SB 1175

                                                 PRINTER'S NO.   1516
                THE GENERAL ASSEMBLY OF PENNSYLVANIA
                   SENATE BILL
                   No. 1175
                                           Session of
                                             2026
INTRODUCED BY HUGHES, SANTARSIERO, COSTA, TARTAGLIONE, SCHWANK,
   KIM, HAYWOOD, STREET, KANE, FONTANA, PENNYCUICK AND
   CAPPELLETTI, MARCH 18, 2026
REFERRED TO FINANCE, MARCH 18, 2026
                                AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2    act relating to tax reform and State taxation by codifying
3    and enumerating certain subjects of taxation and imposing
4    taxes thereon; providing procedures for the payment,
5    collection, administration and enforcement thereof; providing
6    for tax credits in certain cases; conferring powers and
7    imposing duties upon the Department of Revenue, certain
8    employers, fiduciaries, individuals, persons, corporations
9    and other entities; prescribing crimes, offenses and
10    penalties," in Innovate in PA Tax Credit, further providing
11    for legislative intent, for definitions, for duties, for use
12    of tax credits by qualified taxpayers, for sale, carryover
13    and carryback, for sale of tax credits to qualified
14    taxpayers, for Innovate in PA Program, for guidelines and for
15    report and providing for second distribution report.
16    The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18    Section 1.     Section 1802-F of the act of March 4, 1971
19 (P.L.6, No.2), known as the Tax Reform Code of 1971, is amended
20 to read:
21 Section 1802-F.    Legislative intent.
22    It is the intent of this article to invest in innovation as a
23 catalyst for economic growth. Investment in the Ben Franklin
24 Technology Development Authority, the Ben Franklin Technology
1 Partners, regional biotechnology research centers, the
2 [department] life sciences industry, workforce development
3 programs and venture capital funds will advance the
4 competitiveness of this Commonwealth's companies in the global
5 economy.
6    Section 2.     The definition of "recipient" in section 1803-F
7 of the act is amended to read:
8 Section 1803-F.    Definitions.
9    The following words and phrases when used in this article
10 shall have the meanings given to them in this section unless the
11 context clearly indicates otherwise:
12    * * *
13    "Recipient."     An entity that receives a distribution of funds
14 under section 1811-F(c) or section 1811-F(d).
15    * * *
16    Section 3.     Section 1805-F(b) of the act is amended and the
17 section is amended by adding a subsection to read:
18 Section 1805-F.    Duties.
19    * * *
20    (a.1)     Sale of additional tax credits.--The department may
21 sell up to $350,000,000 in tax credits to qualified taxpayers.
22 The sale of the tax credits shall be in accordance with section
23 1808-F.
24    (b)     Time of sale.--The sale authorized under subsection (a)
25 may not occur before October 1, 2013. The sale authorized under
26 subsection (a.1) may not occur prior to October 1, 2026.
27    Section 4.     Section 1806-F(a) of the act is amended and
28 subsection (d) is amended by adding a paragraph to read:
29 Section 1806-F.    Use of tax credits by qualified taxpayers.
30    (a)     Use against insurance premiums tax liability.--A
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1 qualified taxpayer that purchases tax credits under [section
2 1805-F] section 1805-F(a) may claim the credits beginning in
3 calendar year 2017 against insurance premiums tax liability
4 incurred for a taxable year that begins on or after January 1,
5 2016. A qualified taxpayer that purchases tax credits under
6 section 1805-F(a.1) may claim the credits beginning in calendar
7 year 2030 against insurance premiums tax liability incurred for
8 a taxable year that begins on or after January 1, 2029.
9    * * *
10    (d)     Limitations.--The following shall apply:
11* * *
12(1.1)   The total amount of tax credits applied against
13    insurance premiums tax liability by all qualified taxpayers
14    in a fiscal year may not exceed $70,000,000 per year
15    beginning in calendar year 2030.
16* * *
17    Section 5.     Sections 1807-F(a) and 1808-F(g) of the act are
18 amended to read:
19 Section 1807-F.    Sale, carryover and carryback.
20    (a)     Carryover.--If the qualified taxpayer cannot use the
21 entire amount of the tax credit for the taxable year in which
22 the taxpayer is eligible for the credit, the excess may be
23 carried over to succeeding taxable years and used as a credit
24 against the qualified tax liability of the taxpayer for those
25 taxable years, provided that the credit may not be carried over
26 to any taxable year that begins after December 31, 2025[.], for
27 tax credits sold under section 1805-F(a) and after December 31,
28 2034, for tax credits sold under section 1805-F(a.1).
29    * * *
30 Section 1808-F.    Sale of tax credits to qualified taxpayers.
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1    * * *
2    (g)     Limitation.--No tax credits may be sold under section
3 1805-F(a) if the bidding process, upon completion, has failed to
4 yield at least $40,000,000 in revenue. No tax credits may be
5 sold under section 1805-F(a.1) if the bidding process, upon
6 completion, has failed to yield at least $200,000,000 in
7 revenue.
8    Section 6.        Section 1811-F of the act is amended by adding a
9 subsection to read:
10 Section 1811-F.       Innovate in PA Program.
11    * * *
12    (d)     Second distribution.--The department shall distribute
13 the net proceeds received by the department as a result of the
14 sale of tax credits under section 1805-F(a.1) as follows:
15(1)   Forty percent to the Commonwealth Financing
16    Authority for grants or loans to support the construction of
17    commercial lab space, incubators, applied research and
18    development facilities and related public improvement and
19    public interest projects in the surrounding community.
20(2)   Eight percent to the department for grants to life
21    science companies and institutions of higher education for
22    recruitment and retention initiatives to attract and retain
23    exceptional life science researchers in this Commonwealth.
24(3)   Ten percent to the Department of Labor and Industry,
25    in collaboration with the department, the Department of
26    Education and the Department of Human Services, for grants to
27    fund:
28(i)    New partnerships between biotechnology and life
29science companies, training providers and educational
30institutions at all levels to create training programs
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1      that are free, accessible and open to students and adults
2      with a high school education and no previous experience.
3(ii)    Programs that provide opportunities to prepare
4      a diverse range of students from diverse backgrounds for
5      careers in the biotechnology or life sciences sector via
6      quality internships for undergraduate and graduate
7      students from historically underrepresented or
8      economically disadvantaged communities, including
9      programs that offer curriculum and training support with
10      refined "hard" skills in the sciences and "soft" skills
11      of professional and personal development.
12(iii)    Programs designed for 11th and 12th grade
13      students from historically underrepresented or
14      economically disadvantaged communities and have an
15      interest in biotechnology or life sciences research.
16      Programs would combine intensive lab training with
17      opportunities for students to connect with paid six-week
18      summer internships in cutting-edge academic and industry
19      research labs. Eligible programs under this subparagraph
20      would include programs that prepare students to go
21      directly into the workforce or into higher education in
22      STEM fields.
23(iv)    Programs that provide personalized
24      entrepreneurial education for first-time founders of
25      biotechnology or life science ventures of any development
26      stage. Programs will focus on individual needs and
27      utilize accredited entrepreneur coaches and expert
28      mentors to craft unique, educational experiences crucial
29      to the development of successful ventures, while
30      assisting them with networking with partners in the
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1health care system, biotechnology and life science
2community in a cooperative learning environment.
3(4)   Seven percent to the Ben Franklin Technology
4    Partners Program for use according to program guidelines.
5(5)   Twenty-five percent to the Venture Investment
6    Program for use according to program guidelines, including
7    traditional venture investments or impact investments. The
8    authority may consider impact investments based on
9    performance. Impact investments may not exceed 15% of the
10    Venture Investment Program distribution under this paragraph.
11(6)   Ten percent to the three regional biotechnology
12    research centers for distribution in equal proportions to
13    each regional biotechnology research center.
14    Section 7.     Sections 1812-F and 1813-F(b) introductory
15 paragraph of the act are amended to read:
16 Section 1812-F.    Guidelines.
17    The department, in consultation with the Commonwealth
18 Financing Authority, the Department of Labor and Industry, the
19 Department of Education, the Department of Human Services, the
20 authority and each regional biotechnology research center, shall
21 promulgate guidelines implementing this article.
22 Section 1813-F.    Report.
23    * * *
24    (b)     Contents.--The report under subsection (a) shall apply
25 to the distribution under section 1811-F(c) and include the
26 following:
27* * *
28    Section 8.     The act is amended by adding a section to read:
29 Section 1814-F.    Second distribution report.
30    (a)     Duties.--On or before January 1, 2027, and January 1 of
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1 each subsequent year, the department, in consultation with the
2 Commonwealth Financing Authority, the Department of Labor and
3 Industry, the Department of Education, the Department of Human
4 Services, the authority and each regional biotechnology research
5 center, shall:
6(1)   Submit a report on the implementation of the program
7    to all of the following:
8(i)    The Governor.
9(ii)    The chairperson and minority chairperson of the
10Appropriations Committee of the Senate.
11(iii)    The chairperson and minority chairperson of
12the Appropriations Committee of the House of
13Representatives.
14(2)   Publish the report under paragraph (1) on the
15    department's publicly accessible Internet website.
16    (b)   Contents.--The report under subsection (a) shall apply
17 to the distribution under section 1811-F(d) and include:
18(1)   The name of the purchaser of premiums tax credits.
19(2)   The amount of premiums tax credits allocated to the
20    purchaser.
21(3)   The amount of capital the purchaser contributed for
22    the issuance of the tax credit certificate.
23(4)   The amount of any tax credits that have been
24    transferred under section 1810-F(e).
25(5)   The amount of funds received by the recipients
26    during the previous year.
27(6)   The cumulative amount of capital received by the
28    department in connection with the sale of the tax credits.
29(7)   The amount of capital remaining uninvested at the
30    end of the preceding calendar year.
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1      (8)     The names and locations of businesses or other
2  entities receiving capital from the recipients, whether the
3  investment was a grant or a loan, the reason for the
4  investment and the amount of the investment.
5      (9)     The total number of jobs created in this
6  Commonwealth by the investment and the average wages paid for
7  the jobs.
8      (10)     The total number of jobs retained in this
9  Commonwealth as a result of the investment and the average
10  wages paid for the jobs.
11      (11)     The total number of individuals participating in
12  the programs under section 1811-F(d)(3).
13  Section 9.    This act shall take effect in 60 days.
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