Stricken language would be deleted from and underlined language would be added to present law.
Act 174 of the Fiscal Session
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State of Arkansas As Engrossed: S4/24/24 1
94th General Assembly A Bill 2
Fiscal Session, 2024 SENATE BILL 79 3
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By: Senators Irvin, J. Bryant 5
By: Representative J. Moore 6
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For An Act To Be Entitled 8
TO AMEND ARKANSAS LA W CONCERNING DIGITAL ASSET MINING 9
BUSINESSES; TO AMEND THE ARKANSAS DATA CE NTERS ACT OF 10
2023; TO AMEND ARKAN SAS LAW TO PROVIDE F OR THE 11
PERMITTING AND REGUL ATION OF DIGITAL ASSET MINING 12
BUSINESSES; TO DECLA RE AN EMERGENCY; AND FOR OTHER 13
PURPOSES. 14
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16
Subtitle 17
TO AMEND THE ARKANSAS DATA CENTERS ACT OF 18
2023; TO PROVIDE FOR THE REGULATION OF 19
DIGITAL ASSET MINING BUSINESSES; AND TO 20
DECLARE AN EMERGENCY. 21
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
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SECTION 1. Arkansas Code § 14 -1-602(b), concerning legislative intent 26
and findings for the Arkansas Data Centers Act of 2023, is amended to read as 27
follows: 28
(b) Through the enactment of this subchapter, th e General Assembly 29
intends to: 30
(1) Recognize recognize that data centers create jobs, pay 31
taxes, and provide general economic value to local communities and this 32
state; and 33
(2) Clarify the guidelines needed to protect data asset miners 34
from discriminatory industry-specific regulations and taxes . 35
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SECTION 2. Arkansas Code § 14 -1-605(a), concerning prohibiting a local 1
government from imposing ordinances or zoning regulations on a digital asset 2
mining business with the intent to discriminate against the digital asset 3
mining business, is amended to read as follows: 4
(a) Except as provided by subsection (d) of this section, a local 5
government shall not : 6
(1) Enact or adopt an ordinance, policy, or action that limits 7
the sound decibels generated from home digital asset mining other than the 8
limits set for sound pollution generally; 9
(2) Impose a different requirement for a digital asset mining 10
business than is applicable to any requirement for a data center; 11
(3) Rezone rezone an area in which a di gital asset mining 12
business is located without complying with applicable state law and local 13
zoning ordinances; or 14
(4) Rezone an area with the intent or effect of discriminating 15
against a digital asset mining business . 16
17
SECTION 3. Arkansas Code Titl e 14, Chapter 1, Subchapter 6, is amended 18
to add an additional section to read as follows: 19
14-1-606. Ownership of digital asset mining business by prohibited 20
foreign-party-controlled business prohibited — Definitions — Penalty — 21
Reporting. 22
(a) As used in this section: 23
(1) "Interest" means an ownership interest of greater than zero 24
percent (0%); 25
(2) "Prohibited foreign -party-controlled business" means a 26
digital asset mining business in which a prohibited foreign party owns an 27
interest; and 28
(3) “Prohibited foreign party” means: 29
(A) A citizen, resident, or agent of a country subject to 30
§ 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 120.1 31
et seq., as existing on January 1, 2024; 32
(B) A foreign government formed wit hin a country subject 33
to § 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 34
120.1 et seq., as existing on January 1, 2024; 35
(C) A party other than an individual or a government that 36 As Engrossed: S4/24/24 SB79
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is created or organized under the laws of a foreign government within a 1
country subject to § 126.1 of the International Traffic in Arms Regulations, 2
22 C.F.R. § 120.1 et seq., as existing on January 1, 2024; 3
(D) Any party other than an individual or a government: 4
(i) That is created or organized under the laws of 5
any state; and 6
(ii) In which a significant interest or substantial 7
control is directly or indirectly held or is capable of being exercised by: 8
(a) An individual referred to in subdivision 9
(a)(3)(A) of this section; 10
(b) A foreign government referred to in 11
subdivision (a)(3)(B) of this section; 12
(c) A party referred to in subdivision 13
(a)(3)(C) of this section; or 14
(d) A combination of the individuals, parties, 15
or governments referred to in this subdivision (a)(3)(D )(ii); 16
(E) An Entity of Particular Concern designated by the 17
United States Department of State; or 18
(F) An agent, trustee, or other fiduciary of a person or 19
entity enumerated in subdivisions (a)(3)(A) -(E) of this section. 20
(b)(1) A prohibited forei gn party shall not acquire or hold by grant, 21
purchase, devise, descent, or otherwise any interest in a digital asset 22
mining business in this state. 23
(2) A person shall not acquire or hold a digital asset mining 24
business as an agent, trustee, or other fid uciary for a prohibited foreign -25
party-controlled business. 26
(c)(1) A prohibited foreign -party-controlled business in operation 27
before the effective date of this act shall have three hundred sixty -five 28
(365) calendar days from the effective date of this ac t for the prohibited 29
foreign party to divest all interest in the digital asset mining business. 30
(2) If a prohibited foreign party fails to divest all interest 31
in the digital asset mining business under subdivision (c)(1) of this 32
section, the Attorney General may commence an action in a circuit court with 33
proper jurisdiction under subsection (e) of t his section. 34
(d) Upon request of a person or upon receipt of information that leads 35
the Attorney General to believe that a violation of this section may exist, 36 As Engrossed: S4/24/24 SB79
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the Attorney General may conduct an investigation that includes without 1
limitation: 2
(1) Receiving sworn statements; and 3
(2) Issuing subpoenas to compel the: 4
(A) Testimony of witnesses subpoenaed before him or her; 5
and 6
(B) Production of records and other documents under § 25 -7
16-705. 8
(e)(1) If as a result of an investigation under s ubsection (d) of this 9
section the Attorney General concludes that a violation of this section has 10
occurred, the Attorney General may order a prohibited foreign party to divest 11
all interest in the digital asset mining business within three hundred sixty -12
five (365) calendar days. 13
(2) If the prohibited foreign party fails to divest all interest 14
in the digital asset mining business within three hundred sixty five (365) 15
calendar days, the Attorney General may commence an action in a circuit court 16
with proper jurisdiction over the digital asset mining business. 17
(3)(A) If the circuit court finds that a violation of this 18
section has occurred, the circuit court shall issue an order for the digital 19
asset mining business to be sold through judicial foreclosure. 20
(B) The proceeds of the sale under subdivision (e)(3)(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 bu siness 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 (c)(2) or subdivision (e)(2) of this section; and 28
(ii) The order for the sale of the digital asset 29
mining business under subdivision (e)(3)(A) of this section. 30
(3) The Attorney General may pursue other remedies in an action 31
brought under subdivision (c)(2) or subdivision (e)(2) of this section, 32
including without limitation: 33
(A) A civil penalty not to exceed up to one million 34
dollars ($1,000,000) or twenty -five percent (25%) of the fair market value, 35
on the date of the assessment of the civil penalty, of the prohibited foreign 36 As Engrossed: S4/24/24 SB79
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party’s interest in the digital asset mining business for the failure to 1
divest of all interest in the digital asset mining business within three 2
hundred sixty-five (365) calendar days as required under this section; 3
(B) Court costs; 4
(C) Prejudgment interest and p ostjudgment interest at the 5
maximum rates permitted by law; and 6
(D) Reasonable attorney's fees. 7
(4) In addition to the remedies under subdivision (e)(3) of this 8
section, the Attorney General may pursue treble damages against a digital 9
asset mining business if the digital asset mining business: 10
(A) Is held in violation of this section; 11
(B) Is ordered to pay a civil penalty under subdivision 12
(e)(3)(A) of this section; and 13
(C) Fails to pay a civil penalty under subdivision 14
(e)(3)(A) of this section within the scope of the order of the circuit court. 15
(5) The approval of a digital asset mining business by a local 16
government or the receipt by a digital asset mining business of a permit or 17
other authorization from the state to operate shall n ot be a defense to a 18
cause of action brought under subdivision (c)(2) or subdivision (e)(2) of 19
this section. 20
(f) Civil penalties and damages received by the Attorney General under 21
this section shall be distributed as follows: 22
(1) Fifty percent (50%) to the Oil and Gas Commission Fund, § 23
19-6-410; and 24
(2) Fifty percent (50%) to the Attorney General to be used in 25
the same manner as provided in § 25 -16-718. 26
(g) A prohibited foreign -party-controlled business shall report t he 27
composition of its ownership to the Attorney General. 28
(h) Title to real property is not invalid due to a violation of this 29
section by any former owner of the real property. 30
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SECTION 4. Arkansas Code, Title 23, is amended to add an additional 32
chapter to read as follows: 33
34
CHAPTER 119 - DIGITAL ASSET MINING BUSINESSES 35
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23-119-101. Legislative intent – Findings - Purpose. 1
(a) This chapter establishes the standards and criteria for the 2
permitting and regulation of digital asset mining businesses. 3
(b) The General Assembly finds: 4
(1) Digital asset mining businesses represent a new and emerging 5
industry that presents significant challenges for the citizens of Arkansas, 6
including without limitation: 7
(A) Significant noise emissions; 8
(B) Massive consumption of power; 9
(C) The usage of large quantities of water that could 10
potentially threaten resources for citizens and future economic development 11
opportunities; and 12
(D) Potential issues involving cybersecurity. 13
(2) While the State of Arkansas welcomes new businesses and 14
economic growth, the General Assembly likewise has a responsibility to ensure 15
that the operations of new industries do not negatively impact the public 16
peace, health, and safety or otherwise dama ge the well-being of the citizens 17
of the state; 18
(3) When an industry presents harm to the public peace, health, 19
and safety, it has been the practice of the General Assembly to provide for 20
regulation of that industry to ensure that the industry operates successfully 21
while not harming the citizens of the state and its natural resources; and 22
(4) Based upon the challenges presented by digital asset mining 23
businesses, it is necessary to regulate digital asset mining businesses as 24
provided in this chapter to provide a regulatory framework for the safe 25
operation of this new, emerging industry. 26
(c) The purpose of this chapter is to: 27
(1) Promote, preserve, and protect the public peace, health, and 28
safety through effective permitting and regulation of digital asset mining 29
businesses; 30
(2) Provide for the powers and duties of the Oil and Gas 31
Commission relating to the permitting and regulation of digital asset mining 32
businesses; and 33
(3) Prescribe penalties for violations of this chapter. 34
35
23-119-102. Definitions. 36 As Engrossed: S4/24/24 SB79
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As used in this chapter: 1
(1) “Blockchain network” means a group of computers operating 2
and processing toget her to execute a consensus mechanism to agree upon and 3
verify data in a digital record for the purpose of generating digital assets; 4
(2) “Digital assets” means cryptocurrency, virtual currency, and 5
natively electronic assets, including without limitatio n stable coins, 6
nonfungible tokens, and other digital -only assets, that confer economic 7
rights or powers; 8
(3) “Digital asset mining business” means a group of computers 9
working at a single site that consumes more than one megawatt (1 MW) of 10
electrical energy on an average annual basis for the purpose of generating 11
digital assets by securing a blockchain network; and 12
(4) "Local government" means a county, a city of the first 13
class, a city of the second class, or an incorporated town. 14
15
23-119-103. Permit – Application. 16
(a) A digital asset mining business shall not operate in Arkansas 17
without a valid permit from the Oil and Gas Commission under this chapter. 18
(b) The commission shall establish the application for a permit for a 19
digital asset mining businesses to operate. 20
(c) The issuance of a digital asset mining business permit shall be 21
contingent upon compliance with all applicable state laws, including without 22
limitation the Arkansas Data Centers Act of 2023, § 14 -1-601 et seq. 23
24
23-119-104. Rules. 25
The Oil and Gas Commission shall promulgate rules to implement this 26
chapter, including without limitation rules establishing requirements for: 27
(1) Permitting; 28
(2) Application for a permit; 29
(3) Renewal of a perm it; 30
(4) The requirements and terms for a permit; and 31
(5) The establishment and operation of a digital asset mining 32
business. 33
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23-119-105. Enforcement. 35
(a) The Oil and Gas Commission shall have jurisdiction of and 36 As Engrossed: S4/24/24 SB79
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authority over all person s and property necessary to administer and enforce 1
effectively: 2
(1) This chapter; and 3
(2) The Arkansas Data Centers Act of 2023, § 14 -1-601 et seq. 4
(b) Upon receipt of a complaint under subsection (d) of this section, 5
the commission may make i nquiries it deems proper relating to its duties to 6
administer and enforce this chapter and the Arkansas Data Centers Act of 7
2023, § 14-1-601 et seq., including without limitation: 8
(1) Making reasonable investigations and inspections; 9
(2) Examining properties, leases, papers, books, and records; 10
(3) Holding hearings; 11
(4) Requiring the keeping of records and the making of reports; 12
and 13
(5) Taking such action as may be reasonably necessary to enforce 14
this chapter. 15
(c) Upon receipt of a complaint under subsection (d) of this section, 16
the commission may make, after hearing and notice, such reasonable orders as 17
necessary from time to time in the proper administration and enforcement of 18
this chapter and the Arkansas Data Centers Act of 2023, § 14-1-601 et seq. 19
(d)(1) An individual or legal entity may file a complaint with the 20
commission relating to the compliance of digital asset mining businesses with 21
state law, the requirements and terms of a permit, or the rules of the 22
commission. 23
(2) Upon receipt of a complaint, the commission may: 24
(A) Investigate the complaint; and 25
(B) Assess penalties in response to any identified 26
noncompliance. 27
(e) The commission shall promulgate rules establishing: 28
(1) The procedures for ensuring compliance with state law, the 29
requirements and terms of a permit, and rules of the commission; and 30
(2)(A) Penalties for failure to comply with state law, the 31
requirements and terms of a permit, or rules of the commissi on, including 32
without limitation: 33
(i) Financial penalties; and 34
(ii) The suspension or revocation of a permit issued 35
under this chapter. 36 As Engrossed: S4/24/24 SB79
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(B) Financial penalties under this subdivision (e)(2) 1
shall not exceed five thousand dollars ($5,000) per day of a violation. 2
(f) This chapter does not: 3
(1) Prohibit a local government from adopting one (1) or more 4
ordinances, resolutions, or other appropriate legislative enactments to 5
regulate digital asset mining businesses that: 6
(A) Address areas of regulation that are not otherwise 7
addressed by federal law, state law, or the rules of the commission; and 8
(B) Are not inconsistent with federal law, state law, or 9
the rules of the commission; and 10
(2) Prevent a local government from en forcing an ordinance, 11
resolution, or other appropriate legislative enactment regulating digital 12
asset mining businesses that is not inconsistent with federal law, state law, 13
or the rules of the commission. 14
15
SECTION 5. Arkansas Code § 19 -6-140 is amended to read as follows: 16
19-6-410. Oil and Gas Commission Fund. 17
The Oil and Gas Commission Fund shall consist of those special revenues 18
as specified in § 19 -6-301(62), and (111), and (275) and § 14-1-606, there to 19
be used for: 20
(1) The maintenance, oper ation, and improvement required by the 21
Oil and Gas Commission in carrying out the functions, powers, and duties as 22
set out in § 15-72-101 et seq. and § 23-119-101 et seq.; 23
(2) Payment of expenses of the Office of the State Geologist 24
under § 15-71-107(b)(2)(B); or 25
(3) Other duties imposed by law upon the commission. 26
27
SECTION 6. Arkansas Code § 19 -6-301 is amended to add an additional 28
subdivision to read as follows: 29
(275) Digital asset mining business penalties under § 23 -119-101 30
et seq.; 31
32
SECTION 7. DO NOT CODIFY. TEMPORARY LANGUAGE. APPLICATION FOR 33
INITIAL PERMITS. 34
(a) Within ninety (90) days of the effective date of the initial rules 35
promulgated under § 23 -119-104, an individual or legal entity operating one 36 As Engrossed: S4/24/24 SB79
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(1) or more digital min ing asset businesses in Arkansas shall apply for a 1
permit for each digital asset mining business operated by the individual or 2
legal entity in Arkansas. 3
(b) This act does not prohibit a digital asset mining business from 4
operating: 5
(1) Before the effe ctive date of the initial rules promulgated 6
under § 23-119-104; 7
(2) During the ninety -day period to apply for a permit under 8
subsection (a) of this section; and 9
(3) While the Oil and Gas Commission is considering the digital 10
asset mining business's application for a permit. 11
(c) A digital asset mining business shall cease operations if: 12
(1) The digital asset mining business is operating on the 13
effective date of the initial rules promulgated under § 23 -119-104 and fails 14
to apply for a permit in the ninety-day period to apply for a permit under 15
subsection (a) of this section; or 16
(2) The digital asset mining business's application for a permit 17
under subsection (a) of this section is denied. 18
19
SECTION 8. EMERGENCY CLAUSE. It is foun d and determined by the 20
General Assembly of the State of Arkansas that digital asset mining 21
businesses present significant threats to the public peace, health, and 22
safety, including without limitation significant noise emissions, massive 23
power consumption, the use of large quantities of water that potentially 24
threatens water resources, and potential issues with cybersecurity; that the 25
continuous noise emitted by digital asset mining businesses threatens the 26
public peace, health, and safety as it risks poten tial damage to the hearing 27
and quality of life of the citizens of this state; that in light of these 28
threats it is imperative that the General Assembly regulate by permit digital 29
asset mining businesses to protect the public peace, health, and safety; and 30
that this act should become effective at the earliest opportunity to begin 31
the regulatory process and protect the citizens of the state from any harmful 32
actions related to digital asset mining businesses. Therefore, an emergency 33
is declared to exist, and this act being immediately necessary for the 34
preservation of the public peace, health, and safety shall become effective 35
on: 36 As Engrossed: S4/24/24 SB79
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(1) The date of its approval by the Governor; 1
(2) If the bill is neither approved nor vetoed by the Governor, 2
the expiration of the period of time during which the Governor may veto the 3
bill; or 4
(3) If the bill is vetoed by the Governor and the veto is 5
overridden, the date the last house overrides the veto. 6
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/s/Irvin 8
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APPROVED: 5/3/24 11
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