Bill Summary – FastDemocracy

 State of Arkansas
 94th General Assembly
 Fiscal Session, 2024                                                            HR 1019
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 By: Representative Miller
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                                  HOUSE RESOLUTION
                TO AUTHORIZE THE INTRODUCTION OF AN NONAPPROPRIATION
                BILL TO AMEND THE ARKANSAS DATA CENTERS ACT OF 2023;
                TO REQUIRE A DIGITAL ASSET MINING BUSINESS TO PAY A
                FEE TO THE DEPARTMENT OF ENERGY AND ENVIRONMENT FOR
                EXTRAORDINARY ELECTRICAL ENERGY USAGE; AND TO
                IMPLEMENT OVERSIGHT AND MONITORING PROCEDURES FOR A
                DIGITAL ASSET MINING BUSINESS.
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                                          Subtitle
                         TO AUTHORIZE THE INTRODUCTION OF A
                         NONAPPROPRIATION BILL TO REQUIRE A
                         DIGITAL ASSET MINING BUSINESS TO PAY A
                         FEE FOR EXTRAORDINARY ELECTRICAL ENERGY
                         USAGE.
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 BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-FOURTH GENERAL
 ASSEMBLY OF THE STATE OF ARKANSAS:
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          THAT Senator King is authorized to introduce a bill which as introduced
 will read substantially as follows:
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 “Title
 AN ACT TO AMEND THE ARKANSAS DATA CENTERS ACT OF 2023; TO REQUIRE A DIGITAL
 ASSET MINING BUSINESS TO PAY A FEE TO THE DEPARTMENT OF ENERGY AND
 ENVIRONMENT FOR EXTRAORDINARY ELECTRICAL ENERGY USAGE; TO IMPLEMENT OVERSIGHT
 AND MONITORING PROCEDURES FOR A DIGITAL ASSET MINING BUSINESS; AND FOR OTHER
 PURPOSES.
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                                                                                     HR1019
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 Subtitle
 TO REQUIRE A DIGITAL ASSET MINING BUSINESS TO PAY A FEE TO THE DEPARTMENT OF
 ENERGY AND ENVIRONMENT FOR EXTRAORDINARY ELECTRICAL ENERGY USAGE.
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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          SECTION 1.      Arkansas Code Title 14, Chapter 1, Subchapter 6, is amended
 to add an additional section to read as follows:
          14-1-606.      Digital asset mining business — Extraordinary electrical
 energy usage fee — Oversight and monitoring procedures.
          (a)   A digital asset mining business or business utilizing a blockchain
 network that is in operation as of the effective date of this act shall pay a
 fee to the Department of Energy and Environment on an annual basis for each
 instance of extraordinary electrical energy usage generated during the
 preceding calendar year according to the following scale:
                   (1)   Twenty-five thousand dollars ($25,000) for each one megawatt
 (1 MW) to two and forty-nine hundredths megawatts (2.49 MW) of electrical
 energy in any given calendar month of the preceding calendar year;
                   (2)   Fifty thousand dollars ($50,000) for each two and five-
 tenths megawatts (2.5 MW) to four and ninety-nine hundredths megawatts (4.99
 MW) of electrical energy in any given calendar month of the preceding
 calendar year;
                   (3)   Seventy-five thousand dollars ($75,000) for each five
 megawatts (5 MW) to ten megawatts (10 MW) of electrical energy in any given
 calendar month of the preceding calendar year; and
                   (4)   One hundred thousand dollars ($100,000) for each use of more
 than ten megawatts (10 MW) of electrical energy in any given calendar month
 of the preceding calendar year.
          (b)(1)     If a digital asset mining business or business utilizing a
 blockchain network begins operation after the effective date of this act,
 before the digital asset mining business or business utilizing a blockchain
 network begins consuming electrical energy at the site of its operation, the
 digital asset mining business or business utilizing a blockchain network
 shall:
                          (A)   Prepare a good faith estimate of what the digital
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                                                                                HR1019
 asset mining business or business utilizing a blockchain network's electrical
 energy usage for the next following calendar year will be; and
                     (B)   Submit any applicable fees to the Department of Energy
 and Environment that the digital asset mining business or business utilizing
 a blockchain network believes in good faith would apply to the digital asset
 mining business or business utilizing a blockchain network under subsection
 (a) of this section, together with the good faith estimate of the digital
 asset mining business or business utilizing a blockchain network's
 anticipated electrical energy usage.
            (2)(A)     Within thirty (30) days of a digital asset mining
 business or business utilizing a blockchain network's completing one (1)
 calendar year of electrical energy consumption at the site of the operation
 of the digital asset mining business or business utilizing a blockchain
 network under subdivision (b)(1) of this section, the digital asset mining
 business or business utilizing a blockchain network shall provide to the
 Department of Energy and Environment an attestation, together with full and
 accurate documentation showing the actual electrical energy usage of the
 digital asset mining business or business utilizing a blockchain network for
 the preceding calendar year, that the estimate provided in subdivision (b)(1)
 was accurate or, if underestimated, that there was more electrical energy
 consumption than estimated, together with the applicable fees under
 subsection (a) of this section.
                     (B)   If a digital asset mining business or business
 utilizing a blockchain network overestimated its electrical energy usage
 under subdivision (b)(1)(A) of this section and overpaid the Department of
 Energy and Environment under subdivision (b)(1)(B) of this section, the
 Department of Energy and Environment, within thirty calendar (30) days of
 receipt of the attestation and documentation under subdivision (b)(2)(A) of
 this section, shall provide a refund of the difference to the digital asset
 mining business or business utilizing a blockchain network.
            (3)(A)     If through audit or other means the Department of Energy
 and Environment gains actual knowledge that a digital asset mining business
 or business utilizing a blockchain network has knowingly made a false
 material statement under subdivision (b)(2)(A) of this section, the
 Department of Energy and Environment may assess penalties against the digital
 asset mining business or business utilizing a blockchain network of no less
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 than twenty-five thousand dollars ($25,000) per violation.
                      (B)   A digital asset mining business or business utilizing
 a blockchain network that has knowingly made a false material statement under
 subdivision (b)(2)(A) of this section is, upon conviction, guilty of a:
                            (i)    Class A misdemeanor for a first offense; and
                            (ii)   Class D felony for a second or subsequent
 offense.
      (c)   The proceeds from the extraordinary electrical energy usage fee
 under subsection (a) of this section shall be disbursed as follows:
               (1)   Fifty percent (50%) to the State Securities Department, to a
 cash fund deposited into the State Treasury as determined by the Chief Fiscal
 Officer of the State, to be used exclusively for:
                      (A)   Personal services and operating expenses; and
                      (B)   Oversight and monitoring of digital asset mining
 businesses for fraud or other illegal activities;
               (2)   Twenty-five percent (25%) to the Office of the Attorney
 General, to a cash fund deposited into the State Treasury as determined by
 the Chief Fiscal Officer of the State, to be used exclusively for:
                      (A)   Personal services and operating expenses; and
                      (B)   Oversight and monitoring of digital asset mining
 businesses and businesses utilizing a blockchain network for fraud or other
 illegal activities, including without limitation investigation into state and
 national security concerns; and
               (3)   Twenty-five percent (25%) to the Department of Energy and
 Environment, to a cash fund deposited into the State Treasury as determined
 by the Chief Fiscal Officer of the State, to be used exclusively for:
                      (A)   Personal services and operating expenses; and
                      (B)   Oversight and monitoring of digital asset mining
 businesses for concerns related to energy usage.
      (d)(1)     The Department of Energy and Environment shall promulgate rules
 to implement this section.
               (2)   A proposed rule by the Department of Energy and Environment
 promulgated under subdivision (d)(1) of this section shall be approved by the
 Legislative Council or Joint Budget Committee under § 10-3-309.
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      SECTION 2. DO NOT CODIFY.        Rules implementing this act.
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      (a)   The Department of Energy and Environment shall promulgate rules
 necessary to implement this act.
      (b)(1)     When adopting the initial rules to implement this act, the
 final rule shall be filed with the Secretary of State for adoption under §
 25-15-204(f):
                      (A)   On or before January 1, 2025; or
                      (B)   If approval under § 10-3-309 has not occurred by
 January 1, 2024, as soon as practicable after approval under § 10-3-309.
               (2)   The Department of Energy and Environment shall file the
 proposed rule with the Legislative Council under § 10-3-309(c) sufficiently
 in advance of January 1, 2025, so that the Legislative Council may consider
 the rule for approval before January 1, 2025.”
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