Opinion ID: 1891385
Heading Depth: 1
Heading Rank: 2

Heading: Scope of the Powers Granted to the University; the Role of Conditions.

Text: The delineation of the power granted to the university is based in large part on the role of conditions placed upon appropriations. This authority derives from two cases. The first is the Chase decision, where this court stated (175 Minn. 268, 220 N.W. 955), quoting from a Michigan case:  All that power having been put in the regents, none of it remained to be exercised by any other body  not even the legislature itself. At the one extreme, the legislature has no power to make effective, in the form of law, a mere direction of academic policy or administration. At the other extreme it has the undoubted right within reason to condition appropriations as it sees fit. `In such case the regents may accept or reject such appropriation,   . If they accept, the conditions are binding upon them.' Board of Regents v. Auditor General, 167 Mich. 444, 451, 132 N.W. 1037, 1041. (Italics supplied in part.) The second is Fanning v. University of Minnesota, 183 Minn. 222, 227, 236 N.W. 217, 219 (1931), where this court stated:    It is conceded that if the university accepts a donation or appropriation, it must take it with the conditions attached. State ex rel. Black v. Board of Education, 33 Idaho 415, 196 P. 201; Board of Regents v. Auditor General, 167 Mich. 444, 132 N.W. 1037. It may take it with the conditions, or it may leave it alone. Thus, the first inquiry must concern the general type of conditions allowed by the constitution. Not all conditions, of course, would qualify as within reason. This issue has been addressed by several other courts. The Michigan Supreme Court noted in State Bd. of Agriculture v. State Admin. Bd., 226 Mich. 417, 425, 197 N.W. 160, 161 (1924): Clearly, in saying that the Legislature can attach to an appropriation any condition which it may deem expedient and wise, the court had in mind only such a condition as the Legislature had power to make. It did not mean that a condition could be imposed that would be an invasion of the constitutional rights and powers of the governing board of the college. It did not mean to say that in order to avail itself of the money appropriated the [university] must turn over to the Legislature management and control of the college, or of any of its activities. See, also, Sprik v. Regents of the University of Michigan, 43 Mich.App. 178, 204 N.W.2d 62 (1972), where the court held that conditions imposed by the legislature on appropriations may not interfere with the Regents' management, affirmed on other grounds, 390 Mich. 84, 210 N.W.2d 332 (1973); State ex rel. Black v. State Bd. of Education, 33 Idaho 415, 196 P. 201 (1921); Caldwell v. Board of Regents, 54 Ariz. 404, 96 P.2d 401 (1939); King v. Board of Regents of the University of Nevada, 65 Nev. 533, 200 P.2d 221 (1948). Regulations must not be of a character which would interfere essentially with the discretion granted the Board of Regents by the constitution. The issue for this court to decide is whether conditioning the appropriation of funds upon compliance with the state designer selection board act constitutes an attempt by the legislature to control the exercise of the constitutional powers of the Board of Regents over internal management of the university. In other states, constitutional corporations have been held subject to the workers' compensation acts, [2] collective bargaining statutes, [3] and the abolition of governmental immunity to tort actions. [4] The University of Minnesota itself is already subjected to the Minnesota public employment labor relations act of 1971, [5] the highway traffic regulation act, [6] regulation of the sale of intoxicants, [7] and the regulation of its forest programs by the Department of Natural Resources. [8] While these regulations are not at issue here, their existence and the acquiescence by the university in their application does carry some significance towards a practical construction of the statutes in controversy in the instant case. On the other hand, legislation has been held invalid which required a university to establish a medical college in one city and discontinue the existing college in another, [9] prohibited expenditure of state funds for instructors or students who had been convicted of the offense of interfering with normal university operations, or for any student, found by school officials or the courts, to have willfully damaged university property, [10] created an advisory board of regents, [11] or attempted to apply a nepotism act [12] or civil service act. [13] Also, one court has intimated that legislation aimed at a university alone or against an activity peculiar to the university would be invalid. [14] In addition, this court has struck down legislation which purported to authorize the commissioners of administration and finance to supervise and control the expenditure of any and all moneys by or for the university and the making of all contracts by the Board of Regents, on the grounds that [t]he right so to control university finances is the power to dictate academic policy and direct every institutional activity; [15] refused to enjoin the construction of a dormitory on the university campus on the grounds that whether the university shall build is a question of university policy; [16] and struck down a statute which purported to allow the governor to appoint other regents and also to appoint three state officers ex officio regents. [17] The state designer selection board act manifests a primary intent to avoid the conflicts of interest which arise when members of a state agency select a firm in which they have an interest, be it financial or otherwise. To this end, it requires that the board be composed of a representative nominated by the consulting engineers council of Minnesota; a representative nominated by the Minnesota society of architects; and a representative nominated by the Minnesota board of the arts. These provisions, among others, are provided to insure competency in the selection process. Moreover, the act requires that criteria adopted by the board for the selection process be made public, and that the board compile data on and conduct interviews with proposed designers. The user agency (in this case the University of Minnesota) may participate throughout, although without having a vote in the final selection. Thus, the thrust of the statute is to promote the general welfare and to prevent conflicts of interests and fraudulent acts. It is not aimed specifically at the university but applies to all public agencies of the state. The limited conditions imposed by the state designer selection board act are radically different from the direct attempt to control all university expenditures dealt with in the Chase case. Moreover, times have greatly changed since 1928 when the Chase case was decided. At that time the University of Minnesota was largely self-supporting insofar as operating revenues were concerned, and its building requirements from the legislature were relatively modest. Today, on the other hand, the University of Minnesota receives hundreds of millions of dollars in legislative appropriations each biennium for operations and building needs. In light of this fact alone, the legislature must by necessity be said to have the right to impose reasonable, even though limited, conditions on the use of such sizable appropriations of public funds. We cannot and will not attempt to define in this case what conditions would be acceptable in other instances and which conditions would not. This must be decided on a case-by-case basis. In this case, we hold that the legislature has applied very minimal conditions on the use of funds appropriated by it to the university  conditions which are limited in scope and which are not an intrusion into the internal control and management of the university by its Board of Regents. If the university were providing all funds for the construction of a building from its own revenues, it would not be subject to the terms of the act. Moreover, although the university does not select the designer, it certainly has the right to direct his actions and to reject any design it finds unsuitable. Also, while the state designer selection board act provides that the department of administration shall negotiate the designer's fee and prepare the contract to be entered into between the designer and the university, we hold that the Board of Regents of the university must be consulted during the negotiation process, and must specifically approve the contract both as to form and content before execution on the part of the Board of Regents. Reversed and remanded with instructions to enter summary judgment for appellants in the form presented to the district court.