Advanced Communications and Information Technology Committee and Energy - Joint

All right appreciate one being here this morning for the joint committee meaning of the technology and the energy committee meetings to explore the bit coin and bit coin mining industry here in arkansas the purpose of this committee meeting is for us to be more informed on this decision into to learn for those of you that are in attendance today please understand that because we are in the interest we were not able to pass any laws or take any action today this is just an opportunity for us to learn the facts and get better educated so that when time comes for us to make any decisions concerning this industry that we will be better informed to be able to do so so what we're going to do today is we're going to start off so this is going to be primarily about education we're going to start off with a couple of videos that are going to explain first of all white bit claim is and then we're going to have another video that's going to explain what bit coin mining is so that way we all know what we're talking about we will then get into the rest of our agenda following that we will allow public comment normally during interim meetings that's not something that's done but due to the nature of this topic we do want to hear from members of the public to hear your concerns and suggestions and so forth will get into that how we're going to handle that we get to that portion of the of the meeting before we proceed I don't know if my coacher has any comments not none this morning so with that we're going to go ahead and proceed we're gonna watch the two videos first one learn we're gonna learn about what bit coin is between mining and then we will go to the rest of the agenda so I will turn over the staff to go ahead and play those two videos force in ninety nine but it coins our car i'm eight martin and i'll be here guide through this video series bid coin white war to we're going to cover a lot of topics. Such as bit coming mining because in wallace part of the coin and a lot more today we're going to start from scratch and answer the third most search term on google today what is deadline if you're worried they were going to get to technical it is a lot of complicated words don't hear in ninety nine the coins we translate coin into plain english so even if you have no technical background you'll be able to understand everything by the end of this course you know more about the coin and how it works then ninety nine percent of the population so let's get started. Before we talk about dear coin I want to take a moment and talk about what is money exactly and it's core money represents value if I do some work for you you give me money in exchange for the value I gave you I can then use their money to get something a value from someone else in the future throughout history value has taken many force and people have used a lot of different materials to represent money so we shells in of course gold have all been used as a medium of exchange however in order for something to represent value people have to trust that it is indeed valuable and will stay valuable long enough for them to redeem that value in the future of until a hundred years ago or so we always struggle in some things to represent money however something happened along the way and we've changed their trust model from front of something some one let me explain over time people found it too conversation to walk around the world carrying bars of gold or other forms of money so paper money was invented here's how it worked a bank or government would offer to take this action of your bar of gold let's say worth a thousand dollars and in return that bank would give you the certificates which we call bills or mounting dealer thousand hours now and only where these pieces of favor most easier to carry but you could spend a dollar on a couple of coffee in that happy to cut your gold bar to do thousand pieces and if you wanted your gold back you simply took the thousand dollars in bills they acted at the bank to redeem them for the actual form of money in this case that gold barred whenever you need it and so paper begin its use as money as an instrument of practically and convenience however as time progressed in due to macro economic changes this bond between the people receive and the goal that stands for was broken now to explain the path that let us away from the goal standards extremely complex but suffice to say that governments told their people that the government itself would be liable for the value of that people money. Basically we all said let's just forget about gold entry paper instead so people continue to trade with receives that are back by nothing but the government's promise and why do they continue to work well because of trust even though there is no actual commodity backing people money evils for the government and there's healthier money was created fia is a landword that means by decree meaning the dollars or euros or any other currency for that matter have value because the government orders it too it's what's known as legal tender coins or being those that must be accepted if offer is payment so the value of today's money actually comes from a legal service given to it by its central authority in this case the government and so the throttle model has changed from fraudulent something someone in this case the government fiat money has two main drawbacks one it is centralized you have a central authority that controls and issues it in this case the government or central bank and two it is not limited by quality the government or central bank in print as much as they want whenever needed and in flavor of money supply on the market the problem with printing money is there because you're following the market with more money the value of each dollar draws so your own money is worth less when you see prices rising through all the years it's not necessarily that price is rising as much as that the purchasing power of your money is dropping you need more dollars to buy something that used to cost less was fear money was in place that moved additional money was pretty simple we already have it central authority that is used money so why that make money mostly digital and that that authority track of who wants what today we mean these credit cards while you're transfers paypal and other forms of digital money the amount of physical money in the world is almost negligible and it's getting small with each year the passes. So with money today is digital how does that even work I mean if I have a file that represents it our what's to start me from copying in a million times having a million dollars this is called the devil's spend problem the solution the banks used today is a centralized solution they keep a letter on their computer which keeps track of who owns what everyone has an account and this letter keeps a tally for reach account we also ask the bank and they're being trust their computer and so the solution is centralized on this leisure in this computer you may not know this but there were many attempts to create alternative forms of digital currencies however none we're successful in solving the double spend problem without a central authority whenever you give anyone control over the money supply you were giving them enormous power and this creates three major issues the first issue is corruption power for us and absolutely power corrupts absolutely when based out of me and it create money or value they basically control the floor value on the world which gives them almost unlimited power a small example of how power courage can be seen in the wells fargo scan where employees secretly created millions of unauthorized bank and credit card accounts in order to inflate the banks rate industry without their customers knowing about it for years the second issue of a centralized system is missing management if the central authorities interest isn't a wind with the people that controls there may be the case of mismanagement for example printing a lot of money in order to save a certain bank or institution from collapsing as will happen in two thousand and eight the problem with printing too much money is that it costs his inflation and basically erodes the value of the citizen's money one extreme example for this is vanish oil where the government has printed so much money and the value of it has dropped so much that people are no longer counting money but are weighing it and said. The last issue is control you're basically giving away all control of your money to the government at any point in time the government can decide to freeze your account and in you access your funds even if you use only cold hard cash the government can cancel the legal status of your currency as was done in india a few years back this was the same of things until two thousand nine creating an alternative to the current monitoring system seemed like a lost cars but then everything changed in october of two thousand and document was published online by the guy calling himself in our car model the document also called or white paper suggested we have creating a system for a decentralized currency called behind this system claimed to create digital money they're solved the double spound problem with alda need for a central authority and it's core bid point is a transparent leisure without a central authority but what is this confusing phrase even really mean well less compare bid point to the back since most money today is already digital the bank basically manages its own leisure of balances and transactions however the base letter is not transparent and it's stored on the bank's main computer you can't sneak a peak into the base lesser and only the bank has complete control over it bid coin on the other hand is a transparent leisure at any point in time I can sneak a peek into the letter and see all of the transactions in balances the only thing you can't figure out is who owns these balances and who was behind each transaction this means bid point is pseudo anonymous everything is open transparent and trackable but you still can't tell who sending what to whom let's explain this with an example you can see on your screen certain roles from the coin pleasure we can see that a certain vehicle in address send ten thousand digits to another big coin address in may of two thousand ten. This specific transaction is the first purchase that was ever made with the coin and it was used to buy two pleases by a guy named last was low policy opposed back in two thousand ten asking for someone to sell him to please in exchange for ten thousand eight point well someone did and now the price of these two pieces is worthwhile over one hundred million dollars today the coin is also decentralized there's no one computer that holds the leisure with that coin every computer that participates in the system is also keeping the copy of the letter also known as the watching so if you want to take down the system or haggle a leisure you'll have to take down thousands of computers which are keeping a copy and constantly updating it like most money today bit coin is also digital this means there's nothing physical that you can touch in the account there are no actual coins there are only rose of transactions and balances when you own the coin it means that you on the right to access the specific bit coin address record in the leisure and fun from it to a different address so what is all this mean why is the account such a big news well for the first time since digital money came into existence we now have an alternative to the current system bid coin is a form of money that no government or bank can control think about the time before the internet has centralized the floor information was basically if you wanted information you could get it from a few minutes for players like the new york times in the washington post and others like them today thanks to the internet information is decentralized in european communicate in consume knowledge from around the world with a click of a one big one is the internet of money and it's offering a decentralized solution to money bid coin has several advantages of the current system first it gives you can flee control over your money with me point you and you along can access your funds. Are you actually do this will be explained in a later video no government or banking decide if raise your account or confiscate your holdings bid point also cuts a lot of the middle man from the process of transferring money this means that in many cases bid coin is cheaper to use then for additional wire transfers or money orders also unlike fiat currencies bid for it was designed to be digital by nature this means you can add additional layers of programming on top of it and turn it into smart money but more on that in later videos finally bid for in opens up digital commerce to two and a half billion people around the world who don't have access to the current banking system these people are on bank or undergrad because of where they live and the reality that they've been born into however today with a mobile phone and a clickable button they can start trading using bid no permission needed today there are several merchants online and offline that except the account you can order a book a hotel would be a coin if you like there are even between debit cards that allow you to pay it almost any store with european coin balance however the road for an exception the majority of the public is still a long way as we continue with this video series we will break down exactly how the coin works and how to use it we will learn about the coin mining the coin wallace how to buy the end much more the revolution of money began a two thousand nine in these days we are seeing it change money as we know it you may still have some questions if so just leave them in the comment section below and if you're watching this video on you too and enjoy what you've seen don't forget to hit the like button then make sure to subscribe for notifications about new episodes thanks for joining me here for the white word for ninety nine eight coins the account i'm nate part you in a bit. Computer is it still profitable to mind it coin these days well stick around here on the coin white board tuesday will answer these questions and more. Bill coin was created as a decentralized alternative to the banking system this means that the system can operate and transfer false from one account to the other without any sensible authority with the central authority transferring one is easy just tell the bank you want to remove fifty dollars from your account and add it to someone else's account in this case the bank has all the power since the bank is the only one who was allowed to update the letter that holds the balances of everyone in the system but how do you create a system that has a decentralized letter how do you give someone the ability to update the watch without giving them so much power that they'll become corrupt or negligent well the rules of the big coin system notice that the protocol solves this in a very creative way I like to call who wants to be a banker in short anyone who wants to participate in updating the leisure a bit coin transactions can do so all you need to do is get a random number of equation generated by the system so symbol right of course this guessing is all done by your computer the more powerful of the computer you have the more guesses you can eight percent does increasing your chances of winning this game if you manage to get right you are new coins and get to write the next page of it going transactions on the blocking here's a more detailed breakdown of the mining process was your mind in computer comes up with the right guess you're mining program determined to wish if the currently pending transactions will be grouped together into the next block of transactions compiling this block represents your moment of laurie as you have now become the temporary bank who gets to update the big coin transaction letter notice the watching the block you create it along with your solution to the whole network so that other computers each computer that validates your solution updates is happy going transaction transactions that you chose to include and that ex block is you can imagine since mining is based on the form of guessing for. A different minor will guess the number and he granted the right to work watching of course the miners with more computing power more often the due to the laws of the typical probability it is highly unlikely that the same minor will do so every time after this stage is complete the system generates a fixed amount of big points and rewards them to you as a compensation for the time and energy you've spent in solving the math problem that digitally you get paid any transaction peace that were attached to the transactions you inserted into this lock so that's been coin mining into that shell it's called mining because of the fact that this process helps my new bid points from the system but if you think about it the mining part is just a product of the transaction verification process so the name is a bit misleading since the main rule of mining is to maintain the leisure centralized manner well now that you know what the coin writing is you might be thinking cool three money so where do I sign up well so fast amount of who invented it crafted the rules for mining in a way that the more mining power of the network asked the harder it is to get the answer to the mining math problem so the difficulty of the money process is actually self adjusted into the accumulated mining power the network possesses if more minors join it will get harder to solve the problem if many of them drop off it will get easier and this is known as the mining difficulty so why on earth is utility do this well he wanted to create a steady flow of new bid points to the system in a sense this was done to keep inflation and check the mining difficulties average a new block will be added every ten minutes now remember this is on average we can have two lots being added minute every minute and then wait an hour for the next block in the long run all this will even out to ten minutes on average is you can imagine this type of self adapting mechanism and arms race to get a most efficient and powerful minor as soon as possible. When did going first started out there weren't a lot of minors out there in fact tells you the inventory coin and his friend half it were some of the very few people mining bill at the time with their own personal computer using your cpu meaning or several processing computer brain was enough reminding the point back in twenty one difficulty as we coincided to care people look for a more powerful mining solutions gradually people moved to gp mining a gp or graphics processing unit is a special component added to the computer to carry out more complex calculations g p us were originally interested to all of the american computer games with a task graphics requirements because of their architecture became popular in the field of critical and rob twenty eleven people also start using them to mind between for reference the minimum power of one gp that of around thirty cpus another revolution came later on with f p g a minute pga is a piece of hardware that could be connected to a computer in order to run a set of calculations there just like AG PU but three to a hundred times faster the downside is that their heart in figure which is why they weren't is commonly used in minding as gpus finally around twenty thirteen a new breed of minor was introduced the asic minor easier experience for application specific integrated circuit and these were pieces of hardware manufacturers solely for the purpose of minding their coin unlike gpu's cpus and f e g as they couldn't be used for anything else their fortune was hard called it into the machines minors are the current mining standard some earliest minors even appeared in the form of the US b but they became a solely rather quickly even started out in forty thirteen the technology quickly evolved and new more powerful minors were coming out every six months after about three years of this crazy tech we finally reached the technological barrier and. Things have cool down a bit since twenty sixteen the pace at which new highers are released has slowed considerably now that you know what minors are let's talk about about mining pools assuming you're just entering the big coin mining game even if you buy the best possible minor out there you're still at a huge disadvantage compared to professional coining farms that's why mining pool similar systems the idea of the civil minors group together meaning they combine their minding power to compete more effectively if the poor managers to win the competition the reward is spread out between the wall members depending on how much mining power each of them contribute it this way even small minors can join the mining game and have a chance of earning the point even though they're getting all the part of the reward today there are over a dozen large cools that compete for the chance to mind the account and update the leisure I know you might be thinking all the steering stuff is very nice but is bill coin mining actually profitable today well the assured answer is probably not the correct in the long answer is it depends on a lot of factors when calculating the coin mining craft and ability there are a lot of things you need to take it out well that's corner them quickly number one your hass rate a hash is the math medical problem the minor's computer needs to solve their has rate rivers to your minor's performance or how many guesses your computer can eight per second has recould be measured in mega has second gigahertz terra had second and even padahasker second number two the dead coin reward per block and this reference to the number of bit for his generated when a minor finds the solution this number started at fifty point twenty oh nine and is have every two hundred and ten thousand blocks about every four years the current number a bit coins awarded for lock is twelve and a half the last block having occurred in july of twenty sixteen and the next one will be in twenty twenty. Number three the mining difficulty this is a number that represents how hard it is to mind a certain moment according to the amount of minding power currently active in the system that reform your electricity cost how many dollars are you paying per killer what you'll need to find out your electricity rate in order to calculate profitability this can usually be found on your monthly electricity the reason this is important is because minors consumer electricity for powering of the minor or for pulling it down is these machines can get really hot number five your minor's power consumption each minor consumes a different amount of energy you'll need to find out the exact power consumption of your minor before calculating profitability and this could be found easily with a quick search on the internet or through his list power consumption is measured in was. Number six pool fees if you're mining through all mining pool and should then the poor thing certainly percentage for rendering their service. Number seven dear coins price since no one else would be a coins price will be in the future is hard to predict people in mind will be profitable if your planning to convert your mind a bit coins in the future to any other currency this variable will have a significant impact on your profitability and finally number eight the difficulty increase per year this is probably the most important and illusive variable of them all the idea is that since no one can actually predict the rate of minors joining the network neither can anyone predict how difficult it will be to mind in six weeks six months or six years from now in fact in all the time as existed profitability has dropped only a handful of times even at time from the price was relatively low the last two factors are the reason that no one will ever be able to give it complete answer to the question is be a coin minding profitable once you have all of these variables at hand you can answer them it will be coin mining calculator and give an estimate of how much to be a coin you'll earn each month if you care to get a positive result on the calculator it probably means you don't have the right conditions for reminding to be brought at all I assume by now you pretty much know with mining is for you or not but you may have also heard about other types of money like cloud manning more will mining or even work mining cloud mining is that you don't buy a physical mining rig but rather really confusing power from a money and it period according to how much mining power you are at first it sounds like a really good idea since you don't have to go through all of the hassle of extras of equipment storing it cooling it and monitoring it however when you do the meth it seems that none of these cloud line excites are profitable those that do seem probable are usually scams don't even own any mining equipment they're just elaborate policy schemes they will end up running away with your money as a general rule of them I would suggest you avoid cloud mining altogether if you still want to pursue this make sure you make the right calculations before heading or any funds. The. Some mobile **** claim to mind be a coin on your phone while in theory this is possible due to the low processing powerfulness have compared to you'll probably end up draining your phone's battery much faster and make a very small fraction it will be a point in return the **** that allow this act is mining to distribute earnings according to how much work was done by each phone remember mining his possible with any computer it's just not worth the electricity wasted on it since the slower the computer the smaller the chances of actually getting some kind of reward finally somewhere around twenty seventeen the concept of web minute came to life simply put where my legal house website owners do hijacks you to speak their visitors you and use them to mind vehicle this means that a website owner can leave use of thousands of innocent c p use in order to get products however since mining bit points isn't really profitable with the c PU most of the sites that utilize where mining mine other coins instead as of the release of this video over twenty thousand six have been known to utilize where mining the concept of work miling is very controversial from the sites visitors perspectives using their computer without insert to mind their points in extreme cases this can also harm the c PU due to overheating from the sites owners perspective where mining has become a new way to monitor his websites without the need for placing annoying **** also can control how much of the visitors you he wants to control in order to make sure he's out of using his hardware to include this episode of bid going to whiteward tuesday here are three questions a lot of is it mining or waste of electricity what is there a lot of criticism regarding the energy consumption that did coin mining employees worldwide there are various arguments against this claim as well. For starters you could say that bid coin mining ultimately requires less resources than the current banking system if you take into account backs servers atm's credit card companies and all other components of the current monetary system you'll find out that it's much more wasteful than bid coin mining especially if you think about all of the paper use for printing money and the pollution caused by these institutions also you could say bill coin lining is actually power consumption around the world many companies are moving their mining operations to the countries that have an excess electricity this means that the use of electricity worldwide is actually becoming more efficient there are a lot of additional arguments in favor of mining but i'll leave you with these two for now the second question I usually get is can't google start mining the coin and blow out the competition yes it can but it won't do it much good the reason is that google servers aren't fit for solving the coin minding problem the same way that are for reference if google harnesses all of its service to the sole purpose of mining the account and abandons all other business operations it will account for around one one thousand seven percent of the total mining power that the coin network currently has and finally should I might be coins well now that you've about finished watching this video you should be able to answer this question yourself keep in mind this sometimes there might be better alternatives to be a coin mining in order to produce a higher return on your investment for example depending on the coins price it might just be more profitable is instead of mining them and other options would be the perhaps mine all coins which can still be mind is like that theory man arrow or zegas this concludes this week of bid coin white war tuesday hopefully now you have a better understanding of what coin mining is the process of updating the letter of big coin transactions in the rewarding of new york going to those who participate. You may still have some questions yourself just leave them in the common section below and if you're watching this video on youtube and enjoy what you're seeing don't forget to hit the white button then make sure the subscribe notifications things are joining me here at the white board for nineteen ninety i'm day martin and i'll see you in a bit. Alright hopefully that was helpful I know that was a lot to take in but there's been a lot of questions about what bit coin airs but how big coin operating how it works we do want to reiterate that there's nothing here against the the bankers of the banking association as we go for with this the current price a bit coin right now is about twenty eight thousand dollars a coin if you successfully solve if you saw the video you were getting twelve coins that did have around twenty twenties so you're now getting six coins or six times thirty hundred and eighty thousand dollars worth a bit coin if you solve so you can see it could be lucrative in twenty twenty four we'll have again and you'll get roughly three coins when when that having takes place so what we want to do now is i've asked representative mcclere if you worked as to give us a quick a reminder of in route while representative of clearer is getting settled we do need to approve the minutes from the may ninth meeting so if you're on the technology committee if I get a motion from someone to approve the meeting so that I have got that in second thank you all in favor of proving those minutes then you posed at so we will consider those minutes approved so i've asked representative mcclore if you were to give us a brief synopsis of act eight fifty one he's agreed to to do that so representative clarifications introduce yourself through the committee not that we don't know who you are but and then you are recognized to proceed the state representative brick mcclure from district twenty nine and all thank or cultures were putting together such a great group on agenda today so up run i'll just go ahead and tear you since we have the expertise from so many of the different agencies and department i'm going to refer the questions to them because it affects their agencies in their areas with their expertise so a little bit of background and twenty twenty one I begin to worry the plans for digital asset mounting and locations and our counties. Like most in our area we had little knowledge of what that meant I began to research and read the multiple stories of location around locations around the us and world. Most of those stories were not good just like the ones many of you have read when you did your research. The common denominator and number one issue was power consumption and power grid overload issues I was hearing reports of possible growth and digital asset mounting in arkansas. It was my opinion that the primary way to protect our kansas was by protecting the power grid. As a continued to research the digital asset mounting by business aspect I learned that it is not new to arkansas. In fact the university of arkansas sam in walton business college block changed center of excellence was already educating students and I quote to discover and disseminate innovative uses of emerging technology and to teach students it's important to the future of business and digital security. Well this is not necessarily digital mounting in itself it is part of the block chain right chain take nology commerce awareness and education is the key we need to know what is going on in the US and in the area of digital commerce regardless of my personal reluctance to the industry act eight fifty one is the first regulatory act with the intentions to protect arkansas paragraph and regulate power providers we wanted to make sure there are paragraph could provide power without overload that would be plent and there would be plentiful power for all our kinds of the similar bills from other states were reviewed to see how they were dealing with the digital asset money. Enter the electric coops the meaning of all association of power providers the public service commission all understood the intent of the bill. The association of counties are municipal municipally reviewed the drafting process and took a position of neutral on the bill. Act eight fifty one gives a list of laws that digital asset manners must follow in short they must follow all laws any other industry follows that would include any city. Counting state or federal laws that also includes environmental and sound guidelines act eight fifty one does not address any industry specific noise issues it just reaffirmed the existing laws we even noted the digital asset mounters must play all bills and acceptable currency which in arkansas is us dollars. Active fifty one was proved overwhelmingly and no one spoke against the bill and committees are on legislative force but in weeks following there were several reports of problems with noise being generated by digital asset minors. Those digital manning operation that cause complaints were already in the planning stages or operational before acting fifty one was voted. Large digital asset mounting operations without sound debatement can be a problem. They can be loud. They can be annoying. In bag depending on how close you are without sound debatement and this would be true for any industry it can be date dangerous to your hearing and even trigger other health issues. Act eight fifty one was not intended to address specific sound other than occurring guidelines it would be reported to the arkansas department of environmental quality or the federal environmental protection agency. The valid concerns of ownership by countries not friendly to the united states will need to be addressed but unfortunately it was not included in active fifty one again I want to thank her co chairs for putting together all the different agencies today that's going to be able to answer our questions a hard affects them thank you thank you representative of clear at this time mr harford from the arks are blocked chain council of. And the reason I asked mr harford here this morning is I know with block chain and bit coin in minding that there's a lot of technical aspects to it in members might have questioned himself do you have any questions related to betcoin because mining how any of that works that's why i've asked this gentleman here i'm a throtter just a real quick question and then we'll go to center chesterfield while our main focus this morning is on a bitcoin bit coin mining can you give us some examples of other ways that block change technology can be used and can be beneficial to the state of arkansas certainly so since the technology itself creates an immutable ledger that is decentralized and. Not prone to the mistakes that could occur with having it on a central. Secure server it's been explored in partnership with a I development with supply chain structures in the eu some countries are even looking at block chain technology as a better way to maintain the privacy of health records and keep them immutable as well there are multiple other examples and I don't want to get to technical many referred to web which is the idea of the internet having a foundation with this block chain technology to make it a less centralized less controlled buy sea google or some other large centralized private entity and expand its liberty if you will to each individual because of the nature of the decentralized block chain. Actually just couple weeks ago I heard about a company in arkansas it's working on ways to use block chain help make our court systems more efficient so a lot lot of potential users so we're going to go to members questions senator chesterfield you're first. Thank you mr chair and good morning good morning I keep hearing about the noise could she explain to me what causes there. Yeah so the asic machines which are designed specifically to do one function which is crypto mine. Generate a great deal of noise when operating to try to call them there is noise a bateman technology that it's been around for decades that can be utilised as some is even more creative in the johnsburg area we have in our cans and founded company they uses something called immersion cooling. That puts these asic machines submerged in a fluid that means they don't have to create or generate the noise created by all the fans and cooling mechanisms that do create such unusually large south effects right if one were to visit that site you would find that the operation is as quiet as this room so it creates no noise whatsoever some use a blended model of air cooling and emergency calling. Those that don't and just have open mining platforms there are very proven noise about systems that can be utilized any company can do them according to the specs that I think any minister palody wants to institute the arkansas blocking council was actively involved in helping the template language that has been passed in many counties for a noise a bank that for industry sound. Any company that doesn't comply with that or ignores those kind of a noise abatement issues is simply a bad actor and one that would not be qualified to become a member of the block chain association is the reluctance to price of the american. Yes I mean the price I think is negligible and anyone who does an invest in it again is a sign of a company that is I think a bad actor well what is considered negligible well I think that you could do a fish now depends specifically on location you know how how far are you from the rural settings and from residential settings at the border it should not be higher than sixty decibles. Of the property of the industrial site that's in the language that a lot of municipalities have been considering we support that very strongly. The cost would cut into a fraction of their profits again I couldn't be specific with the exact number because it would depend on the maker watch used but there's no reason a company can't meet those requirements and certainly if they're instituted into while they have to meet those requirements and what. Pre clue fraud in this system where precludes fraud fraud and in terms of like money laundering and things with that nature. The us government has actually been very good regarding. Creative ways to track crypto currency in fact one percent of bed coin his own by the us government from seizures that's a much higher figure than seizures of cash cash is still the preferred methodology for nefarious actors because it's still completely untraceable. As you saw on the video the block chain ledger is sued to anonymous so you can see the transactions but not necessarily who has made them. Whenever any entity wants to cash out. That bid coin it creates an opportunity. To be traced. Unlike cash which can be bundled and. Passed off in large suitcases it's still the proven method for example with mexican card tells they tried bid coin ran into trouble with utilizing their currency prefer cash because of that very thing and currency is is in its hard forum in its paper forum is less traceable as demonstrated by the percentage of seizures of bed coined by the us government thank you and thank you mister representative railroad got you next thank you mister chairman mr hartford you use that sort of decade of me of good actors and and bad actors can you describe in in your estimation what distinguishes a good actor from a bad actor yes. I'll articulate the criteria we use at the block change council to certify members of what they need to do. And order to be a member of our association okay a they must reveal ten percent or higher ownership so we understand country of origin of that particular minor they must pass through party inspections for noise abatement and grid safety. Additionally they must go through a background check we currently have on staff. A former veteran for a military intelligence who's a certified money laundering expert and it's access to the resources in which to check background on companies so they can be veteran properly we're attempting to do so in partnership with the local fbi field office cyber crime division and we've reached out to the attorney general's office to set protocols whereby they have to go through a background check in order to become certified anyone who doesn't meet those criteria. Does not qualify for a membership in the black chain council they're very rigorous criteria and to this date for companies have passed that. That rigorous check a bad actor is one that doesn't engage the community is not transparent about ownership does not have contact on the ground so that local entities can reach out when they're great issues and has connections to governments direct your indirect they do not share the values of the united states. It all on the subject of noise abatement you were describing the fan cooling system that produces a lot of the noise work can you describe and a little bit more detail the the what whatever is used for noise abate method is able to reduce the sounds sure if once night using something like emergency cooling there are various structures and designs i'm not in engineer but from what I understand there are various technologies that have been round for decades whilst that have sort of a honeycomm sheep noise abatement that works quite efficiently you can construct the machines where they're located so that they're within walls and facing inward so reflect you know deflecting the noise is mitigated by those structures around it architecturally that kind of contain it it's really not complex and again noise abatement for industry were at large whether it's a a steel mill you know a chicken plan have been around for it quite a long time most companies utilize them there is no reason that this industry can't utilize them as well okay in the last thing I was going to ask do you have any estimate or do a no approximately how many companies are individuals in the state or or mining bitcoin digital assets you know that's a good question one of the things we've been investigating and we relied I mean the support is to help us garner this since there is not a centralised registry of big coin miners. It's my understanding that there is roughly fifteen companies in the state in various stages of operation some at the very beginning stages some are operational of those I can only speak to three or four companies that have been vetted by the council and received our certification we're reaching out to others to see if they pass muster if they don't. Our view is that's a good indication to any municipality that has a minor present war one that is being proposed they should contact the block chain council were happy to partner with them so we can tell them whether there are thoroughly veteran company and have met when I think our rigorous standards of operation. Senator gilmore thank you miss share and what you just stated was going along lines of my questioning so if you would just just briefly and are you sort of touched on it would you sort of describe the role of the council in and who is a part of that council so it's you and i'm assuming several other members would you would you just talk about that and sort of what your role is in in an inverting these individuals and then what sort of. Self regulatory role that you'll play or these members play in governing yourselves and in them. So thank you for their question. The reason we set up the criteria to become members that we have which I think are very high in terms of self regulating industry standards is because there is it is a relatively new technology and you field and there are a lot of folks doing it as demonstrated in this state and many states throughout the country who are not operating in a transparent manner. Are attempt to self regulate obviously we're not a government entity we're not a formal regulatory body we encourage and work with municipalities to pass the kind of regulatory laws for example the noise batement laws that have been articulated in many municipalities of late we strongly encourage regulation in this industry of course that's in the hands of legislative barties so we serve an advisory capacity on what those should be. We believe that regulation leads to good actors and good actors results in good business. We think we're much more profitable if everybody is being by the regulations we've set forth the committee itself the border directors is comprised of folks who have a background in block chain talk technology. Pertaining not to be coin mining but to other areas specifically a I and virtual reality we have an individual who was an engineer at the university of arkansas who worked in this area do you have entrepreneurs. We have other. They did members of companies who have passed our standards and be better to approved by the council we're currently looking to expand our board with more community representation we would also like to explore the option of having an annual rotating student at large board member so we can make sure that educationally represented by having someone any university or college setting who is researching block chain and can have a voice and participate in our efforts to explore disseminate communicate and educate on this expanding technology for the st. Yeah thank you for that and as second ago you mentioned reaching out to the attorney general's office did you do that or someone else within the your entity and do you member who they spoke to. I'm doing that particularly myself i'm reaching out via the assistance of lobbyist room so that we can develop a chain of communication i've personally been in contact with the cyber crime's division in the little rock office so currently. I'm handling the outreach in terms of various law enforcement entities to set up guidelines by which they can. Work with us or we can heed their advice and reading a companies in the stage to explore the legitimacy and whether they meet the criteria to join the council. And so how to members how to board members like yourself how do you get become a part of the council or part of the board well the board is relatively new we've been around for a bit over a year I reached out to various entities that I knew were doing work in the state too represent diverse views and interests in block chain right large. Currently uh my effort is to expand the board to include those in the educational arena and perhaps in the legislative arena as well as well as community representation. Community representation is reflected I think in individual members who have joined the council who simply wanted to be a part of it to hear about you know development and using the stage it's a very inexpensive membership it's only forty dollars for an individual to join and have access to our newsletter and other things and be able to recharge to us students can join for twenty dollars annually in terms of companies represented on the board the only companies represented currently are cryptic farms. And. Bt immersion which is the emergency cooling company that operates in the john's bureau area. In the cryptic forest that who you work with or for our own or would ah yes I work for their mate they don't own it okay the founder is. In the audience camera and baker who is eight three ninth generation correct me on this are kansas by way of texas he is a us federal disabled veteran who founded the company about a year and a half ago two years ago I joined the company about a year ago. And a work force development capacity since I do have a background in that. The council rose organically out of that businesses operations. The company itself cryptic forums are. It's values or transparency community engagement. And embarty some of the principles that we wanted and the arkansas block changed council so I said about to found the council so that we could have a more formal role in this stage in terms of some of the issues that I previously alluded to. Thank you. Do you have a website so from someone wants to learn more about the council they can go to absolutely it's arkansas. Block jane slash council doed work I contact information is there as well I welcome questions and our reach from any entity in the state any individual I spent a great deal of time answering questions through that portal everything from economic development councils to individuals citizens in a community we have questions about noise issues in their community so I welcome all communication that's what we're here for appreciate you're saying the question because we currently have five now bar or six more members of on the bar here so senator hill you are next. Try again order to hear to your left sir okay as you know we wouldn't be here today if we weren't here in complaints are compliment so so we're all here for a reason just a from from the treeland view what I see looking at this. Banks have regulations that they all have to follow and go back in you said your head some regulations while ago whenever you were making your comments about about the how things are handled looking at this it looks to me that this is an easy way to launder money and I know you said that there's like one percent is what you mention for is money laundering or bad actors that are there doing things when you when you compare that to her to the centralized bank though in total issues that we are facing yet you should have a real small number so is that number actually being skewed by what you're saying that no that's why refer to percentage you know money laundering is an issue wherever you have any type of currency whether it's fia currency or decentralize crypto currency. As with any technology as technology evolves so does the need for a line forcement and regulations to catch up with that I do think that. Great straights have been made in. Tracking money laundering through crypto currency which is why the high percentage of seizures that you've seen specifically with cryptocurrency being at around one percent of the total value of us cryptocurrency in operation. By the us government. Yeah. It's a constant battle wherever you have any means of currency you have an affairs actors attempting to utilize their currency. For a dark purposes that's why we have a money laundering expert on our board who can help keep a surprise to which going on and has access to all the resources to keep us up to date on how federal state and local law enforcement and cyber crime are tracking some of these issues. So is it a concern yes is it a unique concern to crypt occurrency I don't think so I think it's an issue. That you find wherever currency exists I do believe that at the uperiodsperio. Are there bad actors in arkansas right now and who are they yes there are bad actors in arkansas right now specifically i'll refer to a company that is currently going by the named green digital. Formerly known as megahash. They're operating or attempting to operate in in harrison and volonia I do consider the council does consider them a bad actor simply because they have not. Even attempted to meet the criteria the regulatory criteria that we have articulated via the council so that is one I can specifically name. I have concerns about their country of origin of their ownership. How the. Do not seem to be transparent in any of their operations as evidence by their multiple llc name changes arm so they are. Definitely when I would identify as a black bad actor in the state pre scheduled times are yes sir. This. All right representative lady manual next. Thank you mister chairman mr harvard thanks for being here and there thanks for setting up. Control within your industry which is a new industry thank you for doing that I think that something we really need but not a couple questions. Many counties including my county i'm from jones borrow by the way help her pass orders or noise control. The. But these counties do not have an enforcement branch. That knows how to enforce these regulations. Also. It it talks about in the federal law federal regulations about. Noise control at the property line being the state and local government responsibility but i'll ask you if you're familiar with these laws if you're not trying to have someone else played. In a section forty two usc forty nine wine it talks about the noise control act of nineteen seventy two. Which is actually epa and forced man ocean. Now the ocean regs are primarily for workers. And I was a special government employee for ocean back in the early two thousand and their specific requirement specific binds very controlled and osha has people letter capable of knowing compliance and I complied epa on the other hand is more environmental. But my question is so there's two laws noise control account nineteen seventy two and then the quiet community act of nineteen seventy eight are you familiar with those two laws at all. I am generally I am aware of them and by no means illegal expert in them but I want to ask you a specific question are there noise controls in those laws at the property line and are they enforceable back epa. I don't know the answer to that it's a compelling question one that i'm going to investigate with our legal advice team I think that's quite possible. I'm just speculating here. I would have to have someone with a legal background explorer the actual you know teeth of that law and see if that is a mechanism by which municipalities can enforce noise abatement loss. Um. Concurrent with that um I think passing local or needs that articulate very specific language is also a good idea you might as well fight this battle on multiple fronts but it's definitely worth exploring and I will enquire further when it representative lady would you have some folks from the division of environmental quality who are going to be testifying later on the agenda so they may be able to better answer that question you store it out there for you okay i'll get one or two more if you let me please. On the noise of baitman i'm you're absolutely right that that technologies been around for years I did projects with that back in the nineteen eighties and it's very established very easy to do but depending on the frequency and the volume of the noise it can be very expensive. Because you have to have better materials and that sort of thing and in the size of the facility that you're trying to debate so. Would you say that the the biggest detriment to controlling this noise. Is having regulations which force bad actors as you we talked about earlier to do this I mean some companies are good. Community neighbors and they do that on their own but there are a lot of companies that don't do that unless they're forced to do that so would you say the biggest. Road block in doing that is the cost. Yeah. I think that the cost while considerable depending on the size of the site and the operation um. You know maybe it a deterrent for companies I don't want to be good neighbors to take all of the proper measures which is why I think regulatory laws. That can be strongly enforced or so essential. The template language that has been passed around two various municipalities I think is a very very strong step in their direction it's the council's view that they should be i'll passed into law. I do not think that noise abatement technology presents a huge profit obstacle to operations whether they be small medium size or large so we fully support the kind of industry standards that have been around for a long time as you mention noise appearance in. A a structure of industry since industry began and there's there's no reason it can't be utilized in this one in fact it's more essential that it be utilized in this one because of the noise issues at one of the change subject here but on them the bit coin or the other crypto currency you know right now if I have a problem with my bank transaction a call my local bank if I have a problem with the crypto currency transaction who do I call. Well if you're using the block chain which is in a mutable ledger it prevents their from being a problem the other modes that were referenced of obtaining cryptocurrency in the educational video that we saw earlier. The narrator articulated that there are great risks with using those I would go step further and say I actively discourage individuals from pursuing crypto currency outside of the normal mining process with an asic machine simply because those transactions are the only ones where you can guarantee that they transpire on the and beautiful block chain public leisure which nobody has control over centrally. So you wouldn't have to go back to the currency in benter or currency. Company like bed going no because it's centralized you know its value may fluctuate there is a speculative aspect of their coin which makes the value of it fluctuate in terms of when when chooses to quote and quote cash out and then conduct it coin into you know see out currency but the big quote itself the transaction is immudable it's in the public leisure it can't be tampered with by any other individual you have complete control of it because it's decentralized and because there's not one. Centralized overload activity or authority that can do things with it in that regard it's one of the safest. Modes of. Transaction that you have the risks associated obviously are in terms of you know it's fluctuating value and that's where it could be profitable or it can be highly unprofitable depending on that fluctuation I myself in the little wary of cryptocurrencies outside of bitcoin simply because you know bit coin. Has its origins you know through the anonymous satoshi white paper its connections to the transparent sort of mining process I think. While it's still very speculative its value goes up and down is much more secure than say you know some of these old coins that were referenced in the in the video that we watched mrs choose one would question I have gotten a lot of stands one more than if you allow me to do that one last one okay there's a discussion out there at least in the news media heard it this morning on the radio about a federal crypto currency that would be. But I don't know what the return would be but be a federal government crypto currency if that were to happen what would happen to the other companies like that coin with with the balu do you have any idea what would happen there. What would be the dynamics of that oh that's. That's very difficult for me to predict I have opinions on it but i'm just one individual II don't like the idea of it personally I know that the bad administration is proposed the idea of. Uh federally centralizing but cryptocurrency I think that that means it just replicates. Digital currency and it's traditional format and takes away some of the the liberty associated with the decentralized currency I think that that block change technology and it's decentralized approach and it's transparent public ledger approach. Um. Is it needed alternative to centralized currency simply because I think it's very sound to have that option available to individuals and for their own individual sovereignty and liberty. Thank you mister thank you german for the latter two and and what you're referring to representative is a central bank digital currency and that would be controlled by the central government and should such a current c be implemented that would solve the money laundering a lot of the drug trafficking that you can see take place but same time you also lose a lot of privacy and it creates a lot of concern so as it right now there doesn't seem to be an appetite in congress to create one for the united states but other countries have started pursuing central bank digital currencies and I mean personally i'm not a fan just because of all the privacy concerns representative back you're next. The. Thank you mister chair. And these questions are just that to turn form. May have some thanks what one of the things that you talked about early on was whether requirements are to be a member are to be accepted in into your group was great as safety so my first question disprivately what does that look like what do you what he got is considering good site. Well we would like third party engineers to make sure that the construction of the site is sound that it's not leaking energy that it's using it efficiently and safely concurrent with that I would just point out why we require that a company operating a crypto mine. Have some local contact on the ground and be transparent about that is you know one of the benefits in terms of grid stability of a crypto mine is its ability to turn off power quickly unlike a steel mill or some other industries which during grid overload you know maybe require. A whole process that it takes days of night weeks to shut down a crypto mine can literally shut down in a matter of minutes and in that regard of contributed to great stability. You know because of that but then only works if you have a clear transparent contact and are working hand in hand with the community to assure that that efficiently you know follows through. The. Excuse me. So my next question is this isn't these they're not tended to be negative questions I just use mitten that are fifteen companies are around fifteen companies operating in arkansas I think the possible and three or four those companies are in your council three or four have passed the vetting process yes and one is currently at the tail end of it but which is why I say three or four but I fully expect that company to to pass certification. Okay so in that disconnect question okay you sell it your well organized and I appreciate you guys efforts on all this stuff who were is your funding coming from. When it comes from membership we're on a shoestring budget quite frankly. Yeah no I would love to. Promote the block chain council anyone who wants to donate to the block channel council can return to me directly we are looking for a partnerships with educational entities and companies so that we can continue this mission of striving to provide some sort of regulatory advice and council to local and state government in my final question is is a camera bad actor right on I mean there are tried you guys said you're not meeting our requirements i'm not in what is that really cost me. It it within you know I might am minding what is that really cost but is it really hurt me or does I just don't get something yes okay it will hurt you because the i'll use green digital as an example as a result of of their poor engagement with the community and the way they've operated. They don't have a sound business plan there they're not evolving in a way in a state that a good actor who engages with community and this transparent could ultimately the price of the may pay as a company is that they find that they're. There their lights are turned off uh in essence that because they have created such a bad test as a reaction more proactive measures get taken by local municipalities to regulate the industry and in regulating the industry which I think is good they prevent those companies from operating in the way that they currently are thus making them less profitable so it it if I could just want quite followed so I guess I was speaking directly to within a day to mind anything how how your endorsement and i'm not i'm not shorting your doors and the how your endorsement would improve me might now I guess i'm looking for more markability or less market building if I don't have it that type of deal that that questions then i'll just one other and i'll i'll i'll be quiet so you said the power goes off potentially. Who does that well you know i'm just sort of. I was speaking a little aspirationally there and locally but so if you're a bad actor and you're not of being the local norris noise ordinances for example. You know the the utility in partnership with and this is something that I think the you know john bessel from entry she could talk more directly to but there are means by which you know it becomes highly highly unprofitable for them to keep their energy on because of the finest that they incur from the utility and from hopefully from the municipality if if laws develop enough teeth to sort of bite that off ultimately it would be wonderful if the certification requirements that we have in the council. Are no longer needed because they're embedded in legislation you know we fully support that our goal is to. I'm see the center industry regulated in a smart intelligent and effective manner i'm i'm not a legislator but I do have a sense of. What I think a good actor should abide by and so you know done my best and consultation with other board members try to institute those. In membership a company can certainly choose not to become a member. As a result of that though local municipalities can say what this person is not a member of the council meaning they haven't met the certification requirements so we may have questions about them. Thank you. Representative brown you're next. Stringent requirements but it really would be incumbent on local and state regulation in laws to ensure that those. Individuals and those companies are not operating outside the bounds of what is permissible. I watched the multiple towns and with others too and consistent as my opinion I really don't even know while we're going down this past but but out the far depot what is a difference necessarily in minding and the data center but the block train that I can see that regulating data centers but tell us a little bit of the difference between nightmaring and data center. So while data centers but you know but they share a lot of the infrastructure in architecture of what you would find in a crypto mining center you could say that a crypto mining center is sort of a subcategory of data mining but it only can do one thing. A data center. Can create algorithms to mind data for a whole you know plethora of different thanks depending on what the needs are what the clients you know inquiries may be right. A crypto mind does one thing the asic machine utilized. Yeah. To use in analogy it's like an ice maker it can only make a case. A data center the computers that are utilized in a data center. Are a very sophisticated mining operations that can. Use various algorithms to that are fed into them to extract all kinds of data at the demological consumer research he know you name it now that's their purpose. Also can you tell I don't know how short I answer this would be but. What is the difference in proof of work and proof of state. A ok so proof of work refers to what was described with their coin and data mining proof of steak is something that ethereon which is another currency as proposed which is a way of obtaining that crypto currency without mining by virtue of. Again i'm not an expert in a theory and so much but the way I understand it is. The proof is the equity associated with the investment. I think that's the best way I could explain it I could clarify further by researching again well I was some of the studies and shows a difference in energy usage and the way they did it that I don't yeah I don't know that proof of work since it does require you to actually mining with the asuc machines does utilise like data centers is essentially the same kind of grid operation whereas proof of stake is not because not a noise as a huge factor specially to the bulks and the locality of it but the energy uses as a huge factor of bank wide doll of us thank you. Alright and are a proof of stake is basically your investing in that currency which allows that currency to operate and then you get interest count like you put money into a bank account the bank can utilize those fines and then they give you interest and that's called how proof of state works yeah and and just let everybody know i'm deferring to committee members first to get their questions answered and then i'll go to the non community members representative flowers you are next thank you mr chair so I too want to thank you mister harford for bringing us this information and answering our questions. Um and i'll also start out by saying that I am extremely excited and also extremely afraid by what i've heard so far but it's been educational for sure so just based on the question the line of questions and answers that i've heard so far they really touch on. Um a lot of what's been swirling in my mind and I will limit. Those starts to two things that i've like your feedback on. Um heard questions around the implication of corruptions and certainly we know what we know right now and then there's so much more than we don't know yet because this is very new just like the gold rest just like any sort of invention even with the the currency the empty goal standard the paper currency rate so this is a new thing and you mentioned earlier you know money laundering and corruption are things that will happen but there are safeguards. My question they'll would be given that there is a lot that we don't know. Just like. When the internet. Evald nobody thought about what a dark web wise it was no such word no such concept. Yeah. As opposed to a central bank what are your thoughts about. Central or national regulatory standards and authority which kind of deviates away from a central authority but how do we not have one and maintain some simpleness of stability and standards across the country versus local and st regulatory standards for whatever for the activity of the cryptocurrency for what is this the mining for whatever evolves from this yeah that's an excellent question and I share with technology in general and it's the the fast evolution of technology I share both you know what you expressed fear and excitement particularly around aai and other issues. Technology has been evolving faster than the federal government can come up with ways to regulate that just a given. You know II see them struggling at the federal level with. Uh ai and with. You know cryptocurrency in general the internet has been around for quite a while now in it and I don't even I don't think they've gotten their hands around that yet um so you know this is why anything that it can occur at the local and state level in terms of regulatory actions is is important because it's usually immediate practical and to the concerns of a particular technology you know for example you know the noise abatement was. In terms of federal authority in you know you alluded to the epa and other entities that may express you know industry standards that are you know federalized. Yeah that's quite possible and I think there are smart ways to do it. My concern or or my the questions I have or around the federal government's ability to do this effectively. You know given the speed at which technology evolves so in the interim in that sort of grey area I think it's very important for it industries to step up and in a sat regulatory guidelines for themselves not because they want to supplant the role of. You know local state and federal legislators but simply because it's incumbent on them to you know be a good actors in that regard I think you've seen sort of as a parallel individuals associated with ai coming forward to do that very thing. Unfortunately I don't know how big a voice that will have or how quickly that will go into effect so. These are uncharged and and we are all I think in this together technology is is a fast moving beast it's going to be are blessing and it's going to be our curse depending on how things how things go. Not to sound you know apocalyptic but scared the unknown is scary and while it creates great promise and airs as as introduced things that are amazing in terms of. Yeah parapolitics and their ability to you know ai devices that have been able to work with the computer is to help recreate nervous synapsies. You know it's also you know one thing so do you know terminator so I share those I sure those concerns and and both those aspirations atmospheres my second question um kind of speaks to your what you just serve and. Early in the video you know it was sort of this um. The. It made me think of it made me feel excited about the the prospect of what it could bring. And then later on I started hearing about you know the foundation all affect of energy and our energy grave and energy consumption. Um the fast moving nature of technology but also access to that technology where they were talking about hardware you know ones access to have a phone once access to broadband which we know right now it seems archaic conversation in light of what we're talking about today but it's real and then of course you mentioned aai so when I think about the average person in our estate which is relatively speaking a poor state. Not aid state routed in technology. Um. You know what does all of this mean cause it found that it sounds like you want to believe that it's the scrape front here of opportunity and in great equalizer and a great opportunity for individuals right to hardest there technological and economic possibilities but then earlier you said you kind of think individuals shouldn't really you know you shy away from there because of how big it is and how knew it is how fast moving how and regulated so. How how are how are individuals. Protected in this arena. And then how is our energy group protected I mean right now we're still. Subject to environmental terrorism and infrastructural terrorism what happens when. This thing that becomes the currency for the country in now controlling our economy could be threatened by. Something that is are already a threat but now everything's based upon. You know the electricity and the energy create everything is based upon and maybe a few companies controlling everything. Because of the implication of data mining and. You know a bit coin mining like all of it seems so. It is incredibly intangible. And then becomes even more inaccessible to the average person. That that's the really big scary part on top of what is this mean for the jobs that we know. That will go away and the jobs that we don't know how do we even train people for that because everything's moving so far so. I know that several questions but give me one answer well i'll let your specifically cause you and that's of a larger technological. You know advanced issue and with bitcoin mining and it's I don't think their bit coin will ever replace via currency I don't think it has the capacity to I think it's an alternative to your currency one of its benefits is because it doesn't require centralised authority it means that a folks who are having trouble accessing funds from local banking systems or from central authorities may be able to complete transactions without having to. You know get permission so to speak from a central bank whether it would be you know for purchase of of a mortgage or thinks of that nature so I think it represents good alternatives in that regard in terms of grid usage. You know at a big coin mining is if it goes on track to order currently is is going to roughly occupy a within the next favor six years one percent of the state's energy grid usage. One large salmon is. In comparably larger than the footprint that you're going to find with this industry it is a niche industry it is small I don't think that it's a pole from the state above one percent is going to be significant i'm on the other hand it does provide grid stability as a reference before because of its ability to turn on an office so quickly. Thank you welcome in our our next presenters will get into the power bridge version represent michael under new next. The. Looks fire to get the right button here. I've still got the wrong boat. Thank you appreciate that so I want to follow up on senator hill and represent a because question about good actors and bad actors I am concerned about their being bad actors so are you advocating as I think I heard you say to represent a back you're advocating for regulation of the industry as that correct okay are you familiar with regulations in other states have you looked at that to see what other seats are doing in terms of regulating our incentivising good acting yeah specifically on the noise we've looked at other states to see you know some of the template language that they have utilised to insure that there are sound debate meant regulations and ordinances they are enacted in in communities. You know but I think ohio has a particularly smart approach to this as well as some other states. You know we do encourage that kind of regulation because as I said we think. Good actors mean good business I mean it's it's a stability for the industry it's better for the communities so we are pro smart regulation and not. We do not approach as the council that this is an industry that it is totally hands off should not be regulated and nobody has any say in it okay and then a second question a little bit falling up on a representative fires question when you talk about the energy grade and this may be the later i'm speakers but we talk about the energy greatest you look at our complaints coming off line and green energy coming more online are you concerned about stress in a reduction of available energy to set assets. Yeah. I've i'll leave that to the representative from the utility to speak more expertly on II will say that you know. How you utilize energy for a crypto mine can be quite broad and can be solar it can be window can be geotherman the largest crypto amining center in the world is an iceland and it's completely geotheral so it utilizes no energy from the grid so I mignasted on the energy sources per se. I think that with any industry the smart thing to do is to adapt to evolving energy portfolios and utilize them to the best of your ability. Thank you. No see next on the list thank you going back to senator hill. I'll hear to your left and will keep this one this one can be pretty simple I just want everyone in the committee and want you to say this and person always saw a video earlier this mountain so many persons say this never wonder pay attention how is the value of the according determined and who determines. Well like any speculative theatre entity I think the value is determined by the amount of. A hash rate activity on a macro level the number of minors involved the number of big coins that are released each year out into the block chain it's value can be dramatically over inflated and at times under inflated. Bid coin I think is the most stable of the currencies obviously but even there you see wide fluctuations in terms of its value I think it was add. Uh you know and it's early days something like you know a hundred thousand dollars per big coin now it's down I think to twenty eight twenty nine today twenty nine today it's been much lower than that so it is going to fluctuate based on all of those factors. So basically you're saying supply demand in essence yeah as with other speculative entities yeah it's it's like stocks or other things it's value can rise are fall depending on the value that people see it having. Who determines the supply going into bit chain. Well the block chain is set up in such a way that as yet gives me block chain it's a finite you know it's set. To I think they made reference to this in the video so the higher the the hash rate goes the number of people mining for it the more competitive it gets to release a better coin you know into the block change so. It's sort of self regulating in that regard that you know it prevents the idea of like a massive gold rush of everybody jumping in so the more activity you have the more conservative the release of the according s and. It is a limited currency at some point there will be no more bit coin produced but I think is how they have set it up in the block change of that's ninety years from now I believe but you know an expert in correct me on that if i'm wrong. Okay next up is a representative thank you mister chairman i'm over here. Mr harford I appreciate you come and addressing the questions of the committee today i've heard you reference the block jane council and your board members could you tell us who serves on the board of the blocking council and some of their background and some of their information so that we can be familiar with who actually who composes to the board of directors sure all that information is available on the website if you see border directors you'll see a buyer on each one of the members you know a current member is include maxavery claver those are prenorates max everywhere a candidate republican candidate is district. He is also involved very strongly with the export association in the state. We have the individual reference to is an engineer from university of arkansas there's myself there is andrew king who works cryptic forms who has an expert background in consulting health structures and other things but for a full list which is expanding an updating as we acquire you know new board members please go to the website that a reference you'll see detailed background on everyone in the individuals who currently serve on the board so I did do they appears that you have six board members currently that are identified on the on the website. And. And with I would say the majority those are direct ties to the company that you represent and work for myself and andrew king two people who are under board currently who work with cryptic forms okay thank you very much sure thing senator king you're next thank you mister chairman mister from and thank you for coming the meeting and here's another day you know people then i'll be sleep pretty vocal about this with the issue and I hope you felt like we gave a fair both sides hearing the other day and the so when thank you for coming so explaining your group block change in your cryptic forms was behind this legislation that's correct right seventeen ninety nine in terms of being behind the legislation resupported it the language came from. A federal group known as to she actioned fund I wish attempted to pass and successfully passed similar legislation in other states we supported the language of the bill we didn't we didn't write it on with and contribute to it in that sense but it had a full support but it was a rose law firm that. I mean there is a arkansas business article or something like that at the rooms law firm is one that. Was the primary drafters of that was a correct or something about no rose laugh did not draft I the language as far as I know they represent the black chain council in terms of okay you know incorporating our entity and providing legal advice but I don't they were not associated with the language of the bill and in your part of this group satashi I believe there's name over the years and it's a national group that's trying to do you have a board member of one of the board members is on your board or something like that yeah i'm not a member of the tow she action fund that we do have a board member who is a policy expert who worked at various institutes you know the economic growth forum and others who is on the board yes. Okay but you were part of this at least the legislation watching it through you have all obviously monitoring the situation so that mean certainly no one else knew about it mean but you reported it we did fully support that legislation yeah and I understand you know you want to do the block chamber as in here is and I say you know i'm a cattle and poultry farmer you know we don't the cattle and association does not get to decide the bad actors in that farm bureau so I kind of have a issue with a you know this analogy so i'm on a point that out the thing is too you keep talking about bad actors bad actors bad actors through this whole experience as you've said that bad actors are very important to this process to make a right you've been clear about the bad accurate pora. So what any put bad actors in in their bad actions in the legislation and begin with. Well it's not up to incumbent I mean to put anything in the legislation they didn't write the legislation and so. I think that that's something for legislative bodies to address and we support any regulations that. You and in terms of you know self regulating I would just say that just to clarify we don't view but the council does as authoritatively self regulating we're trying to set guidelines that we approve of that we consider good standards whatever gets enacted in to lower legislatively in terms of regulation that is aligned with that we fully support them as I said earlier I believe. If. Legislatively all the standards that we articulate to become members of the council guide and acted in two hour then I wouldn't wouldn't be incumbent upon us to to actually pursue that so we don't consider it a write or a privilege to. To do this sort of self regulating it's just that we have two options we could either do nothing to. Have standards for the industry or we could set standards that we think our best practices and we chose the latter. Well I mean in this bill let's look at it like oakland you know you have the sources line up the gate i'll shoot out like before that there is a process before to get the bad actors or whatever you know that in that stock distant happened but I mean so I can I have issue with you know your group was part of this legislation and pushing his somebody like me I didn't know much about crypto mining before this I mean to me this is almost like a lightening issue it's like unless it's near you or strikes you or is close to you don't really pay attention to it not think that's and this is a new industry is is we're talking about so you don't mean the frustration is if the bad actor part was there you should have if your lobbying for this bill which you obviously did you heard of obvious for you a part of it then you should have been out there saying what the bad actors are and we put that in the language and you know the other issue that I have and nothing I mean said harrison is at somehow this industry now is like a protected class out there I mean I understand is the test money from harrison from your point of view and I get it if you if you're invested money want to put a facility in you don't want to have something to but the reality is that's with every business out there I mean I talked about farmers we have we have more regulations so what we've done by trying to say you're not going to discriminate against this business the reality is is what is one of them doing is discriminating against every other business out there because now as always first there is a protected class with this industry out there and as we're learning on the backing in its it's all it may is harder to chase the rabbit after it's already out you know there is differences between eliminate stand in a bar I mean there there's even though they both serve drinks you know there's a difference between you know i'm a poetry farmer that we have a hundred and eighty thousand chickens versus somebody that has one or two backyard chickens okay so there's there is a big difference in that so in one of the things that i'm troubling with that is very problematic to me is this idea. The these new terms of crypto currency those encrypt of currency block chain in data centers and this marriage or unity of trying to make it into data centers so example a bank up there has a data center you know it's it's you know storage facility in the test money in harrison you said and crypto currency there's really basically no storage facility but yet you're merged it into lock a data center so if the highways are locked internet I mean this is like trucks in your transporting something or going somewhere so if you're going to currency you're going to different destination then say the local bank center and trying to merge shows things and not taken away the flexibility of cities and countings to regulate that which we're waiting to and way too much earth because cities and counties can meet marketing and change and be flexible even in decisions we don't like we made every two years so you know this extra protected class the reality is you know somebody if you're protecting the class in this and put in extra protections in there you're discriminate against everybody else you know this data center issue back to that again so I understand like a data center when you're trying to merge things in may thinking that is like a data center of amazon and walmart when attract your purchases and in guests your next purchases are what your previous purchases are that is totally separate indifferent than a crypto currency. I mean. I don't see them as the same other than you use the budget. Do you have a set of questions yeah as I submentioned earlier I think the centers and cryptomining centers are are kinda like first cousins that they share a lot of similarities in terms of structure but a data mining center can do a vast ray of. Thanks given what their computers are utilized for whereas a cripped onlining century does one thing specifically which is mine for bitcoin but I think in the legislation what should have been the discussion on the front end was much more that discussion because there is no data center but it's a bank data sooner or something for a truck in company there is no data center out there from what I understand about the wooster situation where they apply for two thousand gallons and now they're using two hundred I mean there is no data center out there that is operating twenty four hours a day we've never had that before so when we used this concept of data center and you put that in the bill to me that's like a troaching horse and trying to mislead and get in get into something that shouldn't be done I think it clearly there is much more difference between crypto currency from what I know right now correct today versus what my idea in what I think the general public side do your data centers I think those two things need to be separate because like I said there's no data center that I know that is ever existed or have been a problem that's used in two hundred fifty thousand gallons are not using ten megawites which would power seven thousand homes I mean so we have this bill to me was almost like a troaching horse in the way it got in here so that's just a statement and certainly i'm going to present my interest thirty deal here I think next week and we'll get a counter argument of something different than this meeting which is one side. Thank you for your comments appreciated all right I have a question from senator urban who she's watching online she was not able to attend today i'm kind of following up on that in the discussion you've mentioned several times that you would like to see a regulatory environment and kind of giving given kind of where we're at today are the recommendations that you would make to ask as far as what kind of legislation you would see how you would like to see things done differently well I think that cartification of noise ordinances you know at the state level may be the way to go. You know i'm not a legislative expert but I know what results I like to see how that's achieved legislatively whether it's best through local county or state long I leave that to you know you're collective expertise but really the criteria that we articulate in terms of being certified as a a crypto minor with the council I think very much allies with. What kind of regulation we will enjoy seeing for the industry from your side of the aisle if you will and and college this is an fire II do have legislation on the noise drafted ready to go and on the electricity but we'll get to that in the minute we're going to go to representative warrant he's going to be our last person for this witness and then we were gonna go to move on so representative thank you miss chair thank you for coming today and test fan I guess I have two questions how many jobs do these create for the community and what kind of revenue will community see if one of these data centers or crypto minings locate there are great questions so crypto mining centers are not going to create anything close to the type of jab numbers that you would see at a skill know or something like that an average crypto mine may employee you know five to seven to ten people now that's the employment that they do demand is high skilled. You know i've currently reached out to work force development in the state and the association of to your colleges in arkansas to talk about work force development in the rename essentially the skills required to you know be attack out a site and keep the computer boards up to date and maintained or transferable skills that can carry you know hi you know five digit low six digit incomes so these are in technology these are very good professions that should be developed and i'm that can carry over into an array of of computer technology occupations not just encrypto mining. One of the economic benefits obviously too a township is the energy sales tax with crypto mains which could go a long way to addressing the say balance dead issues for a city i'm getting a city or township from the red to the black in terms of their their bonded issues and thus creating the opportunity for investment in other economic areas so while we don't create the same level of you know direct employment that a large mill traditionally would we do we do think we've contribute quite significantly and were a good fed four places where that's the case. You know it's a no brainer if a township has a choice between a crypto minute a steel mill in a steel millions of viable option you know clearly having the five hundred employees is is agreed bone but you know that's not a one size fit sole model for different townships and and we feel that we we feel good niche in terms of academic development. Both in the and the work force development area that I mentioned but i'll so in terms of increased revenue for the cities. Thank you for your answer and I guess map lasting and final question be are these typically jobs that are filled by our candidates or are people coming in from out of state and bringing employees in to run these facilities traditionally there are kansas that's what we support which is why i'm working for the two with the two year college association to develop statewide work force development to ensure that it's you know kept locally as much as possible and creates a you know professional growth and work force development and state. My microphone turned all right mister harford thank you for for being here for your your time as you can see there's a lot of questions and all and a lot of digging that we still need to do on this issue we appreciate your time for us this morning and at this point you are dismissed appreciate very much for your time and appreciate answering your questions and please do you feel free to reach out to me with additional questions as as you see fed that's what we're here for thank you thank you all right and colleagues just to give you a heads up we still have four items to go on the agenda and it is now lunch time so we want to try to get everyone's questions answer but please be mindful where i'm going to start getting hungry here in the next fifteen minutes so next we're going to have mister bathel with the entrgy and as to save time mr martin from the public service commission are you here. Or whoever representative okay from the public service commission if you are we go ahead and come to table at the same time since they're kind of related we will let mr better introduce himself and then you can proceed with your comments will let the public service commission make their comics and then we'll go to any questions by the committee so mister battle if you would please introduce yourself and then you can proceed. Good afternoon which chairman and members of the committee thank you for the opportunity to be here i'm john bethel i'm the director of public affairs for entry arkansas and representative meeks had called me earlier and asked me to address how we serve crypto maining customers in arkansas i'm will give you just an overview of the the the way we serve them and the rate schedule that we have in place that we we believe is is reasonable and and balances and protects the the interests of all of our customers. My first of all is with all of our customers we have a legal obligation crypto mining customers when they approach us and request service just like we do with any other customer and just like with all of our other customers we can only serve them under rates and that are approved by the arkansas public service commission and so the rate scheduled that we developed to serve crypto mining customers was approved by the public service commission and it was developed in a way to ensure that any risk supposed by the crypto mining customers did not shift from them to our other customers and first of all from a from a reliability standpoint horribility to serve all of our customers reliably and safely is is our top priority and the crypto mining customers are served under an interruptible rate schedule and so that in the event that we need power to serve any other customers were able to interrupt those customers service and continue to serve all of our other customers and we believe that that insurers are ability to reliably serve all of our customers secondly the crypto manning customers are required to pay an additional deposit typically customers pay the deposit equal to two times they're highest bill cry domaining customers are required to pay a deposit equal to three times their highest bill that would protect our other customers from being forced to to bear the and unpaid balance if the if the customer were to leave and then also the crypto mining customers have to post a a surety bind that would cover the cost of any penalties or other costs associated with their failure to interrupt if they were called upon interrupt and they didn't the of the mind would cover the cost of that to protect our other customers. From having to absorb that as well and then the crypto mining customers also have to pay for all costs of constructing facilities to serve them before they take service and so again that would prevent any of our other customers from bearing the the cost of extending service to those customers and so we believe they at the rate schedule the tin place to serve those customers takes into account the the unique nature of those customers as well as the risks that they pose and includes provisions to ensure that those don't shift over to our other customers we believe that we have adequate capacity to serve the the other customers on our system as well as the crypto mining customers and we believe that we have a adequate capacity for the anticipated growth that would be associated with future customers and other economic developments and as a part of our normal operating procedures the the the state law and the public service commission rules require us to every three years submit a a resource plan to the commission that looks at are expectation of of load and then our expectation of resources necessary to meet that load and so we believe based upon our continued review of our generating capacity and the load that we intend to serve that we have adequate resources to meet those expected customer needs of issues such as noise are zoning or investors are things that are outside of our perview and so we don't take a position on those sorts of laws or regulations and the the the act that was pay asked did not alter the public service commission's oversight of electric utilities or our obligation to serve our customers and so our position on the on the bill with neutral during the during the session and so we didn't. We didn't engage in that we made sure that the the language did not alter the the public service commission's role or our role and so it is night and so we we took the position of of being neutral but we we hope that we've addressed your your questions and i'm available to respond at the proper time part the chairman's direction alright thank you mister representatives from public service commission if you would please introduce yourselves and then you can proceed with any comments and then we'll go to questions good morning at well actually a representative makes noted up like it's good afternoon officially i'm katie anderson I am a commissioner over the the public service commission I appreciate you are having us here today hopefully we can answer any questions that you may have in make any clarifications as to the commission's role as it in as it involves a current demanding facilities and the rates that they pay so hopefully we can we can help do out and appreciate your time today thank you. Okay go ahead. The. Hello. Okay obviously i'm not an engineer good afternoon my name is michael marshand and on the executive director of the public service commission senator johnson representative meeks center gill more and representative back and members of the committee committees i'd like to thank you for having me here today just a little bit about the public service commission the public service commission has general regulatory authority over electric and natural gas public utilities and is charged with the duty of ensuring that public utilities provide safe adequate and reliable electric service i'm sorry utility service at just in reasonable rates. Arkansas is currently served by four investor owned utilities entered the arkansas is the largest investor owned utility and provides service to the majority of the state. Southwestern electric power company or swept co serbs loads along the western border of the state which includes the regions uh surrounding text texarkana and fairville. Oklahoma gas and electric company and the empire district electric company serve smaller loads on the western and northern borders of the state. So as of today entertain arkansas is the only arkansas with a dedicated rate schedule or tariff. To service crypto currency minors. Introduced tariff contains safeguards against possible cost shifting. By requiring a larger deposit larger security deposit and mandatory contribution and ate of construction or kayak for any required upgrades. A requirement to receive service under this rate schedule is the the service provided is interruptable meaning entered you can curtail the crypto currency minor service during peak times or during emergencies. As mister bettle said earlier. In the as he also said a further safeguard under this tariff is the requirement that a surely bonded letter of credit. Be held to cover costs possibly incurred due to a minors refusal to curtail. So I can report that i've confirmed with all the other investors utilities operating in arkansas they do not have crypto currency minor specific tariffs currently. Nor do they have them in their other jurisdictions they also do not have a crypto currency mining customers of which they are aware and arkansas. So again thank you for having me here today looking forward to the discussion thank you for being herself so as of right now as far as we know all the crypto miners are on introduced system and based upon your testimony this morning this has been a major concern of my constituents is as far as you know you've put in safeguards so that under no circumstance there should be any cost safe to any other customers on the great in that location is that correct. Yes sir the best to your ability yes okay so the best your ability there should be no car shifting. The other concern that I hear from my constituents as a course the reliability concern I know though the mining site that's in my district is consuming thirteen megawater power and there's concern that you know during an emergency. Then that that's a lot of energy that is not available to the to the community so underneath the the agreement that you've said they would have to shared off make that thirteen mb available to everybody else in the community is that correct yes sir the rate schedule calls for those customers to be interruptable and on and and an hour's notice and so we have in the event that we needed power to serve our other customers whether it was an issue that developed on the interesting system exclusively or if it was interruption called by via the regional transmission organization myself we would be able to call on those customers to interrupt so they should not pose a reliability risk to the rest of our our customers we believe that was an important provision that we included in the terror for that purpose okay one of the question I have them will go to the the committee is there's been some concern among my constituents on the cyber security issue because there's a facility out there with a whole lot of little network boxes crunching away and insured there be a country with nefarious you know intent out there could that site be used to damage or bring down the grid anyway to your dear knowledge can you talk about the cyber scary aspect as far as that the cyber security associated with the electric network that's a high priority of not only introduced but the industry in general and I think that all of the safeguards that are in place. It should comprehend the threat posed by that customer ad but II can't you know beyond that II i'm not able to speak to a specific customer but I believe that the the provisions that are are in place should should be adwit but that's something that we continue to work on the go when I appreciate that all right so let's go to the committee we got several questions representative back europe first thank you mister chair so much my first question just and that and I think I know they entered this I just want to want to hear this lesson out there i've got money little box running in your popping me thirteen megalights in you say shut down a number and I doubt I understand i've got a barnet that covers a car so doesn't but in that event you need me to shut out that power if I refuse to do that would you have the ability to go out there and shut off my power without permission. Am I not a hundred percent certain as far as what happens when a customer refuses to interrupt I know that there are financial penalties in the event that they fail to do that and we would impose those if we had to go into a. You know shedding of load we might be able to add and really but my answer is I don't know. Let me email this in another way do you have the equipment online independent of the equipment that the data center has to shut off power to there if an emergency existed so the words independent of my hardware my equipment that I have at that site you could shut off my power. Let me let me consult with my team and get get an answer to that question i'll bring that back to you rather than say something that's incorrect II would rather do that my next question is this we've heard about thirteen or something companies multiple locations in your you're the only guy that yeah I mean energies seems available like a winner here so with all that said what purchase of the low that energy provides in arkansas is crypto money nominated for an exact number but round figures is it more than two percent I don't believe so and I can confirm that and also follow up with you on on their sector states less than five percent. Yes and probably less than two without any to confirm so relatively speaking it's a relative as far as the overall grid it's a relatively very small load at this point. Yes thank you. Representative maybe thank you mr chair i'm just curious she over here you you mentioned that you you require a three month deposit and so i'm curious before they start construction and and all that you really don't know what their average monthly bill is going to be so how do you determine that and if you don't mind sharing i've got a few of the questions to but if you don't mind sharing what is that average bill for these companies I am sure there is a wide range but I would think it's a little higher than my home electric but it's going to be substantially higher than your home electric bill several thousand dollars but certainly is a is a a safe estimate in what we would do as we do with other customers as we would look at the expected size of the load based on the level of service that they've requested and would estimate what they're highest bill would be and then would calculate the required deposit and that's that's a normal business practice that we have in place and have for all of our customers if there is if there's a known usage at a location obviously we we've been used to the usage history if there's an unknown usage we're able to come up with a a reasonable estimate of what that would be an assessed and depending on the load the the level of deposit at the level of usage would obviously be different mates customer but we would use the same methodology to come up with there is there ever you know and standard practice sometimes as you get that deposit back if you show that you are paying your bill does that ever take place with this they they do not get their deposit back after a certain amount of time a good behavior that be correct I believe that wonder the under the rate schedule we would maintain the the deposit until they service with us and they do have an opportunity of the right schedule with a a history of good payment history in it that they can reduce that deposit from three months. To two months which that evaluation would have to happen after they've been in service for at least one year thank you representative work thank you mister chair mister battleman I have two questions in the first one how many of these facilities do you all currently provide power to do you have a rough number due thirteen I would say a rough number and I think uh mr harford mentions 10-15 and I think that's probably accurate as it is best I know it's an op not precise but somewhere that ballpark sure how many facilities do you have the capacity to serve. I don't know the answer to that I think it would be a matter of looking at the available capacity and it would be also as to where on our system they want to locate and that's part of a part of looking at any any customer that would have a large consumption is you would look at where they intend to locate and what facilities are available and what upgrades would be required and that would be part of the customer's consideration is to you know the cost of of locating in one area versus another so could this potentially staff or the growth of a community then from a capacity standpoint if one of these centers are too centers locate and then you all have the inability to sure by growing community could that be a scenario we look at the future. The. It could have an effect on that potentially and that would be part of looking at our ability to serve and what facilities are there and what facilities they would need to construct thanks sir yes. Representative lady in your next thank you mister chairman done I had a question about similar to what representative will just talked about. But. I add that this was silly in jonesbury as an example they there was brought up earlier they use about five megawatts I believe it is 3-5 something like that they're located in an area where factories have closed so you have a substation or the has excess capacity so it's kind of a no brainer you can sell power there that doesn't really effect but you just answered my question by saying that you you look at the load you look at the available infrastructure to see if it can carry that extra load is that the way he looks at it yes it would be as we would with any customer that would have a a large load as far as what where they were looking at do we have the capacity to serve them at that location we have to be build additional facilities to serve them at that location and we would you know inform the customer yes we can serve you there or no we can't serve you there and if you still want to locate their you know you'd have to pay an amount to build build facilities so in some cases it could be an economic advantage. If you have excess capacity in an area like the one i'm talking about and and and they go in they build one of these units and absorb that capacity that left because of accurate closed so that could be of benefit right to the extent the customer these crypto customers are our online and are taking service they are helping to pay the cost of the system just like all of our other customers do so you're spreading it over and additional group of customers over an additional number of killer what hours and kill whites of of consumption and so yes they would as as would any other new customer help to be or some of the cost of the system that serves all customers now the flip side of that coin would be if you go do a search right now which I did last week on crypto manners in arkansas and think I had eleven that was a couple weeks ago that just pops up so we know. Ability were a hot beard for this for a couple reasons and I believe more of these companies these national companies like the one in jails borrow is a branch of a company that has sight other places they're going to look at arkansas for a couple reasons why is the bill that we passed in the last session in the other one is the cost of energy right now if you look nationally where are console is the eleventh cheapest. Energy in the nation. That's state why there are places like jones were impairable as an example there lot better than that. So that is their biggest cost these companies. So they're going to come here for that reason I believe if they do. Would that affect the cost of energy across the board so in other words that demands going to go up. If we get a large inflex of these companies. Could that affect my electric cost or anybody's like the man. Affect the cost of that I think and I think you're correct there are for any large user of electricity arkansas hairs and advantage of being able to attract those customers because of our very competitive electric rates and it's my understanding that the the level of activity from the crypto mining customers it should not have a an effect of of raising other customers rates because they will pay the the direct cost that we have to build facilities to serve them and then they will pay their proportionate share of the cost of the rest of our system and any fuel or purchased energy that's necessary to serve them they'll pay their share of that and so I don't add on anticipate that those customers would be a factor in driving a electric rates crossable. Thank you. Senator king thank you mischief so mr bethlehem so we're talking about the capacity right now in you know. There's no problem and you're given the same time announce anything of like you have the capacity to supply these different are crypto facilities in the they use laughter energy right now right. But there's also the question of generation okay if we look at our country in our our energy policy not I want to get into the I mean we're going to get into amount of touch on it but it about how I think what you were with the pse when I was down here years ago the tark plant was probably the last cold one of the one of the last cold produce and energy right yes sir certainly was the last one built in arkansas yeah and so we get this debate on one side that if you're looking down the road and like I said i'm a former and that's when the frustrating things do on here that that no one looks poor three five ten years down the red it looks like our energy policy I mean legitimately is getting or we're going to be hitting a ceiling out there at some point because we are not building you have one side that gives this argument we're not building new cold plants were not building new nuclear plans we're not building new natural gas plans. This demand keeps going up whether it's electric vehicles or we're using charging more phones and devices now whatever it is the usage is going up we have this. Yeah the other side which you know when and solar is not keeping up with that I mean that is my opinion that is not that's kind of a universal opinion you know you know the other primary change activists it's a well hey blackouts would be good I mean so you know once again you get this side on there but I think that looking down the road. People are talking about it that we're having this. Ceiling out there. Concern. So why you have the supplier right now is one thing but look in five eighteen years down the road. We got a problem because if I understand this correctly like the the testimony from harrison was ceased facilities are used in somewhere between five and fifteen mhz somebody told me there's a facility use a twenty megawatts is that correct. I'm I don't have the statistics on each individual customer and II know under state lowen and pse regulations i'm limited as far as what I could say about individual customers but in terms of of capacity and the ability to meet our load we actually do have people that that look into the future as far as what the load expectation is and what the resources we need to have and what we do have to meet that load and we currently have a diverse fuel mix meaning that we have call natural gas hidden electric nuclear solar as a part of our generation fleet we have a diverse makes we have units that can run twenty four seven we have units that can outrun twenty four seven as a part of that mix we're able to meet the load to serve our customers reliably twenty four seven and that's our intention is to continue to be able to provide our customers twenty four seven reliable power at a reasonable price and a have a diverse mix of resources that are necessary to meet that even with the expected cease to burn cole at white bluff and independence which are currently part of our fuel mix where we are working to make sure that we have adequate reliable resources to meet those needs into the future well behind the retirement or the the cease to burn call at those two units and we think that we believe based upon our work that we are in a position to do that and will continue to be in a position to do that but your energy set out notices a few years go up in my district where they said warning about need to cut back on usage for different reasons you're in peak summer time so we you mean you're already one thing you're saying there but then we've also had the notices we also have there is article in the washington time certainly night on the left side of things it says that gave our area and the said wondered about possible blackouts and things like that and brown outside usage so if you have a ten mb facility my understanding is that's. It comparable to like six seven thousand homes is that about right. It's been on the homes i'd need the I don't know the answer to that I was any industry person that gave me that so i'm just trying to use reference so if you look at lack of civility like okay look in my example like poetry plants or accurate your plan it may employ twenty five hundred three thousand people and poetry growers in that hole industry network is using about ten megawatts so yeah a facility out here that is used ten mbs of energy for this cripped onlining and only employees two or three people. And in you have another industry out there that is employing thousands of people and using the same amount of energy I mean. And you are giving a discounted rate to. At this energy supply at culture plants poetry grovers are need that. Sure where. Are you aware of any farmers you sought you spot power farmers generally right we serve so you have this industry in your given a special rate to this. You know communist chinese back company or whatever bad actor good actor in this you're giving this special rate to them is it comparable to what a poetry grower is paying in now. You know that we are using that and creating this large amount of economy in our largest economy in arkansas ago to not crypto mining. So what what are the comparable rates that you're given to this and you're giving a discounted rate to these companies versus the industry that creates all these jobs and does all the essentials done it for years versus a poultry gore what's crypto mining rate versus the poetry or what is the the rate four hour customers that are are. Agriculture whether it's paltry rocard farming or other and in all of our customers as well as our cryptomating customers are cost based depending on the the nature of the service and the the rates for the the crypto mining customers reflect the fact that they're interruptable and the other terms of service and they the rates for them are reflective of the nature of the service in the cost to serve them just like the rates for the poultry farmers in the poultry price the issues are based on the nature of the service that we deliver to them we deliver firm service to those customers as a general rule and so there's a difference in the nature of the service and both of those are cost based both of those have been scrutinized reviewed by the public service commissioned and been found to be in the public interest and have been approved we can't charge a rate and I would not characterize the rate for the the crypto customers is being discounted it is a rate that's based on the cost in the nature of the service versus it'll be different than the rate for our residential customers it'll be different than the rate for our small general service customers and it would be different than the rate for our large general service customers that are served with firm service and so but it all of the rates that we charge have been presented and reviewed and examined by the public service commission the attorney general's office and other parties to our rate making proceedings and have been found to be in the public interest in those of the only rates that we can charge we can't charge anything else now it answers in the service commission I want to say I took people massive satisfied mister better was with private in you were completely professional when you were with the public service commission you've been helpful in the answer my questions out there and but but in the thing you're getting read. So is the crypto money facilities because the hours getting late if you would just want more question and then we'll move on please sir okay so basically there's a crypto mining paid less or kill what our then the ag culture industry at like a former the the kill what our rate is is. Probably less per killer one hour but their other factors in the white they're served again they're interruptable versus firm they may use more so that it's to compare the two rates just straight up once versus the other is you have to look at a whole lot of other factors as far as the the reasonableness of the rate the reason why it is I think we'll get into that more when i'm getting with you about this and I will say this better public service commission we create that but they don't get ever decision right okay they're influenced about three members i've been down this road we've had things reversed by them bett things right and we've had a process that was fair and i've certainly complimented on you it's your time it's public service commission but I do think this needs to be a bigger issue and one last question like the bad act report last question you walk into energy whether you're. John q farmer whatever you're treated the same right as long as you could pay your bill how the credentials and all that correct. Yes we have criteria that we review customers and they're their consistent with the regulations of the public service commission as far as how we evaluate customers for service but we're required by law to serve all the customers that show up that are qualified to take service and we serve him under the rate schedule it's approved by the public service commission okay and and i'm going to have future questions and meetings with you and I appreciate you you've been opening communicate with the thanks thank you there are things our representative back just a quick question the interruptible rate the right that's given to an interruptable power that's that's a right that a public service commission would determine. Correct yes we would propose that they would approve it right they would approve it and then that rate the cost that interruptable power creates some stability in the grade another words you can turn it off and trices that's what the reasons that they have a reduced rate correct yes that's cry in that rate it's in I just wanted a lab right a little bit more than when you compare a non interruptible rate to an interruptable right that's an unfair comparison that costs this loud is going to stay there and you can not get rid of it. The dislove would be interruptable so that's why they're giving a lower right in that interruptible rate is pretty much standardized and approved by the public service commission for all interruptable. Customers. That's correct the the crypto customers have a separate rate from some of our other interruptable customers because the nature of the service is different but they interruptable service would be different from firm service and the cost of serving those customers is different and that's why the ra. And i'm not finished up with a question for the public service commission cause we haven't picked on your negative without all being john here so so can't my question in relation to kind of this interruptible versus not interruptable and reliability of the load can you all kind of go into that a little bit II know you you don't get into regulating specific businesses that's beyond the perview of what you do but can you talk about how that process works about interruptable versus not interruptable in how you assure the reliability of the grade to make sure that you know entregie says they're looking five years in the future to make sure the power is going to be there can you talk about how your processes work to make sure that they're doing what they are supposed to be doing for the benefit of the customers of the state. The. I'll be happy to add a little bit to that and then i'll let michael finish out to organs are is in i'm gonna start at a broader level and arkansas in two different regional transmission organizations where an spp as well as myself and the commissioners are involved and we're involved with both of these groups I would say we spend a tremendous amount of time and energy there one of the priorities of those regional transmission organizations is reliability a and you know there are different components to reliability that we are studying and focusing on and trying to you know bring those back to our states as regulators we want to bring home you know what we can that we want to improve the reliability of the credit overall but we also focus on what's best for arkansas right payers at the same time and I would say that um demand response is kind of an example of one particular aspect of reliability that we focused on on a national level and the interruptable component to the tariff that enter she has filed for the crypto mining customers is key to that and it's an example of demand response it in it has it really helps those the crypto mining facilities I know they they have a large load and we all we all know that and it is a concern however the interruptible component of the tariff is also it's an example of demand response it also adds to the flexibility and to the balance of the overall grid when times of stress and and when when that interruptable component is applied and used that power can be shifted to other customers in times of need whether it's you know whether situation really hot days or and whether emergency or whatever the situation may be and that is considered an asset when you're looking at reliability overall for the grid on a even a broader spectrum it is it is considered an asset and they also again as we've noticed early as we mentioned earlier. Share the cost of of energy and as that cost is spread out to various classes of rate payers i'm large customers sharing that in it benefits everyone overall so and my colleague may have something that you wanted to add to that but I would I would start there so I mean so so and i'm sorry interrupt yourself are you saying kind of a front from your point of view that these that the lord and the way these crypto mining facilities are handled as they're a net benefit to the other customers of the state there are there are definitely safeguards in the tariff arm to ensure that that you know there are some benefits and they are considered an asset when they can with with that interruptible component from the great overall it it definitely enhances reliability and as something that even on a national level that regulators are looking for ways to to implement some of these things to insure reliability. The II didn't know if you had anything to add or not that all sound are good to me I don't know your question mister bed though might have something to add to that's just from a regular standpoint of roaders to employee I thought it might be helpful in them that the the question that I asked mr bethlehem earlier to meet position don't look at the cyber security aspect of the utilities within the state I know this last session we passed some of the most comprehensive cyber right legislation that we've ever done in arkansas we really didn't touch on utilities and our representative back and I have just actually joined a organization where we're going to start taking into cyber security on the grad and i'm just wondering what role they are playing in that if any. There's a lot of discussion around cyber security and are electric grid and arm it is is something i'm a little bit new to as a newer commissioner but we are you know definitely looking into that there are a lot of discussions and work groups on that across the country and that were participating in and I would love to visit further about that with you too and let it let let's talk about what role I am the commission can play in that it's definitely something that's top of mind excellent okay alright saying no other questions thank you offer for being here this afternoon welcome thank you thank you miss chairman committee alright so our next we've got the department of commerce and so well that those folks come up and. Alright and when you gentlemen get seated if you would please introduce yourselves to the committee and then you may present good afternoon my name is human donald sector of commerce i'll let my year colleagues introduce themselves before I make it if you brief comments jim hurts and cheap the staff department commerce I clinton executive director arkansas economic building commission. Again now good afternoon thank you for allowing us to be here today human donald just really want to cut to the cut of the chase I know. Probably stomach or gralling but. Want to make sure that everybody knows. From a crypto mining crypto currency mining perspective in that industry those projects are not eligible for incentives adc does not promote that they don't they don't provide the. The number of jobs create the number of jobs and the infrastructure investments that are targeted industry would so we don't we don't prioritise that from a. From a targeted industry perspective. Also if if we are contacted by a crypto firm you know we would most likely just you know provide them like we would anybody information on our on our public site you know for for them to be able to provide information. We could provide information and then with regard to sites across the state. So while week we did pass a tax incentive if you will for data center so with that tax and senate will does not apply to these crypto mining facilities that correct that's that's correct I mean it theoretically it could but I mean the practice crypto mining and data centers in the traditional sense of data centers from an economic development perspective or two very different animals so i'm the one of the questions that I had that that it does you'd all to be here to visit with community about is as there's concern about the horses to one of the crypto minds it's an in my district has looks like ties to china the the communist party in china and obviously that is a deep concern force so my my questions that I have come a two questions related to that monitor that to any degree about any you know are there other businesses and arkansas that maybe have ties to china or the chinese communist party you are regulate there you all look at that when you know businesses apply for their licensing in the state is is that something your can go into provide us any information on. I mean specifically we do not. Promote we do not have a china office we do not recruit businesses from china. Any industry and any business that does I want to locate in arkansas we have a very thorough vetting process looking at the three years of honorable financial statements for example so we would we would know where the country where the companies are from what the ownership percentages are clint can get into much more detail that I can but like I said we were not actively and have not been active in terms of uhm recruiting industry from china yeah and just jumping there real quickly too that relates to any questions about incentives that would be offered going through a dilgence process that we know that company is but as a general matter of the department of commerce is not a regulating energy and does not issue business licenses are business licenses or traditionally issued and at a local level bargaining spouse in some comes by county government so we are not the gatekeepers determined whether not business a or b may open shop there's just that something that we have the authority to do it is is you know of any is there anybody even in state government because I know like a lot of times secretary states office handles business licenses and so forth is there anybody within the state that you know of that is looking or watches this aspect of businesses. Or is is something we need to get into where we are looking at you know are there businesses in arkansas or groups and arkansas that have ties to maybe non friendly regimes that we need to be keeping a closer eye on then maybe we have band or is that something we leave to the federal government yeah I think the the federal authorities are much more sniff get much more robust um there is a sanctionalist that's maintaining by the US department of state that precludes entities affiliated with certain foreign powers from transacting business and the united states are basically engaging and commerce with a initiate their style myself the united states I think that's the strong replace I think in the broader context of what we're really talking about here I would. I would encourage lots of dialogue to make sure that because of one concern that we had here we don't throw up a necessary impediments to business coming into the state. And slow down the process for some come in and if we do have act six thirty six I believe that past should be effective today that relates to the ownership of any land by certain sanctions that confers on the attorney general some authorities to be able to go and divest property from state actors that are on the sanction list maintained by the department mistake. Alright any questions from any committee members. Does sound like something that we might need to say I said I didn't think we don't have to pop up all the sudden our representative around which is representative right now in around see I don't know if you are comment on this or not. I have a very hard time figuring out. What are pluses. The mining can bring to our state. Versus our energy usage. I'm maybe that may be I mean I know I don't understand all of it but and I don't know if you don't want to comment on it but I mean I couldn't say you are going out and trying to bring those businesses and to our state and and I just can't see the whether they're good or bad actors. I can't see the plus to our state. For what appears to me to be a load on our grade that is already overloaded in my thank you if you want to come well I mean as I said earlier it is not a targeted industry where not recruiting. Cryptocurrency data minors I think representative ladyman. Maybe you hit the point early on. The the low cost of power is is probably the the biggest driver of that industry come to the state now data centers for traditional data center that's a different deal. We would we would certainly support. In promote large data centers google amazon would have you you know half a million square feet of uh. A bottle of the building space hundreds of jobs so that's that's a different different situation that we would distinguished very differently. Thank you direct donald appreciate you guys meeting with me early on when we try to clear up this because I think they know one of the bills and last session that happens that everything gets past there was a catch and has singer dismayed that the disease crypto minimum facilities qualify mean you did say earlier that. That's not your goal and everything like that but it's possible in theory they could qualify I mean or they definitely one hundred percent night or in theory they could you could you clear that at yeah I really think it would be a unique set of circumstances for one who qualify first fall in in the the act that pass on the incentive for data centers you gotta have five hundred million dollars in capital invested that's way beyond the scale of these operations million dollars and pay a rolling they might be able to do that but I think one of the things that it's a real impediment to them qualifying is I don't think they have customers I think they're there are participating in an eco system but in order to receive these in san anx you got to have customers doing a service for a third party for which you're billing them inside I think it'd be a a challenge that meet the definition of an eligible business under the data center incentive so it it's like a nine bit in some ways the law it could qualify what you're saying I mean you obviously said it could quote less safer example walmart for example where amazon were mcdonald's or restaurants or whatever they want to do they want to get they can want to get away from a pay and chase the through two or three percent or they want to capture that money and they want to come up with their own top currency I mean. I think that there has been some articles written in some credible newspapers about that is at least being explored and talked about so I mean could they come up with something in a currency world that would say hey we're tired of paying chase this to a three percent we want to try to do her own currency get king speak to that senator I think we will talk about data centers now we're talking about their own currency at I just don't know what but that's where the laws like not clear enough I mean you know we do need a clear definition of what a data center is is at talked about earlier in the test morning with the crypto person is they're trying to they're trying to piggy back you know it's like a troached horse with this bill that's why it's so bad that they're trying to say their data centers with data centers in it in my manner stores facilities as I say our banks up there have data centers you know maybe a truck and company is going to have a data center none of them in my mind or net is going to use two hundred fifty thousand galance of this amount of energy so you know that's why this bill is so bad that got out is we've got to have clear as your test money you're saying it's basically what i'm saying not trying to growing into this data centers and crypto mining or two different there are two different thanks and I thought any time we do an economic development project we have a detailed intake process where we're going to move beyond one or two letter descriptions we're gonna really understand the nature of the business and are they rendering data processing services to third parties for which the receiving revenue back I don't think that a plastic cripped on that well this is what to watch in the process that you know why didn't you guys when this bill was going through say hey wait a minute here we need to find these two different things or tutored for animals we don't need to put you know crypto currency facilities in with data centers well yeah past the bills you know we engage when we have the opportunity to we do not have a position on this bill and so i. You know we don't pass legislation we try to implement it as much as possible and we have no authorities in terms of crypto money but I mean i've been down how long enough to know when department of commerce wants to come in away and agency should come in and help clarify because you know insisting the last week turned into a banana republic of passing bills batched bills up in very critical of that now that rules the change that we should know what we're bowing on whether the minor disrupted stamp in the senate change the rules from previous years senator police try to stick to the topic okay just anyway to the time I just think for the commerce part whenever we think we need to have a clear definition and it needs to be cleared up as you said what is the data center in what is crypto period and they they did they need to quit this merging in the two because they're not we always stand ready to assist the journal assembly when I ask to do so always. We need legislate we need you to step in and do that. I was in our ladyman thank you mister chairman got a quick question I hope secretary of mcnonnell thank you for being here and bringing your team with you appreciate that my question is in this might not be just crypto currency bed if you have a large company or industry sigh industrial site whatever coming into the state and they contact you first because you're kind of the point person on there is there a coordination between I mean do you let like public service commission the energy industry I mean is there any coordination to let them know hay these guys are looking you'll they need five hundred megawatts in northwest arkansas whatever is really coordinated typically and I let the executive director of neil jump in here with more detail but we would we would work with our regional economic development partners across the state who might have the available site the available buildings that we know of and make sure that. We're putting the best foot forward for the state in terms of all the assets that the prospect would not be looking for. Yeah representative lady you're absolutely correct that we've had some really unique requirements whether via data center elected vehicle manufacturer there's very large utility requirements on some projects that we've seen recently and so our first couple phone calls are going to be to the local economic development partners and to the business development team at enter or the article electric coops are whatever territory we're looking at for the site so those utility companies have folks engaged in economic development to the size up whether they could serve that site adequately for the power required for any given project so it's it's a team effort for sure thank you. This. Okay seeing no other questions for this group with it we thank you for your test thank you next week I moved to the you know and is that discussion on the taxes implementation of the the crypto currency and through that we're going to get the department of finance and administration up here paul are you in. This. If you were take your seats and identify yourself for the comedian then you are good to go. Thank you mister chair members of the committee paul gearing dfa. And i'm tommy burns assistant administrator for corporate income tax thank you mister chair members of the committee for inviting dfa to join in the discussion today regarding crypto currencies in the taxation crypto currencies we have prepared the powerpoint presentation that you'll see on your monitors we did include in this presentation a brief discussion on digital payments so that we can. Draw those distinctions between digital payments and digital currencies and how their taxed and arkansas. And I will I know that we've covered and great detail what crypto currencies are in arkansas will try not to plough that same ground to move along as quickly as possible and get to the questions but a four digital payments as as you'll see in your screen and it's also called an electronic payments transfer of value from one payment account and other using a digital device such as a cell phone a point of sale system a computer or digital channel of communication such as mobile wireless data most important point typically what we're talking about is united states dollars is being the currency. The. You'll see on the slide is the multiple platforms in which you can make a mobile payment from apple pay to paypal to walmart pay car then mo zell there are multiple platforms to make these transfers of of united states dollars between individuals. And is you'll see on this next slide there has been a an evolution over the last proxy twenty five years over the ability to make transfers of of payments from one person to another. As you'll see that you know first you know typically what we prior to this what we would have would be either currency checks or wire transfers that would occur but we have certainly involved to now to have the ability to have multiple credit cards or bank accounts and other platforms on our mobile phones in our computers to to facilitate the payments between one person in the other. The next slide can show how this is really grown over time from two thousand and eighteen to two thousand twenty two the merchants that are accepting as a percentage of digital payments is. I really grown between the last four years. And they're a lot of advantages to make digital payments. They are require allow for a and facilitate a faster more secure payment and with little risk in minimal charges compared to using a traditional debiter credit card and also many of us have cell phones where we can have those secure requirements on your cell phone using your fingerprint faceid getting a text message for you multiple factor authentication to minimize the risk of somebody hacking into your account. Blood of advantages for businesses that use digital payments cash management is reduced or eliminated lower risk of losing that that cash on hand of the business digital payments or quicker transactions shorter lines for customers in sharp experiences clear trails are evident for counting and also for but individuals businesses and dfa simple simplifies operations and tax compliance. And was the most important thing beginning of twenty twenty three d companies are going to be required to send a ten ninety nine k to any merchant or person receiving more heart than six hundred dollars of payments through their service tax payers that have received payment for goods or services filing a schedule see will include that amount online one of grocery seats are sales but importantly any personal transactions that are not for goods or services will not need to include those amounts on their returns. Here you see an example on the next slide of a ten ninety nine k showing the gross amount of payments or using a third party network. Okay I turn into the next part the presentation is going to be on crypto currency you know of course we have multiple definitions that are available one unique definition that applies to crypto currencies but you have in front of us the basic definition of crypto currency. The internal revenue service and did provide in two thousand fourteen and notice to furnish some definitions of virtual currency convertible virtual current scene but for also in that notice for federal tax purposes convertible virtual currency is treated property and not as as currency just like the how the the dollar or other forms of via currency are treated. The virtual currencies are actually treated as a property also the other sections of the federal government have stepped into regulate digital assets the commodity comma futures trading commission has taken the position that bit coin ether light coin tether and finance are subject to their cfts regulatory authority as well as the sec they have pending litigation forcement actions that are related to digital assets and as many you also may be following in the news. The there is pending legislation in in before congress the financial innovation in technology for the twenty first century act it was filed july twentieth of this year representative hill from arkansas one of the primary responses of that legislation and that will actually code the cft as well as the the sec's regulatory thoughty now that's we're just working its way through committee's relatively new legislation but that will provide a regulatory framework should congress decide to implement that law. We've covered earlier discussion of the data centers regular legislation that the general simply enacted act eight fifty one which provided some specific definitions in that legislation of this digital assets digital asset miners digital asset mining as well as digital asset mining businesses. This light just provide brief overview of that act won't for important purposes for dfa is that act i'm required that a digital asset manner pay the applicable taxes and government fees and acceptable forms of currency as well as operator mayor that causes a no stress on electric public utilities generation capabilities. I. And just don't know there there is crypto currency that was created as a joke dose coin but it continues to be publicly traded. And of course there's a classifications of these crypto currencies you have stable coins those are designed to maintain a fixed value and and the other are the the the volatile coins that are their value you can very greatly. They are internal revenue service they treat crypto as an **** at subject to its rules on capital gains and losses just like other forms of income are when you buy crypto currency your stocks the original person's price of the asset becomes its cost bases when you sell that asset your tax based on the difference between the cost basis and the sales price. The. Yeah. Okay for capital gains and losses anytime you sell crypto currency the gain or loss and value has tax implications. This type of transaction tends to be straightforward especially if you aren't frequently buying and selling crypto in his classified under capital gains. You can also exchange one form of crypto currency for another form of crypto currency called a crypto swap when you directly trade one crypto currency for another without exchanging your crypto for cash mini folks will are overlooked this type of transaction when it comes to taxes because no cash was realized in in us currency if you exchange bed coin or like coin or theory and for bid coin is still a taxable event. Also when you use your crypto to purchase goods or services and it has the same tax implications if you were to sell it for us dollars it could be as little as you're going to buy a cup of coffee or spin and using bit coin as that currency to pay for it when you were buying anything with crypto the tax will gain or loss is based on what you paid for the cripped and crypto currency and it's value at the time of the transaction. The. Okay capital gains and losses are based on the net total of all transactions that year he sold five different assets for a total gain of ten thousand and three other assets for a total loss of fifteen thousand then you have five thousand dollars in capital losses you can claim up to three thousand dollars a year in capital losses from your taxable income and carry those losses over exceed that limit to a future years. The slide discussed as long term there's a short term capital gains short term capable game results from the sale when asset owned for one year or less while long term capital gains are generally tax at a more favorable rate than salary or wages short term gains do not benefit from any special tax rates they are subject to taxation is ordinary income and as you know there are. It multiple tax bracks from the federal side from tin to thirty seven percent arkansas we have a top rate of four point seven percent. What importantly for our longdashterm capital gains you get the the benefit of that uh half of your longterm capital gains or excluded whereas a short term capital gain or tax just like regular income. Okay also so in the example of the bit coin or other crypto currency minor when they earn those coins as a result of their mining operation the receipt of that value of the crypto currency is considered income for arkansas income tax purposes. You can earn crypto currency in other ways and then just then mining their is also. Crypto staking income. And also yields on crypto accounts. And also some individuals might choose to take their income as crypto to be paid in crypto. The. Okay also if you receive crypto currency as in as a gratuity or for is for free there are those instances that you might have a taxable event when example is an air drop in that wind these companies give away crypto for free uses a marketing tool for try to generate interest with their with their currency also in other transaction hard for work that's when a crypto currency splits into different types of crypto tokens or coins. So just a summarized digital payments they're not going to be create a taxable event and for it just for that for purposes of making it a transfer from one party to another of us dollars now if you of course if you transfer a digital payment for for services or transit its transaction of good certainly that creates gross receipts for the parties. Also crypto currencies not regulated by banks cannot be withdrawn in a physical form it can increase in decrease in value but a transaction must take place before it's taxable. And also whether your transaction is a gain or loss is dependent on the cost bases at the time of the accrual of the crypto currency and the value of the time the transaction. Okay and i'll move on to ten ninety nine reporting this is very important for for tax compliance for the holders of. Crypto currencies as well as for the tax administration agencies such as dfa and the IRS we have noted the ten ninety nine k which is used to report digital payments to recipient as a to be claimed as income for goods or services ten ninety nine mit miscellaneous is used to report interest earned on crypto currency investments at ten ninety nine in ec is used to report income earned from mining of crypto currency and at ten ninety nine b is used to report capital gains from trading or selling of crypto currency including it used to pay for goods or services. Okay we'd be happy to answer any questions about the presentation of or any questions the committee might have right thank you for being here when you have a few questions so much start off here real quick and appreciate you offer being so the crypto mining facilities any crypto that they generate from their efforts they have the report how much coins or how much profit they made and then they would pay taxes on that according to the regular tax schedule for for our cancer are consultant citizens. If I go down to the local coffee shop and I pay with my you know better coin than that coffee shop would have to collect taxes on that just like they would any other transaction and then they would report that as as well so as all that correct that that's correct it also what's important for the transaction if you use your bit coin and mister chair to pay for goods or services you actually might have a taxable event based upon you using your big point because if there was a difference between in basis of what you acquired the the crypto currency for and the white the value of the goods are services that you received when you traded the the the crypto currency for the good our services you might have a gain or a loss depending upon the acquisition cost of your crypto right and then the other question I have deal in and out of this this is a new arena don't have any statistics on how much revenue the state is receiving because of crypto assets or is it still too early or is that something that york and pars out of the data and get to us certainly mister burns would you all have any data currently on. What is being reported and do not have any specific data currently on specifically to crypto related her bit corner is that something you are contract separately though and get to us so we can see why if any economic benefit is having to the tax revenue in the state we can certainly see what type of information but what might be the. The ten on ninety nine information could possibly be co-mingled with other types of ten ninety nine information but will certainly look and see what we have available and provide that to the committee okay yeah and if that's something you can get to our source that's something where we need to tweak a law to give you the authority to to be able to park that out I know you can't give us individuals as a as a group it would be nice to know that you know the mining industry generated a million dollars in when I we got so much tax revenue as a benefit to the citizens of the state that they'd be good information froster to have that something that that yaken provided to the committee and then we'll get it out to everybody senator johnson I think you're up so first thank you mischairman misgearing our can walk you through some things and I think you'll get to my port as we move through it what is our current general sales tax rate in the state of arkansas so the general sales tactory is six and half percent gave so at six point five okay in many carriers who in this penalties have a general tax rate of their own correct less just use gilasky for example that I believe the city of little rock has one and a half percent is that not correct I believe the total of plastic county and little rock together is somewhere around nine percent right so let's say okay one point five for little rock and one for. Ugh. Pilaski caddy which I think i'm correct on this. So that would total nine percent yes okay so if i'm a crypto person I want to come to arkansas and will cheer like I could put this a little rock and then I would bilectricity and I assume the general tax rate is what is applied to the sale of electricity to to the consumers is that correct yes so they add to uniform yes sir I mean obviously if. Conway has a different tax rate it would be that or buy no it's out in them. In the incorporated area would only be the total of the state six of the half and whatever the county why for category that's great so what we're doing is and again this is a but a problem in an issue with tax policy which you know I don't jump on you about because you're just the messenger you carry out what we've vote here in this legislature but if you have a situation like the issue and in in in fortner county or or early anywhere in this day you have a a rural area you may or may not have a county squad sales tax you might just have some city sales to access because as a practical matter for. The cities and cats are really any any any entity it's is there a retailer that has a permeate that cells goods and services and you collect it and remain into the site so whether or not there's revenue coming out of that area on sales text has to do with with what's there well. It appears in the i'm seeing this wrong please correct me that these entities pick a spot that doesn't have any activity and they plop this thing down they hook up up to entry g entregy follows the la collects. The state six point five percent if that county has a tax they collect that but since there's no minute the they're only paying the very lowest possible manner taxes now again they're not broking the law they just take advantage of what's there but a look I look at this as a standpoint it by having are again a problem with the tax. Sister the whole overall economic incentives and distance we create whether income tax system and and like many the members in this room and start our governor we want to do away with with the income to excel we're gonna be counting more on sales tax for our state revenue it looks to me like we've created an economic inside it even though it was not what the secretary of mcdonald talked about we're not attracting these businesses we were trying to get him to come in here but by having this despair in this taxation if you go out here in the middle of the country where people have moved to get away from sitting always now there and you pluck this thing down and you start this home and all that we have that blaming anyone but we have inadvertently created an incentive to put that facility all other costs that were standing on. In that area because it does pay less sales tax on electricity did I get that all that right I believe so senator I think certainly the point is is that if they're if the driver of the location of the crypto reminding businesses to minimize their cost of the electricity of the factor of having an additional either a municipal rate or or lower county rate would certainly be drivers of of where they're going to locate cycling my point mister gering and thank you for that I just I won't clear for that now on this taxation of of of the the the big point having worked in this for helping the past I think about okay if the definitely looks for business like file tax return so say there is say it's a sea cooperation so it's a taxpayer cooperation they they father their income tax return your colleagues have you'll have the appropriately to go audit them to see if they're following the largest like the rs wording and you have your paying tax on whatever you reach this bottom line thing well if a. If I have a let's say representative back hazard a car dealership okay he sales and we won't get into the used car tax and what's what's the right will just act like they're all new and even though he has a really great core bear but still he sells passes car from the manufacturer whatever it will use all fashion terms because I like round numbers let's say pays ten thousand dollars for the car and he sells it to me for twelve thousand dollars or he's get two thousand dollars profit on that car and that's a taxable income to the rs as a state of arkansas and. That and it's fan as far as if if he files us for tournament says only car soul that year and he says that you know back motors made two thousand dollars this year then. You'll look at this so we're not sure that back motors really just by two thousand so the i'll go out on him when you find that yes here's the high transaction so that's correct now you've got a paper trail of what that transaction wise I mean we all know what these counted ledgers look like and in the paperwork that required spicel is a record someone origin and factual determination is made and you say okay you know mr back you're ok and then we move on well. You're if I saw this thing correctly and I know you watch the initial video and everything these are and will use a worried that exist basilions of transactions and every one of those would be if it's a quote profitable transaction it would be subject arkansas income tax if it were a one other the next one was. I slightly less than profitable there would be some cannibal of a capital loss for for lack of better word it may actually be a cap the loss but we're but the point is. I cannot imagine you having anyone on your staff younger some great people who think that could go in and say hmm you made this much money okay and did where did you bike it what did you make it in rural faultner carty or did you make it in wherever the the customer that owned that as said that your minding is that the whole thing is this is like this is like a crime nail jellow on the wall I don't see now we can treat this as something that is properly in the inner vacuum I know because we we write the tax loss thanks thinking about normal things like united states dollars or even british pounds that can be converted or something like that but this is I don't see how we you you're stay secretary walth and I don't see how you. Factually practically can do this correctly am i. Misreading this narrowed all center and so certainly that that in your example that individual that is going to have gains and losses from dealings in crypto currencies they're going to have they have the responsibility to file a return with us and report there their gains and their losses on that return in addition to any other forms of income that they have which dfa would you know of course review and process and possibly audit at some point it's certainly would be much more challenging if that person was a completely non filer in our auditors would have to go in and obtain that information from the taxpayer or from third parties and then try to reconstruct what they're true taxable income worse but certainly we do have we have sophisticated taxpayers that have complicated dealings in property other than crypto currencies that the same types of challenges arise from time to time and yeah we certainly have a very capable staff but this does this type of dealings in crypto currency is is certainly going to add a level another level of expertise that we will have to be able to be very capable in them so we do try to keep is educated as possible track them the the federal legislation that pertains to these issues and just try to stay ahead of as much as possible of the developments but obviously from the presentations early the technology and the changes move so rapidly. Data were always playing catch up to the realities of what's going on in the marketplace and I am appreciate the heading and new work together a lot of these little tweaks we do to the tax laws in app I know this is not a little tweak potentially this could be a a big deal and a done any good go down this path of well just the chart comes away warming their way in or is this a something else I try to keep it in mister chairman in june in specific terms at normal people like me to understand i'm not as smart and technology is our our house chair but. If this were a hard rendering planned I don't want my constituents in a real part of my district have to deal with whether it's a technological thing the harms and is annoying and all that or it's you know rendering hogs and it's it's a matter of you know we close the place up on the buffalo river because it was a public nuisance and this is to me is the same guy I think we're we've gotten into a lot of technical areas but this is still about being a public nuisance without even getting into the potential geopolitical and I use that word carefully since of this issue I just I want to make sure that we as the state of arkansas have the tools to protect our citizens from some kind of annoying noise or other brought up the threat to the period if the but power goes off I won't carry it because of a you know something else if this was the outfit that got the deduce instead of me i'll be upset because it's hot day and I want my electricity but I appreciate your candor because it's clear that a lot of these things that come out this is we just don't know I certainly agree and also in a week and we certainly appreciate the general assembly's efforts to you know to study the issue to provide the the state laws that will govern these areas to give us the direction and we're happy to be involved in that process i'm going to make sure this is not the end of it mr thank you very much thank you mister chairman. Number thirteen representative agree. Thank you mister german quick question and i'm not sure you have the answer formally better I have a crypto phone saver seeing mandatory to tend to small municipality mountain pan and wondering what the impact is going to be them for what they could get off the shelves to act essentially she's going to be the electric meal. And I guess any procedure many gain that they have there. And I guess each shed he has its own power need research and found out what preceded to city is putting on that shelf tax in the determine that. So yes or so what you have in as has been described for purposes of the crypto mining or data the mining operations of of crypto currency you're certainly going to have the as as an ongoing cost for the crypto mine or is going to be their electricity purchased but also as they as they consume and purchase. The the servers the computer equipment those were going to be subject to arkansas sales tax and when when they make the purchase or or they purchase them out of state and they're brought into arkansas on the pay use tax on that purchase in addition to any of their building materials things of that nature and of course they're there employees will then also. Have purchases for it for the business for the ongoing items that are needed by the operation that will be sourced to to wear the. That the purchaser of the equipment or the other supplies and materials to that location so answering your question i'm sorry if i'm yeah I think basically you're there's not a standard for immediate period the air to percentage on to energy bill is different from your news found the green rest penalty in terms of the local sales taxes yes I certainly there is the ability for the the local either the county government toward the city government to levy of rate change on their their local sales tax but we certainly either has to go through that elections process in order to change the rate of tax that's collected. Thank you yes. Oh yeah I think representative maybe you're next thank you mister chair kind of piggybacking on word senator johnson was asking it to me it just seems like this would be an easier way to hide some money so when dfna is trying to track down as someone paying the taxes that the responsibility you know pay and and all that it seems like it would be a lot more complicated because as you mentioned technologies changing and and this is kind of new emerging things do you envision that dfa is going to have to have specialist just on this or division just to deal with this which might mean hiring more people or more training what a fake representative and that's that point is very. In terms of the complexity that's involved in as we try to learn about this technology it's not just attorneys and accounts that you need you need people that are well versed in in computers and in this area so and we don't have any immediate plans right now to to come to the general assembly and ask for more people are more resources to tackle this issue we we certainly try to encourage the voluntary compliance in our income tax to for people to that want to obtain a an income either from. Crypto mining or from dealings in in sales and purchases of crypto two lawfully followed return pay the tax that sold but certainly there's it's often times there's just a difference in understanding in a difference in conclusion on whether whether everything is filed and reported correctly so yes it we do have many talented people in corporate income tax individual income tax that look at these types of issues every single day but certainly this does not make the make the job any easier now that we have to figure out these and have figured out the the methods that taxpayers are are having these dealings in whether it's from mining or from buying and selling but no to your question we don't have any meeted. Yeah request right now to to expand or are staff but of course over time we we would certainly have to evaluate that depending upon how this effects how people pay their taxes in arkansas. Alright and it's the last question we have gentlemen appreciate you're getting here please advert as we move into this area if you're seeing tweaks that need to be made to deal with this properly please keep us informed on that and then not whatever you can do to provide us any data that you might have on any taxation we are currently receiving due to crypto currencies in the state yesterday mr chair thank you making so got one more item before we get to public command term this is going to be dealing with the environmental concerns so we have kale bosborne in bailey taylor from energy and environment so if you all come up with appreciate your patience and when you get seated if you would just introduce yourselves to the committee. The. Yeah. All right good afternoon chair my name is kale bosborne and the chief administrator of the environment for the department of energy and environment better known to most of you all as the eq director. And i'm barely tailored the associate environment administrator. And then we're open going when you may proceed with any coverage in well I will just share a few thoughts especially based on some of the conversations gone on earlier and then we'll be happy to entertain any questions I think many of you all are familiar with the equivalent our role of what we do is the states environmental regulatory agency are our task that we are given is to implement the state and federal programs environmental regulatory programs. The primary mechanism of how we do that is through permitting we have three offices our office of air quality are off the water quality in our office of land resources these are permits that or for airmissions water primarily was water discharges but some other aspects that program and then solid ways hazardous ways and regulated storage tanks. So as we've talked about some of these operations there have been some descriptions of those and there's I can certainly understand why there may be some question about potential environmental impacts I will share that to date the sites and locations that we are aware of and have been made aware of in the state there have not been the nature of those operations and not required permitting through us especially if they're getting you know they're connecting to the grid that's their power source compared to having a generator of generating union of some type that is what would give them require them to have an air permit with us based on what they're doing for cooling if they're doing something that at the end they have a by product or they have processed water that they're getting rid of that sort of thing would require a permit but II believe that that at least for the site so we are aware of now that has not been a need we have also polled some other states through some organizations that were were part of understand that there. It sounds very much to be like an emerging issue from any states the ones that we know that have taken some actions on the regulatory front have been where they have located these sites next to perhaps a new nature gas turbine and new york ran into that issue they were going into old call fire paraplant sites and in putting in a new generating unit that was at our gas fired and then building a bunch of these and I think new york put some restrictions in on that so I think this conversation today these questions are being asked for very helpful as we plan for what we're looking at but as of now this is not we have not seen operations in sights that have a large environmental uh or release from a regulatory permanent standpoint I see representative ladyman and I will mention I know earlier you mention you raise the question about EPA and have an annoyed is my understanding that the noise rule has been around since the early seventies I believe a lot his transparent with that so that there is. There's not really a federal standard for that for the noise regulations from epa and the same way we have standards on air emissions or on our water quality the way those programs work the other piece is with our clean iraq programs or clean water programs we have delegated authority from the feds sees me from the federal government to operate and run those programs on the state level we don't have any delegation for any federal noise feral noise control actor I can't remember the exact name that's not a delegated program for us so we're left with in you know and there's really not one that has been primarily and as you stated earlier it's in some of the language that the the the the epa will share as it's primarily a state and local issue and that is my understanding of how it has been regulated and for us we have in our state authorities that the general assembly has given us we don't have direct authorities over noise in that way and we have it is taken into account in some things our ear section looks at was shooting ranges and with motor vehicle racing sites rate tracks those are the two places that it's part of it but really those. Particularly on the motor vehicle racing that there is actually a component of air mission air quality that's really the primary driver so I did want to try to go ahead and answer that for you you may have additional questions but want to throw that out there in that's really what we have to offer now but we welcome questions or future discussion with with with you all as you evaluate what are part for you on phone question I have is on the water usage of this of the decides as far as the the amount of water that they use to make sure they're you know they're not overburdened some I know there's industries that use a whole lot more water than than the better corresponding folks do but is that something that you'll look at is that something that you need to allow you to start looking at to make sure that we're using that resources wisely as possible on these situations. I haven't now we don't understand some presented earlier about some new technologies for a cooling that they are trying to use I think it is definitely something that we will have on our rate are I don't know that we would need any new authorities to do that the the the way the clean water act programs work is when something is discharged are released into a creak or a river where some other water body that is where we have a point that we can we can permit that so we would have to know more about the type of specificativity that's going on what is happening with the water but I do think it would probably fall under some of our likely fall under some of our existing programs if there was but it as of now and we we dug into this a little bit because it's it seems like something there there would be some sort of cooling water process haven't had not turned out much but also recognizes what shared earlier this is very much an emerging in dynamic dynamic field but I think we have the basic tool kit we need as of right now and certainly would share with you or mr chair and others if if we see a need or a gap and what we could do and have a job don't look at the input charles look at the outputs at this point yes we're worried about was discharged senator more well and and just follow up on the learning questioning if that were to be the case what represent me suggested. Clearly you'd want to break that out separately from other industry you wouldn't want to penalize other industry and so keep in that mind would that be could you even do that could you differentiate in such a way I mean obviously I guess they're permitting additional permanent you could do something similar similar to that so with our program in our in our office of water quality we have a few different variations on our types of permits we can issue. We do have some in some of the activity that they're doing would sound similar to some of our general permits which are broadly applicable across the state should you know we have one for car washes and other things like that consistent activity that would happen across the state. It would be something of the at some point it could be evaluated for that but the alternative is if you don't have a general permit something generally applicable we can also issue individual permits and those run the game it from you know our large municipal waste water treatment systems to very specific you know industry operations are even some other activities what the. For clean water act really focuses on is what goes into the water and we develop permit requirements around that and so it can be made I believe it could be tailored to fit this specific activity without creating some sort of detrimental effect on other permit types of issue. Yeah thank you for that i'm typically someone who didn't like no fence likes to give you off more authority and more regulatory authority so if they were even. If they were even the path that this body ever chose to go down I just want to make sure that we wouldn't unnecessarily penalize anyone else right or or do too much of a catch up and thank you. This. Thank you mister chairman. Yeah. But getting in the other issues mister borne you know i'm very concerned about a water affluent issues and I can see how that effect but there are as of late i'm just not real optimistic to come back your agency peak apple to deal with real ones much less something that we're looking at will cooling water for some computers but moving on to this one let me say this you mentioned in response it's important what representative ladyman's comments about epa noise. I would say I know they designate certain enforcement to the state of arkansas is that consistent across our fifty states do they say these are the things we're going to let states do or do they pick and choose for example in another state could they say we want to hold enforce noise restrictions or california to enforce some other thing is it something they do or candidate. Typically with the epa programs. The the term of art seems to be delegation in depending on what the type of rule or federal law is the the states would be implementing that that cannot controls how the delegation goes we have delegation on our clean iraq programs and clean water programs based on the information the that I reviewed and what I know about the noise pollution control I can't read the exact title of the law from nineteen seventy two that has not been something that epa has either promulgated a lot of rules a specificity in their rules in terms of how will reply and different instances and has not pushed that out to other states I my understanding is there approach that they have it here too pretty well since the nineteen eighties his error they had attempted it through the seventies and the early eighties and seemed to take a step back from what I understand certainly not pushing it down to other states or to the state level or even probably getting new rules on their own and have really deferred to state and local governments to make decisions on how those would apply my understanding is in in similar to us in order to go more comment about different industries I think some of the noise implications of noise for different types of industries and where they're located it certainly seems the current more towards a local local issue and I think it's part of what we're here today well in the case of the noise thing and again where I was really hearing on the on the federal thing. Is the epa chat we say this is not appeared to be a high priority for them. And how it now in fairness to them and everyone the fed seemed to be more concerned about a controlling noise in the ocean ocearina than in the pa you're thinking about employees and loud noises that could you know heard of an employees a year that you have to have your protectors all that and that's fine I get there but if this this may be a dormant thing that they need to look at because there is a a rural versus urban thing generally not too much noise enforcement and rural areas but now we've got this issue coming up so II guess my real question is is this something the epa could certainly wake up to and decide by rule to address or is this something that require action by congress for the two mandate or to give them the authority or perhaps a similar parallel action by the state of architect certain noise levels as opposed to trying to throw it all off on her cities and counties. From my understanding of the existing federal law that is out there it may require additional congressional action to do something without their maybe components of that and i'm not a not an expert not deeply familiar with it causes you said it has not been nearly the priority that some of our other rules and laws from them had been I believe we'll take additional congressional action but I am and i'm not entirely certain of that but based on how this this is certainly a program and I think they can make some recommendations and they can they can gather information and do some research that is very different than a lot of their core regulatory programs which makes me think there would need to be some additional direction from congress on what they could do okay then it did answer my question well to the best of your to the best amount of thank you representative ladyman. Mister chairman my question actually is about water and this question asked a couple times but I want it maybe somewhere else that are ask in different way. The only immersion units that I am aware of urban people have talked about is the unit there in jonesborough. And pretty familiar with what they're doing there so my question is that the process that they use these as I see units are in a oil immersion bath and that oil obviously is heated up so it's cooled by plate. Heat exchangers their water water plate heat exchanges and they have a cooling tower similar what you would see it a power plant might have ten or twelve segments in their cooling tower so that water would go into the cooling tower and come back coolly oil obviously a cooling tower has chemicals that have to be put in there on regular basis and then that water some of the waters discharged all the time so I guess my question is I believe I know the answer to this but I want to verify. If that unit or that facility is discharging to a local water system like a city or or a rule of water system and going through their treatment plant in that would be control by that entity there would be monitored control they have a permit through that entity in you all would only get involved if they're just charging to a creek or river in that case you would have to give them a permit they have to comply with it am I correct in there yes sir I think your characterization that was actually was very it was very good because you captured what sort of the options are if they're going to a larger treatment facility voice or a treatment plant it is really up to them it's really up to the but the permittee that manages the facility to determine what they can take and how that can handle it if in turn that whatever water they're using is discharged through you know the pipe do to creek or some other water body that is where we get involved because that is a that's really clean water prohibition comes in you can't just discharge in that manner especially that kind of process where you're describing so alright thank you. The. Yeah. Thank you mister chair over here why just a point of information since we since representative lady been brought up the noise abatement control side of the PA just a cursory review and search on their show that in the seventies they had that office but in nineteen eighty two in a shift in federal policy they defined it that entire operation and they transferred the control and primarily or responsibility for regulation no ways to the state local government so that's already been transferred back so I also my opinion would be they wouldn't have to have congressional action to to reinstate to you to pursue these these avenues it would probably be at agency discretion in an adjustment on their budget they might have to get approval for that but they could move forward my comments for you and questions for you looking at the agenda item and it says that you were here to testify and provide information of potential environmental concerns with crip domining sites. As a. This point in the meeting I really haven't heard you bring up any concerns that from the agency standpoint you have with crypto mining sites. So could you make those concerns clear and clearly communicate what they are to us and if you have known and could you also provide that information in a statement from the agency. Well. Representative shared earlier the my intent today we were we were asked to count and present and I share that we really have not had extensive engagement on these sites into the extent we have the issues there are environmental concerns from us which is having appropriate affected permits in place have not been an issue because similar what representative ladyman said they may be discharged to an existing treatment play at their drawing power off the grid they don't have a generation unit those are certainly concerned and would be a requirement depending on how they set up and run their operation we can speak to that in and under what the authorities were given under our current state state requirements if there are other issues in this one reason. I gave our being here is to hear it if there are other concerns you all are hearing from communities and and others around that we aren't aware of is is all acknowledged this is a new and emerging very much emerging dynamic field it is possible that the sites we have been made aware of and have had folks from the department beyond site to see we're not fully wear how those operate so if there's others were happy to hear that but they certainly cannot operate in the state in certain manners without right if they had tried to. Set up their own generating unit to generate their own electricity they are out time in the grid they said they're going to set up some something like that it would require permanent from us and require an air permanent and potentially a pretty pretty extensive air permit to meet those requirements currently if they're getting it from you know in introduce facility entregy has a some significant permits that have all those controls in there so in our mind those are those are environmental concerns that are part of these and it's a matter of managing them the way we manage these environmental concerns is through through the permitting process wow again at a guess maybe the agenda items should be in concerns about permeating some so basically if they apply for the required permit to transact conduct business in the state that your agency approves then outside of the the regular established permitting process you have no concerns are you have an express to me any concerns from an environmental standpoint outside of just what we have in per meeting right now in the state is are there other concerns you have that are outside the scope of the permits that you been granted authority to impose then and grant based by the from the legislature that you have concerns all. The. Uh. Based on the information we have about these sites to date I have addressed those that we are aware of their need and it need to be permitted and and i'll reiterate the reason for those permits is because of environmental impacts in those are environmental concerns I didn't make the agenda but adult think that was an entirely inappropriate way to describe it but if there are other items if there's something we're missing if you're aware of please let us know and we're happy to investigate further provide further response when I again I my concerns are I won't hear what you're concerned are from an environmental standpoint not so much what market search may be and look at us the expert in the area but since you brought it permits just for information purposes for the members of the committee the the current level of permits that you issue and approve in the state what is your current backlog on those permeates and wash your turn around time on getting those approved and back to to the applicates so representative we issue a number of different permits I don't have numbers in front of me today on exactly what our timing is on those we always establish a goal on our our major water and air permits we establish a goal of a hundred and eighty days from the time a completed application is received until the time it is issued and out the door I know there from the most recent numbers i'll look at from our air permits we are we are right there right around a hundred and eighty days we are a little bit behind on some of our water permits referred to their behind on soon because of some very complicating issues regarding disputes with that we have with epa about how those were done do not have the numbers at hand on our. Solid waste and hazardous ways and some of those other sites but I can tell you that since taking this role in january one of the things I have pushed my team and and miss taylor who's hearing me today is actually my point person on this is that we are beginning the process of consolidating the information we have to better track the turnaround towns on our permits cause we recognize the the town the issue it's of good defense for permissions critical not only to protect the environment the state but protecting the economic development in the state and it is something that we are working through the process of better understanding where we've been and how we can get better and i've challenged each of the air water and land offices I described earlier have given them a charge of working to continuously get better and get our times better now i'll admit I think we have been. We've had some significant permit since the significant challenge is on a few particularly in our solid ways and a hazardous way section in our as I said our was water air his had some challenges but it was risen to the challenge and we're working on getting good solid numbers so that we know where those are I will admit this is far field of where we are in this conversation but the challenge in hiring a retaining engineers who were the ones who were writing in a valid in these permits has been a significant one but i've also challenged your team we're figuring out how we get better at that because we ought to the people of arkansas to the very best job we can and so we're working hard at it and hopefully here in a few think we really need a few months to consolidate and make sure we're really tracking correctly but hopefully later this year we'll be able to share with with with you and others assign a where we are and be able to tell you straight up what we're doing to get better about it well I have one will say that appreciate warned that the acknowledgment that are that there is an issue in a problem and the fact that you're pushing your team to correct that problem turn around because once they see on this site two things that i'm unpassionate about one job creation economic development and then protection of the the great resources that gods given the state of arkansas so I applied to for taking care of that and I do look forward to that point where we can talk in and and everything so up to date and and on mark so thank you for being here today thank you not I think that it for the committee members thank you both for for being here today and please keep us posted of anything that comes up in this regard. So we are now to the public comment section so we're going to go to that we have five people signed up to to speak to us this afternoon for those of you that are going to speak as you can see we're getting down to the needy gridy of all makers who are still in the room so just a couple of things i'm going to ask of you please keep your comments to three to five minutes so that everyone has a chance to have their say also as you're making your comments we do want to hear your comments we do want to hear from you from your concerns any suggestions you have but please are refrain from any you know accusations name calling any of that kind of stuff we want to keep it keep a professional alright so we're going to call you up one of the time mr jim hall you are first or if you would just have to see that the table and turn the microphone on and. The. Now when you get settled in this introduce yourself to the committee and then you're recognized for up to five minutes. The. You know this are we got I am jim all a **** move to the ozarks I would have to come out of rein retired because there need to be a voice. Last year mobile argent. See all of her some regional chamber commerce started making his rams to the council corn court. Moan can republican committee. He should have a bare huge bone coming to bone carry a huge bone comma megagrivilus drink just around a corner. Now I hope everyone will go listen to the uh harrison hearing children in use are we appreciated center came bringing it up there I know how hard it was we were hoping to see center gill more but that's a six hour driver better I think so we understood we had bad senators to represent it showed up and that we had a good hearing. But we had some manage and i'm not going but we had some sit right here today. Consider king asked in the question. Did you write house bill seventeen and an in here he said no in harrison. They are blocked chain council said they did ride now something else I took credit for in harrison was. Father know who the bad actors were. Lady able your sign up come up here soon lives partisan and her team or medication global. Green digital. Whatever other names you're using. Researchers have been canny harrison. We discovered who they were and that's what I want to share with you now there was a meeting in harrison that nobody's asking about but us december twenty second two thousand one into bottle argent chamber of commerce ahead. A representative from enter a matter here. Now known as green digital. Made it a restaurant. According to medications now. Deleted link page they made a two point five million dollar investment. According to the. Check around on the board of the hair some regional chamber commerce came home and publisher the heritage daily times. They made a two point five million dollar investment. Hook out what. How much do you get was this a bribe. Two energy. To allow these people to come into our state and take her energy. We don't know there's questions nobody's asking. We have been called round zero. Her big coin mine crypto money. We found we stood up term we were beautiful whose city hall each eighty three people if you open the big doors. Over two hundred showed up type of twenty fifth meeting. Over a hundred spoke there was hundreds outside billing could get in. A camera was made by state representative that no one came here and spoke out against this. In the committee made. And we did. We had know about it. It got slipped in her point i've heard a number of different days spell combined different members of the legislature we didn't know of that. Or we want to spoke out that understand these noises can travel several miles. Can you imagine a new encounter on. At their power substation just across the line from county and emparassing its one and we're both noise when made. You wouldn't want to come to the buffalo national river you wouldn't want to come elcose or you would be able to come here coding because you would meet you the robert should and noises which care all of them. Who are many fishing for a trial. This is that just a very minimal problem in economic problem that. They should sum our porch counties seriously. Their money is interesting there is somebody looking at land. On how sixty five in share she cannot near the bottom line as your river. They're trying to balance we don't know where they are but we're getting word that you're trying to buy a lane no one were concerned you didn't. The. But right now if you give me a credit card or myself and miss mister how you're five minutes is up so if you would please wrap it up in the next few seconds it's a llc six of them are season registered to a gang come in for your china. And I can create you and ls and under five minutes on saturday stage website there's no check and balances there. The only one a hung farmer above we don't want crypto. Okay many members any questions for this witness. Same name thank you mister offer for being here today next we have that merry west. The. All right miss west thank you for being here today when she gets up and then if you would just introduce yourself to the committee and then now again you'll have five minutes. I'll make sure you do your microphone force. Yeah there's a button down here at the bottom. Very good all right now we got you my first time doing this hi my name is very west and a concerned citizen in about six months ago I started to help fight the wind farm in. Green forest and one of the things we couldn't understand is when it had the lowest window eatings why there were then later when we learned about big coin it all made sense they wanted the water we need to protect our water so my notes now just from listening today are a little bit hard to participate let me quickly go through them i'm gonna talk ask as you can relisten to this so first of all just an overall one because which you probably know it does contribute to money laundering and human and drug human trafficking and and drug trafficking. An article twelve twenty six two thousand twenty two per the ftc forty six thousand people were scammed one billion dollars in crypto. I'm sort of like a column both column comma collaboral and who pays for the water sometimes we just have to ask simple question who pays for our water. Can towns exist without water. Can you can anybody exist without water can our wildlife exist without water and clean water. These tax subsidies there are coming through the re investment act there the truth is is their side stepping almost all environmental regulations and all regulations that's what you guys need to understand so no matter what they're saying they can side step the relate regulations there virtually are none through the biden administration the money is up to about five hundred billion dollars most of it anything that has to do with climate change in a renewable energy pretty much taste a china. And their side stepping their regulations please understand that point. Who prevents stealing of electricity on the grid. So the black block count and sold that we heard today if there were tender fifteen and as of today up till today at these bitcoin operations. They were illegal who was monitoring them. Was the block chain council does noise it's more than noise you guys this vibrator to death. Please hear me it vibrates you to death it is a chinese sonic war weapon. I can give you more information later and you can also look it up did cameron baker leave texas because the regulations because became stiffer there and that's why like china the facilities are all coming here because it was banned in china and about ten countries that's why it's coming here can we not learn out less than from other countries why they banned it there. How come in the block chain law that supports. You know the black chain lower that's a supported this lie why did they say in there to take away our local control. Does that mean they're really for the citizens of arkansas are they for every one of you in this room I don't believe they are for me or for any of you. We all know if you know anything about the energy filled the renewable energy electrical only is not a redundance system solar only is not a redundant system it does not reliable there is no case in the world not anywhere in the world where the energy bills did not go up because you're paying for the system right now. That is why you're groceries and your gas are so high and can arkansas people especially afford this. I care. Immensely I care about the mother in the father who can barely feed their children right now. There is an article that send environmentalist sorry my own handwriting it was eleven to two thousand twenty one and baroness environmentalists for sending a clear message to politicians they were talking about the electronic waste it's as much as the netherlands thirty thousand seven hundred tons who is going to regulate where that's all gonna be dumped. What do you have in place for that it's the computer equipment that lasts about one point two nine years to all the chips and those chips are increasing the already the chips are already we don't have enough in the world so it's complicating that problem who's going to regulate that mislast year five minutes is up a few good bringing in for landing here I know it goes quick but if you could bring it in okay here in the next few moments okay to just okay let me just foot my page because I do have just a very important ok what makes electricity I think sometimes we have to be simple it's water this issues about water we do not have enough water to sustain this that is the most important and the other glass point is than texas in two thousand and twenty one when they had the storm they had to pay one hundred and seventy five thousand dollars an hour to that single poor chinese own company you always have to look for the chinese connection when it comes to renewable energy the taxpayers had to pay that. What do you have and place our citizens here in arkansas do not have to pay that. Okay miss was would you take out a question from one of the committee members yes I have lots of questions alright representative beating is over here well and I was early on in your testimony you stated a number about bit coin and and the cost to americans what was that number that you yes sir one second and i'll be happy to get the exact source for you promise after this cause I am factual I just wrote this really fast sitting back there just a minute it was very promised that all the and you guys I just want to say while i'm looking for that fact for him I really appreciate senators and representatives now in how hard your job I have really seen how difficult this is ok so per the ftc I believe this is the number you are looking for. Forty six thousand people were scanned one billion dollars encrypto with the crypto schemes and that was as of twelve twenty six two thousand twenty two so i'm sure that number is much higher and I can also provide other pieces of data for you that are on my phone so my my question is do you know what dollar a mail american suffered from internet scams in twenty twenty two. Um it was an average of I do know that number I think it was like twenty five or twenty six hundred dollars no no no ten point three billion dollars in twenty twenty two I was just talking about per average per person sorry the number of ten point three billion dollars that americans were scammed out of own internet scams in twenty twenty two about fifty fifty eight thousand people that were scammed on there so it was keep these things I mean any scam that cost folks money is is a detriment and and skirts of society but putting those things in in perspective based on some of the arts here we would be in the internet because of ten point three billion dollars impact on on folks being scammed there I think the key years to have safeguards in police that protect the americans consumer and give some. Maybe some carpeters in the system instead of just. Eliminating the systems so ten times the impact. I'll internet schemes that you paired with crypto currency just kind of something to put it in perspective thank you. Alright saying no other questions misless thank you for remaining here today rebecca smith in your next. The. In miss mouthly will introduce yourself in it I am a wreckers may have that live in fault we're counting and I would just like to thank all of you today for taking our comments and are concerns. This says it has been an issue that has that arose approx my six months ago and of course it was very new on most of our right are. What I would like to ask you is what are the benefits to our cansons what are the benefits and these cripped onlines that's that's the magic question I live like I said in fault we're counting we have a mine in mono which is a little bit north of green prior the as one of the gentleman were talking about the bad actors this is a bad actor this minute it is less than one hundred feet from a residential property there is a family that lives in that home a child a thirteen year old boy with artism. This mine has been app and running for I want to say three or four months now and it goes anywhere from fifteen fifty five decimals happening that's the the correct word two about eighty eighty five at any given point in the day this is a very very damaging so when we talk about actors that's a bad actor there was no consideration for a family right next door to this mind now this group of inbound I believe was also associated with the group and harrison and bolonia and so I guess there's ten fifteen mins at arkansas. I just I just ask you again what's the benefit what's the benefit or kansas we we know a lot of the negatives but what is live in a fantastic i've made a lot of notes and I won't get winter a lot of out but I just want I just again I just want to press upon what the benefit is I appreciate you send her johnson speaking on the hard form that this really is no different it's impacting this family you know who is going to be responsible for this family's mental health because this has been a constant running for three four five months now for this family her living room is about one hundred and twenty feet I believe for the mine itself that's outrageous so we had a gentleman here that I had to leave he lose two doors down from the mine I mean it's absolutely absurd that these minutes can go in next to people that are living in in their house that is that the one gentleman moved here from oregon he moved here for you know a wonderful life here he now is two doors home are crypto mine that is running non start where is the regulation on this I mean this is in the county my my understanding is avolonia shut them down in the city now they are looking at land at an county so I mean i'm not against the data and not against digital digital currency that sort of thing I am against the central maintenance or currency because that is taking away all of our freedoms. But where is the regulation who when it's enough enough this family has been suffering the families that live near this particular mind in bono i've got family and wooster which is right next to bono so I go out and I see it in the driveway at this home and listen to this and this is what the family is listening to twenty four hours a day. Thank you for listening thank you for taking our comments I just ask for our elected officials to do their new deltance look into this. Deeper in deeper. There are then I want to say what I want thank you thank you for your time alright thank you miss and just kind of on that that point she is one of my constituents in the lady next doors one of my constituents and and I just watch all to hear that noise. The. That's. That that's what she's talking about that goes on there twenty four seven so in it that it's it's definitely unacceptable no doubt also to point I should mention this earlier representative cooper does have legislation to try to handle the deciding location so i've got something on noise and energy using out something on siding a location so our representative of accuming senator johnson you're recogniser. Thank you mr chairman my question was was from his wife but she can not away from the audience are called me later and you're always welcome to do their own course of the fat mechanic corn court passed and ordinance related to the could you just tell me or do you think it's adequate or are you what what would you have have recommended differently if you don't thank you i'm I know there is no perfect legislation but if you think it's a step in the right direction horton you're comments on what the forum I think it's a step and the right direction if it's gonna be enforced so the lady that lives in the home next door has called to file a complaint the sheriff's office they don't have the proper tools there's nothing they can do right now they need terraining so please keep me in the loop on this because i've not hate to say it's a it's a. Like the old man magazine spot versus by they do something and you gotta go do something else and then we respond to the ordinances up and then they they come back so please just keep me in the loop on that and I appreciate we'll see I will just say she's a very very frustrated with that and now that there is a noise ordinance what are we going to do with that or is the are the minor is going to only be slapped on the hands fine and they'll just pay the fines and continue on this is why we have hearings and while we have to meet regular leaders fast thank you thank you me my legislation will take care of that rather way for get that pass but that's. Not that i'm trying to sell that here but that's not definitely something we need to handle miss black well you're next. Alright so again thank you for being here once you've get seated if you would please intergust yourself to the committee and then you're recognized for five minutes. The. Now you've turned it off. It's my name is military black well and i'm a registered nurse and i'm glad i'm here because there aren't any health professionals here today so what I have to say is can I am important but before I speak because what I have to say is very short and concise I do want to share it misback where would you pull that mike a little bit closer so we can make sure you're your comment sure. Sat better. The. This is more than just noise. This is waves of energy. An energy through noise like music affects liquid. It affects the human body. And that's what I want to talk about I don't care who gets rich off a crypto currency I don't care if we cut all the trees down and like birds bees dear all that they didn't matter to me. What matters to me is that in saying that it is okay for this to come in to the state that these things are going to go out in rural areas where very few people live where there's not a lot of legislation but those people will be affected this noise sustained we'll shorten people's life spans. So I want to know how much. Is a year of your life worth. Because that's what you're saying. You're saying yeah let's have this black chainstore just because you can do something doesn't mean you should. The arkansas apartment of hills stroke program director doctor elisa brown. Has testified to the symbol on you about the increase of stroke risk by thirty percent of people that live close to this now you may lightly other than a neighborhood where one of these go win because you live somewhere else but is it okay for your neighbor. To have that stroke risk increase. Are the artistic child who is beginning to have behavioral problems in school because of the insarmer and his inability to process stimular like artistic and neurodivergent people do like veterans with post traumatic stress disorder. This is the people that were talking about this is not some little get rich thing you'll. I mean it is sucking up forty you know forty percent of our electricity is generated by a non renewable natural resource gas. And water is considered a limited resource. I don't even care if we use all that a men well does that you can all we can all just direct from crypto okay. But allowing children and elderly people to be tortured. Our after hour. It's a slow death. It increases depression in increases hospital bills. People's blood pressure goes up they have taken cardiar increased pulse rates. And they have a lot of vincerbia so they have accidents that would be preventable that if they were well rested they have issues with work. Because they cannot pay attention they're so exhausted. Imagine if they worked at the same meal that we talked about earlier the theoretical and they had an accident. Because of this this is what I would like to tell you. And that all i've got to say thank you all right misplacable thank you for being here so new questions folder you are last. Okay so again you'll have five minutes I miss another makes thank you for this meaning thank you for the people home how the patience to be here. There's no many left my name is my father originally from chile my background is. I am a big them up common I was I am aware of it of better non better in. With very very strong bustromagic synthem paypass away in two thousand nineteen she never was able to get out from there. My father law was in the ground war. Most of my family and friends. I'd rick them up communism in my statement today is to focus and how we're going to become a victim of common issue. A week let this lol. Is state and the way it never feel I have been talking with people. No many of us do they we make it why because airport they under time you're west getting together most of the people have they are working but we have a hundred of hundred of people signatures. Who they are willing to talk with you to. And tell you. This lot never supposed to be bus never. That against our rights. This long take the right from locker local governors. I meant mayors and city councils I mean. Charges county charges power. To do the best for their locals. For the people for we the small people we are not reach we go to work every day to get our check and today with the economy huddle hardly we can make it. I can guarantee you descript the mining issue is one of the thousand fingers of commonism. The. They will find the foreign ways to take this south. And I tell your nobody told me here this in the united states they told me the higher intelligent people in my own country. Shines looking for the south they know. Here you guys have more weapons than anybody can even imagine her. They cannot control you. And the biggest part of this is because this part of the country is creased in. We believe in god. Shy known this morning for you know it's a work in intengious project to change the bible. Do you know that. Okay. In nineteen seventy shina create the first international bit of filia ring you know why because they want to use that has to talk. Two get you guys to put your nice girls or boys or put you in the dirty business so the later on they can just do it to just you. Okay. And nineteen eighteen four forty nine are really. In russia they were looking the way to implement the abolition of family. That is the ground they have. Destroy our basic values the more important but I tell you something none of this things i'm just name into your there juice and in their own country. Now they gave more men they gave moment if it's that are really entered in nineteen eighty four why because it's also it's one tool to destroy our society our family why have to be a big deal with gaze will within his so we have so whether the point I trying to make today to all of you to please look deep and this think about why president charm in twenty twenty declare stale emergency any of you know why. He he hit the clear is the emergency white because he order one of the transformers who been purchased from china volunteered an investigated when they come in the front of him with the report what was there must be fallen your five minutes as opportunities to have finished. They have found a base where china internet on and off the doser element and then the thing is here before I leave this. This time. I want to ask you to you please go there we have told many issues related to crypto mind today is true but none of the things you will can provide to their citizen of arkansas is china take over our country do you do you know they have already put it martin and my work in our system in the government is dealing with that right now okay listen the day when the chinese flag it they put the flag m in the white house and then you will realize what i'm talking to you is something real grip to mine is one of the finger to destroy our bank system and our dollar why do you want to destroy that one is the more wonderful thing we can have in the world that that is our currency we don't need all the currency so please I ask you. Go there what is the reason why china von have creeped on mine in china thank you thank you any questions for this alright saying none thank you for being here today for your time ladies and both of you would come up just for sake at times it's it's when we've been here over four and a half hours now and I know everybody is ready to get some watch if you too ladies would just have a seat at the table there introduced yourselves for the committee and all that both of you have a couple of minutes. I just pushed the button at the bottom of the microphone turned on there again there we go my name's elizabeth torgerson I live in harrison arkansas. My one of my main concerns is with regards to the bill. Er and well eight fifty one the last section the last four pieces that section of the fifty one. Ha take a breath here it's specifically targets. Local governments with regards to restrictions point into the fact that local government barties are only mentioned in the four shall not. Statements in the law. Now these two gentlemen from whatever mr hartford and. And they were the two that represented and. Proponents for these two bills. But yet how can you allow and I and I state this with you you can't leave those who created the problem in charge of the resolution. Just let that sync for a second. Couple of questions that I have with regards to the public service they said they state the arkansas public service they stay there they have to have a surely bought. My understanding of a surely bond you have to have a valid residence or valid address. The sites that we people discovered for green digital and arm they went by medicash green digital new raise and they keep changing our names. When they filed their documentations for llc they listed their fiction's address. Now how is that veteran okay that's a question for our I guess our sector secretary of state I have that same question then for our public service you have to have a shirty bind are you vetting those addresses. That's just something to think about on some of these. Also what kind of get me starting or give you quick background we were told that a town meeting clear back in april from a representative of enter announced himself as a representative from entry that during peak hours we would have to curtail or cut our usages of electricity to avoid a blackout. Why do I as a home owner in a consumer have to consider curtail my usage for a business that I have no interest in it doesn't bring anything to the town of harrison. Minimum of two to three people to operate it I understand data centers i've worked in data centers i've worked in banking and I understand server rooms and build goods that they were selling at that town meeting is what got me fired up and got me started looking everything up and finding out a lot of bad actors so again. Please look at eight fifty one read at last section because right now our hands are tied our hands are tight thank you. Hi my name is becky myers and i'm also spend harrison. And are as far as the act goes my understanding and the research we've done not just myself but many others are satashy action fine is writing these bills all over the country. They are proof senting them to black chain councils i'll over the country there's another one in texas they're everywhere and. Dennis porter of the ceo of satashi action funds said bitcoin miner should be proactive with regulators this is an organization whose goal is to build the political infrastructure from the bottom of the money for the bitcoin industry. The ceo found are also says through the twitter topic his vision is the appropriate strategy to count her regulation attempts against betcoin mining. He also states that the case requires the organization to coordinate introduced terrorist cases to utility companies. This guy I can't prove their front china and that this came from china this company. But i'm still believing that china did not give up the coin they sent them out into the world to use r energy our water and are a carbon footprint to be built up. It also says that where did you say that. We passed our rights to mind bitcoin bill into law in the state of arkansas and montana this is on their website. Both were signed into law in both law protects miners from specific types of discrimination like. They can't they can make all the noise they want they can do whatever they want and also insurers local governments are. A or are being taken care of with these bills they're passing. Um where was it. What we focus on is a bit coin mining because I can say that it coin minor can provide jobs what jobs two or three local investment grade stability what does that mean local and when everybody's got to have blackouts they're saying things that are not true environmental clean up how can it be environmentally clean up when they are using so much electricity and their carbon footprint is huge the ability to enhance green so we're going to spend millions of dollars on this kind of energy are that we have in our community so that maybe we'll have extra dollars from our taxes to do green work. But it says how can any policymaker on the planet hearing this. And these things that we will do that they won't follow our. Requirements so they're acting I think it's right on the internet that they're out there trying to manipulate all of us then it goes to arkansas then the big coin council or owners of the crypto farms. The crypto farms they're secure the highest value location for their companies there are coalition with the crypto mining to for their container hosting their energy management grid assessments power purchase agreements this company this organization here is feeding their people to them so that they can purchase the agreements and public special reads for a case negotiations and sight developments designing the value of engineering this is a systematic attack on the united states as far as I can see they are all over this country and it does not mean yeah it's just crazy thank you later would you believe in two questions getting our representative eighty at mischief my question goes back to a previous individual that was at the table about some comments that were made and I would ask to ask those questions not for the ladies okay any of anybody else for these ladies. Okay saying known ladies thank you for making the trip down here today for sharing your concerns with us appreciate your time please really look at eight fifty one the last four percent of who would you like to the question for mr jim hall mister how would you be wanted to take a question from one of the representatives at the table. There mr hall when you get settled in in representative eighty or recognize your question thank you mister chairman. Now now that your customer is already finished i'm sorry just yeah II guess my question during your your community you made you made a statement related to two and a half million dollars maybe a donation to the city of hairs under to the chamber and you reference the word bribe and I was wondering if you could expound on that sum and maybe clarify or are be more exact with your words on there than what you were in your previous testimony have you got a losers group made a hash low slash green digital. There is documents owner they screen shouted the lady who actually came to her son for me to have slash green digital. And she states on her linked in page has now gone but we've got it saved on that there they invasion two point five million dollars be more and invested can you explain that more cause you said bribing them in change and investment you get a return the chamber of commerce tells anybody who gives money to investors so they made a donation to the chamber of commitment so I can't but the three parties in intertable was this is what they say at a representative of introductor former now former called hers and chamber and it's like you for matter hash we had jim holland chairman of the board published by the chamber public sure the heritage posted in a mail edited blog on the hairs and chamber of sight that these people were in that meeting and I invested two point five million we have tried to find out who that was. And the general consensus of the people the way docting out in plus members of our group. A no getting a government committee and the general consumer sales should say one pop to us we can't for you the chamber we can't for you introduce nobody on tell us exactly who they gave him energy it may have been now a former employee that is working for green I don't know. We don't know that some problem with all this we can't find out and the in the more we find out the more question mister hall might I guess my my whole point of bringing you back here and I and I don't mind I really don't want to be confrontational but the language that you chose to use right I guess come in in regarding your chamber of commerce. One of the public set corporate public citizens at the state and entregy and the word bribe for a donational investment in your chamber of commerce that's going to directly come back in benefit the members you committee I find that reckless and I wanted to give you an opportunity to maybe change your words or maybe use more guarded language than the throw brian out there for something that's just an opinion and it it sounds like if they gave two and a half million dollars the the person that got that are the place it was given was the the chamber of commerce that was an investment back in the community that could be utilized for the benefit of of the members of the chamber in the members of the community I mean I can understand maybe your perception so my question is in canny maybe walk that back some and not be as reckless with your comments as you're being are understanding from what we've read above parties talked about that meeting is there was a contract written. Members of the contract was introduced. The hers and regional chamber commerce and medication of green digital so have have you seen a contract or do you even know that there was two and a half million dollars donated to the chamber they have heard this all speculation have used the term non disclosure. So we don't have anything else that we had no idea your verbal comments today that this committee to substantiate or back any this there's no fact we have made a hash in the chamber chair the more saying there was two and a half million but they will not say where it went who've got it how much okay well you know regardless of where that we are the using the word right again my my comments would be if if there was a donation to the chamber out I would maybe phrase there's a donation and not a bribe and I just found your comments rather reckless I don't want to give you an opportunity to correct their apologize for the long term alright thank you males were suggested delivered to the boundary for a salem mitigation. I just got to picture from I raised it in a falcon can in eight bills are being unloaded right now and that is a fine thing bank thank you all right colleagues I appreciate charles hongeville today spent a long day there's been a lot of information that has been shared obviously this is something we're still going to continue to look at going into the future and they're being northern business for the committee we are turn.