Pension fund eyed for economic growth

Monday, July 3, 2000 | 11:22 a.m.

Former Congresswoman Barbara Vucanovich was named a co-chairwoman of the campaign for passage of Question 1, a November ballot measure that would allow the state to invest in startup companies.

Question 1 is touted as an economic development tool that will enable the state to assist high-technology startup companies. Supporters say this would help diversify the economy and create jobs.

Vucanovich said changing the state Constitution to allow for such investments "would create a more fertile environment for technology companies to form or move operations here."

CARSON CITY -- The Nevada Economic Development Commission is looking to tap up to $50 million from the state public employees' pension fund to help finance emerging or new businesses in Nevada.

Lt. Gov. Lorraine Hunt, chairwoman of the commission, said the money currently is being put into venture capital investments outside Nevada. "I believe that whenever possible, we should invest Nevadans' money in Nevada businesses," she said.

The retirement fund, with assets of $12 billion, employs Pathway Capital Management Co., of Irvine, Calif., to make its venture capital investments.

Hunt told a legislative subcommittee Friday that "the hard-earned assets of Nevada's employees are being exported to benefit residents of other states." She stressed no investment would be made unless the Nevada firms met stringent conditions.

Bob Shriver, director of the commission, said there are half a dozen venture capital companies in Nevada that might benefit from using the money from the retirement fund.

Hunt said the pension funds would not be invested in "high risk" ventures but in more stable businesses.

Shriver said Pathways has an "excellent record" of investing the fund from the retirement system, which has more than 77,000 members. And he cautioned the subcommittee this would be a "slow, tedious process," before the money reaches any of these emerging businesses.

Laura Wallace, investment officer for the Nevada State Public Employees Retirement Systems, said she has talked with the lieutenant governor about the issue, but there are no negotiations to invest any money now with Nevada firms.

The goal of the fund is to earn high returns on its investment while protecting its assets.

There is no prohibition against putting money into Nevada companies, but they must meet "very stringent criteria," Wallace said.

In the last 15 years, she said, there have been one or two investments in Nevada companies but there are none now.

The Legislative Subcommittee to Study Methods to Encourage Corporations and Other Business Entities to Organize and Conduct Business in this State developed an agenda Friday to present to the 2001 session.

Also among its proposals will be a constitutional amendment to create a business court.

At present business-related cases are handled by regular district court judges.

But even before the next Legislature, the district court in Clark County may designate two of its judges to preside over business cases. The Nevada Supreme Court will hear a proposal Wednesday from the 8th District Court to designate two of its judges to handle such cases as a pilot project.

Chief Justice Bob Rose told the legislative subcommittee that the majority of the Supreme Court favors the move. But it wants some questions answered.

Under the Nevada Constitution, the district judges would have to rotate in and out of the business court. Rose said he thinks there are enough judges in Las Vegas with business backgrounds to handle the task.

This would be an experiment for two or three years, he said. In the meantime, the proposed constitutional amendment would be working its way through the Legislature.

The subcommittee, headed by Sen. Mark James, R-Las Vegas, also voted to sponsor a number of bills to protect business. They include:

--Prohibiting the use of the Internet "as an offensive tool to disrupt business operations by sending unsolicited communications. Illegal activity includes electronically jamming or clogging a website through the use of unsolicited e-mails or similar correspondence."

--Adopting the Uniform Electronics Transaction Act that includes a provision allowing court acceptance of electronic records into evidence.

--Allowing a court to issue an immediate injunction to prohibit the dissemination of trade secrets through the Internet.

--Making illegal the use of a famous trademark on unrelated goods or services, thus weakening or deleting the value of the trademark.

Cy Ryan

covers state government for the Sun. He can be reached at (775) 687-5032.