1.1 	A bill for an act
1.2 	relating to higher education; limiting salaries and payment of bonuses in certain 
1.3 	contracts; requiring an organizational efficiency study of the Minnesota State 
1.4 	Colleges and Universities; phasing out centers of excellence; clarifying use of 
1.5 	certain appropriations;amending Minnesota Statutes 2010, sections 15A.081, 
1.6 	subdivision 7c; 136F.40, subdivision 2; repealing Minnesota Statutes 2010, 
1.7 	section 136F.31.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	ARTICLE 1
1.10 	TRANSFORMING HIGHER EDUCATION

1.11 	Section 1. REPORT ON TRANSFORMING HIGHER EDUCATION.
 1.12 	The Board of Trustees of the Minnesota State Colleges and Universities shall 
1.13 	do a comprehensive evaluation of the structure of the Minnesota State Colleges and 
1.14 	Universities and report to the legislature with recommendations for improvements to 
1.15 	increase the efficiency and effectiveness of delivering postsecondary education through 
1.16 	public two-year colleges and state universities. The study must evaluate the organization 
1.17 	of the Minnesota State Colleges and Universities system, and must consider and evaluate 
1.18 	the following organizational alternatives:
1.19 	(1) the alignment of the two-year and four-year institutions into separate 
1.20 	administrative systems;
1.21 	(2) establishment of regional education districts;
1.22 	(3) formation of multicampus institutions;
1.23 	(4) district or subdistrict accreditation of institutions;
1.24 	(5) regional delivery of shared services and programs; and
1.25 	(6) elimination of duplicate services and programs.
2.1 	The study must identify potential structural and operational efficiencies and must 
2.2 	recommend methods to refocus administration at the campus level and reduce or 
2.3 	eliminate duplicative administration through central services. The costs and benefits 
2.4 	of each alternative in the study must be evaluated and reported with the study findings 
2.5 	and recommendations, by January 30, 2012, to the committees of the legislature with 
2.6 	responsibility for higher education finance.

2.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

2.8 	Sec. 2. CENTERS OF EXCELLENCE SUNSET.
 2.9 	The Board of Trustees of the Minnesota State Colleges and Universities must 
2.10 	develop a plan to phase out centers of excellence as a systemwide initiative. Beginning 
2.11 	in fiscal year 2013 and thereafter, any amount of the base operations and maintenance 
2.12 	appropriation attributable to centers of excellence under Minnesota Statutes, section 
2.13 	136F.31, must not be separately allocated by the board, but must be included in the total 
2.14 	amount available for allocation to all institutions.

2.15 	Sec. 3. FUNDING TRANSFORMATIONAL INITIATIVES.
 2.16 	Any new transformational initiatives for the Minnesota State Colleges and 
2.17 	Universities undertaken by the board of trustees during fiscal years 2012 and 2013 must be 
2.18 	funded out of the direct appropriation for the central office and shared services. None of 
2.19 	the direct appropriations for operation and maintenance of the Minnesota State Colleges 
2.20 	and Universities may be used for new transformational initiatives in the biennium ending 
2.21 	June 30, 2013.

2.22 	Sec. 4.  REPEALER.
 2.23 	Minnesota Statutes 2010, section 136F.31, is repealed.

2.24 	ARTICLE 2
2.25 	HIGHER EDUCATION COMPENSATION

2.26 	Section 1. Minnesota Statutes 2010, section 15A.081, subdivision 7c, is amended to 
2.27 	read:
2.28 		Subd. 7c.Minnesota State Colleges and Universities chancellor. The Board of 
2.29 	Trustees of the Minnesota State Colleges and Universities shall establish a salary range for 
2.30 	the position of chancellor of the Minnesota State Colleges and Universities. The board 
2.31 	shall submit the proposed salary range to the Legislative Coordinating Commission for 
3.1 	approval, modification, or rejection in the manner provided in section 3.855. The board 
3.2 	shall establish thea salary for the chancellor within the approved salary range that does 
3.3 	not exceed the governor's salary.
3.4 	In deciding whether to approve a salary increase, the board shall consider the 
3.5 	performance of the chancellor in areas including educational leadership, student success, 
3.6 	system management, human resources, and affirmative action.

3.7 	EFFECTIVE DATE. This section is effective the day following final enactment for 
3.8 	contracts entered into on or after that date.

3.9 	Sec. 2. Minnesota Statutes 2010, section 136F.40, subdivision 2, is amended to read:
3.10 		Subd. 2.Contracts. (a) The board may enter into a contract with the chancellor, 
3.11 	a vice-chancellor, or a president, containing terms and conditions of employment. The 
3.12 	terms of the contract must be authorized under a plan approved under section 43A.18, 
3.13 	subdivision 3a. The salary established for a contract under this section must not exceed 
3.14 	the governor's salary.
3.15 	(b) Notwithstanding section 43A.17, subdivision 11, or other law to the contrary, a 
3.16 	contract under this section may provide a liquidated salary amount or other compensation 
3.17 	if a contract is terminated by the board prior to its expiration. 
3.18 	(c) Notwithstanding section 356.24 or other law to the contrary, a contract under 
3.19 	this section may contain a deferred compensation plan made in conformance with section 
3.20 	457(f) of the Internal Revenue Code. 
3.21 	(d) Notwithstanding any provision of the plan approved under section 43A.18, 
3.22 	subdivision 3a, a contract under this section must not authorize or otherwise provide 
3.23 	for a bonus payment.
3.24 	(e) To promote transparency and accountability, the board must provide timely, 
3.25 	complete, and easily accessible information on its Web site on the compensation of 
3.26 	persons with contracts under this section.

3.27 	EFFECTIVE DATE. This section is effective the day following final enactment for 
3.28 	contracts entered into on or after that date.