GOVERNMENT CODE
SECTION 13994-13994.12
13994.  Unless the context otherwise requires, the definitions inthis section govern the construction of this chapter. (a) "Agency" means the Business, Transportation and HousingAgency. (b) "California-based foundation" means an organization defined inthe Internal Revenue Code as a private foundation, which isincorporated in, and primarily conducts its activities within, thestate and receives funding in whole or in substantial part fromCalifornia-based companies. (c) "Collaborative research" means technological or scientificresearch that accelerates existing research toward thecommercialization of products, processes, and services, and isconducted jointly or funded jointly by some or all of the following: (1) The private sector, including intraindustry groups,California-based private foundations, industry associations, andnonprofit cooperative associations. (2) The federal government. (3) The state. (4) Public or private universities, colleges, and laboratories. (d) "Consortia" means jointly funded or jointly operated nonprofitindependent research and development organizations. "Consortiadevelopment" means the establishment of consortia to manage and funda variety of technology transfer projects within a specifictechnology or industry priority. (e) "Industry association" is a nonprofit organization with asubstantial presence in California whose membership consists in wholeor in part of California-based companies, and whose funding isderived in whole or in part from California-based companies. (f) "Information technology" includes, but is not limited to, allelectronic technology systems and services, automated informationhandling, system design and analysis, conversion of data, computerprogramming, information storage and retrieval, telecommunicationsthat include voice, video, and data communications, requisite systemcontrols, simulation, electronic commerce, and all relatedinteractions between people and machines. (g) "Nonprofit cooperative association" means an association,organized and operating pursuant to either Chapter 1 (commencing withSection 54001) of Division 20 of the Food and Agricultural Code orPart 2 (commencing with Section 12200) of Division 3 of Title 1 ofthe Corporations Code. (h) "Technology" includes, but is not limited to, the applicationof science and engineering to research and development, especiallyfor industrial or commercial objectives, in sectors that includetelecommunications, information technologies, electronics,biochemistry, medicine, agriculture, transportation, space, andaerospace. (i) "Technology transfer" means the movement of the results ofbasic or applied technological or scientific research to the design,development, and production of new or improved products, services, orprocesses.13994.1.  (a) (1) There is within the agency the Regional TechnologyAlliance Program. The intent of the regional technology alliances isto decentralize the delivery of services and resources, programs andactivities for technology development, commercialization,application, and competitiveness at a regional level. (2) The agency may designate new regional technology alliancesupon application to carry out activities described in this section. (3) The agency may establish criteria for designation thatincludes, but need not be limited to, criteria previously establishedby the Defense Conversion Council pursuant to Article 3.7(commencing with Section 15346) of Chapter 1, as it read on December31, 1998. (b) Each alliance shall perform the following activities: (1) Raise and leverage funds from multiple public and privatesources to support technology development, commercialization, andapplication and industry competitiveness particularly in response todefense industry conversion and diversification. (2) Assist in the formation of new businesses. (3) Maintain an electronic network and access to databases thatencourages business ventures. (4) Coordinate with activities and efforts of industry, academia,federal laboratories, and governments. (5) Recommend administrative actions or programs that could assistCalifornia's defense-dependent industries to successfully convert tocommercial markets. (6) Provide information about state and federal defense conversionprograms, including, but not limited to, job training, economicdevelopment, industrial modernization, dual-use technology, newmanagement techniques, and technology development and transfer. (7) Identify emerging industries that may include commercial spaceapplications, transportation, environment, high performancecomputing and communications, biotechnology and advanced materials,and processing and critical existing industries. (c) Each alliance may also perform, but need not be limited to,the following activities: (1) Assist in identifying businesses that could benefit fromdefense conversion programs and defense-dislocated workers whorequire employment and training opportunities. (2) Assist and provide coordination in determining jobopportunities within and outside of the defense industry for whichdisplaced workers could be retrained and placed. (3) Serve as a forum for industrywide networking linkingproducers, suppliers, and consumers. (4) Assist individual businesses and industry consortia inapplying for state and federal defense conversion program funds. (5) Provide information and assistance in upgrading individualbusinesses and industrywide production and management processes. (6) Provide information on available state and federal resourcesto aid businesses and workers affected by defense spendingreductions, base closures, plant closures, and layoffs, to fosterlong-term economic vitality, industrial growth, and jobopportunities. (d) Each alliance is encouraged to develop activities that achievethe following results: (1) Creation and retention of jobs. (2) Creation of new businesses. (3) Development of new commercial or dual-use products. (4) Establishment of industry partnerships and consortia. (5) Demonstration of productivity enhancement such as return oninvestment, reduced cost, employee training, and upgrades. (6) Establishment of public and private partnerships. (7) Commitment of industry support, participation, and capital. (8) Leverage of state funds. (9) Loan repayment ratio. (10) Participation of small businesses and minority-, women-, anddisabled veteran-owned businesses. (11) Workforce training. (e) The agency shall be authorized to enter into a contract forservices with any alliance to provide services to the office. Thesecontracts shall be sole source contracts, and exempt from thecompetitive bid process. (f) During the first two years following selection of an alliance,the alliance shall monitor the performance of any application fundedpursuant to Section 13994.2, and each invoice for payment shall bereviewed and approved by the alliance, but the contract for servicesshall be directly between the agency and the entity receiving grantfunding. Commencing with the third year of designation, any alliancewith procedures and processes approved by the agency shall beauthorized to directly contract with grant recipients. The agencyshall audit these grants on a regular basis.13994.2.  (a) There is within the agency the Challenge GrantProgram, consisting of technology transfer grants and defenseindustry conversion and diversification grants. Challenge grantprojects funded shall include, but not be limited to, the following:defense industry conversion and diversification, access to ongoingresearch and research findings, exchange or transfer of personnel andresearch support services, including capital outlay, consortiadevelopment, and collaborative research. (b) All funds appropriated or received by the Challenge GrantProgram shall administratively be divided into either the TechnologyTransfer Grant Program or the Defense Industry Conversion andDiversification Program. Funding awards for the Technology TransferGrant Program shall be made pursuant to the requirements set forth inSections 13994.3 and 13994.6. (c) The agency shall award grants based upon a competitiveapplication process addressing the project's eligibility and abilityto fulfill the goals of the program. (d) The agency shall report on this program to the Governor andthe Legislature.13994.3.  (a) An eligible technology transfer or defense industryconversion and diversification project shall, at least, do all of thefollowing: (1) Identify the sources of funding for the entire project. (2) Not supplant other funding. (3) Demonstrate that a significant portion of the project will beundertaken in California. (b) In addition to the requirements contained in subdivision (a),a defense industry conversion and diversification project shall notreceive more than 25 percent of the total project costs requested inthe proposal. (c) In addition to the requirements contained in subdivision (a),a technology transfer project shall: (1) Represent a technology or industry, or both, targeted in theapplication. (2) Include a significant amount of matching contributions fromeither of the following: (A) A private sector company or companies. (B) A California-based foundation or foundations, an industryassociation or associations, or a nonprofit cooperative associationor associations. (3) Include either of the following: (A) A private sector company or companies that have significantoperations in the state. (B) A California-based foundation or foundations, an industryassociation or associations, or a nonprofit cooperative associationor associations.13994.4.  The technology transfer grantee shall not incur expensesto be paid with grant funds without evidence of a workable agreementbetween the parties participating in the project that includes atleast both of the following: (a) A resolution of the intellectual property rights relative tothe project. (b) A direct and ongoing involvement of the public and privatesectors, when applicable in the project.13994.5.  (a) In awarding technology transfer grants, the agencyshall consider the following: (1) The likelihood of commercialization of a product, service, orprocess. (2) The potential impact on the state's economy. (3) The cost-effectiveness of the project. (4) The importance of state funding for the viability of theproject. (5) Cost sharing by other participants. (6) The involvement of small businesses and minority-, disabledveteran-, and women-owned businesses. (7) Projects that will result in a prototype by the end of thegrant period. (8) Other criteria that the agency determines are consistent withthe purposes of the program. (b) The agency shall target industries and technologies with apotential for enhancing the California economy, and shall fundprojects within those industries and utilizing those technologies.13994.6.  Technology transfer projects may include reasonableoverhead costs incurred by a research institute and related to theproject that shall not exceed the allowable federal overhead costsfor research. All other projects may include any costs authorized bythe principal funding agency, and not precluded by staterequirements.13994.7.  Except for defense industry conversion and diversificationprojects, only a public agency or a not-for-profit or nonprofitorganization shall receive funds under this chapter. Any person orentity is authorized to receive a defense industry conversion anddiversification grant.13994.8.  (a) The agency may obtain scientific and technologicalexpertise as needed to provide advice and input on the program, theestablishment of targeted technologies and industries, the review ofgrant applications, and the review of project performance. (b) The agency may award funds over a multiyear period to agrantee without requiring the grantee to reapply, so long as thefunds in multiple years are utilized for the same project originallyfunded.13994.9.  (a) Notwithstanding Sections 13994.2, 13994.3, 13994.4,and 13994.5, and the regulations implementing this chapter, thesecretary may award discretionary technology transfer grants totalingnot more than 5 percent or one hundred thousand dollars ($100,000),whichever is greater, of the funds appropriated each year for thisprogram. (b) Notwithstanding Sections 13994.2, 13994.3, 13994.4, 13994.5,and subdivision (a) of this section, the secretary may award up to 15percent of the funds appropriated for a given fiscal year forconsortia development projects that do not have private sector matchbut will have private sector match within six months from the date ofthe award of funding. For purposes of this subdivision, "privatesector match" means a cash or in-kind contribution available forexpenditure or use to a consortium development project. If, after sixmonths, no private sector match is available, funding under theprogram shall cease and all moneys previously received shall bereturned to the state.13994.10.  (a) In order to carry out this chapter, there is herebycreated in the State Treasury the California Competitive TechnologyFund. (b) The fund shall receive state funds appropriated to it,contributions from nonstate sources, reimbursements, federal funds,and interest that accrues to the moneys in the fund pursuant tosubdivision (c). (c) The Treasurer shall invest moneys contained in the fund notneeded to meet current obligations in the same manner as other publicfunds are invested. (d) Notwithstanding Section 13340, all moneys in the fund arecontinuously appropriated without regard to fiscal years to theagency for the purposes of this chapter, and for the purposes forwhich moneys were provided. Except for state funds appropriated to,or transferred into, the fund for local assistance, moneys in thefund, including all interest, may be spent for support.13994.11.  The agency shall report on this program to the Governorand the Legislature.13994.12.  There is hereby established within the agency theTechnology Planning Program. The program shall provide grants andtechnical assistance to California nonprofit organizations and publicentities working within specific industries to identify conversionor expansion projects. Grants may be awarded in the areas ofstrategic planning and strategic alliances. The program shall awardgrants based upon a competitive application process addressing theproject's eligibility, a review of the proposal's scientific andtechnological aspects, and ability to fulfill goals of the program.Priority shall be given to those projects with the identified supportof industry representatives, matching funding, projects likely toreceive federal funds requiring matching funds, and any othercriteria determined by the agency. A project example is a jointeffort to develop and commercialize defense-related technologies byfederal laboratories, universities, and companies in closegeographical proximity.