and Kyle Cheney
State House News Service
BOSTON - Gov. Deval Patrick said the Bay State stands to lose business expansion projects if his $1 billion life sciences bill fails to pass.
During a hearing on his bill Tuesday, the governor said Cambridge-based Novartis AG recently abandoned plans to grow its business in Massachusetts by 400 jobs because the life sciences bill had yet to pass.
But the bill – designed to pump $1 billion in grants, tax breaks and capital investments into life sciences businesses and research institutions over the next decade – is facing a tough review through six hearings before the Committee on Economic Development and Emerging Technologies, which is co-chaired by Rep. Daniel E. Bosley, D-North Adams.
Legislators questioned the bill's tax breaks and overall cost during the first of those hearings Tuesday.
Three of Patrick's Cabinet secretaries, former secretary of economic development Ranch Kimball and New England Patriots President Jonathan Kraft testified in support of the bill, which Patrick said could spur as many as 250,000 new jobs over 10 years.
"Life sciences is a powerful force in the commonwealth," said Patrick. "For the sake our economy and for the sake of our competitive future I urge you to take swift and favorable action on this bill."
If passed, the bill would create life sciences research grants for research institutions, tax incentives for businesses and $65 million to construct a stem cell research center at University of Massachusetts Medical School in Worcester.
The bill invests $500 million over 10 years in life science research, laboratories and equipment. The bill also features business incentives – including credits for Federal Drug Administration user fees, research and development tax credits and grants for life sciences companies that grow their businesses and add jobs in Massachusetts.
Patrick's bill also includes administrative changes to the board of directors that governs the Massachusetts Life Sciences Center, the quasi-state agency dedicated to making the state's life sciences investment decisions.
Daniel O'Connell, secretary of the Executive Office of Housing and Economic Development, faced questions from committee members about the structure of the tax incentives in the bill.
Critics of the bill say promising industries, such as alternative energy technology, would suffer if lawmakers decide to throw so much state funding toward one industry. John Regan, executive vice president of government affairs at Associated Industries of Massachusetts, said he opposes the targeted industry investments made in Patrick's life sciences bill.
"We believe the far more effective thing for state government to do is to work on broad-based economic climate change," said Regan. "Highly targeted activity is to be avoided."
Sen. Susan Tucker, D-Andover, said she is "skeptical" about the ability of state government to pick industry winner and losers. She also said the committee is concerned with the structure of tax incentives and the bill's high price tag.
"All of us are struggling with the issue of a cost-benefit analysis," said Tucker. "This is a very expensive proposal."
But supporters of the bill, including Nobel Prize-winning UMass professor Craig Mello, call it a great investment opportunity for Massachusetts to stay ahead of other states.
"The time is now," said Mello, who is an expert in RNAi research.
Suzanne Bump, secretary of labor and work-force development, and JudyAnn Bigby, secretary of health and human services, joined Patrick and O'Connell at the hearing to testify in favor of the bill.
It is unclear which parts of Patrick's bill will survive the legislative process or if the total price tag would be reduced. Sen. Jack Hart, co-chairman of the committee, said lawmakers would work together with administration officials to find the right combination of incentives "within the resources available to us."
According to Senate President Therese Murray, the hearing process is just beginning. "We were informed that there were going to be six hearings on the bill – more than we do on the budget," Murray told the News Service Tuesday, adding that all six would be held by the Committee on Economic Development and Emerging Technologies.
Murray didn't specify any expected changes to the bill, but she said "the administration's been meeting with the [committee] chairs to talk about some concerns they had and some things they would like to see changed."
Both Hart and Bosley said they supported finding ways to grow the Bay State life sciences industry and Bosley added that the committee is focusing most of its time on reviewing Patrick's life sciences bill.
"We will eventually pass a life sciences bill," said Bosley.
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