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Blockchains idea finally makes legislative debut


By April Corbin Girnus, Nevada Current
This story was originally published by Nevada Current

Gov. Steve Sisolak’s proposal to create a committee to study the concept of ‘innovation zones’ received its first hearing Tuesday.

The five-member Senate committee on legislative operations and elections gave little indication of their feelings about the underlying concept of allowing private companies to establish a new form of government in undeveloped areas of Nevada, a proposal the governor himself has inextricably linked with a company called Blockchains LLC.

But more than a dozen organizations from across the state used the hearing as an opportunity to publicly declare their opinions or reservations about the controversial idea.

Sisolak initially intended to introduce innovation zone legislation during the current legislative session, but that plan has since been scrapped and replaced with a resolution to create a committee to study the concept of innovation zones.

Scott Gilles, senior advisor to the governor, told the Senate committee Tuesday that the intent “and hope” is to get people “enthusiastic” about the proposal, “not skeptical about a fast-tracked bill in a 120-day session.”

Democratic state Sen. Roberta Lange noted early in the resolution’s hearing for Senate Concurrent Resolution 11 that the committee was tasked with discussing the creation of the study — not the innovation zone proposal itself.

Lange questioned the proposed timeline for the innovation zone study. SCR11 would have the innovation zone committee recommend by Dec. 31 whether the state should abandon the concept, propose it for the 2023 Legislative Session, or propose it for an upcoming special session. She noted that state lawmakers are already expecting to have two special sessions this calendar year — one related to allocating federal relief money, the other for redrawing political boundary lines.

Republican state Sen. Heidi Seevers Gansert similarly questioned legislative staff on their capacity to help support an interim committee.

Lange suggested moving the recommendation deadline for the innovation zone committee to spring of 2022.

Gilles did not address the December deadline specifically, though he did describe the timeline as “fairly strict” during his opening presentation.

Gilles told lawmakers that draft legislation on innovation zones is expected to be completed by the end of the current regular session for consideration by the proposed study committee, which would be composed of three members of the Assembly and three members of the Senate. Among the topics expected to be addressed by the study committee are: economic development, affordable housing, “empowerment centers,” natural resources, and tax distribution.

A previous draft of innovation zones legislation, which was reported on by numerous media outlets in February, was received with bemusement from politicians on both sides of the aisle and ridicule from the general public. No draft legislation was ever formally released by the governor’s office or introduced into the Legislature.

While SCR11 calls for a study of a broad concept of innovation zones, there’s no doubt that the concept of creating “a unique form of local government on private land” centers on the tech company Blockchains LLC and their plans to create a “smart city” on 67,000 acres of undeveloped land in Storey County.

Numerous building trade organizations, as well as Renown Health, testified in support of SCR11, citing the Painted Rock Smart City project’s potential for job creation and economic diversification. The resolution also received support from Blockchain Center Foundation, a group not related to Blockchains LLC.

More than half a dozen lobbyists representing counties and tribes testified in neutral on the bill, though several expressed concerns about specific parts of the proposed innovation zone. Those groups included Nevada Association of Counties (NACO), Storey County and the Pyramid Lake Paiute Tribe.

“They can build all of the things that are being proposed so far,” said Storey County Manager Austin Osborne, referring to the known plans for Painted Rock Smart City. “We will roll out the red carpet for the types of developments being proposed — without separation from government.”

Only one group testified formally in opposition. Annette Magnus of Battle Born Progress characterized the Blockchains proposal as a “magical-thinking pipedream” and said elected officials’ willingness to listen is “even worse than previous boondoggles” — meaning the $750 million public subsidy for the Raiders stadium, or the public concessions offered as part of the failed Faraday Future project.

She added: “This legislature and this committee has the ability to reject this ridiculous concept here and now, instead of once again falling for the fine-tuned presentation pitch of a big company promising the moon.”

The Senate committee took no action Tuesday.

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