53H-16 - Nucleus Institute
Title 53H > 53H-16
Sections (15)
General Provisions
53H-16-101 - General provisions — Definitions.
Nucleus Institute
53H-16-201 - General provisions — Definitions.
As used in this part: 53H-16-201(1) “Executive director” means the executive director of the institute appointed under Section 53H-16-304. 53H-16-201(2) “Institute board” means the board of directors of the Nucleus Institute as described in Section 53H-16-302. 53H-16-201(3) “Investment committee” means the investment committee of the Utah innovation fund created in Section 53H-16-403. 53H-16-201(4) “Nucleus Institute” or “institute” means the Nucleus Institute created in Section 53H-16-202. 53H-16-201(5) “Qualified business” means a business entity that:is established to commercialize a technology, product, or service developed in partnership with a technology commercialization program at a public institution orprivate postsecondary educational institution in the state; andmaintains the business’s principal business operations in the state. 53H-16-201(6) “Qualified investment” means any distribution or payment of funds to a qualified business from the Utah innovation fund, including:a direct investment of capital in a qualified business for the purchase of shares of stock;a secured loan or revolving line of credit to a qualified business; ora financial grant to a qualified business. 53H-16-201(7) “Utah innovation fund” means a limited liability company organized under Section 53H-16-402.
53H-16-202 - Creation of Nucleus Institute — Status and applicability of other law — Powers and purposes.
53H-16-202(1) There is created the Nucleus Institute. 53H-16-202(2) The institute is:an independent, nonprofit, quasi-public corporation as defined in Section 63E-1-102; andsubject to and governed by Sections 63E-2-106, 63E-2-108, 63E-2-110, and 63E-2-111, but is not otherwise subject to or governed by Title 63E, Independent Entities Code. 53H-16-202(3) The institute and the Utah innovation fund are not subject to:Title 52, Chapter 4, Open and Public Meetings Act; orTitle 63G, Chapter 2, Government Records Access and Management Act. 53H-16-202(4) Pursuant to Subsection 53H-1-203(2)(p)(i), in coordination with the board and the commissioner, the institute shall promote efficiency and support of the Utah System of Higher Education on commercialization efforts as provided in this chapter. 53H-16-202(5) The institute shall: organize and administer the Utah innovation fund; andcoordinate and support innovation districts that have a connection with higher education. 53H-16-202(6) The institute may:engage consultants and legal counsel;invest and expend funds;apply for grants;enter into contracts;insure against loss;receive private donations;hire employees;sue and be sued in the institute’s own name; andperform any other act necessary to carry out the purposes of the institute. 53H-16-202(7) The institute may not:issue debt or borrow funds;exercise governmental functions;have members; orpledge the credit or taxing power of the state or any political subdivision of the state.
53H-16-203 - Office facilities, clerical, and administrative support for the Nucleus Institute.
53H-16-203(1) The Utah Board of Higher Education shall provide to the institute, by agreement, administrative support, office facilities, and space. 53H-16-203(2) The Utah Board of Higher Education may levy reasonable charges or fees against the institute pursuant to the agreement for the services provided by the Utah Board of Higher Education.
Nucleus Institute Governance
53H-16-301 - General provisions — Definitions.
53H-16-302 - Board of directors — Membership — Limitations.
53H-16-302(1) The institute shall be governed by a board of directors which shall manage and conduct the business and affairs of the institute. 53H-16-302(2) The institute board shall consist of seven voting members as follows:the executive director, appointed as described in Section 53H-16-304;the director of the Talent Ready Utah Program, described in Section 53H-13-303; andfive individuals with relevant experience, jointly appointed by the commissioner, the executive director, and the director of the Talent Ready Utah Program described in Section 53H-13-303. 53H-16-302(3) A member described in Subsection (2)(c):shall serve a term of two years; andmay serve more than one term.The commissioner, jointly with the executive director and the director of the Talent Ready Utah Program described in Section 53H-13-303, may remove a member from the institute board.If a vacancy occurs for a member described in Subsection (2)(c), the commissioner, jointly with the executive director and the director of the Talent Ready Utah Program described in Section 53H-13-303, shall appoint a replacement to serve the remainder of the member’s term. 53H-16-302(4) The executive director shall serve as the chair of the institute board. 53H-16-302(5) A majority of the members of the institute board constitutes a quorum of the institute board.The action by a majority of the members of a quorum constitutes the action of the institute board. 53H-16-302(6) A member of the institute board:is subject to any restrictions on conflicts of interest specified in the organizational documents of the institute;may not influence a vote by the investment committee related to a qualified investment by the Utah innovation fund, if the member has an interest in the qualified investment; andexcept for the executive director, may not receive compensation or benefits for the member’s service.
53H-16-303 - Institute board duties and powers.
53H-16-303(1) The institute board shall:manage and conduct the business and affairs of the institute and determine all questions of institute and Utah innovation fund policy;provide strategic oversight for all institute initiatives;support and guide workforce development, innovation, and policy integration across institutions and industry;consistent with this chapter, oversee the Utah innovation fund and investment committee;coordinate efforts and collaborations across innovation districts;create opportunities for students through projects and partnerships;set compensation and incentives for the executive director;advance the purposes of the Utah innovation fund as described in Section 53H-16-402; andconsider investment proposals and determine whether a proposal furthers the objectives of the fund. 53H-16-303(2) The institute board may establish independent committees for the purpose of assisting the institute board in an advisory role. 53H-16-303(3) In coordination with the Governor’s Office of Economic Opportunity, the institute board shall convene and facilitate discussions with industry, education, and policy makers to promote regulatory innovation.
53H-16-304 - Executive director appointment — Duties and powers.
53H-16-304(1) The commissioner shall appoint an executive director for the institute. 53H-16-304(2) The executive director shall serve as the chair of the institute board as described in Section 53H-16-302. 53H-16-304(3) The executive director shall:manage the day-to-day operations of the institute and the Utah innovation fund;execute the policies of the institute board;oversee the investment and expenditure of funds;oversee qualified investments made by the Utah innovation fund;assess reasonable fees for management of assets in the Utah innovation fund for reasonable costs of the Utah innovation fund;consult with the institute board regarding policies and direction of the institute;prepare an operating budget for the institute and submit the operating budget to the Utah Board of Higher Education for approval;adopt a budget submitted by the chair of the investment committee;establish job descriptions and, within budgetary constraints, employ staff necessary to accomplish the purposes of the institute and Utah innovation fund; andexecute other duties as assigned by the institute board. 53H-16-304(4) The executive director may:hire and supervise necessary staff for the institute;manage contracts and collaborations with consultants; andenter into contracts on behalf of the institute.
Utah Innovation Fund
53H-16-401 - General provisions — Definitions.
53H-16-402 - Organization of Utah innovation fund — Powers and purposes — Use of investment proceeds.
53H-16-402(1) The institute shall organize, and be the sole member and manager of, the Utah innovation fund.The Utah innovation fund shall be organized as a limited liability company.The Utah innovation fund may:engage consultants and legal counsel;invest and expend funds;use funds for operations of the Utah innovation fund;enter into contracts;insure against loss;hire employees; andperform any other act necessary to carry out the purposes of the Utah innovation fund. 53H-16-402(2) The Utah innovation fund shall, subject to investment committee approval, make qualified investments in a manner and for the following purposes:to advance innovative technologies developed in Utah;to strengthen Utah’s economy and facilitate job creation;to help qualified businesses gain access to capital;to attract entrepreneurs and innovation to Utah;to facilitate the commercialization of technologies discovered, advanced, or developed at institutions of higher education;to advance the competitiveness of Utah businesses in the global economy;to ensure that the Utah innovation fund remains financially self-sustaining; andto encourage other investors to invest in qualified businesses alongside the Utah innovation fund. 53H-16-402(3) The Utah innovation fund shall hold and manage qualified investments made by the Utah innovation fund and the proceeds of those qualified investments. 53H-16-402(4) The Utah innovation fund may charge a fee on assets under management in the Utah innovation fund to pay for reasonable and necessary costs of the Utah innovation fund, including the costs of the annual audit required under Section 53H-16-407.
53H-16-403 - Utah innovation fund investment committee.
53H-16-403(1) The Utah innovation fund shall be governed by an investment committee. 53H-16-403(2) The investment committee shall consist of five members appointed by the institute board. 53H-16-403(3) A member of the investment committee:shall serve a term of two years; andmay serve more than one term.If a vacancy occurs for a member of the investment committee, the institute board shall appoint a replacement to serve the remainder of the member’s term.The commissioner or the institute board may remove a member of the investment committee for cause. 53H-16-403(4) The institute board shall appoint a chair of the investment committee. 53H-16-403(5) The investment committee may appoint up to two additional nonvoting members to provide industry and technical expertise. 53H-16-403(6) A member of the investment committee:shall have significant experience in venture capital or entrepreneurship;is subject to any restrictions on conflicts of interest specified in the organizational documents of the institute;may not participate in a vote by the investment committee related to a qualified investment by the Utah innovation fund if the member has an interest in the qualified investment; andexcept as provided in Subsection (6)(b), may not receive compensation or benefits for the member’s service.The chair of the investment committee may receive compensation or benefits for the chair’s service. 53H-16-403(7) A majority of the members of the investment committee constitutes a quorum of the investment committee.The action by a majority of the members of a quorum constitutes the action of the investment committee.
53H-16-404 - Utah innovation fund investment committee duties.
53H-16-404(1) The investment committee shall:comply with guidelines and directives from the institute board;manage and conduct business affairs of the Utah innovation fund;establish policies for the management of the Utah innovation fund, including:an investment management code of conduct and associated compliance policy;a policy for the strategic allocation of Utah innovation fund assets; anda policy articulating the investment committee’s investment philosophy for Utah innovation fund assets; andensure that policies adopted by the investment committee are:consistent with this chapter, the Utah Constitution, and other applicable law;consistent with sound fiduciary principles; anddesigned to maintain the integrity of the Utah innovation fund and prevent the misapplication of money in the Utah innovation fund. 53H-16-404(2) The investment committee shall engage a third-party to audit the Utah innovation fund at least annually.
53H-16-405 - Utah innovation fund investment committee chair — Duties.
53H-16-405(1) The institute board shall appoint and determine compensation for a chair of the investment committee. 53H-16-405(2) The committee chair shall:manage and execute the policies established by the institute board and the investment committee;in consultation with the investment committee, manage qualified investments made by the Utah innovation fund;annually submit to the institute:a budget for the Utah innovation fund; anda financial plan for operations of the Utah innovation fund;in accordance with generally accepted principles of fund accounting, establish a system to identify and account for Utah innovation fund assets;maintain appropriate records of Utah innovation fund activities to enable auditors to conduct periodic audits as described in Section 53H-16-407; andfulfill other duties as provided by the investment committee.
53H-16-406 - Annual report.
53H-16-406(1) On or before October 1 of each year, the institute shall publish an annual report of the activities conducted by the Utah innovation fund and submit, in accordance with Section 68-3-14, the written report to:the governor;the Economic Development and Workforce Services Interim Committee; andthe Executive Appropriations Committee. 53H-16-406(2) The annual report shall:be designed to provide clear, accurate, and accessible information to the public, the governor, and the Legislature;include a copy of the annual audit required under Section 53H-16-407;describe the policies adopted by the institute board under Subsection 53H-16-404(1)(c);include detailed information regarding:the name and location of each qualified business that received capital from the Utah innovation fund;the amount of each qualified investment made by the Utah innovation fund;the aggregate amount of capital provided to qualified businesses; andrealized gains from qualified investments and any realized losses;include detailed information regarding the institute’s yearly expenditures, including:administrative, operating, and financing expenses; andaggregate compensation information for full-time and part-time employees, including benefit and travel expenses;include detailed information regarding all funding sources for administrative, operating, and financing expenses, including any fees charged by the institute to the Utah innovation fund under Subsection 53H-16-304(3)(e); andinclude an explanation of the Utah innovation fund’s progress in achieving the purposes described in Subsection 53H-16-402(2).
53H-16-407 - Annual audit.
53H-16-407(1) Each calendar year, an audit of the activities of the Utah innovation fund shall be conducted by:the state auditor; orthe state auditor’s designee. 53H-16-407(2) A designee described in Subsection (1)(b) may not have a business, contractual, or other connection to the institute or the Utah innovation fund. 53H-16-407(3) The annual audit shall:include a valuation of the assets owned by the Utah innovation fund as of the end of the reporting year, using market-standard techniques for assets typically held by early stage private investment and venture capital funds;include an opinion regarding the accuracy of the information provided in the annual report described in Section 53H-16-406; andon or before September 1, be delivered to:the institute; andthe state treasurer. 53H-16-407(4) The institute shall pay the costs associated with the annual audit.