DAR File No. 42357

Science Technology and Research Governing Auth., Administration

Rule R856-2

USTAR University-Industry Partnership Program Grants

Notice of Proposed Rule

(Repeal and Reenact)

DAR File No.: 42357
Filed: 12/01/2017 04:38:29 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 USTAR's second grant program, the USTAR University-Industry Partnership Program 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 and codify the language in the administrative rule 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; 3) make USTAR administrative rule language similar across grant programs; and 4) general cleanup.

Summary of the rule or change:

This rule establishes the USTAR Industry Partnership Program Grants and describes the eligibility, reporting, and other criteria required 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 entities eligible to apply for a grant; 3) a description of specific types of research 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 and codify the language in the administrative rule 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; 3) make USTAR administrative rule language similar across grant programs; and 4) general cleanup.

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:

It is expected to have a cost savings for business awarded grants as it is a grant program where businesses partner with universities to perform research and development on the development of new technologies. USTAR provides matching or shared funds to assist with the research and development. The grant funding for this particular grant is up to $1,000,000 per year. It is estimated to impact up to 20 companies that could win awards for matching USTAR IPP funding. USTAR is unable to estimate the exact cost, since it will vary given the grant amount awarded and the nature of the project conducted. Any potential costs on businesses would be limited to the time and materials spent to complete an application and will affect only those that choose to apply. Businesses that are awarded funding will be required to report data for at least five subsequent years 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 submitting the report.

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 subsequent years 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 submitting the report.

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

I. WHETHER A FISCAL IMPACT TO BUSINESS IS EXPECTED AS A RESULT OF THE PROPOSED RULE AND, IF SO, A DESCRIPTION OF WHY: After conducting a thorough analysis, it was determined that this proposed rule is expected to have a cost savings for businesses. It is a grant program where businesses partner with universities to perform research and development of new technologies. USTAR provides matching or shared funds to assist with the research and development. II. AN ESTIMATE OF THE TOTAL NUMBER OF BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The grant funding for this particular grant is up to $1,000,000 per year. It is estimated to impact up to 20 companies that could win awards for matching USTAR IPP funding. III. AN ESTIMATE OF THE SMALL BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The small business that could be impacted would be the estimated up to 20 companies that could win awards. IV. A DESCRIPTION OF THE SOURCES OF COST OR SAVINGS AS WELL AS THE EXPECTED NET SAVINGS OR COST TO BUSINESS ESTABLISHMENTS AND SMALL BUSINESS ESTABLISHMENTS AS A RESULT OF THE PROPOSED RULE OVER A ONE-YEAR PERIOD, IDENTIFYING ONE-TIME AND ONGOING COSTS: The company and university would receive funding from USTAR to offset the company's research and development costs. The total aggregate savings for businesses could be up to $1,000,000 annually. V. DEPARTMENT HEAD?S COMMENTS ON THE ANALYSIS: Any potential costs on businesses would be limited to the time and materials spent to complete an application and will affect only those that choose to apply. Businesses that are awarded funding will be required to report data for at least five subsequent years 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.

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.
AdministrationRoom SUITE 550
111 S MAIN
SALT LAKE CITY, UT 84111

Direct questions regarding this rule to:

• Ivy Estabrooke at the above address, by phone at 801-538-8709, by FAX at 801-538-8881, or by Internet E-mail at iestabrooke@utah.gov
• Justin Berry at the above address, by phone at 801-538-8884, by FAX at , or by Internet E-mail at jberry@utah.gov

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:

01/16/2018

This rule may become effective on:

01/23/2018

Authorized by:

Ivy Estabrooke, Executive Director

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 describing the purpose, eligibility criteria, award process, and reporting requirements for each grant program administered by USTAR.

 

R856-2-2. Purpose and Goals.

USTAR's Industry Partnership Program promotes the development of industry-university partnerships for technology-based economic 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 company with a substantial presence in Utah. The technology development will lead to a new product or a market advantage for the company.

 

R856-2-3. Definitions.

(1) "Applicant" means a company and a university researcher applying for a particular collaborative 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" or "Companies" 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) "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.

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

(10) "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.

(11) "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/).

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

(a) USTAR will identify the 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

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

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

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

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

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

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

(2) Proposal must be jointly developed by a company with a substantial presence in Utah as defined in R856-2-4(4), and a university.

(3) Proposal must be submitted by an authorized body within the university, (Eg. Office of Sponsored Programs).

(4) 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.

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

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

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

(ii) have a valid business license from the governing locality at the company's primary location;

(iii) meet the following criteria for employees in the state of Utah:

(A) if the company has 8 full time equivalent employees or less, at least 50% must be employed in Utah;

(B) if the company has 9-36 full time equivalent employees, at least 4 employees or 25%, whichever is greater, must be employed in Utah;

(C) if the company has over 36 full time equivalents, at least 10 people must be employed in Utah; or

(D) as approved by USTAR governing authority.

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

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

(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) business taxes paid 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 in Utah;

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

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

(6) 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) time on the project;

(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;

(ii) budgetary requirements to complete the project; and,

(iii) potential economic impact to state.

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

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

 

R856-2-5. Application and Submission Guidelines.

(1) USTAR will accept applications for IPP grants on an ongoing basis.

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

(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 product;

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

(v) timeline for completion.

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

(i) total project cost;

(ii) a description of funds secured or dedicated 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) The IPP grant application and instructions will be available on USTAR's website and in paper form upon request.

(4) 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 are encouraged to work with USTAR headquarters or a USTAR regional director to define the technology gap and identify appropriate researchers at universities.

(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) strict conformity with application instructions;

(iii) verification of minimum eligibility requirements;

(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 R856-2-6(2) will be rejected and not considered for review.

(3) Panel Review.

(a) Accepted applications will be reviewed 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 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.

(ii) 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.

(iii) USTAR will screen the experts for conflicts of interest before reviews are initiated, using the conflict of interest policy on USTAR's website. Experts. 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 IPP grants.

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

 

R856-2-7. Evaluation and Award Criteria.

(1) The panel of subject matter experts will use an established scoring system to evaluate and rank grant applications (if there is more than 1) 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 proposal across several categories, which may include:

(i) technical merit of proposal;

(ii) strength and experience of company and management team;

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

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

(A) job creation

(B) product sales;

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

(D) projected time to revenue or job creation.

(v) market need;

(vi) technical capabilities and experience of the team;

(vii) commercialization strategy;

(viii) reasonableness of the proposed budget and commitment of matching funds, including whether the amounts are appropriate for the work proposed;

(ix) reasonableness of proposed milestones;

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

(xi) 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.

 

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

(1) USTAR will have the discretion to limit the amount of funding that may be awarded for each 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 judgment and discretion of the governing authority.

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

(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 or country 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 disbursement of funding has been made, and first year reporting has been completed.

(5) Violations of Subsection R856-2-8(4) may result in forfeiture of grant funding and may 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, non-substantive changes.

(a) Non-substantive 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.

 

R856-2-10. Milestones.

(1) IPP grant funding must be used to accelerate the research and development of a technology from TRL level 2 to 5 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 may include:

(a) research and development activities;

(b) proof of concept;

(c) product validation; and,

(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 IPP grant contract.

 

R856-2-11. 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 IPP grant contract.

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

 

R856-2-12. 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.]

R856-2-1. Authority.

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.

 

R856-2-2. Purpose and Goals.

(1) USTAR's Industry Partnership Program (IPP) promotes the development of industry-university partnerships for technology development. This program teams industry and university research expertise to address specific technology problems or gaps identified by a Utah company.

(2) The goals of IPP are to accelerate the commercialization of technology and innovation that 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) "IPP" means the USTAR Industry Partnership Program, its activities and services.

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

(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 IPP grants using the selection criteria described in these rules.

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

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

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

(14) "Utah Company" means any company that meets the eligibility criteria

 

R856-2-4. Eligibility Criteria.

(1) Proposal must be jointly developed by a Utah 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) amount of business taxes paid 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) Company must achieve cost-sharing requirement:

(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) time spent on project;

(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 the 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.

(6) The technology gap must be between TRL 2-5.

(7) Applicants must be developing a technology in a targeted industry sector.

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

(b) The USTAR governing authority will, according to its discretion and judgment, review and approve the eligible 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 STIG, 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) 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 IPP.

(8) If Company or University 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.

 

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

(1) USTAR will accept applications for IPP grants on an ongoing basis.

(2) USTAR will make applications and instructions available on USTAR's website and in paper form upon request.

(3) The instructions will include the following:

(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 market;

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

(vi) timeline for completion.

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

(i) a description of any funds already secured for activities related to the project;

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

(iii) breakdown of costs to 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.

(4) All completed applications will be reviewed and awardees selected via the criteria and method outlined in Sections R856-2-6 and R856-2-7 herein.

 

R856-2-6. Application Review Procedure.

(1) Pre-screening.

(a) Companies and researchers are encouraged to work with USTAR staff 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 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 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, and use the scoring rubric provided by USTAR.

(ii) 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.

(iii) 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) GA subcommittee will consider prior performance of research team in evaluation.

(iii) 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. Application Evaluation Criteria.

(1) The review panel will use a scoring system to evaluate 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 each proposal and may include:

(i) Technical merit of proposal;

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

(iii) Reasonableness of proposed milestones with the recommended technical approach;

(iv) Reasonableness of the proposed timeline;

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

(A) job creation;

(B) product sales;

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

(D) projected time to revenue or job creation;

(vi) Commercialization plan/Market need;

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

(viii) reasonableness of proposed milestones and timelines; 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.

(2) IPP 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.

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

(a) research and development activities;

(b) proof of concept;

(c) product validation; and,

(d) product development.

 

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 judgment and discretion of USTAR and the governing authority. USTAR also reserves the right to certify any agreements between university and company on IP terms and confidentiality, publishing embargos, etc. .

(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 IPP 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, awardees must maintain eligibility status for the IPP 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.

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

 

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, non-substantive changes.

(a) Non-substantive 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 contract.

 

R856-2-10. Funding Distribution.

(1) USTAR shall reimburse University for no more than the total amount specified in the contract.

(2) Payment will only be made for those costs authorized and approved by USTAR and submitted in accordance with the terms and conditions provided in the 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.

 

R856-2-11. 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: Industry Partnership Program (IPP) , Utah Science Technology and Research (USTAR), technology readiness level (TRL)

Date of Enactment or Last Substantive Amendment: [August 15, 2017]2018

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