Assembly bill would let Nevada permanent school fund back early-stage businesses through NCIC

Assembly Member Steve Yeager on Tuesday told the Assembly Committee on Government Affairs that Assembly Bill 427 would modernize the Nevada Capital Investment Corporation (NCIC) to provide early- and middle-stage venture capital to Nevada businesses.

Yeager said the NCIC — created after the 2011 Legislature authorized a public benefit corporation to invest in private businesses — was originally focused on later-stage private equity but that the state now needs tools to finance startups, seed-stage companies and businesses seeking to expand. “This bill will not impose any new fiscal impact on our state's general fund if the committee wishes to move forward,” Yeager said.

Under the proposal, eligible businesses must have an active presence in Nevada or be relocating here, employ Nevada workers, pay competitive wages and benefits, and align with the state's economic development plan. The bill would allow the NCIC board to invest directly in companies or through qualified venture capital firms, revise board membership to replace the chancellor of the Nevada System of Higher Education with the executive director of the Governor's Office of Economic Development (GOED), and require diversification of investments.

Yeager traced the NCIC’s origins to Senate Bill 75 in 2011 and said the fund was capitalized initially with up to $50 million from the permanent school fund and was increased to $75 million under Senate Bill 68 in 2021. He said those investments are intended to return earnings to the permanent school fund, which supports public education.

Jeff Saling (pronounced S-A-L-I-N-G), cofounder of StartUpNV and a venture investor, told the committee his group “has invested $11,200,000 into 23 Nevada startups” and said those investments had appreciated to about $55 million. Saling and supporters argued that allowing NCIC to deploy venture-style capital could both create jobs and improve returns to the permanent school fund.

Supporters who testified included Yoana Ontiveros of the Las Vegas Global Economic Alliance and Randy Robinson, director of government affairs for the City of Las Vegas, who said the update to NCIC could increase economic-development opportunities across Clark County.

Opponents and public commenters expressed concern about the risk of using public funds for venture investments. Barry Johnston, who identified himself on the record as a Las Vegas resident, called the plan “crony capitalism” and argued public dollars should not be used where private capital already exists. Al Rojas, a public commenter, said the state should prioritize education and early childhood investments rather than deploying trust funds into startups.

Committee members pressed the sponsor on oversight, selection criteria and accountability. Assembly Member DeLong asked whether replacing the NSHE chancellor with GOED’s director provided enough investment expertise; Yeager noted the board includes additional appointed members and an incumbent board member with long tenure. Assembly Member Goulding asked for clearer selection criteria and how equity and distribution would be handled; witnesses said a fund typically sets an investment thesis and suggested guardrails could be set by either statute or subsequent regulation.

Yeager said NCIC’s application and due-diligence process is robust and that he would obtain additional information from the state treasurer’s office about how companies and funds apply. He also agreed to follow up with GOED about the state economic development plan referenced by the bill; committee members noted the most recent publicly available plan they found dated to 2012–2014 and requested an updated alignment document.

Yeager described the permanent school fund balance as about $500,000,000 based on older financial statements, but told members he would seek up-to-date figures. The committee did not take a final vote on AB 427 at the hearing.

Ending: The sponsor asked for favorable consideration and said he would work with committee members and agencies to provide additional information on board operations, application and oversight mechanisms before the bill advances.