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Lawmakers consider new Business Innovation Act cash fund to sustain startup supports (LB1015)

Nebraska Legislature, Business and Labor Committee · January 26, 2026
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Summary

LB1015 would create a Business Innovation Act cash fund using a portion of the state's combined unemployment tax to provide stable funding for the Business Innovation Act and workforce grants; proponents described strong ROI and urged protections against burdensome quarterly reporting and for statutory funding minimums.

Sen. Teresa Ibach introduced LB1015 to create a dedicated Business Innovation Cash Fund to support the Business Innovation Act (BIA) and workforce development grants by allocating a portion of the existing combined unemployment tax (state unemployment insurance tax or SUT) to a BIA cash fund. The bill directs the Commissioner of Labor to designate annually the percentage of the combined tax allocated to workforce development and to the BIA.

Commissioner Katie Thurber said the proposal aims to fund BIA programs without raising taxes and noted the unemployment trust fund balance was $584,000,000 as of Sept. 30, 2025; she said $5,700,000 was allocated to workforce development in 2025 and the department anticipates increasing that amount in 2026. Thurber said the department proposes authority to shift the SUT designation from 20% up to 50% to better fund both workforce and innovation programs.

Proponents from Invest Nebraska, Open Range, the Center for Rural Affairs, chambers of commerce and startup founders described the BIA’s economic impact. Richard Baier (former Invest Nebraska board chair) said the state has invested roughly $56.8 million since the program’s inception and testified to substantial venture capital growth; Laurel Otken (Open Range) and others cited reports indicating BIA awards unlocked hundreds of millions in private investment and created jobs statewide. Entrepreneurs who received prototype grants said the BIA helped their firms grow; one witness described a prototype award of $75,000 that supported job creation.

Several witnesses urged adjustment to parts of the bill: concerns included giving the commissioner unfettered annual discretion to set funding levels (request for statutory minima), and that quarterly reporting requirements could burden early-stage companies that already file forms annually with DED. Proponents asked the committee to advance the bill with amendments to ensure reporting is reasonable and predictable funding levels are in statute.

Sen. Ibach closed noting return-on-investment claims cited in testimony (examples included per-dollar multipliers provided by proponents) and acknowledged stakeholder concerns that the committee could address in amendments. The committee did not take a vote during the hearing.