Tax law casts doubt on stem cell royalties State may not reap billions promised to voters

San Francisco Chronicle ^ | 10.25.05 | Bernadette Tansey

[Coleus]

The billion dollars in royalties that voters were told could flow to the state if they passed California's $3 billion stem cell research funding initiative in 2004 may turn into an empty promise.

Researchers and business groups are raising a host of reasons the state should claim no portion of the revenue from inventions produced under the stem cell program created by Proposition 71.

For one thing, they say, requiring that the state get a share would hinder work toward disease cures by removing some of the incentive for private investors.

But perhaps their strongest argument is that the state might actually be forbidden from sharing royalties by federal tax laws -- that is, if California chooses to finance the program by the cheapest possible route: tax-exempt bonds.

Whether those tax laws actually would be an obstacle, however, is by no means certain. And yet no one with responsibility for the $3 billion in bonds -- not the main author of the initiative, Robert Klein, who now chairs the state's stem cell institute, nor state Treasurer Phil Angelides, who is running for governor -- has promised to make sure the question is answered.

Some Prop. 71 critics now wonder whether Klein ever intended the state to receive royalties.

"It starts to have the look of a bait and switch," said Jesse Reynolds, a spokesman for the Center for Genetics and Society, an Oakland nonprofit organization that supports genetic technology but advocates ethical constraints. It was Klein, the architect of the Prop. 71 campaign, who persuaded voters to commit billions to research during a state budget crisis by saying that the universities and private firms that received stem cell grants would share as much as $1 billion or more in royalties with the state.

[Coleus]

Embryo Vivisection and Elusive Promises Act--California Stem Cell Research and Cures Initiative

[Carry_Okie]

Tax law casts doubt on stem cell royalties State may not reap billions promised to voters

I'm shocked... shocked I tell you.

[Cicero]

One thing is for sure. A lot of "researchers" who enjoy grinding up little human beings and making soup out of them will be getting big bucks out of this scam for many years.

Whether anything useful will come out of it is dubious.

Thanks, Arnold.

[umgud]

Gullable Cali voters screwed again. Voted for unethical issue and expected to actually gain from it.

[traviskicks]

With the state nearly bankrupt I can't believe they passed this law and then are shocked to realize that only private investment can make useful applications anyway.



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[Allosaurs_r_us]

Californians take it in the shorts again, heh, heh! Another shyster runs a scam on 'em and they're surprised they're not going to make a billion $. I'm shocked! Just shocked, I tell ya!