§ 1012. Exemption from taxation. It is hereby found and declared that
the projects authorized by this title are for the aid and improvement of
commerce and navigation and that such aid and improvement of commerce
and navigation and the development, sale and distribution of power is
primarily for the benefit of the people of the state of New York, for
the improvement of their health and welfare and material prosperity, and
is a public purpose, and the authority shall be regarded as performing a
governmental function in undertaking such projects and in carrying out
the provisions of this title, and shall be required to pay no taxes or
assessments upon any of the property acquired by it for such projects or
upon its activities in the operation and maintenance thereof, provided
that nothing herein shall prevent the authority from entering into
agreements to make payments in lieu of taxes with respect to property
acquired for any project where such payments are based solely on the
value of real property without regard to any improvement thereof by the
authority and where no bonds to pay any costs of such project were
issued prior to January first, nineteen hundred seventy-two.

The securities and other obligations issued by the authority, their
transfer and the income therefrom shall, at all times, be free from
taxation within this state. It is furthermore declared that the object
and purpose of this title is that such projects shall be in all respects
self-supporting.