Nevada Governor Steve Sisolak will be announcing legislation today that will allow major technology companies to effectively form techno-governments.
Gov. Sisolak first mentioned the proposal of creating “Innovation Zones” in Nevada during his State-of-the-State address on January 19. “New companies creating groundbreaking technologies can come to Nevada to develop their industries. This will be done without tax abatements or public financing.”
While the legislation wouldn’t provide subsidiaries or public funding, according to a draft of the Bill obtained by the Las Vegas Review-Journal, major technology firms would be granted authority to form their independent techno-governments within Nevada. “[They] would carry the same authority as a county, including the ability to impose taxes, form school districts and justice courts and provide government services, to name a few duties,” Las Vegas Review-Journal reports.
During his remarks in January, Gov. Sisolak specifically mentioned the company Blockchains, LLC as already being committed to creating a techno-government in the state that would “fully run on blockchain technology.” Gov. Sisolak said the move would make Nevada “the epicenter of this emerging industry and creating the high paying jobs and revenue that go with it.”
In the simplest terms, blockchain is a type of database system that stores computational information in groups, known as “blocks.” Though not entirely unalterable, blockchain technology is considered secure by design because data transactions between parties are recorded efficiently and in an open, verifiable, and permanent manner. Financial services, particularly cryptocurrencies, widely use blockchain technology.
The company mentioned explicitly by Gov. Sisolak, Blockchains, LLC, was founded in 2014 by consumer protection attorney and cryptocurrency millionaire Jeffrey Berns.
According to their website, Blockchains, LLC currently owns over 67,000 acres in Storey County, Nevada. The company says they aim to convert this land into “the most advanced ‘high-tech’ community and society for business and residents in the country.”
Calling it “a new way to live,” Blockchains says they “believe the integration of our product suite is where the full potential of a smart community, digital economy, and connected society can be realized.”
“Blockchains aims to showcase how business development, residential living, and commerce can flourish alongside world-changing technologies. To do that, we have to start with a blank slate – otherwise, we’d merely be trying to insert smart technologies into devices that aren’t, well, ‘smart,'” reads the company’s “Road to Development” plan.
According to state records, in 2018, Blockchains purchased 67,125 acres of uninhabited land at the Tahoe Reno Industrial Center for $170 million. At the time, the company’s website did not list any executive, a phone number, or a clear explanation of what it’s software did, leading some local media outlets to label the company as “mysterious.”
Since the land grab, Blockchains has been lobbying hard to get legislation passed that would allow the company to form its own techno-government.
Las Vegas Review-Journal reports Blockchains, LLC gave $50,000 to a political action committee, Home Means Nevada, which managed Sisolak’s transition into office in January 2019. Campaign finance records also show the company donated $10,000 to Sisolak and his Republican opponent Adam Laxalt’s campaign in 2018.
Records also show the company’s owner, Jeffrey Berns, personally gave $50,000 to the Nevada Democratic Party in 2019 and various donations ranging from $1,000 to $5,000 to various state lawmakers from both parties.
Over a week ago, The Debrief reached out to Blockchains, LLC for comment; however, the company did not respond to this request.
In an email to The Debrief, Communications Director for the Governor’s office, Meghin Delaney, said Gov. Sisolack will formally unveil the proposed “Innovation Zones” legislation during a virtual press conference today, Friday, February 26, at 4:30 pm (EST).
Joining Gov. Sisolack at today’s conference will be Michael Brown, Executive Director of the Governor’s Office of Economic Development, and Jeremy Aguero, principal analyst at Applied Analysis.
According to the Las Vegas Review-Journal, the draft language in the proposal said the traditional local government model was “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.”
The draft proposal also reportedly said the creation of techno-governments or “alternative forms of local government” were needed to aid economic development within the state.
The Governor’s Office of Economic Development is slated to handle applications for the Innovation Zones, which would be limited to specific “innovative technologies,” including “blockchain, autonomous technology, the internet of things, artificial intelligence, wireless technology, biometrics, and renewable resource technology.”
The Governor’s Office of Economic Development redirected The Debrief’s questions on the legislation backing techno-governments to the Governor’s communications staff; since the Bill had not been formally proposed, much less passed.
The draft proposal laid out the requirements for companies to create their own techno-government, including an applicant owning at least 50,000 acres of undeveloped and uninhabited land, all within a single county but separate from any city, town or tax increment area.
Big Tech companies would also have to pledge at least $250 million toward initial development, with a plan to invest an additional $1 billion over ten years in the zone.
Major technology companies would function as their own independent governmental body, with a three-member board of supervisors that would carry the same authority as a board of county commissioners. The Bill’s proposed draft suggests technology companies would have a significant say over who would sit on techno-government’s board.
While the draft proposal provides insight into some of the details behind the concept, some aspects could be changed when the Bill is formally introduced.
Aside from lobbying by companies such as Blockchains, the primary motivation for proposing the allowance of techno-governments would be the hope that the move would significantly boost Nevada’s beleaguered economy.
With tourism indirectly or directly accounting for almost 25% of the state’s economy, Nevada has been devastated by the COVID-19 pandemic. Las Vegas, the United States’ second-largest municipal tourism industry, accounted for over $19 billion of Nevada’s GDP before the pandemic. According to the Nevada Resort Association, tourism and leisure services account for one out of every three jobs in Nevada.
The Brookings Institute found two Nevada cities, Las Vegas and Reno, were among the top three metro economies hardest-hit by the pandemic. In December 2020, the U.S. Bureau of Labor Statistics reported Nevada’s unemployment rate of 9.2% was the second-highest in the United States. Hawaii, which came in dead last, was only a tenth of a percentage point below Nevada at 9.3%.
Conversely, metropolitan hubs specializing in technology, such as Seattle and San Francisco, have thrived and benefited from COVID-19. Sales at non-store retailers (i.e., online shopping) increased by 15% from November 2019 to November 2020. Online retail giant Amazon, headquartered in Seattle, nearly doubled its workforce, adding 400,000 jobs in 2020. Social media monolith Facebook announced plans to hire an additional 10,000 workers in April 2020.
The adage that “the most secure job is a federal government job” has held during the COVID-19 pandemic, and the U.S. Government grew by over 50,000 jobs in 2020. The metropolitan seat of America’s power, Washington D.C., saw a government employment rate increase over 2% last year.
By allowing major technology corporations to form their techno-governments, Nevada will be trying to capture lightning in a bottle by enticing a mix of the most benefited industries during these economically downtrodden times.
While economic benefits seem enticing, almost assuredly, there will be some public concerns over the idea of Big Tech being allowed to form its own sovereign governance.
In a 2018 essay, technology analyst Jamie Bartlett warned technology monopolies posed a real threat to democracies. “Tech is just the latest vehicle for very rich people to use well-tested techniques of buying political influence, monopolistic behavior and avoiding regulation,” wrote Bartlett.
Fear over the power Big Tech companies wield has only increased in the past two years. The public and politicians alike have expressed concerns over Big Tech companies’ potential to be a cultural hegemony, dominating public ideas and beliefs.
The jury is still out as to the ultimate impact of allowing Big Tech to form techno-governments, provided that the proposed legislation passes.
In the area Blockchains plans to build their “better way to live,” Storey County Commissioner Lance Gilman was a little hesitant toward the proposed legislation during an interview with the Las Vegas Journal Review. “[It’s] going to have an impact on Storey County, and the jury is still out on whether that will be positive or negative.”