Law limiting incentives for crypto miners passes Texas Senate, moves to House
Texas lawmakers in the state senate have approved a bill that largely aims to remove incentives for crypto miners operating under the seemingly friendly regulatory environment.
In a 30-1 vote on the floor of the Texas State Senate on April 12, lawmakers in the 88th legislative session passed Senate Bill 1751, legislation that would amend parts of the state’s utilities and tax code to add restrictions on crypto mining companies. The Senate session marked the first time the bill was moved forward in state government in more than a week, when the Texas Senate Business and Commerce Committee passed it on April 4.
The bill will next move to the Texas House of Representatives, which is scheduled to meet and debate legislation on April 13 — though it’s unclear if lawmakers intend to take up SB 1751 at that time. If passed in the House, Texas Governor Greg Abbott – a self-described “supporter of crypto bills” – would be able to sign the bill into law.
SB 1751 has received national attention from crypto advocacy groups, including the Chamber of Digital Commerce and the Satoshi Action Fund. The organizations have called on Texas residents to voice their opposition to the bill through their local representatives, but also plan to rally supporters of cryptomining at a rally at the Texas State Capitol on April 25.
Under the proposed legislation, crypto mining companies participating in a program to compensate them for load reductions on Texas’ power grid would have their incentives capped at 10%. Certain companies that operate data centers will also not receive a discount on state taxes from September 2023.
“Elected officials only know how to use hammers – they don’t know how to be surgeons,” Fred Thiel, CEO of mining company Marathon Digital Holdings, told Cointelegraph before the Senate vote. “They started banking on crypto, and Bitcoin mining has been caught up in the banking ring.”
Thiel added that should the bill pass in Texas, some mining companies, including Riot Platforms, that participate in the Energy Grid Load Reduction Program would likely see reduced revenue. According to the Marathon Digital CEO, all miners operating in the state will be affected by the tax reduction policy, potentially causing companies to reconsider Texas as a home — a move that could be interpreted as part of the anti-crypto sentiment at the federal level.
“What the politicians are trying to do now is to push crypto and Bitcoin offshore, which is only going to mean that countries like the US that don’t want to control this technology will gain control of it.”
Related: Texas Legislature Introduces Resolution to Protect Bitcoin Miners and HODLers
Marathon Digital largely powers Bitcoin (BTC) mining in Texas through a wind farm, and other firms operating in the state include Core Scientific, Riot Platforms, White Rock Management and Argo Blockchain. Core Scientific filed for bankruptcy in December 2022 but continues to mine in Texas, while Argo announced around the same time that it planned to sell its Texas facility to Galaxy Digital.
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