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Calif. judge OKs state's $3 bln stem-cell effort

Posted on: Friday, 21 April 2006, 19:50 CDT

SAN FRANCISCO (Reuters) - California's stem-cell research institute is a constitutional state agency, a state judge ruled on Friday in a decision that may allow it to begin to issue up to $3 billion in general obligation debt.

Alameda County Judge Bonnie Sabraw held that the California Institute for Regenerative Medicine, approved by state voters in November 2004, is a legitimate state agency. Groups opposed to the research the institute would fund, which may include the use of human stem-cells from human embryos, had challenged its constitutionality, which put its efforts to issue up to $300 million in debt annually on hold.

"The court decision upheld Proposition 71 in its entirety," Robert Klein, the institute's chairman, said on a conference call, referring to the measure enacting the institute. "We have a victory across the board on every issue presented."

The stem cell institute earlier this month issued $12.1 million to researchers, marking its first grants, backed by bond anticipation notes while its debt authority faced the court challenge.

The grants would be drawn from $14 million in notes sold to six philanthropic groups by the California Institute for Regenerative Medicine to jump-start its research grants until a court challenge to its authority to sell state general obligation debt is resolved.

California voters approved the institute's formation by passing a November 2004 ballot measure. It allows the institute to sell up to $3 billion in state debt to fund stem-cell research that many scientists believe will lead to breakthroughs for treating various illnesses and ailments.

Source: REUTERS

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