(a)
(1) The property of a rural development authority is declared to be public property used for essential and exclusively public and governmental purposes and not for profit.
(2) The property and income from notes and bonds issued by an authority shall be exempt from all taxes, including state income taxes, and special assessments of the state or any state public body.
(b)
(1) In lieu of taxes or special assessments, an authority may agree to make payments to a state public body for improvements, services, and facilities furnished by the state public body for the benefit of a development project.
(2) In no event shall these payments exceed the estimated cost to the state public body of the improvements, services, or facilities to be furnished.