California OKs $150 million stem-cell research loan (interim financing while court battle continues)

Reuters on Yahoo ^ | 11/20/06 | Reuters

[NormsRevenge]

SAN FRANCISCO (Reuters) - California officials approved on Monday a $150 million loan offered by the state to fund its stem-cell research institute in San Francisco.

In addition to the loan, the California Institute for Regenerative Medicine has sold $31 million worth of bond anticipation notes to raise money for research into medical applications of stem-cell technology.

Many scientists believe stem cells, either adult cells or ones from embryos, may be used to find treatments and cures for serious diseases such as cancer and diabetes.

Voters approved the creation of the institute by passing a statewide measure in 2004 that allows it to sell up to $3 billion in general obligation debt over 10 years, but that bond authority is currently being challenged in court.

To allow the research to move forward, earlier this year Gov. Arnold Schwarzenegger offered the $150 million loan, described by his budget planners as interim financing.

Meanwhile, the center moved on its own to sell the bond anticipation notes.

"Today's action keeps California on the forefront as a national leader in stem cell research," Schwarzenegger said in a statement. "This life-saving 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."

[NormsRevenge]

sister to this one..

CA: Schwarzenegger gives $150 million loan to stem cell agency (after Presidential veto) ^
http://www.freerepublic.com/focus/f-news/1669333/posts
Posted by NormsRevenge
On News/Activism ^ 07/20/2006 11:56:46 AM PDT · 20 replies · 423+ views

ap on Riverside Press Enterprise ^ | 7/20/06 | Laura Kurtzman - ap
SACRAMENTO A day after President Bush vetoed a measure that would have expanded federal funding of embryonic stem cell research, California Gov. Arnold Schwarzenegger on Thursday authorized a $150 million loan to fund the state's moribund stem cell institute, which has been stalled by lawsuits. The move has distinct political benefits for the governor who is seeking to put as much distance as possible between himself and the deeply unpopular president as he seeks re-election this year. Schwarzenegger said the state cannot afford to wait to fund the critical science associated with stem cells. "I remain committed to advancing stem...

[isthisnickcool]

Many scientists believe stem cells, either adult cells or ones from embryos, may be used to find treatments and cures for serious diseases such as cancer and diabetes.

If this is the case then the development of stem cell based solutions to such diseases is worth a fortune. So why should any taxpayer money be used to fund it?

[Amerigomag]

Could anyone please explain the legal authority under which the executive can loan money from the General Fund without either the approval of the legislature or the electorate?

I am simply not familiar with that provision in the California Constitution.

[Carry_Okie]

Much of the money will of course go from the research to the purchase of embryos from Planned Parenthood. The latter will then turn around and use the money for advocacy benefitting Democrats.

[Indy Pendance]

The point of this entire stem cell debate is to get federal funding, facts don't matter.

[Amerigomag]

facts don't matter.

A hallmark of the Austrian's administration.

[Indy Pendance]

I'll trade you the WI's governor Doyle for yours.

[calcowgirl]

Could anyone please explain the legal authority under which the executive can loan money from the General Fund without either the approval of the legislature or the electorate?

This perhaps?

Press Release, 07/20/2006
Governor Schwarzenegger Takes Executive Action to Strengthen Stem Cell Research in California

Notwithstanding this litigation, the CIRM and other state agencies have taken the steps necessary to implement the will of the people in funding this important stem cell research. The California Stem Cell Research and Cures Finance Committee held two public meetings and approved the issuance of $3 billion in General Obligation bonds. In addition, the Committee authorized Treasurer Angelides to issue $200 million of these bonds without additional action by the Committee, and further authorized the issuance of up to $200 million in Bond Anticipation Notes. Of this amount, $14 million of these Notes have been purchased by private philanthropic individuals and organizations, and an additional $30 to 36 million of these Notes are expected to be sold in the near future, leaving $150 million authorized but not issued.

Text of Proposition 71 (PDF)

125291.55. Notwithstanding Section 13340 of the Government Code, there is hereby appropriated from the General Fund in the State Treasury, for the purposes of this article, an amount that will equal the total of the following:

(a) The sum annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to this article, as the principal and interest become due and payable.

(b) The sum necessary to carry out Section 125291.60 appropriated without regard to fiscal years.

125291.60. The Director of Finance may authorize the withdrawal from the General Fund of an amount or amounts, not to exceed the amount of the unsold bonds that have been authorized by the committee, to be sold for the purpose of carrying out this article. Any amount withdrawn shall be deposited in the fund. Any money made available under this section shall be returned to the General Fund, plus an amount equal to the interest that the money would have earned in the Pooled Money Investment Account, from money received from the sale of bonds for the purpose of carrying out this article.

[Amerigomag]

Thank you.

[calcowgirl]

There seems to be an everending number of misdeeds written into the fine print of these initiatives. Prop 71 may take the award, at this point. But people keep on trying! This one is a doozie!
The McCauley-Rooker Wealth Tax and Oceans Preservation Act (PDF)

[Amerigomag]

What bothered me about the references provided for Prop 71 was the lack of a specified sunset for loan repayment if the bonds were never issued. Yes, the monies must be returned to the General Fund, but no repayment time frame was contained in the language in the bonds are not purchased. Essentially a gift, accruing interest.

I can only suppose that the loan contract, held by the Department of Finance, outlines the terms and those aren't public record.

[calcowgirl]

What bothered me ... was the lack of a specified sunset for loan repayment if the bonds were never issued.

Appropriately so:

SacBee: The state loan and the other backed by investors including the Gordon and Betty Moore Foundation and David and Lucile Packard Foundation will be repaid from the sale of bonds after the stem cell institute wins a final court victory, said Anne Sheehan, chief deputy director for policy of the California Department of Finance. If the program does not survive a legal challenge, the funding -- formally known as bond anticipation notes -- will not be repaid, she said.

[calcowgirl]

Los Angeles Times:

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."