28-7504. Bond payment; security

A. In connection with the issuance of the bonds authorized by this article or to secure the payment of the bonds and interest on the bonds, the board by resolution may:

1. Provide that bonds issued under this article may be secured by a first lien, subject to section 28-7509, on all or any part of the monies paid into the state highway fund from the sources specifically collected as prescribed in article IX, section 14, Constitution of Arizona, and the monies distributed pursuant to section 28-5808.

2. Pledge and assign to or in trust with a trustee appointed by the board for the benefit of the holder or the holders of the bonds any part of the state highway fund revenues collected as prescribed in article IX, section 14, Constitution of Arizona, and the monies distributed pursuant to section 28-5808, as will be necessary to pay the principal of and interest on the bonds as the principal and interest become due.

3. Set aside, regulate and dispose of reserves and sinking funds.

4. Provide that sufficient amounts of the proceeds from the sale of the bonds may be used to fully or partly fund all reserves or sinking funds set up by the bond resolution.

5. Prescribe the procedure, if any, by which the terms of a contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent to and the manner in which the consent may be given.

6. Provide for payment from the proceeds of the sale of the bonds of all fees, charges and bond related expenses or obligations incurred by the board in the issuance, sale, delivery and payment of the bonds.

7. Do any other matters, of like or different character, that may in any way affect the security and protection of the bonds.

B. A pledge made pursuant to this article is valid and binding from the time when the pledge is made.

C. The monies pledged pursuant to this article and deposited in the state highway fund are immediately subject to the lien of the pledge without any future physical delivery or further act, and any lien of any pledge is valid or binding against all parties having claims of any kind in tort, contract or otherwise against the board regardless of whether the parties have notice of the lien or pledge. When placed in the records of the board, the official resolution or trust indenture or any instrument by which this pledge is created is notice to all concerned of the creation of the pledge, and these instruments are not required to be recorded in any other place.