R856-1. USTAR Technology Acceleration Program Grants, R856. Science Technology and Research Governing Authority (Utah), Administration, Utah Administrative Code

Utah Administrative Code (Current through November 1, 2019)

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

R856-1. USTAR Technology Acceleration Program Grants

R856-1-1. Authority

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

R856-1-2. Purpose and Goals

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(1) USTAR's Technology Acceleration Program (TAP) provides grants and other support to assist start-ups and early stage companies to accelerate the development of a new technology.

(2) The goals of the program are to:

(a) enhance the state's innovation system by supporting the development, retention, and attraction of science and technology companies in Utah; and,

(b) accelerate the growth of high-potential technology companies in the state leading to the creation of high-paying science and technology jobs in Utah.

R856-1-3. Definitions

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(1) "Applicant" means a company applying for a USTAR TAP Grant.

(2) "Awardee" means a company that has been awarded a TAP 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) "TAP" means the USTAR Technology Acceleration Program, its activities and services.

(6) "TAP grant" means the competitive grant funding awarded and administered by USTAR under TAP.

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

(8) "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.

(9) "Technology Readiness Level" or "TRL" level means the method of estimating technology maturity used by the Federal Government and is available on the USTAR website.

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

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

R856-1-4. Eligibility Criteria

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(1) Company must be Utah-based.

(a) To be considered "Utah-based," a company must:

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

(ii) maintain its principal place of business in Utah; and,

(iii) not relocate the business or substantial portions of its employees, operations, or management outside of the State of Utah.

(b) If a company does not meet the criteria in Subsection R856-1-4(1) above, or if it cannot be reasonably determined whether the company meets the criteria, the governing authority, in its discretion and upon approval by a majority vote, may determine whether a company should be considered a Utah-based company for purposes of the TAP grant by weighing the following factors:

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

(ii) 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;

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

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

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

(2) Company must have fewer than 50 employees, less than $1 million annual revenue and raised less than $5 million in private capitol.

(3) Company must be developing a technology in a targeted industry sector.

(a) USTAR will identify the targeted industry sector(s) eligible to receive a TAP grant in the TAP application materials.

(b) The USTAR governing authority will, according to its discretion and judgment, review and approve the targeted technology sectors to ensure they are strategically selected to align with USTAR's economic development objectives and maximize the potential benefit to the state

(c) In selecting industry sectors eligible to receive support from TAP, the governing authority may consider the following factors:

(i) statewide or regional importance of the industry to Utah's economy;

(ii) relative size of the sector, its stability, and growth potential;

(iii) characteristics of the state's existing workforce, including education and training;

(iv) the current availability of other sources of funding or risk capital (public or private) for early-stage companies in the technology sector;

(v) the potential for the industry sector to develop new jobs and business opportunities in the state; and,

(vi) Likelihood that research in this sector will result in creation of a company in Utah or IP transfer to an existing Utah company; and,

(vii) any other factor the governing authority deems relevant, considering the mission of USTAR and the purpose of TAP.

(4) The company must be developing a technology assessed to be between a TRL of 3-5.

(5) If the Company is a current recipient of a USTAR grant, that project must be verified as complete by USTAR before the application deadline in order for the awardee to be eligible to apply, unless expressly exempted by USTAR.

R856-1-5. Application Form and Submission Guidelines

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(1) For each new round of grants, USTAR will provide a program announcement and make applications and instructions available on USTAR's website and in paper form upon request.

(2) The instructions will include the following:

(a) A general procedure for submitting an application;

(b) Requirements for a letter of intent;

(i) description of the company's technology;

(ii) commercialization plan;

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

(iv) potential market;

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

(vi) timeline for completion.

(d) Instructions for the required budget outline, including:

(i) total project cost;

(ii) a description of funds already secured for activities related to this project;

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

(iv) breakdown of costs to complete each milestone.

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

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

(3) Completed applications must be received on or before the specified deadline in the application instructions.

(4) All complete applications will be reviewed and awardees selected via the criteria and method outlined in Sections R856-1-6 and R856-1-7 herein.

R856-1-6. Application Review Procedure

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(1) Pre-screening

(a) Companies will submit a letter of intent before the specified deadline.

(b) Letter of intent will be reviewed by USTAR staff to determine eligibility to apply based on this Rule and TAP policies. Only companies determined to be eligible may apply for TAP.

(2) Initial eligibility screening.

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

(i) Completeness; and

(ii) Verification of minimum eligibility requirements.

(b) Any application that fails to meet the criteria in Section R856-1-6(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 R856-1-7.

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

(v) 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;

(D) experience evaluating grant proposals;

(E) any other factors USTAR deems important.

(vi) USTAR will screen the experts for conflicts of interest before reviews are initiated using the conflict of interest policy available on USTAR's website.

(4) Governing authority review.

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

(b) GA subcommittee will consider prior performance of applicant in evaluation

(c) The subcommittee will recommend projects for award and award amounts to the full governing authority for final approval.

R856-1-7. Application Evaluation Criteria

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(1) Letter of Intent

(a) The administrative criteria to review letters of intent will be published in advance.

(2) The review panel will use a scoring system to evaluate and rank grant applications and recommend grant amounts.

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

(b) The scoring system will be designed to assess and compare each applicant across several categories, which may include:

(i) technical merit of proposal;

(ii) strength and maturity of company and management;

(iii) potential for economic impact, as measured by:

(A) job creation;

(B) product sales;

(D) projected time to revenue or job creation;

(iv) Commercialization plan/ market need;

(v) reasonableness of cost proposal (i.e. size and allocation of budget is appropriate for the work proposed and matching funds available);

(vi) reasonableness of proposed milestones and timelines; and

(vii) any other factor indicative of applicant's ability to produce measurable and timely impacts on the state in areas related to the economic development performance metrics used to evaluate USTAR's activities.

(3) TAP Grants must be used to accelerate the development and commercialization of a technology and project proposals must identify specific technical milestones leading to the proposed outcome.

(4) Examples of acceptable milestones must be specific to the project may include:

(a) research and development activities;

(b) proof of concept;

(d) product development.

R856-1-8. Grant Amount, Award, and Required Contract

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(1) USTAR will have the discretion to determine the maximum amount of funding that may be awarded for each round of TAP based on available funds and quality of applicant pool.

(2) USTAR reserves the right to award funding for any application 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 judgment and discretion of USTAR and the governing authority.

(3) Upon award of the TAP grant, and prior to any disbursement of funds, Company must enter into a written agreement with USTAR governing the use of TAP grant funding.

(4) Unless addressed in the terms and conditions of the written agreement between company and USTAR, the following provisions shall apply:

(a) company must remain a Utah-based company for at least five years from initial disbursement of TAP funding;

(b) company may not use TAP grant funding 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 TAP 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 Section R856-1-8(4) may result in the forfeiture of grant funding and may require repayment all or a portion of funds received as part of the TAP grant.

R856-1-9. Contract Modifications

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(1) Company may request a modification to the terms of a TAP contract.

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

(3) USTAR shall have discretion to agree to reasonable, non-substantive changes.

(a) Nonsubstantive changes may include the following:

(i) changes to timelines within the scope of work;

(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 agreement.

R856-1-10. Funding Distribution

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(1) Initial funding of no more than 50% of the total grant award will be provided within a reasonable time after a TAP grant is approved to allow company to meet initial milestones.

(2) Remaining grant funds will be disbursed upon successful completion of designated milestones.

(3) Specific funding details will be provided in the program announcement and in each TAP grant contract.

(4) Failure to successfully complete the milestones may result in a recapture of all or part of the grant funding and will be grounds to terminate the contract and any future funding.

R856-1-11. Reporting

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