You asked us to summarize Massachusetts' bioscience business assistance programs and compare them with Connecticut's. You also asked us to identify any major bioscience projects Massachusetts recently attracted or retained.

SUMMARY

In 2008, the Massachusetts legislature launched a 10-year, $1 billion strategy to develop and sustain the state's bioscience industry and support the academic institutions that conduct bioscience research. To implement the strategy, the legislature created many new programs and assigned them to the Massachusetts Life Science Center (MLSC), a quasi-public agency it created in 2006.

The bioscience programs provide funds and tax credits for developing infrastructure and facilities, acquiring machines and equipment, starting or expanding new businesses, and hiring college interns. They run parallel to older programs serving a wider range of businesses, including bioscience ones. Both program tracks offer the same types of assistance (e.g., loans and tax credits), but the older track is mostly for mid-stage and mature businesses while the bioscience track offers assistance for bioscience businesses at all developmental stages.

MLSC uses the bioscience programs to recruit and retain businesses. MLSC staff actively recruits bioscience businesses by attending conferences and tradeshows. The recruited businesses include branches or divisions of Biocell Center (from Italy), Integragen (from France), and Pfizer (from Groton, Connecticut), although MLSC's annual reports do not include them among the businesses that received assistance. The reports do not identify those businesses MLSC kept from leaving the state or closing.

Connecticut provides the same types of assistance to bioscience businesses as Massachusetts, but mostly through programs opened to many different types of businesses, such as manufacturers and financial service firms. The exception is the Bioscience Facilities Fund, which provides financing for constructing laboratories designed for handling chemicals, drugs, and other substances (i.e., wet laboratories). Recently, the legislature sought to stimulate and sustain the bioscience industry by funding large-scale bioscience projects at John Dempsey Hospital and the University of Connecticut Health Center.

MASSACHUSETTS BIOSCIENCE ASSISTANCE PROGRAMS

Massachusetts 2008 Life Science Initiative

In 2008, Massachusetts enacted a 10-year, $1 billion strategy to develop and sustain the state's bioscience industry, which includes biotechnology, pharmaceutical, medical devices, diagnostic, and bioinformatic businesses (2008 Mass. Chapter 130). The strategy addresses the industry's physical, human, and technological development needs and consists of many economic development programs targeting only bioscience businesses.

The $1 billion price tag includes up to $500 million in bonds for specified projects; $250 million in appropriations for research grants, fellowships, and sector-wide workforce training initiatives; and $250 million in personal and corporate business tax credits and sales tax exemptions. The tax credits are capped at $25 million per year. As Table 1 shows, the programs address the bioscience industry's long- and short-term infrastructure, workforce development, and financial needs.

Table 1: Massachusetts Life Sciences Initiatives

* “Throwback” requires companies to add sales in states where there are no corporate taxes to Massachusetts sales.

The programs are implemented by MLSC and are available to any business meeting statutory criteria that require, among other things, the business to estimate the revenue it expects to generate and the number of permanent full-time jobs it expects to create or retain. MLSC can revoke funding if the actual revenue is less than 70% of the projected revenue.

Generic Economic Development Programs

The life science programs are in addition to the Massachusetts' generic economic development programs, many of which are still available to life science businesses and predate the bioscience programs. Table 2 identifies the programs and the implementing agencies.

Table 2: Massachusetts Generic Economic Development Programs

As the table shows, Massachusetts' generic programs include several that help businesses obtain necessary state and local approvals. The Massachusetts Permitting Regulatory Office helps businesses, including bioscience ones, obtain necessary licenses, permits, and approvals. It also provides grants to municipalities to identify sites where they can expeditiously approve permits for a proposed development. The office also tracks pending regulatory approvals for state funded-housing and economic development projects.

Massachusetts' generic economic development and new bioscience programs can be combined to help bioscience businesses in different developmental stages. As Table 3 shows, the generic programs focus on mid-stage or mature businesses while bioscience programs cover these and start-up and early stage businesses.

Table 3: Massachusetts Life Science Incentives Matrix

Source: Massachusetts Biotechnology Council

Attracted or Retained Projects

MLSC and MassDevelopment report on the businesses they financed in their annual plans. MLSC identifies those it attracted to Massachusetts, but does not specifically identify those it retained there. (We assume that a retention project provides assistance to a company that might close or leave the state.) MassDevelopment does not divide projects into attraction and retention categories.

Table 4 lists the bioscience businesses that received financial assistance from MLSC and MassDevelopment and investment capital from MTDC. It also identifies projects MLSC identified as attractions projects, some of which were not listed among those that received financing or tax credits. We limited the businesses receiving tax credits to those that received over $1 million in credits. The table does not include the early-stage businesses that received MLSC assistance. Nor does it include businesses awarded tax credits by the Executive Office of Housing and Economic Development, which oversees the Massachusetts Office of Business Development, the Massachusetts Permit Regulatory Office, and several other executive branch entities.

Table 4: Bioscience Businesses Receiving MLSC and MassDevelopment Financing, 2006-2011

Sources: MLSC FY 2010 and 2011 annual reports and MassDevelopment annual reports 2006-2010, and MTDC website.

CONNECTICUT'S ECONOMIC ASSISTANCE FOR BIOSCIENCE BUSINESSES

Connecticut provides the same kind of economic assistance to bioscience businesses as Massachusetts, but does so through agencies and programs serving several different industry sectors.

● The Department of Economic and Community Development, like Massachusetts' Executive Office of Housing and Economic Development, finances business and municipal development projects and helps expedite state approvals of large-scale economic development projects.

● The Connecticut Development Authority, like MassDevelopment, provides loans, loan guarantees, and tax-exempt bond financing for business development projects. It also provides sales and use tax exemptions for these projects.

● Connecticut Innovations, Inc.(CII), like MTDC, mostly invests in technology businesses, but also finances the construction of wet laboratories and related facilities (Bioscience Facilities Fund) and provides tax credits to individuals investing in small businesses developing new technologies (Angel Investor Tax Credit Program).

The legislature recently shifted gears, authorizing bonds for large-scale bioscience projects as a way to stimulate and develop the bioscience industry. PA 10-104 provided over $360 million in bonds and other funds for constructing a new bed tower; renovating academic, clinical, and research space at John Dempsey Hospital; and developing regional health network initiatives. It also extended enterprise zone property tax exemptions and corporation business tax credits to bioscience businesses in Hartford and designated sections of Farmington, New Britain, and Bristol. (PA 11-140 extended these benefits to designated sections of Plainville.)

PA 11-2, October Special Session, authorized CII to develop a bioscience industry cluster centered on a new Jackson Labs research facility to be constructed at the University of Connecticut Health Center. It authorized up to $290 million in bonds over 10 years for the laboratory's construction, operation, and research activities.

LINKS

2008 Mass. Chapter 130, http://www.malegislature.gov/Laws/SessionLaws/Acts/2008/Chapter130

Massachusetts Life Science Center, http://www.masslifesciences.com/mission.html

Massachusetts Biotechnology Council, “Massachusetts Life Science Incentive Matrix,” http://www.massbio.org/writable/editor_files/2010_incentives.pdf

MassDevelopment, http://www.massdevelopment.com/

Massachusetts Executive Office of Housing and Economic Development, http://www.mass.gov/hed/

Massachusetts Economic Development Incentive Program, http://www.mass.gov/hed/business/incentives/edip/edip-program-information.html

Massachusetts Investment Tax Credit, http://www.mass.gov/hed/business/incentives/investment-tax-credit.html

Massachusetts Technology Development Corporation, http://www.mtdc.com/

Massachusetts Permit Regulatory Office, http://www.mass.gov/hed/economic/eohed/pro/about/mission-of-the-office.html

Connecticut Department of Economic and Community Development, http://www.ct.gov/ecd/site/default.asp

Connecticut Development Authority, http://www.ctcda.com/

Connecticut Innovations, Inc., http://www.ctinnovations.com/FundingOpportunities.aspx

Connecticut Innovations, Inc., Bioscience Facilities Fund, http://www.ctinnovations.com/FundingOpportunities/BioScienceFacilitiesFund.aspx

Connecticut Innovations, Inc., Angel Investor Tax Credit, http://www.ctangeltaxcredit.com/

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