§ 36-a. Additional powers of municipalities. In addition to any other powers granted to a municipality by law, and notwithstanding the provisions of any other law, a municipality acting by its local legislative body shall have power: 1. To undertake, plan, develop, construct or enter into contracts for the planning, development or construction of, or to own one or more projects or any part thereof, or to engage in one or more of such activities in respect to one or more projects or any part thereof. For any of the purposes of this subdivision, a municipality may contract either with a housing company incorporated under this article or with a housing development fund company incorporated pursuant to article eleven of this chapter. 2. (a) Acquire by purchase, gift, devise, lease, condemnation or otherwise, in accordance with the provisions of the appropriate general, special or local law applicable to the acquisition of real or personal property by such municipality, real or personal property or any interest therein necessary for or incidental to a project, including but not limited to air rights, and easements or other rights of user necessary for the use and development of such air rights, to be developed as air rights sites for a project; provided, however, that the acquisition of any air rights over railroad tracks, rights of way or facilities and easements or other rights of user necessary for the use and development of such air rights are to be subject to the provision of section fifty-one-a of the railroad law. The acquisition of real property pursuant to a plan shall in every case be deemed to be and constitute a continuous rather than separate takings.

(b) Property so acquired by a municipality shall be exempt from taxation until sold, leased for a term not exceeding ninety-nine years or otherwise disposed of in accordance with the provisions of this section; provided however, that any such municipality shall have the power and authority, with respect to such property, to pay or transfer, out of funds available to it for the effectuating of such program or project annual sums in lieu of taxes to any taxing jurisdiction providing services to the project area, or to the part or portion thereof within such taxing jurisdiction, in order that no such taxing jurisdiction shall suffer an inequitable loss of revenue by virtue of such project; provided, further, that the amount so paid or transferred for any year with respect to any such property shall not exceed the lesser of (1) the sum last levied for the benefit of such taxing jurisdiction as an annual tax on such property prior to the time of its acquisition for project purposes or (2) such amount as shall be approved by the commissioner pursuant to such rules, regulations, limitations and conditions as he may prescribe, as an eligible and proper charge against such project. Upon the sale, lease or disposition of such property to any person, firm or corporation, not entitled to an exemption from taxation or entitled to only a partial tax exemption such property shall immediately become subject to taxation in whole or in part, as the case may be, and shall be taxed pro rata for the unexpired portion of the taxable year. As used in this paragraph, 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. 3. To sell or lease for a term not exceeding ninety-nine years any such project, or part thereof, at any stage before or at the date of or after the physical completion of such project, to a company which will undertake, plan, construct, own, manage or operate such project in accordance with the plan and the provisions of this article. In the event of a sale or lease of any such project prior to the physical completion thereof, the municipality may agree to complete and may complete construction and development of such project or cause the same to be completed. Any such sale or lease may be made without public bidding, public sale or public offering pursuant to such negotiated contract, agreement or lease, containing such provisions, limitations, requirements, terms and conditions, price or rental as the governing body of the municipality may deem necessary or desirable to effectuate the plan and the public policy and public purposes described in sections eleven and eleven-a of this article. 4. Notwithstanding the provisions of section thirty-three of this article the real property in a project sold or leased as provided in this section, when the transfer thereunder becomes effective, shall be exempt from local and municipal taxes, other than assessments for local improvements to such extent as may be granted by the local legislative body of the municipality. The tax exemption shall operate and continue so long as capital loans of the company to which such project shall have been sold or leased or any additional loan the proceeds of which are primarily used for the residential portion of the project, which additional loan is approved by the commissioner or the supervising agency are outstanding. Notes, bonds, mortgages and other obligations of such a company are declared to be issued for a public purpose and to be public instrumentalities and, together with interest thereon, shall be exempt from tax. 5. The provisions of section thirteen of this article requiring the approval by the commissioner of housing of the persons incorporating a limited-profit housing company and the provisions of section fourteen of this article requiring the consent of the commissioner of housing to the filing of the certificate of incorporation of such a company in the office of the secretary of state and the amendment thereof shall not apply to a corporation created pursuant to this article on a cooperative basis for the purchase or lease of a project pursuant to this section; nor shall any of the provisions of this article conferring upon the commissioner of housing any powers in respect of limited-profit housing companies apply to such a corporation. The application of this subdivision shall be limited to corporations undertaking a project with the aid of a municipal loan under this article. 6. A project or part of a project sold or leased to a housing company pursuant to the provisions of this section thirty-six-a shall be owned or operated by such housing company in accordance with the provisions of this article and in accordance with an agreement of sale or lease to be entered into by the municipality and such housing company. Each such agreement shall contain, in addition to such other terms and conditions as may lawfully be agreed upon by the parties, the following provisions, which shall be subject to any approvals which may be required by this article:

(a) Establishing a schedule of maximum rents which may be charged by the housing company.

(b) Prescribing the method by which tenants are to be selected for the project and criteria of tenant eligibility.

(c) Any such agreement of lease may provide for the transfer of title of the real property so leased to the housing company at the end of the term or lease. 7. A housing company shall have the power, in addition to any other powers under this article to enter into and carry out the provisions of any agreement authorized under this section or under section twenty-three-a or twenty-three-b of this article, and to enter into and carry out agreements in order to obtain insurance by the federal government of a mortgage for the purpose of refinancing all or any part of a mortgage loan pursuant to section twenty-three of this article. 8. Any project that received a tax exemption under this section may, upon the expiration of the tax exemption period, be granted an additional tax exemption period of up to fifty 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.