Did the AG opine on what local-government powers remain over digital asset mining under Arkansas's Data Centers Act?
Plain-English summary
Senator Bryan King and Representative Ron McNair asked the AG six questions about the Arkansas Data Centers Act of 2023, the same statute Representative Rick McClure asked about in Opinion No. 2023-060. Their questions ranged from the statutory definition of "ordinance" (A.C.A. § 14-1-603(10)) to whether localities can update zoning to address modular mining containers, to whether buffer requirements near schools and daycares would be discriminatory, to what counts as an electric utility's "transmission network" under A.C.A. § 14-1-604.
The AG declined to opine on all six questions. The reason: on November 1, 2023, Jones Digital LLC filed a federal lawsuit (Jones Digital LLC v. Ark. Cty., No. 2:2023cv00220 (E.D. Ark.)) challenging local regulation of digital asset mining. The AG noted the long-standing policy of declining to opine on matters pending before the courts (citing Op. 2023-028, Op. 2016-027, Op. 2010-047). Because the litigation could directly affect the issues King and McNair raised, the AG declined.
This declination matters because it leaves several Data Centers Act questions unresolved at the AG-opinion level until the courts rule (or the case settles or is dismissed). For an answer on the limited subset of questions that Op. 2023-060 did address, see that opinion.
What this means for you
City attorneys and county attorneys
The AG has declined to opine on the more granular Data Centers Act questions. For now, the only authoritative AG guidance comes from Op. 2023-060: cities and counties cannot ban digital asset mining; they can apply general operational and noise rules; and any such rules must apply equally to data centers.
Track Jones Digital LLC v. Ark. Cty. (E.D. Ark. No. 2:2023cv00220) for the federal court's analysis of what local regulation the act permits. The opinion declined to address modular-container zoning, school/daycare buffer requirements, and the meaning of "transmission network."
Cryptocurrency miners
This declination does not change your operational position. Op. 2023-060 still confirms cities cannot ban your activity. The Jones Digital case may produce binding federal-court precedent on the contested questions about local regulation. Consult counsel before relying on either silence-by-AG or any preliminary court orders.
Data center operators
You benefit from the equal-treatment rule (Op. 2023-060). The Jones Digital case may further define what local regulation the act permits or prohibits. If the case produces binding precedent that limits local rules even further, your operating environment may improve.
State legislators
If the courts produce a reading of the Data Centers Act that you believe is wrong on policy grounds, the legislative response is to amend the statute to clarify the intended scope. The AG declination is procedural; it does not signal AG agreement or disagreement on the substance.
Utility regulators
The "transmission network" question (whether it includes the distribution network from substations to end users) was one of the six questions declined. This is a substantive ambiguity in § 14-1-604. The federal court may address it; otherwise it remains open.
Common questions
What is the AG's policy on pending litigation?
Long-standing practice: the AG, as part of the executive branch, declines to opine on matters pending before the courts for resolution. Issuing an opinion that telegraphs a position could prejudice the litigation, and the courts will resolve the issues regardless. (See Op. 2023-028, Op. 2016-027, Op. 2010-047.)
What is Jones Digital LLC v. Ark. Cty.?
A federal lawsuit filed November 1, 2023, in the Eastern District of Arkansas (case number 2:2023cv00220), challenging local regulation of digital asset mining. The AG cited it as the trigger for declination here.
Does this mean my municipality can or cannot regulate cryptocurrency mining?
The bottom-line answers from Op. 2023-060 still apply: no outright bans, equal treatment with data centers, generally applicable noise rules OK. The unresolved questions involve more granular issues like zoning for modular containers, buffer zones near sensitive uses, and the precise scope of the "transmission network" reference.
Does this opinion bind the courts?
No. AG opinions are persuasive but not binding. A federal court can reach a different conclusion. The declination here is just a procedural decision not to weigh in.
What happens after the Jones Digital case is resolved?
The AG could revisit these questions in a new opinion if asked. Whether the AG would still defer would depend on whether further litigation is pending and what the resolved court ruling addressed.
What about local ordinances passed before this opinion?
The opinion did not invalidate or address any specific local ordinance. Any pending local rule needs to be evaluated under the Op. 2023-060 framework (no ban, equal treatment, generally applicable noise OK) and may be subject to further refinement by the courts.
Background and statutory framework
A.C.A. §§ 14-1-601 to 14-1-605. The Arkansas Data Centers Act of 2023.
A.C.A. § 14-1-603(10). Defines "ordinance." (One of the six declined questions asked whether this definition is required for the act's intended application.)
A.C.A. § 14-1-604. Sets the operating requirements for digital asset miners, including the requirement to operate "in a manner that causes no stress on a public electric utility's generation capabilities or transmission network."
Jones Digital LLC v. Ark. Cty., Ark., et al., No. 2:2023cv00220 (E.D. Ark. filed Nov. 1, 2023). Pending federal litigation that triggered this declination.
AG declination policy. Op. 2023-028, Op. 2016-027, Op. 2010-047. Long-standing policy of declining to opine on issues pending before courts.
Citations
- A.C.A. §§ 14-1-601 to 14-1-605 (Data Centers Act of 2023)
- A.C.A. § 14-1-603(10) (definition of ordinance)
- A.C.A. § 14-1-604 (digital asset miner operating requirements)
- Jones Digital LLC v. Ark. Cty., Ark., et al., No. 2:2023cv00220 (E.D. Ark. filed Nov. 1, 2023)
- Ark. Att'y Gen. Op. 2010-047, 2016-027, 2023-028, 2023-060
Source
Original opinion text
Opinion No. 2023-068
November 16, 2023
The Honorable Bryan B. King
State Senator
871 CR 814
Green Forest, Arkansas 72638
The Honorable Ron McNair
State Representative
10819 Daffodil Court
Harrison, Arkansas 72601
Dear Senator King and Representative McNair:
You have requested my opinion regarding the Arkansas Data Centers Act of 2023 ("the Act") and digital asset mining. You ask the following questions:
Question 1: Is the definition of ordinance as listed in A.C.A. § 14-1-603(10) required for the intended application of the Act?
Question 2: With the existing definition of ordinance as set out in A.C.A. § 14-1-603(10), is a digital asset mining operator that is not home based required to follow local law and regulation regarding safety and operation under A.C.A. § 14-1-604?
Question 3: Is there any expansion or grant of authority to local governments in the Act?
Question 4: After the Act goes into effect, can a local government update their zoning code to address the transient nature of a data center that utilizes modular/portable containers to house mining rigs? Or would such a regulation be considered discriminatory toward a digital asset mining operation because traditional data centers do not typically use modular/portable containers?
Question 5: Are local governments able to update zoning codes to include buffers for sensitive areas such as schools and daycares? Is that considered discriminatory?
Question 6: A.C.A. § 14-1-604 states, "A digital asset miner shall operate in a manner that causes no stress on a public electric utility's generation capabilities or transmission network." Does the term transmission network include a public electric utility's distribution network (from substations to end users)?
(Note: Although you referred to these provisions as A.C.A. § 14-1-501 et seq., they were later codified as A.C.A. § 14-1-601 et seq. Your questions have been revised to reflect this change.)
RESPONSE
I must respectfully decline to opine on your questions because of pending litigation, the outcome of which could directly affect the issues you raised. (See Jones Digital LLC v. Ark. Cty., Ark., et al., No. 2:2023cv00220 (E.D. Ark.), filed November 1, 2023.) It is the long-standing policy of the Office of the Attorney General, as a member of the executive branch, to decline to opine on matters that are pending before the courts for resolution. (See Ark. Att'y Gen. Ops. 2023-028, 2016-027, 2010-047.)
I regret that I cannot be of assistance in this matter. Please do not hesitate to contact me if I may be of future assistance in some other respect.
Assistant Attorney General Jodie Keener prepared this opinion, which I hereby approve.
Sincerely,
TIM GRIFFIN
Attorney General