Supporters of a failed proposition that would have allowed universities to accept stock in private companies said they would try again next year.
Proposition 102 would have amended the state constitution to allow the UA and other state universities to become a shareholder in private companies started by professors who want to license their inventions.
The proposition was defeated by a narrow margin last Tuesday, 52 to 48 percent. It passed 53 to 47 percent in Pima County.
Richard Powell, Vice President for Research and Graduate Studies at the UA, said he was surprised the proposition was defeated.
Powell said there was no formal opposition to the bill and thought the proposition probably failed because voters did not understand what the amendment would do.
"They didn't understand it and they automatically voted 'no,'" Powell said.
In a previous interview before the election, UA President Peter Likins said the constitutional ban on universities owning stock in private companies is outdated. The ban was written to prevent railroad companies from trading their stock for state lands. The companies would later go out of business and the stock would be worthless.
Without the ability to trade stock in private companies, the UA cannot compete with other universities that can help their faculty bring their intellectual property into the marketplace without requiring significant licensing fees, Likins said.
Powell said he has been working on the initiative for almost two years. He started when he was asked by newly appointed Gov. Janet Napolitano to join a committee on innovation and technology.
The committee decided the ban preventing universities from accepting stock in private companies was hindering their ability to grow and attract highly sought professionals.
Powell said the committee started with introducing a law in the legislature. Powell said the legislature was very receptive, and the bill passed easily. But because the proposed law would have amended the constitution, voters needed to approve it before it could become law.
Powell said while the proposition passed in Pima County, Proposition 102 supporters need to do a better job of educating voters if they re-introduce the proposition in the next election.
Gregory Fahey, chief lobbyist for the UA, said he was not sure whether a bill similar to 102 would be introduced next year. Fahey said he was unsure whether the proposition would be warmly received by the Legislature after being rejected by voters.
Fahey said the UA has an indirect way in taking equity in private companies, but characterizes the method as less than ideal. While the UA is forbidden by the Arizona Constitution from taking stock in private companies, the University of Arizona Foundation, the primary fundraising arm for the university, is not.
By acting as intermediary, the UA Foundation could pay licensing fees for faculty who want to start a company with some of the intellectual property they developed at the UA. In exchange for paying the licensing fees, the faculty member would give the UA Foundation stock in their company.
Under such an arrangement, Fahey said the UA is still able to encourage faculty to bring their intellectual property into the marketplace without violating the law.