1. All bonds issued pursuant to sections 393.700 to 393.770 and all income or interest thereon shall be exempt from all state taxes, except estate and transfer taxes.

2. All property, real and tangible personal, except for properties acquired exclusively for water supply districts and water supply commissions, acquired by the bonds issued pursuant to sections 393.700 and 393.770 or otherwise acquired by a commission shall be subject to taxation for state, county, and municipal and other local purposes only to the same extent as if such property was owned directly by each contracting or participating municipality in such proportion or manner as specified by contract among all contracting or participating municipalities party to a project or if not specified in proportion to the percentage of each municipality’s interest or participation in the facility or property.