Program establishes a transparent, performance-based framework to compete for private lithium investment while protecting existing County and community revenues
Imperial County, CA — The Imperial County Board of Supervisors today voted 3-2 to adopt the Lithium Innovation and Competitiveness (LiNC) Program, establishing a standardized economic development incentive framework designed to strengthen Imperial County’s competitiveness for commercial lithium investment and support the continued development of Lithium Valley.
The LiNC Program is designed around a straightforward principle: private investment must occur before any reimbursement can occur. The Program does not provide upfront grants, cash payments, or funding to proposed projects. Instead, it allows the County to reinvest a limited portion of certain future tax revenues generated by a participating project after the project is developed and meets established performance requirements.
“Imperial County has spent years building the planning, environmental, workforce, infrastructure, and economic development foundation necessary to support Lithium Valley. LiNC is intended to help translate that work into private investment, construction, jobs, commercial production, and ultimately new revenues for our communities,” said Chairwoman Peggy Price.
Adoption Does Not Automatically Provide Incentives to Any Project
Adoption of the LiNC Program does not approve an incentive or reimbursement for any individual company or project. Any company seeking to participate in the LiNC Program must submit a complete application, provide an independent Fiscal and Economic Impact Analysis, demonstrate compliance with applicable Program requirements, and have its application considered by the Imperial County Board of Supervisors during a public hearing. A project must also enter into a Board-approved reimbursement agreement before receiving any incentive.
This process is intended to provide the Board and public an opportunity to evaluate the economic and fiscal merits of each proposed incentive individually rather than providing automatic benefits based solely on a company's participation in the lithium industry.
No Project, No Tax Revenue, No Reimbursement
The County emphasized that no money is being issued as a result of today's action. There is currently no commercial lithium extraction occurring in Imperial County that would generate Lithium Extraction Excise Tax revenue under Senate Bill 125 (SB 125). Under the LiNC framework, projects must invest first, meet performance requirements, generate eligible revenues, and only then become eligible for reimbursement. The Program highlights that projects that fail to reach commercial operations or do not generate tax revenues will not receive reimbursements.
The Program’s two incentive components are structured around new revenues generated by participating projects. The Construction Sales and Use Tax Reimbursement is funded from a limited portion of the County’s local 1% share of eligible sales and use tax actually paid by the participating project during construction. No reimbursement begins during construction. Payments begin only after the project reaches commercial operation and are then distributed over five years on a quarterly basis, allowing the County to retain and utilize the project-generated revenue before reimbursements are made. The SB 125 Capital Investment Reimbursement is similarly funded only from the County’s own share of Lithium Extraction Excise Tax revenues actually generated and received after the participating project begins commercial lithium production. The Program does not reduce or redirect funding allocated to cities, Tribes, directly or indirectly affected communities, or the Lithium Community Benefits Program. Those allocations remain unchanged, with any LiNC reimbursement borne solely by the County’s allocation. The County’s Lithium Extraction Excise Tax Funding Plan, which was adopted on September 10, 2024, can be read here: https://lithiumvalley.imperialcounty.org/community/lithium-excise-tax/#docaccess-2e557202eeff71038c014ee7a63a65a9
To be clear, if development does not occur, the associated tax revenues do not materialize and there is nothing for the County to reimburse.
Competing for Long-Term Investment
Imperial County is home to one of the world's largest known lithium brine resources, but County officials emphasized that possessing the resource does not guarantee that private capital and downstream supply chain will be invested locally. Lithium projects compete for financing and investment against projects in other states and countries offering their own combinations of tax incentives, infrastructure support, workforce programs, and economic development assistance.
The LiNC Program is intended to improve Imperial County's position during a critical period when domestic lithium supply chains are being established. Establishing commercial production locally could also help position the region to compete for future lithium extraction, processing, conversion, battery manufacturing, recycling, equipment suppliers, and other downstream investments.
The Program includes an Early Investment Incentive for qualifying projects meeting near-term investment and permitting milestones and a Standard Investment Incentive designed to continue supporting commercial-scale investment as the local industry matures. LiNC does not alter environmental review or permitting requirements, or guarantee approval of any lithium development project.
Ultimately, the purpose of LiNC is to help turn proposed development into operating projects that generate new revenues and long-term economic benefits for Imperial County and its communities. If commercial development does not occur, these new revenues and economic benefits will not be realized. By strategically reinvesting a limited portion of future project-generated revenues, the County is working to attract the private investment necessary to create high-paying jobs, expand infrastructure, generate new property tax and other public revenues, stimulate indirect economic growth, attract additional supply-chain investment, and build a substantially larger, long-term revenue base for the region.
Learn More
The complete Lithium Innovation and Competitiveness (LiNC) Program, including eligibility requirements, incentive limits, taxpayer safeguards, funding structures, illustrative funding examples, and frequently asked questions, is available on the Imperial County website:https://lithiumvalley.imperialcounty.org/#docaccess-4c6148b1b0f47b39b32a6163c977088d
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