Legislative Update: Gov.’s proposed budget includes millions for lithium development

Editor’s note: This report was prepared for the May 17 Board of Supervisors meeting.

FEDERAL

Both chambers of Congress are in session this week. On Tuesday, House Appropriations Committee Chair Rosa DeLauro introduced H.R. 7790, a supplemental appropriations bill to provide $28 million in emergency funding to give the U.S. Food and Drug Administration, the resources it needs to address the urgent infant formula shortage and help prevent it from ever happening again. In addition to this measure, the House will consider just over two dozen bills that are currently on their suspension calendar.

Last week, President Biden’s $40 billion funding request for additional assistance to Ukraine passed out of the House by a vote of 368-57. However there was a delay when it was heard in the Senate, due to an objection from Sen. Rand Paul. The Senate voted 81-11 to advance the bill, which is expected to come to a vote in the Senate later this week. The hope is that they vote as early as Wednesday, if they can overcome other procedural hurdles.

In other federal news, Monday Congressman Juan Vargas posted his fiscal year 2023 Community Project Funding Requests for this appropriations cycle. As a reminder, Community Project Funding Requests are earmark requests to support specific community projects as part of the annual appropriations process. Each member of the House of Representatives were limited to submitting only 15 requests each for consideration. The County of Imperial submitted seven community project funding requests this fiscal year to our congressional delegation for consideration and we’re proud to announce that one of our requests has been included in Vargas’ requests.

The project selected for funding consideration is a project to replace Brandt Road Bridge, which is a 72-year old timber bridge that will be a critical connection to the Lithium Valley development in the coming years. The county’s next steps is to work closely with our congressional delegation and appropriators to ensure that the funding is included in the final appropriations package for fiscal year 2022-23.

STATE

On Friday, Gov. Newsom released the May budget revise, which is his updated proposed $300.7 billion spending plan for fiscal year 2022-23.

The updated plan puts a large focus on lithium development as the state, and the world, move toward a clean energy future. Therefore, the governor included investments in infrastructure that are intended to support the development of geothermal and lithium extraction facilities in Lithium Valley.

Specifically, the May Revision proposes to:

■ Provide $5 million to support the development of geothermal energy and lithium recovery in the Salton Sea region through evaluation, community planning and engagement;

■ Make $45 million available over three years to incentivize projects that manufacture, process, or recover lithium through a sales and use tax exclusion;

■ Proposes $80 million to expand campus infrastructure at the San Diego State University, Brawley Center that will create pathways for local residents to benefit from jobs created by the anticipated new industries;

■ Proposes to dedicate $15 million to equipment purchases related to the extraction, processing, or manufacturing of lithium through an expansion of the California Alternative Energy and Advanced Transportation Financing Authority program;

■ Invest up to $250 million for clean energy projects, with priority given to transmission lines from Salton Sea projects that also have a private and U.S. Department of Energy backing; and

■ Provide for local governments and residents to benefit from the development and extraction of lithium by establishing a tax-per-ton of lithium extraction, placing reporting and fee requirements on lithium extraction activities, and providing funds to contribute to the maintenance, operations, and restoration of Salton Sea, and grants to support disadvantaged communities in the region.

The governor also proposed all these developments include strong environmental protections and be in close coordination with local entities, community-based organizations, environmental and social justice groups, non-governmental organizations, and California Native American tribes.

Other major spending updates include an $18 billion package to provide relief for Californians of high inflation rates and an expansion of existing Climate Resiliency spending initiatives. In regards to inflation relief, Newsom has proposed a combination of efforts to get money back into the pockets of Californians and bring down costs with various proposals of tax refunds, emergency rental and utility assistance, free temporary public transit, and a pause in the diesel sales tax.

Beginning this week, the Legislature will conduct Budget Committee hearings to receive a broad overview of the Governor’s proposals. These hearings will take place over the course of the coming weeks and will provide the Legislature an opportunity to work with the administration to incorporate legislative priorities into the budget.

Additionally, the administration will continue to develop and release budget trailer bill language over the coming weeks, which will contain details on how the various budget proposals would be implemented. The Legislature has until midnight on June 15 to pass a budget.