Nevada Draft Bill To Allow Tech Firms To Form Own Communities

Officials at the US state of Nevada (home of Las Vegas etc) want tech firms to forget the campus approach of the past decade.

Instead, a draft bill obtained by the Las Vegas Review – Journal, would allow tech companies to create local governments and bespoke neighbourhood communities in the US state.

It comes amid signs that tech firms are re-evaulating their historical ties to California. Late last year Hewlett-Packard Enterprise (HPE), one of the founding fathers of California’s tech homeland of Silicon Valley, announced it was leaving the ‘golden state’ and moving its headquarters to Texas.

California exodus?

Soon after, another big name tech firm, namely database giant Oracle, also announced it was moving its corporate headquarters from California, and relocating it to the Lone Star State of Texas.

And the world’s second richest man, Elon Musk, also announced he had left California after he had sold his Bel Air homes in 2020.

Musk is now living in Texas.

A number of other firms have already left the San Francisco Bay Area, including data-mining provider Palantir Technologies, which moved to Denver from Palo Alto.

E-cigarette maker Juul Labs also relocated to Washington from San Francisco, and Charles Schwab said last year its headquarters will move from San Francisco to Westlake, Texas.

Firms are leaving California for a number of reasons, with the global Coronavirus pandemic also being a factor, after people began working from home, sometimes out of state.

Tech firms in particular have committed to allowing staff to permanently work from home, even after the pandemic ends.

But economics is also another reason. California has problems surrounding its very high cost of living (i.e notoriously expensive house prices) and commuting difficulties.

Another factor is that California also has a high personal income tax rate, while US States such as Florida and Texas have none.

Innovations zones

Into this mix are various US states aggressively appealing to tech firms, often with tempting tax offers, to make it tempting for them to relocate their facilities (and jobs).

The Nevada draft bill is seeking to allow tech companies build their own communities, in much the same way that chocolate manufacturer George Cadbury created the village of Bournville in the UK for his workers in the 1800s.

The Las Vegas Review-Journal reported that state lawmakers will soon be voting on whether or not to approve the creation of “Innovation Zones”.

These would be large swathes of land owned by companies that specialise in emerging technologies such as blockchain, artificial intelligence, biometrics, autonomous vehicles and connected infrastructure – that carry virtually the same authority as a county government to impose taxes, form school districts and justice courts, among other traditional services that government provides.

According to the draft legislation, companies that want to create their own innovation zone would need to own at least 50,000 acres of contiguous, uninhabited land located within a single county, spend $250 million initially and have plans to invest at least $1 billion inside the zone over the first 10 years after its approval.

Eventually, each zone would be run by a three-person board, one member of which would be appointed by the governor and the other two chosen by the entity applying to create the zone.

The boards would have the ability to hire and pay public officials like school board members and justices of the peace, collect and imposes taxes and establish licensing boards, just like any other Nevada county.

The move comes as Nevada’s economy, which is heavily dependent on tourism, has been one of the hardest-hit by the pandemic as visits to Las Vegas and the Grand Canyon have reportedly dried up for months.