1     
UTAH SCIENCE, TECHNOLOGY, AND RESEARCH

2     
MODIFICATIONS

3     
2016 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Ann Millner

6     
House Sponsor: Brad R. Wilson

7     

8     LONG TITLE
9     General Description:
10          This bill modifies provisions related to the Utah Science Technology and Research
11     Initiative.
12     Highlighted Provisions:
13          This bill:
14          ▸     rewrites provisions relating to the Utah Science and Technology Research Initiative
15     (USTAR), its governing authority, and funding and other support provided by
16     USTAR;
17          ▸     modifies the powers and duties of the USTAR governing authority;
18          ▸     modifies reporting requirements;
19          ▸     modifies provisions related to USTAR researchers and USTAR buildings;
20          ▸     modifies provisions related to an audit of USTAR's annual report;
21          ▸     repeals provisions relating to a technology outreach innovation program and an
22     advisory council;
23          ▸     makes appropriations to USTAR nonlapsing; and
24          ▸     makes technical and conforming changes.
25     Money Appropriated in this Bill:
26          None
27     Other Special Clauses:

28          None
29     Utah Code Sections Affected:
30     AMENDS:
31          63A-5-305, as last amended by Laws of Utah 2003, Chapter 289
32          63J-1-602.4, as last amended by Laws of Utah 2015, Chapters 179 and 283
33          63M-2-102, as last amended by Laws of Utah 2015, Chapter 357
34          63M-2-301, as last amended by Laws of Utah 2015, Chapter 357
35          63M-2-302.5, as enacted by Laws of Utah 2014, Chapter 186
36     ENACTS:
37          63M-2-501, Utah Code Annotated 1953
38          63M-2-502, Utah Code Annotated 1953
39          63M-2-503, Utah Code Annotated 1953
40          63M-2-504, Utah Code Annotated 1953
41          63M-2-601, Utah Code Annotated 1953
42          63M-2-602, Utah Code Annotated 1953
43          63M-2-701, Utah Code Annotated 1953
44          63M-2-702, Utah Code Annotated 1953
45          63M-2-703, Utah Code Annotated 1953
46          63M-2-704, Utah Code Annotated 1953
47          63M-2-705, Utah Code Annotated 1953
48          63M-2-801, Utah Code Annotated 1953
49          63M-2-802, Utah Code Annotated 1953
50     REPEALS AND REENACTS:
51          63M-2-302, as last amended by Laws of Utah 2015, Chapter 357
52     RENUMBERS AND AMENDS:
53          63M-2-803, (Renumbered from 63M-2-402, as last amended by Laws of Utah 2015,
54     Chapter 357)
55     REPEALS:
56          63M-2-201, as last amended by Laws of Utah 2014, Chapter 186
57          63M-2-202, as last amended by Laws of Utah 2015, Chapter 357
58          63M-2-203, as last amended by Laws of Utah 2014, Chapter 186

59          63M-2-204, as last amended by Laws of Utah 2015, Chapter 357
60          63M-2-303, as last amended by Laws of Utah 2014, Chapter 186
61          63M-2-401, as last amended by Laws of Utah 2015, Chapter 357
62     

63     Be it enacted by the Legislature of the state of Utah:
64          Section 1. Section 63A-5-305 is amended to read:
65          63A-5-305. Leasing by higher education institutions.
66          (1) The Board of Regents shall establish written policies and procedures governing
67     leasing by higher education institutions.
68          (2) Except as provided in Section 53B-2a-113[, each] and Section 63M-2-602, a higher
69     education institution shall comply with the procedures and requirements of the Board of
70     Regents' policies before signing or renewing [any] a lease.
71          Section 2. Section 63J-1-602.4 is amended to read:
72          63J-1-602.4. List of nonlapsing funds and accounts -- Title 61 through Title 63N.
73          (1) Funds paid to the Division of Real Estate for the cost of a criminal background
74     check for a mortgage loan license, as provided in Section 61-2c-202.
75          (2) Funds paid to the Division of Real Estate for the cost of a criminal background
76     check for principal broker, associate broker, and sales agent licenses, as provided in Section
77     61-2f-204.
78          (3) Certain funds donated to the Department of Human Services, as provided in
79     Section 62A-1-111.
80          (4) Appropriations from the National Professional Men's Basketball Team Support of
81     Women and Children Issues Restricted Account created in Section 62A-1-202.
82          (5) Certain funds donated to the Division of Child and Family Services, as provided in
83     Section 62A-4a-110.
84          (6) Appropriations from the Choose Life Adoption Support Restricted Account created
85     in Section 62A-4a-608.
86          (7) Appropriations to the Division of Services for People with Disabilities, as provided
87     in Section 62A-5-102.
88          (8) Appropriations to the Division of Fleet Operations for the purpose of upgrading
89     underground storage tanks under Section 63A-9-401.

90          (9) A portion of the funds appropriated to the Utah Seismic Safety Commission, as
91     provided in Section 63C-6-104.
92          (10) Funds appropriated or collected for publishing the Division of Administrative
93     Rules' publications, as provided in Section 63G-3-402.
94          (11) The Immigration Act Restricted Account created in Section 63G-12-103.
95          (12) Money received by the military installation development authority, as provided in
96     Section 63H-1-504.
97          (13) Appropriations to the Utah Science Technology and Research Initiative created in
98     Section 63M-2-301.
99          [(13)] (14) Appropriations to fund the Governor's Office of Economic Development's
100     Enterprise Zone Act, as provided in Title 63N, Chapter 2, Part 2, Enterprise Zone Act.
101          [(14)] (15) The Motion Picture Incentive Account created in Section 63N-8-103.
102          [(15)] (16) Certain money payable for commission expenses of the Pete Suazo Utah
103     Athletic Commission, as provided under Section 63N-10-301.
104          Section 3. Section 63M-2-102 is amended to read:
105          63M-2-102. Definitions.
106          As used in this chapter:
107          [(1) "Commercialization revenues" means dividends, realized capital gains, license
108     fees, royalty fees, and all other revenues received by a university as a result of commercial
109     applications, inventions, or intellectual property developed from the USTAR initiative, less:]
110          [(a) the portion of revenues allocated to the inventor; and]
111          [(b) expenditures incurred by the university to legally protect the intellectual property.]
112          [(2)] (1) "Executive director" means the [person] individual appointed under [Section]
113     Subsection 63M-2-301(9).
114          (2) "Governing authority" means the Utah Science Technology and Research
115     Governing Authority created in Section 63M-2-301.
116          (3) "Higher education institution" means an institution listed in Section 53B-2-101.
117          (4) "Principal researcher" means an individual who:
118          (a) (i) on May 10, 2016, is employed, alone or as part of a research team, by a research
119     university;
120          (ii) before May 10, 2016, received funding from USTAR for some or all of the

121     researcher's startup costs or research university salary;
122          (iii) was recruited by a research university to become a member of a research
123     university's faculty; and
124          (iv) on or after May 10, 2016, continues to receive USTAR support; or
125          (b) (i) is employed on or after May 10, 2016 as a researcher by a higher education
126     institution;
127          (ii) receives USTAR support; and
128          (iii) is recruited by the governing authority and the higher education institution to
129     become a member of the higher education institution's faculty.
130          (5) "Private entity":
131          (a) means a privately owned corporation, limited liability company, partnership, or
132     other business entity or association; and
133          (b) does not include an individual or a sole proprietorship.
134          [(3)] (6) "Research [buildings" means any of the buildings listed in Section
135     63M-2-201.] building" means a building:
136          (a) for which the governing authority holds title; and
137          (b) that is located on the campus of a research university.
138          [(4)] (7) "Research [universities] university" means:
139          (a) the University of Utah [and]; or
140          (b) Utah State University.
141          [(5) "Technology outreach innovation program" or "TOIP" means the program
142     described in Section 63M-2-202.]
143          [(6) "USTAR governing authority" means the Utah Science Technology and Research
144     Governing Authority created in Section 63M-2-301.]
145          [(7) (a)] (8) "USTAR [initiative]" means the Utah Science Technology and Research
146     Initiative created in Section 63M-2-301.
147          [(b) "USTAR initiative" includes the projects, operations, activities, programs, and
148     services described in this chapter.]
149          (9) "USTAR researcher" means:
150          (a) a principal researcher; or
151          (b) an individual, other than a principal researcher, who:

152          (i) is employed by a higher education institution; and
153          (ii) receives USTAR support.
154          (10) "USTAR support" means assistance provided by USTAR including:
155          (a) financial support;
156          (b) technical assistance;
157          (c) mentoring; and
158          (d) the use of:
159          (i) research or laboratory space controlled by USTAR in a building other than a
160     research building; and
161          (ii) equipment in space described in Subsection (10)(d)(i).
162          Section 4. Section 63M-2-301 is amended to read:
163          63M-2-301. The Utah Science Technology and Research Initiative -- Governing
164     authority -- Executive director.
165          (1) There is created the Utah Science Technology and Research Initiative.
166          (2) To oversee [the Utah Science Technology and Research Initiative] USTAR, there is
167     created the Utah Science Technology and Research Governing Authority consisting of:
168          (a) the state treasurer or the state treasurer's designee[,];
169          (b) the executive director of the Governor's Office of Economic Development[, and the
170     following eight members appointed as follows:];
171          [(a)] (c) three members appointed by the governor, with the consent of the Senate;
172          [(b)] (d) two members appointed by the president of the Senate;
173          [(c)] (e) two members appointed by the speaker of the House of Representatives; and
174          [(d)] (f) one member appointed by the commissioner of higher education.
175          (3) (a) [(i)] The eight appointed members under Subsections (2)(c) through (f) shall
176     serve four-year staggered terms.
177          [(ii) The] (b) An appointed [members] member under Subsection (2)(c), (d), (e), or (f):
178          (i) may not serve more than two full consecutive terms[.]; and
179          [(iii) An appointed member]
180          (ii) may be removed from the [board] governing authority for any reason before the
181     member's term is completed:
182          (A) at the discretion of the original appointing authority; and

183          (B) after [consultation] the original appointing authority consults with the governing
184     authority.
185          [(b) Notwithstanding Subsection (3)(a)(i), the terms of the first members of the
186     governing authority shall be staggered by lot so that half of the initial members serve two-year
187     terms and half serve four-year terms.]
188          (4) [Vacancies in the appointed positions] A vacancy on the governing authority in an
189     appointed position under Subsection (2)(c), (d), (e), or (f) shall be filled for the unexpired term
190     by the appointing authority in the same manner as the original appointment [for the unexpired
191     term].
192          (5) (a) [The] Except as provided in Subsection (5)(b), the governor, with the consent of
193     the Senate, shall select the chair of the governing authority to serve a one-year term.
194          (b) The governor may extend the term of a sitting chair of the governing authority
195     without the consent of the Senate.
196          (c) The executive director of the Governor's Office of Economic Development shall
197     serve as the vice chair of the governing authority.
198          (6) The governing authority shall meet at least six times each year and may meet more
199     frequently at the request of a majority of the members of the governing authority.
200          (7) Five members of the governing authority are a quorum.
201          (8) A member of the governing authority may not receive compensation or benefits for
202     the member's service, but may receive per diem and travel expenses as allowed in:
203          (a) Section 63A-3-106;
204          (b) Section 63A-3-107; and
205          (c) rules made by the Division of Finance [according]:
206          (i) pursuant to Sections 63A-3-106 and 63A-3-107[.]; and
207          (ii) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
208          (9) (a) After consultation with the [USTAR] governing authority, the governor, with
209     the consent of the Senate, shall appoint a full-time executive director to provide staff support
210     for the [USTAR] governing authority.
211          (b) The executive director is an at-will employee who may be terminated with or
212     without cause by:
213          (i) the governor; or [by]

214          (ii) majority vote of the [USTAR] governing authority.
215          Section 5. Section 63M-2-302 is repealed and reenacted to read:
216          63M-2-302. USTAR governing authority powers and duties.
217          (1) The governing authority shall:
218          (a) ensure that funds appropriated to USTAR are used appropriately, effectively, and
219     efficiently in accordance with this chapter;
220          (b) in cooperation with a research university's administration, work to expand research
221     at the research university;
222          (c) enhance technology transfer and commercialization of research and technology
223     developed at a higher education institution to create high-quality jobs and new industries in the
224     private sector in the state;
225          (d) ensure that USTAR programs do not duplicate existing or planned programs of
226     other state agencies;
227          (e) establish written economic development objectives for USTAR that are measurable
228     and verifiable;
229          (f) consider input from the Governor's Office of Economic Development and higher
230     education institutions;
231          (g) establish and administer a grant program, as provided in Section 63M-2-503, and
232     provide USTAR support, as provided in Section 63M-2-504, consistent with and to further
233     economic development objectives that the governing authority establishes; and
234          (h) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
235     make rules to implement this chapter.
236          (2) The governing authority may:
237          (a) in addition to receiving money appropriated by the Legislature, receive
238     contributions to USTAR from any source, in the form of money, property, labor, or other thing
239     of value;
240          (b) subject to restrictions imposed by a donor or legislative appropriation, allocate
241     money for programs and activities described in this chapter;
242          (c) enter into an agreement necessary to obtain private equity investment in USTAR;
243          (d) charge and collect rent for space in a facility or building that USTAR controls;
244          (e) in fulfilling the governing authority's duties and responsibilities under this chapter,

245     collaborate with:
246          (i) the Governor's Office of Economic Development and other state agencies with an
247     interest in economic development; and
248          (ii) private entities with an interest in economic development; and
249          (f) delegate powers and duties to the executive director.
250          (3) A state agency, higher education institution, or political subdivision with which the
251     governing authority seeks to collaborate in fulfilling the governing authority's duties under this
252     chapter shall cooperate with the governing authority as reasonably necessary to enable the
253     governing authority to fulfill its duties under this chapter.
254          Section 6. Section 63M-2-302.5 is amended to read:
255          63M-2-302.5. USTAR governing authority requirements.
256          The [USTAR] governing authority is subject to the requirements of an executive branch
257     agency and is:
258          (1) an agency for purposes of Title 63J, Chapter 1, Budgetary Procedures Act;
259          (2) an executive branch procurement unit for purposes of Title 63G, Chapter 6a, Utah
260     Procurement Code;
261          (3) a governmental entity for purposes of Title 63G, Chapter 2, Government Records
262     Access and Management Act; and
263          (4) a public body for purposes of Title 52, Chapter 4, Open and Public Meetings Act.
264          Section 7. Section 63M-2-501 is enacted to read:
265     
Part 5. USTAR Support

266          63M-2-501. Title.
267          This part is known as "USTAR Support."
268          Section 8. Section 63M-2-502 is enacted to read:
269          63M-2-502. Principal researchers -- Agreement requirements -- Discontinuing
270     funding.
271          (1) Subject to legislative appropriation, the governing authority shall:
272          (a) provide funding to help a research university honor its commitments to principal
273     researchers employed by the research university; and
274          (b) give priority to funding provided under Subsection (1)(a).
275          (2) The governing authority shall enter into a written agreement with a higher

276     education institution that employs a principal researcher:
277          (a) establishing performance standards and expectations for a principal researcher; and
278          (b) requiring the higher education institution to require a principal researcher to comply
279     with reporting requirements set forth in Section 63M-2-702.
280          (3) (a) A principal researcher may not be hired on or after May 10, 2016 without the
281     approval of the governing authority and the higher education institution.
282          (b) A higher education institution that enters into or renews an agreement with a
283     principal researcher on or after May 10, 2016 shall include in the agreement:
284          (i) a specific time period for the commitment of USTAR funding;
285          (ii) the amount of USTAR funding committed to the higher education institution for
286     the principal researcher, specifying the purpose of the funding;
287          (iii) an acknowledgment that the principal researcher understands and agrees to the
288     reporting requirements and performance standards under this chapter; and
289          (iv) the governing authority's written approval of the terms of the new or renewed
290     agreement.
291          (4) The governing authority may not allocate money to a higher education institution
292     for a principal researcher unless the higher education institution provides the reporting required
293     under Section 63M-2-702.
294          (5) The governing authority may discontinue allocating money to a higher education
295     institution for a principal researcher if the governing authority and the president of the higher
296     education institution employing the principal researcher agree in writing that:
297          (a) the principal researcher:
298          (i) fails to meet the performance standards and expectations established under
299     Subsection (2)(a);
300          (ii) receives a reasonable opportunity to remedy the failure to meet performance
301     standards and expectations; and
302          (iii) fails to remedy the failure to meet performance standards and expectations; and
303          (b) under the circumstances, discontinuing USTAR funding to the higher education
304     institution for the principal researcher is appropriate and justified.
305          Section 9. Section 63M-2-503 is enacted to read:
306          63M-2-503. USTAR grant programs.

307          (1) The governing authority shall establish at least one competitive grant program that:
308          (a) is designed to:
309          (i) address market gaps in technology development in the state; or
310          (ii) facilitate research and development of promising technologies;
311          (b) does not overlap with or duplicate other state funded programs; and
312          (c) offers grants, on a competitive basis, to:
313          (i) researchers employed by higher education institutions;
314          (ii) private entities; or
315          (iii) partnerships between researchers employed by higher education institutions and
316     private entities.
317          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
318     governing authority shall make rules that describe, for each grant program:
319          (a) the purpose;
320          (b) eligibility criteria to receive a grant;
321          (c) how the governing authority determines which proposals receive grants;
322          (d) reporting requirements in accordance with Part 7, Reporting by Recipients of
323     USTAR Support; and
324          (e) other information the governing authority determines is necessary or appropriate.
325          (3) The governing authority:
326          (a) shall solicit proposals for each grant program; and
327          (b) may, subject to legislative appropriation and Subsection 63M-2-502(1)(b), award
328     grants for each program.
329          (4) In evaluating a grant proposal received in response to a solicitation under this
330     section, the governing authority shall consider, as applicable:
331          (a) the extent to which the planned research has the potential for commercialization;
332          (b) the market gap the technology or research fills; and
333          (c) other factors the governing authority determines are relevant, important, or
334     necessary.
335          (5) The governing authority shall require a recipient of a grant under this section, as a
336     condition of receiving a grant, to comply with the reporting requirements described in:
337          (a) Section 63M-2-702, for a USTAR researcher; or

338          (b) Section 63M-2-703, for a private entity or for a partnership between a USTAR
339     researcher and a private entity.
340          Section 10. Section 63M-2-504 is enacted to read:
341          63M-2-504. Other USTAR support.
342          (1) The governing authority shall:
343          (a) provide mentoring, networking, and entrepreneurial training for a private entity or
344     USTAR researcher to help take a new technology to market;
345          (b) provide support to a private entity or USTAR researcher in assessing the potential
346     for bringing a technology to market; and
347          (c) encourage industry partnerships between a private entity and a USTAR researcher.
348          (2) The governing authority shall require a recipient of USTAR support under this
349     section, as a condition of receiving USTAR support, to comply with the reporting requirements
350     in:
351          (a) Section 63M-2-702, for a USTAR researcher; or
352          (b) Section 63M-2-703, for a private entity or for a partnership between a USTAR
353     researcher and a private entity.
354          Section 11. Section 63M-2-601 is enacted to read:
355     
Part 6. Research Buildings

356          63M-2-601. Title.
357          This part is known as "Research Buildings."
358          Section 12. Section 63M-2-602 is enacted to read:
359          63M-2-602. Lease agreement for a research building -- Requirements for lease
360     agreement.
361          (1) The governing authority shall enter into a written lease agreement with a research
362     university to lease to the research university a research building constructed on the research
363     university's campus.
364          (2) A lease agreement under Subsection (1) shall:
365          (a) require the research university to pay the ongoing operation and maintenance
366     expenses associated with the research building, including for any infrastructure in the research
367     building; and
368          (b) subject to the reporting requirements described in Section 63M-2-705, permit the

369     research university to use or rent space within the research building for research other than
370     research receiving USTAR support, including research by a private entity.
371          Section 13. Section 63M-2-701 is enacted to read:
372     
Part 7. Reporting by Recipients of USTAR Support

373          63M-2-701. Title.
374          This part is known as "Reporting by Recipients of USTAR Support."
375          Section 14. Section 63M-2-702 is enacted to read:
376          63M-2-702. Reporting requirements for higher education institutions.
377          (1) Except as provided in Subsection (3), on or before September 1 each year, a higher
378     education institution employing a USTAR researcher shall submit a written report to the
379     governing authority.
380          (2) A report under Subsection (1) shall contain information on:
381          (a) collaborations established by a USTAR researcher with other researchers;
382          (b) the amount and source of funding, other than USTAR funding, expended on a
383     USTAR researcher's research program, including:
384          (i) federal funds;
385          (ii) philanthropic or nonprofit funds;
386          (iii) industry funds; and
387          (iv) state funds other than USTAR funds, including funds from a higher education
388     institution;
389          (c) a copy of each:
390          (i) technology disclosure that a USTAR researcher files with a higher education
391     institution;
392          (ii) license agreement that the higher education institution enters into with respect to a
393     technology developed by a USTAR researcher, including any current, expired, or breached
394     license; and
395          (iii) patent filed by the higher education institution based on technology developed by a
396     USTAR researcher;
397          (d) publications in which a USTAR researcher participated, including a citation for
398     each peer reviewed publication;
399          (e) the number of research jobs maintained by a USTAR researcher's research program

400     and average wages paid to those holding those jobs;
401          (f) expenses paid using USTAR funds, including:
402          (i) salary and benefits for a USTAR researcher or staff;
403          (ii) operational expenses;
404          (iii) capital equipment expenses; and
405          (iv) travel; and
406          (g) compensation, including salary and benefits, that a USTAR researcher received
407     from a publicly funded source other than USTAR funds.
408          (3) The governing authority may make rules, in accordance with Title 63G, Chapter 3,
409     Utah Administrative Rulemaking Act, to simplify or eliminate the reporting requirements
410     described in this section for a USTAR researcher who has received less than $100,000 in
411     cumulative USTAR funding for a particular line of research.
412          Section 15. Section 63M-2-703 is enacted to read:
413          63M-2-703. Reporting requirements for private entities.
414          (1) On or before September 1 of each year, the governing authority shall collect the
415     information described in Subsection (2) from each private entity that:
416          (a) receives USTAR support;
417          (b) receives more than 20 hours of training from USTAR;
418          (c) purchases a private entity that previously received USTAR support; or
419          (d) licenses a technology developed by a USTAR researcher.
420          (2) The governing authority shall collect information on:
421          (a) public or private investment received by the private entity after the private entity:
422          (i) begins to receive USTAR support;
423          (ii) licenses a technology from a USTAR researcher; or
424          (iii) purchases a private entity that previously received USTAR support;
425          (b) sales or revenue generated by the product or technology;
426          (c) the number of jobs created by the private entity and the average wage for each
427     position; and
428          (d) the location of the private entity.
429          (3) (a) To collect the information described in Subsection (2), the governing authority
430     shall, in accordance with Title 63G, Chapter 6a, Utah Procurement Code, contract with an

431     independent third party to conduct a survey of each private entity described in Subsection (1).
432          (b) The independent third party selected under Subsection (3)(a) shall use industry
433     standard practices to collect the information described in Subsection (2).
434          (4) The governing authority and Department of Workforce Services shall coordinate to
435     verify the job and average wage information described in Subsection (2)(c).
436          Section 16. Section 63M-2-704 is enacted to read:
437          63M-2-704. Reporting on licensed or acquired intellectual property.
438          In an agreement between an institution of higher education and a private entity that
439     licenses or acquires an interest in intellectual property developed by a USTAR researcher, the
440     institution of higher education shall include a provision requiring the private entity, as a
441     condition of receiving a license or acquiring an interest in intellectual property, to comply with
442     the reporting requirements in Section 63M-2-703.
443          Section 17. Section 63M-2-705 is enacted to read:
444          63M-2-705. Reporting on use of research buildings.
445          On or before September 1 of each year, a research university shall submit a report to the
446     governing authority concerning the use, during the immediately preceding fiscal year, of the
447     research building located on the research university's campus, including:
448          (1) the name of each individual who conducts research in the research building;
449          (2) the name of each private entity that uses the research building;
450          (3) the total amount charged by the research university for the use of space or facilities
451     in the research building;
452          (4) the amount and source of funding, other than USTAR funding, received by a
453     researcher, other than a researcher that is a private entity, housed in the research building,
454     including:
455          (a) federal funding;
456          (b) state funding, including institutional funding;
457          (c) private philanthropic or nonprofit funding; and
458          (d) industry funding; and
459          (5) the number of disclosures, patents, and licenses resulting from research conducted
460     in the research building.
461          Section 18. Section 63M-2-801 is enacted to read:

462     
Part 8. USTAR Reporting and Audit Requirements

463          63M-2-801. Title.
464          This part is known as "USTAR Reporting and Audit Requirements."
465          Section 19. Section 63M-2-802 is enacted to read:
466          63M-2-802. USTAR annual report.
467          (1) (a) On or before October 1 of each year, the governing authority shall submit an
468     annual written report for the preceding fiscal year to:
469          (i) the Business, Economic Development, and Labor Appropriations Subcommittee;
470          (ii) the Economic Development and Workforce Services Interim Committee;
471          (iii) the Business and Labor Interim Committee; and
472          (iv) the governor.
473          (b) An annual report under Subsection (1)(a) is subject to modification as provided in
474     Subsection (5) after an audit described in Section 63M-2-803 is released.
475          (2) An annual report described in Subsection (1) shall include:
476          (a) information reported to the governing authority:
477          (i) by an institution of higher education under Section 63M-2-702;
478          (ii) through the survey described in Section 63M-2-703; and
479          (iii) by a research university, under Section 63M-2-705;
480          (b) a clear description of the methodology used to arrive at any information in the
481     report that is based on an estimate;
482          (c) starting with fiscal year 2017 data as a baseline, data from previous years for
483     comparison with the annual data reported under this Subsection (2);
484          (d) relevant federal and state statutory references and requirements;
485          (e) contact information for the executive director;
486          (f) other information determined by the governing authority that promotes
487     accountability and transparency; and
488          (g) the written economic development objectives required under Subsection
489     63M-2-302(1)(e) and a description of progress or challenges in meeting the objectives.
490          (3) The governing authority shall design the annual report to provide clear, accurate,
491     and accessible information to the public, the governor, and the Legislature.
492          (4) The governing authority shall:

493          (a) submit the annual report in accordance with Section 68-3-14; and
494          (b) place a link to the annual report and previous annual reports on USTAR's website.
495          (5) Following the completion of an annual audit described in Section 63M-2-803, the
496     governing authority shall:
497          (a) publicly issue a revised annual report that:
498          (i) addresses the audit;
499          (ii) responds to audit findings; and
500          (iii) incorporates any revisions to the annual report based on audit findings;
501          (b) publish the revised annual report on USTAR's website, with a link to the audit; and
502          (c) provide written notification of any revisions of the annual report to:
503          (i) the Business, Economic Development, and Labor Appropriations Subcommittee;
504          (ii) the Economic Development and Workforce Services Interim Committee;
505          (iii) the Business and Labor Interim Committee; and
506          (iv) the governor.
507          (6) In addition to the annual written report described in this section, the governing
508     authority shall:
509          (a) provide information and progress reports to a legislative committee upon request;
510     and
511          (b) on or before October 1, 2019, and every five years after October 1, 2019, include
512     with the annual report described in this section a written analysis and recommendations
513     concerning the usefulness of the information required in the annual report and USTAR's
514     ongoing effectiveness, including whether:
515          (i) the reporting requirements are effective at measuring USTAR's performance;
516          (ii) the reporting requirements should be modified; and
517          (iii) USTAR is beneficial to the state and should continue.
518          Section 20. Section 63M-2-803, which is renumbered from Section 63M-2-402 is
519     renumbered and amended to read:
520          [63M-2-402].      63M-2-803. Audit requirements.
521          (1) [Each fiscal] Every third year beginning 2018, an audit of [the activities of the]
522     USTAR [initiative] shall be made as described in this section.
523          (2) (a) As approved by the Legislative Audit Subcommittee, the audit shall be

524     conducted by:
525          (i) the legislative auditor; or
526          (ii) an independent auditor engaged by the legislative auditor.
527          (b) An independent auditor used under Subsection (2)(a)(ii) may not have a direct
528     financial conflict of interest with [the] USTAR [initiative] or the [USTAR] governing
529     authority.
530          (3) The [USTAR] governing authority shall pay the costs associated with the annual
531     audit.
532          (4) The annual audit shall:
533          (a) include a verification of the accuracy of the information required to be included in
534     the annual report described in Section [63M-2-401] 63M-2-802; and
535          (b) be completed by [September] December 1 of [each] the year the report is required
536     under Subsection (1).
537          Section 21. Repealer.
538          This bill repeals:
539          Section 63M-2-201, Science technology research buildings.
540          Section 63M-2-202, Technology outreach innovation program.
541          Section 63M-2-203, Research teams.
542          Section 63M-2-204, Financial participation agreement.
543          Section 63M-2-303, USTAR Governing Authority Advisory Council -- Chair --
544     Meetings.
545          Section 63M-2-401, Reporting requirements.






Legislative Review Note
Office of Legislative Research and General Counsel