Public resources: geothermal resources: lithium.
The tax revenues generated will be funneled into the Lithium Extraction Excise Tax Fund, from which 80% will be allocated to affected counties, including Imperial County, proportional to their tax collections, while 20% will be deposited into a Lithium Subaccount aimed at funding community-focused projects. Notably, the bill appropriates $5 million from the General Fund specifically for the County of Imperial, supporting efforts related to geothermal energy and lithium extraction infrastructure.
Senate Bill 125, enacted in California, outlines provisions related to the extraction of lithium and establishes a new excise tax on lithium extraction. The bill mandates that individuals extracting lithium must pay a tax based on the weight of the lithium extracted from various natural sources, which includes geothermal fluids and ores. This tax is designed to be in lieu of any other local taxes that may apply. It aims to create a dedicated funding stream for environmental initiatives tied to lithium extraction activities, particularly in regions like the Salton Sea, which has significant ecological and community challenges.
Reactions to SB 125 have generally been supportive, particularly from environmental advocates who recognize the potential benefits of regulating lithium extraction and providing financial resources for restoration projects at the Salton Sea. However, there are some concerns regarding the potential economic impact on local businesses and whether the tax burden could hinder the mining industry. Community engagement is emphasized, suggesting a recognition of local voices in decision-making processes.
One point of contention involves the bill's provisions exempting it from reimbursement requirements under specific conditions, which may raise concerns among local governments about unfunded mandates associated with the new tax. Additionally, the bill proposes a study on possibly replacing the volume-based tax with a gross receipts taxation model, which could shift the landscape of fiscal responsibility for lithium extraction further down the line.