§ 1226-r. Exemption from taxes, assessments and certain fees. 1. The
authority shall not be required to pay any fees, taxes, special ad
valorem levies or assessments, 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 excise taxes, upon any
property owned by it or under its jurisdiction, control or supervision,
or upon the uses thereof, or upon its activities in the operation and
maintenance of its facilities or 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 authority shall at all times be exempt from any
filing, mortgage recording or transfer fees or taxes in relation to
instruments filed, recorded or transferred by it or on its behalf. 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
there from as well as the property of the authority shall at all times
be exempt from taxes, except for transfer and estate taxes. 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 and all revenues, monies, and other property pledged to secure
the payment of such bonds shall at all times be free from taxation,
except for transfer and estate taxes.

3. Notwithstanding the foregoing, the water board shall pay to each
municipality and each school district as hereinafter provided located
either in the service area or within municipalities in which real
property of the water board is located in monthly payments commencing on
the first day of the fiscal year of such municipality or school district
in the year succeeding the calendar year in which this title shall take
effect:

(a) to all school districts annually determined by the water board to
have lost real property tax revenues as a consequence of the transfer of
any previously taxable real property by either the board of water supply
or any municipality to the water board, the sum of nine hundred
seventy-five thousand dollars in the first fiscal year and such sum
annually thereafter in each of the next twenty-two years equal to the
sum so paid the preceding year decreased by forty-two thousand three
hundred ninety-one dollars, the amount to be paid to each individual
school district to be determined annually by the water board in
proportion to the amount of real property taxes received by each such
school district from the board of water supply in fiscal year nineteen
hundred ninety-three--nineteen hundred ninety-four;

(b) to each town which the water board annually determines will
provide services to the water board during the next ensuing calendar
year, for a period of forty years commencing in the calendar year
succeeding the year after the date of enactment of this title, the
annual sum of seventy-four thousand seven hundred thirty-seven dollars,
which sum shall be increased every sixth year by five per centum;
provided, that the town of Trenton shall initially receive sixty
thousand dollars of such initial aggregate amount with the remainder
being distributed to the town of Russia in the amount of nine thousand
five hundred dollars, to the town of Norway in the amount of four
thousand three hundred eighteen dollars, to the town of Ohio in the
amount of eight hundred ninety-four dollars and to the town of Salisbury
in the amount of twenty-five dollars; which such amounts being increased
by such five per centum as herein provided, and thereafter as the water
board shall determine;

(c) to the county of Oneida, in each year during which the auditorium
commonly known as the Utica memorial auditorium, as the same may be
reconstructed, enlarged or modified, or replaced by a building serving a
similar function at a different location within the service area, shall
be operated as an auditorium for the benefit of the residents of the
county of Oneida or any portion thereof, the annual sum of five hundred
thousand dollars, which sum shall be increased every sixth year by ten
per centum, for a period of forty years; and thereafter as the water
board shall determine;

(d) to the city of Utica, the sum of two hundred thousand dollars
during each of the next ten years, commencing in the calendar year
succeeding the year after the date of enactment of this title; the sum
of three hundred fifty thousand dollars in each of the following five
years; the sum of four hundred fifty-five thousand dollars in each of
the following five years; the sum of three hundred seventy-five thousand
dollars in each of the following five years; the sum of four hundred
twenty-five thousand dollars in each of the following five years; the
sum of four hundred seventy-five thousand dollars in each of the
following five years; the sum of five hundred twenty-five thousand
dollars in each of the following five years; and thereafter as the water
board shall determine.

Notwithstanding any other provision of this section, any payment in
lieu of tax payments described in paragraph (a), (b), (c) or (d) of this
subdivision, (i) may be decreased at any time for any period by
resolution of the governing body of the water board approved by the
affirmative vote of at least seventy-five per centum of such governing
body and provided further that any such decrease shall be uniform for
all payment in lieu of tax payments to the affect that any percentage
decrease to any municipality or school district shall be equally reduced
to each other municipality or school district, and (ii) as the water
board shall determine, be in priority to or subordinate to any other
payments required to be made pursuant to this title, including, without
limitation, the payment of sums to the authority or to any trustee
representing the holders of any bonds issued by the authority.