* § 1114-m. Exemption from taxes, assessments and certain fees;
payments in lieu of taxes. 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 and is a public
purpose, and the authority shall be regarded as performing a
governmental function in the exercise of the powers conferred upon it by
this title and shall not be required to pay any taxes, special ad
valorem levies or special assessments upon any real property owned by it
or any filing, recording or transfer fees or taxes in relation to
instruments filed, recorded or transferred by it or on its behalf.

2. The authority may pay, or may enter into agreements with any
municipality to pay, a sum or sums annually or otherwise or to provide
other considerations to such municipality with respect to real property
owned by the authority located within such municipality and constituting
a part of its water system.

3. Any bonds issued pursuant to this title together with the income
therefrom shall be exempt from taxation except for transfer and estate
taxes. The revenues, moneys and all other property and all activities of
the authority shall be exempt from all taxes and governmental fees or
charges, whether imposed by the state or any municipality, including
without limitation real estate taxes, income taxes, franchise taxes,
sales taxes or other excise taxes.

4. The state hereby covenants 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 shall be exempt from such
taxation, as stated in subdivision three of this section, and that all
revenues, moneys, and other property pledged to secure the payment of
such bonds shall at all times be free from such taxes as stated in such
subdivision.

5. Notwithstanding the provisions of subdivisions one through four of
this section, nothing herein shall prevent the state from assessing a
tax or surcharge against the water customers based on their water
consumption, provided, however, that all such taxes and surcharges and
the authority's obligation to collect and pay such taxes and surcharges
shall be subordinate to the rights of holders of all of the authority's
bonds and notes and to the payment of principal, premiums if any, and
interest thereon.

* NB There are 2 § 1114-m's