N.Y. Pub. Auth. Law § 2050-ff

§ 2050-ff. Governmental capacity of the authority and municipalities.\nThe towns, other municipalities within the area of operation and the\nauthority, in carrying out their respective powers and duties under this\ntitle, shall be deemed to be acting in a governmental capacity. The\nconstruction, operation and maintenance of any project financed in whole\nor in part by the authority shall be deemed to be the performance of an\nessential governmental function by the authority acting in its\ngovernmental capacity, whether such project shall be owned or operated\nby the authority or by any person or other public corporation.\n