Any contract for the lease of any development for the manufacture of ships, vessels, shipyards, shipbuilding facilities, machinery and equipment, ship components, systems, parts, fuel and materials required or incidental to any of such purposes to be constructed out of the proceeds of bonds to be issued under the provisions of this chapter may be exempt from ad valorem taxation except state ad valorem taxation and school district ad valorem taxation. The time of such exemption shall not exceed a total of ten (10) years, which shall commence from the date of the contract. Any request for an exemption must be made in writing before the date of the contract.
The lessee shall be required, after the expiration of any exemption granted hereunder, to pay ad valorem taxes on the leasehold notwithstanding that title to such development is vested in the county and port authority.