From the Arkansas Advocate:
Some lawmakers are hoping their colleagues will consider their non-budgetary bills during the fiscal session that began last week.
While Arkansas has yearly legislative sessions, lawmaking during even-numbered years is typically limited to fiscal bills. Lawmakers can introduce non-fiscal legislation with a two-thirds vote in each chamber.
This year, lawmakers have introduced proposals to raise the homestead tax credit, limit the state’s school voucher program and roll back swaths of the 2023 cryptocurrency mining law that restricts local regulations.
Crypto mining
The Arkansas Data Centers Act was introduced about a week before the 2023 legislative session ended and passed both chambers with bipartisan support. Green Forest Republican Sen. Bryan King has since spearheaded an effort to change the law, saying it passed with too little scrutiny.
Crypto mines are large groups of computers that harvest digital currency. They are usually located in rural areas due to the space they take up, and require large amounts of electricity to keep the computers running and water to keep them cool.
In 2024, King proposed six crypto regulations that passed the Senate but failed in the House. He filed six nearly identical resolutions this month.
- Senate Resolution 7 would allow local governments to regulate crypto mines and prohibit ownership by the list of foreign countries from which the federal International Traffic in Arms Regulations bans imports and exports.
- Senate Resolution 8 would require cryptocurrency businesses to pay a fee to the Department of Energy and Environment for “extraordinary electrical energy usage.”
- Senate Resolution 9 would ban the use of computers or software manufactured by foreign entities in crypto mining in Arkansas.
- Senate Resolution 10 would require people who engage in crypto mining to be licensed money transmitters under the state’s Uniform Money Services Act.
- Senate Resolution 11 would require at least six months’ advance notice before buying or leasing any land or buildings used for crypto mines.
- Senate Resolution 12 would require the Arkansas Natural Resources Commission to monitor crypto mines’ water usage and administer consequences to any mine that “threatens the critical groundwater supplies of this state through an excessive use of water.”
The regulations are necessary to “get it back to local control” over whether a crypto mine can be established in a community, King said.
“Is this going to stress the grid system or exorbitantly raise electric rates, or is it going to drain water supplies and cause the water rates to go up?” King said in an interview. “Those are things that we need to know ahead of time before they come in.”
Faulkner County residents filed a federal lawsuit in 2023 over the excessive noise from a crypto mine built in the area after the Arkansas Data Centers Act passed.
Rep. Ron McNair, an Alpena Republican, is the sponsor of the six identical crypto resolutions in the House. McNair and King represent Harrison, where out-of-state entities showed interest in developing a crypto mine in recent years.
Legislative Democrats largely stayed out of the crypto regulation discussion in the 2024 fiscal session. Senate Minority Leader Greg Leding of Fayetteville still believes the fiscal session should stick to fiscal issues, he said in an interview, but King’s renewed proposals might be worth considering.
“Having regular sessions every two years doesn’t really give us the chance to be responsive to things, and the concerns over data centers have only grown in the last two years,” Leding said.
School vouchers
King and Rep. Jim Wooten of Beebe, two Republicans who opposed the creation of the state’s school voucher program in 2023, have filed resolutions to curtail the Educational Freedom Account program. Wooten said the high threshold for permission to get the bill filed is “a mountain to climb for any piece of legislation.”
“There’s a lot of concern [about the program] among people who favored the vouchers system,” Wooten said.
The school voucher program, which was phased in over three years and opened to all K-12 students this year, has been scrutinized by some lawmakers for its growing cost and broad eligibility criteria.
Program participants will receive up to $7,208 for private school tuition and other eligible educational expenses next year. Up to $379 million could be spent on the program under the governor’s proposed budget.
The proposed bill would cap accounts to $5,000 per school year and prohibit students who were already enrolled in private school prior to the passage of the LEARNS Act, which created the voucher program, from receiving funds.
King said this shouldn’t affect students with disabilities who previously participated in the Succeed Scholarship program, which was absorbed into the EFA program.
Students would also have to meet or exceed set scores on a yearly assessment to be eligible for state funds. King said this is necessary to “compare apples to apples” in students’ educational outcomes.
“If you go to public school, private school or homeschool, we need one standardized test that is used for that, and none of this [ability to] pick and choose your test if you’re in the EFA program,” King said.
Other proposed legislation
House Speaker Brian Evans, a Republican from Cabot, said Thursday that House members have been particularly interested in raising the homestead tax credit for a third time in as many years.
Magnolia Republican Sen. Steve Crowell and Cave City Republican Rep. Bart Schulz filed resolutions asking permission to file the legislation to increase the credit by $75, to $675.
“I just think it’s really important, if we have excess funds and things are trending the right way, that we take care of the people of Arkansas as fast as we can,” Crowell said Friday. He said he hadn’t spoken with his fellow legislators to gauge interest in the bill.
Meanwhile, King and Huntsville Republican Rep. James Eaton introduced a proposal to provide counties with more state funds to maintain their water, sewer and road infrastructure. The “Equal Distribution County Turnback Fund” would collect a minimum of $150 million in state tax revenue and distribute at least $2 million to each of Arkansas’ 75 counties.
Several towns and cities have gone without turnback funds for months because they fell behind on filing required audits of their water and sewer systems.
A handful of House and Senate Republicans are sponsoring a resolution that would prohibit restrictions on the sales of interest in property. The proposed Arkansas Property Rights Protection From Sharia Law Act would safeguard against “peer pressure” to comply with the provision of Islamic law that restricts property sales, said Harvey Republican Rep. Marcus Richmond, the resolution’s primary House sponsor.
“Even if this resolution doesn’t pass, the assembly needs to be aware so that maybe they address it next year,” said Richmond, who is not running for reelection.
Sen. Tyler Dees, a Republican from Siloam Springs, and Rep. Howard Beaty Jr., a Republican from Crossett, introduced a proposal to alter the Industrial Development Authorities Expansion Act. If successful, it would require members of an industrial development authority board to step down if they move outside the area they represent, make industrial development authorities subject to local planning and zoning regulations, and eliminate their eminent domain powers.
