§ 125. Tax exemptions. 1. (a) The local legislative body of any
municipality in which a project of such company is or is to be located
may by contract agree with any redevelopment company to exempt from
local and municipal taxes, other than assessments for local
improvements, all or part of the value of the property included in such
project which represents an increase over the assessed valuation of the
real property, both land and improvements, acquired for the project at
the time of its acquisition by the redevelopment company which
originally undertook the project and for such definite period of years
as such contract may provide, except that where the real property in a
project was acquired for purposes of rehabilitation, the local
legislative body either may utilize the foregoing formula or may agree
to exempt from such taxes all or part of the value of the property
included in such project on condition that the amount of such taxes to
be paid shall not be less than ten per centum of the annual shelter rent
or carrying charges of such rehabilitation project. The tax exemption
shall not operate for a period of more than twenty-five years,
commencing in each instance from the date on which the benefits of such
exemption first become available and effective; provided, however, that
with respect to a project either acquired by a mutual redevelopment
company pursuant to section one hundred twenty-six or owned and
continuing to be owned by a mutual redevelopment company which would
require substantial increases in carrying charges after the period of
tax exemption is ended unless relief is provided, the local legislative
body may contract with such mutual redevelopment company to extend such
tax exemption for not more than twenty-five additional years at a rate
of tax exemption not to exceed an average of fifty per centum during
such additional period, provided that the tax exemption during the first
two years of such additional period shall continue at the rate of the
tax exemption of such project immediately preceding the termination of
the initial twenty-five year period and that the tax exemption
thereafter shall be decreased in equal biennial decrements, the first of
which shall occur immediately following such two year period, and
provided that such contract shall contain provisions as to income
limitations relating to admission and continued occupancy of the project
and provisions as to rental surcharges to the same effect as are
contained in subdivisions two, three, four and five of section
thirty-one, except that in the case of projects owned and continuing to
be owned by mutual redevelopment companies, persons or families whose
probable aggregate annual income does not exceed the median income for
families of the same size in the same metropolitan area shall also be
eligible for admission to the project on the understanding that any
person or family becoming eligible by reason hereof whose probable
aggregate annual income at the time of admission or during the period of
occupancy exceeds, the greater of (i) the median income for such persons
or families for the metropolitan statistical area in which the project
is located, or if a project is located outside a metropolitan
statistical area, the median income for such persons or families for the
county in which the project is located, as most recently determined by
the United States department of housing and urban development, in which
case any person or family becoming eligible for admission pursuant to
this subparagraph shall pay, from the time of admission, a rental
surcharge as provided for in subdivision three of section thirty-one of
this chapter, computed on the basis of the income limitations applicable
to such persons or families in the absence of this subparagraph, or (ii)
six times the rental shall be liable for payment of rental surcharges
hereunder computed on the basis of such ratio, except that in the case
of families with three or more dependents such ratio shall be seven to
one; and provided further that with respect to a project which is or is
to be permanently financed by a federally-aided mortgage, the tax
exemption shall operate for so long as such mortgage is outstanding, 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
become available and effective; and provided further that with respect
to a project which is or is to be permanently financed by a loan from
the New York city housing development corporation, the tax exemption
shall operate for so long as such loan is outstanding.

(a-1) Where the redevelopment contract between a mutual redevelopment
company and the local legislative body under which the initial tax
exemption was granted contains provisions different from those in
subdivisions two, three, four and five of section thirty-one of this
chapter, then a contract to extend the tax exemption for an additional
period under paragraph (a) of this subdivision may provide that those
provisions of the redevelopment contract shall continue to apply (with
such modifications as the supervising agency of such mutual
redevelopment company shall approve) during the additional period as if
such additional period were the initial period of tax exemption for such
mutual redevelopment company, notwithstanding the provisions of
paragraph (a) of this subdivision to the contrary.

(a-2) Any inconsistent provision of law notwithstanding, in a city
having a population of one million or more, where a local legislative
body has acted to extend the tax exemption of a mutual redevelopment
company for an additional twenty-five years after the initial tax
exemption period has expired, the local legislative body may authorize
tax exemption during the final eleven years of such additional
twenty-five year exemption period under this subdivision, provided that
the amount of taxes to be paid by the mutual redevelopment company
during the final eleven years of such additional twenty-five year
exemption period shall not be less than an amount equal to the greater
of (i) ten per centum of the annual rent or carrying charges of the
project minus utilities for the residential portion of the project, or
(ii) the taxes payable by such company for the residential portion of
the project in the fourteenth year of such additional twenty-five year
exemption period, and may further extend the period of such additional
twenty-five year exemption for up to a total period of thirty-five years
from the date of expiration of the initial tax exemption, provided that
the amount of taxes to be paid by the mutual redevelopment company
during any such extension beyond such additional twenty-five year
exemption period shall not be less than an amount equal to the greater
of (i) ten per centum of the annual rent or carrying charges of the
project minus utilities for the residential portion of the project, or
(ii) the taxes payable by such company for the residential portion of
the project in the fourteenth year of such additional twenty-five year
exemption period.

(a-3) Any inconsistent provision of law notwithstanding, the local
legislative body of any municipality may grant an additional tax
exemption period for any project, other than a project by a mutual
redevelopment company, that received a tax exemption under paragraph (a)
of this subdivision, upon the expiration of the tax exemption period.
The additional tax exemption period may be for a term of forty years, or
until such time as the project is no longer operated under the
restrictions and for the purposes set forth in this article, whichever
is sooner. Unless otherwise approved by the local legislative body, the
amount of taxes paid by the redevelopment company during such additional
tax exemption period shall not be less than (i) the taxes payable by
such company in accordance with the resolution for such redevelopment
company that was approved by the local legislative body and that was in
effect immediately prior to the expiration of the initial tax exemption
period, or (ii) if there is no such resolution, the taxes payable by
such company in accordance with the exemption authorized pursuant to
this article immediately prior to the expiration of the initial tax
exemption period.

(a-4) Any inconsistent provision of law notwithstanding, in a city
having a population of one million or more, where a local legislative
body has acted to extend the tax exemption of a mutual redevelopment
company for the maximum period provided for in paragraph (a-2) of this
subdivision, the local legislative body may grant an additional tax
exemption for a period of up to fifty years, provided that the amount of
taxes to be paid during any such period of tax exemption shall be not
less than an amount equal to the greater of (i) ten per centum of the
annual rent or carrying charges of the project minus utilities for the
residential portion of the project, or (ii) the taxes payable by such
company for the residential portion of the project during the tax year
commencing July first, two thousand and ending on June thirtieth, two
thousand one. Such grant of an additional tax exemption period shall
take effect upon the expiration of the maximum period provided for in
paragraph (a-2) of this subdivision.

(b) A redevelopment company which has been granted and has received
tax exemption pursuant to this section may at any time elect to pay to
the municipality or other appropriate taxing jurisdiction the total of
all accrued taxes for which exemption was granted and received, together
with interest at the rate of five per centum per annum. Upon such
payment the tax exemption of the project shall thereupon cease and
terminate.

(c) 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 said agreement by the local legislative body of such
municipality shall have the effect of exempting the real property in a
project from local and municipal taxes, other than assessments for local
improvements, levied by or in behalf of both such taxing jurisdictions.

(d) As used in this subdivision the term "taxing jurisdiction" means
any municipal corporation or district corporation, including any school
district or any special district, having the power to levy or collect
taxes and benefit assessments upon real property, or in whose behalf
such taxes or benefit assessments may be levied or collected.

2. Any inconsistent provision of law notwithstanding, mortgages of any
such company issued to the federal government or any instrumentality
thereof, or to any municipal housing authority or other public housing
agency or instrumentality thereof whose obligations are determined to be
exempt from federal taxation by the federal government, or issued to a
financial institution and insured or guaranteed by the federal housing
administrator or any other instrumentality of the federal government
shall be exempt from the mortgage recording taxes imposed by article
eleven of the tax law.