No. 40681 (New Rule): Rule R856-2. USTAR University-Industry Partnership Program Grants

(New Rule)

DAR File No.: 40681
Filed: 08/15/2016 11:54:20 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is a direct result of recently passed legislation, S.B. 166 (2016 General Session), as now codified in Title 63M, Chapter 2. Subsection 63M-2-503(2) requires USTAR to create rules governing all USTAR grant programs. This rule is for USTAR's second proposed new grant program, the USTAR University-Industry Partnership Program Grants.

Summary of the rule or change:

This rule establishes the USTAR Industry Partnership Program Grants and describes the eligibility, evaluation, and reporting criteria for the program including: 1) the form and process of submitting a grant application; 2) a description of the entities eligible to apply for a grant; and 3) the specific types of research projects eligible for a grant.

Statutory or constitutional authorization for this rule:

• Subsection 63M-2-302(h)

Anticipated cost or savings to:

the state budget:

None--Although this is a new program, it's funded by appropriations that have already been allocated to USTAR for these purposes.

local governments:

None--Although this is a new program, it's funded by appropriations that have already been allocated to USTAR for these purposes.

small businesses:

None--Although this is a new program, it's funded by appropriations that have already been allocated to USTAR for these purposes.

persons other than small businesses, businesses, or local governmental entities:

None--Although this is a new program, it's funded by appropriations that have already been allocated to USTAR for these purposes.

Compliance costs for affected persons:

If successful in winning a grant, companies will be required to report data via an online and/or telephonic survey for at least five years subsequent at approximately an hour/year of effort.

Comments by the department head on the fiscal impact the rule may have on businesses:

Any potential fiscal impacts on businesses would be limited to the time and materials spent to complete an application and will affect only those that choose to apply.

Ivy Estabrooke, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Science Technology and Research Governing Auth.
Administration
60 E NORTH TEMPLE 3RD FLR
SALT LAKE CITY, UT 84111

Direct questions regarding this rule to:

• Koa Perlac at the above address, by phone at 801-538-8622, by FAX at 801-538-8881, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/03/2016

This rule may become effective on:

10/11/2016

Authorized by:

Ivy Estabrooke, Executive Director

RULE TEXT

R856. Science Technology and Research Governing Authority (Utah), Administration.

R856-2. USTAR University-Industry Partnership Program Grants.

R856-2-1. Authority.

Subsection 63M-2-503(2) requires the USTAR governing authority to make rules establishing the eligibility, award process, and reporting criteria for each grant program administered by USTAR.

 

R856-2-2. Purpose.

U STAR's Industry Partnership Program promotes the development of industry-university partnerships for technology development. This program will accelerate the commercialization of technology and innovation by teaming industry and university research expertise to address specific technology problems or gaps identified by a Utah company. The technology development will lead to a new product or a market advantage for the company.

 

R856-2-3. Definitions.

(1) "Applicant" means a collaboration between a company and university researcher for a particular project.

(2) "Awardee(s)" means a project that has been awarded an Industry Partnership Program Grant.

(3) "Governing authority" means the Utah Science, Technology and Research Governing Authority.

(4) "Company" means a privately-owned corporation, limited liability company, partnership, or other business entity or association and:

(a) does not include an individual, sole proprietorship, or higher-education institution; and,

(b) is represented by persons at least 18 years old.

(5) "Commercialization plan" means the strategy or process by which a company will introduce a technology into the market.

(6) "IPP" means the USTAR Industry Partnership Program, its activities and services.

(7) "IPP Grant" means the competitive grants awarded and administered as part of the USTAR Industry Partnership Program.

(8) "Technology" includes applications of scientific research such as inventions, methods, processes, or other material, virtual, or intellectual property.

(9) "Technology gap" means the disparity between a company's existing technology or technological capacity and what is needed to develop a commercial application for a product.

(10) "Technology Readiness Level" or "TRL" level means the method of estimating technology maturity used by the U.S. Department of Defense.

(11) "Targeted Industry Sector" means the Utah industry or industries designated as such by USTAR for purposes of eligibility for IPP grants using the selection criteria described in these rules.

(12) "University" means any public or not-for-profit institution of higher education located in Utah.

(13) "USTAR" means the Utah Science, Technology and Research Initiative.

 

R856-2-4. Eligibility Criteria.

(1) Proposal must be jointly developed by a Utah-based company and a university.

(2) Proposal must be submitted by an authorized body within the university.

(3) An authorized representative from the company must certify that:

(a) Company lacks technical capacity to resolve stated technology gap;

(b) The proposed university technology will resolve the technology gap; and,

(c) Company commits to provide a cost-share contribution in the form of a defined amount of funding paid to the university and/or in-kind contributions as defined in Sections R856-2-4 and R856-2-5.

(4) Company must have a substantial presence in Utah.

(a) A substantial presence, for purposes of the IPP grant, requires the following:

(i) company must be properly registered with the Utah Division of Corporations as an active, for-profit business entity, in good standing; and,

(ii) company must be properly licensed in the appropriate city or county.

(b) Additionally, USTAR shall, according to its judgment and discretion, determine whether a company has a substantial presence for purposes of the IPP grant by weighing the following factors:

(i) size of workforce in Utah;

(ii) percentage of company's total workforce in Utah.

(iii) amount of matching funds

(iv) pays business taxes to the State of Utah.

(v) relative size of the entity including the number of employees in Utah and the relative size of operations in the state;

(vi) whether the company is registered as a domestic, for-profit business entity in Utah and has a business license in the appropriate utah city or county;

(vii) whether the company's principal place of business is Utah;

(viii) likelihood that the company will maintain a significant presence in the state of Utah; and,

(ix) the degree to which the company's activities and operations positively impact Utah's economy.

(5) Cost-sharing required:

(a) Company must pledge a matching contribution to support the project;

(b) Company matching funds may be provided via:

(i) Direct payment to university for the research project; and/or

(ii) "In-kind" contribution, which may include:

(A) Company Subject Matter Expert(s) (SME);

(B) Materials and equipment;

(C) Work/research space;

(D) Travel and other company expenses budgeted for the project; or,

(E) Other contributions, as approved by USTAR.

(c) A one-to-one match is not required. USTAR retains discretion to approve the ratio of the match. In determining the ratio of the match, USTAR considerations may include:

(i) size of company; and,

(ii) potential economic impact to state.

(d) University will provide USTAR with documentation of funding received from company to fulfill the company cost-share commitment prior to completion of the project.

(e) All reported cost-share is subject to audit by USTAR.

(5) IPP is open to companies with a technology gap between TRL 2-5.

 

R856-2-5. Application Form and Submission Guidelines.

(1) USTAR will provide the following instructions for applicants:

(a) A general procedure for submitting an application.

(b) Instructions for application content, which includes:

(i) description of technology gap;

(ii) commercialization plan if technology gap is solved;

(iii) description of technical milestones and qualification of team to meet milestones;

(iv) potential economic impact on Utah economy; and,

(v) timeline for completion.

(c) Instructions for providing an outlined budget for total project cost, including;

(i) a description of funds already secured;

(ii) an itemized budget detailing planned use of grant funds; and,

(iii) funding by milestones and timelines.

(d) Description of the application evaluation process and scoring system.

(e) Instructions for reporting project results and completing annual follow-up surveys.

(2) The IPP grant application and instructions will be available on USTAR's website and in paper form upon request.

(3) All completed applications will be reviewed and awardees selected via the criteria and method outlined herein.

 

R856-2-6. Application Review Procedure.

(1) Pre-screening.

(a) Companies and researchers are encouraged to work with USTAR headquarters or a USTAR regional director in identifying appropriate researchers and developing a proposal.

(b) Universities may perform an initial analysis and assessment of the project to be submitted with the application.

(2) Initial eligibility screening.

(a) USTAR will conduct an initial eligibility screening for each application to ensure:

(i) completeness;

(ii) verification of minimum eligibility requirements; and

(iii) appropriateness of applicant's reported TRL assessment, proposed timelines, and budget.

(b) Any application that fails to meet the criteria in Subsection R856-2-6(2) will be rejected.

(3) Panel Review.

(a) Accepted applications will be reviewed by a panel of independent subject-matter experts ("expert panel") who will evaluate and score the applicant's proposed research project using the criteria in Section R856-2-7.

(i) Each expert panel will consist of at least two technical experts and one business expert.

(ii) Technical subject-matter experts will assess the scientific and technical merits of the proposal.

(iii) Business subject-matter experts will provide feedback on the applicant's evaluate the business model, project cost, commercialization strategy, and potential economic impacts of the proposal.

(iv) USTAR will have discretion to select the independent experts for the expert review panels and shall consider, as applicable:

(A) academic qualifications, including, for a technical subject-matter expert, whether the expert has a terminal degree in a relevant field;

(B) relevant work experience and practical training in the field;

(C) knowledge of the target industry sector in Utah;

(D) experience evaluating grant proposals; and,

(E) any other factors USTAR deems important.

(v) USTAR will screen the experts for conflicts of interest before reviews are initiated.

(4) Governing authority review.

(i) A subcommittee of the governing authority will convene to review the expert panel's scores and develop recommendations.

(ii) Recommendations from the subcommittee concerning which projects should be awarded a grant will be presented to the full governing authority for final approval.

 

R856-2-7. Evaluation and Award Criteria.

(1) The peer review and business experts will use a scoring system to evaluate and rank grant applications and determine grant amounts:

(a) The scoring criteria will be made available during the application period;

(b) The scoring system will be designed to assess each proposal and may include:

(i) Technical merit;

(ii) Appropriate technology readiness level (TRL 2-5);

(iii) Proposed milestones are reasonably obtainable with the recommended technical approach;

(iv) Proposed timeline is achievable and will not exceed 18 months;

(v) Potential for economic impact, as measured by potential for:

(A) Potential revenue due to expansion of current business or development of new businesses;

(B) Product sales; and/or

(C) Projected time to revenue or job creation.

(vi) Commercialization plan/Market need;

(vii) Technical capabilities and experience of the team; and,

(viii) Realism of the proposed costs and commitment of matching funds.

 

R856-2-8. Grant Amount, Award, and Required Contract.

(1) USTAR will have the discretion to limit the maximum amount of funding that may be awarded for each IPP grant based on available funds, scope of project, and quality of proposal.

(2) USTAR reserves the right to award funding for any proposal in full or in part, to request additional information, or to reject any or all applications based on the eligibility and evaluation criteria set forth in these rules and according to the judgement and discretion of the governing authority.

(3) Upon award of an IPP grant, and prior to any disbursement of funds, university must enter into a contract with USTAR governing the use of grant funding.

(4) Unless addressed in the terms and conditions of the contract between university and USTAR, the following provisions shall apply:

(a) company must maintain a substantial presence in the state for at least five years subsequent to initial disbursement of grant funds;

(b) IPP grant funding may not be used to provide a primary benefit to any state other than Utah; and,

(c) for all other eligibility requirements, company must maintain eligibility status for the IPP program until the project is complete, all milestones have been met, final dispersant of funding has been made, and first year reporting has been completed.

(5) Violations of Subsection R856-2-8(4) of this section may result in forfeiture of grant funding and require repayment of all or a portion of the funding received as part of the IPP program.

 

R856-2-9. Contract Modifications.

(1) University and Company may request a modification to the terms of an IPP contract.

(2) USTAR may deny a modification request for any reason.

(3) USTAR shall have discretion to agree to reasonable, nonsubstantive changes.

(a) Nonsubstantive changes may include the following:

(i) changes to timelines of less than one month if it is the first such modification;

(ii) corrections to clerical errors in the application materials;

(iii) technical changes to conditions that do not alter the budget, company's eligibility status, or violate any state or federal law;

(4) Substantive changes must be approved by the USTAR governing authority.

(5) All approved changes shall be made in writing and through an amendment modifying the terms of the grant contract.

 

R856-2-10. Milestones and Reporting.

(1) Companies are required to provide the reporting, as applicable, specified in Section 63M-2-703 for at least five (5) years following initial receipt of grant funds.

(2) University is required to provide the reporting, as applicable, specified in Sections 63M-2-702 and 63M-2-704.

 

KEY: Utah Science Technology and Research (USTAR), Industry Partnership Program (IPP), technology readiness level (TRL)

Date of Enactment or Last Substantive Amendment: 2016

Authorizing, and Implemented or Interpreted Law: 63M-2-302(h)

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