(a) The exercise of the powers granted by this chapter shall constitute the performance of an essential governmental function and the authority shall not be required to pay any taxes or assessments upon or in respect to a project, or any property or moneys of the authority, levied by any municipality or political subdivision or special district having taxing powers of the state, nor shall the authority be required to pay state taxes of any kind, and the authority, its projects, property and money and the principal and interest of bonds issued under the provisions of this chapter, their transfer and the income therefrom, including revenues derived from the sale thereof, shall at all times be free from taxation, except for estate and gift taxes imposed by the state or any political subdivision thereof. Nothing herein shall prevent the authority from entering into agreements to make payments in lieu of taxes with respect to property acquired by it or by any person leasing a project from the authority or operating or managing a project on behalf of the authority and neither the authority nor its projects, properties, money or bonds shall be obligated, liable or subject to lien of any kind for the enforcement, collection or payment thereof. If and to the extent the proceedings under which the bonds authorized to be issued under the provisions of this chapter so provide, the authority may agree to cooperate with the lessee or operator of a project in connection with any administrative or judicial proceedings for determining the validity or amount of such payment and may agree to appoint or designate and reserve the right in and for such lessee or operators to take all action which the authority may lawfully take in respect of such payments and all matters relating thereto, providing such lessee or operator shall bear and pay all costs and expenses of the authority thereby incurred at the request of such lessee or operator or by reason of any such action taken by such lessee or operator on behalf of the authority. Any lessee or operator of a project which has paid the amounts in lieu of taxes permitted by this section to be paid shall not be required to pay any such taxes in which a payment in lieu thereof has been made to the state or to any such municipality or other political subdivision or special district having taxing powers, any other law to the contrary notwithstanding.

(b) Any real or personal property leased by the authority in connection with the operation of a project under the provisions of this chapter which would otherwise be subject to taxation under chapter 203 shall be exempt from the assessment of property taxes permitted and required under said chapter 203 if such real or personal property is the subject of an agreement to make payments in lieu of taxes with respect to such property between the authority or the lessee of such project and the municipality in which such project is located. Any lessee or operator of such project from such authority who has made any payment of taxes due under such agreement shall not be required to make any payment of taxes on which a payment in lieu thereof has been made to the municipality.

(P.A. 81-213, S. 15, 18; P.A. 85-478, S. 8, 10; P.A. 89-331, S. 5, 30.)

History: P.A. 85-478 struck previous language and inserted more specific language relating to exemptions from taxes and agreements for payments in lieu of taxes; P.A. 89-331 clarified the exemption from taxation of the principal and interest of the bonds.