What could go wrong? Big Tech companies could be running their own local govts in Nevada

Nevada’s Democratic governor is proposing legislation that would allow technology companies to form their own local governments as part of a push to attract business to the state.

“If you’ve got enough money, acres upon acres of undeveloped land, and an ‘innovative technology,’ you could soon form a new local government in Nevada” under a plan introduced last month by Democratic Gov. Steve Sisolak, the Las Vegas Review-Journal reported earlier this week.

The plan involves the creation of “Innovation Zones” and is aimed at boosting Nevada’s economy which has suffered business slowdowns and losses during the pandemic due to state-mandated closures and lockdowns. 

In particular though, the plan seems focused on attracting technology companies.

A draft of the legislation obtained by the paper but which has yet to be introduced in the state legislature would authorize tech companies “to effectively form separate local governments” in the state “that would carry the same authority as a county, including the ability to impose taxes, form school districts and justice courts and provide government services,” the paper reported.

The governor made his appeal for the new legislation during his State of the State Address in January which he said dovetailed with his overall plans to attract “groundbreaking technologies” to Nevada, but without utilizing the usual methods including tax reductions and other incentives that are funded by the public.

In his address, Sisolak mentioned Blockchains, LLC specifically as a firm that could come to Nevada and construct a “smart city” that would operate entirely on blockchain technology in an area east of Reno.

According to the draft of the legislation obtained by the paper, traditional models of local government are “inadequate alone to provide the flexibility and resources conducive to making the State a leader in attracting and retaining new forms and types of businesses and fostering economic development in emerging technologies and innovative industries.”

As such, the “alternative form of local government” is necessary in order to successfully attract the kind of desired economic development to Nevada, it adds.

The plan envisions the use of blockchain and additional “innovative technology” including the internet, artificial intelligence, autonomous technology robotics, wireless, biometrics, and renewable resources.

A spokeswoman for Sisolak told the Review-Journal in a statement that he “looks forward to rolling out more information on Innovation Zones and other items from his State of the State speech in the future.”

She added: “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.”

The plan calls for the technology ‘cities’ to operate within counties and eventually take over the functions of the county government to become their own independent entity. The tech governments would be managed by a three-person supervisory board that would be similarly empowered as an existing county commissioner’s board. Also, the company managing the zone would have a lot of sway over who sat on the board.

The plan envisions the state benefitting economically by imposing an “industry-specific tax that will be imposed upon the innovative technology or activity related to the innovative technology.”

It also requires the applicant firm to own at least 50,000 acres of uninhabited land that resides within a single county without incorporating existing towns or tax entities. It requires companies to have $250 million cash on hand and pledge to invest $1 billion in the zone over a decade.

Lance Gilman, a Storey County Commissioner and a developer of the concept, told the paper that the Blockchains Innovation Zone is “going to have an impact on Storey County, and the jury is still out on whether that will be positive or negative.”

He said his county remains open to the concept but that officials want to know what benefits the county will receive before ceding land to any tech firm.

“We’re going to want to know that Storey County gets the benefit of the bargain,” he told the paper.

Meanwhile, Senate Minority Leader James Settelmeyer (R), who represents a portion of Storey County, expressed some enthusiasm for the concept but he also has concerns.

“The legislation seems to be rather one-sided, that the Innovation Zones get to make determinations and the county has to go along with them,” he told the Review-Journal, adding he was “not impressed” to learn of the plan involving his county with it so far along.

Some online users were highly skeptical of the concept, however, including questions about conflict resolution and how such zones would be policed.

“But how about use of force? Isn’t that the end-all for states? All considered this is fluff… a company can sorta do some of these things now. Navada legislatures just throwing shade to non-libertarians. Just PR, no bite,” one user wrote.

Another mockingly envisioned conflict between the tech zones.

Still others questioned whether such a concept is practical and legal.

Warning: Strong language

Some noted the historical context of the concept.


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