The secretary in making any loan or grants pursuant to Kan. Stat. Ann. § 75-5048, and amendments thereto, may:

(a) Stipulate minimum operating standards for rail lines designed to achieve reasonable transportation service for shippers and to achieve best use of funds invested in rail line rehabilitation;

(b) require a portion of the total assistance for improving a rail line to be loaned to the railroad by rail users and require the railroad to reimburse rail users for any loan on the basis of use of the line and the revenues produced when the line has been improved;

(c) determine the terms and conditions under which all or any portion of funds loaned shall be repaid to the department of transportation by the railroads. Reimbursement may be made as a portion of the increased revenue derived from the improved rail line. Any reimbursement received by the department pursuant to this subsection shall be remitted to the state treasurer in accordance with the provisions of Kan. Stat. Ann. § 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the rail service improvement fund and shall be appropriated exclusively for the rehabilitation of other rail lines in the state pursuant to Kan. Stat. Ann. § 75-5048, and amendments thereto.

(d) The secretary may enter into loan or grant agreements with any entity which is a qualified entity pursuant to Kan. Stat. Ann. § 75-5048, and amendments thereto, for payment of all or part of a project’s costs. Any governmental unit that is a qualified entity and in coordination with the railroad providing service, may enter into such an agreement and may accept such assistance when so authorized by its governing body.

(e) Upon the failure of a governmental unit, which is a qualified entity, to meet the repayment terms and conditions of a loan agreement under this section, the secretary may order the state treasurer to pay to the rail service improvement fund the portion of such governmental unit’s share of the special city and county highway fund as may be necessary to meet the terms of the loan agreement.

(f) Any loans received by a governmental unit under the provisions of Kan. Stat. Ann. §§ 75-5048 through 75-5050, and amendments thereto, shall be construed to be bonds for the purpose of Kan. Stat. Ann. § 10-1116, and amendments thereto, and the amount of such loans shall not be included within any limitation on the bonded indebtedness of the governmental unit.