BILL ANALYSIS
AB 2381
Page 1
ASSEMBLY THIRD READING
AB 2381 (Mullin)
As Amended April 3, 2008
Majority vote
HEALTH 13-0 APPROPRIATIONS 17-0
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|Ayes:|Dymally, Nakanishi, Berg, |Ayes:|Leno, Walters, Caballero, |
| |De Leon, Emmerson, | |Davis, DeSaulnier, |
| |Hancock, Hayashi, | |Emmerson, Furutani, |
| |Hernandez, Huff, Jones, | |Huffman, Karnette, |
| |Ma, Salas, Strickland | |Krekorian, |
| | | |La Malfa, Lieu, Ma, |
| | | |Nakanishi, Nava, Sharon |
| | | |Runner, Solorio |
| | | | |
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SUMMARY : Defines "California supplier" for purposes of the
California Stem Cell Research and Cures Act (Act), as any sole
proprietorship, partnership, joint venture, corporation, or
other business entity, the owners or policymaking officers of
which are domiciled in California and whose permanent, principal
office or place of business from which the supplier's trade is
directed or managed is located in California.
EXISTING LAW :
1)Establishes the Act approved by voters as Proposition 71 in
November 2004.
2)Establishes the California Institute for Regenerative Medicine
(CIRM) to award grants, loans or contracts for stem cell
research and research facilities. Establishes the Independent
Citizen's Oversight Committee (ICOC) to oversee operations of
the CIRM and includes within the functions of the ICOC the
responsibility to render final decisions on research standards
and grant awards.
3)Requires CIRM to provide a public annual report disclosing
specified information relating to its activities, grants
awarded, grants in progress, research accomplishments, and
future program directions, including the number and dollar
amounts of research and facilities grants; the grantees from
AB 2381
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the prior year; CIRM's administrative expenses; an assessment
of the funding for stem cell research from non-CIRM sources; a
summary of research findings; an evaluation of the
relationship between CIRM grants; and, the overall strategy of
its research program and a report on CIRM's strategic research
and financial plans.
4)Requires the ICOC to establish standards to require all grants
and loans be subject to intellectual property agreements
(agreements). Requires the agreements to balance the
opportunity of the state to benefit from the patents,
royalties, and licenses that result from research and therapy
development and clinical trials, with the need to assure that
essential medical research is not unreasonably hindered by the
agreements.
5)Requires the ICOC to establish standards to ensure that
grantees purchase goods and services from California suppliers
to the extent reasonably possible, in a good faith effort to
achieve a goal of more than 50% of such purchases from
California suppliers.
6)Prohibits any amendment to Proposition 71 by the Legislature
unless the amendment is approved by the voters or accomplished
by a bill introduced after the first two full calendar years
and approved by a vote of 70% of both houses.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis this bill has no direct fiscal impact.
COMMENTS : According to the sponsor, Invitrogen, a
biotechnology company with headquarters in California, CIRM has
initiated significant grant-making activities but guidance is
needed to assist grantees in meeting the preference for
California suppliers specified in current law. This bill seeks
to provide grantees clarification of this preference by defining
a California supplier as an entity that must have its commercial
domicile in California and maintain and staff a permanent place
of business in California from which its trade or business is
directly managed. The sponsor asserts that this bill fills a
vital missing link in the matrix of terms within which CIRM
grantees must work when applying for CIRM funding and helps to
ensure that public funding of stem cell research generates
critically important business transaction revenues for the
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state's struggling economy.
In January 2008, the sponsor submitted a petition to CIRM to
adopt by regulation a definition of a "California supplier." In
the petition, the sponsor contended that the ICOC is mandated to
establish a definition in order to achieve the goals of
Proposition 71. According to the sponsor, defining a California
supplier to mean those companies that are headquartered in the
state, whose principal owners or officers are residents of the
state, and whose operations are directed from within the state,
ensures that a variety of California companies are
well-positioned to provide the goods and services needed to
conduct CIRM-funded research.
At the March 12, 2008, meeting of the ICOC, CIRM staff initially
recommended denying the petition for several reasons, including
that the ICOC has already carried out its statutory requirement
to establish a standard for a preference for California
suppliers; that new revenue and employment opportunities can
also be achieved in California by including any supplier that
pays income or sales tax in the state, employs residents of the
state or has a brick and mortar location in the state; and,
finally, that the sponsor's proposed definition may violate
federal interstate commerce law. However, CIRM indicates that
during the meeting, the sponsor clarified that the petition was
intended to initiate a rulemaking process rather than to demand
the adoption of a definition. As a result, the ICOC decided to
adopt the sponsor's definition as an initial draft for the
purpose of initiating a regulatory review process to finalize a
formal definition.
BIOCOM states in support of this bill that it benefits
California's economy by creating additional jobs within the
supply industry and increasing the number of specialty supplier
businesses to serve CIRM grantees.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097
FN: 0004334