§ 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.

2-a. Notwithstanding any inconsistent provision of law to the
contrary, a project of a housing development fund company incorporated
pursuant to the not-for-profit corporation law and this article shall be
exempt from the sales and compensating use taxes imposed pursuant to
article twenty-eight or twenty-nine of the tax law, provided that such
housing development fund company has entered into a regulatory agreement
with respect to the provision of affordable housing with the
commissioner, a state agency or authority as defined in this chapter,
the New York city department of housing preservation and development, or
the New York city housing development corporation, and such tax
exemption shall continue only so long as such agreement is in force and
effect.

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.