SB 1120 (McNerney) is sponsored by the Silicon Valley Leadership Group
SACRAMENTO (April 8, 2026) – The California Senate Revenue and Taxation Committee has advanced SB 1120, a bill authored by Senator Jerry McNerney to strengthen and expand the California Competes Tax Credit (CalCompetes) program and boost the state’s innovation economy. The legislation – sponsored by the Silicon Valley Leadership Group – would make CalCompetes tax credits refundable for businesses in strategic industries, ensuring California remains competitive in attracting and retaining cutting-edge companies in sectors like fusion energy, quantum computing, semiconductors, and zero-emission vehicles.
“CalCompetes is one of the main drivers for bringing new businesses and jobs to California and keeping existing companies here. But more needs to be done to ensure that the program reaches its full potential,” said Sen. McNerney, who is chair of the Senate Revenue and Taxation Committee. “SB 1120 will ensure that CalCompetes is fully utilized and spurs innovation and job creation throughout the state, especially in burgeoning clean economy industries.”
“SB 1120 is a smart, targeted fix that will ensure the next wave of innovators continue to develop and scale their companies here in California,” said SVLG CEO Ahmad Thomas. “This bill ensures CalCompetes program dollars actually reach the startups and emerging technology companies driving California’s future in fusion energy, quantum computing, zero emissions vehicles, and so many more. We’re grateful to Senator McNerney for his leadership, and we look forward to continuing to advance this bill.”
The legislation aims to unlock hundreds of millions of dollars in previously inaccessible tax credits by making them refundable, particularly benefiting startups and early-stage companies that may not yet have significant tax liability but are making substantial investments in research, development, and job creation in California.
While CalCompetes has been a critical tool for economic development, its current structure often limits participation to more established firms with existing tax liability, leaving many high-potential startups unable to benefit. SB 1120 addresses this gap by making the program more inclusive and responsive to the needs of emerging industries, helping ensure that companies developing transformative technologies can scale and grow within California rather than relocating elsewhere.
The bill’s advancement out of the Senate Revenue and Taxation Committee marks an important step toward strengthening California’s position as the global epicenter of innovation and ensuring that the state’s economic development programs align with the needs of a rapidly evolving technology landscape.
The bill will now move to the Senate Appropriations Committee.
About Silicon Valley Leadership Group
About the Silicon Valley Leadership Group: The Silicon Valley Leadership Group (SVLG) is the leading business association representing the innovation economy and its ecosystem. Founded by David Packard of Hewlett-Packard, SVLG has worked for nearly five decades to address issues that affect the region’s economic dynamism and quality of life. Today, SVLG is focused on accelerating the next era of Silicon Valley leadership, activated by our Institute for California AI Policy (ICAP) and three Centers of Expertise (COE): Technology & Innovation, Business Competitiveness, and Civic Impact. SVLG members collectively provide nearly one in every three private-sector jobs in Silicon Valley and contribute trillions to the global economy. For more information, visit svlg.org.
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