Section 1776. Exemption from taxation

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 state and of the
  hospital district and its environs for the improvement and care of their
  health and general welfare, and is a public purpose. The authority shall
  be regarded as performing an essential governmental purpose and function
  in the exercise of the powers conferred upon it by this title and  shall
  be  required  to  pay no taxes or assessments upon any of the properties
  acquired  by  the  authority  or  under  its  jurisdiction,  control  or
  supervision  or  upon  its  activities, or any revenue, contributions or
  other income received by the authority.
    2. The state covenants with the purchasers  and  with  all  subsequent
  holders  and  transferees  of  bonds  or  notes  issued by the authority
  pursuant to this title,  in  consideration  of  the  acceptance  of  and
  payment  for  the  bonds  or  notes,  that  the  bonds  and notes of the
  authority, issued pursuant to this title, and the income  therefrom  and
  all  moneys, funds, and revenues pledged to pay or secure the payment of
  such bonds or notes, shall at all times be free from taxation except for
  estate or gift taxes and taxes on transfers by or  in  contemplation  of
  death.