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The Research Account

While the Health Education Account was widely debated and many proposals were floated for how to use the money, the Research Account attracted far less attention. The Research Account, like the Public Resources Account, was not “on the table” because it was viewed as an earmarked account.[46] Everyone assumed that the 5 percent allocation specified by the initiative would be put into research. Three issues had to be resolved concerning the Research Account: (1) who would administer it, (2) how indirect costs (overhead) would be handled, and (3) what kinds of research would be funded. None of the preferences that the voluntary agencies had initially expressed ended up in the final legislation.


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Instead, the preferences of the governor and the University of California (UC) prevailed.

The voluntaries wanted DHS to administer the money and limit the amount of indirect costs that could be charged to research grants funded out of the Proposition 99 Research Account. In their view, indirect costs would involve general support for the universities rather than support for tobacco-related work. By January 20, 1989, the California research universities had drafted their own statement of principles, supporting UC as the lead agency, establishing scientific merit as the basis for awards, and requiring the payment of all research costs, both direct and indirect, consistent with federal guidelines.[47] The private universities opposed limiting overhead. (Stanford's overhead at the time was higher than 80 percent.[1]) On March 7 the UC proposal, supported by Stanford, Cal Tech, the University of Southern California, and the California State University system, was on the table. It proposed UC as the administrator, a system of outside peer review based on the National Institutes of Health model, a policy advisory committee, and full-cost reimbursement of indirect costs “consistent with federal guidelines.”[48]

The research program was eventually authorized by Senator John Garamendi's (D-Walnut Grove) SB 1613. It specified that the Research Account was to be managed by the University of California, and the university was directed to appoint a Scientific Advisory Committee to advise it in administering the account to conduct research related to tobacco. The private universities got full indirect costs, but UC did not. The university was given wide latitude in administering the Research Account. Deukmejian approved SB 1613 on October 2, 1989, which authorized the research programs through December 31, 1993.


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