TEXT OF PROPOSED BONDPROPOSITION 14
This initiative measure is submitted to the people inaccordance with the provisions of Section 8 of Article
II of the California Constitution.
This initiative measure amends and adds sections to
the Health and Safety Code; therefore, existing
provisions proposed to be deleted are printed instrikeout type and new provisions proposed to be
added are printed in italic type to indicate that they
are new.

PROPOSED LAW
The California Stem Cell Research,
Treatments, and Cures Initiative of 2020
SECTION 1.

Title.

This measure shall be known, and may be cited, as
the “California Stem Cell Research, Treatments, andCures Initiative of 2020.”
SEC. 2.

Findings and Declarations.

The people of the State of California hereby ﬁnd anddeclare all the following:(a) In 2004, California voters rejected efforts by thefederal government to limit stem cell research by
establishing California’s own stem cell research andtherapy development funding institute, catapulting
California into a worldwide leadership position in the
cutting-edge ﬁeld of stem cell research.
(b) Since then, the California Institute forRegenerative Medicine (California’s stem cell research
institute), which was established by California voters,
has funded more than 1,000 research projects at 70
institutions and businesses across the state, whichhave led to more than 2,500 peer-reviewed medical
research discoveries, including discoveries that havecontributed to more than 70 human clinical trials
aimed at ﬁnding treatments and cures for chronic
injuries and diseases. Many other discoveries are in
the translational pipeline awaiting additional funds tomove them towards clinical trials. To date,approximately 2,000 patients have been or are
expected to be treated in institute-funded clinical
trials or at the institute’s centers of excellence, andmore than 4,000 patients have been or are expected
to be enrolled in human clinical trials in which the
California stem cell research institute has funded
research or therapy development or at the institute’s
centers of excellence.
(c) Researchers funded by California’s stem cellresearch institute are working to develop therapies
and cures for devastating diseases and injuries,
including, without limitation, cancer, diabetes, heartdisease, lower respiratory diseases, kidney disease,
Alzheimer’s, Parkinson’s, spinal cord injuries,
blindness, amyotrophic lateral sclerosis (ALS), HIV/

AIDS, multiple sclerosis, and mental health disorders,such as schizophrenia, depression, and autism.
(d) Institute-funded
researchersaremakingsigniﬁcant progress in developing therapies for many
devastating diseases, ranging from cancer treatments
to helping to ﬁnd a cure for “bubble baby” disease,which has already saved the lives of many children,
but many of these projects require additional funds tomove from the research stage to the clinic.

14(e) Treatments developed with support from
California’s stem cell research institute are changing
lives. Thanks to this research, a high school student
who was paralyzed in a diving accident was able toregain function in his upper body and go on to college;
a mother who went blind from a genetic disease
recovered her sight; and a cure has been found for adisease that causes fetal death.
(f) Through 2018, institute-funded research projects
are estimated to have generated more than $3 billion
in matching funds, created more than 55,000 fulltime equivalent jobs in California, resulted inapproximately $641 million in state and local tax
revenues, and generated an increase of $10.7 billion
in California’s economic activity. California’s stem cellresearch institute has drawn hundreds of out-of-state
researchers and many companies to California, making
California a worldwide leader in the ﬁeld. The morethan $3 billion in matching funds generated by theseprojects validate the value of the voters’ decision toinvest in research and therapies to treat and curechronic disease and injury.
(g) Although California’s stem cell research funding
institute has made great gains, much work remains to
be done. With new federal restrictions on importantresearch, an anti-science agenda on the rise, andthreats to reduce federal research and development
funding, California once again must take the lead toensure that this promising area of research continues
and to advance projects from the research stage to theclinic.
(h) Without additional funding, many of thesepromising research and development projects will beforced to stop work on potentially life-changing
medical therapies. California’s stem cell research
institute needs additional funding to help bringpromising discoveries through the development
process, including clinical trials, with the goal of
making treatments available to California patientswith chronic diseases and injuries.
SEC. 3.

Purpose and Intent.

In enacting this initiative, it is the purpose and intent
of the people of the State of California to continue tosupport stem cell research to mitigate or cure chronic
disease and injury and thereby reduce or mitigate
human suffering and the cost of care and improve thehealth and productivity of Californians by:
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14(a) Providing $5.5 billion in bond funding to allow
California’s stem cell research institute to continue
funding stem cell and other vital research to develop
treatments and cures for serious diseases andconditions like diabetes, cancer, HIV/AIDS, heartdisease, paralysis, blindness, kidney disease,respiratory illnesses, and many more.
(b) Dedicating $1.5 billion for the support of researchand the development of treatments for diseases andconditions of the brain and central nervous system,
such as Alzheimer’s disease, Parkinson’s disease,stroke, dementia, epilepsy, depression, brain cancer,
schizophrenia, autism, and other diseases andconditions of the brain.
(c) Promoting the accessibility and affordability oftreatments and cures by ensuring that more
Californians have the opportunity to participate inclinical trials for promising new treatments for chronic
disease and injury, expanding the number andgeographic reach of clinics where specialized
treatments and cures can be provided, including
centers of excellence like Alpha Stem Cell Clinics andCommunity Care Centers of Excellence, which support
clinical trials and will serve as the foundation for thedelivery of future treatments, and by helping California
patients obtain treatments and cures that arise frominstitute-funded research and development.
(d) Requiring strict accountability and transparency,
including rigorous conﬂict of interest rules that are
updated every four years, a limit on the number of
employees the institute may hire, and a cap on
administrative funding for the institute to ensure thatat least 92.5 percent of the bond proceeds are spent
on research and the development and delivery oftreatments and cures.
(e) Creating the workforce jobs necessary to ensurethat promising research developments are advanced tothe clinic and that resulting treatments are madeavailable to California patients.
(f) Reinforcing California’s position as a world leader
in the development of stem cell treatments and curesfor patients.
(g) Promoting private investment in institute-funded
projects to leverage institute funding so that thiscritical research can advance new treatments fastertowards the goal of making them available to
California patients.
(h) Protecting the General Fund by postponing
General Fund payments on the bonds for the ﬁrst ﬁve
years, restricting the issuance of bonds in any one
year to no more than one half of one percent of thetotal amount of the state’s outstanding and authorized
general obligation bonds, in the aggregate total, as ofJanuary 1, 2020, requiring that bonds be sold over a
period of no less than 10 years, and spreading thecost of the bonds over a period of up to 40 years, sothat the repayment is aligned with the period of time90 | Text of Proposed BondPROPOSITION 14 CONTINUED

over which California patients are expected to beneﬁt
from institute-funded research.
SEC. 4. Section 125290.72 is added to the Healthand Safety Code, to read:
125290.72. Expand Alpha Stem Cell Clinic Programand Establish Community Care Centers of Excellence
Program(a) The institute shall expand the Alpha Stem Cell
Clinic Program and establish the Community Care
Centers of Excellence Program to fund theestablishment of centers of excellence where clinical
trials are conducted and treatments and cures are
made available for all patients. The goal of theCommunity Care Centers of Excellence Program is toexpand the capacity of the Alpha Stem Cell Clinic
Program to promote access to human clinical trials
and the accessibility of treatments and cures arisingfrom institute-funded research for patients in
California by establishing geographically diverse
centers of excellence to conduct clinical trials and toseek to make the resulting treatments and cures
broadly available to California patients.
(b) The institute shall prioritize the funding of
applications for Community Care Centers of Excellence
that enhance the geographic distribution ofCommunity Care Centers of Excellence across thestate, considering the location of the Alpha Stem Cell
Clinics, to promote patient access. The institute shallprioritize applications for Alpha Stem Cell Clinics andCommunity Care Centers of Excellence that offer
matching funds or veriﬁed in-kind support, consistent
with the highest medical standards, as established by
the governing board of the institute.
(c) Applications for Alpha Stem Cell Clinic andCommunity Care Centers of Excellence grants shall be
required to include a plan for enhancing access toclinical trials for California patients and making
treatments and cures that arise from institute-funded
research more widely available to California patients,
including addressing how the applicant will support
the ancillary hospital and access costs of patients
participating in clinical trials to enhance access totrials for California patients, regardless of theireconomic means and geographical location.
(d) Alpha Stem Cell Clinic and Community Care
Centers of Excellence awards shall be made pursuant
to the procedures set forth in Article 1 (commencing
with Section 125290.10) of Chapter 3 of Part 5 ofDivision 106.
SEC. 5. Section 125290.73 is added to the Healthand Safety Code, to read:
125290.73. Scientiﬁc and Medical Training and
Fellowship Programs(a) The institute shall establish training andfellowship programs. The goal of the training andfellowship programs shall be to:TEXT OF PROPOSED BOND
(1) Ensure that California has the workforce necessary
to move new discoveries from the research stage tothe clinic.
(2) Accelerate the accessibility of treatments andcures, and make treatments and cures arising frominstitute-funded research available to California
patients.
(3) Prepare California undergraduates and master’s
students for careers in stem cell research and othervital research opportunities and in the development
and delivery of treatments and cures.
(4) Support graduate students, postdoctoral students,and medical students, including, but not limited to,interns, residents, and graduate fellows who work inthe ﬁelds of stem cell and other vital research
opportunities and in the development and delivery oftreatments and cures, with fellowships.
(b) (1) (A) The program shall provide awards to
California Community Colleges and California State
University campuses to establish training programs toprepare undergraduates and provide fellowships formaster’s graduate students for advanced degrees andtechnical careers in stem cell research and other vital
research opportunities and the development anddelivery of treatments and cures, including hands-on
training and education in stem cell research and othervital research opportunities and in the development
and delivery of treatments and cures. Direct patientengagement and outreach activities that engage
California’s diverse communities to ensure that allcommunities are aware of, and have access to,institute-funded treatments and cures shall be apriority outcome of this program. The institute shallprioritize the funding of applications from institutions
that enhance the geographic distribution of training
across the state and socio-economic diversity andapplications that offer matching funds or veriﬁed inkind support.
(B) The institute may establish coinvestment,
sponsored apprenticeships as part of the training
program in order to leverage the institute’s funding
and create employment opportunities for students intechnical positions that advance the ﬁelds of stem
cell and other vital research opportunities and thedevelopment and delivery of treatments and cures.
(2) (A) The fellowship program shall provide awards
to academic and nonproﬁt research institutions in
California to administer fellowship awards to graduate
and postdoctoral students and medical school
students, including, but not limited to, interns,
residents, and graduate fellows, engaged in stem cellresearch and other vital research opportunities andthe development and delivery of treatments and cures.
Fellowship awards may be freestanding or
supplemental of other sources of funding.
(B) The institute may establish a program to empower
fellows to work in Alpha Stem Cell Clinics and

PROPOSITION 14 CONTINUED

Community Care Centers of Excellence as part of their
participation in the fellowship program.

14(c) Training and fellowship program awards shall bemade pursuant to the procedures set forth in Article 1(commencing with Section 125290.10) of Chapter 3
of Part 5 of Division 106.
SEC. 6. Section 125290.74 is added to the Healthand Safety Code, to read:
125290.74.

Shared Research Laboratory Program(a) The institute shall reestablish a Shared ResearchLaboratory Program to provide funding to academic
and nonproﬁt research institutions in California for
specialized instrumentation, a supply of cell lines,
culture materials, and instruction and training inresearch methods and techniques. Awardees ofShared Research Laboratory grants shall be required
to offer use of the research laboratory to investigators
conducting research at the awardee institution andprovide a reasonable access plan for neighboring
research institutions, and to offer instruction andtraining opportunities to students and investigators at
the awardee institution and provide a reasonable
access plan for neighboring research institutions.
(b) The institute shall prioritize the funding of
applications that enhance the geographic distributionof Shared Research Laboratories across the state andapplications that offer matching funds or veriﬁed inkind support.
(c) Shared Research Laboratory Program awards shallbe made pursuant to the procedures set forth in
Article 1 (commencing with Section 125290.10) of
Chapter 3 of Part 5 of Division 106.
SEC. 7. Section 125290.75 is added to the Healthand Safety Code, to read:
125290.75. Treatments and Cures Accessibility andAffordability Working Group(a) Membership
The Treatments and Cures Accessibility andAffordability Working Group shall have 17 members,
nominated by the chairperson or vice chairperson andapproved by the board, as follows:(1) Five members of the ICOC (the governing board),
with at least two of those members drawn from theappointments made pursuant to paragraph (3), (4),(5), or (6) of subdivision (a) of Section 125290.20.
(2) An individual who has private sector experience ininnovative
therapy
medicalcoverageterms,
qualiﬁcations, and the process for reimbursement,
including, if possible, experience with coveragenegotiations with private insurers, health management
organizations, or corporate self-insurance healthplans.
(3) An expert or a highly knowledgeable individualwith experience in federal therapy coverage,
qualiﬁcations, and process for reimbursement,
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14

PROPOSITION 14 CONTINUED

including, if possible, experience with the federal
Centers for Medicare and Medicaid Services.

arising from institute-funded research available to
California patients throughout California.

(4) An expert or a highly knowledgeable individualwith experience in California’s public insurance
program (Covered California), coverage, qualiﬁcations,and the process for reimbursement of innovative
therapies.

(3) Recommend to the governing board policies andprograms to help Californians afford to participate inhuman clinical trials and to make treatments andcures arising from institute-funded research affordable
to California patients, regardless of their ﬁnancial
means.

(5) Two representatives from hospitals in California
that are participating in stem cell clinical trials or thatare treating patients with federal Food and Drug
Administration approved stem cell or genetic
therapies.
(6) A representative from a philanthropic organization
who has experience assisting patients with clinical
trial access and affordability or with access to, andthe affordability of, innovative therapies.
(7) Two representatives from patient advocacy
organizations who have technical expertise or
experience in coverage, qualiﬁcations, and the process
for reimbursement of innovative therapies.
(8) A health care economist with experience inadvising or negotiating with private insurers,
government insurers, or corporate self-insurance
programs on coverage for innovative therapies orhuman trials, including experience in assisting
hospitals and clinics in covering ﬁnancial gaps incoverage of the direct and indirect costs of innovative
therapies.
(9) A patient navigator with training and experience
helping patients obtain ﬁnancial support from private
insurers, public support, or nonproﬁt support, andhelping patients obtain social service support tofacilitate their participation in federal Food and Drug
Administration approved human trials or their
qualiﬁcation for access and ﬁnancial assistance forinnovative therapies.
(10) The chairperson and vice chairperson of thegoverning board.
(b) Functions
The Treatments and Cures Accessibility andAffordability Working Group shall have the following
functions:(1) Examine, develop, and assist with theimplementation of ﬁnancial models to enhance theaccessibility and affordability of treatments and curesarising from institute-funded research for Californians
and to enhance access to clinical trials, including
reimbursement alternatives for patient-qualiﬁed costs
to help achieve the objective that reimbursement
covers patient expenses, including, but not limited to,
medical expenses, lodging, meals, and travel for
research participants and their caregivers.
(2) Recommend to the governing board policies andprograms to help Californians obtain access to humanclinical trials and to make treatments and cures
92 | Text of Proposed Bond

(4) Work with the Alpha Stem Cell Clinics andCommunity Care Centers of Excellence and other
California health care institutions, and health carepayors, including private insurers, government
programs, and foundations, to develop model
programs and coverage models to promote the accessand affordability of treatments and cures arising frominstitute-funded research for California patients,
regardless of their ﬁnancial means, or the disease,
injury, or health condition from which they suffer.
(5) Advise the governing board regarding the coverage
criteria and the process for reimbursement ofinnovative therapies and cures arising from institutefunded research and made available to patients
through publicly or privately funded programs in
California with the goal of expanding access andaffordability.
SEC. 8. Section 125290.76 is added to the Healthand Safety Code, to read:
125290.76.

Advisory Task Forces(a) Membership
The chairperson and the president may appoint one ormore advisory task forces to provide expert guidance
to address speciﬁc objectives in areas under the
institute’s jurisdiction, including scientiﬁc, policy,
ethical, ﬁnancial, and technical matters. The
chairperson and president shall each appoint an equal
number of members with expertise in the area or areas
for which advice is sought, including at least one
member who has a patient advocate perspective.
(b) Functions
The advisory task forces shall advise the board throughthe chairperson and the president, regarding
scientiﬁc, policy, ﬁnancial, ethical, and technicalmatters under the institute’s jurisdiction.
(c) Operations(1) The advisory task forces shall be advisory only andtheir operations shall be subject to the requirements
applicable to working groups pursuant to Section
125290.50, provided that the advisory task forces
shall meet in public when they vote on policy
recommendations.
(2) Members of the advisory task forces shall be
subject to the conﬂict of interest requirements
applicable to members of the working groups,
provided that the advisory task forces shall not review,

TEXT OF PROPOSED BONDPROPOSITION 14 CONTINUED

comment upon, or have jurisdiction over, any
individual grant or loan approval.
SEC. 9. Section 125290.20 of the Health and
Safety Code is amended to read:
125290.20. ICOC
Terms of Ofﬁce

Membership;

Appointments;(a) ICOC Membership
The ICOC shall have 29 35 members, appointed asfollows:(1) The Chancellors of the University of California at
San Francisco, Davis, San Diego, Los Angeles, andIrvine, and Riverside shall each appoint an executiveofﬁcer from his or her campus. In addition, theChancellor of the University of California at San
Francisco (UCSF)
shall also appoint a faculty
member, physician/scientist, researcher, or executiveofﬁcer from the UCSF Fresno/Clovis campus topromote geographic diversity and access.
(2) The Governor, the Lieutenant Governor, theTreasurer, and the Controller shall each appoint an
executive ofﬁcer from the following three categories:(A) A California university, excluding the ﬁve sevencampuses of the University of California described inparagraph (1), that has demonstrated success andleadership in stem cell research, other vital research
opportunities, therapy development, or therapy
delivery, and that has:(i) A nationally ranked research hospital and medical
school; this criteria will apply to only two of the four
appointments.
(ii) A recent proven history of administering scientiﬁc
and/or medical research grants and contracts in an
average annual range exceeding one hundred million
dollars ($100,000,000).
(iii) A ranking, within the past ﬁve years, in the top
10 United States universities with the highest numberof life science patents or that has research or clinicalfaculty who are members of the National Academy of
Sciences.
(iv) For purposes of this category, the Governor may
appoint an executive ofﬁcer from the California State
University system who has an advanced degree inbiological sciences.
(B) A California nonproﬁt academic and research
institution that is not a part of the University ofCalifornia, that has demonstrated success andleadership in stem cell research, other vital research
opportunities, therapy development, or therapy
delivery and that has:(i) A nationally ranked research hospital or that has
research or clinical faculty who are members of the
National Academy of Sciences.
(ii) A proven history in the last ﬁve years of managing
a research budget in the life sciences exceeding
twenty million dollars ($20,000,000) annually.

(C) A California life science commercial entity that is
not actively engaged in researching or developing
therapies or therapy delivery with pluripotent orprogenitor stem cells or genetic medical treatments,that has a background in implementing successful ordeveloping experimental medical therapies, including
conducting human clinical trials, and that has notbeen awarded, or applied for, funding by the instituteat the time of appointment. A board member of that
entity who generally meets the same qualiﬁcations
with a successful history of developing innovative
medical therapies may be appointed in lieu of an
executive ofﬁcer.

14(D) Only one member shall be appointed from a single
university, institution, or entity for the purposes ofparagraph (2). The executive ofﬁcer of a California
university, a nonproﬁt research institution or life
science commercial entity who is appointed as amember, may from time to time delegate those duties
to an executive ofﬁcer of the entity or to the dean of
the medical school, if applicable.
(3) The Governor, the Lieutenant Governor, theTreasurer, and the Controller shall appoint members
from among California representatives of California
regional, state, or national disease advocacy groups,
as follows:(A) The Governor shall appoint two three members,
one from each of the following disease advocacy
groups: spinal cord injury; and Alzheimer’s disease;and mental health conditions.
(B) The Lieutenant Governor shall appoint two threemembers, one from each of the following diseaseadvocacy groups: type II diabetes; and multiple
sclerosis or amyotrophic lateral sclerosis; and mental
health conditions.
(C) The Treasurer shall appoint two members, one
from each of the following disease groups: type I
diabetes and heart disease.
(D) The Controller shall appoint two members, one
from each of the following disease groups: cancer andParkinson’s disease.
(4) The Speaker of the Assembly shall appoint a
member from among California representatives of a
California regional, state, or national mental healthdisease or mental health conditions advocacy group.
(5) The President pro Tempore of the Senate shallappoint a member from among California
representatives of a California regional, state, or
national HIV/AIDS disease advocacy group.
(6) The Treasurer and Controller shall each appoint a
nurse with experience in clinical trial management orstem cell or genetic therapy delivery.
(6) (7) A chairperson and vice chairperson who shallbe elected by the ICOC members. Each constitutionalofﬁcer shall nominate a candidate for chairperson andanother candidate for vice chairperson. The
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14

PROPOSITION 14 CONTINUED

chairperson and vice chairperson shall each beelected for a term of six years. The chairperson andvice chairperson of ICOC shall be full- or part-time
employees of the institute and shall meet the following
criteria:(A) Mandatory Chairperson Criteria(i) Documented history in successful stem cellresearch or other vital research opportunity in therapy
development or therapy delivery advocacy.
(ii) Experience with state and federal legislative
processes that must include some experience withmedical legislative approvals of standards and/or
funding.
(iii) Qualiﬁed for appointment pursuant to paragraph(3), (4), or (5) of subdivision (a).
(iv) Cannot be concurrently employed by or on leavefrom any prospective grant or loan recipient
institutions in California.
(B) Additional Criteria for Consideration:(i) Experience with governmental agencies
institutions (either executive or board position).

or(ii) Experience with the process of establishinggovernment standards and procedures.
(iii) Legal experience with the legal review of proper
governmental authority for the exercise of government
agency or government institutional powers.
(iv) Direct
ﬁnancing.

knowledge

andexperience

in

bond

The vice chairperson shall satisfy clauses (i), (iii), and(iv) of subparagraph (A). The vice chairperson shall beselected from among individuals who have attributesand experience complementary to those of thechairperson, preferably covering the criteria notrepresented by the chairperson’s credentials andexperience.
(b) Appointment of ICOC Members(1) All appointments shall be made within 40 days ofthe effective date of this act. In the event that any of
the appointments are not completed within thepermitted timeframe, the ICOC shall proceed tooperate with the appointments that are in place,provided that at least 60 percent of the appointments
have been made.
(2) Forty-ﬁve days after the effective date of themeasure adding this chapter this act, the Controller
and the Treasurer, or if only one is available within 45
days, the other shall convene a meeting of theappointed members of the ICOC to elect a chairperson
and vice chairperson from among the individuals
nominated by the constitutional ofﬁcers pursuant toparagraph (6) (7) of subdivision (a).
(c) ICOC Member Terms of Ofﬁce(1) The members appointed pursuant to paragraphs(1), (3), (4), and (5), and (6) of subdivision (a) shall94 | Text of Proposed Bond

serve eight-year terms, and all other members shallserve six-year terms. Members shall serve a maximumof two terms, unless earlier removed pursuant toparagraph (5).
(2) If a vacancy occurs within a term, the appointing
authority shall appoint a replacement member within
30 90 days to serve the remainder of the term.
(3) When a term expires, the appointing authority
shall appoint a member within 30 90 days. ICOC
members shall continue to serve until theirreplacements are appointed.
(4) Notwithstanding paragraph (1), the appointing
authority may replace a member, other than thechairperson or vice chairperson, who has served, as ofthe effective date of the act adding this paragraph, atleast half of the member’s current term, by appointing
a new member, who shall be eligible to serve afull term. These appointments shall be made within
90 days of the effective date of the initiative adding
this paragraph.
(5) The ICOC may, by a vote of 60 percent of aquorum, recommend the removal of a member by themember’s appointing authority, or in the case of thechairperson and the vice chairperson, the nominating
authority or nominating authorities, if more than one
constitutional ofﬁcer nominated the chairperson orvice chairperson. The appointing authority or
nominating authority or authorities in the case of thechairperson and vice chairperson, shall have theauthority to remove the member, chairperson, or vicechairperson, respectively, upon receipt of the ICOC’s
recommendation. If more than one constitutionalofﬁcer nominated the chairperson or vice chairperson,
each of them must agree in order to remove thechairperson or vice chairperson.
SEC. 10. Section 125290.30 of the Health and
Safety Code is amended to read:
125290.30.
Standards

Public and Financial Accountability(a) Annual Public Report
The institute shall issue an annual report to the publicwhich sets forth its activities, grants awarded, grants
in progress, research accomplishments, and future
program directions. Each annual report shall include,
but not be limited to, the following: the number anddollar amounts of research and facilities grants; thegrantees for the prior year; the institute’s
administrative expenses; an assessment of theavailability of funding for stem cell research fromsources other than the institute; a summary of
research ﬁndings, including promising new researchareas; an assessment of the relationship between theinstitute’s grants and the overall strategy of its
research program; and a report of the institute’s
strategic research and ﬁnancial plans.

TEXT OF PROPOSED BONDPROPOSITION 14 CONTINUED(b) Independent Financial Audit for Review byController
The institute shall annually commission an
independent ﬁnancial audit of its activities from acertiﬁed public accounting ﬁrm, which shall be
provided to the Controller, who shall review the audit
and annually issue a public report of that review.
(c) A performance audit shall be commissioned by theinstitute every three years beginning with the audit forthe 2010–11 ﬁscal year. The performance audit,
which may be performed by the Bureau of State
Audits, shall examine the functions, operations,management systems, and policies and procedures of
the institute to assess whether the institute isachieving economy, efﬁciency, and effectiveness inthe employment of available resources. The
performance audit shall be conducted in accordancewith government auditing standards, and shall include
a review of whether the institute is complying with
ICOC policies and procedures. The performance audit
shall not be required to include a review of scientiﬁc
performance. The ﬁrst performance audit shall
include, but not be limited to, all of the following:(1) The ICOC shall hold at least two four public
meetings per year, one of which will be designated as
the institute’s annual meeting. The ICOC may holdadditional meetings as it determines are necessary or
appropriate.
(2) The Bagley-Keene Open Meeting Act, Article 9(commencing with Section 11120) of Chapter 1 ofPart 1 of Division 3 of Title 2 of the Government Code,shall apply to all meetings of the ICOC, except asotherwise provided in this section. The ICOC shallaward all grants, loans, and contracts in public
meetings and shall adopt all governance, scientiﬁc,medical, and regulatory standards in public meetings.
(3) The ICOC may conduct closed sessions aspermitted by the Bagley-Keene Open Meeting Act,
under Section 11126 of the Government Code. In
addition, the ICOC may conduct closed sessions whenit meets to consider or discuss:(A) Matters involving information relating to patientsor medical subjects, the disclosure of which would
constitute an unwarranted invasion of personalprivacy.

(d) All administrative costs of the audits required bysubdivisions (b) and (c) shall be paid by the institute.

(B) Matters involving conﬁdential intellectual property
or work product, whether patentable or not, including,but not limited to, any formula, plan, pattern, process,tool, mechanism, compound, procedure, production
data, or compilation of information, which is notpatented, which is known only to certain individuals
who are using it to fabricate, produce, or compoundan article of trade or a service having commercial
value and which gives its user an opportunity to obtaina business advantage over competitors who do notknow it or use it.

(e) Citizen’s
Committee(C) Matters involving prepublication,scientiﬁc research or data.

(1) Policies and procedures for the issuance ofcontracts and grants and a review of a representative
sample of contracts, grants, and loans executed by
the institute.
(2) Policies and procedures relating to the protection
or treatment of intellectual property rights associatedwith research funded or commissioned by theinstitute.

Financial

Accountability

Oversight

There shall be a Citizen’s Financial Accountability
Oversight Committee chaired by the Controller. This
committee shall review the annual ﬁnancial audit, theController’s report and evaluation of that audit, andthe ﬁnancial practices of the institute. The Controller,
the Treasurer, the President pro Tempore of the
Senate, the Speaker of the Assembly, and the
Chairperson of the ICOC shall each appoint a publicmember of the committee. Committee members shallhave medical or patient advocacy backgrounds andknowledge of relevant ﬁnancial matters. The
committee shall provide recommendations on theinstitute’s ﬁnancial practices and performance. The
Controller shall provide staff support. The committee
shall hold a public meeting, with appropriate notice,
and with a formal public comment period. The
committee shall evaluate public comments andinclude appropriate summaries in its annual report.
The ICOC shall provide funds for all costs associatedwith the per diem expenses of the committee
members and for publication of the annual report.
(f) Public Meeting Laws

14

conﬁdential(D) Mattersconcerningtheappointment,
employment,
performance,compensation,ordismissal of institute ofﬁcers and employees. Action
on compensation of the institute’s ofﬁcers andemployees shall only be taken in open session.
(4) The meeting required by paragraph (2) ofsubdivision (b) of Section 125290.20 shall bedeemed to be a special meeting for the purposes ofSection 11125.4 of the Government Code.
(g) Public Records(1) The California Public Records Act, Article 1(commencing with Section 6250) of Chapter 3.5 ofDivision 7 of Title 1 of the Government Code, shallapply to all records of the institute, except asotherwise provided in this section.
(2) Nothing in this section shall be construed torequire disclosure of any records that are any of thefollowing:(A) Personnel, medical, or similar ﬁles, the disclosureof which would constitute an unwarranted invasion of
personal privacy.
Text of Proposed Bond |95

TEXT OF PROPOSED BOND

14(B) Records containing or reﬂecting conﬁdential
intellectual property or work product, whether
patentable or not, including, but not limited to, any
formula, plan, pattern, process, tool, mechanism,compound, procedure, production data, or compilationof information, which is not patented, which is known
only to certain individuals who are using it tofabricate, produce, or compound an article of trade ora service having commercial value and which gives its
user an opportunity to obtain a business advantage
over competitors who do not know it or use it.
(C) Prepublication scientiﬁc working papers or
research data, including, but not limited to,applications and progress reports.
(3) The institute shall include, in all meeting minutes,
a summary of vote tallies and disclosure of each board
member’s votes and recusals on all action items.
(h) Competitive Bidding(1) The institute shall, except as otherwise provided
in this section, be governed by the competitive
bidding requirements applicable to the University ofCalifornia, as set forth in Chapter 2.1 (commencing
with Section 10500) of Part 2 of Division 2 of the
Public Contract Code.
(2) For all institute contracts, the ICOC shall follow
the procedures required of the Regents by Chapter
2.1 (commencing with Section 10500) of Part 2 ofDivision 2 of the Public Contract Code with respect tocontracts let by the University of California.
(3) The requirements of this section shall not beapplicable to grants or loans approved by the ICOC.
(4) Except as provided in this section, the Public
Contract Code shall not apply to contracts let by theinstitute.
(i) Conﬂicts of Interest(1) The Political Reform Act, Title 9 (commencing
with Section 81000) of the Government Code, shallapply to the institute and to the ICOC, except asprovided in this section and in subdivision (e) of
Section 125290.50.
(A) No member of the ICOC shall make, participate inmaking, or in any way attempt to use his or her ofﬁcial
position to inﬂuence a decision to approve or award a
grant, loan, or contract to his or her employer, but amember may participate in a decision to approve oraward a grant, loan, or contract to a nonproﬁt an entity
in the same ﬁeld as his or her employer.
(B) A member of the ICOC may participate in adecision to approve or award a grant, loan, or contract
to an entity for the purpose of research involving a
disease from which a member or his or her immediatefamily suffers or in which the member has an interest
as a representative of a disease advocacy organization.
(C) The adoption of standards, including, but notlimited to, strategic plans, concept plans, and

96 | Text of Proposed BondPROPOSITION 14 CONTINUED

research budgets, is not a decision subject to thissection.
(2) Service as a member of the ICOC by a member ofthe faculty or administration of any system of the
University of California shall not, by itself, be deemed
to be inconsistent, incompatible, in conﬂict with, or
inimical to the duties of the ICOC member as amember of the faculty or administration of any systemof the University of California and shall not result in
the automatic vacation of either such ofﬁce. Service
as a member of the ICOC by a representative or
employee of a disease advocacy organization, anonproﬁt academic and research institution, or a life
science commercial entity shall not be deemed to beinconsistent, incompatible, in conﬂict with, or
inimical to the duties of the ICOC member as arepresentative or employee of that organization,
institution, or entity.
(3) Section 1090 of the Government Code shall not
apply to any grant, loan, or contract made by the ICOC
except where both of the following conditions are met:(A) The grant, loan, or contract directly relates toservices to be provided by any member of the ICOC or
the entity the member represents or ﬁnancially
beneﬁts the member or the entity he or she represents.
(B) The member fails to recuse himself or herself
from making, participating in making, or in any way
attempting to use his or her ofﬁcial position toinﬂuence a decision on the grant, loan, or contract.
(j) Patent Royalties and License Revenues Paid to theState of California(1) The ICOC shall establish standards that requirethat all grants and loan awards be subject tointellectual property agreements that balance theopportunity of the State of California to beneﬁt fromthe patents, royalties, and licenses that result frombasic research, therapy development, and clinical
trials with the need to ensure that essential medical
research is not unreasonably hindered by theintellectual property agreements. All royalty revenues
received through the intellectual property agreements
established pursuant to this subdivision shall bedeposited into an interest-bearing account in the
General Fund, and to the extent permitted by law, theamount so deposited and interest thereon shall beappropriated for the purpose of offsetting the costs ofproviding treatments and cures arising from institutefunded research to California patients who haveinsufﬁcient means to purchase such treatment or
cure, including the reimbursement of patient-qualiﬁed
costs for research participants.
(2) These standards shall include, at a minimum, arequirement that CIRM grantees, other than loan
recipients and facilities grant recipients, share a
fraction of the revenue they receive from licensing or
self-commercializing an invention or technology thatarises from research funded by CIRM, as set forth

TEXT OF PROPOSED BOND
below. AII revenues received pursuant to thisparagraph or regulations adopted to implement thisparagraph shall be deposited in the General Fund foruse consistent with Section 202(c)(7) of Title 35 of
the United States Code, if applicable.
(A) (i) A grantee that licenses an invention or
technology that arises from a research program funded
by CIRM, regardless of the number of grants awarded
to that research program, shall pay 25 percent of therevenues it receives in excess of ﬁve hundred
thousand dollars ($500,000), in the aggregate, to theGeneral Fund. The threshold amount of ﬁve hundred
thousand dollars ($500,000) shall be adjusted
annually by a multiple of a fraction, the denominatorof which is the Consumer Price Index, All Urban
Consumers, All Items (San Francisco-Oakland-San
Jose; 1982–84=100) as prepared by the Bureau ofLabor Statistics of the United States Department ofLabor and published for the month of October 2009,
and the numerator of which is that index published forthe month in which the grantee accepts the grant. Forawards made on or after November 5, 2020, thethreshold amount of ﬁve hundred thousand dollars($500,000) shall be adjusted annually by a multipleof a fraction, the denominator of which is theConsumer Price Index, All Urban Consumers, All
Items
(San
Francisco-Oakland-San
Jose;
1982–84=100) as prepared by the Bureau of Labor
Statistics of the United States Department of Labor
and published for the month of October 2020, andthe numerator of which is that index published for themonth in which the grantee accepts the grant.
(ii) If funding sources other than CIRM directly
contributed to the development of the invention or
technology, then the return to the General Fund shallbe calculated as follows: The amount of CIRM funding
for the invention or technology shall be divided by the
total of funding provided by all sources, and thatfraction shall be multiplied by 25. That numeral is thepercentage due to the General Fund.
(B) (i) A grantee that self-commercializes a productthat results from an invention or technology that arises
from research funded by CIRM shall pay an amount to
the General Fund equal to three times the total
amount of the CIRM grant or grants received by the
grantee in support of the research that contributed tothe creation of the product. The rate of payback of theroyalty shall be at a rate of 3 percent of the annual net
revenue received by the grantee from the product.
(ii) In addition to the payment required by clause (i),the ﬁrst time that net commercial revenues earned by
the grantee from the product exceed two hundred ﬁfty
million dollars ($250,000,000) in a calendar year,
the grantee shall make a one-time payment to theGeneral Fund equal to three times the total amount of
the grant or grants awarded by CIRM to the grantee insupport of the research that contributed to thecreation of the product.

PROPOSITION 14 CONTINUED(iii) In addition to the payments required by clauses(i) and (ii), the ﬁrst time that net commercial revenues
earned by the grantee from the product exceed ﬁve
hundred million dollars ($500,000,000) in a calendar
year, the grantee shall make an additional one-time
payment to the General Fund equal to three times thetotal amount of the grant or grants awarded by ClRM
to the grantee in support of the research that
contributed to the creation of the product.

14(iv) In addition to the payments required by clauses(i), (ii), and (iii), the ﬁrst time that net commercial
revenues earned by the grantee from the productequal or exceed ﬁve hundred million dollars($500,000,000) in a calendar year, the grantee shall
pay the General Fund 1 percent annually of netcommercial revenue in excess of ﬁve hundred million
dollars ($500,000,000) for the life of any patent
covering the invention or technology, if the grantee
patented its invention or technology and received a
CIRM grant or grants amounting to more than ﬁvemillion dollars ($5,000,000) in support of theresearch that contributed to the creation of the
product.
(3) The ICOC shall have the authority to adopt
regulations to implement this subdivision. The ICOC
shall also have the authority to modify the formulas
speciﬁed in subparagraphs (A) and (B) of paragraph(2) through regulations if the ICOC determines
pursuant to paragraph (1) that a modiﬁcation isrequired either in order to ensure that essential
medical research, including, but not limited to,therapy development and the broad delivery oftherapies to patients, is not unreasonably hindered, or
to ensure that the State of California has anopportunity to beneﬁt from the patents, royalties, andlicenses that result from basic research, therapy
development, and clinical trials. The ICOC shall notify
the appropriate ﬁscal and policy committees of theLegislature 10 calendar days before exercising its
authority to vote on the modiﬁcation of the formulas
speciﬁed in subparagraphs (A) and (B) of paragraph(2). The amendments made to this subdivision are notintended to affect the institute’s authority to modify
the provisions set forth in this subdivision pursuant tothis paragraph, including, but not limited to, any
modiﬁcations that occurred prior to the effective dateof the initiative amending this subdivision.
(k) Preference for California Suppliers
The ICOC shall establish standards to ensure that
grantees purchase goods and services from California
suppliers to the extent reasonably possible, in a goodfaith effort to achieve a goal of more than 50 percent
of such purchases from California suppliers.
(l) Additional Accountability Requirements
To assure strict accountability and transparency,
including rigorous conﬂict of interest rules, ethicalresearch and treatment standards, and independent
Text of Proposed Bond |97

TEXT OF PROPOSED BOND

14

ﬁnancial audits, every four years the ICOC shallupdate, at its discretion, the standards relating to
conﬂict of interest rules, ethical research andtreatment, and independent ﬁnancial audits, to begenerally aligned with standards adopted by the
National Academy of Sciences to the extent that thosestandards are consistent with constitutional andstatutory requirements applicable to the institute.
SEC. 11. Section 125290.35 of the Health and
Safety Code is amended to read:
125290.35.
Standards

Medical and Scientiﬁc Accountability(a) Medical Standards
In order to avoid duplication or conﬂicts in technicalstandards for scientiﬁc and medical research, withalternative state programs, the institute will develop
its own scientiﬁc and medical standards to carry out
the speciﬁc controls and intent of the act,
notwithstanding subdivision (b) of Section Sections
125300, Sections 125320, 125118, 125118.5,
125119, 125119.3, and 125119.5, or any othercurrent or future state laws or regulations dealing withthe study and research of pluripotent stem cells and/or progenitor cells, or other vital research
opportunities, except Section 125315. The ICOC, its
working committees, and its grantees shall begoverned solely by the provisions of this act in theestablishment of standards, the award of grants, andthe conduct of grants awarded pursuant to this act.
(b) The ICOC shall establish standards as follows:(1) Informed Consent

PROPOSITION 14 CONTINUED

friends, and professional
supportive care.

caregivers

providing(4) (5) Patient Privacy Laws
Standards to assure compliance with state and federal
patient privacy laws.
(5) (6) Limitations on Payments for Cells
Standards limiting payments for the purchase of stem
cells or stem cell lines to reasonable payment for theremoval, processing, disposal, preservation, quality
control, storage, transplantation, or implantation orlegal transaction costs or other administrative costs
associated with these medical procedures andspeciﬁcally including any required payments for
medical or scientiﬁc technologies, products, orprocesses for royalties, patent, or licensing fees orother costs for intellectual property.
(6) (7) Time Limits for Obtaining Cells
Standards setting a limit on the time during whichcells may be extracted from blastocysts, which shallinitially be 8 up to 12 days after cell division begins,not counting any time during which the blastocysts
and/or cells have been stored frozen.
(8) Standards for Genetic Medical Treatments andResearch
Standards for research involving genetic medical
treatments that shall, in the ICOC’s discretion,
generaIly be based on the standards adopted by the
National Academy of Sciences.
SEC. 12. Section 125290.40 of the Health and
Safety Code is amended to read:Standards for obtaining the informed consent ofresearch donors, patients, or participants, which
initially shall be generally based on the standards inplace on January 1, 2003, for all research funded by
the National Institutes of Health, with modiﬁcations
to adapt to the mission and objectives of the institute.

125290.40.

(2) Controls on Research Involving Humans(c) Make ﬁnal decisions on research standards andgrant awards in California across the research andtherapy development and delivery spectrum, fromstem cell discovery research and early development toclinical trials and therapy delivery.

Standards for the review of research involving humansubjects which initially shall be generally based on
the Institutional Review Board standards promulgatedby the National Institutes of Health and in effect onJanuary 1, 2003, with modiﬁcations to adapt to themission and objectives of the institute.
(3) Prohibition on Compensation
Standards prohibiting compensation to researchdonorsor
participants,
whilepermitting
reimbursement of expenses.
(4) Permitted Reimbursement
Standards permitting reimbursement for expenses,
including, but not limited to, medical expenses andlodging, meals, and travel expenses, for research
participants and caregivers in order to ensure
functional access to clinical trials. For purposes ofthis paragraph, “caregivers” includes family members,
98 | Text of Proposed BondICOC Functions

The ICOC shall perform the following functions:(a) Oversee the operations of the institute.
(b) Develop annual and long-term strategic researchand ﬁnancial plans for the institute.

(d) Ensure the completion of an annual ﬁnancial
audit of the institute’s operations.
(e) Issue public reports on the activities of theinstitute.
(f) Establish Develop and implement programs toenhance patient access to affordable stem cell andrelated treatments and cures through public hospitals
and clinics and establish policies regarding
intellectual property rights arising from research
funded by the institute.
(g) Establish and oversee the institute’s research,
therapy development, and therapy delivery programs,
including, but not limited to, the Alpha Stem CellTEXT OF PROPOSED BOND
Clinics and Community Care Centers of Excellence,
training and fellowship, and shared research laboratory
programs.
(h) Establish and oversee the development of policies
and programs to help make treatments and curesarising from institute-funded research available andaffordable for California patients, through engagementwith health care providers, research and therapy
development institutions, businesses, governmental
agencies, philanthropists, foundations, and patientadvocacy groups, and based on recommendations
made by the Treatments and Cures Accessibility andAffordability Working Group.
(g) (i) Establish rules and guidelines for the operationof the ICOC and its working groups.
(h) (j) Perform all other acts necessary or appropriate
in the exercise of its power, authority, and jurisdiction
over the institute.
(i) (k) Select members of the working groups.
(j) (l) Adopt, amend, and rescind rules andregulations to carry out the purposes and provisions of
this chapter, and to govern the procedures of the
ICOC. Except as provided in subdivision (k) (m), theserules and regulations shall be adopted in accordancewith the Administrative Procedure Act (Government
Code, Title 2, Division 3, Part 1, Chapter 4.5 3.5,
Sections 11371 11340 et seq.).
(k) (m) Notwithstanding the Administrative Procedure
Act (APA), and in order to facilitate the immediate
commencement of research covered by this chapter,the ICOC may adopt interim regulations withoutcompliance with the procedures set forth in the APA.
The interim regulations shall remain in effect for
270 days unless earlier superseded by regulations
adopted pursuant to the APA. For purposes ofsubdivision (l), requests for applications, program
announcements, and notices of award shall not be
considered regulations.
(l) (n) Request the issuance of bonds from the
California Stem Cell Research and Cures FinanceCommittee and loans from the Pooled Money
Investment Board.
(m) (o) May annually modify its funding and ﬁnanceprograms to optimize the institute’s ability to achieve
the objective that its activities be revenue-positive for
the State of California during its ﬁrst ﬁve years ofoperation without jeopardizing the progress of its core
medical and scientiﬁc research program.
(n) (p) Notwithstanding Section 11005 of theGovernment Code, accept additional revenue and realand personal property, including, but not limited to,gifts, royalties, interest, and appropriations that may
be used to supplement annual research grant funding
and the operations of the institute.
(o) Under the guidance of the ICOC, the instituteshall create a succession plan addressing changes in

PROPOSITION 14 CONTINUED

leadership of both the institute and the ICOC designed
to minimize disruption and adverse impacts to theactivities of the institute. A copy of the succession
plan shall be transmitted to the Governor, Controller,
and the Legislature within 30 days of its completion.
The succession plan should include, but is not limitedto:(1) An assessment
beginning a search.

ofleadership

needs

14

before(2) An outline of succession procedures.
(3) Strategies
transfer.

toensuresuccessful

knowledge(q) Subject to the restrictions set forth in this article,
develop conﬂict of interest standards, and at its
discretion, consult with the National Academy of
SciencesandtheScientiﬁcandMedical
Accountability Standards Working Group, for theconsideration of funding awards based on bestpractices established by the National Academy of
Sciences to prevent conﬂicts of interest in the award
of research funding and update those standards noless than every four years to be, at the ICOC’s
discretion, generally aligned with standards adopted
by the National Academy of Sciences, subject to theconstitutional and statutory requirements applicableto the institute.
SEC. 13. Section 125290.45 of the Health and
Safety Code is amended to read:
125290.45.

ICOC Operations(a) Legal Actions and Liability(1) The institute may sue and be sued.
(2) Based upon ICOC standards, institute grantees
shall indemnify or insure and hold the instituteharmless against any and all losses, claims, damages,
expenses, or liabilities, including attorneys’ fees,
arising from research conducted by the grantee
pursuant to the grant, and/or, in the alternative,
grantees shall name the institute as an additional
insured and submit proof of such insurance.
(3) Given the scientiﬁc, medical, and technical natureof the issues facing the ICOC, and notwithstanding
Section 11042 of the Government Code, the instituteis authorized to retain outside counsel when the ICOC
determines that the institute requires specialized
services not provided by the Attorney General’s ofﬁce.
(4) The institute may enter into any contracts or
obligations which are authorized or permitted by law.
(b) Personnel(1) The ICOC shall from time to time determine thetotal number of authorized employees for the institute,which number shall not exceed 70 employees (fulltime equivalent), excluding members of the working
groups and members of the ICOC, who shall not be
considered institute employees, and excluding up to
15 additional institute employees (full-time
Text of Proposed Bond |99

TEXT OF PROPOSED BOND

14

equivalent) to support the development of policies andprograms to help make treatments and cures arisingfrom institute-funded research available andaffordable for Californians. The cap on employees
shall not apply to employees funded through sources
other than bond proceeds or the General Fund. The
ICOC shall select a chairperson, vice chairperson, andpresident who shall exercise all of the powers
delegated to them by the ICOC. The following
functions apply to the chairperson, vice chairperson,and president:(A) The chairperson’s primary responsibilities are to
manage the ICOC agenda and workﬂow including all
evaluations and approvals of scientiﬁc and medical
working group grants, loans, facilities, and standards
evaluations, and to supervise all annual reports andpublic accountability requirements; to manage andoptimize the institute’s bond ﬁnancing plans andfunding cashﬂow plan; to interface with the California
Legislature, the United States Congress, the California
health care system, and the California public; tooptimize all ﬁnancial leverage opportunities for the
institute, including, without limitation, generating
matchingorsupplemental
funds
throughcollaborations with other states, nations, territories, or
institutions; and to lead negotiations for intellectual
property agreements, policies, and contract terms.
The chairperson shall also serve as a member of theTreatments and Cures Accessibility and Affordability
Working Group, the Scientiﬁc and Medical
Accountability Standards Working Group, and theScientiﬁc and Medical Research Facilities Working
Group and as an ex ofﬁcio member of the Scientiﬁcand Medical Research Funding Working Group. The
vice chairperson’s primary responsibilities are to
support the chairperson in all duties and to carry out
those duties in the chairperson’s absence.
(B) The president’s primary responsibilities are toserve as the chief executive of the institute; to recruit
the highest scientiﬁc and medical talent in the UnitedStates to serve the institute on its working groups; toserve the institute on its working groups; to direct
ICOC staff and participate in the process of supporting
all working group requirements to develop
recommendations on grants, loans, facilities, andstandards as well as to direct and support the ICOC
process of evaluating and acting on thoserecommendations, the implementation of all decisions
on these and general matters of the ICOC; to hire,
direct, and manage the staff of the institute; todevelop the budgets and cost control programs of theinstitute; to manage compliance with all rules andregulations of the ICOC, including the performance of
all grant recipients; and to manage and execute all
intellectual property agreements and any othercontracts pertaining to the institute or research it
funds.
(2) Each member of the ICOC except, the chairperson,
vice chairperson, and president the members

100 | Text of Proposed BondPROPOSITION 14 CONTINUED

appointed pursuant to paragraphs (3), (4), (5), and(6) of subdivision (a) of Section 125290.20, whoshall be compensated pursuant to paragraph (3), shallreceive a per diem of one hundred dollars ($100) perday (adjusted annually for cost of living) for each day
actually spent in the discharge of the member’s
duties, plus reasonable and necessary travel and otherexpenses incurred in the performance of the member’s
duties.
(3) The ICOC shall establish daily consulting rates
and expense reimbursement standards for themembers of all of its working groups, including themembers of the ICOC appointed pursuant toparagraphs (3), (4), (5), and (6) of subdivision (a) of
Section 125290.20. The daily consulting rate shall
include time spent in preparation for, and participationin, institute, working group, and ICOC meetings andshall
includecompensation
andexpensereimbursement for caregivers when necessary tofacilitate a member’s participation in a meeting as aresult of the member’s medical condition.
(4) Notwithstanding
Section
19825
of
the
Government Code, the ICOC shall set compensation
for the chairperson, vice chairperson, and president
and other ofﬁcers, and for the scientiﬁc, medical,
technical, and administrative staff of the institutewithin the range of compensation levels for executiveofﬁcers and scientiﬁc, medical, technical, andadministrative staff of medical schools within the
University of California system and the nonproﬁt
academic and research institutions described inparagraph (2) of subdivision (a) of Section
125290.20, and travel expense reimbursement rates
and moving and relocation expense limits.
SEC. 14. Section 125290.50 of the Health and
Safety Code is amended to read:
125290.50. Scientiﬁc
Groups—GeneralandMedicalWorking(a) The institute shall have, and there is hereby
established, three four separate scientiﬁc and medical
working groups as follows:(1) Scientiﬁc and Medical Research Funding Working
Group.
(2) Scientiﬁc and Medical Accountability Standards
Working Group.
(3) Scientiﬁc andWorking Group.

Medical(4) Treatments
and
Cures
Affordability Working Group.

Research

Facilities

Accessibilityand(b) Working Group Members(1) Appointments of scientiﬁc and medical working
group members shall be made by a majority vote of aquorum of the ICOC, within 30 days of the election
and appointment of the initial ICOC members. The
working group members’ terms shall be six years
except that, after the ﬁrst six-year terms, theTEXT OF PROPOSED BONDPROPOSITION 14 CONTINUED

members’ terms will be staggered so that one-third of
the members shall be elected for a term that expires
two years later, one-third of the members shall beelected for a term that expires four years later, andone-third of the members shall be elected for a termthat expires six years later. Subsequent terms are forsix years. Working group members may serve a
maximum of two consecutive terms, provided that the
ICOC may, by a two-thirds vote of a quorum, reappoint
non-ICOC working group members to serve more than
two consecutive terms.

(3) Because the working groups are purely advisoryand have no ﬁnal decisionmaking authority, membersof the working groups shall not be considered publicofﬁcials, employees, or consultants for purposes of the
Political Reform Act (Title 9 (commencing with
Section 81000) of the Government Code), Sections
1090 and 19990 of the Government Code, andSections 10516 and 10517 of the Public Contract
Code.

(2) Appointments of members of the Treatments andCures Accessibility and Affordability Working Groupshall be made by a majority vote of a quorum of the
ICOC, within 90 days of the effective date of theinitiative adding this paragraph. The working groupmembers’ terms shall be six years, and members may
serve a maximum of two consecutive terms, provided
that the ICOC may, by a two-thirds vote of a quorum,
reappoint non-ICOC working group members to serve
more than two consecutive terms.

All records of the working groups submitted as part of
the working groups’ recommendations to the ICOC for
approval shall be subject to the Public Records Act.
Except as provided in this subdivision, the working
groups shall not be subject to the provisions of Article
9 (commencing with Section 11120) of Chapter 1 ofPart 1 of Division 3 of Title 2 of the Government Code,or Article 1 (commencing with Section 6250) of
Chapter 3.5 of Division 7 of Title 1 of the Government
Code.

(3) The ICOC may appoint ad hoc voting members toeach working group as necessary to obtain expertisefor a particular expert review session, not to exceed
three members for any one expert review session.

SEC. 15. Section 125290.55 of the Health and
Safety Code is amended to read:(c) Working Group Meetings(a) Membership

Each scientiﬁc and medical working group shall holdat least four meetings per year, one of which shall be
designated as its annual meeting, except as otherwise
determined by the institute.

The Scientiﬁc and Medical Accountability Standards
Working Group shall have 19 members as follows:(d) Working Group Recommendations to the ICOC
Recommendations of each panel of the working
groups may be forwarded to the ICOC only by a vote ofa majority of a quorum of the members of each panel
for that working group. If 35 percent of the membersof any working group join together in a minority
position panel award scores in the funding range, aminority recommendation report, including a summaryof the strengths and weaknesses of the application
and a rebuttal to the majority recommendation, shall
may be submitted to the ICOC. The ICOC shallconsider the recommendations of the working groups
in making its decisions on applications for research
and facility grants and loan awards and in adopting
regulatory standards, policies, and programs. Eachworking group shall recommend to ICOC rules,
procedures, and practices for that working group.
(e) Conﬂict of Interest(1) The ICOC shall adopt conﬂict of interest rules,
based on standards applicable to members ofscientiﬁc review committees of the National Institutesof Health, to govern the participation of non-lCOC
working group members.
(2) The ICOC shall appoint an ethics ofﬁcer fromamong the staff of the institute.

14(f) Working Group Records

125290.55. Scientiﬁc and Medical Accountability
Standards Working Group(1) Five ICOC members from the 10 groups that focus
on disease-speciﬁc areas described in paragraphs (3),(4), and (5) of subdivision (a) of Section 125290.20
or from the members appointed pursuant to paragraph(6) of subdivision (a) of Section 125290.20.
(2) Nine scientists and clinicians nationallyrecognized in the ﬁeld of pluripotent and progenitor
cell research.
(3) Four medical ethicists.
(4) The Chairperson of the ICOC.
(b) Functions
The Scientiﬁc and Medical Accountability Standards
Working Group shall have the following functions:(1) To recommend to the ICOC scientiﬁc, medical,
and ethical standards.
(2) To recommend to the ICOC standards for all
medical, socioeconomic, and ﬁnancial aspects ofclinical trials and therapy delivery to patients,
including, among others, standards for safe andethical procedures for obtaining materials and cells
for research and clinical efforts for the appropriate
treatment of human subjects in medical research
consistent with paragraph (2) of subdivision (b) of
Section 125290.35, and to ensure compliance withpatient privacy laws.
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TEXT OF PROPOSED BOND

14

PROPOSITION 14 CONTINUED(3) To recommend to the ICOC modiﬁcation of thestandards described in paragraphs (1) and (2) asneeded.

authorize the Scientiﬁc and Medical Research
Funding Working Group to audit a grantee and forward
any recommendations for action to the ICOC.

(4) To make recommendations to the ICOC on theoversight of funded research to ensure compliancewith the standards described in paragraphs (1) and(2).

(7) Recommend its ﬁrst grant awards within 60 daysof the issuance of the interim standards.

(5) To advise the ICOC, the Scientiﬁc and Medical
Research Funding Working Group, and the Scientiﬁcand Medical Research Facilities Working Group, on an
ongoing basis, on relevant ethical and regulatory
issues.

Award recommendations shall be based upon acompetitive evaluation as follows:

SEC. 16. Section 125290.60 of the Health and
Safety Code is amended to read:
125290.60. Scientiﬁc
Funding Working GroupandMedicalResearch(a) Membership
The Scientiﬁc and Medical Research Funding Working
Group shall have at least 23 members as follows:(1) Seven ICOC members from the 10 12 diseaseadvocacy group members described in paragraphs (3),(4), and (5) of subdivision (a) of Section 125290.20
or from the members described in paragraph (6) of
subdivision (a) of Section 125290.20.
(2) At least 15 scientists nationally recognized in theﬁeld of stem cell research or other vital research
opportunities, 15 of whom shall be designated toserve on each expert review panel.
(3) The Chairperson of the ICOC.
(b) Functions
The Scientiﬁc and Medical Research Funding Working
Group shall perform the following functions:(1) Recommend to the ICOC interim and ﬁnal criteria,
standards, and requirements for considering funding
applications and for awarding research grants andloans.
(2) Recommend to the ICOC standards for thescientiﬁc and medical oversight of awards.
(3) Recommend to the ICOC any modiﬁcations of thecriteria, standards, and requirements described inparagraphs (1) and (2) above as needed.
(4) Review grant and loan applications based on thecriteria, requirements, and standards adopted by the
ICOC and make recommendations to the ICOC for theaward of research, therapy development, and clinical
trial, and therapy delivery grants and loans.
(5) Conduct peer group expert peer review andprogress oversight reviews of grantees to ensurecompliance with the terms of the award, and report to
the ICOC any recommendations for subsequent action.
(6) Recommend to the ICOC standards for theevaluation of grantees to ensure that they comply withall applicable requirements. Such standards shallmandate periodic reporting by grantees and shall102 | Text of Proposed Bond(c) Recommendations for Awards

A peer An expert peer review panel shall consist ofboth scientists and patient advocates. There shall be
15 scientists on a peer each expert peer review panel.
Only the scientist members of the Scientiﬁc andMedical Research Funding Working Group shall score
grant and loan award applications for scientiﬁc merit.
Such scoring shall be based on scientiﬁc merit inthree separate classiﬁcations—research, therapy
development, and clinical trials, on criteria including
the following:(1) A demonstrated record of achievement in theareas of pluripotent stem cell and progenitor cellbiology and medicine, unless the research isdetermined to be a vital research opportunity or inother vital research opportunities.
(2) The quality of the research proposal, the potential
for achieving signiﬁcant research, or clinical results,
the timetable for realizing such signiﬁcant results, theimportance of the research objectives, and theinnovativeness of the proposed research.
(3) In order to ensure that institute funding does not
duplicate or supplant existing funding, a high priority
shall be placed on funding pluripotent stem cell andprogenitor cell research that cannot, or is unlikely to,receive timely or sufﬁcient federal funding,unencumbered by limitations that would impede theresearch. In this regard, other research categories
funded by the National Institutes of Health shall not
be funded by the institute, unless such researchfunding is not timely or sufﬁcient.
(4) Notwithstanding paragraph (3), other scientiﬁcand medical research and technologies and/or any
stem cell research proposal not actually funded by theinstitute under paragraph (3) may be funded by theinstitute if at least two-thirds of a quorum of themembers of the Scientiﬁc and Medical Research
Funding Working Group recommend to the ICOC, or if
a majority of a quorum of the members of the ICOC
determine, that such a research proposal is a vital
research opportunity.
SEC. 17. Section 125290.70.5 is added to the
Health and Safety Code, to read:
125290.70.5.
Funding

Appropriation

andAllocationof(a) Moneys in the California Stem Cell Research andCures Fund shall be allocated as follows:

TEXT OF PROPOSED BOND
(1) (A) No less than 95.5 percent of the proceeds ofthe bonds authorized pursuant to Section
125291.110, net of bond proceeds allocated topurposes described in paragraphs (4) and (5) of
subdivision (a) of Section 125291.100, shall be used
for grants and grant oversight as provided in thischapter.
(B) Not less than 98 percent of the proceeds of bonds
used for grants shall be used for research, therapy
development, and therapy delivery grants, with nomore than the following amounts, as stipulated below,
to be committed during the ﬁrst 10 years following
the effective date of the initiative adding thissubparagraph, with each year’s funding commitments
to be advanced over a period of one to seven years,
except that any such funds that are not committed
may be carried over to one or more following years.
The maximum amount of research funding to beallocated annually is as follows: year 1, 11 percent;year 2, 11 percent; years 3 through 10, 9 percent;and year 11 and each year thereafter, 6 percent
cumulatively. To accomplish the goals of Section
125290.75, up to 2 percent of the amount available
for grants may be used for research consulting in
support of access to, and the affordability of,treatments and cures arising from institute-funded
research and therapy development and delivery, as
determined by the governing board of the institutebased on the recommendations of the Treatments andCures Accessibility and Affordability Working Groupand the president.
(C) Not more than 3 percent of the proceeds of bonds
authorized by Section 125291.110 may be used by
the institute for research and research facilities
implementation costs, including the development,
administration, and oversight of the grant-making
process.
(2) (A) Not more than 3.5 percent of the proceeds ofthe bonds authorized pursuant to Section
125291.110 shall be used for the costs of generaladministration of the institute.
(B) Not more than 1 percent of the proceeds of thebonds authorized pursuant to Section 125291.110
may be used by the institute to pay for the costs of up
to 15 full-time employees over 10 to 15 or more
years, including, but not limited to, administrative
support, facilities costs, salary, beneﬁts, travel
reimbursement, and meeting costs, to support thework of the institute to develop policies and programs
to help Californians obtain access to human clinical
trials, therapies, mitigating treatments, and curesarising from institute-funded research and to promote
the accessibility and affordability of human clinical
trials, treatments, and cures for Californians.
(3) In any single year, any new research funding to
any single grantee for any program year is limited tono more than 1 percent of the total bonds authorized
pursuant to Section 125291.110. This limitation

PROPOSITION 14 CONTINUED

shall be considered separately for each new proposal
without aggregating any prior year approvals that may
fund research activities. This requirement shall be
determinative, unless 65 percent of a quorum of the
ICOC approves a higher limit for that grantee.

14(4) Up to 1.5 percent of the proceeds of the bonds
authorized pursuant to Section 125291.110, net ofcosts described in paragraphs (2), (4), and (5) of
subdivision (a) of Section 125291.100, shall beallocated for grants to build, equip, or fund operationsof Community Care Centers of Excellence and up to
one-half of 1 percent shall be allocated to build or
equip shared labs, which are intended to be
operational in the ﬁrst ﬁve years following the effective
date of the initiative adding this section. Funding
received by a grantee from an institute award forconstruction shall be subject to prevailing wage laws.
(5) The institute shall limit indirect costs to no morethan 25 percent of a research award, excluding
amounts included in a facilities award, except that theindirect cost limitation may be increased by thatamount by which the grantee provides matching funds
in excess of 20 percent of the grant amount.
(b) The institute’s funding schedule is designed tocreate a positive tax revenue stream for the State ofCalifornia during the ﬁrst ﬁve calendar years following
the voters’ approval of the initiative adding thissection, without drawing funds from the state GeneralFund for principal and interest payments for thoseﬁrst ﬁve calendar years.
(c) The institute shall allocate at least one billion ﬁve
hundred million dollars ($1,500,000,000) of theproceeds of the bonds authorized pursuant to Section
125291.110 to make grants for research, therapy
development, and therapy delivery involving diseases
and conditions of the brain and central nervous
system, including, but not limited to, Alzheimer’s
disease, Parkinson’s disease, stroke, dementia,
epilepsy, schizophrenia, depression, traumatic brain
injury, brain cancer, and autism, and for grantoversight and general administration costs associatedwith these grants and loans, subject to the limits in
subparagraph (C) of paragraph (1) and subparagraph(A) of paragraph (2) of subdivision (a).
(d) The allocation of the proceeds of bonds authorized
pursuant to Section 125291.30 shall continue to be
governed by Section 125290.70.
SEC. 18. Section 125291.15 of the Health and
Safety Code is amended to read:
125291.15. As used in this article, the California
Stem Cell Research and Cures Bond Act of 2004, thefollowing terms have the following meaning:(a) “Act” means the California Stem Cell Researchand Cures Bond Act constituting Chapter 3(commencing with Section 125290.10) of Part 5 ofDivision 106.
Text of Proposed Bond |103

TEXT OF PROPOSED BOND

14(b) “Board” or “institute” means the California
Institute for Regenerative Medicine designated inaccordance with subdivision (b) of Section
125291.40.
(c) “Committee” means the California Stem Cell
Research and Cures Finance Committee createdpursuant to subdivision (a) of Section 125291.40.
(d) “Fund” means the California Stem Cell Researchand Cures Fund created pursuant to Section
125291.25.
(e) “Interim debt” means any interim loans pursuant
to subdivision (b) of Section 125290.70, andSections 125291.60 and 125291.65, bondanticipation notes or commercial paper notes issued
to make deposits into the fund and which will be paid
from the proceeds of bonds issued pursuant to thisarticle.
SEC. 19. Section 125291.35 of the Health and
Safety Code is amended to read:
125291.35. The bonds authorized by this article
shall be prepared, executed, issued, sold, paid, andredeemed as provided in the State General Obligation
Bond Law (Chapter 4 (commencing with Section
16720) of Part 3 of Division 4 of Title 2 of theGovernment Code), and all of the provisions of thatlaw, as amended from time to time, except
subdivisions (a) and (b) of Section 16727 of theGovernment Code apply to the bonds and to thisarticle and are hereby incorporated in this article asthough set forth in full in this article.
SEC. 20. Section 125291.60 of the Health and
Safety Code is amended to read:
125291.60. The For the purpose of carrying out thisarticle, the Director of Finance may authorize thewithdrawal from the General Fund of an amount oramounts, not to exceed the amount of the unsold
bonds that have been authorized by the committee, tobe sold for the purpose of carrying out this article,
excluding any refunding bonds authorized pursuant to
Section 125291.75, less any amount loaned pursuant
to Section 125291.65 and not yet repaid, and any
amount withdrawn from the General Fund pursuant tothis section and not yet returned to the General Fund.
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 ofcarrying out this article.
SEC. 21. Section 125291.65 of the Health and
Safety Code is amended to read:
125291.65. The institute may request the Pooled
Money Investment Board to make a loan from thePooled Money Investment Account in accordance with
Section 16312 of the Government Code for the

104 | Text of Proposed BondPROPOSITION 14 CONTINUED

purposes of carrying out this article, excluding any
refunding bonds authorized pursuant to Section
125291.75, less any amount loaned pursuant to thissection and not yet repaid, and any amount withdrawn
from the General Fund pursuant to Section
125291.60 and not yet returned to the General Fund.
The amount of the request shall not exceed theamount of the unsold bonds that the committee, byresolution, has authorized to be sold for the purposeof carrying out this article. The institute shall execute
any documents required by the Pooled Money
Investment Board to obtain and repay the loan. Anyamounts loaned shall be deposited in the fund to beallocated by the institute in accordance with thisarticle.
SEC. 22. Section 125291.70 of the Health and
Safety Code is amended to read:
125291.70. All money deposited in the fund that isderived from premium and accrued interest on bonds
sold shall be reserved in the fund and shall beavailable for transfer to the General Fund as a credit
to expenditures for bond interest, except that amounts
derived from premium may be reserved and used to
pay costs of issuance prior to any transfer to theGeneral Fund.
SEC. 23. Section 125291.75 of the Health and
Safety Code is amended to read:
125291.75. The bonds issued and sold pursuant tothis article may be refunded in accordance with
Article 6 (commencing with Section 16780) of
Chapter 4 of Part 3 of Division 4 of Title 2 of theGovernment Code, which is a part of the State General
Obligation Bond Law. Approval by the voters of thestate for the issuance of the bonds described in thisarticle includes the approval of the issuance of any
bonds issued to refund any bonds originally issued
under this article or any previously issued refunding
bonds. Any bond refunded with the proceeds ofrefunding bonds as authorized by this section may belegally defeased to the extent permitted by law in themanner and to the extent set forth in the resolution,as amended from time to time, authorizing thatrefunded bond.
SEC. 24. Article 2.5 (commencing with Section
125291.90) is added to Chapter 3 of Part 5 ofDivision 106 of the Health and Safety Code, to read:
Article 2.5. California Stem Cell Research,
Treatments, and Cures Bond Act of 2020
125291.90. This article shall be known, and may
be cited, as the California Stem Cell Research,
Treatments, and Cures Bond Act of 2020.
125291.95. As used in this article, the following
terms have the following meanings:(a) “Act” means the California Stem Cell Researchand Cures Act constituting this chapter, as amended

TEXT OF PROPOSED BOND
by the California Stem Cell Research, Treatments, andCures Initiative of 2020.
(b) “Board” or “institute” means the California
Institute for Regenerative Medicine designated inaccordance with subdivision (b) of Section
125291.120.
(c) “Committee” means the California Stem Cell
Research and Cures Finance Committee createdpursuant to subdivision (a) of Section 125291.40 anddesignated in accordance with subdivision (a) of
Section 125291.120.
(d) “Fund” means the California Stem Cell Research,
Treatments, and Cures Fund of 2020 created pursuant
to Section 125291.105.
(e) “Interim debt” means any interim loans pursuant
to Sections 125291.140 and 125291.145, bondanticipation notes, or commercial paper notes issued
to make deposits into the fund and that will be paid
from the proceeds of bonds issued pursuant to thisarticle.
125291.100. (a) Notwithstanding Section 13340
of the Government Code or any other provision of law,moneys in the fund are appropriated without regard toﬁscal years to the institute for the following purposes:(1) Making grants or loans to fund research andconstruct facilities for research, all as described inand pursuant to Section 125290.70.5.
(2) Paying general administrative costs of the institute(not to exceed 3.5 percent in accordance with
subparagraph (A) of paragraph (2) of subdivision (a) of
Section 125290.70.5).
(3) Paying the annual administration costs of any
interim debt or bonds after December 31 of the ﬁfth
full calendar year after this section takes effect.
(4) Paying the costs of issuing interim debt, paying
the annual administration costs of the interim debt
until and including December 31 of the ﬁfth fullcalendar year after this section takes effect, andpaying interest on interim debt, if such interim debt isincurred or issued on or prior to December 31 of theﬁfth full calendar year after this section takes effect.
(5) Paying the costs of issuing bonds, paying theannual administration costs of the bonds until andincluding December 31 of the ﬁfth full calendar year
after this section takes effect, and paying interest on
bonds that accrues on or prior to December 31 of theﬁfth full calendar year after this section takes effect,
except that such limitation does not apply to premium
and accrued interest as provided in Section
125291.150.
(b) Moneys in the fund or other proceeds of the saleof bonds authorized by this article may be used to pay
principal of, redemption price, including accrued
interest, or premium on any interim debt issued prior
to the initial issuance of bonds authorized by thisarticle. Moneys deposited in the fund from the

PROPOSITION 14 CONTINUED

proceeds of interim debt may be used to pay generaladministrative costs of the institute without regard to
the 3.5 percent limit set forth in paragraph (2) ofsubdivision (a), so long as such 3.5 percent limit issatisﬁed for each issue of bonds.

14(c) Repayment of principal and interest on any loans
made by the institute pursuant to this article shall bedeposited in the fund and used for the purposes ofSection 125290.70.5, including the institute’s
administrative costs, or for paying continuing costs of
the annual administration of outstanding bonds.
125291.105. The proceeds of interim debt andbonds issued and sold pursuant to this article shall bedeposited in the State Treasury to the credit of the
California Stem Cell Research and Cures Fund of
2020, which is hereby created in the State Treasury,
except to the extent that proceeds of the issuance ofbonds are used directly to repay interim debt.
125291.110. Bonds in the total amount of ﬁvebillion ﬁve hundred million dollars ($5,500,000,000),
not including the amount of any refunding bonds
issued in accordance with Section 125291.155, or asmuch thereof as is necessary, may be issued and soldto provide a fund to be used for carrying out the
purposes expressed in this article, to be used and soldfor carrying out the purposes of Section 125291.100,
and to reimburse the General Obligation Bond
Expense Revolving Fund pursuant to Section 16724.5of the Government Code. The bonds, when sold, shallbe and shall constitute a valid and binding obligationof the state, and the full faith and credit of the stateis hereby pledged for the punctual payment of boththe principal of, and interest on, the bonds as theprincipal and interest become due and payable.
125291.115. The bonds authorized by this article
shall be prepared, executed, issued, sold, paid, andredeemed as provided in the State General Obligation
Bond Law (Chapter 4 (commencing with Section
16720) of Part 3 of Division 4 of Title 2 of theGovernment Code) and all of the provisions of thatlaw, as amended from time to time, except
subdivisions (a) and (b) of Section 16727 apply to thebonds and to this article and are hereby incorporated
in this article as though set forth in full in this article.
125291.120. (a) Solely for the purpose of
authorizing the issuance and sale, pursuant to theState General Obligation Bond Law (Chapter 4(commencing with Section 16720) of Part 3 ofDivision 4 of Title 2 of the Government Code), of thebonds and interim debt authorized by this article, theCalifornia Stem Cell Research and Cures FinanceCommittee, established pursuant to Section
125291.40, is hereby designated as “the committee”
as that term is used in the State General Obligation
Bond Law.
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TEXT OF PROPOSED BOND

14(b) For purposes of the State General Obligation Bond
Law, the California Institute for Regenerative Medicine
Governing Board is designated the “board.”
125291.125. (a) The committee shall determine
whether or not it is necessary or desirable to issue
bonds authorized pursuant to this article in order tocarry out the actions speciﬁed in this article and, if
so, the amount of bonds to be issued and sold. The
Treasurer shall use reasonable efforts to sell bonds
with pricing at par or better and to pay the issuancecosts out of premium if reasonably achievable and in
the best interests of the state, at the Treasurer’s
discretion. Successive issues of bonds may be
authorized and sold to carry out those actions
progressively, and it is not necessary that all of thebonds authorized to be issued be sold at any one time.
The bonds may bear interest, which is includable ingross income for federal income tax purposes if thecommittee determines that such treatment isnecessary in order to provide funds for the purposes of
the act. The costs of each bond issue sold on or after
the 61st month after this article takes effect shall beat the discretion of the Treasurer and may beamortized over or up to a 40-year period.
(b) The total amount of the bonds authorized by
Section 125291.110 that may be issued in any
calendar year, commencing in 2021, shall not exceed
a cumulative average of ﬁve hundred forty million
dollars ($540,000,000). If less than this amount ofbonds is issued in any year, the remaining permitted
amount may be carried over to one or more subsequent
years. Pursuant to Section 125291.140, the Directorof Finance may, in the director’s discretion, authorize
a loan from the General Fund to the institute on orafter the effective date of this article.
(c) Until December 31 of the ﬁfth full calendar year
after this section becomes effective, all interest on
any interim debt or bonds issued under this article
will be paid from proceeds from the sale of thatinterim debt or bonds in accordance with the objectiveof this initiative of avoiding any debt service payments
by the General Fund, both principal and interest,
during the initial period of basic research and therapy
development following the effective date of thissection.
125291.130. There shall be collected each year
and in the same manner and at the same time asother state revenue is collected, in addition to theordinary revenues of the state, a sum in an amountrequired to pay the principal of, and interest on, thebonds becoming due each year. It is the duty of allofﬁcers charged by law with any duty in regard to thecollection of the revenue to do and perform each andevery act that is necessary to collect that additionalsum.
125291.135. Notwithstanding Section 13340 of
the Government Code, there is hereby appropriatedfrom the General Fund in the State Treasury, for the

106 | Text of Proposed BondPROPOSITION 14 CONTINUED

purposes of this article, an amount that will equal the
total of the following:(a) The sum annually necessary to pay the principalof, and interest on, bonds issued and sold pursuant tothis article, as the principal and interest become dueand payable.
(b) The sum necessary to carry out Section
125291.140, appropriated without regard to ﬁscal
years.
125291.140. For purposes of carrying out thisarticle, the Director of Finance may authorize thewithdrawal from the General Fund of an amount oramounts, not to exceed the amount of the unsold
bonds that have been authorized by the committee, tobe sold for the purpose of carrying out this article,
excluding any refunding bonds authorized pursuant to
Section 125291.155, less any amount loaned
pursuant to Section 125291.145 and not yet repaid,
and any amount withdrawn from the General Fundpursuant to this section and not yet returned to theGeneral Fund. Any amount withdrawn shall bedeposited in the fund. Any money made available
under this section shall be returned to the GeneralFund, plus an amount equal to the interest that themoney would have earned in the Pooled Money
Investment Account, from money received from thesale of bonds for the purpose of carrying out thisarticle.
125291.145. The institute may request the Pooled
Money Investment Board to make a loan from thePooled Money Investment Account in accordance with
Section 16312 of the Government Code for the
purposes of carrying out this article. The amount of
the loan shall not exceed the amount of the unsold
bonds that the committee, by resolution, hasauthorized to be sold for the purpose of carrying out
this article excluding any refunding bonds authorized
pursuant to Section 125291.155, less any amountloaned pursuant to this section and not yet repaid,
and any amount withdrawn from the General Fundpursuant to Section 125291.140 and not yet returnedto the General Fund. The institute shall execute any
documents required by the Pooled Money Investment
Board to obtain and repay the loan. Any amounts
loaned shall be deposited in the fund to be allocatedby the institute in accordance with this article.
125291.150. All money deposited in the fund thatis derived from premium and accrued interest on
bonds sold shall be reserved in the fund and shall beavailable for transfer to the General Fund as a credit
to expenditures for bond interest, except the amounts
derived from premium may be reserved and used to
pay costs of issuance prior to any transfer to theGeneral Fund.
125291.155. The bonds issued and sold pursuant
to this article may be refunded in accordance with
Article 6 (commencing with Section 16780) of

TEXT OF PROPOSED BOND
Chapter 4 of Part 3 of Division 4 of Title 2 of theGovernment Code, which is a part of the State General
Obligation Bond Law. Approval by the voters of thestate for the issuance of the bonds described in thisarticle includes the approval of the issuance of any
bonds issued to refund any bonds originally issued
under this article or any previously issued refunding
bonds. Any bond refunded with the proceeds ofrefunding bonds as authorized by this section may belegally defeased to the extent permitted by law in themanner and to the extent set forth in the resolution,as amended from time to time, authorizing thatrefunded bond.

PROPOSITION 14 CONTINUED(c) “Basic research” means the investigation of basic
mechanisms underlying stem cell biology, cellular
plasticity, cellular differentiation, and other vital
research opportunities.
(c) (d) “Capitalized interest” means interest fundedby bond proceeds.
(d) (e) “Committee” means the California Stem Cell
Research and Cures Finance Committee createdpursuant to subdivision (a) of Section 125291.40.
(e) (f) “Constitutional ofﬁcers” means the Governor,
Lieutenant Governor, Treasurer, and Controller ofCalifornia.

125291.160. Notwithstanding any provision of thisarticle or the State General Obligation Bond Law(Chapter 4 (commencing with Section 16720) of Part
3 of Division 4 of Title 2 of the Government Code), if
the Treasurer sells bonds pursuant to this article that
include a bond counsel opinion to the effect that theinterest on the bonds is excluded from gross income
for federal tax purposes, under designated conditions,
the Treasurer may maintain separate accounts for theinvestment of bond proceeds and the investment
earnings on those proceeds. The Treasurer may use or
direct the use of those proceeds or earnings to pay any
rebate, penalty, or other payment required underfederal law or to take any other action with respect tothe investment and use of bond proceeds required ordesirable under federal law to maintain the tax-exempt
status of those bonds and to obtain any otheradvantage under federal law on behalf of the funds ofthis state.

(g) “Early development” means discovery of promising
new stem cell-based technologies that could betranslated to enable broad use and ultimately improve
patient care.

125291.165. The proceeds from the sale of bonds
authorized by this article are not “proceeds of taxes”
as that term is used in Article XIII B of the California
Constitution, and the disbursement of these proceeds
is not subject to the limitations imposed by that
article.

(k) (m) “Human reproductive cloning” means thepractice of creating or attempting to create a humanbeing by transferring the nucleus from a human cell
into an egg cell from which the nucleus has been
removed for the purpose of implanting the resulting
product in a uterus to initiate a pregnancy.

SEC. 25. Section 125292.10 of the Health and
Safety Code is amended to read:(l) (n) “Indirect costs” mean the recipient’s costs inthe administration, accounting, general overhead, andgeneral support costs for implementing a grant or loanof the institute. NIH deﬁnitions of indirect costs will
be utilized as one of the bases by the Scientiﬁc andMedical Research Standards Working Group to createa guideline for recipients on this deﬁnition, with
modiﬁcations to reﬂect guidance by the ICOC and thisact.

125292.10.

Deﬁnitions

As used in this chapter and in Article XXXV of the
California Constitution, the following terms have thefollowing meanings:(a) “Act” means the California Stem Cell Researchand Cures Bond Act constituting Chapter 3(commencing with Section 125290.10) of Part 5 ofDivision 106 of the Health and Safety Code.
(b) “Adult stem cell” means an undifferentiated cellfound in a differentiated tissue in an adult organismthat can renew itself and may, with certain limitations,differentiate to yield all the specialized cell types of
the tissue from which it originated, including a cellthat is committed to make all of the functional cells of
the tissue or organ where it resides and regenerates
but that is itself undifferentiated.

14(f) (h) “Facilities” means buildings, building leases,or capital equipment.
(g) (i) “Floating-rate bonds” means bonds which do
not bear a ﬁxed rate of interest until their ﬁnal
maturity date, including commercial paper notes.
(h) (j) “Fund” means the California Stem Cell
Research and Disease Cures Fund created pursuant to
Section 125291.25.
(i) (k) “Grant” means a grant, loan, or guarantee.
(j) (l) “Grantee” means a recipient of a grant fromthe institute. All University of California grantee
institutions shall be considered as separate andindividual grantee institutions.

(m) (o) “Institute” means the California Institute forRegenerative Medicine.
(n) (p) “Interim
standards”
means
temporarystandards that perform the same function as“emergency regulations” under the Administrative
Procedure Act (Government Code, Title 2, Division 3,
Part 1, Chapter 4.5 3.5, Sections 11340 et seq.)
except that in order to provide greater opportunity for
public comment on the permanent regulations, remain
in force for 270 days rather than 180 days.
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TEXT OF PROPOSED BOND

14(o) (q) “Life science commercial entity” means a ﬁrm
or organization, headquartered in California, whosebusiness model includes biomedical or biotechnology
product development and commercialization.
(p) (r) “Medical ethicist” means an individual withadvanced training in ethics who holds a Ph.D., MA, or
equivalent training in the biological sciences or theﬁeld of clinical medicine or clinical ethics and who
spends or has spent substantial time (1) researching
and writing on ethical issues related to medicine, and(2) administering ethical safeguards during theclinical trial process, particularly through service on
institutional review boards.
(q) (s) “Pluripotent cells” means cells that arecapable of self-renewal, and have broad potential todifferentiate into multiple adult cell types. Pluripotent
stem cells may be derived from somatic cell nuclear
transfer or from surplus products of in vitro
fertilization treatments when such products are
donated under appropriate informed consent
procedures. These excess cells from in vitro
fertilization treatments would otherwise be intended
to be discarded if not utilized for medical research.
(r) (t) “Progenitor cells” means multipotent or
precursor cells that are partially differentiated but
retain the ability to divide and give rise todifferentiated cells.
(s) (u) “Quorum” means at least 65 percent of themembers who are eligible to vote.
(t) (v) “Research donor” means a human who donates
biological materials for research purposes after full
disclosure and consent.
(u) (w) “Research funding” includes interdisciplinaryscientiﬁc and medical funding for basic research, allstages of research, including, but not limited to, stem
cell
discovery
research,early
development,
translational research, therapy development, and thedevelopment of pharmacologies and treatments
through clinical trials, including, without limitation,
the reimbursement of patient-qualiﬁed costs forresearch participants and their caregivers pursuant toparagraph (4) of subdivision (b) of Section
125290.35; the operations of the working groups,
including the costs associated with the expert review
of applications; the costs of advisory groups andconsultants established or retained to evaluate andadvise the governing board, the working groups, andawardees; and research conferences. When a facility’s
grant or loan has not been provided to house all
elements of the research, therapy development, and/or
clinical trials, research funding shall include anallowance for a market lease rate of reimbursement
for the facility. In all cases, operating costs of the
facility, including, but not limited to, library andcommunication services, utilities, maintenance,
janitorial, and security, shall be included as direct108 | Text of Proposed BondPROPOSITION 14 CONTINUED

research funding costs. Legal costs of the instituteincurred in order to negotiate standards with federal
and state governments and research institutions; toimplement standards or regulations; to resolve
disputes; and/or to carry out all other actions
necessary to defend and/or advance the institute’s
mission shall be considered direct research funding
costs.
(v) (x) “Research participant” means a humanenrolled with full disclosure and consent, andparticipating in clinical trials.
(y) “Research program” means research projects thatare designed to advance the same ultimate goal along
the research continuum and that are conducted by thesame or overlapping investigators.
(w) (z) “Revenue positive” means all state tax
revenues generated directly and indirectly by the
research and facilities of the institute are greater thanthe debt service on the state bonds actually paid by
the General Fund in the same year.
(x) (aa) “Stem cells” mean nonspecialized cells thathave the capacity to divide in culture and todifferentiate into more mature cells with specialized
functions.
(ab) “Stem cell discovery research” means basic
research, early development, and the discovery,
evaluation, or improvement of tools and technologies
in the ﬁelds of stem cell and genetic research andother vital research opportunities.
(y) (ac) “Vital research opportunity” means scientiﬁcand medical research and technologies, including, but
not limited to, genetics, personalized medicine, andaging as a pathology, and/or any stem cell research
not actually funded by the institute undersubparagraph (C) of paragraph (1) paragraph (3) ofsubdivision (c) of Section 125290.60 which provides
a substantially superior research opportunity, vital toadvance medical science as determined by at least a
two-thirds vote of a quorum of the members of the
Scientiﬁc and Medical Research Funding Working
Group and recommended as such by that working
group to the ICOC, or as determined by the vote of amajority of a quorum of members of the ICOC. Human
reproductive cloning shall not be a vital research
opportunity.
SEC. 26.

Amendment.

The provisions of this initiative, except the bondprovisions, may not be amended before the measure isapproved by the voters. The provisions of this initiative
may be amended after its approval by the voters by astatute that is passed by a vote of 70 percent of themembers of each house of the Legislature and signedby the Governor, provided that such amendments are
consistent with and further the intent of the grant andloan programs created by this initiative.

TEXT OF PROPOSED BOND
SEC. 27.

Severability.

If any provision of this initiative, or part of thisinitiative, or the application of any provision or part toany person or circumstances, is for any reason held to
be invalid, the remaining provisions, or applications ofprovisions, shall not be affected, but shall remain in
full force and effect, and to this end the provisions of
this initiative are severable. If a court were to ﬁnd in a
ﬁnal, unreviewable judgment that the exclusion of one
or more entities or activities from the applicability of
the initiative renders the initiative unconstitutional,
those exceptions should be severed and the initiative
should be made applicable to the entities or activities
formerly exempt from the initiative. It is the intent of
the voters that this initiative would have been enacted
regardless of whether any invalid provision had been
included or any invalid application had been made.
SEC. 28.

Conﬂicting Initiatives.

(a) In the event that this initiative and anothermeasure addressing medical research or therapy
development shall appear on the same statewide
ballot, the provisions of the other measure or measures
shall be deemed to conﬂict with this measure. In theevent that this initiative receives a greater number of
afﬁrmative votes than a measure deemed to conﬂictwith it, the provisions of this initiative shall prevail in
their entirety, and the other measure or measures shallbe null and void.

PROPOSITION 14 CONTINUED(b) If this initiative is approved by the voters but
superseded by law by any other conﬂicting measureapproved by voters by a greater number of votes at thesame election, and the conﬂicting ballot measure islater held invalid, this initiative shall be self-executing
and given full force and effect.
SEC. 29.

14

Standing.

Notwithstanding any other provision of law, if thestate, or any of its ofﬁcials fail to defend theconstitutionality of this initiative, following its
approval by the voters, any other state governmental
agency of this state shall have the authority tointervene in any court action challenging theconstitutionality of this initiative for the purpose ofdefending its constitutionality, whether such action isin state or federal trial court, on appeal, or on
discretionary review by the Supreme Court ofCalifornia and/or the Supreme Court of the UnitedStates. The reasonable fees and costs of defending
the action shall be a charge on funds appropriated to
the Department of Justice, which shall be satisﬁedpromptly.
SEC. 30.

Liberal Construction.

This initiative shall be liberally construed to effectuate
its purposes.

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