Revenue Committee
February 12, 2025
Committee Chair: Sen. Mike von Gillern | Bills Heard: 1 | Full Transcript (PDF)
LB526: A bill to establish an excise tax on cryptocurrency mining operations and require infrastructure cost-sharing with public power districts
Introduced by: Sen. Mike Jacobson | Testimony: 1 proponents, 10 opponents, 2 neutral | Read bill text (PDF)
Nebraska would become the first state to tax cryptocurrency mining under LB526, imposing a 1-cent-per-kilowatt-hour excise tax on operations exceeding 1,000 kilowatt hours annually. The bill also requires miners to help fund infrastructure upgrades through direct payments or letters of credit to public power districts.
Why it matters: Nebraska faces a projected power shortage by 2027 as demand from data centers, AI facilities, and other industries outpaces generation capacity. Policymakers argue crypto mining consumes enormous amounts of power—NPPD alone provides 250 megawatts to crypto operations—while creating few jobs and generating minimal economic benefit compared to traditional industries. The state wants to preserve power for higher-value economic development.
What they're saying:
Proponents: "Crypto miners are the lowest on the food chain in terms of consuming power with providing nothing in return," Sen. Jacobson said. The governor's office argued the state made a mistake through past incentive programs attracting large data centers with minimal job creation. A 1-cent tax aligns Nebraska with surrounding states and won't force established miners to leave given their $30M-$200M+ sunk investments.
Opponents: The tax is discriminatory, targeting only crypto while exempting data centers with similar energy consumption. Miners provide grid flexibility, operate on interruptible rates, and help utilities monetize excess capacity. Margins are razor-thin—a 1-cent increase represents a 20-25% cost jump for some operators. "No other state has done this," testified Eric Peterson of the Satoshi Action Fund. "Nebraska would instantly move from most-friendly to least-friendly for the industry."
By the numbers: NPPD provides 250 megawatts to crypto operations—enough to power 203,000 homes, 1.7 times Lincoln's housing stock. Marathon Digital has invested nearly $200M in Nebraska and pays $6.5M+ annually in state and local taxes. One operator calculated a 1-cent tax would cost his facility $1.6M annually. Another testified his operation generates 4 Bitcoin monthly with $1M annual profit after all costs.
What's next: No vote was taken. The committee heard testimony but did not advance the bill. Sen. Jacobson indicated he remains committed to curbing crypto mining growth and preserving power for industries creating more jobs and economic value.
Committee sentiment: Supportive: Sen. Dave Murman, Sen. Mike von Gillern (Chair) Skeptical: Sen. George Dungan, Sen. Kathleen Kauth Unclear: Sen. Tony Sorrentino, Sen. Julie Ibach
Sentiment estimated from questions and comments — not stated positions.
Session Notes
Committee Chair Sen. von Gillern was initially absent, with Sen. Bostar serving as acting chair until von Gillern's return. Sen. Jacobson, the bill's introducer, was unable to remain for the full hearing due to other committee obligations. The hearing lasted approximately 60 pages of transcript. Amendment AM205 was distributed to committee members during the hearing, reducing the excise tax from 2.5 cents to 1 cent per kilowatt hour and making other technical adjustments. No vote was taken on the bill.
Generated by NE Wire Service | Source: Nebraska Legislature Transcribers Office This is an AI-generated summary. Verify all claims against the official transcript.