This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Wed, Mar 4, 2015 at 12:07 PM by bhansen.
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7 LONG TITLE
8 General Description:
9 This bill modifies provisions regarding the Utah Science Technology and Research
10 Governing Authority.
11 Highlighted Provisions:
12 This bill:
13 ▸ modifies certain intent language regarding the Utah Science Technology and
14 Research Governing Authority;
15 ▸ requires that prospective gubernatorial appointees to the Utah Science Technology
16 and Research Governing Authority be approved by the Senate;
17 ▸ gives the governor authority to remove a member of the Utah Science Technology
18 and Research Governing Authority before a member's term is completed;
19 ▸ modifies provisions of the technology outreach innovation program; and
20 ▸ makes technical changes.
21 Money Appropriated in this Bill:
22 None
23 Other Special Clauses:
24 None
25 Utah Code Sections Affected:
26 AMENDS:
27 63B-15-101, as enacted by Laws of Utah 2006, Chapter 123
28 63B-19-101, as enacted by Laws of Utah 2010, Chapter 181
29 63M-2-102, as last amended by Laws of Utah 2014, Chapter 186
30 63M-2-202, as last amended by Laws of Utah 2014, Chapter 186
31 63M-2-204, as last amended by Laws of Utah 2014, Chapter 186
32 63M-2-301, as last amended by Laws of Utah 2014, Chapter 186
33 63M-2-302, as last amended by Laws of Utah 2014, Chapter 186
34 63M-2-401, as enacted by Laws of Utah 2014, Chapter 186
35 63M-2-402, as enacted by Laws of Utah 2014, Chapter 186
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37 Be it enacted by the Legislature of the state of Utah:
38 Section 1. Section 63B-15-101 is amended to read:
39 63B-15-101. Capital facilities bonds -- Utah Science Technology and Research
40 Governing Authority -- Maximum amount -- Projects authorized.
41 (1) (a) The total amount of bonds issued under this section may not exceed
42 $111,100,000.
43 (b) When Utah State University certifies to the commission that the university has
44 obtained reliable commitments, convertible to cash, of $10,000,000 or more in nonstate funds
45 to construct the Bio Innovations Research Institute, and when the chairs of the Legislature's
46 Executive Appropriations Committee have certified that the committee has heard a
47 presentation by the chair of the bonding commission and the Utah Science Technology and
48 Research Governing Authority on the project, the commission may issue and sell general
49 obligation bonds in a total amount not to exceed $40,400,000.
50 (c) When the University of Utah certifies to the commission that the university has
51 obtained reliable commitments, convertible to cash, of $30,000,000 or more in nonstate funds
52 to construct the Neuroscience and Biomedical Technology Research Building, and when the
53 chairs of the Legislature's Executive Appropriations Committee have certified that the
54 committee has heard a presentation by the chair of the bonding commission and the Utah
55 Science Technology and Research Governing Authority on the project, the commission may
56 issue and sell general obligation bonds in a total amount not to exceed $70,700,000.
57 (2) (a) Proceeds from the issuance of bonds shall be provided to the Utah Science
58 Technology and Research Governing Authority to provide funds to pay all or part of the cost of
59 acquiring and constructing the projects listed in this Subsection (2).
60 (b) These costs may include the cost of acquiring easements and rights-of-way,
61 improving sites, and acquiring, constructing, equipping, and furnishing facilities and all
62 structures, roads, parking facilities, utilities, and improvements necessary, incidental, or
63 convenient to the facilities, interest estimated to accrue on these bonds during the period to be
64 covered by construction of the projects plus a period of six months after the end of the
65 construction period, and all related engineering, architectural, and legal fees.
66 (c) For the Utah Science Technology and Research Governing Authority, proceeds
67 shall be provided for the following:
| 68 | CAPITAL DEVELOPMENT PROJECTS | |||
| 69 | Project Description | Estimated Operations and Maintenance | Amount Funded | |
| 70 | Bio Innovations Research Institute -- Utah State University | $0 | $40,000,000 | |
| 71 | Neuroscience and Biomedical Technology Research Building -- University of Utah | $0 | $70,000,000 | |
| 72 | TOTAL CAPITAL DEVELOPMENT PROJECTS | $110,000,000 | ||
| 73 | TOTAL GENERAL OBLIGATION BOND AUTHORIZATION FOR CAPITAL DEVELOPMENT PROJECTS | $110,000,000 | ||
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77 (3) (a) The amounts funded as listed in Subsection (2) are estimates only and do not
78 constitute a limitation on the amount that may be expended for the projects.
79 (b) The commission, by resolution and in consultation with the Utah Science
80 Technology and Research Governing Authority, may delete the project if the inclusion of that
81 project could be construed to violate state law or federal law or regulation.
82 (4) The Utah Science Technology and Research Governing Authority may enter into
83 agreements related to the project before the receipt of proceeds of bonds issued under this
84 chapter.
85 (5) The commission or the state treasurer may make any statement of intent relating to
86 that reimbursement that is necessary or desirable to comply with federal tax law.
87 (6) The commission may not issue or execute bonds authorized by this section that
88 have a maturity date or dates of more than 20 years after the date of delivery of the bonds.
89 (7) The Utah Science Technology and Research Governing Authority shall contract
90 with the Division of Facilities Construction and Management to oversee construction of the
91 buildings.
92 (8) The Utah Science Technology and Research Governing Authority may not delegate
93 authority over construction of the capitol development projects identified in this section to any
94 entity other than the Division of Facilities Construction and Management.
95 Section 2. Section 63B-19-101 is amended to read:
96 63B-19-101. Capital facilities bonds -- Utah Science Technology and Research
97 Governing Authority -- Maximum amount -- Projects authorized.
98 (1) The bonds issued under this section may not exceed $46,000,000 for acquisition
99 and construction proceeds, plus additional amounts necessary to pay costs of issuance, to pay
100 capitalized interest, and to fund any debt service reserve requirements, with the total amount of
101 the bonds not to exceed $46,460,000.
102 (2) (a) Proceeds from the issuance of bonds shall be provided to the Utah Science
103 Technology and Research Governing Authority to provide funds to pay all or part of the cost of
104 constructing the projects listed in this Subsection (2).
105 (b) These costs may include the cost of acquiring easements and rights-of-way,
106 improving sites, and acquiring, constructing, equipping, and furnishing facilities and all
107 structures, roads, parking facilities, utilities, and improvements necessary, incidental, or
108 convenient to the facilities, interest estimated to accrue on these bonds during the period to be
109 covered by construction of the projects plus a period of six months after the end of the
110 construction period, and all related engineering, architectural, and legal fees.
111 (c) For the Utah Science Technology and Research Governing Authority, proceeds
112 shall be provided for the following:
| 113 | CAPITAL DEVELOPMENT PROJECTS | ||
| 114 | Project Description | Estimated Operations and Maintenance | Amount Funded |
| 115 | Bio Innovations Research Institute -- Utah State University | $0 | $18,400,000 |
| 116 | Neuroscience and Biomedical Technology Research Building -- University of Utah | $0 | $27,600,000 |
| 117 | TOTAL CAPITAL DEVELOPMENT PROJECTS | $46,000,000 | |
| 118 | ADDITIONAL AUTHORIZED AMOUNTS | $460,000 | |
| 119 | TOTAL GENERAL OBLIGATION BOND AUTHORIZATION FOR CAPITAL DEVELOPMENT PROJECTS | $46,460,000 | |
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123 (3) (a) The amounts funded as listed in Subsection (2) are estimates only and do not
124 constitute a limitation on the amount that may be expended for the projects.
125 (b) The commission, by resolution and in consultation with the Utah Science
126 Technology and Research Governing Authority, may delete the project if the inclusion of that
127 project could be construed to violate state law or federal law or regulation.
128 (4) The Utah Science Technology and Research Governing Authority may enter into
129 agreements related to the project before the receipt of proceeds of bonds issued under this
130 chapter.
131 (5) The commission or the state treasurer may make any statement of intent relating to
132 that reimbursement that is necessary or desirable to comply with federal tax law.
133 (6) The Utah Science Technology and Research Governing Authority shall contract
134 with the Division of Facilities Construction and Management to oversee construction of the
135 buildings.
136 (7) The Utah Science Technology and Research Governing Authority may not delegate
137 authority over construction of the capital development projects identified in this section to any
138 entity other than the Division of Facilities Construction and Management.
139 Section 3. Section 63M-2-102 is amended to read:
140 63M-2-102. Definitions.
141 As used in this chapter:
142 (1) "Commercialization revenues" means dividends, realized capital gains, license fees,
143 royalty fees, and all other revenues received by a university as a result of commercial
144 applications, inventions, or intellectual property developed from the USTAR initiative, less:
145 (a) the portion of [
146 (b) expenditures incurred by the university to legally protect the intellectual property.
147 (2) "Executive director" means the person appointed [
148 Section 63M-2-301.
149 (3) "Research buildings" means any of the buildings listed in Section 63M-2-201.
150 (4) "Research universities" means the University of Utah and Utah State University.
151 (5) "Technology outreach innovation program" or "TOIP" means the program
152 described in Section 63M-2-202.
153 (6) "USTAR governing authority" means the Utah Science Technology and Research
154 Governing Authority created in Section 63M-2-301.
155 (7) (a) "USTAR initiative" means the Utah Science Technology and Research Initiative
156 created in Section 63M-2-301.
157 (b) "USTAR initiative" includes the projects, operations, activities, programs, and
158 services described in this chapter.
159 Section 4. Section 63M-2-202 is amended to read:
160 63M-2-202. Technology outreach innovation program.
161 (1) As funding becomes available from the Legislature or other sources, the USTAR
162 governing authority shall establish a technology outreach innovation program, also known as
163 the TOIP, at up to five locations distributed strategically throughout Utah.
164 (2) [
165 outreach program acts as a resource to:
166 [
167 throughout a defined service area;
168 [
169 colleges, and universities by connecting them to Utah's research universities;
170 [
171 highest growth potential receive the most targeted services and attention;
172 [
173 industries or in regional colleges and universities with the expertise of Utah's research
174 universities;
175 [
176 developing commercial applications for their research; and
177 [
178 research universities to local entrepreneurs, businesses, applied technology centers, colleges,
179 and universities.
180 [
181 TOIP location the USTAR governing authority [
182 [
183 (a) may hire a TOIP director;
184 [
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186 [
187 standards and expectations on at least an annual basis[
188 [
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190 (4) A TOIP director hired under Subsection (3) shall:
191 (a) be categorized as a schedule AC employee in accordance with Section 67-19-15;
192 (b) report to, and be supervised by, the executive director;
193 (c) ensure the TOIP serves to further the vision and mission of the USTAR initiative;
194 and
195 (d) as directed by the executive director, implement the policies and procedures
196 adopted by the USTAR governing authority.
197 Section 5. Section 63M-2-204 is amended to read:
198 63M-2-204. Financial participation agreement.
199 (1) In consideration of the money and services provided or agreed to be provided, the
200 state of Utah, Utah State University, and the University of Utah agree that they will allocate
201 commercialization revenues as follows:
202 [
203 [
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206 [
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208 (a) for up to and including the first $15,000,000 in commercialization revenues
209 generated:
210 (i) 66.6% shall be retained by the research universities, with the money distributed
211 proportionably to the university that generated the commercialization revenue; and
212 (ii) 33.4% shall be paid to the USTAR governing authority for the ongoing operation
213 of the USTAR initiative;
214 (b) for all subsequent money received:
215 (i) 50% to Utah State University and the University of Utah, with the money
216 distributed proportionately based upon which university conducted the research that generated
217 the commercialization revenues; and
218 (ii) 50% to the USTAR governing authority or other entity designated by the state to be
219 used for:
220 (A) unless prohibited by law, deposit with the state treasurer for deposit into the
221 sinking fund created under Section 63B-1a-301 for debt service on the bonds issued to fund
222 planning, design, and construction of the research buildings;
223 (B) ongoing operations of the USTAR initiative;
224 (C) replacement of equipment in the research buildings;
225 (D) recruitment and funding of additional research teams; and
226 (E) construction of additional research buildings.
227 Section 6. Section 63M-2-301 is amended to read:
228 63M-2-301. The Utah Science Technology and Research Initiative and the Utah
229 Science Technology and Research Governing Authority -- Creation -- Membership --
230 Meetings -- Staff.
231 (1) There is created the Utah Science Technology and Research Initiative.
232 (2) To oversee the Utah Science Technology and Research Initiative, there is created
233 the Utah Science Technology and Research Governing Authority consisting of the state
234 treasurer or the state treasurer's designee, the executive director of the Governor's Office of
235 Economic Development, and the following eight members appointed as follows:
236 (a) three appointed by the governor, with the consent of the Senate;
237 (b) two appointed by the president of the Senate;
238 (c) two appointed by the speaker of the House of Representatives; and
239 (d) one appointed by the commissioner of higher education.
240 (3) (a) (i) The eight appointed members shall serve four-year staggered terms.
241 (ii) The appointed members may not serve more than two full consecutive terms.
242 (iii) An appointed member may be removed from the board for any reason before the
243 member's term is completed at the discretion of the Ŝ→ [
243a authority ←Ŝ after consultation with the
244 governing authority.
245 (b) Notwithstanding Subsection (3)(a)(i), the terms of the first members of the
246 governing authority shall be staggered by lot so that half of the initial members serve two-year
247 terms and half serve four-year terms.
248 (4) Vacancies in the appointed positions on the governing authority shall be filled by
249 the appointing authority [
250 appointment for the unexpired term.
251 (5) (a) The governor, with the consent of the Senate, shall select the chair of the
252 governing authority to serve a one-year term.
253 (b) The governor may extend the term of a sitting chair of the governing authority
254 without the consent of the Senate.
255 [
256 shall serve as the vice chair of the governing authority.
257 (6) The governing authority shall meet at least [
258 meet more frequently at the request of a majority of the members of the governing authority.
259 (7) Five members of the governing authority are a quorum.
260 (8) A member may not receive compensation or benefits for the member's service, but
261 may receive per diem and travel expenses as allowed in:
262 (a) Section 63A-3-106;
263 (b) Section 63A-3-107; and
264 (c) rules made by the Division of Finance according to Sections 63A-3-106 and
265 63A-3-107.
266 (9) (a) After consultation with the USTAR governing authority, the governor, with the
267 consent of the Senate, shall appoint a full-time executive director to provide staff support for
268 the USTAR governing authority.
269 (b) The executive director is an at-will employee who may be terminated without cause
270 by the governor or by majority vote of the USTAR governing authority.
271 Section 7. Section 63M-2-302 is amended to read:
272 63M-2-302. USTAR governing authority powers.
273 (1) The USTAR governing authority shall:
274 (a) ensure that funds appropriated and received for research and development at the
275 research universities and for the [
276 effectively, and efficiently in accordance with the intent of the Legislature;
277 (b) in cooperation with the universities' administrations, expand key research at the two
278 research universities;
279 (c) enhance technology transfer and commercialization of research and technologies
280 developed at the research universities to create high-quality jobs and new industries in the
281 private sector in Utah;
282 (d) review state and local economic development plans and appropriations to ensure
283 that the USTAR initiative and its appropriations do not duplicate existing or planned programs;
284 (e) establish written economic development objectives for the USTAR initiative that
285 are measurable and verifiable, including how to maximize revenue to the USTAR initiative so
286 that it becomes financially self-supporting;
287 (f) by following the procedures and requirements of Title 63G, Chapter 3, Utah
288 Administrative Rulemaking Act, make rules for allocating appropriated money for research
289 teams and for the commercialization of new technology between Utah State University and the
290 University of Utah;
291 (g) verify that the USTAR initiative is being enhanced by research grants and that it is
292 meeting the governing authority's economic development objectives;
293 (h) monitor all research plans that are part of the USTAR initiative at the research
294 universities to determine that appropriations are being spent in accordance with legislative
295 intent and to maximize the benefit and return to the state; and
296 (i) develop methods and incentives to encourage investment in and contributions to the
297 USTAR initiative from the private sector.
298 (2) The USTAR governing authority may:
299 (a) in addition to money received from the Legislature, receive contributions for the
300 USTAR initiative from any source in the form of money, property, labor, or other things of
301 value;
302 (b) subject to any restrictions imposed by the donation, appropriations, or bond
303 authorizations, allocate money received by it among the research universities, technology
304 outreach program, and technology transfer offices to support commercialization and technology
305 transfer to the private sector; or
306 (c) enter into agreements necessary to obtain private equity investment in the USTAR
307 initiative.
308 Section 8. Section 63M-2-401 is amended to read:
309 63M-2-401. Reporting requirements.
310 (1) By October 1 of each year, the USTAR governing authority shall submit to the
311 governor; the Legislature; the Business, Economic Development, and Labor Appropriations
312 Subcommittee; and the Economic Development and Workforce Services Interim Committee an
313 annual written report of the operations, activities, programs, and services of the governing
314 authority and the USTAR initiative for the preceding fiscal year.
315 (2) For each project, operation, activity, program, or service related to the USTAR
316 initiative or overseen or funded through the USTAR governing authority, the annual report
317 shall include:
318 (a) a description of the project, operation, activity, program, or service;
319 (b) data selected and used by the governing authority to measure progress,
320 performance, and scope of the project, operation, activity, program, or service, including
321 summary data;
322 (c) a clear description of the methodology for any data in the report that includes an
323 estimation;
324 (d) the amount and source of all USTAR initiative funding, including:
325 (i) funding from legislative appropriations;
326 (ii) funding procured outside of legislative appropriations, including a separate
327 accounting of grants or investments contributing to research teams and other activities of the
328 USTAR initiative from the federal government, private entities, or other sources, and an
329 explanation of the extent to which:
330 (A) outside funding was contingent on or leveraged by legislative appropriations; and
331 (B) outside funding would continue if legislative appropriations were discontinued;
332 (iii) commercialization revenue, including a separate accounting of:
333 (A) realized commercialization revenue;
334 (B) unrealized [
335 (C) commercialization revenue going to other parties attributable to USTAR initiative
336 funding;
337 (iv) lease revenue from each building in which the USTAR governing authority holds
338 title; and
339 (v) the amount of money deposited with the state treasurer for deposit into the sinking
340 fund created under Section 63B-1a-301 for debt service on the bonds issued to fund planning,
341 design, and construction of the research buildings;
342 (e) all expenses of the USTAR initiative, including:
343 (i) operational expenses;
344 (ii) for each employee receiving compensation from USTAR initiative funding,
345 compensation information, including:
346 (A) salary expenses, benefit expenses, and travel expenses;
347 (B) information for each research team employee and each employee of the
348 [
349 USTAR initiative funding; and
350 (C) information regarding compensation for each employee from sources other than
351 USTAR initiative funding, including grants and compensation from a university or private
352 entity;
353 (iii) for each research team, salary expenses, benefit expenses, travel expenses, and
354 operations and maintenance expenses;
355 (iv) operational and maintenance expenses for each building in which the USTAR
356 governing authority holds title;
357 (v) operational and maintenance expenses paid for by USTAR initiative funding for
358 each location that has an established [
359 (vi) each grant or other incentive given as a result of the USTAR initiative, including
360 grants or incentives awarded through the [
361 (f) the number of jobs and the corresponding salary ranges created by the USTAR
362 initiative, including the number of jobs where the employee is expected to be employed for at
363 least one year and earns at least 125% of the prevailing wage of the county where the employee
364 works;
365 (g) the name of each business entity receiving a grant or other incentive as a result of
366 the USTAR initiative, including the outreach program;
367 (h) a list of business entities that have hired employees as a result of the USTAR
368 initiative;
369 (i) the tax revenue generated as a result of the USTAR initiative, with actual revenue
370 generated clearly separated from potential revenue;
371 (j) a list of intellectual property assets, including patents, generated by research teams
372 as a result of the USTAR initiative, including a reasonable estimate of the USTAR initiative's
373 percentage share of potential commercialization revenue that may be realized from those
374 assets;
375 (k) a description of any agreements entered into regarding private equity investment in
376 the USTAR initiative;
377 (l) beginning with data from the fiscal year beginning July 1, 2013, historical data from
378 previous years for comparison with the annual data reported under this Subsection (2);
379 (m) goals, challenges, and achievements related to the project, operation, activity,
380 program, or service;
381 (n) relevant federal and state statutory references and requirements;
382 (o) contact information of officials knowledgeable and responsible for each project,
383 operation, activity, program, or service;
384 (p) other information determined by the USTAR governing authority that:
385 (i) may be needed, useful, or of historical significance; or
386 (ii) promotes accountability and transparency for each project, operation, activity,
387 program, or service with the public and with elected officials;
388 (q) the written economic development objectives required under Subsection
389 63M-2-302(1)(e) and a description of any progress or challenges in meeting the objectives; and
390 (r) the audit report described in Section 63M-2-402.
391 (3) The annual report shall be designed to provide clear, accurate, and accessible
392 information to the public, the governor, and the Legislature.
393 (4) The governing authority shall:
394 (a) submit the annual report in accordance with Section 68-3-14; and
395 (b) make the annual report and previous annual reports accessible to the public by
396 placing a link to the reports on the USTAR initiative's website.
397 (5) In addition to the annual written report described in this section:
398 (a) upon the request of a committee, the USTAR governing authority shall provide
399 information and progress reports to the Economic Development and Workforce Services
400 Interim Committee; the Business and Labor Interim Committee; and the Business, Economic
401 Development, and Labor Appropriations Subcommittee; and
402 (b) on or before October 1, 2019, and every five years after October 1, 2019, the
403 USTAR governing authority shall include with the annual report described in this section a
404 written analysis and recommendations concerning the usefulness of the information required in
405 the annual report and the ongoing effectiveness of the USTAR initiative, including whether:
406 (i) the reporting requirements are effective at measuring the performance of the
407 USTAR initiative;
408 (ii) the reporting requirements should be modified; and
409 (iii) the USTAR initiative is beneficial to the state and should continue.
410 Section 9. Section 63M-2-402 is amended to read:
411 63M-2-402. Audit requirements.
412 (1) Each fiscal year, an audit of the activities of the USTAR initiative shall be made as
413 described in this section.
414 (2) (a) As approved by the Legislative Audit Subcommittee, the audit shall be
415 conducted by:
416 (i) the legislative auditor; or
417 (ii) an independent auditor engaged by the legislative auditor.
418 (b) An independent auditor used under Subsection (2)(a)(ii) may not have a [
419
420 USTAR initiative or the USTAR governing authority.
421 (3) The USTAR governing authority shall pay the costs associated with the annual
422 audit.
423 (4) The annual audit shall:
424 (a) include a verification of the accuracy of the information required to be included in
425 the annual report described in Section 63M-2-401; and
426 (b) be completed by September 1 of each year.