Section 14-1-606 - Ownership of digital asset mining business by prohibited foreign-party-controlled business prohibited - definitions - penalty - reporting(a) As used in this section: (1) "Interest" means an ownership interest of greater than zero percent (0%);(2) "Prohibited foreign-party-controlled business" means a digital asset mining business in which a prohibited foreign party owns an interest; and(3) "Prohibited foreign party" means: (A) A citizen, resident, or agent of a country subject to § 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 120.1 et seq., as existing on January 1, 2024;(B) A foreign government formed within a country subject to § 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 120.1 et seq., as existing on January 1, 2024;(C) A party other than an individual or a government that is created or organized under the laws of a foreign government within a country subject to § 126.1 of the International Traffic in Arms Regulations, 22 C.F.R. § 120.1 et seq., as existing on January 1, 2024;(D) Any party other than an individual or a government:(i) That is created or organized under the laws of any state; and(ii) In which a significant interest or substantial control is directly or indirectly held or is capable of being exercised by: (a) An individual referred to in subdivision (a)(3)(A) of this section;(b) A foreign government referred to in subdivision (a)(3)(B) of this section;(c) A party referred to in subdivision (a)(3)(C) of this section; or(d) A combination of the individuals, parties, or governments referred to in this subdivision (a)(3)(D)(ii);(E) An Entity of Particular Concern designated by the United States Department of State; or(F) An agent, trustee, or other fiduciary of a person or entity enumerated in subdivisions (a)(3)(A)-(E) of this section.(b)(1) A prohibited foreign party shall not acquire or hold by grant, purchase, devise, descent, or otherwise any interest in a digital asset mining business in this state.(2) A person shall not acquire or hold a digital asset mining business as an agent, trustee, or other fiduciary for a prohibited foreign-party-controlled business.(c)(1) A prohibited foreign-party-controlled business in operation before the effective date of this act shall have three hundred sixty-five (365) calendar days from the effective date of this act for the prohibited foreign party to divest all interest in the digital asset mining business.(2) If a prohibited foreign party fails to divest all interest in the digital asset mining business under subdivision (c)(1) of this section, the Attorney General may commence an action in a circuit court with proper jurisdiction under subsection (e) of this section.(d) Upon request of a person or upon receipt of information that leads the Attorney General to believe that a violation of this section may exist, the Attorney General may conduct an investigation that includes without limitation:(1) Receiving sworn statements; and(2) Issuing subpoenas to compel the: (A) Testimony of witnesses subpoenaed before him or her; and(B) Production of records and other documents under § 25-16-705.(e)(1) If as a result of an investigation under subsection (d) of this section the Attorney General concludes that a violation of this section has occurred, the Attorney General may order a prohibited foreign party to divest all interest in the digital asset mining business within three hundred sixty-five (365) calendar days.(2) If the prohibited foreign party fails to divest all interest in the digital asset mining business within three hundred sixty five (365) calendar days, the Attorney General may commence an action in a circuit court with proper jurisdiction over the digital asset mining business.(3)(A) If the circuit court finds that a violation of this section has occurred, the circuit court shall issue an order for the digital asset mining business to be sold through judicial foreclosure.(B) The proceeds of the sale under subdivision (e)(3)(A) of this section shall be disbursed to the lienholders, in order of priority, except for liens that under the terms of the sale are to remain.(C) If the assets of the digital asset mining business include real property, the Attorney General shall promptly record a copy of the following in the local land records: (i) Upon commencement, notice of the pendency of the action under subdivision (c)(2) or subdivision (e)(2) of this section; and(ii) The order for the sale of the digital asset mining business under subdivision (e)(3)(A) of this section.(3) The Attorney General may pursue other remedies in an action brought under subdivision (c)(2) or subdivision (e)(2) of this section, including without limitation:(A) A civil penalty not to exceed up to one million dollars ($1,000,000) or twenty-five percent (25%) of the fair market value, on the date of the assessment of the civil penalty, of the prohibited foreign party's interest in the digital asset mining business for the failure to divest of all interest in the digital asset mining business within three hundred sixty-five (365) calendar days as required under this section;(C) Prejudgment interest and postjudgment interest at the maximum rates permitted by law; and(D) Reasonable attorney's fees.(4) In addition to the remedies under subdivision (e)(3) of this section, the Attorney General may pursue treble damages against a digital asset mining business if the digital asset mining business: (A) Is held in violation of this section;(B) Is ordered to pay a civil penalty under subdivision (e)(3)(A) of this section; and(C) Fails to pay a civil penalty under subdivision (e)(3)(A) of this section within the scope of the order of the circuit court.(5) The approval of a digital asset mining business by a local government or the receipt by a digital asset mining business of a permit or other authorization from the state to operate shall not be a defense to a cause of action brought under subdivision (c)(2) or subdivision (e)(2) of this section.(f) Civil penalties and damages received by the Attorney General under this section shall be distributed as follows: (1) Fifty percent (50%) to the Oil and Gas Commission Fund, § 19-6-410; and(2) Fifty percent (50%) to the Attorney General to be used in the same manner as provided in § 25-16-718.(g) A prohibited foreign-party-controlled business shall report the composition of its ownership to the Attorney General.(h) Title to real property is not invalid due to a violation of this section by any former owner of the real property.Added by Act 2024, No. 174,§ 3, eff. 5/3/2024.Added by Act 2024, No. 173,§ 6, eff. 5/3/2024.