HARRISBURG, PA — The Pennsylvania House on Wednesday overwhelmingly approved bipartisan legislation aimed at giving cash-strapped start-ups a new way to raise capital and keep growing in the commonwealth, sending the proposal to the state Senate.
The bill, H.B. 1129, sponsored by state Rep. Paul Friel, a Democrat from Chester County, passed by a 198–1 vote. It would allow qualified start-up companies that are not yet profitable to sell their net operating losses to profitable corporations in exchange for capital.
Supporters say the measure, modeled after a similar law in New Jersey, would help early-stage firms — particularly in technology and biotechnology — convert losses into usable cash without giving up ownership or relocating out of state.
“Start-up businesses — especially in technology and biotechnology — play a key role in creating jobs and driving innovation,” Friel said. “However, many young companies struggle to raise enough money to grow, and too often they leave Pennsylvania for states with better options.”
Under the bill, proceeds from selling net operating losses could be reinvested directly into hiring workers, expanding operations, and scaling businesses within Pennsylvania. Friel said the approach would give start-ups a critical funding tool while strengthening the state’s competitiveness.
“Supporting these companies helps build good-paying jobs and keeps Pennsylvania competitive for the future,” he said. “This bill turns tough, hard-fought days into tomorrow’s growth and helps ensure that the next generation of jobs, investment and innovation stay right here in the commonwealth.”
The legislation is co-sponsored by state Rep. Jonathan Fritz, a Republican who represents Susquehanna and Wayne counties, reflecting broad bipartisan support for policies aimed at boosting entrepreneurship and economic growth.
With House passage secured, the bill now moves to the Pennsylvania Senate for consideration.
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