The 2026 Nebraska legislative session is in full swing, with a variety of tech and startup-related bills being considered, from funding for the Business Innovation Act to regulation of artificial intelligence and data centers.
Tech Nebraska, the state’s technology trade group, is keeping a close eye on those developments. “Tech moves incredibly fast,” said Emily Allen, Tech Nebraska’s executive director. “The governance made at the federal level and at the state level needs to be flexible so (lawmakers) don’t hinder the growth and the evolution of technology.”
For startups and big business alike to thrive, Tech Nebraska is focused on legislation supporting “pro-growth policy, public-private collaboration, universal access, data-driven and forward-thinking governance and infrastructure and talent as the foundation for growth.”
Here are the top three bills Tech Nebraska sees as important to the state’s innovation ecosystem:
LB 1044, funding the Business Innovation Act
The Business Innovation Act, a cornerstone program for funding Nebraska startups and innovation, has had a rough year. In 2025, it was cut by over $3 million after Gov. Jim Pillen proposed scaling back the BIA.
In October, the BIA was unexpectedly frozen, then unfrozen by Pillen in December after outcry from the startup and business community. Pillen also requested an increase in BIA funding to its previous levels.
State Sen. Jason Prokop’s bill would tell the Nebraska Department of Economic Development, which administers the BIA, that it must spend a set amount on the BIA every year. The governor would no longer be involved in approving DED’s plan for the BIA.
Both moves would make it harder for DED to freeze the BIA again, and keep funding the program from the Legislature’s general fund. Tech Nebraska supports the bill.
“Strengthening innovation funding is going to help startups grow and stay here instead of leaving or looking elsewhere,” Allen said. “Other states are getting more competitive. We want to remain competitive.”
Another bill, introduced by State Sen. Teresa Ibach, also aims to support the BIA. But it would fund the program through the state’s unemployment insurance tax, administered by the Department of Labor.
“We feel strongly that the BIA should be funded, full stop,” said Allen, when asked about Ibach’s bill. “Ideally, it is funded through the general fund with (the Prokop bill), without taking dollars from unemployment.”
Both Prokop’s bill and Ibach’s bill have had hearings. During the Feb. 2 hearing on Prokop’s bill, Prokop told the Banking, Commerce and Insurance Committee that the measure would likely combine with Ibach’s bill and Pillen’s budget proposal for the BIA.
LB 1185, the Conversational Artificial Intelligence Safety Act
State Sen. Eliot Bostar’s bill would regulate AI chatbots to include protections for children, ranging from chatbot providers telling kids using their products that the AI is not a real person to preventing chatbots from having any sort of emotional, romantic or sexual relationship with an underage user.
Kids have committed suicide after allegedly talking to and being encouraged by AI chatbots. Across the country, there’s a concern about “AI psychosis,” and how chatbots can make mental health worse for kids.
Tech Nebraska sees Bostar’s bill as having a common-sense approach, especially with a focus on protecting children. But AI regulation is still a thorny subject, in part because of President Donald Trump’s executive order preempting state AI policies.
“It really limits states’ ability to regulate AI, outside the issues of child safety, AI infrastructure and then zoning, permitting and state procurement issues,” said Luisa Smith, the new director of government affairs for the Nebraska Chamber of Commerce & Industry. Smith is also the dedicated lobbyist for Tech Nebraska, which was formed in partnership with the NE Chamber.
Trump’s executive order also creates an AI Litigation Task Force to challenge state laws the administration considers “onerous and excessive.” The administration could also pull federal funding for states as a result.
“When we’re looking at pro-growth policies, the last thing we want to do is for Nebraska legislation to be tying up the state in litigation, which could be a deterrence for companies to want to come in and work here and develop here,” Smith said.
Because of the child safety exemption, Bostar’s bill may be safe from federal opposition. But it also raises questions about what definitions for fast-moving technology are passed into law, and how that might affect future innovation.
Tech Nebraska appreciates Bostar’s “leadership in starting the AI policy conversation, and as he continues to develop the language, it’s really important that our state policy aligns with the federal framework,” Allen said.
LB 1119, adjusting the Age-Appropriate Online Design Code Act
State Sen. Carolyn Bosn’s bill would introduce new definitions of online design to the Age-Appropriate Online Design Code Act. The code was passed in 2025 to improve privacy design and tools for children using social media platforms.
New definitions would include the infinite scroll (“where content automatically and continuously loads at the bottom of a screen”) and gamification (“a design feature that emulates gameplay, including, but not limited to, a streak, badge or reward that motivates or causes more frequent or more extensive use of an online service.”
Tech Nebraska is neutral on this legislation, and maintains its concern over how definitions are applied. Some lawmakers may not have the technology background to understand what they are trying to regulate, Allen said.
“The age-appropriate design bill that came out this year would kind of backtrack away from the progress that we felt like was made last year,” Smith said.
“All of these bills that are being introduced in the tech and innovation space — the intent is good, and so we just are working with our technologists to find where that intent might be having unforeseen implications, and then communicating with the Legislature about those points,” she said.
