California's Prop. 38 Is Leading. Half of Its $8.4 Billion Goes to One Institute, and the Other Half Only to Institutions Holding Council Seats
November 5, 2026 · 7 min read
Granted Research Team · Editorial policy
California voters have created a state medical research funder twice before. In 2004, Proposition 71 authorized $3 billion in bonds for stem cell research and created the California Institute for Regenerative Medicine (CIRM). In 2020, Proposition 14 added $5.5 billion more. Together, the Legislative Analyst's Office counts $8.5 billion in voter-approved stem cell borrowing.
On November 3, 2026, voters appear to have done it a third time, at nearly the same size. Proposition 38, the "California Immunology Research & Cures Initiative," authorizes an $8.4 billion general obligation bond for immunology and immunotherapy research. CalMatters reported that on Wednesday morning the measure led 56 percent to 44 percent. The Secretary of State has until December 11 to certify results, and late-counted ballots in California can shift margins. Still, a 12-point lead on a statewide measure rarely reverses.
If it holds, researchers should not expect a CIRM-style open competition. Prop. 38 is built differently. One provision determines who can apply, and it sits in Section 130356 of the measure.
The Two Halves
The statutory text (Section 130352) splits the bond exactly in two:
| Half | Amount | Who controls it | Disease floor |
|---|---|---|---|
| Institute | 50% (about $4.2 billion) | "A single nonprofit medical research institute" selected by the California Department of Public Health | At least $2.1 billion for cancer, heart disease and Alzheimer's |
| Council grants | 50% (about $4.2 billion) | An Advisory and Accountability Research Council | At least $2.1 billion for cancer, heart disease and Alzheimer's |
No more than 2 percent of total bond funds can go to state administrative costs. The LAO estimates repayment at $500 million to $600 million a year for about 20 years, or about a quarter of 1 percent of the General Fund. With interest, the total cost runs about 10 percent above the face amount after inflation.
The institute half is effectively spoken for
To qualify for the institute half, an organization must meet criteria tied to dates that have already passed. It must be a 501(c)(3) in existence by January 1, 2025, founded to specialize in immunology and immunotherapy. It must have a UC campus affiliation agreement signed by that date, and the campus health system must exceed 35,000 inpatient admissions and 3.5 million outpatient visits a year. It must have owned or leased a site of at least 200,000 square feet by January 1, 2026. It must also have identified $250 million in philanthropic commitments, plus two separate $50 million commitments for a rapid vaccine program and a microbiome program.
CalMatters reported that the only entity meeting these criteria is the California Institute for Immunology and Immunotherapy, which is affiliated with UCLA and backed by the measure's chief funder, the surgeon and inventor Gary Michelson. According to the 2025 UC audit CalMatters cited, UCLA reports 4.1 million outpatient visits a year. UCSF, the next-largest system, reports 3.4 million, just below the 3.5 million threshold. If no institute qualifies, the statute directs CDPH to make "the minimum amount of modification necessary" to the criteria. CDPH must sign a funding agreement within 90 days of the measure taking effect. The measure also appropriates a $100 million General Fund start-up loan, to be repaid from bond proceeds.
No researcher outside that institute can apply to this half directly. Their way in is collaboration, described below.
The Council Half: Represented Institutions Only
This is the provision most applicants will miss. Section 130352(b)(2) says the grant half goes "to those public and nonprofit universities and other nonprofit research institutions represented on the council." Section 130356(e) repeats it: the council "shall accept or reject applications for funding received from those public and nonprofit universities and other nonprofit research institutions represented on the council."
The council membership is set by Section 130355:
- A seven-member executive committee, one representative appointed by each chancellor of UC Berkeley, Davis, Irvine, Los Angeles, Riverside, San Diego and San Francisco. UCLA's appointee serves as the council's first chairperson.
- 10 to 15 additional members, chosen by majority vote of that executive committee. They come from California nonprofit universities outside the UC system and from nonprofit academic and research institutions with "demonstrated success and leadership in immunology and immunotherapy research."
The result is a closed pool of roughly 17 to 22 institutions. Some groups are excluded by name or by structure:
- UC Merced, UC Santa Barbara and UC Santa Cruz. They have no executive committee seat, and as UC campuses they cannot fill the non-UC seats.
- The California State University system. It is public but not UC, and the non-UC seats are for nonprofit universities and institutions.
- Companies. No for-profit entity is eligible to receive grants.
- Any private university, independent institute or cancer center that the seven UC appointees do not vote onto the council.
Members serve four-year terms. The executive committee also fills vacancies among the appointed members, so the UC appointees control who sits on the council over time.
The closest precedent is CIRM's original governing board under Prop. 71. It was drawn heavily from the institutions that received its grants, a conflict-of-interest problem that a 2012 Institute of Medicine review asked California to fix. Prop. 38 requires the council to adopt conflict-of-interest rules "generally aligned" with National Academies standards. It also bars reviewers from proposals where they have a collaborative or commercial relationship with the applicant. But it puts the institutions eligible for grants in charge of deciding which institutions are eligible.
Terms That Will Shape Every Budget
Applicants at member institutions will face several terms that differ from NIH:
- Indirect costs capped at 20 percent of the grant (Section 130357(g)). The cap rises only to the extent the grantee provides matching funds above 20 percent of the grant. California research universities with federally negotiated rates above 55 percent will need to decide how much overhead they are willing to absorb.
- Individual project grants only. The statute bans "uniform block grants," so member institutions cannot divide the money among themselves by formula.
- California-first purchasing. Grantees must make a "good faith effort" to buy more than 50 percent of goods and services from California suppliers.
- Collaboration offers are mandatory. Every grantee must offer the selected institute "the opportunity to substantially participate in and collaborate on the funded research." Every grantee must also offer UCLA the chance to participate in any clinical trials. UCLA is the only campus named in that requirement.
- Revenue sharing. Recipients pay the state 10 percent of revenues from funded discoveries until the bond is repaid. License agreements must return royalties of at least 10 percent of gross revenues, or 5 percent with a CDPH waiver. Joint ventures must give the grantee at least 25 percent of gross profits.
- A 20 percent California patient discount on treatments developed with the funds and sold in the state.
- Out-of-state collaborators allowed. Grants must go to projects "primarily located" in California, but collaborations with out-of-state researchers are permitted.
The council must give "the highest priority" to projects with "the greatest potential for yielding the most immediate, accessible, and affordable therapies." That favors translational work. Pure mechanistic immunology will compete with clinical-stage projects for the same money.
Timeline and Strategy
Under the California Constitution, an approved initiative statute takes effect five days after certification. If certification comes near the December 11 deadline, the statute would take effect in mid-December. The institute's funding agreement would then be due by roughly mid-March 2027. The measure sets no deadline for forming the council, issuing the first call for proposals or selling the first bonds. For comparison, CIRM's first research grants came more than two years after Prop. 71 passed, delayed partly by lawsuits. Prop. 38 opponents have already called its institute criteria "oddly specific," so litigation is plausible.
What to do now, by position:
If you are at UC Berkeley, Davis, Irvine, UCLA, Riverside, San Diego or UCSF: your campus is guaranteed a council seat. Start inventorying immunology and immunotherapy projects in cancer, cardiovascular disease and Alzheimer's that already have preliminary data. The council's emphasis on "immediate, accessible, and affordable" therapies means projects with a path to trial will lead. Find out how your sponsored research office plans to handle the 20 percent indirect cap before you build budgets.
If you are at Stanford, USC, Caltech, Salk, Scripps Research, City of Hope, Cedars-Sinai, the La Jolla Institute or another non-UC nonprofit: your eligibility depends on a council appointment, not on proposal quality. Your research leadership should make the case for a seat to the seven UC executive committee appointees once they are named. The statutory test is "demonstrated success and leadership in immunology and immunotherapy research," and a record of NIH immunology funding is the strongest evidence. City of Hope publicly endorsed the measure.
If you are at UC Merced, Santa Barbara, Santa Cruz or a CSU campus: your only route is as a collaborator or subrecipient on a member institution's project, if the council's rules allow subawards. The statute does not address subawards either way. Researchers at these campuses should build co-investigator relationships with member-institution labs now.
If you are a company: you cannot receive grants. The practical routes are licensing deals with grantees, which carry the royalty floors listed above, and sponsored clinical trial partnerships with the institute.
If you are outside California: the statute explicitly permits collaborations with out-of-state researchers. A California PI at a council member institution can bring you in.
The state may soon have an immunology funder about the size of CIRM, with eligibility set by a small group of institutions. Watch for three things: certification on or before December 11, the CDPH funding agreement, and the executive committee's first appointments, which will determine which non-UC institutions can apply.
Whether your institution is on the council or partnering with one that is, Granted can help you prepare a translational immunology proposal before the first call is issued.