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S.B. 319 Enrolled

             1     

TECHNOLOGY COMMERCIALIZATION AND INNOVATION

             2     
ACT

             3     
2011 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Curtis S. Bramble

             6     
House Sponsor: Wayne A. Harper

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill changes the name of the Centers of Excellence Act to the Technology
             11      Commercialization and Innovation Act and makes conforming technical changes.
             12      Highlighted Provisions:
             13          This bill:
             14          .    changes the name of the Centers of Excellence Act to the Technology
             15      Commercialization and Innovation Act;
             16          .    defines Technology Commercialization and Innovation Program for purposes of the
             17      Act; and
             18          .    makes conforming technical changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          63M-1-701, as renumbered and amended by Laws of Utah 2008, Chapter 382
             26          63M-1-702, as renumbered and amended by Laws of Utah 2008, Chapter 382
             27          63M-1-703, as renumbered and amended by Laws of Utah 2008, Chapter 382
             28          63M-1-704, as renumbered and amended by Laws of Utah 2008, Chapter 382
             29          63M-1-705, as renumbered and amended by Laws of Utah 2008, Chapter 382


             30          63M-1-1112, as renumbered and amended by Laws of Utah 2008, Chapter 382
             31          63M-2-204, as renumbered and amended by Laws of Utah 2008, Chapter 382
             32     
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 63M-1-701 is amended to read:
             35     
Part 7. Technology Commercialization and Innovation Act

             36           63M-1-701. Title.
             37          This part is known as the "[Centers of Excellence] Technology Commercialization and
             38      Innovation Act."
             39          Section 2. Section 63M-1-702 is amended to read:
             40           63M-1-702. Purpose.
             41          (1) (a) The Legislature recognizes that the growth of new industry and expansion of
             42      existing industry requires a strong technology base, new ideas, concepts, innovations, and
             43      prototypes.
             44          (b) These generally come from strong research colleges and universities.
             45          (c) Technical research in Utah's colleges and universities should be enhanced and
             46      expanded, particularly in those areas targeted by the state for economic development.
             47          (d) Most states are enhancing their research base by direct funding, usually on a
             48      matching basis.
             49          (e) The purpose of this part is to catalyze and enhance the growth of these technologies
             50      by encouraging interdisciplinary research activities in targeted areas and by facilitating the
             51      transition of these technologies out of the university environment into industry where the
             52      technologies can be used to enhance job creation.
             53          (f) The Legislature recognizes that one source of funding is in matching state funds
             54      with federal funds and industrial support to provide the needed new technologies.
             55          (2) The Legislature recommends that the governor consider the allocation of economic
             56      development funds for [Centers of Excellence] the Technology Commercialization and
             57      Innovation Program to be matched by industry and federal grants on at least a two-for-one basis


             58      for colleges and universities in the state that offer any doctoral degrees.
             59          (3) (a) The Legislature recommends that the funds be allocated on a competitive basis
             60      to the various colleges and universities in the state and to companies working in partnership
             61      with colleges and universities to commercialize their technologies.
             62          (b) The funds made available should be used to support interdisciplinary research in
             63      [specialized Centers of Excellence] the Technology Commercialization and Innovation
             64      Program in technologies that are considered to have potential for economic development in this
             65      state and to help transition these technologies out of the colleges and universities into industry.
             66          Section 3. Section 63M-1-703 is amended to read:
             67           63M-1-703. Definitions.
             68          As used in this part:
             69          (1) "Business team consultant" means an experienced technology executive,
             70      entrepreneur, or business person who:
             71          (a) is recruited by the office through a request for proposal process to work directly
             72      with a college or university in the [Centers for Excellence program] Technology
             73      Commercialization and Innovation Program; and
             74          (b) works with the institution to facilitate the transition of its technology into industry
             75      by assisting the institution in developing strategies, including spin out strategies when
             76      appropriate, and go-to-market plans, and identifying and working with potential customers and
             77      partners.
             78          [(2) "Centers of excellence" means university-based, federal and industry-supported,
             79      cooperative research and development programs.]
             80          [(3)] (2) "Direct license" means the licensing between a company and a Utah college or
             81      university of technology developed at the college or university for the intent of
             82      commercializing the technology or facilitating its transition into industry.
             83          [(4)] (3) "Licensee" means:
             84          (a) a company that executes or is in the process of executing a direct license; or
             85          (b) a sublicensee of the technology from a direct license.


             86          (4) "Technology Commercialization and Innovation Program" means university-based,
             87      federal- and industry-supported cooperative research and development programs.
             88          Section 4. Section 63M-1-704 is amended to read:
             89           63M-1-704. Administration -- Grants and loans.
             90          (1) The Governor's Office of Economic Development shall administer this part.
             91          (2) (a) (i) The office may award [Centers of Excellence] Technology
             92      Commercialization and Innovation Program grants or issue loans to the various colleges,
             93      universities, and licensees in the state for the purposes of this part.
             94          (ii) If loans are issued under Subsection (2)(a)(i), the Division of Finance may set up a
             95      fund or account as necessary for the proper accounting of the loans.
             96          (b) The Governor's Office of Economic Development shall develop a process to
             97      determine whether a college or university that receives a grant under this part must return the
             98      grant proceeds or a portion of the grant proceeds if the technology that is developed with the
             99      grant proceeds is licensed to a licensee that:
             100          (i) does not maintain a manufacturing or service location in the state from which the
             101      licensee or a sublicensee exploits the technology; or
             102          (ii) initially maintains a manufacturing or service location in the state from which the
             103      licensee or a sublicensee exploits the technology, but within five years after issuance of the
             104      license the licensee or sublicensee transfers the manufacturing or service location for the
             105      technology to a location out of the state.
             106          (c) A repayment by a college or university of grant proceeds or a portion of the grant
             107      proceeds shall come only from the proceeds of the license established between the licensee and
             108      the college or university.
             109          (d) (i) A licensee that receives a grant under this part shall return the grant proceeds or
             110      a portion of the grant proceeds to the office if the licensee:
             111          (A) does not maintain a manufacturing or service location in the state from which the
             112      licensee exploits the technology; or
             113          (B) initially maintains a manufacturing or service location in the state from which the


             114      licensee exploits the technology, but within five years after issuance of the grant the licensee
             115      transfers the manufacturing or service location for the technology to an out of state location.
             116          (ii) A repayment by a licensee that receives a grant shall come only from the proceeds
             117      of the license to that licensee.
             118          (iii) A repayment by a licensee shall be prorated based only on the number of full years
             119      the licensee operated in the state from the date of the awarded grant.
             120          (3) (a) Funding allocations shall be made by the office with the advice of the State
             121      Advisory Council for Science and Technology and the board.
             122          (b) Each proposal shall receive the best available outside review.
             123          (4) (a) In considering each proposal, the office shall weigh technical merit, the level of
             124      matching funds from private and federal sources, and the potential for job creation and
             125      economic development.
             126          (b) Proposals or consortia that combine and coordinate related research at two or more
             127      colleges and universities shall be encouraged.
             128          (5) The State Advisory Council on Science and Technology shall review the activities
             129      and progress of grant recipients on a regular basis and assist the office in preparing an annual
             130      report on the accomplishments and direction of the [Centers of Excellence Program]
             131      Technology Commercialization and Innovation Program.
             132          Section 5. Section 63M-1-705 is amended to read:
             133           63M-1-705. Business team consultants.
             134          (1) The office may enter into work agreements with business team consultants through
             135      a request for proposal process to participate in the [Centers for Excellence program]
             136      Technology Commercialization and Innovation Program.
             137          (2) Under a work agreement, a business team consultant shall assist a college or
             138      university in facilitating the transition of its technology into industry.
             139          Section 6. Section 63M-1-1112 is amended to read:
             140           63M-1-1112. Technology Commercialization and Innovation Program.
             141          In accordance with Part 6, State Advisory Council on Science and Technology, the


             142      office may award grants to the [Centers of Excellence] Technology Commercialization and
             143      Innovation Program, as defined by Section 63M-1-703 , to fund development of new
             144      technology for recycling if the program funded is a cooperative effort between the [Centers of
             145      Excellence] Technology Commercialization and Innovation Program and one or more
             146      recycling market development zones created under this part.
             147          Section 7. Section 63M-2-204 is amended to read:
             148           63M-2-204. Financial participation agreement.
             149          (1) In consideration of the money and services provided or agreed to be provided, the
             150      state of Utah, Utah State University, and the University of Utah covenant and agree that they
             151      will allocate commercialization revenues as follows:
             152          (a) for the first $15,000,000 received:
             153          (i) $10,000,000 to Utah State University and the University of Utah, with the money
             154      distributed proportionately based upon which university conducted the research that generated
             155      the commercialization revenues; and
             156          (ii) $5,000,000 to the Governor's Office of Economic Development for the [Centers of
             157      Excellence program] Technology Commercialization and Innovation Program created by
             158      Chapter 1, Part 7, [Centers of Excellence Act] Technology Commercialization and Innovation
             159      Act; and
             160          (b) for all subsequent money received:
             161          (i) 50% to Utah State University and the University of Utah, with the money
             162      distributed proportionately based upon which university conducted the research that generated
             163      the commercialization revenues; and
             164          (ii) 50% to the governing authority or other entity designated by the state to be used
             165      for:
             166          (A) the [Centers of Excellence program] Technology Commercialization and
             167      Innovation Program created by Chapter 1, Part 7, [Centers of Excellence] Technology
             168      Commercialization and Innovation Act;
             169          (B) replacement of equipment in the research buildings;


             170          (C) recruiting and paying additional research teams; and
             171          (D) construction of additional research buildings.
             172          (2) The Governor's Office of Economic Development shall:
             173          (a) distribute that portion of the $5,000,000 allocated to the [Centers of Excellence
             174      program] Technology Commercialization and Innovation Program by Subsection (1)(a)(ii) to
             175      Utah State University and the University of Utah based upon which institution performed the
             176      research that generated the commercialization revenues; and
             177          (b) credit those amounts to the universities as matching funds under Subsection
             178      63M-1-702 (2).


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