DAR File No. 41813

Science Technology and Research Governing Auth., Administration

Rule R856-3

USTAR University Technology Acceleration Grants

Notice of Proposed Rule

(Repeal and Reenact)

DAR File No.: 41813
Filed: 06/14/2017 02:29:30 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is a result of S.B. 166 from the 2016 General Session, now codified in Utah Code Title 63M, Chapter 2. Subsection 63M-2-503(2) requires the Utah Science Technology and Research (USTAR) Initiative to create rules governing all USTAR grant programs. This rule is for a USTAR grant program, the USTAR University Technology Acceleration Grants. This rule facilitates the grant under Section 63M-2-503 by establishing the eligibility and reporting criteria for an entity to receive a grant including: 1) the form and process of submitting a grant application; 2) a description of entities eligible to apply for a grant; 3) a description of specific categories of projects that are eligible for a grant; 4) the criteria that will be considered in evaluating and awarding grants; and 5) the contracting and reporting requirements of grant recipients. The repeal and reenact is to: 1) clarify the language in the administrative rules for the grant; 2) update terms and conditions for entities eligible to apply for the grant, criteria for evaluating and awarding grant funding, and contracting and reporting requirements of grant recipients; and 3) to make USTAR administrative rule language similar across grant programs.

Summary of the rule or change:

This rule establishes the USTAR University Technology Acceleration Grants program and describes the eligibility criteria for an entity to receive a grant under Section 63M-2-503, including: 1) the form and process of submitting a grant application; 2) a description of which entities are eligible to apply for a grant; 3) the specific categories of projects that are eligible for a UTAG; 4) the criteria for awarding grants and determining grant amount; and 5) the contracting and reporting requirements of grant recipients. The change is to: 1) clarify the language in the administrative rules for the grant; 2) update terms and conditions for entities eligible to apply for the grant, criteria for evaluating and awarding grant funding, and contracting and reporting requirements of grant recipients; and 3) to make USTAR administrative rule language similar across grant programs.

Statutory or constitutional authorization for this rule:

• Subsection 63M-2-302(1)(h)

Anticipated cost or savings to:

the state budget:

None--It is funded by appropriations that have already been allocated to USTAR for these purposes.

local governments:

None--It is funded by appropriations that have already been allocated to USTAR for these purposes.

small businesses:

None--It is funded by appropriations that have already been allocated to USTAR for these purposes.

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

None--It is funded by appropriations that have already been allocated to USTAR for these purposes.

Compliance costs for affected persons:

If successful in winning a grant, awardees will be required to report data for at least five years subsequent at approximately an hour/year of effort. USTAR is unable to estimate the exact cost, since it will vary given the pay of the individual conducting the reporting.

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

After conducting a thorough analysis, it was determined that this proposed rule will not result in a fiscal impact to business.

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:

• Peter Jay at the above address, by phone at 801-372-3969, by FAX at , or by Internet E-mail at [email protected]

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:

07/31/2017

This rule may become effective on:

08/14/2017

Authorized by:

Ivy Estabrooke, Executive Director

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

R856-3. USTAR University Technology Acceleration Grants.

[ R856-3-1. 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.

R856-3-2. Purpose and Goals.

(1) University Technology Acceleration Grants provide funding to individual researchers or research teams employed by a Utah not-for-profit college or university to support research, discovery and innovation that has a strong market potential.

(2) Proposals will be reviewed on a competitive basis. All projects funded through UTAG must have an identified market and/or commercialization path.

(3) Anticipated duration of projects will be 12-18 months. Funding must be budgeted by State fiscal year (1JUL-30JUN) and funding will be dependent on meeting milestones and continued USTAR appropriation.

 

R856-3-3. Definitions.

(1) "Applicant" means an individual researcher or a research team applying for a USTAR UTAG.

(2) "Awardee" means an individual researcher or team team that have been awarded a UTAG.

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

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

(5) "UTAG" means the University Technology Acceleration Grants administered by the Utah Science, Technology and Research Initiative.

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

(7) "Technology Readiness Level" or "TRL" level means Technology Readiness Level, as defined by the U.S. Department of Defense at https://www.army.mil/e2/c/downloads/404653.pdf

(8) "Targeted Industry Sector" means the Utah industry or industries designated as such by USTAR for purposes of eligibility for UTAG grant funding as described in Rule 4 Section B, below.

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

 

R856-3-4. Eligibility Criteria.

(1) Individual researchers or research teams employed by a Utah University are eligible to apply for UTAG.

(2) Individual researchers or research teams must be developing a technology in a targeted industry sector.

(a) USTAR will identify the "Industry Sector(s)" eligible to receive a UTAG in the UTAG 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 UTAG, 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 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;

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

(vii) any other factor the governing authority deems relevant.

(3) If applicable, applicant must have an identified regulatory pathway.

(4) Realistic and verifiable commercialization path for market entry.

(5) Applicant must be developing a technology assessed to be between a TRL of 2-5.

 

R856-3-5. Application Form and Submission Guidelines.

(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) The procedure for submitting an application.

(b) Specific instructions for application content which will include:

(i) description of the company's technology and commercialization objectives;

(ii) list of technical milestones;

(iii) potential market;

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

(v) timeline for completion.

(c) Specific 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.

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

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

(5) All complete applications will be reviewed and awardees selected via the criteria and method outlined in Sections R856-3-6 and R856-3-7 herein.

 

R856-3-6. Application Review Process.

(1) University Pre-screening.

(a) 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 R856-3-6(2) will not be accepted.

(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 R856-3-7.

(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 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 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) The subcommittee will recommend projects and amounts of grant funding to the full governing authority for final approval.

 

R856-3-7. Evaluation and Award Criteria.

(1) The panel of subject matter 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 and compare each applicant across several categories, which may include:

(i) Technical merit:

(ii) Strength and maturity of research or management team, as applicable;

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

(iv) Potential economic impact, as measured by:

(A) Job creation;

(B) Product sales;

(C) Potential revenue due to expansion of current business or development of a new business; and, or,

(D) Projected time to revenue or job creation;

(v) Market need, technical and management experience and qualifications;

(vi) Reasonableness of cost proposal (i.e. size and allocation of budget is appropriate for the work proposed additional funds available to complete work);

(vii) Reasonableness of proposed milestones;

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

(ix) 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.

R856-3-8. Grant Amount, Award, and Required Contract.

(1) USTAR will have the discretion to limit the amount of funding that may be awarded for each UTAG 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 a UTAG, 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) grant funding may not be used to provide a primary benefit to any state other than Utah; and,

(b) for all other eligibility requirements, awardee must maintain eligibility status for the UTAG 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 R856-3-8(4) may result in forfeiture of grant funding and require repayment of all or a portion of the funding received as part of the program.

 

R856-3-9. Contract Modifications.

(1) University may request a modification to the terms of an UTAG 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.

 

R856-3-10. Milestones.

(1) UTAG funding must be used to accelerate the development and commercialization of a technology and project proposals must identify specific milestones leading to the proposed outcome.

(2) Examples of acceptable milestones must be specific to the project, and may include:

(a) Research and development activities,

(b) Proof of concept,

(c) Product validation; or,

(d) Product development.

(3) Remaining grant funds will be disbursed upon successful completion of designated milestones. Specific funding details will be provided in the program announcement and in each UTAG contract.

 

R856-3-11. Funding Distribution.

(1) Initial funding of no more than 50% of the total grant award will be provided within 30 days of contract signature. Remaining grant funds will be disbursed upon successful completion of designated milestones.

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

(3) 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.

 

R856-3-12. Milestones and Reporting.

(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; or,

(2) University is required to provide the reporting for researchers or research teams, as applicable, specified in Sections 63M-2-702 and 63M-2-704.]

R856-3-1. 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.

 

R856-3-2. Purpose and Goals.

(1) University Technology Acceleration Grants (UTAG) provide funding to individual researchers or research teams employed by a Utah not-for-profit college or university to support research, discovery and innovation that has a strong market potential.

(2) Proposals will be reviewed on a competitive basis. All projects funded through UTAG must have an identified market and/or commercialization path.

(3) Anticipated duration of projects will be 12-18 months. Funding must be budgeted by State fiscal year (July 1 - June 30) and funding will be dependent on meeting milestones and continued USTAR appropriation.

 

R856-3-3. Definitions.

(1) "Applicant" means an individual researcher or a research team applying for a USTAR UTAG.

(2) "Awardee" means an individual researcher or team that has been awarded a UTAG.

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

(4) "Targeted Industry Sector" means the Utah industry or industries designated as such by USTAR for purposes of eligibility for UTAG grant funding as described in R856-3-4(2).

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

(6) "Technology Readiness Level" or "TRL" level means the characterization of the maturity of the technology used by the federal government (http://ustar.org/our-programs/tap-technology-acceleration-program/tap-technology-readiness-levels/).

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

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

(9) "UTAG" means the University Technology Acceleration Grants administered by the Utah Science, Technology and Research Initiative.

 

R856-3-4. Eligibility Criteria.

(1) Individual researchers or research teams employed by a Utah University are eligible to apply for UTAG.

(2) Individual researchers or research teams must be developing a technology in a targeted industry sector.

(a) USTAR will identify the "Industry Sector(s)" eligible to receive a UTAG in the UTAG 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 UTAG, 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 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;

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

(vii) any other factor the governing authority deems relevant.

(3) If applicable, applicant must have an identified regulatory pathway.

(4) Applicant must have a realistic and verifiable commercialization path for market entry.

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

 

R856-3-5. Application and Submission Guidelines.

(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) The procedure for submitting an application.

(b) Specific instructions for application content which will include:

(i) description of the company's technology and commercialization plan and objectives;

(ii) list of technical milestones;

(iii) description of potential market for the product;

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

(v) timeline for completion.

(c) Specific instructions for the required budget outline, including:

(i) total project cost;

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

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

(iv) a breakdown of costs to complete each milestone.

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

(e) 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 from an authorized agent of the university.

(4) All complete applications will be reviewed and awardees selected via the criteria and method outlined in Sections R856-3-6 and R856-3-7 herein.

 

R856-3-6. Application Review Procedure.

(1) University Pre-screening.

(a) 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) strict conformity with application instructions;

(iii) verification of minimum eligibility requirements; and

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

(b) Any application that fails to meet the criteria in Subsection R856-3-6(2) and R856-3-5(1)-(4) will be rejected and not considered for review.

(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 R856-3-7.

(i) Each expert panel will consist of at least two technical subject-matter experts and one business or industry expert.

(ii) Each expert will review the proposals using an established scoring rubric provided by USTAR that includes evaluation on technical merit, commercialization strategy, economic impact to the state and budget and any other factors considered relevant by USTAR.

(iii) 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.

(iv) USTAR will screen the experts for conflicts of interest before reviews are initiated using the conflict of interest policy available on USTAR's website. Experts are participating in the application review as a volunteer for USTAR. Each expert is obligated under contract to maintain the classification of records and to keep information protected and confidential as described in the Utah Government Records Access and Management Act (GRAMA).

(4) Governing authority review.

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

(b) The subcommittee will recommend projects and amounts of grant funding to the full governing authority for final approval.

 

R856-3-7. Application Evaluation and Award Criteria.

(1) The panel of subject matter experts will use an established 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 experience of research or management team, as applicable;

(iii) appropriate technology readiness level (TRL 3-4);

(iv) potential economic impact, as measured by:

(A) job creation;

(B) product sales;

(C) potential revenue due to expansion of current business or development of a new business; and, or,

(D) projected time to revenue or job creation;

(v) market need, technical and management experience and qualifications;

(vi) commercialization strategy;

(vii) reasonableness of the proposed budget, including whether the amounts are appropriate for the work proposed;

(viii) reasonableness of proposed milestones;

(ix) proposed timeline is achievable and will not exceed 18 months; and,

(x) 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.

 

R856-3-8. Grant Amount, Award, and Required Contract.

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

(2) No overhead, F&A, G&A or any other indirects will be funded by the UTAG program.

(3) 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.

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

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

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

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

(6) Violations of Subsection R856-3-8(4) may result in forfeiture of grant funding and require repayment of all or a portion of the funding received as part of the program.

 

R856-3-9. Contract Modifications.

(1) University may request a modification to the terms of an UTAG 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) changes to milestone due dates, if the changes do not change the total length of the project;

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

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

(b) USTAR staff can issue a "stop work" order until the project can be reviewed by the USTAR governing authority in a closed meeting to determine whether to end a contract due to failed milestones.

(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 when required by State procurement regulations.

 

R856-3-10. Milestones.

(1) UTAG funding must be used to accelerate the research and development of a technology from TRL level 3 to 4 to a higher TRL level, and project proposals must identify specific milestones leading to the proposed outcome.

(2) Examples of acceptable milestones must be specific to the project, and may include:

(a) research and development activities,

(b) proof of concept,

(c) product validation; or,

(d) product development.

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

(4) Specific funding details will be provided in the program announcement and in each UTAG contract.

 

R856-3-11. Funding Distribution.

(1) Expenses for each milestone will be reimbursed upon successful completion of that milestone, as outlined in the contract.

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

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

 

R856-3-12. Reporting.

(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; or,

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

 

KEY: Utah Science Technology and Research (USTAR), University Technology Acceleration Grants (UTAG), technology readiness level (TRL)

Date of Enactment or Last Substantive Amendment: [November 16, 2016]2017

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