1.1 	A bill for an act
1.2 	relating to higher education; providing the option for
1.3 	a state college or university to elect
1.4 	self-governance; providing for the administration of
1.5 	an independent state college or university; providing
1.6 	state aid for higher education; appropriating money;
1.7 	amending Minnesota Statutes 2004, sections 135A.053,
1.8 	subdivision 2; 136F.16, subdivision 1; 179A.10, by
1.9 	adding a subdivision; proposing coding for new law in
1.10 	Minnesota Statutes, chapter 135A; proposing coding for
1.11 	new law as Minnesota Statutes, chapter 136H; repealing
1.12 	Minnesota Statutes 2004, sections 135A.01; 135A.031;
1.13 	135A.032; 135A.033.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	ARTICLE 1
1.16 	INDEPENDENT COLLEGES AND UNIVERSITIES

1.17 	Section 1. Minnesota Statutes 2004, section 136F.16,
1.18 	subdivision 1, is amended to read:
1.19 		Subdivision 1.New state colleges and universities.  A
1.20 	new state college or university shall be established only by
1.21 	specific legislation.  For the purposes of this subdivision,
1.22 	campuses or centers that are merged or reorganized under section
1.23 	136F.14 or elect independence under chapter 136H are not new
1.24 	state colleges or universities.

1.25 	Sec. 2. [136H.01] DEFINITIONS.
1.26 		Subdivision 1.Scope. For the purpose of this chapter,
1.27 	the terms defined in this section have the meanings given them
1.28 	in this section.
1.29 		Subd. 2.Board. "Board" means the governing board of a
2.1 	state college or university electing independence under this
2.2 	chapter.
2.3 		Subd. 3.College. "College" means a state college
2.4 	electing independence under this chapter.
2.5 		Subd. 4.University. "University" means a state
2.6 	university electing independence under this chapter.

2.7 	Sec. 3. [136H.02] ELECTION TO BE INDEPENDENT STATE
2.8 	COLLEGE OR UNIVERSITY.
2.9 		Subdivision 1.Local option to be independent. A state
2.10 	college or university may elect to be governed by its own board
2.11 	rather than by the Board of Trustees of the Minnesota State
2.12 	Colleges and Universities.  The election must be made as
2.13 	provided by this section.
2.14 		Subd. 2.Election requirements. An election for local
2.15 	college or university independence must be approved by at least
2.16 	two of the following:
2.17 	(1) a majority of eligible students voting.  An eligible
2.18 	student is one who is enrolled as a full-time student for the
2.19 	semester in which the student election for independence occurs;
2.20 	(2) a majority of tenured faculty at the college or
2.21 	university who vote on the independence; and 
2.22 	(3) the president of the college or university.
2.23 	The local administration of a state college or university
2.24 	may establish procedures for the manner of determining the
2.25 	approval required by clauses (1) to (3) and for determining and
2.26 	verifying voter eligibility.
2.27 		Subd. 3.When election effective. The independence
2.28 	approved by subdivision 2 takes effect on July 1 in the next
2.29 	following odd-numbered year in which the state's fiscal biennium
2.30 	commences, provided that the election is made at least six
2.31 	months prior to that July 1.  Otherwise, the election is
2.32 	effective at the beginning of the second succeeding state fiscal
2.33 	biennium.
2.34 		Subd. 4.Effect of approval. An independent college or
2.35 	university is governed by this chapter.

2.36 	Sec. 4. [136H.03] BOARD OF TRUSTEES.
3.1 		Subdivision 1.Membership. A board consists of 15
3.2 	members appointed by the governor with the advice and consent of
3.3 	the senate.  At least eight of the members of the board must be
3.4 	residents of a county where the college or university is located
3.5 	or a contiguous county.  Three members must be students who are
3.6 	enrolled at least half time in a degree, diploma, or certificate
3.7 	program or have graduated from the college or university within
3.8 	one year of the date of appointment.
3.9 		Subd. 2.Term; compensation; removal; vacancies. The
3.10 	compensation, removal of members, and filling of vacancies on a
3.11 	board are as provided in section 15.0575.  Members are appointed
3.12 	for a term of six years, except that the term of each of the
3.13 	student members is two years.  The terms of original nonstudent
3.14 	members shall be staggered as equally as possible between two,
3.15 	four, and six-year terms.  Terms end on June 30, except that
3.16 	members may serve until their successors are appointed.
3.17 		Subd. 3.Board administration. The board shall elect a
3.18 	chair and other officers as it may desire.  It shall determine
3.19 	its meeting dates and places.
3.20 		Subd. 4.Advisory council. Subject to this section, the
3.21 	candidate advisory council created by section 136F.03 shall
3.22 	assist the governor in determining criteria for, and identifying
3.23 	and recruiting qualified candidates for, nonstudent members on a
3.24 	board.

3.25 	Sec. 5. [136H.04] POWERS AND DUTIES.
3.26 		Subdivision 1.General authority. A board has the power
3.27 	necessary to govern the college or university and all related
3.28 	property.  Those powers shall include, but are not limited to,
3.29 	those enumerated in this section.  A board shall prescribe
3.30 	conditions of admission, set tuition and fees, approve programs
3.31 	of study and requirements for completion of programs, approve
3.32 	the awarding of appropriate certificates, diplomas, and degrees,
3.33 	enter into contracts and other agreements, and adopt suitable
3.34 	policies for the institutions it governs.  Sections 14.01 to
3.35 	14.47 do not apply to policies and procedures of a board.
3.36 		Subd. 2.Governance authority. A board shall have the
4.1 	authority needed to operate and govern a college or university
4.2 	unless otherwise directed or prohibited by law.  A board is
4.3 	responsible for its operations and necessary decisions unless
4.4 	these are specifically delegated by law to a state department or
4.5 	agency.

4.6 	Sec. 6. [136H.05] PRESIDENT.
4.7 	A board shall appoint a president who shall serve in the
4.8 	unclassified service.  The president shall possess powers and
4.9 	perform duties as delegated by the board.

4.10 	Sec. 7. [136H.06] STUDENT HEALTH.
4.11 		Subdivision 1.Health service. A board shall offer
4.12 	health services for students at a state university and may offer
4.13 	health services for students at a state college.  The health
4.14 	services may be offered either on campus or in the nearby
4.15 	community.  A board may charge each student a health service fee
4.16 	set by the board.  The fees shall be used to maintain the health
4.17 	service and equip and construct facilities.  The fee may be used
4.18 	to contract for health, medical, and hospitalization insurance
4.19 	for students.  The fees shall be deposited in an activity fund
4.20 	and are annually appropriated to a board for the purposes of
4.21 	this subdivision.  Each college and university shall provide an
4.22 	annual financial accounting of the health service money to its
4.23 	board.
4.24 		Subd. 2.Health benefits. A board may contract for
4.25 	hospital benefits coverage and medical benefits coverage for
4.26 	students in a state college or university in the same manner as
4.27 	authorized by section 43A.23 for state employees.

4.28 	Sec. 8. [136H.07] APPOINTMENT OF PERSONNEL.
4.29 		Subdivision 1.Appointment procedure. A board shall
4.30 	appoint all teachers and other necessary employees and shall
4.31 	prescribe their duties consistent with chapter 43A.  Salaries
4.32 	and benefits of employees must be determined according to
4.33 	chapters 43A and 179A and other applicable provisions.
4.34 		Subd. 2.Contracts. (a) A board may enter into a
4.35 	contract with a president containing terms and conditions of
4.36 	employment.  The terms of the contract must be authorized under
5.1 	a plan approved under section 43A.18, subdivision 3a.
5.2 	(b) Notwithstanding section 43A.17, subdivision 11, or
5.3 	other law to the contrary, a contract under this section may
5.4 	provide a liquidated salary amount or other compensation if a
5.5 	contract is terminated by the board prior to its expiration.
5.6 	(c) Notwithstanding section 356.24 or other law to the
5.7 	contrary, a contract under this section may contain a deferred
5.8 	compensation plan made in conformance with section 457(f) of the
5.9 	Internal Revenue Code.
5.10 		Subd. 3.Equal treatment. A board of an independent
5.11 	college or university shall, with respect to its employees, have
5.12 	the same powers and obligations under this section as does the
5.13 	Board of Trustees of the Minnesota State Colleges and
5.14 	Universities and shall be treated in that fashion by other state
5.15 	agencies.

5.16 	Sec. 9. Minnesota Statutes 2004, section 179A.10, is
5.17 	amended by adding a subdivision to read:
5.18 		Subd. 2a.Independent state college or university. The
5.19 	appropriate units for employees of an independent state college
5.20 	or university governed by chapter 136H shall be the same as
5.21 	those for other state colleges or universities except that each
5.22 	independent college or university shall be bargained with
5.23 	separately and not as part of a statewide unit.

5.24 	Sec. 10. TRANSFER OF PROPERTY; ASSETS AND OBLIGATIONS.
 5.25 	The Board of Trustees of the Minnesota State Colleges and
5.26 	Universities must transfer property to a board and enter into
5.27 	contracts and cooperate with a board so that a board may carry
5.28 	out its duties under Minnesota Statutes, chapter 136H.

5.29 	Sec. 11. BOARD AUTHORITY.
 5.30 	A board has, in addition to other powers granted to it, the
5.31 	same powers and duties with respect to a college or university
5.32 	as the Board of Trustees of the Minnesota State Colleges and
5.33 	Universities has with respect to state colleges and
5.34 	universities.  This includes, without limitation, powers related
5.35 	to programs, property, and personnel of a college or university.

5.36 	ARTICLE 2
6.1 	STATE AID FOR HIGHER EDUCATION

6.2 	Section 1. [135A.035] FUNDING FORMULA FOR STATE COLLEGES
6.3 	AND UNIVERSITIES.
6.4 	A state college or university, including an independent
6.5 	state college or university, shall receive $....... in state aid
6.6 	each fiscal year for each estimated full-year equivalent
6.7 	student.  No additions or subtractions in the state aid amount
6.8 	for a college or university shall be made unless expressly
6.9 	authorized by law.

6.10 	Sec. 2. Minnesota Statutes 2004, section 135A.053,
6.11 	subdivision 2, is amended to read:
6.12 		Subd. 2.Performance and accountability.  Higher
6.13 	education systems and campuses are expected to achieve the
6.14 	objectives in subdivision 1 and will be held accountable for
6.15 	doing so.  The legislature is increasing the flexibility of the
6.16 	systems and campuses to provide greater responsibility to higher
6.17 	education in deciding how to achieve statewide objectives, and
6.18 	to decentralize authority so that those decisions can be made at
6.19 	the level where the education is delivered.  To demonstrate
6.20 	their accountability, the legislature expects each system and
6.21 	campus to measure and report on its performance, using
6.22 	meaningful indicators that are critical to achieving the
6.23 	objectives in subdivision 1, as provided in section 135A.033.
6.24 	Nothing in this section precludes a system or campus from
6.25 	determining its own objectives and performance measures beyond
6.26 	those identified in this section.

6.27 	Sec. 3. REPEALER.
 6.28 	Minnesota Statutes 2004, sections 135A.01; 135A.031;
6.29 	135A.032; and 135A.033, are repealed.