Read the full stored bill text
LEGISLATIVE BILL 1205
Approved by the Governor April 14, 2026
Introduced by Clouse, 37; Andersen, 49; Conrad, 46.
A BILL FOR AN ACT relating to the Department of Economic Development; to amend
section 81-12,162, Reissue Revised Statutes of Nebraska; to change a
requirement relating to the small business investment program; and to
repeal the original section.
Be it enacted by the people of the State of Nebraska,
Section 1. Section 81-12,162, Reissue Revised Statutes of Nebraska, is
amended to read:
81-12,162 (1) The department shall establish a small business investment
program. The program:
(a) Shall provide grants to microloan delivery organizations, microloan
technical assistance organizations, and innovation hubs to:
(i) Better assure that Nebraska's microenterprises are able to realize
their full potential to create jobs, enhance entrepreneurial skills and
activity, and increase low-income households' capacity to become self-
sufficient;
(ii) Provide funding to foster the creation of microenterprises;
(iii) Establish the department as the coordinating office for the
facilitation of microlending and microenterprise development;
(iv) Facilitate the development of a permanent, statewide infrastructure
of microlending support organizations to serve Nebraska's microenterprise and
self-employment sectors;
(v) Enable the department to provide grants to community-based
microenterprise development organizations in order to encourage the development
and growth of microenterprises throughout Nebraska; and
(vi) Enable the department to engage in contractual relationships with
statewide microlending support organizations and innovation hubs which have the
capacity to leverage additional nonstate funds for microenterprise lending.
To the maximum extent possible, the selection process should assure that
the distribution of such financial assistance provides equitable access to the
benefits of the Business Innovation Act by all geographic areas of the state;
and
(b) May identify and coordinate other state and federal sources of funds
which may be available to the department to enhance the state's ability to
facilitate financial assistance pursuant to the program.
(2) To establish the criteria for making an award to a microloan delivery
organization, microloan technical assistance organization, or innovation hub,
the department shall consider:
(a) The plan for providing business development services and microloans to
microenterprises;
(b) The scope of services to be provided by the microloan delivery
organization, microloan technical assistance organization, or innovation hub;
(c) The plan for coordinating the services and loans provided by the
microloan delivery organization, microloan technical assistance organization,
or innovation hub with commercial lending institutions;
(d) The geographic representation of all regions of the state, including
both urban and rural communities and neighborhoods;
(e) The ability of the microloan delivery organization, microloan
technical assistance organization, or innovation hub to provide for business
development in areas of chronic economic distress and low-income regions of the
state;
(f) The ability of the microloan delivery organization, microloan
technical assistance organization, or innovation hub to provide business
training and technical assistance to microenterprise clients;
(g) The ability of the microloan delivery organization, microloan
technical assistance organization, or innovation hub to monitor and provide
financial oversight of recipients of microloans; and
(h) Sources and sufficiency of operating funds for the microenterprise
development organization.
(3) Awards made by the department to a microloan delivery organization,
microloan technical assistance organization, or innovation hub may be used to:
(a) Satisfy matching fund requirements for other federal or private
grants;
(b) Establish a revolving loan fund from which the microloan delivery
organization, microloan technical assistance organization, or innovation hub
may make loans to microenterprises;
(c) Establish a guaranty fund from which the microloan delivery
organization, microloan technical assistance organization, or innovation hub
may guarantee loans made by commercial lending institutions to
microenterprises;
(d) Provide funding for the operating costs of a microloan delivery
organization, microloan technical assistance organization, or innovation hub
not to exceed twenty percent; and
LB1205
2026
LB1205
2026
-1-
(e) Provide grants to establish loan-loss reserve funds to match loan
capital borrowed from other sources, including federal microenterprise loan
programs.
(4) Any award of financial assistance to a microloan delivery
organization, microloan technical assistance organization, or innovation hub
shall meet the following qualifications:
(a) Funds shall be matched by nonstate funds equivalent in money or in-
kind contributions or a combination of both equal to thirty-five percent of the
grant funds requested. Such matching funds may be from any nonstate source,
including private foundations, federal or local government sources, quasi-
governmental entities, or commercial lending institutions, or any other funds
whose source does not include funds appropriated by the Legislature;
(b) Microloan funds shall be disbursed in microloans which do not exceed
one hundred fifty thousand dollars or used to capitalize loan-loss reserve
funds for such loans; and
(c) A minimum of fifty percent of the microloan funds shall be used by a
microenterprise development assistance organization for small business
technical assistance.
The department shall contract with a statewide microenterprise development
assistance organization to carry out this section.
(5) The Each year the department may award up to three million dollars per
year under this section and beginning in fiscal year 2027-28, shall award up to
three million dollars per year under this section.
Sec. 2. Original section 81-12,162, Reissue Revised Statutes of Nebraska,
is repealed.
LB1205
2026
LB1205
2026
-2-