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| 7-EQUIPMENT USE |
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| 7.20 EQUIPMENT RENTAL NON-UNIVERSITY PURPOSE
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EFFECTIVE
6/1/00 |
LAST UPDATE
12/01/02 |
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| PURPOSE: |
To provide direction to university departments regarding the rental of university and
sponsored equipment for non-university purposes.
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| AUTHORITY: |
Powers and duties of the University President, ABOR Policy 3-801 and 3-802
Below authority applies ONLY to Federal Property (acquisition dollars or title):
Office of Management and Budget Circular A-110
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| POLICY: |
In furtherance of the University's public service mission, departments are permitted to rent
university and sponsor owned equipment under the following criteria to non-university
individuals and entities, and to university employees when acting outside of their university
employment.
- This policy is limited to the use of equipment, equipment maintenance and unique supplies for the safe and proper operation of the equipment. Any use of University personnel or other supplies must be handled through a standard research agreement, copies of which are available from the Office of Research and Contract Analysis or the Office of Technology and Transfer.
- The use of the equipment by the user cannot amount to a subsidy by the University. In addition, the use must be a one-time, short-term use and not a substitute for purchasing the equipment or the components, which have been combined to form the unique configuration. In addition, the duration of the use cannot exceed the period within which it would be possible for the user to purchase the equipment and assemble the configuration.
- The equipment to be used is either unique equipment or a unique configuration of equipment, which is not readily available in the private sector.
- The use of the equipment does not compete with immediate University educational or research needs as determined by the appropriate department head or dean.
- The equipment must be fully paid for, for example, it cannot be on a lease purchase, lease or rental agreement.
- The use of the equipment must be allowed by the terms of any sponsor's grant, contact, or cooperative agreement which funded the purchase of the equipment.
- A "Facilities Use Agreement" must be process for signature by the University's Procurement and Contracting Office.
USE CHARGE
The use charge must meet or exceed the fair market value of the equipment or the use of
the equipment and the University must recover all overhead, taxes and direct costs
associated with the use, such as depreciation, maintenance, electrical and janitorial costs.
The University may not charge any rate which violates OMB Circular A-21. For
assistance in determining that a rate is not in violation of OMB Circular A-21, contact the
Financial Services Office - Financial Management.
The minimum use charge levied for the use of the equipment shall be the fair market
rental rate or the use charge as calculated in accordance with Exhibit A whichever is
higher. In addition, Exhibit B describes how the revenues shall be distributed internally to
University and sponsor accounts. Higher rates may be charged in light of factors or
circumstances unique to the equipment .
The funds received for the use of the equipment must be deposited in a University
account.
INSURANCE
The user must provide insurance as required by the University's Office of Risk
Management and Safety. The department must contact the Office of Risk Management
and Safety to find out what types of insurance will be required.
UNRELATED BUSINESS INCOME TAX
The department must contact the Financial Services Office - Tax Compliance to find out
if there are any "Unrelated Business Income Tax (UBIT)" related issues involved in the
arrangement. The user will be responsible for paying any and all taxes and/or penalties
as a result of its use of the equipment.
HAZARDOUS CHEMICALS
If the use of university equipment requires the use of hazardous chemicals, such materials must be supplied by the user. The user must provide evidence of all applicable permits, and compliance with all applicable regulations, and is responsible for all chemical and/or hazardous waste storage, handling and disposal. Chemicals must be completely removed from all equipment prior to return to the University. Non-university chemical and/or hazardous waste may not be stored in University buildings.
QUALIFED OPERATORS
If the use of university equipment requires special knowledge, training, certification or
licensing, the user must supply copies of training records, certifications or licenses to the
university. The user may be required to provide proof of workman's compensation
insurance coverage to the Office of Risk Management and Safety.
SOFTWARE
Software purchased and/or licensed by the University may not be used by non-university
entities pursuant to this policy.
Use of software subject to the copyright of the Arizona Board of Regents on behalf of the
University of Arizona must be negotiated separately with the Office of Technology
Transfer. |
| PROCEDURE: |
| RESPONSIBILITY |
ACTION |
CUSTODIAL
DEPARTMENT |
- Determine if the equipment was acquired on university or
sponsored (300000 – 499999 account) funds. If acquired on a
sponsored account, obtain the approval of the SPS Property
Administrator for the rental use.
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SPS PROPERTY
ADMINISTRATOR |
- Consult with the Fund Accountant and review the applicable
grant, contract and cooperative agreement for any terms or
requirements affecting the rental use of program acquired
equipment on non-program activities and for non-university
purposes. Advise the department regarding sponsor
requirements, if any.
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CUSTODIAL
DEPARTMENT |
- With SPS Property Administrator approval or if not applicable,
contact the Procurement Office and complete the rental
agreement documents as directed. Obtain the
required approvals of Financial Services Office and Risk
Management.
- Send copies of the signed agreement to Property Management-FSO. If a Sponsored account is not involved, follow the account deposit provisions in the Exhibit B.
If a Sponsored account is involved, send a copy to the SPS
Property Administrator. Sponsored Project Services will set up a
Program Income Account when the equipment was acquired on
a Sponsored account.
- Responsible for invoicing the renter for the agreed upon charges and to initiate follow-up on collections, as necessary. Renter is to send payments to the University Bursar’s Office.
- Responsible to insure the item (s) is returned in good condition less normal wear.
- Negotiating with the renter for the recovery of costs arising from the renter’s damage to the equipment discovered upon its return.
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CROSS-REFERENCES:
EXHIBITS:
Exhibit A |
Rate Calculation |
| Equipment Use Charge (EUC) |
| Equipment < 5 years old |
Annual EUC = 18% x equipment acquisition cost per University's
Fixed Assets System (FFX) |
| Monthly EUC = 1.5% x equipment acquisition cost per University's
Fixed Assets System (FFX) |
| Equipment is 5 - 10 years old |
Annual EUC = 12% x equipment acquisition cost University's
Fixed Assets System (FFX) |
| Monthly EUC = 1% x equipment acquisition cost University's
Fixed Assets System (FFX) |
| Equipment > 10 years old |
Annual EUC = 6% x equipment acquisition cost University's
Fixed Assets System (FFX) |
| Monthly EUC = .5% x equipment acquisition cost per University's
Fixed Assets System (FFX) |
| NOTE: For Donated equipment, acquisition
cost equals the fair market value of the equipment at the time of the donation.
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| Direct Costs (DC) |
Annual DC = Sum of direct University supplies,
maintenance, etc. used in a year to support non UA uses of the equipment.
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Monthly DC = Sum of direct University supplies,
maintenance, etc. used in a Month to support non UA uses of the equipment.
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| Administrative Service Charge (ASC) |
Equipment is used in a UA owned/operated facility |
| Annual ASC = 23% x (Annual EUC + Annual DC) |
| Monthly ASC = 23% x (Monthly EUC + Monthly DC) |
Equipment is used in a facility that is not UA owned/operated |
| Annual ASC = 8% x (Annual EUC + Annual DC) |
| Monthly ASC = 8% x (Monthly EUC + Monthly DC) |
| Total Fee/Rate to be Assessed to Nonuniversity
Entities or Individuals |
| = Annual EUC + Annual DC + Annual ASC |
| = Monthly EUC + Monthly DC + Monthly ASC |
Exhibit B |
Revenue Distribution |
| Distributed to Departmental Account |
EUC and DC will be deposited to an appropriate departmental account
(as determined by the Financial Services Office). |
| Distributed to Central Administration Account |
ASC may be deposited initially to a departmental account, then
transferred to a central administration account (as determined by
the Financial Services Office). |
Exhibit C |
Examples |
| Example 1: A start up enterprise needs access to a
scientific piece of equipment owned by a department in the College of
Agriculture. Access is needed for a period of 6 months. The department
indicates a willingness to 'rent' (but not sell) the piece of equipment
for the needed time. Logistics required that the equipment be used at
its normal University location. The University purchased the equipment
(new) three years ago for $100K. The department estimates that it must
pass along $500 per month of supplies and maintenance expenses. |
| Calculation | Result |
|---|
| = | $100,000 x 1.5% = | $1,500 |
| = | | $500 |
| = | 23% x ($1,500 + $500) = | $460 |
| = | $1,500 + $500 + $460 = | $2,460 |
| = | $2,460 x 6 = | $14,760 |
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| Example 2: Same as example #1 except that the piece of
equipment will be moved to the start up enterprise's company site in
north Tucson. Also, the company will bear all supplies and maintenance
expenses directly. The department will not be involved or utilized. |
| Calculation | Result |
|---|
| $100,000 x 1.5% = | $1,500 |
| | $0 |
| 8% x ($1,500 + $0) = | $120 |
| $1,500 + $0 + $120 = | $1,620 |
| $1,620 x 6 = | $9,720 |
EXHIBIT D
A copy of the Facilities Use Agreement (use of University equipment
for non-University purposes) can be obtained from the eForms web page
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