Nevada Plan to Let Tech Firms Form Local Governments is Scaled Back

People wearing face masks visit the usually crowded "Welcome to Fabulous Las Vegas Nevada" sign amid the coronavirus outbreak along the Las Vegas Strip, Tuesday, April 7, 2020, in Las Vegas.

People wearing face masks visit the usually crowded "Welcome to Fabulous Las Vegas Nevada" sign amid the coronavirus outbreak along the Las Vegas Strip, Tuesday, April 7, 2020, in Las Vegas. AP Photo/John Locher

 

Connecting state and local government leaders

Gov. Steve Sisolak’s revised proposal would create a bipartisan committee to study the controversial "innovation zone" concept.

When Nevada Gov. Steve Sisolak announced a plan earlier this year to let technology companies form their own local governments, he pitched it as a way to diversify the state’s economy and jumpstart its recovery.

“We cannot wait for economic recovery to come to us,” the governor said during an announcement in February. “We must accelerate and pursue innovative ways to inject Nevada with new and organic economic growth.”

But now, the state will wait.

Sisolak scaled back his controversial proposal last week and has instead asked lawmakers to create a committee to study his concept of “innovation zones” for a year. The committee would hopefully be able to address numerous questions that that proposal raised, he said.

“I recognize there are limitations that come with a biennial 120-day session – never mind one taking place in the midst of a historic pandemic that requires state officials and legislators to direct their energies to the impact of COVID and the critical response needed,” Sisolak said in a statement. “I want people to be enthusiastic about this opportunity, not skeptical about a fast-tracked bill.”

The Democratic governor’s original proposal would have allowed companies pursuing emerging technologies—like blockchain, autonomous vehicles or artificial intelligence—to develop autonomous districts. To qualify, a company would have to own at least 50,000 acres of land and invest at least $1.25 billion over 10 years. Over time, the technology company would take over typical government responsibilities such as tax collection, education, law enforcement and other functions.

A bill to establish innovation zones was never formally introduced in the legislature, but local news outlets obtained copies of a draft proposal.

Sisolak pitched the proposal as a way to diversify the state’s economy, which is largely reliant on tourism, hospitality and gambling.

The coronavirus pandemic hit Nevada’s tourism industry particularly hard. The state boasted a record 28.2% unemployment rate in April 2020, the worst in the state’s history. The state’s unemployment rate dropped to 8.1% in March.

The proposal would have directly benefited Blockchains LLC, a cryptocurrency company that owns 67,000 acres in rural Storey County, and has proposed establishing a “smart city and innovation park” that could house 36,000 residents and 11 million square feet of commercial space.

The governor’s latest proposal would create a special committee, which would include legislators from both parties, that would be tasked with holding a series of public meetings to study innovation zones and submitting a final report with findings and recommendations by the end of 2021.

The Democratic heads of both the Nevada House and Senate issued statements backing the proposal, saying it would give lawmakers time to thoroughly vet the controversial proposal.

Andrea Noble is a staff correspondent with Route Fifty.

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