Two bills aimed at tightening regulations on cryptocurrency mining in Arkansas were approved by a House committee on Tuesday at the state Capitol. The House City, County and Local Affairs committee gave the green light to Senate Bill 78 and Senate Bill 79 after a lengthy discussion and questioning from lawmakers. Senate Bill 78, sponsored by Sen. Joshua Bryant, and Senate Bill 79, sponsored by Sen. Missy Irvin, both passed with near-unanimous approval.
The proposed legislation addresses concerns around noise generated by crypto mining facilities, restrictions on foreign investment in these operations, and the allocation of awards for actions taken against businesses violating the rules. Both bills will now move to the full House of Representatives for consideration during Wednesday’s session. If approved, they will go to Gov. Sarah Huckabee Sanders for her signature, with immediate effect due to emergency clauses.
Senate Bill 78 mandates that crypto mining operations implement noise-reduction techniques, such as liquid cooling and fully enclosing the space where noise is produced. The bill also allows for the use of passively cooled containers if located at least 2,000 feet from residential or commercial structures. Individuals near a crypto mining business can file a lawsuit in circuit court to enforce noise-reduction measures.
Sen. Bryant emphasized the need to clarify local control in regulating crypto mining and reiterated the right of individuals to engage in mining as a hobby. Senate Bill 79 requires crypto mining businesses to obtain a permit from the Oil and Gas Commission, providing state-level oversight to the industry.
The bills seek to amend Act 851 of 2023, known as the Arkansas Data Centers Act, which limited local regulation of crypto mines. Sen. Bryant, who sponsored Act 851, acknowledged the need for greater regulation following complaints about noisy mining operations. The bills aim to provide a balanced approach to regulation, with clear guidelines on noise levels and foreign ownership restrictions.
Lawmakers raised questions about prohibiting foreign parties, including China, from owning crypto mines in Arkansas. Chinese investors were reported to operate mines in the state, prompting the inclusion of clauses for divestment within a set timeframe. Civil penalties collected would be split between the Oil and Gas Commission fund and the attorney general’s office.
While some concerns were voiced regarding the impact on foreign investment and local parties, supporters of the bills believe they are necessary to address noise and environmental issues associated with crypto mining. The bills emphasize compliance with regulations and provide mechanisms for enforcement to protect communities and the environment.