Stricken language would be deleted from and underlined language would be added to present law.
Act 173 of the Fiscal Session
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State of Arkansas As Engrossed: S4/23/24 1
94th General Assembly A Bill 2
Fiscal Session, 2024 SENATE BILL 78 3
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By: Senators J. Bryant, Irvin 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 PROHIBI T 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 operatin g a business from 34
a residence; or 35
(B) Requires an individual to obtain approval before 36 As Engrossed: S4/23/24 SB78
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operating a business from a residence ; 1
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SECTION 2. Arkansas Code § 14 -1-604(a), concerning requirements that a 3
digital asset mining business shall comply with to o perate 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 additional 15
subdivisions 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)(a) 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. 27
(b) Except as provided in subdivision 28
(b)(3)(B)(ii)(c) of this section, "fully enclosing the envelope" does not 29
include utilizing a passively cooled premanufactured container without 30
additionally enclosing the system in a complete envelope. 31
(c) A digital asset min ing business may use a 32
passively cooled premanufactured container without additionally enclosing the 33
system in a complete envelope if the digital asset mining business locates or 34
relocates under subdivision (b)(3)(C) of this section; or 35
(C) Upon approval by the local government, locating or 36 As Engrossed: S4/23/24 SB78
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relocating to: 1
(i) A minimum of two thousand feet (2,000') from the 2
nearest residential or commercial use structure; or 3
(ii) An area zoned for industrial use or an 4
otherwise approved use. 5
(4)(A) A person who owns land within two thousand feet (2,000') 6
of the nearest property line of a digital asset mining business may commence 7
an action in a circuit court with proper jurisdiction over the digital asset 8
mining business to enforce the noise reduction techni ques required under 9
subdivision (b)(3) of this section. 10
(B) A person who prevails in an action commenced under 11
subdivision (b)(4)(A) of this section may be awarded reasonable attorney's 12
fees and costs. 13
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SECTION 4. Arkansas Code § 14 -1-604, concerning requirements that a 15
digital asset mining business shall comply with, is amended to add an 16
additional subsection to read as follows: 17
(f) A local government shall not pass an ordinance that: 18
(1) Prohibits an individual from engaging in home digital ass et 19
mining; or 20
(2) Requires an individual to obtain approval from a local 21
government before engaging in home digital asset mining. 22
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SECTION 5. Arkansas Code § 14 -1-605(a), concerning prohibiting a local 24
government from imposing ordinances or zoning reg ulations on a digital asset 25
mining business with the intent to discriminate against the digital asset 26
mining business, is amended to read as follows: 27
(a) Except as provided by subsection (d) of this section, a local 28
government shall not : 29
(1) Enact or adopt an ordinance, policy, or action that limits 30
the sound decibels generated from home digital asset mining other than the 31
limits set for sound pollution generally; 32
(2) Impose a different requirement for a digital asset mining 33
business than is applicable to any requirement for a data center; 34
(3) Rezone rezone an area in which a digital asset mining 35
business is located without complying with applicable state law and local 36 As Engrossed: S4/23/24 SB78
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zoning ordinances; or 1
(4) Rezone an area with the intent or effect of discriminating 2
against a digital asset mining business . 3
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SECTION 6. Arkansas Code Title 14, Chapter 1, Subchapter 6, is amended 5
to add an additional section to read as follows: 6
14-1-606. Ownership of digital asset mining business by prohibited 7
foreign-party-controlled business prohibited — Definitions — Penalty — 8
Reporting. 9
(a) As used in this section: 10
(1) "Interest" means an ownership interest of greater than zero 11
percent (0%); 12
(2) "Prohibited foreign -party-controlled business" means a 13
digital asset mining business in which a prohibited foreign party owns an 14
interest; and 15
(3) “Prohibited foreign party” means: 16
(A) A citizen, resident, or agent of a country subject to 17
§ 126.1 of the International Traffic in Arms Regulations, 22 C.F. R. § 120.1 18
et seq., as existing on January 1, 2024; 19
(B) A foreign government formed within a country subject 20
to § 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 21
120.1 et seq., as existing on January 1, 2024; 22
(C) A party other t han an individual or a government that 23
is created or organized under the laws of a foreign government within a 24
country subject to § 126.1 of the International Traffic in Arms Regulations, 25
22 C.F.R. § 120.1 et seq., as existing on January 1, 2024; 26
(D) Any party other than an individual or a government: 27
(i) That is created or organized under the laws of 28
any state; and 29
(ii) In which a significant interest or substantial 30
control is directly or indirectly held or is capable of being exercised by: 31
(a) An individual referred to in subdivision 32
(a)(3)(A) of this section; 33
(b) A foreign government referred to in 34
subdivision (a)(3)(B) of this section; 35
(c) A party referred to in subdivision 36 As Engrossed: S4/23/24 SB78
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(a)(3)(C) of this section; or 1
(d) A combination of the individuals, parties, 2
or governments referred to in this subdivision (a)(3)(D)(ii); 3
(E) An Entity of Particular Concern designated by the 4
United States Department of State; or 5
(F) An agent, trustee, or other fiduciary of a person or 6
entity enumerated in subdivisions (a)(3)(A) -(E) of this section. 7
(b)(1) A prohibited foreign party shall not acquire or hold by grant, 8
purchase, devise, descent, or otherwise any interest in a digital asset 9
mining business in this state. 10
(2) A person shall not acquire or hold a digital asset mining 11
business as an agent, trustee, or other fiduciary for a prohibited foreign -12
party-controlled business. 13
(c)(1) A prohibited foreign -party-controlled business in operation 14
before the effective date of this act s hall have three hundred sixty -five 15
(365) calendar days from the effective date of this act for the prohibited 16
foreign party to divest all interest in the digital asset mining business. 17
(2) If a prohibited foreign party fails to divest all interest 18
in the digital asset mining business under subdivision (c)(1) of this 19
section, the Attorney General may commence an action in a circuit court with 20
proper jurisdiction under subsection (e) of this section. 21
(d) Upon request of a person or upon receipt of info rmation that leads 22
the Attorney General to believe that a violation of this section may exist, 23
the Attorney General may conduct an investigation that includes without 24
limitation: 25
(1) Receiving sworn statements; and 26
(2) Issuing subpoenas to compel the: 27
(A) Testimony of witnesses subpoenaed before him or her; 28
and 29
(B) Production of records and other documents under § 25 -30
16-705. 31
(e)(1) If as a result of an investigation under subsection (d) of this 32
section the Attorney General concludes that a violation of this section has 33
occurred, the Attorney General may order a prohibited foreign party to divest 34
all interest in the digital asset mining business within three hundred sixty -35
five (365) calendar days. 36 As Engrossed: S4/23/24 SB78
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(2) If the prohibited foreign party fa ils to divest all interest 1
in the digital asset mining business within three hundred sixty five (365) 2
calendar days, the Attorney General may commence an action in a circuit court 3
with proper jurisdiction over the digital asset mining business. 4
(3)(A) If the circuit court finds that a violation of this 5
section has occurred, the circuit court shall issue an order for the digital 6
asset mining business to be sold through judicial foreclosure. 7
(B) The proceeds of the sale under subdivision (e)(3)(A) 8
of this section shall be disbursed to the lienholders, in order of priority, 9
except for liens that under the terms of the sale are to remain. 10
(C) If the assets of the digital asset mining business 11
include real property, the Attorney General shall promptly record a copy of 12
the following in the local land records: 13
(i) Upon commencement, notice of the pendency of the 14
action under subdivision (c)(2) or subdivision (e)(2) of this section; and 15
(ii) The order for the sale of the digital asset 16
mining business under subdivision (e)(3)(A) of this section. 17
(3) The Attorney General may pursue other remedies in an action 18
brought under subdivision (c)(2) or subdivision (e)(2) of this section, 19
including without limitation: 20
(A) A civil penalty not to exceed up to one million 21
dollars ($1,000,000) or twenty -five percent (25%) of the fair market value, 22
on the date of the assessment of the civil penalty, of the prohibited foreign 23
party’s interest in the digital asset mining business for the failure to 24
divest of all interest in the digital asset mining business within three 25
hundred sixty-five (365) calendar days as required under this section; 26
(B) Court costs; 27
(C) Prejudgment interest and postjudgment interest at the 28
maximum rates permitted by law; and 29
(D) Reasonable attorney's fees. 30
(4) In addition to the remedies under subdivision (e)(3) of this 31
section, the Attorney General may pursue treble damages against a digital 32
asset mining business if the digital asset mining business: 33
(A) Is held in violation of this section; 34
(B) Is ordered to pay a civil penalty under subdivision 35
(e)(3)(A) of this section; and 36 As Engrossed: S4/23/24 SB78
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(C) Fails to pay a civil penalty under subdivision 1
(e)(3)(A) of this section within the scope of the order of the circuit court. 2
(5) The approval of a digital asset mining business by a local 3
government or the receipt by a digital asset mining business of a permit or 4
other authorization from the state to operate shall not be a defense to a 5
cause of action brought under subdivision (c) (2) or subdivision (e)(2) of 6
this section. 7
(f) Civil penalties and damages received by the Attorney General under 8
this section shall be distributed as follows: 9
(1) Fifty percent (50%) to the Oil and Gas Commission Fund, § 10
19-6-410; and 11
(2) Fifty percent (50%) to the Attorney General to be used in 12
the same manner as provided in § 25 -16-718. 13
(g) A prohibited foreign -party-controlled business shall report the 14
composition of its ownership to the Attorney General. 15
(h) 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. Arkansas Code § 19 -6-410 is amended to read as follows: 19
19-6-410. Oil and Gas Commission Fund. 20
The Oil and Gas Commission Fund shall consist of those special revenues 21
as specified in § 19 -6-301(62) and (111),and § 14-1-606, there to be used 22
for: 23
(1) The maintenance, operation, and improvement required by the 24
Oil and Gas Commission in carrying out the functions, powers, and duties as 25
set out in § 15-72-101 et seq. and other applicable law; 26
(2) Payment of expenses of the Office of the State Geologist 27
under § 15-71-107(b)(2)(B); or 28
(3) Other duties imposed by law upon the commission. 29
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SECTION 8. DO NOT CODIFY. Applicability. 31
A digital asset mining business in operation before the effective date 32
of this act shall be in full compliance with § 14 -1-604(b)(3) no later than 33
ninety (90) days following the effective date of this act. 34
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SECTION 9. EMERGENCY CLAUSE. It is found and determined by the 36 As Engrossed: S4/23/24 SB78
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General Assembly of the State of Arkansas that increased circulation of 1
digital currency and adoption of digital transformation have led to an influx 2
of digital asset mining businesses in Arkansas in recent years; that digital 3
asset mining businesses have potential to generate excessive noise and that 4
without adequate regulation, digital asset mining businesses can place a 5
strain on, and reduce the quality of life of, residents and communities near 6
them; and that growth of this business sector has been cap italized upon by 7
foreign corporations and other foreign entities and aliens that pose 8
potential threats to the welfare and safety of Arkansas and its residents. 9
Therefore, an emergency is declared to exist, and this act being immediately 10
necessary for the preservation of the public peace, health, and safety shall 11
become effective on: 12
(1) The date of its approval by the Governor; 13
(2) If the bill is neither approved nor vetoed by the Governor, the 14
expiration of the period of time during which the Governo r may veto the bill; 15
or 16
(3) If the bill is vetoed by the Governor and the veto is overridden, 17
the date the last house overrides the veto. 18
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/s/J. Bryant 20
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APPROVED: 5/3/24 23
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