The Arkansas House on Wednesday authorized the introduction of two bills proposing stricter regulations on cryptocurrency mining while six other proposals failed to gain enough votes.
According to Arkansas Advocate, all of the proposed bills would have amended Act 851 of 2023, or the Arkansas Data Centers Act, which passed with bipartisan support and limited the state’s and local governments’ ability to regulate crypto mining operations.
The resolutions required a two-thirds majority vote in both chambers of the Legislature in order to be introduced during the fiscal session. The Senate passed all eight resolutions with at least the minimum of 24 votes.
Six resolutions sponsored by Rep. Josh Miller, R-Heber Springs, fell short of the 67 votes needed to pass the House Wednesday.
King and Miller proposed the following six policies:
House Resolution 1014 would have banned the use of computers or software manufactured by foreign entities in crypto mining in Arkansas. It failed with 54 yes votes, 27 no votes, 12 present votes and seven members not voting.
House Resolution 1015 would have allowed local governments to regulate crypto mines and prohibited ownership of the mines by the list of foreign countries from which the federal International Traffic in Arms Regulations bans imports and exports. It failed with 46 yes votes, 34 no votes, 11 present votes and nine members not voting.
House Resolution 1016 would have required at least six months’ advance notice before buying or leasing any land or buildings used for crypto mines. It failed with 57 yes votes, 25 no votes, nine present votes and nine members not voting.
House Resolution 1017 would have required the Arkansas Natural Resources Commission to monitor crypto mines’ water usage and administer consequences to any mine that “threatens the critical groundwater supplies of this state through an excessive use of water.” It failed with 65 yes votes, 15 no votes, 11 present votes and nine members not voting.
House Resolution 1018 would have required people who engage in crypto mining to be licensed money transmitters under the state’s Uniform Money Services Act. It failed with 57 yes votes, 22 no votes, 13 present votes and eight members not voting.
House Resolution 1019 would have required cryptocurrency businesses to pay a fee to the Department of Energy and Environment for “extraordinary electrical energy usage.” It failed with 41 yes votes, 36 no votes, 13 present votes and 10 members not voting.
Senate Resolution 11, the equivalent of HR 1019, fell three votes short of passing the Senate Thursday, but senators voted to expunge the vote later that day and passed the resolution Monday.
King said he does not expect the same to happen with the failed House resolutions.
Sen. Bryan King, R-Green Forest, sponsored identical resolutions in the Senate and has been the Legislature’s biggest advocate for regulating crypto mining. He said in an interview after the House vote that he believed “the fix is in” for crypto mines to arrive and thrive in Arkansas.
Crypto mines, large groups of computers that harvest digital currency, are often located in rural areas because they take up a lot of space. They also require significant energy to operate and water to keep computers cool.
There are crypto mines in DeWitt and in the Bono community near Greenbrier, and officials have raised concerns over foreign ownership and whether the mines pose a national security risk. Additionally, Greenbrier-area residents have filed a lawsuit claiming noise pollution from a crypto mine.
One of the two policy proposals that passed the House would place noise limits on Arkansas crypto mines and prohibit them from being owned by certain foreign entities. Sen. Joshua Bryant, R-Rogers, and Rep. Rick McClure, R-Malvern, sponsored the resolution, which received 80 yes votes.
Bryant and McClure also sponsored Act 851 last year. King said the resolution they sponsored was essentially “pro-crypto.”
The other resolution, sponsored by Rep. Jeremiah Moore, R-Clarendon, would require crypto mines to be licensed by the state Department of Energy and Environment. It would also require the department to inform legislative committees of its crypto mine regulation methods. It passed the House with 84 yes votes and had the sponsorship of Sen. Missy Irvin, R-Mountain View, in the other chamber.
Bryant and Irvin filed Senate Bill 78 and Senate Bill 79, respectively, Wednesday afternoon after their resolutions passed the House.
Rep. David Ray, R-Maumelle, spoke against all six of Miller’s resolutions. He said he did not believe they addressed the three major problems he sees with crypto mining — noise, foreign ownership and proximity to residential areas — while he believed Moore’s and McClure’s resolutions did.
Ray also said the Legislature should be careful which non-budgetary issues it takes up as legislation during the fiscal session.
“We can do a better job by vetting these individual resolutions and picking one or two to refer to committee that address these issues that we know Arkansans are dealing with,” Ray said.
He called House Resolution 1019, which would have required a fee based on electricity usage, “the worst of the batch” and “a de facto ban on bitcoin mining.”
Miller noted that businesses in several other industries are required to pay fees to the state. He also said requiring advance notice before a crypto mining business purchases land would give citizens a warning not to buy property in an area where property values would likely decline due to noise and high utility bills.
Several legislators agreed with Miller that the House should have allowed all the proposed crypto bills to be filed so they can be debated and amended as members saw fit in committee.
“It may take a little more time to do this, but I think that time will be well-invested,” said Rep. Marcus Richmond, R-Harvey. “…The only thing worse than doing nothing at all is doing something half-baked and then going out to our constituents and trying to explain to them why we still screwed it up the second time around.”
Rep. Stephen Meeks, R-Greenbrier, said he supported all the resolutions, especially since the crypto mine in the Faulkner County portion of his district is facing a lawsuit from local residents.
“Us failing to address this is us failing to protect our citizens like we are supposed to,” Meeks said.
Elsewhere in Faulkner County, the Vilonia Planning Commission unanimously voted against granting a permit to build a crypto mine in the area last June. The vote came after the city council heard citizens’ concerns about crypto mining and voted to limit citywide noise in preparation for the mine’s arrival, Little Rock Public Radio reported.
Rep. Cameron Cooper, R-Romance, represents Vilonia and told the House he received several complaints from constituents about the proposed mine. He said the situation led him to oppose Act 851, not yet in effect as of June, while he hadn’t thought much of it previously.
“Thankfully, the town averted that disaster,” Cooper said. “…If (the law) had already been in place, I don’t think they could have prevented it.”
Rep. Ron McNair, R-Alpena, said he had hoped to discuss the crypto industry during the special session called by Gov. Sarah Huckabee Sanders last September, but “was told there wasn’t enough interest.”
Crypto mining came to Harrison in McNair’s district in 2022, and Act 851 encouraged the industry to keep moving into the state, he said.
“After session, at my first town hall, there was a gentleman from New York who came to Harrison with (Act) 851 in his hand, and he said, ‘We are here because y’all did this,'” McNair said. “That’s what the public saw.”
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