Blockchains’ city: The Next Bullfrog County?

The legislature created a new county in 1987 – it didn’t end well

PHOTO/WIKI IMAGES: An aerial view of Yucca Mountain in Nye County, where the federal government wants to site a nuclear waste repository. In 1987, the Nevada Legislature created Bullfrog County in the area around Yucca Mountain.

In 1987, the Nevada Legislature fashioned a new county– called Bullfrog County– out of the 144 square miles of Nye County that surrounded the proposed nuclear waste site known as Yucca Mountain. The county had no inhabitants and much of the land was owned, or operated, by the federal government.

So why was it created? In short: money.

In other words, while the state government officially protested the establishment of Yucca Mountain as a nuclear waste dump lawmakers also felt that they should get as much money from the federal government as they could if the government ever approved the site. However, since much of the federal monies for the site would be sent to the local county instead of the state, the Nevada Legislature simply created a new county.

The county officials were selected by the governor while the county seat was 270 miles away — in Carson City. But, most importantly, the property taxes in the county were set to the maximum level that the state Constitution would allow. This, of course, would make the cost of running Yucca Mountain significantly higher, if not prohibitive.

Bullfrog went extinct

However, in its haste, the Legislature forgot to designate which judicial court would have jurisdiction over the county. Thus, lawmakers inadvertently created a legal no-man’s land. In addition, Nye County officials were not happy about the loss of potential revenue, nor were they happy about the loss of land from their county. They sued. In a few short years, Bullfrog County ceased to exist.

Now more than 30 years later, a tech billionaire is trying to entice state representatives into creating a new county, this time in the name of attracting business and investment to the state rather than driving it away. Gov. Steve Sisolak touted the initiative in his State of the State address. However, the billionaire CEO of Blockchains LLC., who has a dream of turning “Innovation Zones” into counties, or “county equivalents” ( or perhaps more precisely, quasi-counties or zombie counties) may run into many of the same problems that the Legislature encountered when they created Bullfrog County.

Draft proposal

To be fair, the Legislature has only recently received an initial draft of the legislation and no public hearings have been held on the matter. Nevertheless, the effort seems like a huge power grab. It is not exactly clear why Blockchains LLC., thinks an alternative form of government could facilitate innovation better than a traditional county could. But it appears that they really just want Storey County residents to shoulder much of the initial costs of establishing their city while they reap the majority of the tax and revenue benefits from that city down the road.

At best, this sounds like a glorified Specialized (or Free) Trade Zone similar to those created by developing countries to attract investment, but which sometimes enable companies to circumvent local (and international) laws dealing with issues like trade, labor and taxes. At worst, granting technocrats greater power and influence over state and local government seems like a step towards corporate colonialism.

Boom and bust

Nevada has a long history of doing all sorts of things to draw business to the state, including, liberalizing divorce laws and legalizing gambling throughout the state, while also permitting prostitution in rural counties. And we already have one independent city that sometimes operates as a county. But we have also seen many towns go from boom to bust, so, we would do well to consider who picks up the tab if one of these cities or quasi-counties implodes.

Further, Blockchains LLC., will have to answer many political and legal questions before approval, such as how the state’s open meeting laws apply to the city-corporation, whether it will have sovereign immunity, and how a city built around blockchain and cryptocurrency would protect residents that chose to use U.S. legal tender to pay debts or taxes – which they are required by law to accept.

Constitutional issues

Long before tackling those issues, Blockchains needs to address the constitutional issues presented in the Bullfrog County case. This includes, but is not limited to, the issue of court jurisdiction and the initial election (rather than appointment) of certain county officials. Finally, it ought to seriously look at the issues Nye County raised in 1987, because Storey County may raise similar constitutional questions.

If those primary issues aren’t addressed, Blockchains’ plan for a smart city may evaporate as fast as Bullfrog County did more than thirty years ago.

C. J. Lindsey graduated from Brigham Young University- Idaho in 2012 with a B.A. in Humanities and earned a Juris Doctor degree from Marquette University Law School in 2018. He is licensed to practice law in Wisconsin, but he and his family currently live in Nevada, where he has resided, on and off, for about 12 years.

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