HF 498

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to public safety; radio communications;
modifying sales and use tax exemption for public
safety radio communication system products and
services; expanding definition of subsystems;
expanding purposes for public safety radio
communication systems' revenue bonds; increasing
dollar limits and clarifying the kind of subsystem
certain revenue bonds may be used for; appropriating
money; amending Minnesota Statutes 2004, sections
297A.70, subdivision 8; 403.21, subdivision 8; 403.27,
subdivisions 3, 4, by adding subdivisions; 403.30, by
adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 297A.70,
subdivision 8, is amended to read:

Subd. 8.

Regionwide public safety radio communication
system; products and services.

Products and services including,
but not limited to, end user equipment used for construction,
ownership, operation, maintenance, and enhancement of the
backbone system of the regionwide public safety radio
communication system established under sections 403.21 to
403.34, are exempt. For purposes of this subdivision, backbone
system is defined in section 403.21, subdivision 9. This
subdivision is effective for purchases, sales, storage, use, or
consumption deleted text begin occurring before August 1, 2005, in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington deleted text end new text begin for use in the first and second phases of the system,
as defined in section 403.21, subdivisions 3 and 10, and that
portion of the third phase of the system as defined in section
403.21, subdivision 11, that is located in the southeast
district of the State Patrol and the counties of Benton,
Sherburne, Stearns, and Wright new text end .

Sec. 2.

Minnesota Statutes 2004, section 403.21,
subdivision 8, is amended to read:

Subd. 8.

Subsystems.

"Subsystems" or "public safety
radio subsystems" means systems identified in the plan new text begin or a plan
developed under section 403.36 new text end as subsystems interconnected by
the system backbone deleted text begin in subsequent phases deleted text end and operated by the
Metropolitan Radio Board, a regional radio board, or local
government units for their own internal operations.

Sec. 3.

Minnesota Statutes 2004, section 403.27, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Authorization; third phase. new text end

new text begin The commissioner
of finance, if requested by a vote of at least two-thirds of all
of the members of the Statewide Radio Board, may authorize the
issuance of revenue bonds or other debt instrument for any of
the following purposes:
new text end

new text begin (1) provide funds for the elements of the third phase of
the statewide public safety radio communication system within
the southeast district of the State Patrol and the counties of
Benton, Sherburne, Stearns, and Wright that the board determines
are of regional or statewide benefit and support mutual aid and
emergency medical services communication including, but not
limited to, costs of master controllers of the backbone;
new text end

new text begin (2) provide funds for the third phase of the public safety
radio communication system within the southeast district of the
State Patrol and the counties of Benton, Sherburne, Stearns, and
Wright; and
new text end

new text begin (3) refund bonds issued under this section.
new text end

Sec. 4.

Minnesota Statutes 2004, section 403.27,
subdivision 3, is amended to read:

Subd. 3.

Limitations.

(a) The principal amount of the
bonds issued pursuant to subdivision 1, exclusive of any
original issue discount, shall not exceed the amount of
$10,000,000 plus the amount the council determines necessary to
pay the costs of issuance, fund reserves, debt service, and pay
for any bond insurance or other credit enhancement.

(b) In addition to the amount authorized under paragraph
(a), the council may issue bonds under subdivision 1 in a
principal amount of $3,306,300, plus the amount the council
determines necessary to pay the cost of issuance, fund reserves,
debt service, and any bond insurance or other credit
enhancement. The proceeds of bonds issued under this paragraph
may not be used to finance portable or subscriber radio sets.

(c) In addition to the amount authorized under paragraphs
(a) and (b), the council may issue bonds under subdivision 1 in
a principal amount of $18,000,000, plus the amount the council
determines necessary to pay the costs of issuance, fund
reserves, debt service, and any bond insurance or other credit
enhancement. The proceeds of bonds issued under this paragraph
must be used to pay up to 50 percent of the cost to a local
government unit of building a subsystem new text begin identified in the plan
adopted under section 403.23, subdivision 2, new text end and may not be used
to finance portable or subscriber radio sets. The bond proceeds
may be used to make improvements to an existing 800 MHz radio
system that will interoperate with the regionwide public safety
radio communication system, provided that the improvements
conform to the board's plan and technical standards. The
council must time the sale and issuance of the bonds so that the
debt service on the bonds can be covered by the additional
revenue that will become available in the fiscal year ending
June 30, 2005, generated under section 403.11 and appropriated
under section 403.30.

(d) In addition to the amount authorized under paragraphs
(a) to (c), the council may issue bonds under subdivision 1 in a
principal amount of up to $27,000,000, plus the amount the
council determines necessary to pay the costs of issuance, fund
reserves, debt service, and any bond insurance or other credit
enhancement. The proceeds of bonds issued under this paragraph
are appropriated to the commissioner of public safety for phase
three of the public safety radio communication system. In
anticipation of the receipt by the commissioner of public safety
of the bond proceeds, the Metropolitan Radio Board may advance
money from its operating appropriation to the commissioner of
public safety to pay for design and preliminary engineering for
phase three. The commissioner of public safety must return
these amounts to the Metropolitan Radio Board when the bond
proceeds are received.

new text begin (e) In addition to the amount authorized under paragraphs
(a) through (d), the commissioner of finance may issue bonds
under subdivision 1a in a principal amount of up to $9,500,000,
plus the amount the commissioner of finance determines necessary
to pay the costs of issuance, fund reserves, debt service, and
any bond insurance or other credit enhancement. The proceeds of
bonds issued under this paragraph are appropriated to the
commissioner of public safety for the purpose of subdivision 1a,
provided that the proceeds may not be used to finance portable
or subscriber radio sets.
new text end

Sec. 5.

Minnesota Statutes 2004, section 403.27,
subdivision 4, is amended to read:

Subd. 4.

Security.

The bonds new text begin issued under subdivision 1
new text end may be secured by a bond resolution or a trust indenture entered
into by the council with a corporate trustee within or outside
the state which shall define the fee pledged for the payment and
security of the bonds and for payment of all necessary and
reasonable debt service expenses until all the bonds referred to
in subdivision 1 are fully paid or discharged in accordance with
law. The pledge shall be a valid charge on the emergency
telephone service fee provided in chapter 403. No mortgage of
or security interest in any tangible real or personal property
shall be granted to the bondholders or the trustee, but they
shall have a valid security interest in the revenues and bond
proceeds received by the council and pledged to the payment of
the bonds as against the claims of all persons in tort,
contract, or otherwise, irrespective of whether the parties have
notice and without possession or filing as provided in the
Uniform Commercial Code, or any other law, subject however to
the rights of the holders of any general obligation bonds issued
under section 403.32. In the bond resolution or trust
indenture, the council may make covenants as it determines to be
reasonable for the protection of the bondholders.

Neither the council, nor any council member, officer,
employee, or agent of the council, nor any person executing the
bonds shall be liable personally on the bonds by reason of their
issuance. The bonds are not payable from, and are not a charge
upon, any funds other than the revenues and bond proceeds
pledged to their payment. The council is not subject to any
liability on the bonds and has no power to obligate itself to
pay or to pay the bonds from funds other than the revenues and
bond proceeds pledged. No holder of bonds has the right to
compel any exercise of the taxing power of the council, except
any deficiency tax levy the council covenants to certify under
section 403.31, or any other public body, to the payment of
principal of or interest on the bonds. No holder of bonds has
the right to enforce payment of principal or interest against
any property of the council or other public body other than that
expressly pledged for the payment of the bonds.

Sec. 6.

Minnesota Statutes 2004, section 403.27, is
amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Security. new text end

new text begin The bonds or other debt instrument
issued under subdivision 1a may be secured by a bond resolution
or a trust indenture entered into by the commissioner of finance
with a corporate trustee within or outside the state which shall
define the fee pledged for the payment and security of the bonds
or other debt instrument and for payment of all necessary and
reasonable debt service expenses until all the bonds or other
debt instruments referred to in subdivision 1a are fully paid or
discharged in accordance with law. The pledge shall be a valid
charge on the emergency telephone service fee provided in this
chapter. The bonds or other debt instrument shall have a valid
security interest in the revenues and proceeds received by the
commissioner of finance and pledged to the payment of the bonds
or other debt instrument as against the claims of all persons in
tort, contract, or otherwise, irrespective of whether the
parties have notice and without possession or filing as provided
in the Uniform Commercial Code, or any other law. In the bond
resolution or trust indenture, the commissioner of finance may
make covenants as may be reasonable for the protection of the
bondholders or other creditor.
new text end

new text begin The bonds or other debt instrument are not payable from,
and are not a charge upon, any funds other than the revenues and
bond or other debt instrument proceeds pledged to their
payment. The state of Minnesota is not subject to any liability
on the bonds and the commissioner of finance has no power to
obligate the state of Minnesota to pay or to pay the bonds or
other debt instruments from funds other than the revenues and
debt instrument proceeds pledged. No holder of bonds has the
right to compel any exercise of the taxing power of the state of
Minnesota, except any deficiency tax levy the commissioner is
authorized to certify under section 403.31, or any other public
body, to the payment of principal of or interest on the bonds or
other debt instrument. No holder of bonds has the right to
enforce payment of principal or interest against any property of
the state of Minnesota or other public body other than that
expressly pledged for the payment of the bonds or other debt
instrument.
new text end

Sec. 7.

Minnesota Statutes 2004, section 403.30, is
amended by adding a subdivision to read:

new text begin Subd. 3a. new text end

new text begin Appropriation transfers. new text end

new text begin The commissioner
shall transmit to the commissioner of finance from the approved
appropriation of funds provided for in section 403.30,
subdivision 1, the amount necessary to meet debt service costs
and reserves for bonds or other debt instrument issued by the
commissioner of finance pursuant to section 403.27, subdivision
1a.
new text end

Sec. 8. new text begin REFUND; APPROPRIATION.
new text end

new text begin If taxes have been paid on purchases exempt under section
1, upon application of the city or county, a refund equal to the
tax paid on the gross receipts of the exempt items must be paid
to the city or county. The city or county must apply for the
refunds on a form prescribed by the commissioner of revenue and
must include sufficient information to permit the commissioner
to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, that person must furnish to the city
or county a statement including the cost of the exempt items and
the taxes paid on the items. Claims for refund must be
submitted to the commissioner before January 1, 2006. Interest
must be paid on the refund at the rate in Minnesota Statutes,
section 270.76, from 90 days after the date the refund claim is
filed with the commissioner. The amount necessary to pay the
refund required under this section is appropriated for fiscal
year 2006 from the general fund to the commissioner of revenue.
new text end

Sec. 9. new text begin EFFECTIVE DATE.
new text end

new text begin Section 1 is effective for sales and purchases made after
November 30, 2003. Sections 2 to 8 are effective the day
following final enactment.
new text end