blockworks.co
Time is running out for counties in Arkansas to pass noise ordinances before new crypto mining legislation takes effect on Aug. 1.
Act 851, known as the Arkansas Data Centers Act of 2023, passed the state’s House and Senate in April and was signed into law by Governor Sarah Huckabee Sanders shortly after.
Under the law, local governments may not “enact or adopt an ordinance, policy, or action that limits the sound decibels generated from home digital asset mining other than the limits set for sound pollution generally.”
The act, which considers mining operations to be “data centers,” also requires mining sites to follow state tax laws and safety regulations and “operate in a manner that causes no stress on economic public utility’s generation capabilities.”
Arkansas State Senator Bryan King said he hopes Gov. Sanders will call a special session to repeal the new law. Arkansas is one of four states on a biennial legislature schedule, meaning state lawmakers only meet for regular sessions every other year.
“We’ve got to have a real discussion on the possible grid and economic impacts,” King told Blockworks. “What if 20 crypto mining facilities pop up in Arkansas in the next year? What does that do to another employer that wants to come into Arkansas and we don’t have the power?”
Act 851 does not put any restrictions on power usage, which King said should be a top concern, given Arkansas’s grid is already stretched thin, especially in the summer months.
Those in favor of the law argue that creating a crypto hub will be beneficial for the state.
“Data centers create jobs, pay taxes, and provide general economic value to local communities and this state,” the bill reads.
The law moved through the legislative process very quickly; only a week went by between the day the bill was introduced and the day it passed through the House and Senate.
In the House, the bill passed 93-1, and in the Senate it received 33 votes in favor – including King – and 0 votes against. King said the entire process was too rushed as the end of the session was approaching, plus there was a rule suspension the day of the vote, causing the bill to “slip through.”
If Sanders calls a special session to revisit the law, a two-thirds majority is needed in both houses to repeal.
Crypto miners have flocked to Arkansas in the past two years, attracted to the state’s cheap electricity and lenient zoning requirements.
About a dozen crypto mining facilities now operate in the state, and not all counties and city councils are happy about it.
Last month, in Vilonia, Arkansas, the city’s planning commission revoked a company’s permit to build a crypto mine. The company, Vilo AR LLC failed to submit site plans, which is why the permit was revoked, planning commission member Jonathan Pyron told Blockworks. Vilo’s permit revocation was not related to noise concerns, Pyron added.
Vilonia also moved to limit noise to 60 decibels, about the intensity level of normal conversation. Most single mining machines produce between 70 and 90 decibels of sound, experts say. Plus, larger operations require cooling systems to prevent the computers from overheating, adding to the mining process’ noise level.
The law comes as states across the country continue to take an active role in regulating crypto mining operations. Arkansas’ Act 851 is similar to Montana’s SB0178, which also requires crypto mining operations to be treated as data centers and was signed into law in May.