City, County & Local Affairs Committee - Senate

And before we start, I'm gonna, uh, Ask you to bow with me for a word of prayer for. Of the accident that happened last night on the Potomac River and uh let's pray for those families. Father, we thank you for your mercy. Thank you for your grace, uh, that we can even get up each day. Thank you, Lord, for your promise of always being with us. And I thank You, Lord, that you take our troubles and And turn them into peace. A piece that we can't even understand. I pray for these families, Lord, that you would just Comfort them And pour your strength. Your piece out on them this morning. He exercises. Lord, they grieve for the loss of their loved ones. And I asked this name of the Lord Jesus. Amen. All right, 1st, 1st order of business is, uh, Senator King, Senator King down here. Senator Hill. a You go at the end of the table and recognize yourself, you are recognized. Thank you, Mr. Chair. Ricky Hill, Senate District 11. Do we have an amendment with this? Yes, we do, sir. OK, let's, we need to go ahead and deal with this amendment. The amendment basically strikes on page one, deletes lines 35, 36, and page 2 lines 1 and 2. And, and the reason for this amendment was The reason for this amendment is because it was an era when it was engrossed. OK. are Any discussions on the amendment? We have a motion to move to adopt the amendment. All those in favor. All opposed. You remember. All right, you're Hill. Thank you, Mr. Chair. This is a Senate Bill 60. Which is a crypto bill. I know we've all debated crypto left and right, even brought up during a special session, so I'm not here to debate crypto. What I'm here to discuss today is uh A little safety mechanism to put in every crypto. The state of Arkansas has roughly 53,000 square miles in it. Got 5 facilities listed here and they are listed Little Rock Air Force Base, Camp Joe T. Robinson, Ebbing Air National Guard, Fort Chaffee, and Pine Bluff Arsenal. Those are the 5 facilities that the United States considers major military facilities in the state of Arkansas. And I'm wanting to put a 30 mile radius around those to prevent a crypto mining facility from going in. That's pretty, pretty much all it does. You come on back over here to page 2. Section 2, I actually used the wording. from what we passed during these special session that the oil and gas commission When they issue their permits. That that falls under those Satan guidelines that we did back in Senator Brightsville. With that being said, I'll be, I'll be glad to take, take any questions like I said, the main, the main thing that uh I'm wanting to do with this is the uh Our military, as you know, is under a lot of stress, pressure, and they're always in danger even when they're in, out in training. This just alleviates one area. I know the crypto crypto facilities say that they cannot be Um Manipulated And I want to say that if someone can build something, someone else can tear into it. And with this, I'm just wanting to try to make sure it's a safety, safety issue for our veterans. Alright. Uh, we heard an explanation of the bill. Any questions Sen Wall? Thank you, Mr. Chair. So to heal. You said it would only be 5. But, but the 5 major military facilities in the state of Arkansas. OK, so it would not be around every National Guard armory every other facility, just those 5, just those 5. Yes, sir. And those again are the Rock Air Force Base. Camp Robinson Fort Chaffee. Abbing in the Palo arsenal. Thank you, sir. And I certainly think we can recognize the The necessity for having 1 or 4 Uh, Senator Brian states as an issue, but if it's, it's not owned adversarially, what, what is the threat that we're trying to prohibit as artificial intelligence continues to improve daily. We've got a lot of issues here that we, that we're uncertain about. And I'm just trying to alleviate something from happening that could possibly happen to our veterans who are out here serving this country, putting themselves in danger every day. So we're, we're uncertain what those threats are. It's always an uncertainty on any threat, but as you know as well as I do, are Airbas, military personnel, someone's always trying to break into their systems. They're always trying to do something that's a known fact, even the Pentagon. Can be maneuvered into and so this right here is just to put a buffer around them. We have no-fly zones in areas. So this is just basically a no crypto zone and like I said, with the state being 53,000 square miles, if we can't give up a little bit of space for security. What can we do? So as the federal government weighed in. I mean, they've got national base, they got bases all over the nation, and they've gotten crypto mines that are Many, many sizes that, you know, bigger than what we do here in Arkansas that are allowed to operate and remain to operate. Has the federal government weighed in on the security issue. I have not asked the federal government to weigh in on this simply because sometimes the federal government moves slow, and I feel like we need to move at a faster rate and is our job as legislators for the state of Arkansas to protect our military personnel. OK. And I'll continue, Mr. Chair, with your permission, unless you hold me back, just a couple of questions on the bill. OK um. I'm just in reading, reading the bill and some of the amendments, it, it kind of tell me where you're at, sir. It is um. Be page 2 line 5. Page 2 95. Unless the asset mining business was issued a permit by oil and gas on or before December 31st, 2024, that shall not operate within and they shall cease operation. Um Oil and gas is not finished the, the promulgation of rules to even issue permits. Do you find that we're kind of opening ourselves up to liability, saying you can operate if you have a license that does not yet exist. Well, they, we passed this back in June during our special session. There's no reason they should not have already had that done. So we took, took our time out, maybe they need to get on the ball. Maybe they need to do their job. So we're, we're opening the state up for a little bit of liability that because we haven't quite tied off the issue. I don't feel like we're opening ourselves up for any more liability than what we're opening our military up. OK. OK, thank you. All right, any other members have questions? No more discussion. All right, Central here, you're breaking clothes for your bill. Yeah, the audience in the audience. Sorry about that. Anybody in the audi you come to, come to the end of the table and uh And state your name and who you're with and You'll be recognized. They mean to leave you out. Is that, is this what we got I didn't see this. Thank you, Mr. Chairman. My name is Bill Vickery with Capital Advisors Group, and we represent the the Arkansas blockchain Council, which is a consortium of the mining operations. Vicker, you're, you're recognized to see. Um First of all, I want to say I have a lot of respect for my, my friend here, uh, and so, uh, it's a it's difficult to uh to oppose him on on issues because I do respect him and he is my friend, but as we, as we look through the bill as it's been amended, there are some issues that do pop out in terms of uh just the structure of the bill itself and then the implementation of the bill and then ultimately the impact on cities where mining operations currently exist and pay sales tax on the power. that they consume. So if we, if we look at um The initial section 1 where we determine what a military facility is, as we move through both we noted um The Rock Air Force Base and Joe T Ebbing in Fort Chaffee in the Pine Bluff Arsenal. We do without, without clearly defining uh we do get into as it as it reads, includes without limitation a military base or camp, hospital or clinic and arsenal. Oh, I'm sorry, that part of the amendment. OK, so we I apologize. We weren't aware, I mean, I, I knew the amendment was voted on at the table today, but we didn't familiar. OK, yeah, I, I, well then I apologize for that simply because we were unaware of that before we came in today and, and to some degree, the reason that I'm testifying today and, and the folks that that that actually own the mining operations is we became aware of the amended bill, you know, late last night and so I'm here this morning to to try to testify. Um, so continuing on, The, the key element for us though is in Section 2 on page 2, where we get into uh as, as Senator Bryant noted, line 5 sub subsection B, unless the digital asset mining business was issued a permit by the Oil and Gass Commission on or before December 31, 2024. Additional digital asset mining business shall and then not operate cease to operate on it. So we passed in the fiscal session, um, the law that we operate under now and you're all familiar with it, um. And then it went into effect a number of days later, uh, calling for the oil and gas commission to promulgate rules and regs over the course of however long that took. It's an impossibility for any business to achieve subsection B and Section 2, simply because the permits did not exist then, and they do not exist now because the rules have not been fully promulgated. I haven't come before you for your final approval too. So we would be codifying a, a physical impossibility by requiring these permits to have been granted when they themselves could never have been granted because they didn't exist. And so that would be unique to say the least, uh, in terms of legislative action, um, so, so that's an issue that for existing businesses. That may be inside the range and inside the I guess the newly defined area. That makes it an impossibility for them. That gets into a number of legal questions about does it become a taking any wide variety of legal issues that are opened up as far as that's concerned. Then we get deeper down into the bill into the intent section and we note that as far as the emergency clause is concerned that there is a risk from digital asset mining. I'm on the final page now. That says that without without limitation, threats to national security and you know, a major issue here, I guess, is that Andrews Air Force Base, uh, where the president's plane, Air Force One, takes off and lands, has no buffer around it that Fort Knox in Kentucky has no buffer around it that all of our nuclear arsenal in the country today, there is no geographic or real estate boundary that surrounds it. So I guess a question from our point of view is, if this indeed is a national security issue, why has there been no DOD finding of fact. Why is The Pentagon not weighed in on this. Why do we not have the current commander of the Air Force base asking for this and, and the answer is we don't know, uh, because the machines themselves are relatively crude in terms of computing power. There are any number of other computers that are located physically much closer to any airbase or any of these military facilities for Chaffee or or Ebbing in Fort Smith, which are critical and there is no doubt about that, that national security obviously is a preeminent concern, especially for the airbase here and the airbase in Fort Smith. But the number of computers that are much more sophisticated and easily more weaponizable and actable that that exists within a shorter span of real estate, uh, sometimes, you know, within, you know, less than a half mile. Those computers have a significant amount of liability in terms of being weaponized and utilized against. And then lastly, just because it's all online, the actual distance itself becomes less about the the buffer that's created and, and actions are taken in other countries that impact computer networks here in the United States. So I, I, it's a little bit of false hope in that if you can get a physical barrier that will prevent a digital attack. So for all those reasons and especially sort of reiterating um section 2, subsection B, the fact that a permit is required, but the permit doesn't exist. That uh that opens, that does open up the state in terms of codifying something like that, uh is a is problematic to say the least, simply because the bill would require that to happen and the permits still don't physically exist. So With that, I'll attempt to answer any questions, but as Senator Hill knows, he got the C team today and me, so. Art committee members, uh, any questions? The growth, the growth of AI, would, would it have What would What effect would it have on this? Um, I am Senator, I am way out of my depth when it comes to artificial intelligence, um, I, I can only speak to, to this particular issue and, and, and understanding the very surface amount of the business that I do, that the computers themselves are sort of one dimensional in nature. They're created to do one thing and that's mine, and that's what they do. Uh, I think, uh, you're, you're talking about a very open-ended subject that I am in no. way qualified to the reason I ask you that is I heard a report yesterday that uh We had assumed the Chinese were 2030 months behind us and instead they're, they're more like 3 months behind us in a, uh, so I, I was just curious as to how this would affect the digital digital centers. I, I do think it, well, again, um I also read that and uh I, there are again people much smarter than me to comment on that. I'm, I'm out of my depth on that. OK. Mr. Mr. Cummings, you have a Thank you, Mr. Chairman. I'm Bud Cummins. I'm an attorney. I represent the Arkansas Crypto mining Association, uh, I'm not going to Mr. Vickery did a good job of pointing out maybe some of the flaws. Certainly, uh, like Mr. Vickery, I commend Senator Hill for being concerned about this. Technologies is evolving very quickly. I'm a former United States Attorney. I, I served during the time immediately post 9/11. I served on the Attorney General's Committee to develop we basically stood up a domestic counterterrorism program that didn't exist before 9/11. I held top secret. SCI clearance, uh, I'm not insensitive to national security concerns. My concern here is that The people that should make those initial judgments about where the threats are, I think are in Washington. Hopefully they're they're studying these, these issues carefully and until we hear from the Air Force base or from the Department of Defense, uh, you know, my concerns about takings and and just just jeopardizing legitimate investment in the state of Arkansas may trump that and until somebody tells me there's a threat, then I'm more concerned about, about having a system. We people, this is, you know, this is a growing industry and we want Arkansas to get its share of the investment. So if somebody came to me and said, you know, 11 thing that concerns me though that we didn't mention is, you know, there's kind of a retroactive authority here for the Attorney General after a permit's been granted, somebody's made their investment and has stood up a facility. It appears to me that retroactively someone could make a complaint, the Attorney General could go shut them down and completely ruin their investment. So I think from a, a, you know, uh uh a business standpoint that's troubling if somebody came to me for advice and said, you know, is there a risk here? I would certainly say yes. I think there's, it's a it's a tremendous unknown created by this bill about the reliability, your your ability to, to rely on your permit to protect your investment. So I think that that, that facet of it is also a concern. I, I would just recommend that that it would be better to wait for An identification of a specific threat and address that, but I certainly don't think it's inappropriate for the state of Arkansas to be concerned about that. And I think that's Otherwise, I, I, I echo Mr. Vickery's comments. Thank you. Lady, uh, any, you know, Senator, thank you, Mr. Chair. 11 question. I don't know if if uh you two gentlemen want to address this issue Senator Hill, but just kind of going back to the, to the crypto bill. There's nothing in here that's changing the ability of a county or a city to enact an ordinance. To, you know, regulate noise or energy whatever. Nothing, nothing is changing. If they don't have an ordinance, they can't, to your point, go back and make it retroactive punitive retroactively punitive, but they can enact one in a proactive way to address it. The way, yes, the way we read it, yeah, that's correct, that's what I thought, but I just want to make sure. I know Mr. uh, uh, uh, Senator Bryant that he, he, he may have a comment, but a simple nod if you agree, is sufficient for me on that since he's the crypto guy. So alright, thank you. Our committee, any other questions? Anyone else from the audience. Thank you. Thank you gentlemen. We have a, uh, Mr. Is John Jerry Lee Bogart, Mr. Bogart, would you identify yourself and who you're with and State your name. My name is Jerry Lee Bogart. I live in Stuttgart, Arkansas. I have an investment in AI development, and I'm here to express my concerns this morning to the committee. I appreciate you, Mr. Chairman, recognizing me, you know, appreciate my friend Ricky Hill, who we've shared a duck blind together a time or two and certainly commend his efforts and his concerns about national security. My concern here is, is that there is a clear distinction. Between AI data center development for things like robotics and medicine or are unmanned tractors or Creating an iron dome over this country and how we make that defensible every day and we're in a race, we're we're clearly in a race with everybody else in the world. To figure out who's going to dominate the AI space on a daily basis. That's an ongoing battle that we're involved in now. We can't get away from it. We're going to fight this war and we better win it or it's gonna change everything about our lifestyle. I'm not here to debate the The, the validity of the crypto industry or not, but I'm here to point out that there is a a very distinct difference between Specific crypto mining software and hardware and AI development for all of the other aspects that will determine the future national security of this country and surely we're going to have to fight this battle. Arkansas is uniquely positioned to be a global participant, not only for our own national security but for our allies as well. We know that there's a multibillion dollar investment going in over at West West Memphis for AI development. I'm aware of other developments that are being considered here in this state. There are going to be vitally important to this country. This is something that Arkansas needs to be positioned to take advantage of. We don't need to throw out the baby with the bathwater. And so I urge Mr. Hill, Senator Hill, this committee. To take in all of the consequences. Of what this bill may lead us to. We don't want to be back here like we were last year on 851 trying to fix something because we didn't consider all of the unintended consequences that may happen here. So with that I'll close my remarks and answer any questions that you might have of me. But Senator Rash, you have a question? Thank you. Did you testify? Of the original crypto bill. Yes sir, I did. I was thinking I did and I knew you were very knowledgeable. I appreciate you being here. Thank you, sir. And I remember that committee because it was fixing to be voted on and I don't know if they even ask any questions because we didn't know what questions to ask and I finally thought of one enough to let it be known. I didn't know anything about it, but I was wanting somebody to, so we had some more. Debate on it That's where I feel like I'm at today on this. I think something needs to be done. Because of my, what I've learned in the past, yes, but I don't know what needs to be done. That's the reason why I drove over here this morning. All the stuff that's going on between then and now. We have places that it's, it's Run people's lives, at least for a time with the noise levels and all the stuff that we've been through. We put citizenry through. I don't want to procrastinate because of My ignorance and other people and not doing something to protect critical infrastructure. When there are other places. They can put these in in Arkansas, in Arkansas still go ahead, so could you help somebody like me that doesn't know enough to ask the right questions. Let me give you an example. In, in this bill as it's written today, and I don't know what the magic is about 30 miles in the day that we live in because I'm not sure that you can defend. 3 miles or 3/10 of a mile. We do have remote. Locations. And in certain counties of Arkansas, but very few of those counties that would be suitable or desirable for a large scale, we're not talking about a small crypto mine like sits in Arkansas County. We're talking about 1000 and 2000 acre uh campuses. That will, that will serve this country for 50 years in the development of, of Hyperscale computing, uh, quantum computing, all of the things that we are in this new age of That are going to determine things and they're remote for a reason because they're a nuisance if you put them in town. And you have all of this, this pushback like we had on the crypto mines, right? And, and I spoke out against, not against the business of crypto mining, but against the business of foreign adversaries establishing crypto mines in Arkansas, and I stand by everything I said there, because I do believe it's a national security potential of national security threat to this country. But I take the other side of that and I, and I look at where I've been in my life and some of the things that I've been associated with in my life, and I realized that the very first time since World War II that technology changed the world was in 1990 in Desert Storm, and I happen to have the good fortune to work with a guy named Mike Giroux, who was one of 6 mathematicians that created the Patriot missile System, defense system, and Aiken, South Carolina. And it changed the world forever. It proved that the United States was superior in every aspect of it. How did it get developed? Well, it got developed on a military base. But now here we are 35 years down the road. And we're talking about developing an iron dome over this country. Where is that going to be developed? It's not going to be developed in urban areas. It's going to be developed in places like Arkansas. That has flat remote land that has the natural resources and the availability to generate power that's going to develop these AI facilities. And so when we think about a bill that accommodates everybody's concerns on a specific sector. We don't want it to bleed over into something that truly is a national security threat today. Are we 3 weeks ahead of China. I suspect we're not. Are we behind? Many people think we are. And there are, there are trillions of dollars, trillions and many trillions of dollars. That are being deployed today around this country to develop these AI data centers. To put us head back in the game and get ahead of the game. Otherwise, we're, we're, we're putting ourselves behind the eight ball and so for as much as I have been vocal about my concerns about foreign ownership and crypto mining, and I stand by every bit of that. I'm not against private business and I'm not against good people or, or, you know, honest citizens who are in the crypto mining business. That's their business, right? I don't want them, I don't want them located next door to me. But I don't mind them being in remote areas that don't impact anybody in Arkansas. And so let's don't, let's don't cut our nose off to spite our face. And what are we going to do over here in West Memphis. It's just if it's determined. That, that the military installations over in Memphis, you know, they're right across the river. What if, you know, what if this bill causes an impact there and you've got $10 billion that are being deployed. I've seen people are bidding on the, on, on the steel, the structural steel today. So let's, let's be very careful in our consideration. Otherwise, we're going to be back here trying to trying to fix it, and that's not a place I don't think any of us want to be. Well, I do appreciate Your input and, and I think it is common sense, but the thing I think this nation has done is we've shot ourselves in the foot. So long with, with, with our lack of border security with our lack of defending around military bases and installations and I am greatly concerned about that, that if we continue to wait and don't do something. Uh If we don't put some barriers up. It's too late just to regret it later. I don't disagree. I think we need to understand what those barriers need to be. That's, that's, that's the thing and And, uh, you know, it doesn't do any good to put up, to put up barriers that only prohibit you from accomplishing your mission. And so, while I'm here to, what I'm here to say today to you is, is that I appreciate every effort that you're making. Let's make sure we, let's make sure that we understand all of the issues. Well, and again, just one more time, I, I, I've regretted. Uh That we didn't know more. I remember our conversation many months ago, and I'll tell you what, and it's like this too. The people of Arkansas that are struggling after right now. I hope the economy does get better, but they're struggling for the week to week. They're gonna be asked to pay higher energy bills. Because this stuff's coming. There's got to be more energy put into Arkansas. No doubt about it, and the upgrade to the grid is going to be a conversation that we're all going to have, and I would suggest to this committee that any bill that you consider needs to consider the fact that, that a year ago when we were having this conversation, or not even a year ago. The, the excess energy consumption by cryptoines represented a a potential majority of the excess energy in the state of Arkansas. Now today, this projected that AI development nationwide will take up over 50% of it by the middle of this year. So you can see that the national security threat to the country sort of flips in terms of industry and then what do you do about the developments of things like the him play down here, so we have very serious issues of natural resource consumption, energy consumption, how are we going to generate? You know, additional 500 megawatts over here to to participate in the, in what truly is the race for national security. There are a lot of things that needed to be considered here and uh, you know, I, I don't put myself forth as being a scientist. I'm, I'm an investor and I'm a curious person. And uh so I try to, I try to understand what I'm involved in, and I, I appreciate your time today. I appreciate your testimony. Thank you, Mr. Chair. All right. Mr. Bogo, I, I got a question. Yes, sir. I'll go ahead and ask you recognize. Thank you, Mr. Chair. Thank you, Mr. Bogart, for being here. I know you've weighed in a lot on the crypto and, and asset mining and and just overall AI and and your expertise. It's my understanding if you look at just AI, just take, take the functionality of what's in the building. You can have a physical location. You have to have power. Yes sir. Redundancy of power, redundancy of power, and then you've got to have basically the technology to get the information in and out of the facility. Got to have a way to cool it. You got to have, you, you've got to have access to the uh Oh, the Cable, you know, the fiber optics. If you, if you were to just take any generic facility that deals with data processing, AI, crypto or or blockchain. Which one of those three posed the threat. I, I, I, I'll kind of expand on it to maybe narrow my line of thinking. If it's a physical threat, I can place something in the facility that does harm of a radius to the area. That's, that's one possibility. If it is a, I can Who power off the substation so great that it causes a blackout to the geographical area in which that substation surrounds is, you know, could that be a potential. And Could I put something on, on the transmission lines of of data, the fiber optic that creates an issue which could impact security. Of a facility and, and of those three, is a distance, which one is the distance a relation. To a one of our national security points of interest like I think that, I think that my answer to that question is, is that the scope of that is so broad, anything that you can put in, you can take out. If you're in a fiber optic. Realm or or if you're, if you're hooked up to to Starlink, for example. You don't even, you don't theoretically even need the fiber optic. So, so, uh, I think the answer to your question is that changes rapidly with with the technology and um I would say today that anybody, if you looked at it from, from just a pure where we are today, then you would have to say, well, anywhere you have a foreign adversary that has a relationship. To any of those three categories is a potential threat. I don't think anybody here would deny that our military bases are under daily threat. Some know, most are unknown and we only know about them when they cause something bad to happen. So, so we're, we're here today because there's a lot of unknown. But one thing that we do know is We have an adversary that announced this week, China, uh, deep seek. That, that put the whole world on its ear. With the advancement that they have made in AI development, and most people think that we are behind now. Think about what you just asked me. So there was a ground swell of subscription to deep fake this past week. Jim Cramer even had a feature on it in his financial show. And unknowingly millions of people worldwide signed up for deep fake, and when they did, their subscription required them to hand over without protest all of their financial information, all of their personal information. Millions of people around the world signed up for that because they couldn't wait to get on to the next potential TikTok or whatever the case may be. These are, these are our foreign adversaries. And so, To some degree, they just made everything that we're discussing here, moot. Because if you, if we have foreign adversaries in this country today operating and surely we do. And they have, they have the ability to access anything in open AI. Because they just subscribe to it in an open platform with China. Then how can you protect? Where is the magic number? Where, where is the, what's, what's the, where is the ability to protect. The only ability that we have to protect is to do what America has always done, and that's to out develop and out create technology that protects us. And if we don't do that, We have failed in our job. Uh Any other questions from members? Mr. Bunker, After all you've said today, sir, what, uh, what effect or potential effect will These crypto mines have on A great interview, one mills, solar panels. I looked at, so I looked at, I was approached by a group uh this past July based out of Seattle, Washington. And I hosted them at my place, uh, on two different occasions, and we looked at every aspect of the windmills and the potential to create Uh, renewable energy here in Arkansas and I determined that the that the risk that the windmills posed from an environmental and and safety and cultural standpoint of view versus the amount of electricity that they could produce was not worth the risk. That was my own personal assessment. I could have made some money off the deal. Uh, and it was a lucrative deal, but in my view, it does not accomplish what it is that we need to accomplish, which is to produce more affordable power. for our people that can be replicated in a redundancy so that we take these risks off the table. I think that the, I think the whole issue of solar is a different issue. I think that it's that it's more accommodating in terms of the power generation that it creates and the green footprint that it sort that sort of eliminates, uh, but then, of course, when you do that, then you're, you're committing a resource uh in perpetuity that is lost for its intended purpose, meaning the land itself. So we need to be very careful about what we dedicate and where we dedicate it to, right? Are any other questions from any other questions from committee members. Do we have anybody else in the audience. Thank you so much. I appreciate it. Thank you for coming. Anyone else from the audience? Michael Lindsay. Excellent. That's the next bill. Oh, OK. All right, see, see no one else was listed, uh. Senator Hill, you're recognized to close for your bill. Thank you, Mr. Chair. And just so everyone will know, Mr. Bogart is a pretty good duck hunter. I will let you know that for sure. As I said earlier, Arkansas has roughly 53,000 square miles. We're asking for a small spot to protect our military. We've heard testimony from a lot of different directions from AI to, to cryptocurrency, and I want to make sure everyone understands there are actually two distinct entities themselves. They are, they're different. What we're looking at here is someone being able to come in and modify the crypto algorithm. They say it's simple. It's easy to uh It's not the industry says it's not easy to manipulate it because it's just so simple. As we all know, anything can be manipulated. If someone gets into something, it can be manipulated and my main Part of this bill, asking for these 5 facilities. I'm not asking for the entire state. Crypto is here to stay. That's part of, I am not anti-crypto. I am pro-military. My stance here is I want to do all I can to protect our military and their facilities to protect our personnel. Now we hear everyone say, you know, it, it's not that big a deal, you know, where do you come up with 30 miles at, I'm gonna tell you how I came up 30 miles and I do 50, I it looked too large. When I drew 25 out, it didn't look far enough away from a military base. That's where the 30 came from. I had it, had it graphed out, looked at it from those 5 facilities. I just felt like that was a pretty good protective area. We have no-fly zones. We, we have lots of other things that we do. You just don't walk into the to the airbase. You have to go through guard checks. Everything's safe. all we can to protect them. Like everyone, I know the geopolitical tensions that we're in right now. Especially high tensions with nations like China, Russia, North Korea, we cannot afford to overlook our military. We've got to protect them. That's the main thing I want to say. We've got to protect them. And yes, why, why the military has, why has the airbase not weighed in on this. I'm gonna tell you they're, they're not political. They're not going to come out here to us. This is our This is our job. is to make sure we do that. So with that, I would ask y'all to have a good vote on this. You heard Senator Hill. pass as me. If a motion do pass as amended. Any discussion We have 2 In discussion Uh Good. Um, I just, I just want to say as, as a former Marine. Um, somebody that's that too is passionate about military affairs have relationships, you know, bordered uh ocean to ocean overseas. Uh, somebody that was, you know, kind of thrust into the into the crypto debate, um. reasons of just of simple property rights, which expanded into, you know, where we landed during the fiscal session, trying to get to a place that we can, we can live in harmony and still adapt to entrepreneurship that I, I would like to, to see our work play out, and I agree with everything Mr. Beaugart said, and I agree with all, all my research, and I'll say it again if if you haven't went into a crypto facility or a data mining facility or an AI facility to see how they operate and how they work, um, For the betterment of society and trying to adapt to new technologies, I would encourage you to do that because, you know, the, the threats that we think may exist, um, again, are just We think they may, and I understand we have to look to see what that looks like, but at the same time, if our federal government under two different administrations have not seen the threat, um, I think it's, it's not in our interest to To make that decision for them because I, I certainly do not see the threat if the threat were here, it could be. 50 miles away because it's a building. It's power coming into it, and it is a medium, the transmission medium of the of the data going in and out. So, uh, I would appreciate a no vote on this. Thank you. Alright, any other discussion? We have a motion on the floor of Du pass. All those in favor. Say ah. All opposed. Let's roll call it. It's, it's very close, so let's just roll call it. Senator English So. Senator Hester. Senator Rice. Senator Wallace. Senator Davis. Senator Bryant. Senator Petty. Now, the bill fails, uh, 235 to 1. Thank you, Mindy, for your time. Thank you. not be recognized. Sure. So members, we know by Senate rule we can't meet once we gavel in at 11 o'clock, we have 12 minutes. Maybe we can get through the other bills, but I, I, I would just, I would ask the chairman if we don't If we end up having a pause a bill or if we don't get through, can we come back immediately following session and And, and finish Hopefully it wouldn't take long, but I guess that's my request of this committee that uh a lot of people are here geared up to finish some of these things. Now maybe we can finish in 12 minutes, but if not, I, I, I hope we can come right back and session won't take long. We have, uh, yeah, OK, we have uh Senator Davis's bill and one other bill. Uh Senator Davis is it. And I've got 2 bills. Now Senator Johnson's not here, so let's go ahead and do Senator Davis's bill. We've got time. a So you're, you're right. Thank you, Mr. Chair. I'll start with Senate Bill 98. So, Senate Bill 98, uh, just very high level, it does 3 main things. It adds grocery and convenience stores to the list of approved retailers to deliver alcohol, and we know that grocery stores, um, only can carry beer and wine. It limits it to what counties only. And it establishes a third party delivery permit overseen by ABC. That will include permit fees, training standards for employees that will address identifying underage persons, intoxicated persons, and fake or altered IDs. Arkansas will be the thirty-fifth state to allow third-party delivery if we pass this bill in every single state surrounding that touches Arkansas already allows this. Um, this legislation was modeled exactly after Texas and the way that they do third-party delivery. So I'll go through it and then um quickly but a little more detailed and um we'll be happy to answer any questions. So in the first section, this is where it adds the grocery or convenience stores to the approved list of retailers that are allowed to deliver. Um, we know the liquor stores have been allowed to deliver since 2021. So this is not new to the state, it's just expanding a little bit on who is allowed to deliver. Um, like I said earlier, it's wet counties only and it also clarifies uh the law on curbside pickup. Um, and the second part, this is where we see that it establishes that third-party delivery permit with ABC and it allows them to promulgate rules for the delivery system, which includes age requirements for the employees, um, and also helps them in identifying where what counties are or where it would be illegal to deliver in the state of Arkansas. It also allows um ABC to establish fees for a permit, um, and then if you go on to page. it, there's a determination of delivery area where it's just very clearly outlines what county versus dry County, um, and below that it talks about the delivery handoff, so what employees will be responsible for when they are actually delivering, um, this beer or wine with grocery delivery, um, and it has standards set in there that you have to be 21 or older, present an ID, can't be intoxicated, it clarifies the responsibility um of the third party, putting all liability. on that third party company, um, which I think is very important. Um, we've seen that, um, compliance rates across across the country, um, are in excess of over 90%, um, ensuring that they are safely delivering to customers' homes, um, or the place that they are, um, to ensure that they're over 21 years old and they're meeting the standards within law. Um, and then it creates a training program that ABC will oversee to ensure that the employees are trained adequately so that they're not, you know, delivering to people that should not be delivered to, but that I'm happy to answer any questions committee explanation of the bill. Any questions? right Does this allow Uber drivers to deliver if they get certified. Um, if they're, well, I actually don't know the answer to that about Uber. I know like DoorDash and some of those companies, but yeah, I guess if they, well, let me take that back. If they apply for a permit with ABC, they have to apply for a permit and be given permission to be able to do it. So yes, if they go through that process, and ABC verifies them and acknowledges them as a permit holder, then yes. So that's 21 years old, whether it's a a company DoorDash or uh whatever they're. 21 year old that the company would be liable to see it's delivered properly. And assessed for age. But if a single person or Uber driver or somebody that's doing that could deliver it. You got people for 21 years of age delivering. And you're telling me that data across the nation hadn't been a problem. But I see a problem with young people. Being able to just know what young people do. I did some of it too. And, and it's, you know, the only thing I see that left out of and I'm, I hate to be snarky. we've left amend it and add. churches and schools. For later, they will have to come back at those. Um, Senator Rice, I may have misunderstood your question a little bit. If you're an Uber driver, you work for Uber, and so Uber would, Uber is who would apply for that permit through ABC and then have training standards in place for all their employees, which are their Uber drivers. So, it's, it wouldn't just be a random person delivering. This takes all the onus off of the Liquor Delivery of the, the, the seller. All the owners of them that they have now. Correct, if they're delivering now. They're responsible for doing it right, which is just liquor stores right now, which is what we passed and we put an emphasis on it being done properly, safely, according to law. And, and to me now we're stepping down. We're taking the liability off the one that it's closest to and putting it on somebody making maybe minimum wage that doesn't have near the liability. See what I'm talking about. I talk about it ever liquor bill. We were proliferating, making it easier and easier and easier and every day more common for our young people. It's just another thing. And I, and I don't I'm, I'm, I'm not anybody judge, uh, you know, but this is what we're showing our young people. And that may be the reason, but I'm not going to be a part of it, but I, I appreciate you answering my question. Thank you. Um, and I would say that having liability on the third party actually strengthens our delivery laws, um, because once the groceries transfer from the grocery store to the delivery person, which is what a lot of grocery stores are using now as third-party delivery to deliver groceries, that person is the one that will knock on the door, see the person face to face, verify that they're 21. and verify that they're not intoxicated and that it is in fact the person that that that um bought the groceries and the beer or wine in the first place that they're there in the home, um, or wherever they're being delivered. So, um, if we left the liability on the retailer, the retailer's not actually there delivering the groceries to verify that it's getting to the correct person. So, um, I think it actually strengthens it because that third party, they don't want to mess up and get a bad reputation. for dropping off, you know, beer and, you know, some produce to a bunch of 16 year olds, they want to ensure that their reputation stays intact, um, and that when they deliver, they're delivering to exactly who asked, um, who was able to purchase that beer or wine in the first place. Thank you. Alright, uh, we've got a gavel out in 3 minutes. So And I hate doing this worse than I hate doing anything else because some of you people I know have driven a long way to come, but we're, we're gonna go and pick up this bill again. Next Tuesday. I thought we were coming back after session today, I'm sorry, session we'll come back, we'll Return after session and finish up these last 2 or 3 bills. Thank you, Chairman. So it won't take us very long. My second bill's not really controversial, so we'll be fine. That's what they always say.