HARRISBURG –– Several measures to strengthen Pennsylvania’s position as a leader in research, development and life sciences innovation were approved by the Senate Institutional Sustainability and Innovation Committee, according to committee chair Sen. Frank Farry (R-6).
The bills would expand incentives for research and development, support small businesses and emerging companies, and streamline licensing requirements for pharmaceutical and medical device manufacturers seeking to establish operations in the commonwealth.
Senate Bill 792 would significantly expand Pennsylvania’s Research and Development Tax Credit Program by doubling the annual statewide cap from $60 million to $120 million and increasing the small-business allocation from $12 million to $24 million. The legislation also allows unused credits to be reallocated between small-business and large-business pools, ensuring the full value of available credits can be utilized each year.
The legislation raises the small-business asset threshold from $5 million to $10 million, increases the standard credit rate from 10% to 14% and boosts the small-business credit rate from 20% to 25%. It also creates a new incentive for companies to begin research and development activities in Pennsylvania by providing 6% credit for qualifying expenses incurred by businesses with no research and development activity in Pennsylvania during the previous three years.
“These improvements make our tax credit program more competitive and accessible, particularly for startups and growing businesses that are often at the forefront of innovation,” Farry said. “By encouraging companies to invest in research here in Pennsylvania, we can help create new opportunities for workers and strengthen our economy for years to come.”
Senate Bill 1206 focuses on Pennsylvania’s growing life sciences sector by modernizing licensing requirements for pharmaceutical and medical device manufacturers. The legislation allows companies to apply for state licensure while awaiting approval from the U.S. Food and Drug Administration, enabling them to establish operations and make investments in Pennsylvania sooner.
“Pennsylvania should be doing everything we can to encourage innovation, investment and job creation in this rapidly growing sector,” said Sen. Tracy Pennycuick (R-24), prime-sponsor of the bill. “By removing unnecessary delays and providing greater regulatory clarity, this legislation will help attract cutting-edge companies, strengthen our economy and ensure Pennsylvania remains competitive in the race for life sciences investment.”
The bill also expands the definition of a virtual manufacturer to include companies that have already received FDA approval, have submitted an FDA application or intend to apply within 12 months. In addition, the measure clarifies that the Department of Health may not require FDA approval as a condition of licensure.
“Pennsylvania is home to world-class medical research institutions and a rapidly growing life sciences industry,” Farry said. “This legislation removes unnecessary barriers and helps innovative companies put down roots in our state while maintaining strong regulatory oversight.”
The bills now head to the full Senate for consideration.