Finance Committee approves $181M loan to California's Stem Cell Research Institute

Nov 23 2006

The California Stem Cell Research and Cures Finance Committee on Monday unanimously approved a $181 million loan to the state's stem cell research institute, the California Institute for Regenerative Medicine, in an effort to start the program, which has been stalled by lawsuits, the Los Angeles Times reports (La Ganga, Los Angeles Times, 11/21).

State voters in November 2004 approved Proposition 71 to provide $295 million annually for 10 years for human embryonic stem cell research.

Two taxpayer groups and the California Family Bioethics Council in 2005 filed a lawsuit arguing that the measure violates the state constitution because it created a publicly funded agency that was not "under the exclusive management and control" of the state.

California Superior Court Judge Bonnie Sabraw in April ruled that the plaintiffs failed to show the proposition "is clearly, positively and unmistakably unconstitutional," adding that CIRM and the Independent Citizens' Oversight Committee -- which are charged with implementing Proposition 71 -- "are operating in the same fashion as other state agencies."

The plaintiffs then appealed the ruling, claiming that CIRM lacks adequate state supervision. While the suits are pending, CIRM is unable to sell state bonds required to fund the program, institute officials have said.

The CIRM Finance Committee in April authorized up to $200 million in loans through bond anticipation notes (Kaiser Daily Women's Health Policy Report, 7/21).

The $181 million loan includes $150 million from the state's general fund that was ordered by Gov. Arnold Schwarzenegger (R) in July and $31 million from nine philanthropic groups and individuals (Johnson, San Jose Mercury News, 11/21).

"Thanks to the governor and a courageous group of leading citizens, private citizens, major stem cell research programs in this great state can now be funded," Robert Klein, chair of the Independent Citizens' Oversight Committee, said (CIRM release, 11/20).

Dana Cody -- executive director of the Life Legal Defense Foundation, which represents People's Advocate, a group that is suing to overturn the stem cell bond measure -- said it was inappropriate for the state to fund stem cell research while Proposition 71 funds still were tied up in the courts.

Cody added that the $150 million from the state's general fund "is just a waste of taxpayer funding." CIRM President Zach Hall said the institute will begin reviewing grant applications next week and could begin disbursing funds as early as February 2007 (Los Angeles Times, 11/21).