Upon request of a municipality or the state, the corporation may authorize use of railroad land for public purposes. Subject to AS 42.40.350(b), the corporation shall authorize a walkway or a trail if the board first finds in writing that the proposed walkway or trail will not create a safety hazard and will not unreasonably interfere with continued or expanded operations in the utility corridor. Before authorizing a use under this section, the board shall require the municipality or state to execute an agreement in a form approved by the board to

(1) agree to restrictions, limitations, and conditions on the proposed use required by the corporation and reasonably calculated to reduce the risk of a safety hazard or interference with authorized uses in the utility corridor;

(2) hold the corporation harmless from and indemnify the corporation for liability and claims arising from any use authorized under this section including

(A) defending the corporation in a cause of action brought against the corporation as a result of the use; and

(B) indemnifying the corporation for the amount of a judgment, including prejudgment and postjudgment interest, rendered against the corporation, and for all costs and attorney's fees incurred by the corporation in settling or defending the claim; and

(3) stop the use upon request of the corporation if the use interferes with expansion or replacement of railroad facilities, creates a safety hazard, or interferes with railroad operations.