The Board of Trustees of the Minnesota State Colleges and Universities and the Board of Regents of the University of Minnesota may immediately lay off employees, without notice, if the respective board has declared a financial emergency. All other contractual provisions relating to layoffs continue to apply. A financial emergency may be declared if, at any time: (1) the projected revenue for the system from tuition and the general fund for the current or next fiscal year is less than 93 percent of the anticipated expenditures in the board approved budget, and (2) if tuition would need to be increased more than three times the annual inflation rate to solve the shortfall.

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For employees of the Minnesota State Colleges and Universities covered under a collective bargaining agreement, this section applies to all collective bargaining agreements effective after July 1, 1995, and shall be effective for each collective bargaining agreement covering those employees the day after it has been ratified by the Legislative Commission on Employee Relations. For represented employees of the University of Minnesota, this section applies the day following signing of the next agreement. For employees not covered by a collective bargaining agreement, this section is effective July 1, 1995. The Board of Trustees of the Minnesota State Colleges and Universities and the Board of Regents of the University of Minnesota shall balance layoffs of faculty, other employees, and administrators. The boards should strive to provide uninterrupted service and instruction to students.