Court backs $3 billion California stem cell plan

SAN FRANCISCO (Reuters) - A California appeals court on Monday upheld the legality of a voter-approved program to sell $3 billion in bonds to support stem cell research.

California voters backed a statewide initiative in 2004 to form the California Institute for Regenerative Medicine and authorize it to sell debt to fund stem cell medical research.

State Controller John Chiang said in a statement he was "encouraged that we are one step closer in ending litigation that has tied up the funding for California's historic investment in stem cell research."

Opponents of abortion and fiscal conservatives had challenged the measure's legality, but a state appellate court backed a lower court ruling that said the institute was a legitimate state agency that can issue debt.

The U.S. debate over stem cells pits groups that morally oppose using fertilized human eggs for study against those who hope stem cells can unlock cures to diseases.

"Stem cell research holds our best promise to find a cure for debilitating illnesses, like Parkinson's disease and diabetes," California Gov. Arnold Schwarzenegger said in a statement on Monday.

Those opposing the bond measure include the California Family Bioethics Council, a project of the California Family Council that opposes abortion and gay marriage, and the National Tax Limitation Foundation.

The opponents have said they will appeal to the California Supreme Court.

"The decision isn't final until all the appeals are exhausted," the state's deputy attorney general, Tamar Pachter, said in an interview. She said if the state's top court agreed to review the case, a final word on the matter was unlikely before next year.