Sponsor abandons push to remove state internship statute after funding cut; proponents urge restoring InterNebraska funding (LB423)

Senator Christy Armendariz, who represents District 18, opened discussion of LB423 by explaining the bill was drafted to repeal a state‑administered grant program for internships and job training but that the Legislature—s preliminary budget had already removed funding for the program. She said the governor—s office agreed the program could remain in statute while funding is paused and she planned to leave the bill in committee.

Armendariz said the program initially carried about $20 million in General Fund authorization but that appropriations leaders had decided not to continue funding after a two‑year pilot, citing cumbersome administration, low philanthropic match and unused funds. She said the Appropriations Committee—s preliminary budget would instead leave remaining obligations to be paid out and return the unspent appropriation to the General Fund.

A string of nonprofit, educational and business witnesses urged the committee not to eliminate the program from statute and described how the funded internships were being used to retain talent across Nebraska. Bryan Seck of Lincoln Literacy said his group relies on paid interns to run core programming that helps adult learners reenter careers; Seck said Lincoln Literacy applied for the grant and described the program as manageable and useful. Student and intern witnesses, including Shanti Slater and Payton Schone, said paid internships created professional connections that made them more likely to remain in Nebraska after graduation. Chamber and industry representatives including Brian Sloan and Jeanie McClure told senators that internships and apprenticeships are central to Blueprint Nebraska workforce goals and that the program at scale was designed to improve student retention and meet employer demand.

Senators asked administrative questions about the source of the $20 million (the General Fund), whether program obligations would still be paid, and why the program did not use all funds. Armendariz said outstanding obligations would be paid and that the department and administration cited a labor‑intensive manual payout process as one reason the program had not fulfilled its intended scale. She invited further work on streamlining program administration and on other ways the Legislature could expand internships.

Witnesses said defunding would reduce capacity for student coordinators and for rural expansion of internship "foundry" programs; multiple testifiers urged legislative funding be restored or restructured to preserve the pipeline for talent retention. The sponsor closed by saying she would not advance LB423 given the Appropriations Committee—s decision to stop funding the program but that she would pursue other ways to expand internship opportunities.

No committee vote was taken on LB423; the sponsor left the bill in committee.