DES MOINES — Iowa has rewritten a major economic-development incentive program to accommodate the proposed $15 billion Mesabi Metallics steel complex, with Gov. Kim Reynolds signing House File 2801 after lawmakers approved the measure during a one-day special session Friday.
The new law allows the Iowa Economic Development Authority to offer a single qualifying business in a rural county an investment tax credit worth up to 10% of its qualifying investment, spread evenly over 10 years. The previous MEGA structure allowed incentives of up to 5% for each of two eligible businesses.
The change was crafted with the massive Mesabi Metallics project in mind. State officials say the proposed Iowa complex would represent a $15 billion investment and the largest steel-manufacturing investment in U.S. history.
NorthIowaToday.com reported earlier this week that President Donald Trump announced the Mesabi project at the White House, where Iowa officials and company executives outlined plans for the huge southeast Iowa steel operation.
Reynolds: Iowa lawmakers have “cleared a path”
Reynolds returned to the project Saturday morning with a fresh statement on social media.
“Iowa lawmakers have cleared a path for the largest steel investment in US history to make its home here in Iowa,” Reynolds wrote on Facebook. “I’m grateful to the legislators who got this bill across the finish line. And I look forward to our partnership with Mesabi Metallics!”
The governor had offered a broader economic argument when she signed the bill Friday, saying the legislation would clear the way for the project while bringing major capital investment and thousands of jobs to Iowa.
Reynolds has also argued that the project could strengthen domestic manufacturing and reduce reliance on foreign supply chains.
Special session ends with bill signed
Reynolds called lawmakers back to Des Moines specifically to modify the Major Economic Growth Attraction program after the Mesabi project was announced.
NorthIowaToday.com reported that the special session was called to reshape the MEGA program for the proposed steel complex.
The Iowa House approved HF 2801 on a 75-17 vote. The Senate passed the bill 28-19, with two senators excused. Reynolds signed the legislation later Friday.
Support for the measure crossed party lines in the House, while opposition also included lawmakers from both parties.
Grassley calls project a defining moment
Iowa House Speaker Pat Grassley described the proposed investment as a major development for rural Iowa.
Grassley said the legislation was designed so performance incentives would not be earned until facilities are built and jobs are delivered. He called the project a defining moment for Iowa’s industrial future and argued the safeguards protect taxpayers while encouraging large-scale investment.
Senate Majority Leader Mike Klimesh said lawmakers had been working for years to attract additional economic growth to Iowa and said the Mesabi proposal could bring infrastructure investment, workforce training and high-paying jobs.
Southeast Iowa lawmaker points to regional opportunity
Rep. Matt Rinker of Burlington, whose district is near the proposed plant, said the project represented the kind of economic opportunity southeast Iowa residents had been seeking for years.
Rinker said the vote was about more than changing an incentive program or attracting one steel mill, describing the proposal as a broader economic opportunity for the region.
Tax credit could reach 10% of qualifying investment
The central change allows IEDA to authorize one MEGA investment tax credit equal to as much as 10% of a qualifying investment for an eligible business in a rural county.
The credit would be distributed over 10 years and may be transferable.
The final incentive package for Mesabi Metallics would still have to be determined by the Iowa Economic Development Authority Board.
That distinction is important: HF 2801 expands what Iowa may legally offer, but the law itself does not constitute final approval of a specific Mesabi incentive award.
Potential taxpayer cost draws scrutiny
The incentive package also drew opposition and questions about the size of the potential public commitment.
A Legislative Services Agency fiscal analysis projected a substantial reduction in state General Fund revenue compared with the previous version of the MEGA program if the expanded incentive is ultimately awarded.
Reports surrounding the special session have placed the total potential incentive package for the project at roughly $1.4 billion.
Supporters argue that the incentives are performance-based and tied to actual capital investment and job creation.
Critics questioned the scale of the potential taxpayer commitment, the amount of information available to lawmakers and the speed with which the legislation moved through the special session.
Rep. Dave Jacoby of Coralville supported the legislation but cautioned during debate that the steel complex remains a proposed project rather than a completed plant with workers already on site.
Thousands of jobs projected
State and company officials have projected approximately 6,000 construction jobs and about 1,750 permanent jobs if the project is completed and reaches operation.
The planned start of production has been targeted for around 2030.
The proposed operation would use iron ore tied to Mesabi’s Minnesota mining operation and process it into finished steel in Iowa.
NIT previously reported details of the production plans, employment projections and Minnesota connection in its original report on the massive Iowa steel project.
Project adds to Iowa’s industrial expansion push
The Mesabi proposal arrives as Iowa places increasing emphasis on advanced manufacturing, power generation and other large capital investments.
NorthIowaToday.com previously reported on millions of dollars in Iowa Economic Development Authority assistance for manufacturing and development projects, including projects in Northern Iowa.
NIT has also followed Iowa’s growing electricity needs, including plans involving the restart of the Duane Arnold nuclear plant.
Large industrial projects such as the proposed steel complex could add considerably to future electricity, transportation and infrastructure demands.
Next step shifts to economic development officials
With HF 2801 signed, Iowa law now contains the expanded incentive authority sought by state officials for a project of Mesabi’s size.
The next major step will involve negotiations and action by the Iowa Economic Development Authority Board on a final incentive agreement.
The steel complex itself remains a proposed multiyear project. Financing, permitting, infrastructure, construction, energy supply and workforce development all remain necessary before steel production can begin.
What changed Friday is the state incentive framework: Iowa lawmakers approved the expanded MEGA authority, and Reynolds has now signed it into law.
It is never going to happen.
yep.
https://www.youtube.com/watch?app=desktop&v=EpBKm-MAtIQ&fbclid=IwY2xjawUuWFFleHRuA2FlbQIxMQBwZG9mAXNydGMGYXBwX2lkEDIyMjAzOTE3ODgyMDA4OTIAAR5Td2R_zqFQQcIXNCGk1Qop7LRKggKR88P8Y8Vouwx_DkEwqj-iT9Z_1b0JWA_aem_2a3NFdZPSioDJbf2qniTUw
Oh come on don’t despair. We will all get our $5K checks the day the steel mill opens and plus now the new $90 check trump is giving all people on Medicare. How much more embarrassing can things get ??
Elect the dems and see.
That will happen in about a month. Hope you can survive your disappointment.