Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 202-S.F.No. 1020 
           An act relating to education; authorizing and 
          establishing procedures for the sale of all or part of 
          the Minnesota Educational Computing Corporation; 
          amending Minnesota Statutes 1988, sections 119.04, 
          subdivision 2, and by adding subdivisions; 119.06, 
          subdivision 3; and 119.09. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1988, section 119.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [POWERS.] The board of directors has the 
authority to engage in all activities which carry out the public 
purpose expressed in section 119.01 and which are consistent 
with sections 119.01 to 119.09.  This authority includes but is 
not limited to acquiring, leasing, and disposing of real and 
personal property, establishing banking relationships, borrowing 
funds, establishing policies relating to personnel and 
compensation of personnel, and purchasing insurance.  The board 
of directors may form wholly-owned subsidiaries.  A subsidiary 
shall be under the management control of the MECC board of 
directors.  The board of directors shall employ and set the 
compensation for the chief officer of MECC at not to exceed 95 
percent of the salary of the governor as provided by section 
15A.081, subdivision 6.  The chief officer shall direct and 
carry on the work of MECC and assignments of the board.  The 
board may establish bylaws and elect an executive committee.  
    The board of directors does not have the power to sell or 
offer for sale all or substantially all of the assets or any of 
the ownership of MECC.  
    Sec. 2.  Minnesota Statutes 1988, section 119.04, is 
amended by adding a subdivision to read: 
    Subd. 3.  [SALE OF CORPORATION.] The board of directors may 
sell all, substantially all, or part of the assets or any of the 
ownership of the corporation.  When any part is sold, the board 
shall transfer the assets or ownership that is sold to the 
purchaser.  Upon the sale of all or substantially all of the 
assets or ownership of the corporation, the board of directors 
shall dispose of any remaining assets and dissolve the 
corporation. 
    Sec. 3.  Minnesota Statutes 1988, section 119.04, is 
amended by adding a subdivision to read: 
    Subd. 4.  [DISTRIBUTION OF PROCEEDS.] If all or 
substantially all of the assets of the corporation are sold, the 
proceeds of the sale must be applied in the following order: 
    (1) any liabilities and obligations of the corporation must 
be paid, satisfied, or discharged or adequate provision must be 
made to do so; 
    (2) the corporation must be reimbursed for all expenses 
incurred in connection with the offer for sale and the sale of 
the corporation; and 
    (3) any remaining proceeds must be deposited in the 
permanent school fund.  
    Sec. 4.  Minnesota Statutes 1988, section 119.06, 
subdivision 3, is amended to read: 
    Subd. 3.  [EMPLOYEE RETIREMENT AND INSURANCE.] As long as 
the state owns at least a majority of the assets or ownership of 
MECC, the department of employee relations shall accept MECC 
employees in retirement plans and group life, health, and dental 
insurance plans provided MECC and its employees apply and fully 
pay the premiums and contributions of these plans.  For a period 
of 90 days after the effective date of this section, employees 
of the consortium who are members of the Minnesota state 
retirement system or the teachers retirement association shall 
be entitled to transfer their accumulated employer and employee 
contributions, not including interest, from those funds to the 
state unclassified employees retirement program under chapter 
352D.  For purposes of coverage under section 352D.02, 
subdivision 1, MECC employees transferring under this section 
shall be considered to be unclassified employees of the state.  
    Sec. 5.  Minnesota Statutes 1988, section 119.09, is 
amended to read: 
    119.09 [DISSOLUTION.] 
    In the event of the dissolution of MECC for any reason 
except a sale of all or substantially all of the assets or 
ownership of the corporation under section 119.04, the state of 
Minnesota, upon action by the governor, after consultation with 
the legislative advisory commission, shall have the option to 
require return of all the assets of MECC to the state in 
exchange for the assumption of all outstanding obligations of 
MECC.  
    Sec. 6.  [PROCEDURES AND CONDITIONS OF AN OFFER.] 
    Subdivision 1.  [OFFER REQUIRED.] The board of directors of 
the Minnesota educational computing corporation, in consultation 
with the commissioner of finance, shall solicit offers to 
purchase all or part of the assets or ownership of the 
corporation according to this section.  
    Subd. 2.  [CONDITIONS OF SALE.] Sale of all or any part of 
the assets of or ownership of the corporation shall be 
conditioned upon both of the following: 
    (a) The buyer and all subsequent buyers must continue to 
provide those computing and technology-related products 
developed by the Minnesota educational computing corporation to 
Minnesota educational institutions at one-half of the lowest 
price the products are sold to any non-Minnesota educational 
institution.  Minnesota educational institutions shall maintain 
the right to unlimited copies of products they purchase.  
    (b) All products existing or substantially developed at the 
time of the sale shall be copyrighted in the name of the state 
of Minnesota.  The buyer may use, sell, or market the 
copyrighted products if royalties for use of the products are 
paid as provided under an agreement among the board, the 
commissioner of finance, and the buyer.  
    Subd. 3.  [EVALUATION METHODS.] Before requesting 
proposals, the board and the commissioner of finance shall 
jointly establish:  
    (1) factors to be used in the review and evaluation of 
proposals from responsible bidders; 
    (2) a method for determining whether or to what degree each 
factor has been or would be likely to be met; 
    (3) the relative importance of each factor; 
    (4) that both of the conditions in subdivision 2 can be 
satisfied; and 
    (5) other procedures to be used to review and evaluate 
proposals. 
    Subd. 4.  [PROPOSAL OPTIONS.] The board shall request 
proposals, according to the procedures and deadlines it 
determines, for a public offering of the sale of all, 
substantially all, or any part of the assets or ownership of the 
corporation.  
    Subd. 5.  [PROHIBITION ON PARTICIPATION IN 
PROPOSALS.] Except for a proposal by an organized group of the 
employees of the corporation, no member of the board and no 
employee in a management position may participate in a proposal 
submitted to the board by a private or public corporation unless 
the member resigns from the board or the employee terminates 
employment.  The same restrictions shall apply to a member of 
the immediate family of the board member or employee.  
    Subd. 6.  [EVALUATION FACTORS.] Factors upon which all 
proposals received from responsible bidders by the deadline 
shall be evaluated include, but are not limited to, the 
following: 
    (1) a cost benefit analysis of the proposal for Minnesota 
educational institutions; 
    (2) the price offered by the bidder for any or all of the 
assets or ownership of the corporation; 
    (3) the extent to which the bidder will assume any 
liabilities and obligations of the corporation; 
    (4) the ability of the bidder to provide the capital needed 
to continue providing cost-effective computer technology-related 
products and services to educational institutions in the state 
and elsewhere; 
    (5) the ability of the bidder to provide, each year for 
five years after the date of purchase, capital for research and 
development in an amount comparable to similar corporations; 
    (6) the ability of the bidder to maintain and expand 
employment in the state using assets or ownership purchased from 
the corporation; 
    (7) whether and to what extent the bidder operates, 
conducts, and significantly contributes to business in the 
state; and 
    (8) whether the conditions of sale would be met. 
      In deliberating the approval of the sale, the legislative 
auditor and the commissioner of finance must consider the 
inclusion of these factors in the agreement. 
    Subd. 7.  [PROCEDURES AND RECOMMENDATIONS.] The board shall 
review and evaluate all proposals and adopt recommendations.  
The board may recommend rejection of all proposals.  The board 
shall submit its recommendations and copies of proposals to the 
commissioner of finance.  The commissioner of finance shall 
contract with an independent evaluator to provide an independent 
market valuation of the corporation.  The commissioner of 
finance shall review the recommendations of the board and the 
independent evaluation.  The commissioner of finance shall 
submit the recommendations of the board of directors, the 
independent evaluation, and the recommendations of the 
commissioner of finance to the legislative auditor.  The 
legislative auditor shall review the recommendations of the 
board of directors and the commissioner of finance and the 
independent evaluation and make its recommendations.  
    Subd. 8.  [REPORT TO THE LEGISLATURE.] By January 15, 1990, 
the recommendations of the board of directors, the commissioner 
of finance, and the legislative auditor, and the independent 
evaluation shall be submitted to the education committees of the 
legislature. 
    Sec. 7.  [EFFECTIVE DATE.] 
    Sections 1 to 6 are effective the day following final 
enactment. 
    Presented to the governor May 19, 1989 
    Signed by the governor May 19, 1989, 11:28 p.m.