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The goal of this paper is to analyze and explain the impact of state legislation and funding on the future of stem cell research. Without federal law regulating stem cell research, funding by states and private organizations may spur competition to attract and retain leading scientists and industry in individual states. Alternatively, state-funded stem cell research may incite the federal government to react either positively or negatively to pre-empt state and private action. Traditionally, most support for scientific research comes in the form of grants from the National Institutes of Health (NIH). Due to the practical ban on stem cell research at the federal level, states have taken action to circumvent national biomedical policy. Literally, the states are serving as laboratories for both scientific research and policy decisions.

Part II of this article explains the ethical divide surrounding the technique of establishing embryonic stem cell lines. Part III describes the federal policies regarding stem cell research under Presidents Clinton and George W. Bush. Part IV discusses initiatives, scientific and financial, undertaken by private investors and states to support stem cell research. Part V considers whether the state initiatives will create a state competition for researchers and industry, using state competition under corporate law as a guide.