House Bill 4234
An Act Providing for the Investment In and Expansion of the Life Sciences Industry in the Commonwealth
The Massachusetts Life Sciences Initiative is embodied in House Bill 4234, “An Act Providing for the Investment In and Expansion of the Life Sciences Industry in the Commonwealth,” filed by Governor Patrick on July 19, 2007. The bill serves to grow the life sciences sector in Massachusetts in three ways:
First, the bill provides funding for the Life Sciences Initiative
- $500 million in capital funding.
- $15 million for the Massachusetts Life Sciences Investment Fund this year. Thereafter, the Fund will receive $25 million in annual appropriations.
Second, the bill strengthens the Massachusetts Life Sciences Center
- Increases number of Governor Appointees to the MLSC Board from 2 to 4 and requires that the additional 2 appointees be a venture capitalist and a researcher.
- Establishes the Secretary of Housing and Economic Development as chair of the board.
- Reconstitutes the present membership of the board.
- Mandates capital planning process to implement the capital provisions of the proposal.
- Lifts administrative cap for MLSC.
- Increases fund allowable activities so MLSC has authority to build capital projects, award grants, and expend funds consistent with the plan articulated by the Governor.
- Establishes a 10 person advisory committee composed of members of the Massachusetts Life Sciences Collaborative.
Third, the bill expands tax incentives for Life Sciences companies
The bill creates a Life Sciences Sector Investment Program which requires life sciences businesses to become “certified life sciences projects” to be eligible to receive tax benefits. Certification is predicated upon the projected return on investment (ROI) for the project from the taxable income generated by the project’s new, permanent full-time employees. The Secretary of HED will certify projects. The Secretary of HED and the Secretary of ANF will jointly award tax incentives, based on need. There is also a yearly project evaluation that provides for project decertification if a company fails to achieve projected ROI.
The bill creates the following tax incentives:
- Eliminates the MA throwback provision
- Creates a 100% refundable FDA User Fee Credit
- Creates sales tax pass through for bricks and mortar purchases
- Allows a project to take the current Research and Development Tax Credit as a refundable credit
- Eliminates mathematical test so that true R&D companies can take sales and use tax exemption on appropriate purchases with certainty, as manufacturers do
- Creates redeemable 10% ten year carry forward Life Sciences Investment Tax Credit, allows projects to receive an additional 2% credit if they locate in an Economic Opportunity Area
- Extends the Net Operating Loss Credit to 15 years
The formation of the Massachusetts Life Sciences Initiative comes at a unique and critical time for the growth of life sciences in the Commonwealth. It provides an opportunity for Massachusetts to solidify its position as the world leader in life sciences and gird for the challenges of international competition 
for talent and industry. This initiative is a collaborative effort involving leaders from all sectors of the Life Sciences Supercluster—the biopharmaceutical and medical device industries, academic medical centers, and the health care delivery system. A critical component of this initiative is a comprehensive, long-term, collaborative life sciences strategy to ensure an effective and efficient execution of our mission to strengthen and grow the life sciences. The enactment of the legislation and the development of the programs embodied in the initiative will demand the continued engagement and energies of life sciences stakeholders from throughout the Commonwealth.
Growth of the Massachusetts Life Sciences Center
The Massachusetts Life Sciences Center is a key vehicle for executing the Life Sciences Initiative, and the life sciences legislation strengthens the Center in order to grow the life sciences industry in Massachusetts in a strategic and collaborative way.
The diagram below demonstrates how the bill seeks to grow the Center:
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Strengthening of Center for Life Sciences Initiative |
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