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State OKs loan to aid stem cell research center

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Times Staff Writer

Stem cell research in California received a $181-million boost Monday when the committee that oversees public financing for the controversial science approved a loan from the state and agreed to raise additional money from philanthropic organizations.

Two years ago, California voters resoundingly approved Proposition 71 to authorize $3 billion in bonds to fund stem cell research, making the state a national leader. However, the measure’s opponents immediately took the state to court, and the money has been tied up in litigation ever since.

Gov. Arnold Schwarzenegger ordered the state Department of Finance in July to lend the stem cell effort $150 million, after a state court ruled that the bonds were valid. But taxpayer and religious groups appealed, and a decision on the bonds is not expected for 12 to 18 months.

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The result is that the California Institute for Regenerative Medicine has been functioning largely on donations and has given out only $14 million in grants to train researchers in the cutting-edge science, which shows promise in treating such maladies as Parkinson’s and Alzheimer’s diseases, as well as spinal cord injuries.

But Monday in Sacramento, the stem cell finance committee headed by state Treasurer Phil Angelides finalized the $150-million loan from the state general fund and also approved the sale of $31 million in bond anticipation notes to philanthropic organizations.

The combined action will jump-start the institute’s work by allowing the stem cell center to fund research while the proposition remains tied up in court. The bridge funding, however, is not risk-free. If the state Court of Appeal rules against the stem cell effort, neither the state nor philanthropists will be repaid.

But Anne Sheehan, chief deputy director of the state Department of Finance, called that possibility “remote” and said Monday that the administration was “very confident that we would prevail ... that the bonds would be issued and the state will be paid back.”

Monday’s action “keeps California on the forefront as a national leader in stem cell research,” Schwarzenegger said in a written statement. “This lifesaving science gives the strongest possibility and hope to the patients suffering from chronic and deadly illnesses, such as diabetes, heart disease and cancer, that we will one day find a cure.”

The institute has received more than 300 grant applications -- 232 for short-term grants to bring new investigators into the field and an additional 70 for larger grants to established researchers.

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Zach Hall, president of the institute, said it would begin reviewing applications after the Thanksgiving holiday and could begin disbursing money as early as February.

“It’s a wonderful day,” Hall said Monday. “Our intent is to jump-start human embryonic stem cell research in California with these grants,” which will fund projects ranging from engineering to molecular biology to disease research.

Dana Cody, executive director of Life Legal Defense Foundation, said it was inappropriate for the state to fund stem cell research while Proposition 71 money was still tied up in the courts.

Cody’s organization represents People’s Advocate, a group that is suing to overturn the stem cell bond measure.

“Embryonic stem cells have never created anything but tumors,” Cody said, and the $150-million loan from the state “is just a waste of taxpayer funding.”

maria.laganga@latimes.com

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