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[UPDATED] Arizona Bill Aims To Prevent Regulation Of Blockchain Nodes




A bill recently introduced to the Arizona House of Representatives would take away the power of town, city, and county governments to “prohibit or otherwise restrict” the running blockchain nodes in residences. According to the bill's author, it is one of several pieces of legislation that he has submitted with the intention of making the state of Arizona more friendly to blockchain business and activity.

UPDATED | April 10, 2018:

HB2602, which would protect Arizonans' right to mine cryptocurrencies at home, passed the state Senate on April 5 and was transmitted to the governor's desk on April 9. HB2603, which was submitted to the Arizona House on the same day as HB2602, was signed by Governor Doug Ducey on April 3.

ORIGINAL | February 8, 2018:

A new bill introduced to Arizona's House of Representatives would prohibit cities, towns, and counties from regulating the running of blockchain nodes in a residence.

HB2602, which was introduced on February 6 by Representative Jeff Weninger, was assigned to the House Rules Committee and the House Commerce Committee that same day.

In an interview with ETHNews, Weninger explained that the bill is intended to prevent the passage of regulation in Arizona that could hinder the development of blockchain technology, or of Arizona as a blockchain hub:

"I believe when you have a new technology, you don't want government bureaucrats who don't know anything about it, or politicians like myself who don't know enough about it to arbitrarily put regulations on [it] that morph how those technologies are going to grow rather than just letting them grow organically."

He also related that his interest in submitting the bill was specifically to prevent governmental interference with residential cryptocurrency mining.

The bill states that a "city or town," as well as a "county may not prohibit or otherwise restrict an individual from running a node on blockchain technology in a residence." The regulation of this type of activity "is of statewide concern and not subject to further regulation by" subordinate governments.

Weninger described this wording as the "template language we always use when we want to politely preempt the localities from creating regulations on the industries that we are very interested in attracting to Arizona."

When asked why the HB2602 covers residences and not commercial sites, he responded that he hadn't had enough time to work through all the implications that such a move might entail and address them all in the bill. However, he said, there are a "lot of data centers here and I think … that if they have extra capacity, it would be a great co-use of having more crypto mining farms, digital currency mining operations collocated in there, taking up some of their extra space that they haven't utilized."

He reported that he has personally encouraged the operator of one such facility to start mining cryptocurrency, after coming to the conclusion that Arizona law allows for the collocation of these two types of commercial ventures.

Weninger also introduced two other bills relating to blockchain technology on the same day as HB2602: HB2601, which, according to a press release from the representative's office, authorizes the conducting of ICOs, among other things; and HB2603, which "allows corporate registration of entities through the Arizona Corporation Commission using blockchain technology."

In the last year or so, Arizona has seen other bills introduced relating to blockchain technology and cryptocurrency. In January 2017, Representative Paul Boyer proposed in HB2216 that the state outlaw the act of requiring "a person to use or be subject to electronic firearm tracking technology," including through the use of blockchain technology. The governor signed that bill that April.

On January 10, Weninger, along with Senator Warren Petersen, Senator David Farnsworth, and Representative Travis Grantham, introduced SB1091, which would allow for the payment of the state income tax in bitcoin.

According to Weninger, the bill "went down in the Senate," and was therefore altered. The adjustments include removing the word "bitcoin" from its language, allowing the Department of Revenue to determine which cryptocurrencies should be accepted, and providing for a private entity to convert received cryptocurrencies to fiat, which that entity would then deposit with the department.

Adam Reese

Adam Reese is a Los Angeles-based writer interested in technology, domestic and international politics, social issues, infrastructure and the arts. Adam holds value in Ether, Bitcoin, and Monero.

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