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State agency is betting on novel way to fund awards amid legal challenge.

LOS ANGELES - The panel overseeing the state's new stem cell program plans to approve its first grants Friday in Sacramento, and then herald its decisions as a major breakthrough in training programs.

There's just one hitch: There's no money to pay for the estimated $45 million in grants the committee plans to approve for training new scientists in embryonic stem cell research.

The agency's leaders promised worried committee members during a teleconference meeting last week that they will hold a press conference after Friday's vote to put the best face on the situation.

"We are going to come out of that meeting and say we have a fabulous training program here, and that we are going to provide a work force for the country," said Zach Hall, the agency's interim president. "We're going to play that up."

The committee's chairman, Robert Klein II, said the agency needs to show it's creating the "finest training program in the history of the country" to help attract money to...