CARSON CITY–Although Gov. Steve Sisolak backed away from introducing legislation on “innovation zones”—which would have allowed tech companies, specifically Blockchains, LLC, to govern private land—he got lawmakers to keep the concept alive.
Senate Concurrent Resolution 11, which passed late last Friday, establishes a joint special committee which will study innovation zones and report to the Governor on whether to proceed with legislation.
Sisolak originally introduced the idea of innovation zones in his January State of the State address. A draft of the legislation that leaked in February included provisions that would give tech companies, including Blockchains, LLC, the same power to govern as local counties, with the goal of attracting innovative companies to the state. In April, Sisolak retreated from his plan to propose the legislation, which garnered national headlines and was the target of jokes on late night TV. The Legislature did not have enough time to consider such a complex issue, Sisolak said. But rather than let the concept die, he worked with legislative leaders to create an interim committee.
On May 11, the Senate Committee on Legislative Operations and Elections introduced the resolution to study innovation zones. The resolution establishes a committee of six members, including three members of the Assembly (two appointed by the Speaker and one by the Minority Leader) and three members of the Senate (two appointed by the Majority Leader and one by the Minority Leader).
The committee will be responsible for “a thorough vetting of the critical issues” concerning innovation zones and will “facilitate discussion among all of the interested stakeholders.”
Unlike the drafted legislation which preceded it, the resolution, being just a study, flew comparatively under the radar.
At the initial hearing, trade organizations testified in support of the project, which supporters say will create jobs and diversify the economy. Lobbyists representing tribes and county governments testified as neutral, raising concerns including about their jurisdiction being compromised by innovation zones. Only the progressive nonprofit Battle Born Progress testified in formal opposition.
Annette Magnus, executive director of Battle Born Progress, said in an interview that Battle Born was opposed to the earlier drafted legislation—which she called an “Ayn Rand, dystopian nightmare that we were going to try in our own backyard”—and that they wanted to be on the record as opposing the study, too.
The concept of innovation zones, even as a study, Magnus said, was misguided and a “huge distraction” from more pressing issues.
“The fact that we were even considering giving a billionaire his own county during the global pandemic,” Magnus said, referring to Sisolak’s original proposal, “when people are homeless and being evicted, and don’t have food on the table—It just really spoke to where our priorities as a state should not be.”
Magnus hopes that the committee will rigorously examine the concept of innovation zones, especially their potential harm to local tribal communities, to whom the land and water belongs, she said.
In committee meetings, several legislators voiced concern that the resolution’s deadline might foreclose that kind of deep investigation.
The turnaround is tight: the committee must meet at least once per month and submit a report and recommendations to the Governor by the end of this year.
Legislators pointed out that producing a thorough proposal after only half a dozen meetings (if monthly, beginning in July) might be an unrealistic goal. Legislative support staff will also be stretched thin from the two anticipated special sessions this year, leaving less time to research a policy that would affect so many groups.
The Senate approved SCR 11 on May 19 on a voice vote. The Assembly Revenue Committee meeting, the last before the resolution headed back to the Assembly for a vote, made clear that despite the concerns some legislators had raised throughout the process, amendments were off the table.
Committee Chair Lesley Cohen, after the initial hearing, had submitted amendments that included pushing back the due date of the report to the Governor from Dec. 31, 2021 to March 29, 2022; adding “low income and historically underserved communities” to the list of interested stakeholders; and requiring the committee to study the impact of innovation zones on water supplies.
But after the set of amendments was read aloud, Cohen quickly spoke up to withdraw it.
Several members of the committee were displeased.
“I was pretty excited when I heard the amendment because I thought it made the bill palatable for me,” Assemblywoman Bilbray-Axelrod said at the committee meeting, citing the Dec. 31 deadline as the “biggest, glaring thing to me.”
“There’s no one here to answer my question, but I’m just wondering why none of the amendments were accepted,” Bilbray-Axelrod said, in reference to Cohen’s amendments. Cohen could not be reached for comment.
Republican Assemblyman Gregory Hafen, who voted against the resolution in the Revenue Committee, said in an interview that timing was of particular concern for him, too.
“It’s been, now, five months that they’ve been discussing the idea,” Hafen said, referring to the governor’s idea for innovation zones, “And in these five months they really didn’t have any information for the legislative body. And now, they think that in seven months they can.
Asked why Cohen’s amendments were withdrawn, Hafen said he does not know.
“If I had to speculate, it was because we were up against the deadline, and she just didn’t have time to get it fully vetted, through the process, but I really don’t know why,” Hafen said. The Revenue Committee meeting was just three days before the official end of the session.
Assemblyman Cameron (C.H) Miller voiced concern about the resolution’s set of “interested stakeholders,” which includes groups such as advanced technology industries, environmental groups, “global interests,” and local governments, but does not prioritize those who might be living and working in innovation zones.
“I would very much like to see the language added regarding communities of color, underserved communities, and low-income communities,” Miller said, referring to Cohen’s failed amendment, so they can “come to the table and be part of this conversation.”
Later that day, last Friday night, the Assembly passed the resolution as it was originally written, on a voice vote.
Concurrent resolutions do not require a signature from the Governor, so the resolution took effect immediately, and went directly to the Secretary of State for filing.