Nevada weighs letting tech companies build their own communities

Technology companies could form their own local governmental jurisdictions in Nevada if planned legislation reaches Gov. Steve Sisolak’s desk this year.

According to a draft bill obtained by the Las Vegas Review-Journal this week, state lawmakers will soon be voting on whether or not to approve the creation of “Innovation Zones” — large swathes of land owned by companies that specialize in emerging technologies like blockchain, artificial intelligence, biometrics, autonomous vehicles and connected infrastructure — that carry virtually the same authority as a county government to impose taxes, form school districts and justice courts, among other traditional services that government provides.

According to the draft legislation, companies that want to create their own innovation zone would need to own at least 50,000 acres of contiguous, uninhabited land located within a single county, spend $250 million initially and have plans to invest at least $1 billion inside the zone over the first 10 years after its approval. Eventually, each zone would be run by a three-person board, one member of which would be appointed by the governor and the other two chosen by the entity applying to create the zone. The boards would have the ability to hire and pay public officials like school board members and justices of the peace, collect and imposes taxes and establish licensing boards, just like any other Nevada county.

Sisolak first mentioned the “Innovation Zones” concept during his State of the State address last month as a method to create jobs, especially in growing technological fields, without spending taxpayer money. The draft bill describes these zones as an “alternative form of local government” that’s more conducive to fostering economic development than the current structure of municipal governments. Sisolak’s office declined to offer more information on the draft bill currently circulating.

“The Governor looks forward to rolling out more information on Innovation Zones and other items from his State of the State speech in the future. At this time, the Governor’s Office has not submitted a bill draft request related to this initiative so we will not be commenting on any language at this time,” a spokesperson for the governor’s office told StateScoop via email.

But the idea dates back to at least 2018, when a company called Blockchains LLC, founded by a cryptocurrency enthusiast named Jeffrey Berns, announced it had purchased a 67,000 acres east of Reno, with the intention to build a community running on distributed ledger technology. Sisolak singled out Burns during his speech last month.

Nevada’s economy, which is heavily dependent on tourism, has been one of the hardest-hit by the pandemic as visits to Las Vegas have dried up for months.

But officials in Nevada counties told the Review-Journal they’re skeptical of the zones, based on what they’ve heard so far. Lance Gillman, a commissioner in Storey County, east of Reno and home to Berns’ dream community, told the Review-Journal “the jury is still out on whether that will be positive or negative.”