as represents an increase
  over the  assessed  valuation  of  the  real  property,  both  land  and
  improvements, acquired for the project on the date of its acquisition by
  the  housing  development  fund company. The tax exemption shall operate
  and continue so long as the mortgage loans of such  housing  development
  fund  company are outstanding, but in no event for a period of more than
  forty years, commencing in each instance from the date when such housing
  development fund company first acquired such property. If a state  urban
  development corporation project qualifying for tax exemption pursuant to
  this  subdivision  is  sold,  with  the approval of the commissioner, to
  another housing development fund company, such successor  company  shall
  be entitled to all the benefits of this subdivision.

    (b)  In the event a state urban development corporation project is not
  subject to a state-aided, federally-aided or municipally-aided mortgage,
  as defined herein, it shall receive  the  tax  exemption  granted  under
  paragraph  (a)  of  this  subdivision  only  if  it  has  entered into a
  regulatory  agreement  with  the  commissioner  pursuant to section five
  hundred seventy-six of  this  article,  and  such  tax  exemption  shall
  continue only so long as such agreement is in force and effect.