Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
94th General Assembly A Bill 2
Fiscal Session, 2024 SENATE BILL 78 3
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By: Senator J. Bryant 5
By: Representative McClure 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE ARKANSAS DATA CENTER S ACT OF 9
2023; TO CREATE REQU IREMENTS FOR NOISE R EDUCTION IN 10
THE OPERATION OF A D IGITAL ASSET MINING BUSINESS; TO 11
CLARIFY THE ABILITY OF AN ARKANSAS RESID ENT TO ENGAGE 12
IN HOME DIGITAL ASSE T MINING; TO PROHIBIT FOREIGN-13
PARTY-CONTROLLED OWNERSHIP OF A DIGITAL ASSET M INING 14
BUSINESS IN ARKANSAS ; TO DECLARE AN EMER GENCY; AND 15
FOR OTHER PURPOSES. 16
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Subtitle 19
TO AMEND THE ARKANSAS DATA CENTERS ACT OF 20
2023; TO PROHIBIT FOREIGN -PARTY-21
CONTROLLED OWNERSHIP OF A DIGITAL ASSET 22
MINING BUSINESS; AND TO DECLARE AN 23
EMERGENCY. 24
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 27
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SECTION 1. Arkansas Code § 14 -1-603(10), concerning the definition of 29
"ordinance" under the Arkansas Data Centers Act of 2023, is amended to read 30
as follows: 31
(10) "Ordinance" means an ordinance, resolution, or other 32
appropriate legislative enactment of a legislative body that: 33
(A) Prohibits an individual from operating a business from 34
a residence; or 35
(B) Requires an individual to obtain approval before 36 SB78
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operating a business from a residence ; 1
2
SECTION 2. Arkansas Code § 14 -1-604(a), concerning requirements that a 3
digital asset mining business shall comply with to operate in Arkansas, is 4
amended to read as follows: 5
(a) A digital asset mining business may operate in this state if the 6
digital asset mining business complies with: 7
(1) State law concerning business guidelines and tax policies; 8
(2)(1) Any ordinance concerning operations and safety ordinance; 9
(3)(2) Any rule or rate for utility service provided by or on 10
behalf of a public entity; and 11
(4)(3) State and federal employment laws law. 12
13
SECTION 3. Arkansas Code § 14 -1-604(b), concerning requirements that a 14
digital asset mining business shall comply with, is amended to add an 15
additional subdivision to read as follows: 16
(3) Apply noise-reduction techniques, including without 17
limitation: 18
(A) Using liquid cooling or submerged cooling; 19
(B)(i) Fully enclosing the envelope. 20
(ii) As used in subdivision (b)(3)(B)(i) of this 21
section, "fully enclosing the envelope" means enfolding the envelope where 22
noise from the operation of a digital asset mining business is directly 23
produced around all sides, including above and below the equipment producing 24
the noise, with material that is reasonably calculated by industry standards 25
to reduce noise emissions to a level that is acceptable to a reasonable 26
person under similar circumstances; or 27
(C) Upon approval by the local government, locating or 28
relocating to: 29
(i) A minimum of two thousand feet (2,000') from the 30
nearest residential or commercial use structure; or 31
(ii) An area zoned for industrial use. 32
33
SECTION 4. Arkansas Code § 14 -1-604, concerning requirements that a 34
digital asset mining business shall comply with, is amended to add an 35
additional subsection to read as follows: 36 SB78
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(f) A local government shall not pass an ordinance that: 1
(1) Prohibits an individual from engaging in home digital asset 2
mining; or 3
(2) Requires an individual to obtain approval from a local 4
government before engaging in home digital asset mining. 5
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SECTION 5. Arkansas Code § 14 -1-605(a), concerning prohibiting a local 7
government from imposing ordinances or zoning regulations on a digital asset 8
mining business with the intent to discriminate against the digital asset 9
mining business, is amended to read as follows: 10
(a) Except as provided by subsection (d) of this section, a local 11
government shall not : 12
(1) Enact or adopt an ordinance, policy, or ac tion that limits 13
the sound decibels generated from home digital asset mining other than the 14
limits set for sound pollution generally; 15
(2) Impose a different requirement for a digital asset mining 16
business than is applicable to any requirement for a data center; 17
(3) Rezone rezone an area in which a digital asset mining 18
business is located without complying with applicable state law and local 19
zoning ordinances; or 20
(4) Rezone an area with the intent or effect of discriminating 21
against a digital asset mining business. 22
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SECTION 6. Arkansas Code Title 14, Chapter 1, Subchapter 6, is amended 24
to add an additional section to read as follows: 25
14-1-606. Ownership of digital asset mining business by prohibited 26
foreign-party-controlled business prohibited — Definitions — Penalty — 27
Reporting. 28
(a) As used in this section: 29
(1) "Controlling interest" means an ownership interest of 30
fifteen percent (15%) or more, in the aggregate; 31
(2) "Prohibited foreign -party-controlled business" means a 32
corporation, company, association, firm, partnership, society, joint -stock 33
company, trust, estate, or other legal entity whose controlling interest is 34
owned by a prohibited foreign party; and 35
(3) “Prohibited foreign party” means: 36 SB78
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(A) A citizen, resident, or agent of a country subject to 1
§ 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 120.1 2
et seq.; 3
(B) A foreign government formed within a country subject 4
to § 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 5
120.1 et seq.; 6
(C) A party other than an individual or a government that 7
is created or organized under the laws of a foreign government within a 8
country subject to § 126.1 of the International Traffic in Arms Regulations, 9
22 C.F.R. § 120.1 et seq.; 10
(D) Any party other than an individual or a government: 11
(i) That is created or organized under the laws of 12
any state; and 13
(ii) In which a significant interest or substantial 14
control is directly or indirectly held or is capable of being exercised by: 15
(a) An individual referred to in subdivision 16
(a)(3)(A) of this section; 17
(b) A foreign government referred to in 18
subdivision (a)(3)(B) of this section; 19
(c) A party referred to in subdivision 20
(a)(3)(C) of this section; or 21
(d) A combination of the individuals, parties, 22
or governments referred to in this subdivision (a)(3)(D)(ii); 23
(E) An Entity of Particular Concern designated by the 24
United States Department of State; or 25
(F) An agent, trustee, or other fiduciary of a person or 26
entity enumerated in subdivisions (a)(3)(A) -(E) of this section. 27
(b)(1) A prohibited foreign -party-controlled business shall not 28
acquire or hold by grant, purchase, devise, descent, or otherwise any 29
interest in a digital asset mining business in this state. 30
(2) A person shall not acquire or hold a digital asset mining 31
business as an agent, trustee, or other fiduciary for a prohibited foreign -32
party-controlled business. 33
(c)(1) A prohibited foreign -party-controlled business in operation 34
before the effective date o f this act shall have six (6) months from the 35
effective date of this act to divest itself of the digital asset mining 36 SB78
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business. 1
(2)(A) If the Office of Agricultural Intelligence determines 2
that a prohibited foreign party has acquired or may be holding a digital 3
asset mining business with assets in Arkansas in violation of this section, 4
the office shall report the potential violation to the Attorney General. 5
(B) If the Attorney General has received notice under 6
subdivision (c)(2)(A) of this section, t he Attorney General may: 7
(i) Receive sworn statements; and 8
(ii) Issue subpoenas to compel the: 9
(a) Testimony of witnesses subpoenaed before 10
him or her; and 11
(b) Production of records and other documents 12
under § 25-16-705. 13
(d)(1) If as a result of the investigation under subdivision (c)(2) of 14
this section the Attorney General concludes that a violation of this section 15
has occurred, the Attorney General may commence an action in a circuit court 16
with proper jurisdiction over the digital asset mining business. 17
(2)(A) If the digital asset mining business is held to be in 18
violation of this section, the circuit court shall issue an order for the 19
digital asset mining business to be sold through judicial foreclosure. 20
(B) The proceeds of the sale under subdivision (d)(2)(A) 21
of this section shall be disbursed to the lienholders, in order of priority, 22
except for liens that under the terms of the sale are to remain. 23
(C) If the assets of the digital asset mining business 24
include real property, the Attorney General shall promptly record a copy of 25
the following in the local land records: 26
(i) Upon commencement, notice of the pendency of the 27
action under subdivision (d)(1) of this section; and 28
(ii) The order for the sale of the digita l asset 29
mining business under subdivision (d)(2)(A) of this section. 30
(3) The Attorney General may pursue other remedies in an action 31
brought under subdivision (d)(1) of this section, including without 32
limitation: 33
(A) A civil penalty of fifteen thous and dollars ($15,000); 34
(B) Prejudgment interest and postjudgment interest at the 35
maximum rates permitted by law; and 36 SB78
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(C) Reasonable attorney's fees. 1
(4) In addition to the remedies under subdivision (d)(3) of this 2
section, the Attorney General m ay pursue treble damages against a digital 3
asset mining business if the digital asset mining business: 4
(A) Is held in violation of this section; 5
(B) Is ordered to pay a civil penalty under subdivision 6
(d)(3)(A) of this section; and 7
(C) Fails to pay a civil penalty under subdivision 8
(d)(3)(A) of this section within the scope of the order of the circuit court. 9
(5) The approval of a digital asset mining business by a local 10
government shall not be a defense to a cause of action brought under 11
subdivision (d)(1) of this section. 12
(e) A digital asset mining business that is composed of greater than 13
fifteen-percent ownership by a prohibited foreign -party-controlled business 14
shall report the composition of its ownership to the Attorney General. 15
(f) Title to real property is not invalid due to a violation of this 16
section by any former owner of the real property. 17
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SECTION 7. EMERGENCY CLAUSE. It is found and determined by the 19
General Assembly of the State of Arkansas that increased circulation of 20
digital currency and adoption of digital transformation have led to an influx 21
of digital asset mining businesses in Arkansas in recent years; that digital 22
asset mining businesses have potential to generate excessive noise and that 23
without adequate regulation , digital asset mining businesses can place a 24
strain on, and reduce the quality of life of, residents and communities near 25
them; and that growth of this business sector has been capitalized upon by 26
foreign corporations and other foreign entities and aliens that pose 27
potential threats to the welfare and safety of Arkansas and its residents. 28
Therefore, an emergency is declared to exist, and this act being necessary 29
for the preservation of the public peace, health, and safety shall become 30
effective thirty (30 ) days after: 31
(1) The date of its approval by the Governor; 32
(2) If the bill is neither approved nor vetoed by the Governor, the 33
expiration of the period of time during which the Governor may veto the bill; 34
or 35
(3) If the bill is vetoed by the Governor and the veto is overridden, 36 SB78
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the date the last house overrides the veto. 1
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