Brian Chilson
Sen. Bryan King (file photo)

As the debate over bitcoin mining operations continues at the Legislature, one potential bill remains in limbo: The proposal from Sen. Bryan King (R-Green Forest) to impose fees on crypto mines for excessive energy usage.

As we covered on Thursday, seven resolutions relating to bitcoin mining operations gained the necessary two-thirds majority in the Senate. That’s the threshold needed in both chambers for proposals to take up non-appropriation matters during a fiscal session. If the resolutions likewise get the okay from two thirds of the House, they can then be filed as bills and proceed through the normal process.

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The flurry of bills came in response to Act 851 of 2023, which severely limits the ability of local communities to regulate bitcoin mining operations. Reportedly written by a crypto advocacy group, it was passed with little discussion during last year’s legislative session just eight days after it was introduced.

Five of the resolutions that moved ahead in the Senate were sponsored by King, who has been one of the legislature’s most outspoken critics of Act 851. His slate of proposals would essentially repeal the law, as well as establishing new regulations and fees on crypto mines. A sixth, Senate Resolution 11, fell short with 21 senators voting yes, four voting no and six not voting (another three were excused and not present). King had the vote expunged and could try again this afternoon. He said that he would be counting votes to see if he had the support to give it another shot.

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King said that SR 11 represented a key component of a reform effort in response to Act 851.

“Special exceptions are not not fair,” he said. “These are job killers that are taking advantage of our cheap power and exploiting our natural resources. This bill would set a fee on crypto mines based on their energy usage. We know they use a tremendous amount of energy.”

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If King can hold on to the 21 yes votes, he would need three more to get the resolution over the hump.

The first place to look might be the other side of the aisle. Four Democrats did not vote and a fifth was not present.

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King has already picked up one vote: Senate Minority Leader Greg Leding (D-Fayetteville) announced on Thursday afternoon that if the resolution comes back up, he would vote for it.

“If we’re going to consider some of these bills, we should consider all of them,” Leding said.

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Leding said that his original vote was motivated by a desire to take a stance against bringing up non-appropriation bills during the fiscal session.

“I understand Arkansans’ concerns on this issue, but I’m also reluctant to set a precedent of opening our fiscal session to issues beyond fiscal matters,” he told me. In a followup post on Twitter, he added:

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I had mixed feelings about this, but for me, it’s important to protect the fiscal-session guardrails, else we could see them become mini-regular sessions. My votes today don’t necessarily mean I won’t support at least a few of these bills.

Democrats may be especially motivated to vote for this proposal, as its structure is something liberals would typically get behind: Imposing a tax on a corporation with negative externalities and funneling that money toward further protections from the corporation’s abuses, including environmental regulation. (King, a staunch conservative, has a different lens, calling Act 851 “anti-free market” and describing SR11 as an effort to introduce “responsibility and fairness.)

SR11 would impose the following fee schedule on energy-sapping crypto mines:

  • $25,000 for 1 MW to 2.49 MW of electral energy
  • $50,000 for each 2.5 MW up to 4.99 MW
  • $75,000 for each 5MW to 10 MW
  • $100,000 for each use of more than 10MW

The funds would then be distributed as follows:

  • 50% to the State Securities Department for oversight and monitoring of crypto mining operations for fraud or other illegal activities, and for operating expenses
  • 25% to the Attorney General for oversight and monitoring of crypto mining operations for fraud or other illegal activities, and for operating expenses
  • 25% to the Department of Energy and Environment for oversight and monitoring of crypto mining operations for concerns related to energy usage, and for operating expenses

The question now, said King, is whether lawmakers are “going to protect environmental-destroying billion dollar companies from regulation and responsibility.”

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