Sec. 5.5. (a) In the discretion of the board, any bonds issued under the provisions of this chapter may be secured by a trust agreement by and between the board and a corporate trustee, which may be any trust company or bank having the powers of a trust company within this state. Any resolution adopted by the board providing for the issuance of revenue bonds and any trust agreement pursuant to which the bonds are issued may pledge or assign, subject only to valid prior pledges, all or any portion of the revenues received or to be received by the board, except such part as may be necessary to pay the cost of the board's administrative expenses, operation, maintenance, and repair of the railroad, and to provide reserves required by any bond resolution adopted or trust agreement executed by the board.

(b) In authorizing the issuance of bonds, the board may limit the amount of bonds that may be issued as a first lien against the amounts pledged to the payment of those bonds, or the board may authorize the issuance from time to time thereafter of additional bonds secured by the same lien. Additional bonds shall be issued on such terms and conditions as may be provided in the bond resolution or resolutions adopted by the board and in the trust agreement or any agreement supplemental to the trust agreement. Additional bonds may be secured equally and ratably without preference, priority, or distinction with the original issue of bonds, or may be made junior to the original issue of bonds.

(c) Any pledge or assignment made by the board under this section is valid and binding from the time that the pledge or assignment is made, and the amounts so pledged and thereafter received by the board are immediately subject to the lien of the pledge or assignment without physical delivery of those amounts or further act. The lien of the pledge or assignment is valid and binding against all parties having claims of any kind in tort, contract, or otherwise against the board or district irrespective of whether these parties have notice of the lien. Neither the resolution nor any trust agreement by which a pledge is created or an assignment made need be filed or recorded in order to perfect the resulting lien against third parties. However, a copy of the pledge or assignment shall be filed in the records of the board.

(d) Any trust agreement or resolution providing for the issuance of bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law. The provisions may include, but are not limited to, covenants setting forth the duties of the board in relation to:

(1) the acquisition of property;

(2) the custody, safeguarding, investment, and application of all moneys received or to be received by the board of trustees;

(3) the establishment of funds, reserves, and accounts;

(4) the construction, improvement, maintenance, repair, operation, and insurance of the railroad project in connection with which the bonds shall have been authorized; and

(5) the rates of fees, tolls, rentals, or other charges to be collected for the use of the railroad project.

(e) It is lawful for any bank or trust company incorporated under the laws of the state, and any national banking association which may act as depository of the proceeds of bonds or other funds of the board, to furnish such indemnifying bonds or to pledge such securities as may be required by the board.

(f) Any trust agreement entered into under this section may set forth the rights and remedies of the bondholders and of the trustee, and may restrict the individual right of action by bondholders as is customary in trust agreements or trust indentures securing bonds or debentures of private corporations. In addition, such a trust agreement may contain such other provisions as the board may deem reasonable and proper for the security of the bondholders.

(g) All expenses incurred in carrying out the provisions of a trust agreement entered into under this section may be paid from the amounts distributed to the district from the electric rail service fund, from the bond proceeds, or from revenues.

As added by Acts 1981, P.L.67, SEC.8. Amended by P.L.64-1984, SEC.5.