HARRISON – A state senator says he hopes to call a special session to repeal Act 851 of 2023, a new law that would limit the types of regulations local governments can enact by banning discrimination against digital asset mining companies.
Many local governments concerned about cryptocurrency mines — which in certain cases are known to generate disturbing noise — began passing noise ordinances aimed at data centers before Aug. 1. Ambiguities in the law also lead to concerns.
“I don’t think we can wait two years (for the next legislative session) to answer some of these questions and deal with them,” Sen. R-Green Forest said. Brian King said.
King’s comments came after a meeting of the state Senate’s Children and Youth Committee at North Arkansas College in Harrison, where dozens of community members and members of local and county governments attended and presented testimony from members of the blockchain and cryptocurrency community.
Cameron Baker and Tom Hartford, managing partner of Cryptic Farms, LLC and head of the Arkansas Blockchain Advisory Council, respectively, spoke in favor of regulation of the state’s cryptocurrency industry and praised the council’s work in scrutinizing blockchain companies.
“What we’re doing is obviously pro-industry,” Baker said. “What our intention was when we made this bill was, it’s an anti-discrimination bill. What we tried to do was say, ‘Hey, look, we’re a data center. As long as you treat us like a data center, you know, we’re not going to limit your ability to manage your commercial policy.’
Baker’s reasoning was questioned by some members of the committee, who asked how localities and states would benefit from Act 851 and whether the crypto industry should have special protection.
“Farmers can go out of business at any time with regulations, you know. Any business can. You have to have special protections to say you can’t — I’m saying you have to pull yourself back to what everybody else is trying to do,” King said.
King, who filed an interim study bill to repeal the law in May, said local communities were being blindsided by digital asset mining companies.
Liz Torgerson, a member of the local community involved in opposing cryptocurrency mining in Harrison, had multiple concerns in her opposition to the industry, ranging from environmental to economic.
“My concerns about having it here, one, is the noise pollution — what it’s doing to people, livestock and wildlife,” she said. “Second, the electrical use — what it’s going to do to all of our businesses in town. And it’s not bringing any jobs to this town. … I don’t think they’re going to hire anybody here. They’re going to bring their own people and protect it.”
Committee Vice Chair Alan Clark, R-Lonsdale, asked Baker to explain the overall purpose of the legislation, which was pushed by Cryptic Farms and the Arkansas Blockchain Advisory Committee. Baker said he thought the act was a “soft touch” intended to start a conversation about the rules.
“Of course, the intent is to secure the location and growth of the industry here. That’s something you’ve said from the beginning — I want my investments here to be secure, so of course things will always be that way.”
Clark questioned their stated approach of passing a bill to start a dialogue.
“I’ve filed a lot of bills to start a conversation. I’m not passing them, I’m signing them into law to start the conversation,” Clark said.
Harrison City Attorney Nancy Cartwright also said the ambiguity in the law makes it difficult for her and her office to prepare for a negative crypto operation to set up a mine once the law takes effect.
Act 851’s sponsors were invited to speak at Monday’s meeting but declined, King said in an interview after the meeting.
“It’s unfortunate that the bill that was passed was passed the way it was,” King said. “It was a breakdown in the Legislature that people weren’t informed and didn’t know the process, and we later found out what happened.”
King also addressed concerns about Chinese and other foreign companies coming to operate mines in the state.
“We spent a significant amount of time in the (legislative) session — concerns about Chinese influence with TikTok and … drones from China. Then all of a sudden we dropped it,” King said.