Sisolak's Innovation Zone concept, repackaged as a study, gets first public hearing — without its original backer

Labor unions and blockchains advocates testified Tuesday in support of Gov. Steve Sisolak’s request that the Legislature form a joint special committee to study the idea of allowing private developers to effectively form new local governments, or Innovation Zones. Even initial skeptics of the highly-publicized concept signaled that they were open to the study. 

But there was a notable absence at the hearing: The concept’s original backer, Blockchains Inc., did not testify. In fact, the company’s name was rarely mentioned in the one-hour hearing.

After the hearing, Pete Ernaut, a lobbyist for Blockchains, said that the company did not testify because the study was about the Innovation Zone concept, rather than one specific project.

“The study is not a referendum on this specific project,” Ernaut said. “It’s an opportunity to vet the entire concept, so it was more appropriate to have the governor and the Legislature work on the details and create the committee. And we will have more than adequate time to make our case, because we very much believe in the project.”

Tuesday marked the first public hearing for the Innovation Zone proposal, a concept that was embraced by the governor and originally pushed by Blockchains. The company, which owns about 67,000 acres of land in Storey County, wanted to create a new local government. 

But after the concept received an icy reception from lawmakers, rural counties and progressives in his party, the Democratic governor, last month, scrapped plans to pass enabling legislation.

Instead, Sisolak proposed alternative legislation, SCR11, to study the Innovation Zone proposal. That concurrent resolution, heard before the Senate Committee on Legislative Operations and Elections Tuesday afternoon, would comprise six lawmakers appointed by legislative leadership. 

The committee would be tasked with recommending whether to take further legislative action on the idea, evaluating the effects of Innovation Zones on everything from economic development to affordable housing, local tax revenue and natural resources, including the availability of water.

Under the proposed language, the committee would submit a final report by the end of the year. 

“It became clear in recent weeks that a proposal of this magnitude was not going to fit into this particular session,” Scott Gilles, Sisolak’s senior advisor, said in a presentation for SCR11. “The governor believes this idea warrants and deserves a proper vetting, a proper analysis and time to work through the complex pieces of the proposed legislation.”

Any future Innovation Zone legislation that did pass, Gilles noted, would have general application.

“Yes, there obviously is a project, which everyone has read about, in Storey County that would be looking to take advantage of the legislation,” Gilles said in response to a question from a legislator. “But it would be general law legislation that could be taken advantage of anywhere throughout the state if the appropriate financial commitments and plans were in place.”

Sisolak first unveiled the Innovation Zone concept in his State of the State speech in January, but he offered few details. A few weeks later, Blockchains , a cryptocurrency startup with land in Storey County, began to circulate draft legislation for the Innovation Zone proposal. 

That draft bill would have allowed private developers, with large land holdings, to effectively form new county-like governments if they committed to invest more than $1 billion over 10 years and identified a new revenue source for the state. Yet the proposal raised numerous questions, and many were quick to draw comparisons between the proposal and former company towns.

Although early drafts of the Innovation Zone legislation were circulated, a final version has yet to be released to the public. Gilles said a final version is still being drafted, but Sisolak’s office is  hopeful that the Legislative Counsel Bureau will finish a final draft by the end of the session.

Once a final draft is released by the Legislative Counsel Bureau, Gilles said that a “joint special committee would have a draft piece of legislation to work off of through that committee process.” 

At the hearing Tuesday, business interests and representatives from labor unions in Southern and Northern Nevada came out strongly in favor of the Innovation Zone proposal and the study. 

“This issue represents the biggest opportunity in Nevada to diversify our economy, and probably the biggest opportunity to put Nevadans to work,” said Danny Thompson, representing IBEW 1245, IBEW 396, Operating Engineers Local 3 and Operating Engineers Local 12. 

Several advocates of Blockchains technology, including Brock Pierce, who co-founded the cryptocurrency Tether and starred in The Mighty Ducks, also spoke in favor of the study.

Despite public criticism of the draft Innovation Zone legislation, only one group criticized the study contemplated in SCR11. The opposition came from a progressive group, highlighting the political challenges that Sisolak would have likely faced if he had pushed the initial bill draft.

Annette Magnus, the executive director of Battle Born Progress, said that when the state faces so many issues from unaffordable housing to health care access, “it is grievously inappropriate the amount of time and energy spent this session discussing the proposal to give a billionaire CEO and an unproven company their own autonomous form of government.”

Among the concerns with the draft bill was where Blockchains would get enough water to build out the Innovation Zone, which contemplated a development with about 36,000 residents.

The Nevada Independent highlighted numerous concerns with supplying water to the Innovation Zone proposed by Blockchains. Blockchains had purchased faraway water in northern Washoe County, about 100 miles away from its property. Pumping and moving that water could be costly and negatively affect the hydrology around Pyramid Lake, the terminus of the Truckee River.

For decades, the Pyramid Lake Paiute Tribe has fought to bring more water to the lake as part of an effort to restore two imperiled species, the cui-ui and the Lahontan cutthroat throat, the state fish. In written testimony Tuesday, Pyramid Lake Paiute Tribe Chairwoman Janet Davis said the tribe initially opposed the proposal “due to a lack of transparency and tribal inclusion.”

But Davis wrote that the tribe was neutral on the legislation to create the study, as it required the inclusion of tribal perspectives and an evaluation of how Innovation Zones might affect water. 

“In addition,” Davis wrote in testimony, “we would like to note that any analysis of the potential for the creation of new forms of governments, such as an innovation zone, should protect the tenets of adjudicated agreements, such as the Truckee River Operating Agreement, and must include the need for government-to-government consultation with Native American tribes.”

Rural counties had also raised serious concerns with the original proposal. In March, Storey County commissioners voted to oppose “separatist governing control” within their jurisdiction.

A Storey County water district that serves the Tahoe Reno Industrial Center, where Blockchains owns most of its land, identified several issues with the proposal. The Tahoe Reno Industrial General Improvement District was primarily formed to serve businesses, not residences.

On Tuesday, Storey County Manager Austin Osborne said that the county was neutral on the interim study. But he said the county believed that the joint special committee, if it is empaneled, would find that “the separation from government is not necessary and is not appropriate.” 

Follow the money: Breaking down $2.8 million in combined legislative campaign spending from major industries

The Nevada Legislature building

Even as lawmakers perennially tout the strength of their small-dollar fundraising, the driving force of any campaign in any cycle — with few exceptions — is big-money donors. 

Often contributing upwards of six-figures across dozens of campaigns, money from these donors often comprises the vast majority of campaign funds, especially in the most competitive legislative campaigns.

However, while all these contributions are reported to Nevada’s secretary of state every quarter, parsing trends from such reports or determining how corporate or PAC donors are spending in the aggregate is no simple task, as each contribution is siloed either under individual candidates or individual donors. 

To get at those trends, The Nevada Independent analyzed more than 7,700 individual contributions of more than $200 made to every sitting lawmaker elected in 2020. 

That $200 cutoff excludes a small portion of small-dollar fundraising, as well as two lawmakers who were appointed to their seats in 2021 (Sen. Fabian Donate, D-Las Vegas and Assemblywoman Tracy Brown-May, D-Las Vegas) and any fundraising by losing candidates. 

What is left is an expansive picture of the spending habits of Nevada’s biggest industries, from unions and casinos to health care giants and dark-money PACs. Over the course of our Follow the Money series, we’ve taken a deep dive into the spending of the state’s 10 largest industries, a group of donors that collectively spent $7.8 million of the $10.6 million in big money legislative contributions last cycle. 

Links to all previous installments of this series, including top-line breakdowns of all spending and all fundraising, have been included at the end of this article.

But beyond the largest 10 are the 14 “smallest” industries, according to our categorizations, which still spent upwards of $2.8 million combined. Below is a breakdown of that campaign spending, ordered by industry, from greatest to least. 

Spending nearly as much money last cycle as the much-debated Nevada mining industry were a number of alcohol and tobacco companies, which combined to contribute nearly $319,000. 

Spendiest among industry donors was tobacco company Altria (likely better known by its former name, Philip Morris Companies, Inc.), which gave 30 lawmakers a combined $95,050. Almost all of that money went to Republicans, who received $75,050 to the Democrats’ $20,000. 

Among all legislators, none saw more money from Altria than Senate Minority Leader James Settelmeyer (R-Minden), who received $9,000. He was followed by Assemblyman Tom Roberts (R-Las Vegas) with $8,750 and Sen. Scott Hammond (R-Las Vegas) with $7,000. The remaining 27 lawmakers, including eight Democrats and 19 Republicans, received $5,000 or less.

Other major industry donors include beer-giant Anheuser Busch ($50,500), the Nevada Beer Wholesalers Association ($49,000), alcohol distributor Southern Glazer’s Wine and Spirits ($33,500) and electronic cigarette maker Juul Labs ($26,500). 

Contributing more than $306,000 combined, the state’s transportation industry included a varied mix of donors from car manufacturers, ride-sharing companies, railroads, taxis and associated organizations and individuals. 

Biggest of all was the Nevada automotive dealers PAC, NADEAC, which contributed $52,500 in total, split nearly evenly between Republicans ($27,500) and Democrats ($25,000). Most of NADEAC’s contributions were comparatively small, however, and only two legislators saw more than $2,500 — Sen. Heidi Seevers Gansert (R-Reno) and Sen. Carrie Buck (R-Las Vegas), each of whom received $5,000. 

Following NADEAC was electric car maker Tesla — operator of the massive gigafactory battery plant in Northern Nevada — which gave 20 legislators $45,000. Most of that, $34,500, went to legislative Democrats, with the two Democratic leaders — Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) and Assembly Speaker Jason Frierson (D-Las Vegas) — receiving the most of anyone with $5,000 each. 

Other major transportation donors include the Nevada Trucking Association and its president, Paul Enos (a combined $42,500), Union Pacific Railroad ($33,500), rental car company Enterprise ($29,500) and the ride-sharing company Lyft ($21,000).

Twelve telecommunications companies combined to spend more than $300,000 on lawmakers last cycle, with the single largest chunk coming from internet service provider Cox Communications ($120,000). 

The largest internet provider in the state with a near-monopoly on internet service in the Las Vegas metro area, Cox’s spending largely favored legislative Democrats, who received $80,000 to the Republican’s $40,000. That includes one maximum $10,000 contribution to Frierson, as well as $8,000 for Cannizzaro.  

Communications giant AT&T followed with $82,250, again favoring Democrats ($58,750) to Republicans ($23,500). And here, too, the top recipients were Frierson and Cannizzaro, who received $8,000 each. 

Other major donors included internet service providers Charter Communications ($47,500) and CenturyLink ($14,000), as well as satellite TV provider Dish Network ($12,000). 

Though the pharmaceutical industry at large contributed nearly $273,000, more than half came from just one donor: the Pharmaceutical Researchers and Manufacturers of America (PhRMA), which gave 45 lawmakers $140,500. 

Among the most powerful industry groups in the entire country, PhRMA’s contributions favored Republicans, who received $86,000 to the Democrats’ $54,500. Among individual lawmakers, PhRMA’s four top recipients were all Assembly Republicans: Roberts ($8,000), Assembly Minority Leader Robin Titus (R-Wellington) ($8,000), Assemblywoman Jill Tolles (R-Reno) ($8,000) and Assemblywoman Melissa Hardy (R-Henderson) ($7,000). 

Other major donors include the drugmaker Pfizer ($46,250), National Association of Chain Drug Stores ($17,500), and biotechnology company Amgen ($11,000). Nineteen other donors, including major drugmakers such as Merck, Sanofi, Eli Lilly and Johnson & Johnson, gave $10,000 or less. 

Though 55 donors in the finance and banking industry combined to contribute more than $214,000, almost two-thirds of that money came from one source: the Nevada Credit Union League (NCUL), the credit union trade association, which gave $86,250 across 46 legislators. 

The NCUL’s spending widely favored Democrats, who received $62,000 to the Republicans’ $24,250. Much of that difference was made up by the sheer number of Democrats receiving contributions (30 Democrats to 16 Republicans), but also by three large contributions to Democratic Leaders. 

Frierson and Assembly Majority Leader Teresa Benitez-Thompson (D-Reno) both received the $10,000 maximum, while Cannizzaro received $9,000. No other lawmakers received more than $5,000 from the group.   

Other major donors include One Nevada Credit Union ($25,500) and the National Association of Insurance and Financial Advisors ($14,500). The remaining 52 donors gave just $9,500 or less. 

Unlike some other major industries, technology-related companies and donors gave to lawmakers in comparatively mid-sized or small amounts, with the largest among them — the data company Switch — giving a total of $62,000 to 21 legislators. 

That money was evenly split between 10 Democrats and 11 Republicans, who combined to receive $31,0000 each. That even-split largely extended down to the individual level, too, with Democrats Cannizzaro, Frierson and Gansert, a Republican, receiving $10,000, while Republicans Hammond and Buck received $5,000 each. The remaining recipients all received $2,500 or less. 

The other significant chunk of technology contributions came from Blockchains, Inc. owner Jeff Berns and his wife, Mary, who combined to give $44,500. Berns was at the center of efforts this session to create so-called “Innovation Zones,” which would have created a semi-autonomous county in rural Nevada supported by the use of cryptocurrency. 

As criticism of the concept intensified over the course of the legislative session, Gov. Steve Sisolak backed away from Innovation Zones last week in announcing the proposal would take shape as a study, instead. 

The single biggest beneficiary of Bern’s contributions was Assemblyman Jim Wheeler (R-Minden), who received $10,000 each from Jeff and Mary for $20,000 total. Wheeler’s district, District 39, encompasses parts of Storey County, where Berns’ Blockchains company owns roughly 67,000 acres of land that likely would have become the state’s first Innovation Zone, had the proposal passed muster.  

Berns also gave $5,000 to Cannizzaro, Frierson and Settelmeyer, as well as a handful of smaller contributions to six other lawmakers, including both Democrats and Republicans. 

Other technology companies gave comparatively little, with Reno-based precision measuring equipment firm Hamilton Company following Berns with $15,000, and the tax-software giant Intuit giving $12,500. The remaining 25 donors gave $11,000 or less.  

Insurance companies — close cousins to the finance industry — combined to give lawmakers $165,700, with the Farmers Employee and Agent PAC leading all donors with $63,000. 

Farmers’ spending was split nearly evenly between the two major parties, with Republicans receiving $32,000 to the Democrats’ $31,000. No lawmakers received the maximum amount from the group, though four — Frierson, Roberts, Gansert and Titus — did receive $5,000 contributions. The remaining 20 recipients received $3,000 or less. 

No other single insurance came close to Farmers’ spending. The next largest, USAA, gave just $25,500 (of which most, $17,000, went to Democrats), while small business insurer Employers EIG Services gave $24,000 (including $13,500 for Republicans and $10,500 for Democrats). The remaining 20 insurance donors gave $13,000 or less. 

Though the payday lending industry at large gave comparatively little — $128,000 split across 37 legislators — the single largest industry donor, TitleMax, was among the biggest spenders of any industry as it contributed $93,000 to 35 lawmakers. 

Most of that went to 20 Democrats, who received $56,500 to the Republicans $36,500. TitleMax’s largest individual contributions similarly went to Democrats, with Frierson and Cannizzaro each receiving the $10,000 maximum. Gansert followed with $7,500, while the remaining 32 legislators received $5,000 or less. 

Other payday lending donors gave little in comparison to TitleMax. Dollar Loan Center was next-closest with $23,500 contributed, followed by Purpose Financial with $8,500. The remaining three donors gave marginal amounts, including $1,250 from Advance America, $1,000 from the Security Finance Corporation of Spartanburg and $750 from Community Loans of America.

Breaking down the smaller industries

Dozens of donors categorized as “other” combined to become the 14th largest category, with donors who could not be classified as industry-specific — 357 in all — contributing a combined $247,761. Many of these donors were retirees or private citizens, and most, 262, gave $500 or less. 

Lobbyists and lobbying firms were the next-largest donor group trailing payday lenders, with 56 donors contributing $126,401 combined. There were few major donors in that group — all but 10 gave less than $3,000. The only exception was the Ferraro Group, which gave $32,500 spread across 33 lawmakers. The group’s donations were relatively small, however, and the single-biggest recipient — Cannizzaro — received just $3,500. 

Roughly three dozen education companies, teachers and other individuals combined to contribute $83,272, with the biggest sums coming from charter school company Academica Nevada ($28,500), education management company K12 Management Inc. ($13,500) and for-profit college University of Phoenix ($11,000). Notably absent in this category are major teachers unions, such as the Nevada State Education Association and the Clark County Education Association, as both of those organizations are covered in our analysis of union spending. 

Spending slightly less than they did in 2018 were 15 marijuana companies or related individuals, who combined to spend $86,500 (down from more than $91,000 spent in 2018). Most of that money was concentrated in the three biggest spenders: An LLC linked to The Grove dispensary ($24,750), Nevada Can Committee ($23,000) and a company linked to the Planet 13 dispensary ($15,000). 

The remaining two categories were the smallest of all: Nevada tribes, but only the Reno Sparks Indian Colony reported major campaign contributions with $30,500 across 37 legislators, while just seven agricultural donors combined for $10,950 (of which nearly half, $5,000, came from the PAC Nevadans for Families & Agriculture). 

Tim Lenard, Riley Snyder and Sean Golonka contributed to this report.

As part of our Follow the Money series The Nevada Independent has published deep dives into the industries that dominated legislative campaign spending in the 2020 campaign cycle. To see any of the previous installments, follow the links below: 

Sisolak's office answers questions about relationship with company that lobbied administration to push Innovation Zones legislation

Earlier this month, Jeff Berns, the CEO of Blockchains LLC, a tech company that is pushing an ambitious legislative proposal to create a new type of local government outside Reno, said he pitched Gov. Steve Sisolak on the idea after developing a “friendship” with the Democratic governor. 

But since the interview in early March, the governor’s office stonewalled or provided non-answers to The Nevada Independent about Sisolak’s relationship with Berns and meetings with the company, which hired his wife’s economic consulting firm, Hobbs, Ong & Associates. 

Not until this week, nearly three weeks after The Nevada Independent began asking questions, did the governor’s office address the relationships that intersect with Blockchains’ proposal, a massive project that is being cast as an important part of the state’s post-pandemic economic strategy. 

In addition to meeting with the governor last year, the company donated $10,000 to Sisolak’s 2018 campaign and $50,000 to a political action committee affiliated with Sisolak in 2019. 

Sisolak spokesperson Meghin Delaney said in an email Wednesday that “campaign contributions have no bearing on decisions the governor makes. Since taking office, the governor's decision-making is focused on what is best for the state and for its residents, regardless of where the ideas come from.”

When asked about Berns’ characterization of a “friendship” with Sisolak, Delaney wrote in an email on Monday, nearly three weeks after The Nevada Independent first asked: “Jeff and the governor share common goals for the State including responsible and impactful economic diversification, workforce expansion and development, and protection of natural resources.” 

The governor’s office did not provide more information about the relationship or answer a question about how many times Berns and Sisolak met last year. 

But Delaney said on Wednesday that “one of the governor's top priorities is to recover our economy and develop our workforce, and his door will always be open to any private sector leader or CEO who is looking to expand their business, relocate to the state, and most importantly, create jobs for Nevadans.” 

Delaney added that “it is common practice in Nevada and every other state in the country for private sector leaders to bring proposals to state and local governments.”

She stressed that the governor and First Lady Kathy Sisolak, who is a director at Hobbs, Ong & Associates, do not discuss state issues that the firm might be involved with. The firm worked on an economic impact report for the project, along with Applied Analysis, another consulting firm, and did so “independent from the governor’s office,” Delaney said in a statement on Monday.

The first lady, in an email Tuesday, said the firm “has a policy of segregating work assignments to ensure that I am not engaged in any work performed for the State of Nevada.”

With Blockchains, Sisolak added, the firm’s work was conducted without her involvement. She said that she never discussed the proposal with the governor, and the firm did not brief the state. 

Blockchains owns about 67,000 acres of land in and around the Tahoe Reno Industrial Center, home to the Tesla Gigafactory and other large-scale operations, east of Reno. The company, with Sisolak’s backing, is seeking legislation that would allow it to break away from an existing county government and create a new type of local government, known as an “Innovation Zone.” The company said such a move was necessary to develop a “smart city” of about 36,000 residents.

In the early part of 2020, as the COVID-19 pandemic hit, Berns said that Sisolak approached him about serving on a committee working to acquire personal protective equipment. Berns said he declined and recalled telling the governor that he would begin developing a concept that might bring more revenue to the state. That concept turned into the proposal for Innovation Zones. 

Berns said that he presented the concept to the governor around Labor Day. In January, Sisolak included a line in his State of the State speech touting the proposal and Blockchains LLC.

“Following the passage of my Innovation Zone legislation,” Sisolak said, “Blockchains LLC has committed to make an unprecedented investment in our state to create a smart city in northern Nevada that would fully run on blockchain technology — making Nevada the epicenter of this emerging industry and creating the high-paying jobs and revenue that go with it.”

The governor’s office has not provided a timeline of the events that led to that proposal.

On Monday, Delaney said the proposal was “the product of months of extensive analysis of the economic impact of a smart city developed using blockchain technology, review of different types of political subdivisions around the country and globally to find an optimal model for its development, and evaluation of the benefits and challenges surrounding its creation.”

Jeremy Aguero, a principal analyst with Applied Analysis, the firm that assessed the economic impact of Blockchains’ proposal, said he attended multiple meetings last year with state officials. The governor, he said, was not present during the early meetings. Throughout the process last year, the proposal was fleshed out and refined as questions about Innovation Zones arose. 

When the state unveiled the proposal to the public at a roundtable in February, Sisolak was joined by Michael Brown, who leads the Governor’s Office of Economic Development, and Aguero. Since then, the administration has provided little information about the proposal.

On MSNBC Sunday evening, Sisolak was asked about the proposal. 

Sisolak said that “it’s something that we definitely need to have the discussion and the debate about. You need to look at new bold and creative ideas when it comes to diversifying the economy.”

Other companies, Sisolak added, are also looking at the idea. The governor’s office did not reply to a question about what companies the governor was referring to. The proposal would apply to companies with large landholdings that are developing innovative technologies. 

To apply for an Innovation Zone, a company would have to own more than 50,000 acres of land, make an initial $250 million investment and commit to investing at least $1 billion over ten years, according to draft legislation and a website promoting the concept. An applicant looking to form an Innovation Zone must also identify a way to generate new revenue for the state.

During the MSNBC interview, Sisolak also addressed concerns about the water supply for  Blockchains’ proposed smart city. 

“We will absolutely have the water there otherwise they couldn’t go ahead with the project,” Sisolak said, noting that the company had “made arrangements” to bring water to the area. 

As The Nevada Independent reported, Blockchains acquired water rights about 100 miles north of the area where it owns land. Before importing the water, the company would be required to go through a rigorous application and permitting process with state water officials and federal land managers.

Indigenous leaders, environmentalists urge lawmakers to pass protections for sacred swamp cedars

Good morning, and welcome to the Indy Environment newsletter.

A lot of news this week, and it’s only halfway over. On that note, a small piece of programming. As we spring forward into daylight saving time, so too is this newsletter. We are moving the run date for the Indy Environment newsletter up to Wednesday for the foreseeable future. 

As always, we want to hear from readers. Let us know what you’re seeing on the ground and how policies are affecting you. Email me with any tips or suggestions at daniel@thenvindy.com

To get this newsletter in your inbox, subscribe here.


Most Rocky Mountain juniper trees grow at elevation. But near the eastern edge of the state, a  unique population of large juniper trees rest on a valley floor. For generations, the trees have lived in an area within Spring Valley, outside of Ely, that is known as Bahsahwahbee, or “the sacred water valley” in Shoshone. For Indigenous communities in the area, it is everything.

On Monday, Delaine Spilsbury, an Ely Shoshone elder, told lawmakers that the land is sometimes compared to Mecca or Vatican City. Bahsahwahbee is a ceremonial site for many communities in the area. It could also be compared to Wounded Knee. The land is the site of multiple gruesome massacres of hundreds of Indigenous people in the 1800s.

“But,” Spilsbury said, “I want to say that you cannot compare Bahsahwahbee to anywhere else. There is only one. And if the Swamp Cedars are gone from Bahsahwahbee, then it is all gone.”

The stands of unique juniper trees in Bahsahwahbee are described as the swamp cedars, and under proposed legislation, they could receive state protection, a measure widely supported by Indigenous communities and environmental groups during a hearing Monday evening.

Assembly Bill 171 would make it the state’s policy to protect the geographically distinct Rocky Mountain juniper population and make it illegal to damage the swamp cedars without obtaining a special permit from the state, similar to rules that govern other sensitive species. 

“When you get to this valley, you see how different and significant it is to have a stand of Rocky Mountain junipers thriving in this valley floor,” said Assemblyman Howard Watts III (D-Las Vegas), the bill’s sponsor and the chair of the Assembly Committee on Natural Resources.

Watts said the bill’s language mirrors the protections given to distinct species for threats. Those designations are typically species-wide. But the proposed bill applies similar regulations, Watts said, to a subsection of the Rocky Mountain juniper population in Bahsahwahbee because of its importance to Indigenous communities and its unique presence in low-elevation habitat. 

Rupert Steele, chairman of the Confederated Tribes of the Goshute Reservation, described the area as a sacred, spiritual and holy place for Goshute and Shoshone communities.

“My people were massacred in a very, very harsh way at swamp cedar,” Steele said. “Just like a seed, each one of those swamp cedars was fertilized by one of those that was massacred there. And through that, we live spiritually and connect with Mother Earth through them. And to destroy those trees would be an act of genocide.”

His message resonated with communities from other parts of the state. Marla McDade Williams, a lobbyist testifying on behalf of the Reno-Sparks Indian Colony, said the ancestors of their Paiute, Shoshone and Washoe members “have been affected by issues like this throughout the history of this country.”

“That said, historical cultural areas of Nevada are important to all of us and we urge your support for AB 171,” McDade Williams said. 

If the legislation is approved, it would mark a significant moment for state law because it would be the first time a statute specifically protected a plant because of its cultural value. Watts said he saw the legislation fitting in with broader efforts to recognize Indigenous rights at the state level.

“One of the things I’ve been advocating for is addressing the long and painful history that our state and government has with Native American people,” Watts said in an interview Tuesday. “I think there’ve been a lot of instances, over time, including recently, where the cultural, spiritual beliefs of Native populations here have been overlooked or disregarded.”

Tribal leaders across northeastern Nevada stressed the importance of Bahsahwahbee, and the need for state protection. Although the land, controlled by the Bureau of Land Management, has several layers of protection, state protection would more concretely protect the plant. 

In the past, the swamp cedars faced threats from the proposed Las Vegas pipeline. For decades, the Southern Nevada Water Authority had sought permits to pump groundwater in Spring Valley and pipe it to Las Vegas. The Southern Nevada Water Authority, which shelved its plans for the pipeline last year, has not taken a position on the legislation.

Several environmental groups, including the Center for Biological Diversity, the National Parks Conservation Association, the Nature Conservancy, the Nevada Conservation League, Great Basin Resource Watch and the Great Basin Water Network, supported the legislation.

In written testimony, the Nevada Department of Conservation and Natural Resources said it supported the “spirit and intent” of the bill, but the agency raised concerns about precedent.

“We appear to be standing at the top of a long slippery slope,” Dominique Etchegoyhen, the agency’s deputy director. “There are innumerable important natural resources across this vast state, many of which are located on federal lands. These unique resources cannot all be individually recognized in state statute, each requiring a special permit issued by the State Forester Firewarden. The burden would simply be too great.”

But Etchegoyhen, in later testimony, said the state did support a second piece of legislation, AJR 4, an assembly joint resolution calling on the federal government to increase protections for the area.


Here’s what else I’m watching this week:

A historic confirmation: Incoming Interior Secretary Deb Haaland made history as the first Indigenous person to serve in a cabinet-level position. The Senate confirmed Haaland to the position on Monday in a 51-40 vote. The Department of Interior oversees federal public land across the West, and the agency plays a decision-making role in everything from protecting sensitive ecosystems to permitting mines. The Interior Department is especially important in Nevada, where the federal government is responsible for managing about 85 percent of land within the state. 

  • Importantly, the agency oversees the Bureau of Indian Affairs. That means “Haaland will also be responsible for upholding the government’s legally binding obligations to the tribes – treaty obligations that have been systematically violated with devastating consequences for life expectancy, exposure to environmental hazards, political participation and economic opportunities in Indian Country,” as reporter Nina Lakhani writes for The Guardian.
  • Soon after the election in November, the Inter-Tribal Council of Nevada sent a letter of support to the incoming Biden administration for nominating Haaland. “As the leaders of sovereign tribal nations, we believe it is long past time that a Native American person serve as Secretary of Interior,” the Inter-Tribal Council wrote. After President Joe Biden nominated Haaland to lead the agency, we reached out to tribal leaders from across the state to talk about what her historic nomination meant. 

The mining tax debate: On Tuesday night, we hosted an IndyTalks panel on the debate in the Legislature over whether to change the constitutional cap on taxing mines. In August, legislators passed three resolutions in a special session that would increase how much the industry pays in taxes. Although legislators have not yet taken up the resolutions in this session, lawmakers are expected to weigh the proposals in the coming weeks. To amend the Constitution, the Legislature must approve the resolutions again. Then they would go to a vote in the 2022 general election.

All three resolutions kickstart the process of amending the Constitution. Two resolutions remove a 5 percent cap on the net proceeds of minerals and replace it with a 7.75 percent tax rate on gross proceeds, raising an estimated $541 million, with a portion of that revenue going toward education and health care or to Nevadans as a dividend. A third measure, cast as an “olive branch” to the industry, raises the net proceeds tax cap to 12 percent, but it is estimated to generate less revenue than the other proposals.

Our panel included Lorne Malkiewich, former Legislative Counsel Bureau director; Laura Martin, executive director of the Progressive Leadership Alliance of Nevada; and James Wadhams, a longtime lobbyist for the mining industry. Check out the full discussion here.

Sisolak on Blockchains and water: Last month, we reported on concerns, including from the Pyramid Lake Paiute Tribe, about acquiring the water needed for Blockchains LLC to develop a Smart City as part of Gov. Steve Sisolak’s “Innovation Zone” proposal. Last week, Sisolak’s spokesperson Meghin Delaney replied to two questions I sent to the office. Here they are:

  1.  Is the governor concerned about the environmental consequences of importing water? “Responsible and equitable use of Nevada’s water resources are top of mind and will be the focus of much work between all the parties involved before any approvals are granted.  An Innovation Zone developer will be required to navigate the same water use rules as any other developer in Nevada.”
  1. Has the state consulted with the Pyramid Lake Paiute Tribe or considered their views? “The state is in the very early stages of a long-term project, and the state is committed to working with all stakeholders on the responsible development of the Innovation Zone. The door is always open to the PLPT to answer any questions the tribe may have about the proposal.”

Gold mining outside of Death Valley: The Los Angeles Times’ Louis Sahagún writes about Indigenous communities and environmental groups pushing back against a proposed gold mine near Death Valley. He writes that “environmental groups and tribal nations have drawn a line in the alluvial sands overlooking the community of Lone Pine, population 2,000, on the eastern flanks of the Sierra Nevada range: No mining in Conglomerate Mesa, not ever again.”


Drought across the West: “The Western US is in the midst of yet another dangerous dry spell. The drought has been building over the past year, and since November, a greater stretch of the West has been in the most severe category of drought than at any time in the 20 years that the National Drought Mitigation Center has been keeping records,”  Lili Pike writes for Vox in an article that makes the connection to climate change. 

New report calls for stronger climate action: “A new analysis finds that Nevada is not on track to meet its 2050 greenhouse gas reduction targets absent stronger clean energy policies,” Jeniffer Solis reports for the Nevada Current. “The analysis by research firm Energy Innovation — based on a state-specific version of the firm’s “energy policy simulator“— shows that without additional action Nevada’s emissions will actually increase 12 percent by 2050 as fossil fuel use outpaces solar power and electric vehicle growth.”

30 by 30: The Sierra Nevada Ally’s Brian Bahouth has a good piece about testimony in the Legislature on a resolution supporting the conservation of 30 percent of the state by 2030.

Thacker Pass, lithium and mining: Grist’s Maddie Stone writes about the Thacker Pass Lithium Mine, approved in the final days of the Trump administration. From the story: “The controversy over Thacker Pass highlights a much bigger challenge the Biden administration will have to grapple with in order to quickly transition the U.S. economy to carbon-free energy sources: How to acquire the vast mineral resources that are needed, such as metals needed for batteries, like lithium, cobalt, and nickel, without sacrificing biodiversity or the health of communities living nearby mining projects.”

Something to watch: “As part of its Integrated Resource Plan (IRP), the California Public Utilities Commission (CPUC) has identified more than 2,000 MW of new renewable energy generation in southwest Nevada that would help California achieve its climate change goals,” Gridliance announced in a press release this week. More to report on this in the coming weeks.

Butterfly populations are declining across the American West as the climate changes, UNR researchers find

Good morning, and welcome to the Indy Environment newsletter.

As always, we want to hear from readers. Let us know what you’re seeing on the ground and how policies are affecting you. Email me with any tips or suggestions at daniel@thenvindy.com

To get this newsletter in your inbox, subscribe here.


Hundreds of butterfly species are slowly vanishing from the American West as the landscape becomes warmer and drier, according to a sobering report published in Science last week.

The report, led by researchers at UNR and relying on population data collected over four decades, included more than 450 species of butterflies. The study estimated a 1.6 percent annual decline in butterflies, a rate that is in line with reductions of other insects across the globe. Although insect declines have been observed in developed areas, the study is significant because it demonstrated declines even in untouched landscapes.

“Habitat loss is always the most important thing,” said Matt Forister, a UNR biology professor and the lead author on the report. “But the effect that we see of climate change out there in the open spaces is impressively strong. It’s stronger than we would have expected.”

An annual decline of 1.6 percent might not sound like a lot, but the value represents a significant population loss for species that remain vulnerable to temperatures that are only expected to increase. Forister noted that the rate compounds each year. He calculated that if you went to a location 20 years ago and saw 1,000 butterflies in a day, the rate would predict 725 butterflies now.

“We hope this study adds more motivation to fight climate change wherever possible,” he said.

For scientists studying insects, butterfly populations can provide valuable insights into understanding how populations are changing, Forister said. Researchers and citizen scientists can often have an easier time counting butterflies, compared to other insect species. 

The data analyzed in the study included observations from researchers like Forister who visited the same areas regularly, observations from volunteers and records from nature enthusiasts. 

Insects are small critters, but they play a key role in many ecosystems. Caterpillars, butterflies and moths are large consumers of plants and often provide food for other species, Forister said.

“It’s really almost impossible to imagine ecosystems without these animals in them,” he said. “But we are finding out how they are going to change with fewer of them.”

While insects still face threats from human development and pesticides, the study highlights the fact that warming temperatures can affect all ecosystems, even in largely undisturbed areas.

“If protecting open lands is not enough to protect insects, then that means we need to think close to home,” Forister said. “And it raises the importance of people making smart choices about their backyards and city parks and edges of agriculture and places we have control over.”

Here’s what else I’m watching this week:


THE LEGISLATURE:

A big energy bill is coming: My colleague Riley Snyder reports on state lawmakers preparing a wide-ranging energy bill that will focus primarily on the transportation sector, which makes up the largest share of the state’s carbon emissions. The legislation could require NV Energy to invest more than $100 million in electric charging stations over the next three years. It would also include language making it the state’s policy to increase transmission capacity. 

  • Last week, InsideClimateNews’ Dan Gearino took an in-depth look at Warren Buffett’s energy empire, which includes NV Energy. He writes that Buffett’s “holdings are so large and in so many sectors that he is simultaneously financing the transition to clean energy while continuing to have deep connections to fossil fuel industries.” Buffett focused on transmission in his shareholder letter, mentioning NV Energy’s Greenlink project.  

More on the Blockchains proposal: Earlier this week, I interviewed Blockchains LLC CEO Jeff Berns with my colleague Joey Lovato in a special edition of our IndyMatters podcast. We asked Berns about his effort lobbying the Legislature for a bill that would allow wealthy developers with an innovative technology and large land holdings to break away from existing counties and create a new local government, known as an “Innovation Zone.” Here are a couple takeaways:

  • Blockchains LLC hired Jason King, who retired as Nevada’s top water regulator in 2019, as a consultant to help the company navigate its issues developing water rights.
  • Berns said the company was looking for water in six different areas in multiple counties. Earlier this year, we reported on its acquisition of water rights in rural Washoe County.

WATER AND LAND

A Sloan Canyon pipeline: The Southern Nevada Water Authority is considering a pipeline that would tunnel under the Sloan Canyon National Conservation Area. Las Vegas Review-Journal reporter Blake Apgar writes that “the project is part of an effort to increase the reliability and capacity of the water system in the southern valley while also creating backup infrastructure to an existing water line.” It could help serve a future Clark County airport in the Ivanpah Valley. 

Seeping growth: The city of Fernley is concerned about its long-term water supply as the U.S. Bureau of Reclamation looks to line the Truckee River canal. Right now, the Truckee Canal, one of the earliest federal water projects, is unlined. That means water can seep out of the side of the canal and into the groundwater. Fernley relies on that groundwater, or seepage, for its water supply. If the canal is lined, the water could go away. In a story by the Reno Gazette Journal’s Amy Alonzo, Fernley’s city manager asked: “How can you just take away the water we’ve been dependent on for so many years?” The answer is this: Neither the federal government nor the state recognizes the seepage as a valid water right. I’ll be writing more on this at some point.

Reno water lawsuit goes to federal court: “Dozens of Lemmon Valley residents involved in a years-long legal battle with the city of Reno over the flooding of their homes in 2017 are moving to federal court in a complex case that could cost the city millions of dollars,” Kristen Oh writes in the Reno Gazette Journal.

Group petitions federal government to protect imperiled fish: The Center for Biological Diversity is asking the U.S. Fish and Wildlife Service to list the Fish Lake Valley tui chub under the Endangered Species Act. The conservation group told federal wildlife regulators that the fish species is threatened by groundwater over-pumping and alterations to its natural habitat.

Nevada and mining investment: This news came out a few weeks ago, but I tweeted it last week and thought I should share it in the newsletter, too. A recent survey of mining companies found that Nevada is now the most attractive region for investors, replacing Western Australia. The survey, which was reported by Mining.com, is based on geologic potential and an index “that measures the effects of government policy on attitudes toward exploration investment.”

Nevada Gold Mines negotiates new cooperative agreement: Since last year, Nevada Gold Mines, the state’s largest gold mining company, has been updating a cooperative agreement with Indigenous communities in the large area of Nevada where their mines operate. Several tribes have expressed concerns about their relationship with the company, a joint-venture that formed in 2019. Suzanne Featherston, a reporter for the Elko Daily Free Press, has more.

One other thing: Last week, I reported on Sen. Catherine Cortez Masto’s introduction of the Clark County Lands Bill, which allows for new development on public land around Las Vegas while conserving about 2 million acres. In the story, I wrote that the land also opens up public land around Indian Springs, Laughlin and the Moapa Valley. A point of clarification: Federal land managers, through an administrative process, had already identified those lands for future development. What the bill changes is that it includes those lands in a program known as SNPLMA. If those lands are sold, under the bill, they would help generate revenue that returns to Nevada.

ENERGY

A coalition opposing the Mormon Mesa solar project: “A motley coalition that includes skydivers, off-roaders, and art aficionados has risen up to oppose a proposed solar-power facility in southern Nevada," reporter Jonathan Thompson writes in his Land Desk newsletter.

Using drones to develop geothermal power: “Geophysics faculty and graduate students from the University of Nevada, Reno, announce new exploration for blind geothermal systems with Unmanned Aerial Vehicle (UAV) magnetometry.” (via sUAS News)

CLIMATE CHANGE 

New rules for making energy efficiency codes: This could be a big setback for efforts to tackle climate change. “The private consortium that oversees the model building codes for much of the United States and parts of the Caribbean and Latin America on Thursday stripped local governments of their right to vote on future energy-efficiency codes,” Alexander C. Kaufman reported in the Huffington Post

Oil and gas legislation: Sen. Jacky Rosen and Cortez Masto introduced legislation over the past week that’s aimed at reforming oil and gas drilling on public land. The bills come as the Biden administration reviews the federal oil and gas leasing program, which accounts for a sizable portion of U.S. emissions. More on the legislation in a story I wrote on Wednesday.

Climate change in the rescue bill: “In little-noticed ways, the rescue bill is going to reshape several areas of American climate policy,” Robinson Meyer writes in The Atlantic. “It will revive a number of crucial, pandemic-hammered institutions central to the country’s climate response. More important, it shows how the prevailing atmosphere of American governance has shifted.”

Blockchains CEO discusses lobbying effort for new city, company funding, efforts to acquire water in rural Nevada, claims about technology

Blockchains LLC CEO Jeff Berns, who wants to build a new city in Northern Nevada, has hired an array of high-profile and high-powered consultants, some of them connected to Gov. Steve Sisolak, to push his plan through the Legislature. But he has rarely discussed his plans publicly.

In a lengthy interview on the IndyMatters podcast Tuesday, Berns offered insight into the company’s plans, its balance sheet and his relationship with the governor. Berns conceded that there were many uncertainties about the plan and “hundreds of things that could go wrong,” but he believes there is a huge upside for a state economy pounded by the pandemic. 

Berns, who says he developed a friendship with Sisolak and got the governor to embrace his plan, chafed at the idea that he is proposing a company town and insisted he needed legislation to bypass Storey County, which opposed a development on the scale that he is proposing.

“Now we’re saying to the state: ‘Look, the county doesn’t really want us to do this,'” Berns said. “This is the impact on our whole state of what we’re attempting to do. Yes, there are hundreds of things that can go wrong. But if it goes right, think of what it could mean for the state.”

With Sisolak’s endorsement, Blockchains is asking lawmakers to establish new laws that would allow wealthy developers with an innovative technology and large land holdings to break away from existing counties and create a new local government, known as an “Innovation Zone.”

Blockchains, which controls about 67,000 acres of land outside of Reno and recently purchased water rights, wants to build a technology park and new city along the Truckee River that would incubate blockchain technology, which offers a decentralized form of information storage that experts say is more secure and could give individuals more authority over their data. 

But there are many questions about how the company would build this new smart city of about 36,000 residents and what oversight the project would have. Where will the water come from? How will the land be developed? And who would have access to the new tech community? 

A “friendship” with Sisolak and a pitch

Berns said he developed a “friendship” with Sisolak after meeting with him to talk about issues related to the overpopulation of wild horses, which roam the property that Blockchains owns.

“So a couple of years ago, right after our governor was elected, I got my way in to see him and talk to him about the wild horses, and we have developed a friendship since,” Berns said. 

Berns, who purchased the land in 2018, said he also met with Sisolak and other gubernatorial candidates during the election. Berns made substantial donations to Sisolak’s 2018 campaign. 

When the COVID-19 pandemic hit, Sisolak approached Berns to serve on a committee that was handling issues related to personal protective equipment. But Berns said he declined that offer.

In the interview, Berns recounted telling the governor the following: “I’m of no use to you on that committee. Let me work on a concept that I think might be something that will drive additional revenue to the state, because when we come out of this, that’s going to be the focus.”

After that discussion, he started to develop the concept that is now before the Legislature. 

“Around Labor Day, I presented [the idea] to him,” Berns recalled, “and then he made the decision of whether or not it was something that he felt was worthy of his stamp of approval.”

About four months later, Sisolak would include the concept as a major economic development strategy in his State of the State speech, and the governor’s office is sponsoring the legislation.

A spokesperson for Sisolak did not reply to an emailed request for comment.

Evaluating the company’s finances

Sisolak’s proposal to allow Blockchains to create an Innovation Zone is premised on the idea that the company will invest an initial $250 million in land and infrastructure with a promise to spend at least $1 billion over 10 years. Berns said Blockchains is prepared to invest. But the company’s business model remains unclear. To date, Berns said he has funded the company. 

“We have not made any money, and we have not actually figured out where we will extract fees,” he said, though he alluded to products allowing people to control their digital identity. 

The company plans to release products next year, Berns said.

Until Blockchains starts building out the Innovation Zone technology park, Berns said he plans to continue funding the business. But he acknowledged that private investment would eventually be necessary to fully build out the technology park, what he estimates will cost about $10 billion. 

When asked how the company planned to recoup its upfront costs and whether they would be passed down to end-users, Berns offered only vague details about his plans for monetization. 

“If you’re going to be using our vaults to store your information, will there be a fee for that? We’ll figure all of those parts out of it as we go. We don’t know yet,” Berns said. “But when we build out the park, you’re talking about over $10 billion. That is certainly not something Blockchains will do. We will raise private money to build it out. But there won’t be public money.”

Berns talks about vaults the company purchased in the company’s “Global Event Launch Keynote” in 2018. These vaults will store digital backup keys to access digital assets. Two vaults the company purchased are in Wyoming and Georgia. There are also two international vaults in Sweden and Switzerland. According to what Berns said during the keynote, these vaults are nuclear bomb resistant and resistant to electromagnetic pulses.

Investors have contacted the company since 2018, Berns said. 

Berns noted that the company’s land is considered an “opportunity zone,” a federal designation that offers a tax break to wealthy investors who develop in economically-distressed areas. The decision to give the land special tax status in 2018 came under scrutiny. Nevada politicians and lobbyists pushed for designating the area, despite nearby areas having lower income brackets.

The designation, Berns said, “offers some very unique abilities to raise money.” He also cited the state’s nascent infrastructure bank as a source for potential private or pension investment. Berns said another possibility was using blockchains technology to help fund buildings. 

“I don’t know yet how we’re going to raise money,” he said. “I haven’t gotten that far.”

Looking for water in six different places

To build out a new city with about 36,000 people, Blockchains will need water. The company has water rights through an existing water district within Storey County, but that water district does not serve the area of land where Blockchains has said it plans to build a residential community. 

As The Nevada Independent first reported in February, the company is looking to import water from rural areas. Not long after Berns pitched the concept to Sisolak, the company closed on a more than $30 million deal to purchase water from the area around Gerlach, a small town that sits at the edge of the Black Rock Desert, where the Burning Man festival is hosted each year.

When developers proposed a pipeline to move that water in the 2000s, environmental groups, the Pyramid Lake Paiute Tribe and local, state and federal entities filed legal protests. At the time, the tribe told state officials that exporting the water could harm Pyramid Lake, hindering decadeslong restoration efforts after water was diverted from tribal land in the early-1900s.

In February, a lawyer for the tribe said the tribe is watching the “water rights very closely.” Berns has not yet consulted with the tribe. He said it was a “bit premature” to engage with water users.

Berns believed he could find a “win-win” solution, but indicated that he would respect the tribe’s sovereignty, saying that “if the answer is the door is closed, there’s nothing we can do.” 

“But if the answer is, ‘look, we all have issues with water,’ let’s look at the ways in which maybe we can all work together to not just solve our issue, but to solve your issue and your issue and try to find that win-win. That’s my approach with everything,” he said. “That’s what I hope to do here.”

Berns said he recognized the environmental and economic concerns of piping water from rural Nevada, and he said that “we’re not going to do something that is going to hurt the rural counties,” but he provided few specifics. Berns said the company is investigating water in six different places in multiple counties, but he would not disclose the exact locations. 

“I can just tell you that we know that water is an issue in all Western states,” he said. “We know it’s a serious issue. Stakeholders have very serious, legitimate concerns. And the hope would be that we can get together and figure out a way that takes into accounts all of these concerns.”

Having moved from California, Berns called the water issues a “harsh learning experience.”

Top consultants and a full-court press

In working toward obtaining and entitling the water a city would need, Berns said the company hired Jason King, a former top water regulator. Berns described King, who retired as the State Engineer in 2019, as “the best person” the company could hire “to figure all of this out.”

Since the company first purchased land in 2018, Blockchains has contracted with top lobbying firms and economic consultants across the state. At one point in the interview, Berns said the company “hired the best people in Nevada to do an economic impact analysis on what it would mean to the state,” referring to the Innovation Zone concept and Blockchains concept. 

Berns identified the company’s economic consultant as Jeremy Aguero, a principal analyst with Applied Analysis. Aguero presented the Innovation Zone concept at a panel that Sisolak hosted. Berns also said Guy Hobbs, managing director of Hobbs, Ong & Associates, helped conduct an economic analysis. Kathy Ong Sisolak is listed as a director and the co-founder of the firm.

In the Legislature, the company is deploying a full-court press strategy to convince Democratic and Republican lawmakers to support the proposed bill. Blockchains has hired R&R Partners, a political powerhouse, to lobby lawmakers. In addition to launching a fact-page for the Innovation Zone plan, the campaign sent a video pitch to lawmakers and purchased ad time in Las Vegas.

Despite these efforts, Berns downplayed the idea that the proposed legislation was a big ask.

“All we’re saying is give us a chance to prove this out,” Berns said. 

The company, he noted, is not asking for money and is working to absorb risks. Once the new government structure is established, Berns said that it would operate similar to other counties.

Storey County said no. Will the state say yes?

Last week, Storey County voted to oppose the proposed legislation because of the concerns associated with carving up the county and establishing “separatist governing control.” Many have asked: Why can’t Blockchains develop on its land within the current county structure?

Storey County’s entire population is about 4,000 people. The company’s development proposal involves building about 15,000 dwelling units and establishing a city of about 36,000 residents. When Berns pitched the idea to the county, he said officials did not want to grow to that scale. 

With the proposed development, Berns said the company would be “forcing a change on them, on who their leadership is, on how their government runs, on how everything is structured. And they indicated two years [ago], they had no interest in letting us do that… The max amount of houses that they would authorize would be 3,500 houses, which effectively means you cannot build what we are doing because you need to have that many residents to make this work.”

Apart from the homebuilding and zoning issues, he said other aspects of the proposal — like collecting sales tax instantly, direct democracy through blockchains technology or mandating a higher minimum wage — would not be feasible under Storey County’s government structure.

“This is for people that they don’t even represent yet because they don’t live there,” he said.

Large-scale developers are often frustrated with a county’s decision on zoning or how private land can be entitled. With the county rejecting a full build-out of Blockchains LLC’s development, the company asked the state to endorse creating a new type of local government, Berns said. 

Berns said he approached state officials because the company’s plans, if successful, could have a significant fiscal impact on the state. With plans to launch a digital currency tied to the dollar, Blockchains said it would charge a micro-fee on transactions that could generate revenue.

“Now we’re saying to the state: ‘Look, the county doesn’t really want us to do this,” Berns said. “‘This is the impact on our whole state of what we’re attempting to do. Yes, there are hundreds of things that can go wrong. But if it goes right, think of what it could mean for the state.’”

A company town?

Because of the company’s involvement in lobbying for the Innovation Zones and the set-up of the new local government, critics have said Sisolak’s proposal would allow for the creation of new company towns. Last week, late-night host Stephen Colbert did a segment on the proposal, comparing it to feudalism. Berns, a fan of Colbert, said the company’s goal is to do the opposite.

“It’s using technology to take away the power from the tech companies,” he said. “The narrative out there isn’t the narrative that should exist with the legislation. As soon as the bill comes out, and the governor gets out there and all of those kinds of things, I think that narrative will change.”

Throughout the interview, Berns emphasized the decentralizing features of blockchains and its potential to break up big tech and businesses that have a stranglehold over individual privacy and data. A main feature of blockchains, he said, is that it allows businesses to have more control over their data. Berns described it as the “most anti-Big Tech thing there is.”

“This isn't a company town,” Berns said. “We already own the land. We already could build the city. There's nobody living there. Once there are people living there, [the residents] take control.”

Once the city is populated, there will be elections. For now, Berns said the company is asking this: “please replace the three county supervisors that oversee us, because they are responsible to the voters, with three people that the state will [appoint] to oversee the development.”

The plan, Berns said, is that multiple companies would move into the Innovation Zone. 

“The goal is to show how this technology could allow the community to have control,” he said.

When asked about housing affordability and distributing the land, Berns said that the goal is to lease, rather than sell the land Blockchains owns. Berns said the community would control what happens on the land, but provided few details. He said his concept is “not ready to roll out yet.” 

The technology and international interest 

Throughout the interview, Berns offered vague sketches of how the city might operate and how it would test Blockchains technology. He emphasized the opportunities that come from starting from scratch — that it could change the way infrastructure is built and decisions are made.

“My vision for this is a place where people can come to create,” he said. “In innovating new ideas, you are failing. That’s just the nature of innovation. We have failed probably 50 times already on what we’re trying to develop. So I want to create a place where that’s OK.”

The goal with the Innovation Zone is to create a place to develop new blockchain technology. 

Berns said his vision for the city is “to incubate these different ideas like using blockchains as the foundation for transparency, for payment, for all the ministerial things that companies don’t trust each other with, and then create this place where people can live, work, play, vote — do everything they do in their normal communities — but testing out all of these new technologies.”

Exactly what that technology would look like and what companies are interested in coming to the park remains an open question. Berns said he had nondisclosure agreements with some companies and he could not disclose details, but he added that “we have interest from some very large multinational companies that have indicated they’re interested in projects out here.”

Berns said countries and cities have reached out to the company about working on projects. One country, Berns said, is the Republic of Korea, but he declined to provide other examples.

When asked about how Blockchains planned to market its technology, Berns said that it is not a primary focus for him right now as he concentrates on getting the proposed legislation passed.

“We need to get the legislation passed to see if we’re going to be able to build a smart city,” he said. “And that’s really all I’m focusing on — is trying to answer the legislators’ questions and make sure that I’m out there explaining what we’re trying to accomplish.”

“This is not Big Tech trying to take over the world,” he added. “This is not a separatist who wants to destroy the government. This is me saying there is a technology out there that would allow for us to shift the paradigm and empower the individual, and I want to try to create that here.”

Cortez Masto introduces Clark County lands bill to expand Las Vegas footprint, designate public land for conservation

Good morning, and welcome to the Indy Environment newsletter.

As always, we want to hear from readers. Let us know what you’re seeing on the ground and how policies are affecting you. Email me with any tips or suggestions at daniel@thenvindy.com

To get this newsletter in your inbox, subscribe here.


Democratic Sen. Catherine Cortez Masto introduced long-awaited legislation Wednesday that would change the way public land is managed in Clark County, creating a path to grow the Las Vegas metro area toward California while setting aside land for conservation and recreation.

The introduction of the legislation comes almost three years after the Clark County Commission, then-chaired by Gov. Steve Sisolak, asked the state’s delegation to introduce a public lands bill. 

For years, elected officials, county staff and real estate developers have predicted a demand for more developable acreage with the Las Vegas area, encircled by federal public land, forecast to grow. In an interview, Cortez Masto said the bill looks to balance new growth with conservation.

Cortez Masto said she worked to answer the question: “‘How do we find a balanced approach?”

She said the goal, drafting the bill, was “that we actually look to diversify our economies through this bill, that we build more affordable housing but that we also then continue to preserve the outdoor spaces that we have across Southern Nevada for outdoor recreation and conservation.”

“That’s why it took us some time to really talk with folks, engage the cities, engage the county and make sure that everybody had an opportunity to weigh in,” she added.

The bill, as introduced, would open up a large stretch of federal public land, running south along the I-15 corridor toward Jean and the California border, for potential commercial and residential development. It also opens up public land near Indian Springs, Laughlin and the Moapa Valley.

At the same time, the legislation proposes conserving about 2 million acres of public land. The bill would establish 337,406 million acres of wilderness in the county and protect about 1.3 million acres of the Desert National Wildlife Refuge as wilderness. The refuge is the largest in the contiguous United States and has faced recent threats with the Air Force looking to expand a training range. The bill would also set aside about 350,000 acres of land for wildlife habitat.

In Nevada, the U.S. Bureau of Land Management oversees about 67 percent of the land. As a result, the federal government — and Nevada’s congressional delegation — play a role in how land is managed. Accordingly, the bill proposes changes to land management across the county.

It would convey 41,255 acres to the Moapa Band of Paiutes, whose lands originally consisted of more than two million acres in 1874 and were substantially reduced by Congress one year later. The bill would also convey public land currently leased for municipal use (parks, schools, etc.). 

How the legislation came to be is the result of a long, arduous and often controversial process. The county’s original proposal took heat from environmental groups. It protected a fraction of the acreage that Cortez Masto’s bill does and was viewed by several groups as subverting the spirit of the Endangered Species Act. In October 2019, 14 groups sent a letter of concern to the delegation.

Then there was a wait. A discussion draft came out in January 2020, and Cortez Masto signaled that the bill would be introduced in December. In that time, Cortez Masto’s office reached out to dozens of groups to make changes to the county’s original proposal. When the legislation was introduced on Wednesday, my inbox is proof that many groups, though not all, were in support.

The county put out a supportive press release. The homebuilders. The commercial real estate developers. The Nevada Conservation League. Friends of Nevada Wilderness. Save Red Rock. 

Shaaron Netherton, executive director of Friends of Nevada Wilderness, said that the bill “would be the single largest designation of wilderness acres in the state’s history, ensuring continued public access to these lands and critical wildlife habitat and cultural resource protection.” 

But some environmental groups remain skeptical of the tradeoffs in the bill: future sprawl for conservation. Patrick Donnelly, state director for the Center of Biological Diversity, said the bill was an improvement over what the county had originally proposed. But he said he rejected the premise that conserving more land would offset the environmental impacts of increased sprawl.

Donnelly said in an email that the growth pattern contemplated in the bill “perpetuates a pattern of development that has brought our society to the brink of ecological and climate collapse.”

Dexter Lim, an organizer with the Sunrise Movement Las Vegas, echoed these concerns.

“Our current reality of environmental crises have intrinsic roots in the irrevocable effects of urban sprawl,” Lim wrote in a statement. “Continuing this practice over more sustainable and land-efficient strategies such as infill development is ignorant of the intersectional climate, housing, and transportation injustices that already plague residents of Clark County.”

While the earlier iterations of the legislation did not address climate change, Cortez Masto’s bill does include a provision aimed at climate action. The legislation would allow funds generated through the sale of public land to benefit projects to address climate change in Clark County.

What’s next? Cortez Masto said that the entire delegation supports the proposal. The senator said the bill could potentially move as part of other congressional legislation or independently. 

She also said she expects to continue hearing from constituents about the legislation. 

“This draft that we're going to put out now, I'm sure there are some people that have not had a chance to see it,” Cortez Masto said. “We're open to making sure it gets in front of them, and if they have thoughts on something in this draft, we're open to listening to them as well.”

Here’s what else I’m watching this week:


THE LEGISLATURE

Blockchains, Sisolak and a new city: During a roundtable on Friday, my colleague Michelle Rindels asked the governor about environmental concerns, specifically related to water, in his administration’s legislative effort to create Innovation Zones. The proposed legislation would allow a technology company to develop a self-governing community near Reno. Sisolak said the company would be required to find water for the project. The company has, as we reported. The plan is to import water from rural Nevada, raising several environmental and equity concerns.

Where the wild things are: April Corbin Girnus writes in the Nevada Current about legislation, backed by the state’s natural resource agency, that would limit the public release of information on sensitive species: “State officials contend they are trying to protect species. Environmental groups fear the state is aiming to protect proposed industrial developments from public scrutiny.”

Fixing injustices in geographic naming: Lawmakers are considering a bill that would give Indigenous communities more representation in naming geographic places. As my colleague Jazmin Orozco-Rodriguez wrote in our legislative newsletter Monday, “Native voices could be given more prominence in such decisions if the Legislature approves AB72, which would add a Nevada Indian Commission member to the state geographic names board.” On a related note, if you are not already subscribed to our biweekly legislative newsletter, you should sign up here.

Is the mining industry paying its fair share? My colleague Riley Snyder talked with Nevada Mining Association President Tyre Gray about efforts to change limits on the mining tax. 

Spending big: Nevada Gold Mines, a joint-venture between Barrick and Newmont, donated $500,000 to a PAC affiliated with Sisolak. The PAC gave money to Senate Democrats as the Legislature is looking at increasing mining taxes. My colleague Jacob Solis has a story on it. 

WATER AND LAND

Supreme Court rules on domestic wells: The Supreme Court ruled in favor of Nevada’s top water regulator in a long-running and closely-watched dispute over domestic wells in Pahrump, Robin Hebrock reports in the Pahrump Valley Times. For background on the issue, I wrote a piece back in 2018 looking at some of the complexities (and misinformation) around the issue.

The Colorado River negotiating table: Colorado River water users are set to begin discussing how to manage the watershed as the climate changes and populations continue to grow. Luke Runyon reports for KUNC on the conversations about what the negotiating table might look like. 

ENERGY AND CLIMATE

A Nevada lithium mine and a new rush: A second lawsuit was filed last week challenging the Trump administration’s decision to permit the Thacker Pass lithium mine north of Winnemucca, Brian Bahouth reports for the Sierra Nevada Ally. Last month, High Country News reporter Maya Kapoor and photographer Russel Albert Daniels wrote about the project in the context of a rush to develop lithium mines in the Western U.S. and Nevada. This story is definitely worth reading. 

  • Reuters reporter Ernest Scheyder explores the tensions around permitting mines and supplying the raw materials needed to transition the economy away from fossil fuels.
  • USDA puts brakes on land transfer for Arizona mine, the AP’s Felicia Fonseca reports.

Could it happen here? Is Nevada's power grid prepared for more extreme heat waves? Is it prepared for climate change? Utility regulators are investigating that question, my colleague Riley Snyder reports following the winter storm in Texas that led to a devastating power crisis.

OUTDOOR RECREATION

Outdoor recreation hit by COVID-19: Despite anecdotal evidence that more and more people are turning to the outdoors during the pandemic, the recreation industry in Nevada ended last year with 3,600 fewer jobs, according to a new report. Mike Shoro reports for the Las Vegas Review-Journal: “State officials had previously suggested the pandemic had accelerated the growth pattern. The new report suggests that may have been true in some cases, but not all.”

Lake Tahoe ski resort sued over 2020 avalanche: “The widow and a friend of a man killed in an avalanche at a Lake Tahoe ski resort last year have filed separate lawsuits accusing the resort of negligently rushing to open the slopes in unsafe conditions for a holiday weekend that’s typically one of the busiest of the season,” Scott Sonner writes for the Associated Press.

Storey County board, water district oppose effort to let technology company form local government

Horses at Tahoe Reno Industrial Center

Storey County commissioners voted Tuesday to oppose “separatist governing control” within their jurisdiction after Democratic Gov. Steve Sisolak backed a legislative effort that could result in a private tech company and major campaign donor forming its own local government.

Blockchains LLC, a company that owns roughly 67,000 acres of land in Storey County, is asking lawmakers to approve a program that would allow large-scale landowners to create “Innovation Zones.” As described in draft legislation, Innovation Zones would operate as autonomous entities with governmental powers and focus on developing emerging technology.

A Storey County water district, governed by the commissioners, also voted to oppose the legislative effort Tuesday. Both motions direct staff to continue negotiating with the company. 

“This would carve out a part of Storey County and create another county, in essence,” Austin Osborne, Storey County manager, said before commissioners voted on the motion Tuesday. 

Osborne raised several concerns with the concept of letting Blockchains create a self-governing entity within the county. He argued that the Innovation Zones in the proposed legislation could place strain on the county’s resources and remove a portion of its potential tax base.

In publicly released documents, Blockchains outlined plans to build a “Smart City” on a portion of its land. The proposed residential development, which a company executive said would be located in the Painted Rock area along the Truckee River, would include about 15,000 dwelling units.

For the past decade, Storey County has used tax breaks and expedited permitting to lure major companies, including Tesla, Google and Switch, to set up operations in the county’s Tahoe Reno Industrial Center. The county has focused on growing commercial businesses with a small population. Most workers at the industrial center live in neighboring Washoe or Lyon counties. 

But Blockchains wants to build a residential town, and in the past, county officials had told the company they were not interested in a development at the scale they proposed, the AP reported.

“We have great respect for Storey County,” said Pete Ernaut, a lobbyist representing the tech firm. “They have a remarkable track record on permitting commercial development. However, their history of permitting residential or mixed-use development is where we separate.” 

In an interview Tuesday, Osborne said the company’s plans to build homes could potentially move forward within a traditional government structure. Storey County’s 2016 Master Plan, he noted, discusses the construction of a residential and mixed-use development in Painted Rock.

“It's something, with an appropriate proposal, we would certainly look at,” he said.

A Sisolak spokesperson did not respond to a request for comment. The governor unveiled the legislative proposal on Friday afternoon at a panel with his economic development czar and a private economic analyst. Sisolak asked for people to keep an “open mind” about the concept. Blockchains and its CEO Jeff Berns donated tens of thousands of dollars to help elect Sisolak.

The legislation has not been formally introduced.

Osborne and the county commissioners also questioned whether the legislation was necessary, given that Storey County already has a permissive regulatory environment known for tilting in favor of encouraging private development, a trend dating back to the Comstock mining boom.

“Storey County is the poster-child for this sort of thing,” Osborne said. “There is no place in Nevada that has fast permitting, permitting flexibility, nimbleness that Storey County does. We are well-known for that all over the United States as well as locally. We are the innovation zone.”

In 2019, The Nevada Independent reported on how private and public interests were blurred in the development of the industrial center, where Blockchains owns the majority of its land and is seeking even greater autonomy to pursue a master-planned development that includes housing. 

Storey County Commission Clayton Mitchell echoed Osborne’s comments Tuesday, adding that unlike many local governments, Storey County looks for creative ways to enable development. 

“We often take heat for being too flexible and moving too fast,” Mitchell said.

Mitchell, along with Storey County Commission Chairman Jay Carmona, signaled a willingness to work with Blockchains. The motion directs staff to engage in a “good-faith” dialogue with the company. The motion also asks staff to work with lawmakers to support blockchain technology. 

“They’ve invested substantially in Storey County, and I’d like us to be able to welcome them and facilitate their success as a productive, contributing member of our community like we have with our other corporate citizens,” Mitchell said.

But the commissioners said they could not endorse the company forming its own government, adopting language that opposed “separatist governing control and carving up of Storey County.” 

Mitchell and Carmona both voted for the motion. Commissioner Lance Gilman was not present at the meeting. Gilman, who represents the industrial park’s master developer and also serves on the County Commission, helped sell the roughly 67,000 acres of land to Blockchains in 2018. 

In a statement, Ernaut said the company is open to working with the county moving forward: “A smart city with 35,000 residents is essential to the vision of this Innovation Zone, which makes permitting a city of this size key to this discussion. We understand their initial reaction to such a unique idea, and look forward to finding a path forward that works for everyone.”

The commissioners adopted a similar motion to oppose the legislation at a separate meeting on Tuesday. The Storey County Commission oversees the water district for the industrial center, a utility that serves the Tesla Gigafactory, a Switch data center and other commercial businesses. 

According to a map that was presented at the meeting, all but 2,200 acres of Blockchains’ land is within the water district’s service territory, raising questions about how they would develop the residential land. The district was mainly formed to provide water connections for industrial use.

A map shows the land owned by Blockchains LLC (in blue) and the service territory of the Tahoe Reno Industrial Center's water district. The map was presented at a water district board meeting on Tuesday, March 2, 2020.

The company owns a majority of land within the water district’s service territory. There remains uncertainty about how the district would operate if Blockchains formed its own Innovation Zone.

“They would be a huge user of water in the area,” Will Adler, a lobbyist for the water district, said at the meeting. “And it’s kind of unclear whether you would have to provide that water initially or not, depending on how this is developed or not, because of that uncertainty.”

Sisolak urges Nevadans to keep ‘open mind’ about plan for autonomous Innovation Zone run on cryptocurrency

Gov. Steve Sisolak urged critics not to write off a proposal pushed by Blockchains LLC to create an autonomous “Innovation Zone” in a large undeveloped tract of Nevada, saying the hard-hit state needs to embrace a unique and bold idea instead of waiting on economic recovery.

Sisolak hosted a virtual roundtable discussion on Friday to offer more details on the Innovation Zones, which are backed by Nevada-based Blockchains LLC and were listed as a cornerstone of the governor’s plans for Nevada’s economic rebound. The company envisions developing a 36,000-person Painted Rock Smart City that is run on a Stablecoin cryptocurrency and supports the company’s efforts toward wider adoption of blockchain technology.

But critics have panned the draft proposal — which has not been introduced yet as formal legislation — to have the Zone slowly secede from the surrounding county. They also question how it will secure enough water without harming the environment or touching off a nasty spate of litigation.

“I'm not afraid of the hard questions. And I'm not afraid to listen to those who believe the concept as proposed is flawed,” Sisolak said. “I just ask that all involved understand that the end goal is a massive economic development investment in Nevada, and a chance ... to set down a marker that Nevada is the blockchain technology center of the world.”

To pursue an Innovation Zone, a company needs to make an immediate investment of $250 million in land and infrastructure, commit to investing at least $1 billion over a 10-year period to develop a smart city, and own at least 50,000 uninhabited acres in Nevada. Presenters called it the highest bar for any economic development program in state history; Blockchains notably owns a 67,000-acre parcel of land in Storey County.

Michael Brown of the Governor’s Office of Economic Development said the project could bring the state 123,000 direct, indirect and induced jobs over the course of a 75-year development. That development phase would have an economic impact of $16.4 billion, according to slides shared during the presentation.

“This is a game changer for Nevada,” Brown said. “Opportunity is knocking here with a multi-generational employment opportunity.”

Economic analyst Jeremy Aguero argued that the model was different than in the past, when the state offered tax incentives to attract the Raiders stadium, carmaker Faraday Future and the Tesla Gigafactory. Innovation Zone leaders would be required to go to the Legislature and have a new, industry-specific tax imposed upon the technology being developed in the Zone, he said.

“The concept here isn’t one of abatements or incentives or anything along those lines,” Aguero said. “As a matter of fact, it's quite exactly the opposite.”

Presenters tried to head off concerns that the Smart City would be a “company town,” saying that the Zone would be governed by a three-member board of supervisors appointed by the governor and independent of the applicant. Those supervisors would be subject to the state’s ethics laws and the Open Meeting Law.

Asked why the proposal called for creating an entirely new political subdivision, Aguero pointed out that the proposed Smart City would be significantly larger than the 4,000-person county it’s currently in, and would require such a heavy administrative lift that starting over makes sense.

“We're not talking about retrofitting a community with some type of innovative technology we're talking about building a city from the ground all the way up,” Aguero said. “You're talking about orders of magnitude different in terms of that technology.”

To concerns that there may not be enough water to supply the development, Sisolak noted there is always a concern about water in any new development. As a city being built from nothing, it would incorporate cutting-edge technology to achieve a carbon-neutral footprint, he said, and “is everything that the environment absolutely needs.” 

“They're responsible for providing water to the Innovation Zone. They'll have to buy the water rights, come up with the water rights in order to do that,” he said of Blockchains. “Environmentally, this is the most sound concept you can possibly have.”

Activists scoffed, with one saying the idea was an "outrageous corporate giveaway" that would set the stage for a water war.

“Blockchains LLC's plan is to build a 100 mile pipeline to the Black Rock Desert to drain remote aquifers important to indigenous people, endangered species and Nevada's outdoor recreation economy," said Patrick Donnelly, Nevada state director with the Center for Biological Diversity. "Governor Sisolak wants to give the keys to our state to tech bros, while enabling a water grab which would destroy the environment."

Above all, Sisolak touted the project as a way to provide affordable housing, diversify the tourism-heavy state economy and provide jobs “that our young people that are in college and in university are looking forward to.” He urged people to keep an open mind.

“We have a long history of embracing innovative creators and bold ideas that others dismiss too quickly,” Sisolak said. “Together, we can turn this big idea into reality that can change Nevada's economic future forever.” 

Behind the Bar: Stablecoin, utility regulator fines, abolishing K-12 commissions and more compensation for the wrongfully convicted

Behind the Bar is The Nevada Independent’s newsletter devoted to comprehensive and accessible coverage of the 2021 Legislature. 

In this edition: A bill on “Stablecoin” that is totally not related to Innovation Zones, increasing utility regulator fines, changes to wrongful conviction compensation and heartburn on abolishing education-focused commissions, including one created by beloved former Assemblyman Tyron Thompson.

Check this link to manage your newsletter subscriptions. This newsletter is published on Mondays and Thursdays.

I want to hear from you! Questions, comments, observations, jokes, what you think we should be covering or paying attention to. Email me at rsnyder@thenvindy.com.


I’ve spent a lot of time this week thinking about Texas.

Everyone is generally aware of the massive power grid failures that left millions of Texans without reliable electricity, natural gas service, or even clean water in the midst of a massive winter storm. Dozens of deaths have already been reported and the toll is expected to rise.

I’ve avoided commenting on much of the news in Texas because I’m just not an expert in ERCOT, natural gas pipeline infrastructure or the wild confluence of factors that led to the greatest forced blackout in American history (I also have to write this newsletter). There have been some great breakdowns of what exactly happened to the Texas power grid, as well as some not-so-great ones.

But back in 2017 and 2018, I spent probably too much of my time following the debate and issues around potential implementation of a similar retail energy market in Nevada, in the form of Question 3. It would have amended the state’s Constitution to require that Nevada set up a retail electric market similar to the one in Texas and a handful of other “choice” states (I wrote a long story about why the measure failed).

Even if Question 3 had passed, Nevada would still be in a much different position than Texas. ERCOT, the grid manager for Texas, isn’t connected to any other state’s grid in order to avoid federal regulation. Nevada also has a much different mix of fuel resources than Texas, a different geographical layout and different weather conditions and patterns that affect electric supply and demand in different ways.

I don’t want to get too far in the weeds on retail choice states and what happened to Texas last week, again because this is nominally a newsletter about the Legislature and not Riley’s Thoughts About Electric Markets.

One universal takeaway from last week is this: our lives are governed by increasingly complex systems, whether it be the electric grid, health insurance, unemployment insurance or even the operations of the state government and Legislature. At the same time, expertise in those areas is harder to find, and people tend to apply their political priors to complex systemic issues.

It’s why I’m glad to work in a newsroom where I have the flexibility to spend a few days digging into regulatory filings for a more-than-surface level dive into resource adequacy and how worried Nevadans should be about a California or Texas-size grid disaster happening next summer.

I think there’s real value in reporting on complex issues that is not only deep and accessible, but free to the general public. So while stories on utility regulatory filings aren’t going to get the same attention as a story on which players the Golden Knights have signed, there is a real public service in digging into these issues before they reach the catastrophe phase.

— Riley Snyder

Assemblywomen Claire Thomas, left and Daniele Monroe-Moreno during the first day of the 81st session of the Legislature in Carson City on Monday, Feb. 1, 2021. (David Calvert/The Nevada Independent)

Conine prepares Stablecoin bill, says it’s not related to Innovation Zone run on Stablecoin

Treasurer Zach Conine wants to prepare Nevada government agencies to accept the cryptocurrency Stablecoin as payment — although he insists his bill on the subject is unrelated to Blockchains LLC’s well-publicized proposal to create an entire “Innovation Zone” that secedes from the surrounding county and brings in tax revenue through a Stablecoin product.

Conine discussed the concept on Wednesday as SB39 at a hearing in the Senate Committee on Government Affairs, where he fielded a question about the polarizing Innovation Zone concept.

“The way I'm interpreting this bill is that it is connected to this innovation city. And this is a foundational piece for it to work,” said Democratic Sen. Dina Neal.

“It's not connected,” Conine retorted. “So the ability for us to take payment in the form of Stablecoins — and Innovation Zones, at least to the extent that I understand them — have nothing to do with each other.”

Stablecoin is a type of cryptocurrency that is tied to a reference point such as the U.S. dollar, in contrast to cryptocurrencies such as Bitcoin that don’t have such a peg and are much more volatile. Conine’s bill authorizes government entities to accept Stablecoins as payment in government transactions, just like they can accept credit cards.

“Now one of the reasons we want to put it into statute versus, say, just doing it in the same way that we don't necessarily contract a new piece of statute when we do PayPal or Zelle or something like that, is because we want companies to know that Nevada is open for business, to try and attract businesses that do this kind of thing to try it here,” Conine said.

Stablecoin operators, like credit card companies, can charge a fee for transactions using their Stablecoin. Blockchains LLC envisions creating its own Stablecoin to power “Painted Rock Smart City” and also be circulated well beyond the semi-autonomous Innovation Zone, according to a draft presentation of the proposal obtained by The Nevada Independent.

As previously reported in this newsletter, a PAC registered to Conine and his wife Layke has taken $60,000 from Blockchains LLC founder Jeff Berns. But it’s also not the first time Conine has tried his hand at solving byzantine monetary conundrums (see: his ongoing attempt to solve marijuana banking).   

“In today's connected world, technology changes rapidly and government is often the last to keep up,” Conine said. “Senate Bill 39 presents an opportunity for the state to not only keep up, but to forge a path ahead.”

— Michelle Rindels

Utility regulators seek update to fining powers largely unchanged for four decades

Last year, the California Public Utilities Commission assessed a $200 million fine against Pacific Gas & Electric Company for its role in the deadly 2018 Camp Fire that left 85 people dead.

But if a similar tragedy happened in Nevada, caused by negligence by one of the state’s utility companies, the Nevada Public Utilities Commission would likely only be able to assess a much smaller fine — somewhere in the ballpark of $100,000.

That’s the reason the PUC filed SB18, which was heard Thursday in the Senate Committee on Growth and Infrastructure. PUC officers said that updating the fine amounts (many of which were set up to 40 years ago and never updated) would give the regulatory body the ability to levy fines that would be more than a flesh wound to the massive, investor-owned utilities like NV Energy or Southwest Gas that the commission currently oversees.

“Ultimately, the purpose of this bill is to empower the PUCN to impose fines that are concerning to those companies,” PUC Executive Director Stephanie Mullen said during the hearing. “We don't want the maximum fine amount to be something that they're comfortable paying, nor do we want the fine framework to be so prescriptive that it allows for companies to engage in a cost benefit analysis as to whether it makes business sense to comply with the law.”

For violations of rules and laws covering natural gas storage facilities and pipelines, the legislation (per a proposed PUC-backed amendment) would raise the fine amounts from up to $1,000 per day to $200,000 per day, with a maximum fine set at $2 million (previously set at $200,000). PUC General Counsel Garrett Weir said those amounts were in line with existing federal standards.

The bill would also create an administrative fine category — anyone who provides the PUC information which is “inaccurate or misleading and which the person knew or should have known was inaccurate or misleading.” Doing that, or violating any rulings or orders of the PUC, could now be punishable by a fine of up to $100,000 per day (up from $1,000) and a top-line limit of $10 million (up from $100,000).

It would also raise the fine amount for the unusual crime of operating a public utility without first obtaining a certificate of public convenience (or failing to file a report required by the Commission) from a modest $500 penalty to a maximum fine of no more than $50,000. 

Fines are remitted to the state’s general budget account and not kept by the PUC.

A cadre of business organization and utility representatives — Southwest Gas, Nevada Resort Association, Nevada Taxpayers Association, Vegas Chamber — testified against the bill, with a general concern that the fines were being raised too much. A lobbyist for NV Energy testified in neutral, saying that the utility agreed the fines should be raised but thought they should be tied to inflation rates.

Weir said the commission was willing to work on adjusting the administrative fine scale, but he noted existing law requires the PUC to consider the appropriateness of the fine to the size of the business and other mitigating factors. A larger fine maximum would give the PUC more flexibility in punishing bad, but not the worst, behavior.

“I think the commission struggles with determining what to fine an offense where, say, $100,000 is the maximum, is appropriate, but you don't want to send a message that that's an egregious violation, as something where there's loss of life, or some sort of terrible outcome,” Weir said. “So it's really a struggle. You hope to have that larger range to assess an adequate penalty when something is bad, but not the worst possible type of violation.”

— Riley Snyder

Advocates seeking more compensation for those wrongfully convicted

Public defenders and criminal justice advocates are concerned that a bill to revise the law on compensation for wrongful convictions does not include provisions accounting for the time that a person spends behind bars prior to their conviction.

“As the bill is drafted, it says you would receive compensation only after the time you were wrongfully convicted,” John Piro, of the Clark County public defender’s office, said during a legislative hearing on Friday. “However, there is time that you spend in jail waiting for your case to go to trial, and those are years of your life that you lose, as well.” 

Assembly Judiciary Committee Chairman Steve Yeager (D-Las Vegas), primary sponsor of the bill (AB104), said he thinks opposition for the bill comes from a good place and that he would “probably love to give even more compensation” to those who have been wrongfully convicted. But he also said he was unsure of the proposals from those opposing the bill as it stands.

“The request really is to compensate folks for pre-conviction incarceration,” Yeager said during the meeting. “And as many of you know, people are incarcerated, right or wrong, they're incarcerated all the time before they get to trial. And right now, if you're incarcerated before you get to trial, and you go to trial, and a jury acquits you, the state doesn't compensate you for that time.”

Nobody testified in support of the bill during the hearing. Yeager said that he would continue to work out issues with the legislation before taking it to a committee vote.

The proposed measure builds off of another bill from 2019, AB267, that makes Nevada one of 35 states allowing people who were wrongfully convicted to collect payment from the state as compensation for the time they lost while behind bars.

Since the establishment of AB267 in Oct. 2019, seven individuals have filed wrongful conviction compensation complaints, and the state has settled four cases resulting in aggregate payouts of $7.69 million, including nearly $1 million approved this month for Reginald Mason. That cost could continue to rise, however, as the law includes a provision for reimbursement for other continuing costs such as health care or housing assistance.

— Sean Golonka

Mentoring panel championed by Tyrone Thompson may be spared in commission clean-up

A bill proposed by the Nevada Department of Education would revise and abolish commissions and advisory councils that are no longer in use, inefficient or have overlapping duties, but there is a chance that some on the chopping block — such as the Commission on Mentoring — could be spared. 

State Superintendent Jhone Ebert presented the bill, SB76, to the Senate Education Committee on Wednesday. It states that the duties of the proposed-to-be abolished commissions, councils, and training programs would be transferred to the Department of Education.

The department hopes that eliminating the committees would make the agency more efficient, as it is difficult to recruit to fill seats on the panels and meet quorum. Abolishing the committees would not get rid of the work the department already does in those topic areas, Ebert said.

The Nevada Commission on Mentoring (NCOM), established by the late Democratic Assemblyman Tyrone Thompson, was on the list of being abolished, but Ebert said that the bill would be amended to keep it because it is the only place in state law that details mentoring issues in the education landscape. The bill language is expected to be changed so the mentoring commission remains in statute, but the Department of Education would not be providing the administrative support, which allows the commission to operate independently.

Karl Catarata, a youth commissioner in the Commission on Mentoring, commented in support of amending the bill. He said his experience with the commission has come “full circle,” as he was mentored by Thompson and he is now part of the commission. 

“I hope that you all consider keeping the state entity that regularly brings together mentoring leaders across our state and vote in the affirmative for the...amendment this session,” Catarata said. “The commission is always willing to work with you all on this committee and the Department of Education to continue successful mentoring outcomes, while being frugal and efficient about resources for our throughout the state.”

Some boards, commissions and councils currently set for elimination include the State Financial Literacy Advisory Council, the Commission on Educational Technology, the Council to Establish Academic Standards for Public Schools and the Statewide Council for the Coordination of the Regional Training Programs. 

Sen. Roberta Lange (D-Las Vegas) suggested that the Education Committee should look at each commission that is proposed to be abolished and have a more in-depth discussion on whether to keep it or not. 

— Jannelle Calderon

Bill would stave off court fees for more people facing eviction 

Lawmakers are considering a bill that could help Nevadans facing eviction by simplifying a process to avoid court fees.

When someone is given an eviction notice, they must file a summary eviction notice with the court, which costs $71 in Clark County. During a legislative hearing on Friday of AB107, Bailey Bortolin, policy director for the Nevada Coalition of Legal Service Providers, said the fee can pose a hardship for those facing eviction.

“That's a real impediment if the reason that you're there is because you didn't have enough money to pay to pay your rent in the first place,” Bortolin said.

The state already has a law in place that allows Nevadans to waive the fees required to prosecute or defend a civil action, but Bortolin said that that law is inadequate.

“By and large, our fee waiver system allows many people, thousands of people, every year to proceed, but it's not specific in who that should apply to,” Bortolin said. “And so what we've found is really just inconsistent results across the state.”

The bill would expand and broaden the qualifications for who can apply to have their fees waived, including any client of a legal aid program, any recipient of a state or federal program for public assistance, or anyone who “has expenses for the necessities of life that exceed his or her income.” 

Bortolin also noted that the courts would not bear the burden of waived fees and that the fees for the civil action filings would be paid by the legal aid providers in the state.

Criminal justice advocates noted during the hearing that the bill would make it easier to dispute evictions at a time when many Nevadans are struggling financially. 

“Poverty should never be punished by forcing unequal access to justice,” Liz Davenport of the ACLU of Nevada said during the meeting. “Existing law does not provide Nevada's courts a clear and objective standard for granting fee waivers and further does not provide an applicant with clear guidance.”

— Sean Golonka

DARK SKY SANCTUARY BILL ADVANCES

The Senate Committee on Natural Resources unanimously passed SB 52 on Tuesday, which would establish a voluntary state-based program for “dark sky” designations. The bill authorizes the state’s Division of Outdoor Recreation to create a voluntary program designating certain parts of the state as “dark sky” areas, which are remote parts of the state not affected as much by light pollution. The photo above was taken south of the Massacre Rim Wilderness Study Area, one of two areas in the state certified as a Dark Sky Sanctuary by the International Dark-Sky Association. (Joey Lovato/The Nevada Independent)

What we’re reading

Our legislative fundraising overview and breakdown.

Sens. Jacky Rosen and Catherine Cortez Masto will each get their own Senate subcommittees. Turns out that being 86th and 80th in Senate seniority can pay off!

The Assembly Republicans revealed their 2021 legislative priorities on Thursday. The caucus has also said its official position is that the 2020 election, where Republicans picked up three Assembly seats, was not “fraudulent.” 

Nevada Attorney General Aaron Ford’s office is backing a bill to ban no-knock warrants, made infamous through the police killing of 26-year-old Breonna Taylor.

A very technical clean-up bill on the state’s unemployment system usually wouldn’t get a lot of public attention, but DETR nonetheless remains in the spotlight.

Connecting released inmates with Medicaid benefits (Nevada Current)

More details on the bill to curtail debt-based suspension of driver’s licenses (Nevada Current)

Update on the “tainted voter rolls” lawsuit filed by former AG Adam Laxalt (Associated Press)

About one-third of the Nevada Supreme Court budget is based on administrative assessments, which have gone down greatly since the start of the pandemic. (Nevada Appeal)

More national coverage on the ‘Innovation Zones’ (The New Republic)

Sen. Ben Kieckhefer is planning a bill that would create an esports regulatory body (Las Vegas Review-Journal)

UPCOMING DEADLINES

Days to take action on Initiative Petitions before they go to the 2022 ballot: 18 (March 12, 2021)

Days Until Legislator Bill Introduction Deadline: 21 (March 15, 2021)

Days Until Sine Die: 98 (May 31, 2021)