2013 North Dakota Century Code Title 54 State Government Chapter 54-65 Centers of Research Excellence
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CHAPTER 54-65
CENTERS OF RESEARCH EXCELLENCE
54-65-01. Definitions.
In this chapter, unless the context otherwise requires:
1. "Center" means a center of research excellence that has been designated under this
chapter.
2. "Commission" means the centers of excellence commission as defined under chapter
15-69.
3. "Department" means the department of commerce.
4. "Industry cluster" means one of the following industries:
a. Advanced manufacturing;
b. Energy;
c. Information and technology;
d. Value-added agriculture; or
e. An industry, including the aerospace industry, specifically identified by the
department of commerce as an industry that will contribute to the gross state
product.
5. "Infrastructure" means new building construction or major building renovation. The
term does not include a purchase of equipment or remodel of an existing building.
6. "Research university" means an institution under the control of the state board of
higher education which has a full-time student enrollment in excess of nine thousand
students.
54-65-02. Centers of research excellence - Application - Eligibility.
1. The department shall establish a centers of research excellence program. The
commission shall make funding award determinations under this program. A center
must be a research university or a nonprofit university-related or college-related
foundation of a research university which is working in partnership with the private
sector.
2. The department shall provide center application forms, accept applications, review
applications for completeness and compliance with commission policy, forward
complete applications to the commission in accordance with guidelines established by
the commission, and assist with preaward reviews and postaward monitoring as may
be requested by the commission.
3. The commission shall meet as necessary to review all complete applications; consider
the potential need for independent, expert review of complete applications; approve or
disapprove complete applications; make funding award recommendations for
commission-approved proposed centers; direct the department to distribute funds to
the centers; monitor centers for compliance with award requirements; review changes
in assertions made in center applications; and conduct postaward monitoring of
centers.
4. In considering whether to approve or disapprove a center application, the commission
shall determine whether the applicant has conducted the due diligence necessary to
put together a viable proposal, the commission shall determine whether the applicant
has provided information in the application which clearly outlines how the matching
fund requirement will be met, and the commission shall consider whether the center
will:
a. Use university research to promote private sector job growth and expansion of
knowledge-based industries or use university research to promote the
development of new products, high-tech companies, or skilled jobs in this state;
b. Create high-value private sector employment opportunities in this state;
c. Provide for public-private sector involvement and partnerships;
d. Leverage other funding, including cash from the private sector;
e. Promote the commercialization of new products and services in industry clusters;
and
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5.
6.
Establish and meet a deadline for acquiring and expending all public and private
funds specified in the application.
In considering whether to approve an application, the commission may provide for an
independent, expert review of the application to determine whether the proposed
center is viable and whether the proposed center is likely to have the desired
economic impact. As necessary, the commission may contract for additional technical
review of applications. The commission may not approve an application unless the
commission determines the proposed center has a high likelihood of viability and
success in positively impacting economic development in the state.
The board rules adopted under subsection 9 of section 15-10-17, relating to ownership
of intellectual property, inventions, and discoveries, must address activities and issues
unique to centers.
54-65-03. Use of funds - Terms of funds - Distribution of funds - Postaward
monitoring.
1. A center shall use center grant funds to enhance capacity and leverage state, federal,
and private sources of funding. A center awarded center funds under this chapter may
not use the funds for infrastructure, to supplant funding for current operations or
academic instructions, or to pay indirect costs.
2. For no fewer than six years and no more than ten years following center designation,
the commission shall monitor the center's activities in order to determine whether the
center is having the desired economic impact.
3. As a condition for receipt of funds under this chapter, a center shall agree to provide
the board, foundation, and budget section of the legislative management with annual
audits on all funds distributed to the center under this chapter. The annual audits must
be provided until the completion of the commission's postaward monitoring of the
center. As a condition for receipt of funds under this chapter, a center shall agree to
provide the commission with the information necessary to monitor the postaward
activities of the center. Instead of requiring annual audits under this subsection, the
commission may require that the center be audited on all funds distributed to the
center under this chapter after the second full fiscal year of the postaward monitoring
and after all funds distributed to the center under this chapter have been expended
and that for all other years during the postaward monitoring the center contract with an
independent accountant for an agreed-upon procedures engagement. A center may
use funds distributed to the center under this chapter to pay for audits required under
this subsection or for an agreed-upon procedures engagement. At a minimum, an
agreed-upon procedures engagement under this subsection must include:
a. Verification of the accuracy of jobs data regarding jobs claimed created by the
center, distinguishing between the creation of private sector jobs and jobs within
the institution of higher education;
b. Verification of compliance with the centers of excellence program matching fund
requirements;
c. Verification awarded center funds were used for authorized uses;
d. Verification the center complied with the center's application timeline and any
authorized revisions;
e. Verification the center complied with the center's scope of activities as provided
under the center's application and any authorized revisions;
f. Review of a sample of center expenditures to verify the expenses were approved,
supported with documentation, and made in accordance with the scope identified
in the center's application;
g. Verification of a sample of labor charged to the center; and
h. Comparison of the center's application budget to the center's actual expenditures,
including documentation explaining any material differences.
4. Before the commission directs the department to distribute center funds awarded
under this chapter, the center shall provide the commission with detailed
documentation of private sector participation and the availability of two dollars of
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6.
7.
matching funds for each dollar of state funds to be distributed. Of the two dollars of
matching funds, at least one dollar must be cash, of which at least fifty cents must be
from the private sector. The matching funds may include funds facilitated through the
collaboration of the private sector participants with other funding entities. The noncash
matching funds may include in-kind assets with itemized value. Private sector
participation may be established through equity investments or through contracts for
services with private sector entities. In making funding recommendations and
designation determinations, the commission shall give major consideration to the
portion of the matching funds provided in cash by the private sector.
The commission shall direct the department to distribute the center funds awarded
under this chapter in disbursements consistent with the center's budget and timeframe
outlined in the approved award. The commission may not direct distribution of center
funds under this chapter if there are no private sector partners participating or if the
statutorily required matching funds are not available.
If, before center funds are distributed by the department, a center undergoes a change
in the terms of or assertions made in its application, the commission may direct that
the department withhold all or a portion of any undistributed funds pending
commission review of the changes.
The commission may use funds appropriated for the centers of research excellence
program to pay for the commission's administrative expenses.
54-65-04. Base realignment grants.
As part of the centers of research excellence program, the department of commerce shall
establish and administer a base realignment grant program to provide grants to a research
university or a nonprofit university-related foundation to enhance economic development and
employment opportunities associated with the Grand Forks air force base resulting from action
by the federal defense base closure and realignment commission and infrastructure and
economic development projects or programs to accommodate growth in proximity to or at the
Grand Forks air force base. Under this program, the commission shall make grant award
determinations. The department shall work with the commission in establishing guidelines to
qualify for a grant under this section.
54-65-05. Centers of research excellence fund - Continuing appropriation.
The centers of research excellence fund is a special fund in the state treasury. All moneys in
the centers of research excellence fund are appropriated to the department of commerce on a
continuing basis for the purpose of implementing and administering this chapter. Interest earned
on moneys in the fund must be credited to the fund.
54-65-06. Research North Dakota grants.
The department shall establish and administer a research North Dakota grant program to
provide grants to a research university for research, development, and commercialization
activities related to a private sector partner. The centers of excellence commission, established
under chapter 15-69, shall make grant award determinations under this section. The department
shall work with the centers of excellence commission in establishing guidelines to qualify for a
grant under this section, including the requirement that an application must be accompanied by
a partnership agreement between the private sector partner and a research university. The
agreement must include details regarding the scope of the work, the budget, the location of the
work to be completed, the intellectual property ownership rights, and the intellectual property
income distribution. The commission may approve changes to the scope of the work or the
budget only to the extent that the changes are agreed upon by the private sector partner and
the research university. Before the commission directs the department to distribute funds
awarded under this section, the research university shall provide the commission with detailed
documentation of private sector participation and the availability of one dollar of matching funds
for each dollar of state funds to be distributed. Matching funds must be in the form of cash and
may not include in-kind assets.
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54-65-07. Research North Dakota venture grants.
The department shall establish and administer a research North Dakota venture grant
program to provide grants to a research university for pursuing further commercialization of
technology developed by the research university or developed jointly by the research university
and a startup or spinoff business operating in North Dakota. The department shall collaborate
with the centers of excellence commission in establishing guidelines to qualify for a grant under
this section.
54-65-08. Research North Dakota fund - Continuing appropriation.
The research North Dakota fund is a special fund in the state treasury. All moneys in the
research North Dakota fund are appropriated to the department of commerce on a continuing
basis for the purpose of implementing and administering the research North Dakota grant
program and the research North Dakota venture grant program. Interest earned on moneys in
the fund must be credited to the fund.
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