S.B. 62 Enrolled
7 Cosponsor:John L. Valentine 8
9 LONG TITLE
10 General Description:
11 This bill modifies Title 63M, Chapter 2, Utah Science Technology and Research
12 Governing Authority Act, and other related provisions.
13 Highlighted Provisions:
14 This bill:
15 . defines terms;
16 . requires the Utah Science Technology and Research (USTAR) governing authority
18 . lease certain science and technology buildings to state universities;
19 . establish written performance standards and expectations for each technology
20 outreach program location;
21 . establish written performance standards and expectations for each research team
22 funded by the USTAR initiative;
23 . provide a detailed annual report; and
24 . provide an annual audit;
25 . modifies the allocation of commercialization revenues;
26 . repeals the nonlapsing status of appropriations to the USTAR governing authority;
28 . makes technical changes.
29 Money Appropriated in this Bill:
31 Other Special Clauses:
33 Utah Code Sections Affected:
35 63J-1-602.4 , as last amended by Laws of Utah 2013, Chapter 28
36 63M-2-102 , as renumbered and amended by Laws of Utah 2008, Chapter 382
37 63M-2-201 , as renumbered and amended by Laws of Utah 2008, Chapter 382
38 63M-2-202 , as renumbered and amended by Laws of Utah 2008, Chapter 382
39 63M-2-203 , as renumbered and amended by Laws of Utah 2008, Chapter 382
40 63M-2-204 , as last amended by Laws of Utah 2011, Chapter 392
41 63M-2-301 , as last amended by Laws of Utah 2010, Chapter 286
42 63M-2-302 , as last amended by Laws of Utah 2012, Chapter 242
43 63M-2-303 , as last amended by Laws of Utah 2010, Chapter 286
45 63M-2-302.5 , Utah Code Annotated 1953
46 63M-2-401 , Utah Code Annotated 1953
47 63M-2-402 , Utah Code Annotated 1953
49 Be it enacted by the Legislature of the state of Utah:
50 Section 1. Section 63J-1-602.4 is amended to read:
51 63J-1-602.4. List of nonlapsing funds and accounts -- Title 61 through Title 63M.
52 (1) Funds paid to the Division of Real Estate for the cost of a criminal background
53 check for a mortgage loan license, as provided in Section 61-2c-202 .
54 (2) Funds paid to the Division of Real Estate for the cost of a criminal background
55 check for principal broker, associate broker, and sales agent licenses, as provided in Section
56 61-2f-204 .
57 (3) Certain funds donated to the Department of Human Services, as provided in
58 Section 62A-1-111 .
59 (4) Certain funds donated to the Division of Child and Family Services, as provided in
60 Section 62A-4a-110 .
61 (5) Appropriations from the Choose Life Adoption Support Restricted Account created
62 in Section 62A-4a-608 .
63 (6) Appropriations to the Division of Services for People with Disabilities, as provided
64 in Section 62A-5-102 .
65 (7) A portion of the funds appropriated to the Utah Seismic Safety Commission, as
66 provided in Section 63C-6-104 .
67 (8) Funding for the Medical Education Program administered by the Medical
68 Education Council, as provided in Section 53B-24-202 .
69 (9) Certain money payable for commission expenses of the Pete Suazo Utah Athletic
70 Commission, as provided under Section 63C-11-301 .
71 (10) Funds appropriated or collected for publishing the Division of Administrative
72 Rules' publications, as provided in Section 63G-3-402 .
73 (11) The Immigration Act Restricted Account created in Section 63G-12-103 .
74 (12) Money received by the military installation development authority, as provided in
75 Section 63H-1-504 .
76 (13) The appropriation to fund the Governor's Office of Economic Development's
77 Enterprise Zone Act, as provided in Section 63M-1-416 .
78 (14) The Motion Picture Incentive Account created in Section 63M-1-1803 .
81 Section 2. Section 63M-2-102 is amended to read:
82 63M-2-102. Definitions.
83 As used in this chapter:
84 (1) "Commercialization revenues" means dividends, realized capital gains, license fees,
85 royalty fees, and other revenues received by a university as a result of commercial applications
86 developed from the [
87 (a) the portion of those revenues allocated to the inventor; and
88 (b) expenditures incurred by the university to legally protect the intellectual property.
89 (2) "Executive director" means the person appointed by the governing authority under
90 Section 63M-2-301 .
95 Section 63M-2-202 .
97 Technology and Research Governing Authority created in Section 63M-2-301 .
99 Research [
102 (b) "USTAR initiative" includes the projects, operations, activities, programs, and
103 services described in [
104 Section 3. Section 63M-2-201 is amended to read:
106 63M-2-201. Science technology research buildings.
107 (1) As funding becomes available from the Legislature or other sources, the [
109 authority shall:
110 (a) construct at Utah State University:
111 (i) a Bio Innovations Research Institute;
112 (ii) an Infectious Disease Research Center; and
113 (iii) an Informatics/Computing Research Center; and
114 (b) construct at the University of Utah:
115 (i) a Neuroscience and Biomedical Technology Research Building; and
116 (ii) an Information Technology and Bioinformatics Research Center.
117 (2) The USTAR governing authority shall, subject to any restrictions or directions
118 established by the Legislature, plan, design, and construct the buildings.
119 (3) (a) Utah State University shall provide the land for the construction of science
120 technology and research buildings on its campus.
121 (b) The University of Utah shall provide the land for the construction of science
122 technology and research buildings on its campus.
123 (4) The USTAR governing authority shall hold title to the research buildings.
124 (5) The governing authority [
126 (a) before approving occupancy of a building, lease each building constructed on Utah
127 State University's campus to Utah State University and each building constructed on the
128 University of Utah's campus to the University of Utah by entering into a written lease
129 agreement with each university that clearly establishes the terms for the university's use,
130 maintenance, and ongoing rental payments for the building;
131 (b) require research teams to generate a certain amount of revenue from grants or other
132 sources to contribute to the [
133 (c) unless prohibited by law, deposit lease payments and other money received from
134 the universities and research teams with the state treasurer for deposit into the sinking funds
135 created under Section 63B-1a-301 for debt service on the bonds issued to fund planning,
136 design, and construction of the research buildings.
137 Section 4. Section 63M-2-202 is amended to read:
138 63M-2-202. Technology outreach program.
139 (1) As funding becomes available from the Legislature or other sources, the [
141 authority shall establish a technology outreach program at up to five locations distributed
142 strategically throughout Utah.
143 (2) (a) The USTAR governing authority shall ensure that the technology outreach
144 program acts as a resource to:
145 (i) broker ideas, new technologies, and services to entrepreneurs and businesses
146 throughout a defined service area;
147 (ii) engage local entrepreneurs and professors at applied technology centers, colleges,
148 and universities by connecting them to Utah's research universities;
149 (iii) screen business ideas and new technologies to ensure that the ones with the highest
150 growth potential receive the most targeted services and attention;
151 (iv) connect market ideas and technologies in new or existing businesses or industries
152 or in regional colleges and universities with the expertise of Utah's research universities;
153 (v) assist businesses, applied technology centers, colleges, and universities in
154 developing commercial applications for their research; and
155 (vi) disseminate and share discoveries and technologies emanating from Utah's
156 research universities to local entrepreneurs, businesses, applied technology centers, colleges,
157 and universities.
158 (b) In designing and operating the technology outreach program, the USTAR
159 governing authority shall:
160 (i) for each technology outreach program location:
161 (A) establish written performance standards and expectations for each location; and
162 (B) require reporting from each location related to those performance standards and
163 expectations on at least an annual basis; and
164 (ii) work cooperatively with the Technology Commercialization Offices at Utah State
165 University and the University of Utah.
166 Section 5. Section 63M-2-203 is amended to read:
167 63M-2-203. Research teams.
168 (1) As funding becomes available from the Legislature or other sources, and subject to
169 any restrictions or directions established by the Legislature, the USTAR governing authority
170 shall allocate money to Utah State University and the University of Utah to provide funding for
171 research teams to conduct science and technology research.
172 (2) The USTAR governing authority shall:
173 (a) establish written performance standards and expectations for each research team
174 receiving USTAR initiative funding;
175 (b) require each research team to report on the team's performance related to those
176 standards and expectations on at least an annual basis; and
177 (c) require each research team to report on the amount of funding received from
178 sources other than USTAR initiative funding on at least an annual basis.
179 (3) The USTAR governing authority shall discontinue allocating money to a research
180 team that does not provide the reporting required by Subsection (2).
181 (4) The USTAR governing authority may discontinue allocating money to a research
182 team for any reason, including:
183 (a) when the research team is failing to meet expectations established through
184 performance standards and expectations; and
185 (b) when the research team is receiving sufficient funding from other sources to no
186 longer reasonably need USTAR initiative funding.
187 Section 6. Section 63M-2-204 is amended to read:
188 63M-2-204. Financial participation agreement.
189 (1) In consideration of the money and services provided or agreed to be provided, the
190 state of Utah, Utah State University, and the University of Utah [
191 will allocate commercialization revenues as follows:
192 (a) for the first $15,000,000 received:
193 (i) $10,000,000 to Utah State University and the University of Utah, with the money
194 distributed proportionately based upon which university conducted the research that generated
195 the commercialization revenues; and
196 (ii) $5,000,000 to the [
199 ongoing operations of the USTAR initiative; and
200 (b) for all subsequent money received:
201 (i) 50% to Utah State University and the University of Utah, with the money
202 distributed proportionately based upon which university conducted the research that generated
203 the commercialization revenues; and
204 (ii) 50% to the USTAR governing authority or other entity designated by the state to be
205 used for:
208 (A) unless prohibited by law, deposit with the state treasurer for deposit into the
209 sinking fund created under Section 63B-1a-301 for debt service on the bonds issued to fund
210 planning, design, and construction of the research buildings;
211 (B) ongoing operations of the USTAR initiative;
223 Section 7. Section 63M-2-301 is amended to read:
224 63M-2-301. The Utah Science Technology and Research Initiative and the Utah
225 Science Technology and Research Governing Authority -- Creation -- Membership --
226 Meetings -- Staff.
227 (1) There is created the Utah Science Technology and Research Initiative.
229 is created the Utah Science Technology and Research Governing Authority consisting of the
230 state treasurer, the executive director of the Governor's Office of Economic Development, and
231 the following eight members appointed as follows [
232 (a) three appointed by the governor;
233 (b) two appointed by the president of the Senate;
234 (c) two appointed by the speaker of the House of Representatives; and
235 (d) one appointed by the commissioner of higher education.
237 (ii) The appointed members may not serve more than two full consecutive terms.
238 (b) Notwithstanding Subsection [
239 governing authority shall be staggered by lot so that half of the initial members serve two-year
240 terms and half serve four-year terms.
242 by the appointing authority with consent of the Senate for the unexpired term.
244 governing authority to serve a one-year term.
245 (b) The executive director of the Governor's Office of Economic Development shall
246 serve as the vice chair of the governing authority.
248 frequently at the request of a majority of the members of the governing authority.
251 but may receive per diem and travel expenses [
252 (a) Section 63A-3-106 ;
253 (b) Section 63A-3-107 ; and
254 (c) rules made by the Division of Finance [
255 and 63A-3-107 .
257 (9) (a) After consultation with the USTAR governing authority, the governor, with the
258 consent of the Senate, shall appoint a full-time executive director to provide staff support for
259 the USTAR governing authority.
261 cause by the governor or by majority vote of the USTAR governing authority.
264 Section 8. Section 63M-2-302 is amended to read:
265 63M-2-302. USTAR governing authority powers.
266 (1) The USTAR governing authority shall:
267 (a) ensure that funds appropriated and received for research and development at the
268 research universities and for the technology outreach program are used appropriately,
269 effectively, and efficiently in accordance with the intent of the Legislature;
270 (b) in cooperation with the universities' administrations, expand key research at the two
271 research universities;
272 (c) enhance technology transfer and commercialization of research and technologies
273 developed at the research universities to create high-quality jobs and new industries in the
274 private sector in Utah;
275 (d) review state and local economic development plans and appropriations to ensure
276 that the [
278 (e) establish written economic development objectives for the [
279 initiative that are measurable and verifiable, including how to maximize revenue to the
280 USTAR initiative so that it becomes financially self-supporting;
281 (f) by following the procedures and requirements of Title 63G, Chapter 3, Utah
282 Administrative Rulemaking Act, make rules for allocating [
283 appropriated money for research teams and for the commercialization of new technology
284 between Utah State University and the University of Utah;
285 (g) verify that the [
286 that it is meeting the governing authority's economic development objectives;
287 (h) monitor all research plans that are part of the [
288 research universities to determine that appropriations are being spent in accordance with
289 legislative intent and to maximize the benefit and return to the state; and
290 (i) develop methods and incentives to encourage investment in and contributions to the
295 (2) The USTAR governing authority may:
296 (a) in addition to money received [
297 the USTAR initiative from any source in the form of money, property, labor, or other things of
298 value [
299 (b) subject to any restrictions imposed by the donation, appropriations, or bond
300 authorizations, allocate money received by it among the research universities, technology
301 outreach program, and technology transfer offices to support commercialization and technology
302 transfer to the private sector; or
303 (c) enter into agreements necessary to obtain private equity investment in the [
304 USTAR initiative.
312 Section 9. Section 63M-2-302.5 is enacted to read:
313 63M-2-302.5. USTAR governing authority requirements.
314 The USTAR governing authority is subject to the requirements of an executive branch
315 agency and is:
316 (1) an agency for purposes of Title 63J, Chapter 1, Budgetary Procedures Act;
317 (2) an executive branch procurement unit for purposes of Title 63G, Chapter 6a, Utah
318 Procurement Code;
319 (3) a governmental entity for purposes of Title 63G, Chapter 2, Government Records
320 Access and Management Act; and
321 (4) a public body for purposes of Title 52, Chapter 4, Open and Public Meetings Act.
322 Section 10. Section 63M-2-303 is amended to read:
323 63M-2-303. USTAR Governing Authority Advisory Council -- Chair -- Meetings.
324 (1) There is created the [
325 Authority Advisory Council consisting of 12 members appointed as follows:
326 (a) one member appointed by the director of the Governor's Office of Economic
328 (b) one member appointed by the [
329 Technology Council;
330 (c) one member appointed by the Utah Nanotechnology Initiative;
331 (d) one member appointed by the Economic Development Corporation of Utah;
332 (e) one member appointed by [
333 (f) one member appointed by the Salt Lake Area Chamber of Commerce;
334 (g) one member appointed by the Provo-Orem Chamber of Commerce;
335 (h) one member appointed by the Davis Area Chamber of Commerce;
336 (i) one member appointed by the Ogden-Weber Chamber of Commerce;
337 (j) one member appointed by the Cache Chamber of Commerce;
338 (k) one member appointed by the St. George Area Chamber of Commerce; and
339 (l) one member appointed by the Vernal Chamber of Commerce.
340 (2) The USTAR governing authority shall consult with the advisory council about the
342 (3) The advisory council shall select a chair from among its members to serve a
343 two-year term.
344 (4) The advisory council shall convene whenever the USTAR governing authority
345 requests a meeting for consultation.
346 (5) A member may not receive compensation or benefits for the member's service, but
347 may receive per diem and travel expenses [
348 (a) Section 63A-3-106 ;
349 (b) Section 63A-3-107 ; and
350 (c) rules made by the Division of Finance [
351 and 63A-3-107 .
352 Section 11. Section 63M-2-401 is enacted to read:
354 63M-2-401. Reporting requirements.
355 (1) By October 1 of each year, the USTAR governing authority shall submit to the
356 governor; the Legislature; the Business, Economic Development, and Labor Appropriations
357 Subcommittee; and the Economic Development and Workforce Services Interim Committee an
358 annual written report of the operations, activities, programs, and services of the governing
359 authority and the USTAR initiative for the preceding fiscal year.
360 (2) For each project, operation, activity, program, or service related to the USTAR
361 initiative or overseen or funded through the USTAR governing authority, the annual report
362 shall include:
363 (a) a description of the project, operation, activity, program, or service;
364 (b) data selected and used by the governing authority to measure progress,
365 performance, and scope of the project, operation, activity, program, or service, including
366 summary data;
367 (c) a clear description of the methodology for any data in the report that includes an
369 (d) the amount and source of all USTAR initiative funding, including:
370 (i) funding from legislative appropriations;
371 (ii) funding procured outside of legislative appropriations, including a separate
372 accounting of grants or investments contributing to research teams and other activities of the
373 USTAR initiative from the federal government, private entities, or other sources, and an
374 explanation of the extent to which:
375 (A) outside funding was contingent on or leveraged by legislative appropriations; and
376 (B) outside funding would continue if legislative appropriations were discontinued;
377 (iii) commercialization revenue, including a separate accounting of:
378 (A) realized commercialization revenue;
379 (B) unrealized and expected commercialization revenue; and
380 (C) commercialization revenue going to other parties attributable to USTAR initiative
382 (iv) lease revenue from each building in which the USTAR governing authority holds
383 title; and
384 (v) the amount of money deposited with the state treasurer for deposit into the sinking
385 fund created under Section 63B-1a-301 for debt service on the bonds issued to fund planning,
386 design, and construction of the research buildings;
387 (e) all expenses of the USTAR initiative, including:
388 (i) operational expenses;
389 (ii) for each employee receiving compensation from USTAR initiative funding,
390 compensation information, including:
391 (A) salary expenses, benefit expenses, and travel expenses;
392 (B) information for each research team employee and each employee of the technology
393 outreach program that receives compensation directly or indirectly through USTAR initiative
394 funding; and
395 (C) information regarding compensation for each employee from sources other than
396 USTAR initiative funding, including grants and compensation from a university or private
398 (iii) for each research team, salary expenses, benefit expenses, travel expenses, and
399 operations and maintenance expenses;
400 (iv) operational and maintenance expenses for each building in which the USTAR
401 governing authority holds title;
402 (v) operational and maintenance expenses paid for by USTAR initiative funding for
403 each location that has an established technology outreach program; and
404 (vi) each grant or other incentive given as a result of the USTAR initiative, including
405 grants or incentives awarded through the technology outreach program;
406 (f) the number of jobs and the corresponding salary ranges created by the USTAR
407 initiative, including the number of jobs where the employee is expected to be employed for at
408 least one year and earns at least 125% of the prevailing wage of the county where the employee
410 (g) the name of each business entity receiving a grant or other incentive as a result of
411 the USTAR initiative, including the outreach program;
412 (h) a list of business entities that have hired employees as a result of the USTAR
414 (i) the tax revenue generated as a result of the USTAR initiative, with actual revenue
415 generated clearly separated from potential revenue;
416 (j) a list of intellectual property assets, including patents, generated by research teams
417 as a result of the USTAR initiative, including a reasonable estimate of the USTAR initiative's
418 percentage share of potential commercialization revenue that may be realized from those
420 (k) a description of any agreements entered into regarding private equity investment in
421 the USTAR initiative;
422 (l) beginning with data from the fiscal year beginning July 1, 2013, historical data from
423 previous years for comparison with the annual data reported under this Subsection (2);
424 (m) goals, challenges, and achievements related to the project, operation, activity,
425 program, or service;
426 (n) relevant federal and state statutory references and requirements;
427 (o) contact information of officials knowledgeable and responsible for each project,
428 operation, activity, program, or service;
429 (p) other information determined by the USTAR governing authority that:
430 (i) may be needed, useful, or of historical significance; or
431 (ii) promotes accountability and transparency for each project, operation, activity,
432 program, or service with the public and with elected officials;
433 (q) the written economic development objectives required under Subsection
434 63M-2-302 (1)(e) and a description of any progress or challenges in meeting the objectives; and
435 (r) the audit report described in Section 63M-2-402 .
436 (3) The annual report shall be designed to provide clear, accurate, and accessible
437 information to the public, the governor, and the Legislature.
438 (4) The governing authority shall:
439 (a) submit the annual report in accordance with Section 68-3-14 ; and
440 (b) make the annual report and previous annual reports accessible to the public by
441 placing a link to the reports on the USTAR initiative's website.
442 (5) In addition to the annual written report described in this section:
443 (a) upon the request of a committee, the USTAR governing authority shall provide
444 information and progress reports to the Economic Development and Workforce Services
445 Interim Committee; the Business and Labor Interim Committee; and the Business, Economic
446 Development, and Labor Appropriations Subcommittee; and
447 (b) on or before October 1, 2019, and every five years after October 1, 2019, the
448 USTAR governing authority shall include with the annual report described in this section a
449 written analysis and recommendations concerning the usefulness of the information required in
450 the annual report and the ongoing effectiveness of the USTAR initiative, including whether:
451 (i) the reporting requirements are effective at measuring the performance of the
452 USTAR initiative;
453 (ii) the reporting requirements should be modified; and
454 (iii) the USTAR initiative is beneficial to the state and should continue.
455 Section 12. Section 63M-2-402 is enacted to read:
456 63M-2-402. Audit requirements.
457 (1) Each fiscal year, an audit of the activities of the USTAR initiative shall be made as
458 described in this section.
459 (2) (a) As approved by the Legislative Audit Subcommittee, the audit shall be
460 conducted by:
461 (i) the legislative auditor; or
462 (ii) an independent auditor engaged by the legislative auditor.
463 (b) An independent auditor used under Subsection (2)(a)(ii) may not have a business or
464 contractual connection, or other connection, with the USTAR initiative or the USTAR
465 governing authority.
466 (3) The USTAR governing authority shall pay the costs associated with the annual
468 (4) The annual audit shall:
469 (a) include a verification of the accuracy of the information required to be included in
470 the annual report described in Section 63M-2-401 ; and
471 (b) be completed by September 1 of each year.
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