Massachusetts Governor Files Mass Leads Act To Create Economic Incentive for Life Sciences, Advanced Energy, and Artificial Intelligence Projects

On March 1, 2024, Massachusetts Governor Maura T. Healey (D) filed the Mass Leads Act under House Bill 4459 to create new economic incentives for life sciences, climate technology, and applied artificial intelligence (AI) companies. 

The Mass Leads Act suggests approximately $2.8 billion in bond authorizations for capital grants, with $1.75 billion allocated for the reauthorization of current programs and $1 billion designated for new capital endeavors. Furthermore, the bill advocates for an additional $750 million in adjustments to economic development tax programs. These adjustments include the establishment of a new climate technology incentive program, known as the "Climatetech Initiative," as well as the expansion of Massachusetts’ Life Sciences Credits. In addition, the Mass Leads Act aims to boost investment in the Community One Stop for Growth (“a single application portal and collaborative review process of community development grant programs that make targeted investments based on a Development Continuum”), rural communities, advanced manufacturing, robotics, tourism, the creative economy, and small businesses. 

The bill has been filed to the Joint Committee on Economic Development and Emerging Technologies within the General Court of the Commonwealth of Massachusetts (the Massachusetts state legislature). The Massachusetts State Senate concurred on the bill on March 28, 2024, and extended the reporting date until May 30, 2024, for the Massachusetts State House to follow suit. Once the bill has been approved by the Massachusetts State House, it will be sent back to Governor Healey to be signed into law. 

"The Mass Leads Act will take our proven, homegrown model of the Life Science Initiative to the next level to continue leading the world in attracting innovative businesses to our state and developing life-saving medicines. We’ll also stake our claim in burgeoning industries like climatetech and artificial intelligence to make clear that Massachusetts competes to win. This is a transformative opportunity to strengthen our state's economy while also supporting our businesses, workforce and communities, and we look forward to working with our Legislative partners to get it done."

- Governor of Massachusetts, Maura Healey (D-MA)

Climatech Initiative

The Mass Leads Act proposes a $1 billion, 10-year Climatetech Initiative that aims to make Massachusetts a global hub for climate innovation. The initiative seeks to create jobs, support technology development and infrastructure to reduce emissions, and promote resilience locally. Governor Healey hopes these funds and programs will help companies start and scale in Massachusetts, and thus create well-paying jobs across the commonwealth. The Climatetech Initiative’s goals include:

1. Capital Funding: The Mass Leads Act provides $400 million in capital resources to the Massachusetts Clean Energy Center (“MassCEC”) for the first time. Bond authorizations can support research and development, innovation, manufacturing, commercialization, and the deployment of climatetech technologies, including offshore wind, across the Commonwealth of Massachusetts. The bill proposes the following authorizations:
   • MassCEC Clean Energy Investments Fund ($200 million): Deploy capital resources to support and stimulate research and development, innovation, manufacturing, commercialization, and deployment of Climatetech technologies across Massachusetts. 
   • Offshore Wind Industry Investment Fund ($200 million): Leverage capital resources to support the development and advancement of the offshore wind industry.
2. Tax Incentives: The Mass Leads Act establishes a new $300 million Climatetech Tax Incentive Program to enable the commonwealth to invest in climatetech companies, expand employment opportunities, and support research and development. This new tax incentive program will be subject to a $30 million statutory cap with the annual awards subject to approval by the Massachusetts Secretary of Administration and Finance (A&F). Additionally, the Mass Leads Act seeks to continue the implementation of the newly created $35 million per year Offshore Wind Tax Credit and proposes strategic changes to further grow the program.
3. Operating Funding: This 10-year, $300 million strategy highlights the importance of annual operating support through the commonwealth’s budget process for MassCEC, which is instrumental in fostering the climatetech industry and training a clean energy workforce. Operating funds enable MassCEC to deploy stable programming and initiatives to reach areas that capital programs and tax incentives are not able to reach. This includes workforce development initiatives, internships, strategic partnerships, and operations.

Life Sciences Program

The Mass Leads Act also proposes reauthorizing the Life Sciences Initiative at $1 billion for 10 years to position Massachusetts to further enhance its lead as the global leader in life sciences. The act hopes to catalyze investment in the commonwealth, building upon previous initiatives aimed at bolstering advanced energy investments The Life Sciences Initiative’s goals include:

1. Capital Funding: $500 million for the Life Sciences Capital fund to support the reauthorization of the Life Sciences Initiative with capital resources for execution of the commonwealth’s vision for pursuing health equity ventures, research and development, and capital-eligible initiatives to support collaboration across ecosystems. The Massachusetts Life Sciences Center will adopt a model that encourages multi-institution, cross-sector collaboration among key industries, such as biotechnology, manufacturing, medical technology, higher education, and healthcare. Specifically, the proposed legislation introduces a ten-year, $1 billion initiative to bolster the Massachusetts life sciences ecosystem, including $850 million allocated for new capital authorization, adjustments to the life sciences tax incentive program, and planned operating funding through the annual budget process.
2. Tax Incentives: The Life Sciences Tax Incentive Program has been successful in incentivizing the creation of jobs in the life sciences industry. The Mass Leads Act proposes to increase the statutory cap from $30 million to $50 million for life sciences tax incentives to create more capacity in the future and extend the program through 2033 to demonstrate the commonwealth’s commitment for the next decade. This will further enhance a valuable business development tool to attract and retain companies in Massachusetts.
3. Operating: This new strategy will also project annual appropriations for workforce development programming and other strategic initiatives, including support for early-stage companies. This component of the strategy, notably, incorporates an expansion of Pathmaker, a key component of Governor Healey’s administration’s MassTalent Initiative, to scale career training programs for in-demand job opportunities.

Other New Capital Programs

Alongside the Climatetech Initiative, there are new capital programs, including:

• $100 million for the Applied AI Hub for grants to support the integration of artificial intelligence (AI) throughout the commonwealth's network, guided by the strategic objectives outlined by the AI Strategic Task Force.
• $75 million for the Massachusetts TechHub to create a fresh initiative in Massachusetts aimed at funding consortia focused on vital technology domains, drawing inspiration from the U.S. Economic Development Administration’s Regional Technology and Innovation (Tech Hubs) Program. 
• $25 million for the Robotics Investment Program for capital grants aimed at furthering the commonwealth’s prominence in the robotics industry by fostering research, commercialization, and training.
• $25 million for the Business Builds Capital Program for the initiation of a grant program designed to bolster business enhancements, such as energy efficiency, facilitated through the Business Front Door initiative. 

Expansion of Existing Programs

Furthermore, the Mass Leads Act encompasses capital authorizations for established programs targeting advanced manufacturing, tourism, and the cultural industry. These comprise:

• $400 million for the MassWorks Infrastructure Program for enhancing public infrastructure to stimulate private development and foster job creation. 
• $100 million for the Rural Development Fund to offer financial assistance for infrastructure enhancements and community planning initiatives in rural areas. 
• $100 million for the Seaport Economic Council to bolster marine economies in coastal regions. 
• $99 million for Advanced Manufacturing for flexible grants to endorse advanced manufacturing initiatives via the Mass Tech Collaborative (MTC). This public agency, established to enhance economic development within Massachusetts' innovation-driven sectors, facilitates business expansion, cultivates partnerships, and allocates investments across diverse technology domains including healthcare, information technology, life sciences, marine sciences, nanotechnology, broadband deployment, and clean energy.
• $50 million for the Cultural Facilities Fund to allocate resources for capital enhancements at cultural establishments, encompassing museums, theaters, and performance venues. 
• $40 million for Destination Development Grants to aid in vital capital enhancements at tourism destinations throughout Massachusetts. 

Resources

• H4459
• Governor Maura Healey Press Release
• Mass Leads Act website

^{© Copyright 2024. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.}