Lawmakers Start Study of 'Innovation Zones'

The proposal would allow technology companies to exercise powers similar to those of local governments.

Reno, Nevada.
Reno, Nevada.

CARSON CITY, Nev. (AP) — Nevada lawmakers kicked off a study committee on Thursday about an economic development proposal that would allow technology companies to exercise powers similar to those of local governments, if they own land and promise investment.

Gov. Steve Sisolak and the company Blockchains Inc. want lawmakers to create jurisdictions called “Innovation Zones” that would be semi-autonomous and governed by three supervisors, two of whom would initially be appointed by the technology company that owns the zone.

Despite the proposal’s tepid reception, Sisolak’s policy director DuAne Young and representatives and lobbyists for Blockchains appeared to remain wholly committed to the idea. They submitted a bill draft that was almost identical to the original proposal that circulated in February and was presented to lawmakers behind closed doors.

Blockchains representatives said they could only experiment with applications of their digital ledger technology if they had more autonomy than local government allowed.

"Fitting an Innovation Zone community into an existing county is not reasonably feasible," said Blockchains Executive Vice President Lee Weiss.

Rural county commissioners, he added, “cannot reasonably devote time to govern their existing county, plus a new innovation zone with completely different infrastructure and goals.”

The proposal first appeared in Gov. Steve Sisolak's State of the State address but was never introduced in the Legislature after resistance from local officials, environmentalists and progressive groups who likened it to 19th century company towns — an assertion both the governor and company deny.

Sisolak framed the proposal as a vehicle to diversify Nevada's economy. But amid opposition, it was scaled back to a study to assuage concerns and allow lawmakers, local officials and the public to get their questions answered, the governor said.

Although the company did not appear in the proposal’s draft language, it was pushed behind the scenes by lobbyists for Blockchains, a digital record-keeping company that owns almost half of rural Storey County, in the desert east of Reno.

Construction and trade unions spoke in favor of the proposal and said constructing a “smart city” could provide high-paying construction jobs. Storey County representatives said they supported efforts to incentivize tech companies to come to Nevada but didn't understand why the company felt they couldn't build their city under current governmental structures.

Under the initial proposal, any technology company that possesses 78 square miles (202 square kilometers) of land and promised to invest $1.25 billion could apply to form an Innovation Zone where a governing body could create court systems, impose taxes and make land and water management decisions.

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