(a) The corporation is hereby declared to be performing a public function in behalf of the municipality with respect to which the corporation is organized and to be a public instrumentality of such municipality. Accordingly, the corporation and all properties at any time owned by it, except as provided in subsection (b), and the income and revenues from the properties and all bonds issued by it and the income from the bonds shall be exempt from all taxation in the state, including the mortgage tax imposed by § 67-4-409(b) and any other tax that is imposed upon the privilege of recording any instrument giving notice of the creation of a lien, security interest or pledge, and such exemption shall apply to any transaction to which the corporation is a party whether as the secured party or the debtor. Also, for purposes of the Tennessee Securities Act of 1980, compiled as title 48, chapter 1, part 1, bonds issued by the corporation shall be deemed to be securities issued by a public instrumentality or a political subdivision of the state.

(b)

(1) Notwithstanding any other law to the contrary, an energy acquisition corporation, established pursuant to this chapter, that acquires an ongoing concern engaged in the sale and distribution of liquefied petroleum gas (propane) may enter into agreements for payments in lieu of taxes, referred to as “tax equivalents”, with any local government to which the acquired concern formerly paid ad valorem property tax.

(2) The amount of such payments shall be fixed at the amount of ad valorem taxes that would be otherwise due and payable by the business based upon the assessed value of the property that would be subject to tax if such business had not been acquired by the energy acquisition corporation. Such payments shall only be used in the same manner and for the same purposes as ad valorem taxes collected by the recipient local government.