Arkansas lawmakers have taken decisive action to address the growing concerns surrounding cryptocurrency mining operations within the state.
After facing backlash over a law passed in 2023 that limited local governments’ ability to regulate these energy-intensive facilities, the state legislature has approved two new bills aimed at restoring balance and ensuring the interests of local communities are protected.
TLDR
- Arkansas lawmakers have approved new bills (Senate Bills 78 and 79) to regulate cryptocurrency mining operations, addressing noise levels, water usage, foreign ownership, and licensing requirements.
- These bills aim to address backlash from local communities and officials regarding the impact of crypto mining operations, which were previously given broad protections under the Arkansas Data Centers Act of 2023.
- The bills impose noise reduction techniques, require permits from the state’s Oil and Gas Commission, and restore local governments’ ability to regulate sound decibels from crypto mining facilities.
- Foreign ownership of crypto mining operations in Arkansas will be prohibited for entities from certain countries, including China, raising concerns about potential restrictions on foreign investment.
- Governor Sarah Huckabee Sanders is expected to sign the bills into law, aligning with her stance against foreign adversaries owning crypto mines in the state.
Senate Bills 78 and 79, which have now passed both chambers of the Arkansas General Assembly, introduce a range of measures to rein in the impact of crypto mining operations.
These measures include noise limits, water usage regulations, foreign ownership restrictions, and a requirement for mining businesses to obtain permits from the state’s Oil and Gas Commission under the Department of Energy and Environment.
The need for these regulations arose from the fallout of Act 851, also known as the Arkansas Data Centers Act, which was swiftly passed in the final week of the 2023 legislative session.
This law effectively shielded crypto mining operations from local oversight, leaving communities near these facilities with little recourse to address issues such as noise pollution and environmental concerns.
Representative Jeremiah Moore, the House sponsor of Senate Bill 79, acknowledged the unique challenge posed by this emerging industry, stating, “We’ve never seen anything quite like this in our state before.”
The presence of crypto mines in areas like DeWitt, Bono, and the vicinity of Harrison has fueled concerns among residents and local officials.
One of the key provisions in the new bills is the restoration of local governments’ authority to enact ordinances regulating the sound decibels generated by crypto mining facilities.
This addresses a significant issue raised by communities impacted by the constant noise from these operations.
The bills aim to curb foreign ownership of crypto mining operations in Arkansas. Senate Bill 78 prohibits ownership by entities from countries listed in the federal International Traffic in Arms Regulations, which includes nations like China.
While this measure is intended to address national security concerns, it has also raised questions about potential restrictions on foreign investment.
Democratic Representative Andrew Collins expressed apprehensions about the foreign ownership language, suggesting that it could inadvertently impact innocent parties or miss intended targets due to its broad scope.
Despite these concerns, the bills received overwhelming support in the Republican-controlled House, passing with 93 votes in favor. Governor Sarah Huckabee Sanders has indicated her intention to sign the legislation, aligning with her stance against allowing “foreign adversaries” to own crypto mines in Arkansas.
The passage of these bills represents a significant step in addressing the concerns raised by local communities and officials regarding the impact of crypto mining operations.
However, lawmakers have acknowledged that these measures are likely a temporary solution, with more comprehensive legislation expected to be proposed during the 2025 regular legislative session.
