Ark. House to tackle crypto mining
The Arkansas Senate passed seven resolutions to curb cryptocurrency mining operations on Thursday.
This sets the stage to potentially overturn parts of a law passed last year that limits government regulation of that industry in the state.
Next, the matter will be taken up by the House, where Rep. Josh Miller, RDistrict 41 has already filed similar resolutions. He said on Friday that they could go to committees as soon as Tuesday.
Miller’s six resolutions are modeled after work begun by Sen. Bryan King: “I hope to pass all six on the House end,” he said on Friday.
Eight resolutions were introduced to the Senate in total, six of them by Sen. King, R-Green Forrest, a leader in the push to repeal or significantly amend Act 851 — the Arkansas Data Centers Act of 2023. Five of King’s resolutions passed.
One was introduced by Sen. Joshua Bryant, R-Rogers, an original sponsor of Act 851 and one by Sen. Missy Irvin, R-Mountain View.
A growing industry
Cryptocurrency mining, which uses large banks of computer servers to solve equations in order to create new units of cryptocurrency, is a growing industry in Arkansas.
The servers use large amounts of electricity and a large amount of water to cool the servers, which generate high heat. Large and powerful fans in the cooling system also produce loud noise, a common complaint from neighbors.
There are many unanswered questions, Rep. Miller said, about “the effect they’re going to have on the power grid in some areas. We know that they are destroying property values.”
“They’re taking advantage of our cheap electricity and our good nature,” said Sen. King.
Miller and King also voiced concerns about foreign ownership of crypto mining operations.
Sen. Bryant said on Thursday that, though he agrees that Act 851 needs modification, there are many unfair misconceptions around crypto mining, including overblown national security concerns around crypto centers, that have led to governments around the country “capriciously
shutting them down.”
He called Act 851 “more of a property rights and preemption bill” that left regulation of crypto mining to the state rather than local governments.
The General Assembly does not generally consider legislation that isn’t related to the state budget during the fiscal session, which began on Wednesday. To introduce bills unrelated to the budget, both chambers of the General Assembly must first pass resolutions allowing for it.
This is the first time that “binding” resolutions “with real substance to them” have been introduced during a fiscal session, said a source in the General Assembly with knowledge of the situation.
Act 851, along with the crypto mining industry itself, have generated a lot of controversy and media scrutiny, perhaps one reason that it’s being addressed during a session that’s normally reserved for “rubber stamping” budget and appropriation legislation.
The resolutions
Act 851 of 2023 created the Arkansas Data Centers Act, which restricts local government power to regulate cryptocurrency mining.
Under the law, local governments cannot set noise levels specifically for crypto mining facilities or change zoning usage to exclude mining centers.
King has called for the repeal of Act 851 and said Thursday: “We have to stop tying the local community’s hands.” The resolutions he introduced would:
● Require that only domestic computers and software be used to mine cryptocurrency (SR 12).
● Require crypto miners to be licensed under the Uniform Money Services Act (SR 13).
● Give local governments the power to limit the amount of water and electricity used (SR 14).
● Institute a six-month waiting period to secure land or structures for a crypto center (SR 15)
● Ban ownership of crypto operations by countries listed in the International Traffic in Arms Regulations (SR 16).
A resolution filed by Sen. Bryant calls for crypto facilities to take measures to control noise including different cooling systems and sound insulation, as well as a minimum distance from nearby structures as well as banning foreign ownership by countries listed in the International Traffic in Arms Regulations (SR 5).
A resolution filed by Sen. Irvin would require crypto centers to be licensed under the Department of Energy and Environment (SR 17).