Sec. 26. (a) In the discretion of the department, any bonds issued under the provisions of this chapter may be secured by a trust agreement between the department and a corporate trustee, which may be any trust company or bank having the powers of a trust company within the state.

     (b) An executive order issued by the commissioner providing for the issuance of bonds for any airport facility or airport facilities, and any trust agreement pursuant to which such bonds are issued, may pledge or assign:

(1) all or any portion of the revenues received or to be received by the department from an airport facility or airport facilities except the part as may be necessary to pay the cost of the operation, maintenance, and repair of the airport facility or airport facilities to the extent airport facility or airport facilities and to provide reserves therefor and depreciation reserves if and to the extent required by any bond resolution adopted or trust agreement executed by the department; and

(2) the net revenues of the department from other airport facilities to the extent the net revenues are not otherwise pledged or assigned.

The department shall not convey or mortgage any airport, airport facility or any part thereof.

     (c) In authorizing the issuance of bonds for any particular airport facility or airport facilities undertaken in connection with the development of an airport, the department may limit the amount of bonds that may be issued as a first lien and charge against the revenues pledged to the payment of the bonds. The department may authorize the issuance from time to time of additional bonds secured by the same lien to provide funds for the completion of the airport facility or airport facilities on account of which the original bonds were issued, or to provide funds to pay the cost of additional airport facilities undertaken in connection with the development of the airport, or for both purposes. The additional bonds shall be issued on terms and conditions as provided in the resolution authorizing the issuance of the bonds or in the trust agreement or a supplemental agreement and may be secured equally and ratably without preference, priority, or distinction with the original issue of bonds or may be made junior.

     (d) Any pledge or assignment made by the department is valid and binding from the time that the pledge or assignment is made, and the revenues pledged and received by the department shall immediately be subject to the lien of the pledge or assignment without physical delivery 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 department whether or not the parties have notice.

     (e) Neither the resolution nor any trust agreement by which a pledge is created or assignment made need be filed or recorded except in the records of the department. A trust agreement or resolution providing for the issuance of bonds may contain provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the department in relation to the acquisition of property and the construction, improvements, maintenance, repair, operation, and insurance of the airport facility or airport facilities in connection with which such bonds shall have been authorized, the rates of fees, tolls, rentals, or other charges to be collected for the use of the airport facility or airport facilities, and the custody, safeguarding, and application of all money and provisions for the employment of consulting engineers in connection with the construction or operation of such airport facility or airport facilities.

     (f) It is lawful for any bank or trust company incorporated under the laws of the state that may act as depository of the proceeds of bonds or other funds of the department to furnish indemnifying bonds or to pledge securities as required by the department. A trust agreement 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, a trust agreement may contain other provisions as the department may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of a trust agreement may be treated as a part of the cost of the operation of the airport facility or airport facilities.

Formerly: Acts 1971, P.L.105, SEC.2. As amended by Acts 1980, P.L.74, SEC.357; P.L.18-1990, SEC.162.