Scientists in California's public universities, until now exempt from the state's tough conflict-of-interest law, are about to lose their ivory-tower status.

A California commission has approved a conflict-of-interest regulation for academic researchers--the first time in memory that a government agency in this country has attempted to regulate university conflicts of interest, according to Thomas Houston, chairman of the Fair Political Practices Committee, which adopted the regulation.

The new regulation must get formal approval from the state's Office of Administrative Law, which is expected to act in March.

The committee surveyed the states and found no similar regulations. Houston said the new rules were adopted chiefly because of the boom in gene-engineering companies, which have profited from scientific advances made with public money at universities.

He said the cases of two university researchers in particular--Herbert Boyer and Ray Valentine, who started the companies called Genentech and Calgene--involved potential conflicts and triggered the action by the committee.

The regulations approved by the committee at its last meeting require researchers to disclose some of their personal financial connections with corporations.

When a corporation gives a grant to a university or a researcher, the researcher must report any financial interest he has in that corporation, the regulations say. The FPPC then will decide if the ties represent a conflict of interest and should be cut.

"These researchers are not just using taxpayers' money and facilities, but they are assigning graduate students to the work that ends up benefiting one company over others," Houston said.

"We hear of researchers refusing to share information" because they want to keep the information for the company they consult with, and "there are suspicions people may have that researchers are selecting what research to do based on the profit to themselves" rather than the benefit to the public, Houston said. "We want to avoid that."

Houston said the regulations represent a compromise. The disclosure of all corporate connections is required of all public officials by the California conflict-of-interest law, and some have argued that researchers get grants of public funds and decide how the money should be used, and so should be included under the law with public officials.

On the other hand, the University of California has taken the position that such disclosure could violate academic freedom.

Dean Charles Hess of the College of Agriculture and Environmental Sciences at the University of California at Davis explained that the administrators believe that full disclosure could give information about professors to special-interest groups, which could use the information against the professors.

"I guess they are reminded of the McCarthy era, when professors' associations were used against them," Hess said, referring to the 1950s and the campaign by Sen. Joseph R. McCarthy against communism that put some professors in jeopardy for their beliefs.

Hess said he supports the new regulations and his college already has a rule that requires professors to acknowledge corporate connections, although it does not require that they name the corporations.

Houston of the Fair Political Practices Committee said the new regulations were a first step toward stricter regulation of researchers, and he said he would consider further action, including asking for full disclosure by professors.