Section 1199-NNN. Exemption from taxes, assessments and certain fees; payments in lieu of taxes

1. It is hereby determined that the  creation  of  the  authority  and the carrying out of its corporate purposes is in
  all respects for the benefit of the people of the county and  the  state
  and  is  a  public  purpose,  and  the  authority  shall  be regarded as
  performing a  governmental  function  in  the  exercise  of  the  powers
  conferred  upon  it  by  this title and shall not be required to pay any
  taxes, special ad valorem levies or special assessments  upon  any  real
  property  owned by it or any filing, recording or transfer fees or taxes
  in relation to instruments filed, recorded or transferred by  it  or  on
  its  behalf  provided, however, that any real property owned or acquired
  by the authority outside of the  district  shall  be  exempt  from  real
  property  taxes,  ad valorem levies or special assessments only pursuant
  to and to the extent provided by an agreement with the governing body of
  the municipality in which such real property is located.
    2. The authority may pay,  or  may  enter  into  agreements  with  any
  municipality  not  located  within  the  county  to  pay,  a sum or sums
  annually or  otherwise  or  to  provide  other  considerations  to  such
  municipality  with  respect  to  real  property  owned  by the authority
  located within such municipality and constituting a part  of  its  water
  system.
    3.  Any  bonds  issued pursuant to this title together with the income
  therefrom shall be exempt from taxation except for transfer  and  estate
  taxes. The revenues, moneys and all other property and all activities of
  the  authority  shall  be exempt from all taxes and governmental fees or
  charges, whether imposed by the state  or  any  municipality,  including
  without  limitation,  real estate taxes, franchise taxes, sales taxes or
  other excise taxes.
    4. 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  shall  be  exempt  from  such
  taxation  as  aforestated in subdivision three of this section, and that
  all revenues, moneys, and other property pledged to secure  the  payment
  of  such  bonds  shall  at  all  times  be  free  from  such taxation as
  aforestated in such subdivision.