1.1 	A bill for an act
1.2 	relating to public safety; radio communications;
1.3 	modifying sales and use tax exemption for public
1.4 	safety radio communication system products and
1.5 	services; expanding definition of subsystems;
1.6 	expanding purposes for public safety radio
1.7 	communication systems' revenue bonds; increasing
1.8 	dollar limits and clarifying the kind of subsystem
1.9 	certain revenue bonds may be used for; appropriating
1.10 	money; amending Minnesota Statutes 2004, sections
1.11 	297A.70, subdivision 8; 403.21, subdivision 8; 403.27,
1.12 	subdivisions 3, 4, by adding subdivisions; 403.30, by
1.13 	adding a subdivision.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	Section 1. Minnesota Statutes 2004, section 297A.70,
1.16 	subdivision 8, is amended to read:
1.17 		Subd. 8.Regionwide public safety radio communication
1.18 	system; products and services.  Products and services including,
1.19 	but not limited to, end user equipment used for construction,
1.20 	ownership, operation, maintenance, and enhancement of the
1.21 	backbone system of the regionwide public safety radio
1.22 	communication system established under sections 403.21 to
1.23 	403.34, are exempt.  For purposes of this subdivision, backbone
1.24 	system is defined in section 403.21, subdivision 9.  This
1.25 	subdivision is effective for purchases, sales, storage, use, or
1.26 	consumption occurring before August 1, 2005, in the counties of
1.27 	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
1.28 	Washington for use in the first and second phases of the system,
1.29 	as defined in section 403.21, subdivisions 3 and 10, and that
2.1 	portion of the third phase of the system as defined in section
2.2 	403.21, subdivision 11, that is located in the southeast
2.3 	district of the State Patrol and the counties of Benton,
2.4 	Sherburne, Stearns, and Wright.

2.5 	Sec. 2. Minnesota Statutes 2004, section 403.21,
2.6 	subdivision 8, is amended to read:
2.7 		Subd. 8.Subsystems.  "Subsystems" or "public safety
2.8 	radio subsystems" means systems identified in the plan or a plan
2.9 	developed under section 403.36as subsystems interconnected by
2.10 	the system backbone in subsequent phases and operated by the
2.11 	Metropolitan Radio Board, a regional radio board, or local
2.12 	government units for their own internal operations.

2.13 	Sec. 3. Minnesota Statutes 2004, section 403.27, is
2.14 	amended by adding a subdivision to read:
2.15 		Subd. 1a.Authorization; third phase. The commissioner
2.16 	of finance, if requested by a vote of at least two-thirds of all
2.17 	of the members of the Statewide Radio Board, may authorize the
2.18 	issuance of revenue bonds or other debt instrument for any of
2.19 	the following purposes:
2.20 	(1) provide funds for the elements of the third phase of
2.21 	the statewide public safety radio communication system within
2.22 	the southeast district of the State Patrol and the counties of
2.23 	Benton, Sherburne, Stearns, and Wright that the board determines
2.24 	are of regional or statewide benefit and support mutual aid and
2.25 	emergency medical services communication including, but not
2.26 	limited to, costs of master controllers of the backbone;
2.27 	(2) provide funds for the third phase of the public safety
2.28 	radio communication system within the southeast district of the
2.29 	State Patrol and the counties of Benton, Sherburne, Stearns, and
2.30 	Wright; and 
2.31 	(3) refund bonds issued under this section.

2.32 	Sec. 4. Minnesota Statutes 2004, section 403.27,
2.33 	subdivision 3, is amended to read:
2.34 		Subd. 3.Limitations.  (a) The principal amount of the
2.35 	bonds issued pursuant to subdivision 1, exclusive of any
2.36 	original issue discount, shall not exceed the amount of
3.1 	$10,000,000 plus the amount the council determines necessary to
3.2 	pay the costs of issuance, fund reserves, debt service, and pay
3.3 	for any bond insurance or other credit enhancement.
3.4 	(b) In addition to the amount authorized under paragraph
3.5 	(a), the council may issue bonds under subdivision 1 in a
3.6 	principal amount of $3,306,300, plus the amount the council
3.7 	determines necessary to pay the cost of issuance, fund reserves,
3.8 	debt service, and any bond insurance or other credit
3.9 	enhancement.  The proceeds of bonds issued under this paragraph
3.10 	may not be used to finance portable or subscriber radio sets.
3.11 	(c) In addition to the amount authorized under paragraphs
3.12 	(a) and (b), the council may issue bonds under subdivision 1 in
3.13 	a principal amount of $18,000,000, plus the amount the council
3.14 	determines necessary to pay the costs of issuance, fund
3.15 	reserves, debt service, and any bond insurance or other credit
3.16 	enhancement.  The proceeds of bonds issued under this paragraph
3.17 	must be used to pay up to 50 percent of the cost to a local
3.18 	government unit of building a subsystem identified in the plan
3.19 	adopted under section 403.23, subdivision 2,and may not be used
3.20 	to finance portable or subscriber radio sets.  The bond proceeds
3.21 	may be used to make improvements to an existing 800 MHz radio
3.22 	system that will interoperate with the regionwide public safety
3.23 	radio communication system, provided that the improvements
3.24 	conform to the board's plan and technical standards.  The
3.25 	council must time the sale and issuance of the bonds so that the
3.26 	debt service on the bonds can be covered by the additional
3.27 	revenue that will become available in the fiscal year ending
3.28 	June 30, 2005, generated under section 403.11 and appropriated
3.29 	under section 403.30.
3.30 	(d) In addition to the amount authorized under paragraphs
3.31 	(a) to (c), the council may issue bonds under subdivision 1 in a
3.32 	principal amount of up to $27,000,000, plus the amount the
3.33 	council determines necessary to pay the costs of issuance, fund
3.34 	reserves, debt service, and any bond insurance or other credit
3.35 	enhancement.  The proceeds of bonds issued under this paragraph
3.36 	are appropriated to the commissioner of public safety for phase
4.1 	three of the public safety radio communication system.  In
4.2 	anticipation of the receipt by the commissioner of public safety
4.3 	of the bond proceeds, the Metropolitan Radio Board may advance
4.4 	money from its operating appropriation to the commissioner of
4.5 	public safety to pay for design and preliminary engineering for
4.6 	phase three.  The commissioner of public safety must return
4.7 	these amounts to the Metropolitan Radio Board when the bond
4.8 	proceeds are received.
4.9 	(e) In addition to the amount authorized under paragraphs
4.10 	(a) through (d), the commissioner of finance may issue bonds
4.11 	under subdivision 1a in a principal amount of up to $9,500,000,
4.12 	plus the amount the commissioner of finance determines necessary
4.13 	to pay the costs of issuance, fund reserves, debt service, and
4.14 	any bond insurance or other credit enhancement.  The proceeds of
4.15 	bonds issued under this paragraph are appropriated to the
4.16 	commissioner of public safety for the purpose of subdivision 1a,
4.17 	provided that the proceeds may not be used to finance portable
4.18 	or subscriber radio sets.

4.19 	Sec. 5. Minnesota Statutes 2004, section 403.27,
4.20 	subdivision 4, is amended to read:
4.21 		Subd. 4.Security.  The bonds issued under subdivision 1 
4.22 	may be secured by a bond resolution or a trust indenture entered
4.23 	into by the council with a corporate trustee within or outside
4.24 	the state which shall define the fee pledged for the payment and
4.25 	security of the bonds and for payment of all necessary and
4.26 	reasonable debt service expenses until all the bonds referred to
4.27 	in subdivision 1 are fully paid or discharged in accordance with
4.28 	law.  The pledge shall be a valid charge on the emergency
4.29 	telephone service fee provided in chapter 403.  No mortgage of
4.30 	or security interest in any tangible real or personal property
4.31 	shall be granted to the bondholders or the trustee, but they
4.32 	shall have a valid security interest in the revenues and bond
4.33 	proceeds received by the council and pledged to the payment of
4.34 	the bonds as against the claims of all persons in tort,
4.35 	contract, or otherwise, irrespective of whether the parties have
4.36 	notice and without possession or filing as provided in the
5.1 	Uniform Commercial Code, or any other law, subject however to
5.2 	the rights of the holders of any general obligation bonds issued
5.3 	under section 403.32.  In the bond resolution or trust
5.4 	indenture, the council may make covenants as it determines to be
5.5 	reasonable for the protection of the bondholders.
5.6 	Neither the council, nor any council member, officer,
5.7 	employee, or agent of the council, nor any person executing the
5.8 	bonds shall be liable personally on the bonds by reason of their
5.9 	issuance.  The bonds are not payable from, and are not a charge
5.10 	upon, any funds other than the revenues and bond proceeds
5.11 	pledged to their payment.  The council is not subject to any
5.12 	liability on the bonds and has no power to obligate itself to
5.13 	pay or to pay the bonds from funds other than the revenues and
5.14 	bond proceeds pledged.  No holder of bonds has the right to
5.15 	compel any exercise of the taxing power of the council, except
5.16 	any deficiency tax levy the council covenants to certify under
5.17 	section 403.31, or any other public body, to the payment of
5.18 	principal of or interest on the bonds.  No holder of bonds has
5.19 	the right to enforce payment of principal or interest against
5.20 	any property of the council or other public body other than that
5.21 	expressly pledged for the payment of the bonds.

5.22 	Sec. 6. Minnesota Statutes 2004, section 403.27, is
5.23 	amended by adding a subdivision to read:
5.24 		Subd. 5.Security. The bonds or other debt instrument
5.25 	issued under subdivision 1a may be secured by a bond resolution
5.26 	or a trust indenture entered into by the commissioner of finance
5.27 	with a corporate trustee within or outside the state which shall
5.28 	define the fee pledged for the payment and security of the bonds
5.29 	or other debt instrument and for payment of all necessary and
5.30 	reasonable debt service expenses until all the bonds or other
5.31 	debt instruments referred to in subdivision 1a are fully paid or
5.32 	discharged in accordance with law.  The pledge shall be a valid
5.33 	charge on the emergency telephone service fee provided in this
5.34 	chapter.  The bonds or other debt instrument shall have a valid
5.35 	security interest in the revenues and proceeds received by the
5.36 	commissioner of finance and pledged to the payment of the bonds
6.1 	or other debt instrument as against the claims of all persons in
6.2 	tort, contract, or otherwise, irrespective of whether the
6.3 	parties have notice and without possession or filing as provided
6.4 	in the Uniform Commercial Code, or any other law.  In the bond
6.5 	resolution or trust indenture, the commissioner of finance may
6.6 	make covenants as may be reasonable for the protection of the
6.7 	bondholders or other creditor.
6.8 	The bonds or other debt instrument are not payable from,
6.9 	and are not a charge upon, any funds other than the revenues and
6.10 	bond or other debt instrument proceeds pledged to their
6.11 	payment.  The state of Minnesota is not subject to any liability
6.12 	on the bonds and the commissioner of finance has no power to
6.13 	obligate the state of Minnesota to pay or to pay the bonds or
6.14 	other debt instruments from funds other than the revenues and
6.15 	debt instrument proceeds pledged.  No holder of bonds has the
6.16 	right to compel any exercise of the taxing power of the state of
6.17 	Minnesota, except any deficiency tax levy the commissioner is
6.18 	authorized to certify under section 403.31, or any other public
6.19 	body, to the payment of principal of or interest on the bonds or
6.20 	other debt instrument.  No holder of bonds has the right to
6.21 	enforce payment of principal or interest against any property of
6.22 	the state of Minnesota or other public body other than that
6.23 	expressly pledged for the payment of the bonds or other debt
6.24 	instrument.

6.25 	Sec. 7. Minnesota Statutes 2004, section 403.30, is
6.26 	amended by adding a subdivision to read:
6.27 		Subd. 3a.Appropriation transfers. The commissioner
6.28 	shall transmit to the commissioner of finance from the approved
6.29 	appropriation of funds provided for in section 403.30,
6.30 	subdivision 1, the amount necessary to meet debt service costs
6.31 	and reserves for bonds or other debt instrument issued by the
6.32 	commissioner of finance pursuant to section 403.27, subdivision
6.33 	1a.

6.34 	Sec. 8. REFUND; APPROPRIATION.
 6.35 	If taxes have been paid on purchases exempt under section
6.36 	1, upon application of the city or county, a refund equal to the
7.1 	tax paid on the gross receipts of the exempt items must be paid
7.2 	to the city or county.  The city or county must apply for the
7.3 	refunds on a form prescribed by the commissioner of revenue and
7.4 	must include sufficient information to permit the commissioner
7.5 	to verify the tax paid.  If the tax was paid by a contractor,
7.6 	subcontractor, or builder, that person must furnish to the city
7.7 	or county a statement including the cost of the exempt items and
7.8 	the taxes paid on the items.  Claims for refund must be
7.9 	submitted to the commissioner before January 1, 2006.  Interest
7.10 	must be paid on the refund at the rate in Minnesota Statutes,
7.11 	section 270.76, from 90 days after the date the refund claim is
7.12 	filed with the commissioner.  The amount necessary to pay the
7.13 	refund required under this section is appropriated for fiscal
7.14 	year 2006 from the general fund to the commissioner of revenue.

7.15 	Sec. 9. EFFECTIVE DATE.
 7.16 	Section 1 is effective for sales and purchases made after
7.17 	November 30, 2003.  Sections 2 to 8 are effective the day
7.18 	following final enactment.