Please ensure Javascript is enabled for purposes of website accessibility Friel bill to capitalize net operating losses in Pennsylvania passes to Senate

Friel bill to capitalize net operating losses in Pennsylvania passes to Senate

Legislation would support technology startup firms to grow the economy

Rep. Paul Friel    January 28, 2026 | 4:10 PM

HARRISBURG, Jan. 28 – The Pennsylvania House of Representatives today passed bipartisan legislation (198-1) to allow start-ups in the state that are not yet profitable to sell their net losses to profitable corporations in exchange for capital, announced the bill’s sponsor, state Rep. Paul Friel, D-Chester.

To help keep these businesses here, Friel’s bill, H.B. 1129, would allow qualified start-ups to sell net operating losses to other companies. This approach, based on a successful New Jersey law, would turn losses into usable cash and businesses into job creators. 

“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.”

The bill would allow the money earned from selling their net losses to be reinvested directly into growing the business, hiring workers and expanding operations in Pennsylvania. This gives start-ups a much-needed source of funding without giving up ownership, Friel said.

“Supporting these companies helps build good-paying jobs and keeps Pennsylvania competitive for the future,” he added. “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 bill, which is co-sponsored by state Rep. Jonathan Fritz, R-Susquehanna/Wayne, is now with the Senate.