Iowa’s governor has signed off on the largest economic incentive package in the state’s history, clearing the way for $1.36 billion in tax credits tied to a proposed $15 billion steel plant.
Governor Kim Reynolds put her name to House File 2801 following a rare special legislative session on Friday, October 2, calling it “the most consequential economic development project ever to come to our state.”
The plant is planned by Mesabi Metallics, whose project was announced by President Donald Trump in the Oval Office on Monday. Company executives promise the complex would employ 6,000 construction workers and create 1,750 permanent jobs — and could make Iowa the second-largest steel producing state in the nation if it reaches full operation.
Bipartisan votes, same-day bill text
The bill moved at remarkable speed. The full text was not made public until the morning of the vote, yet it passed the Iowa House 75–17 in the afternoon and the Senate 28–19 in the evening, with lawmakers from both parties breaking ranks.
The legislation rewrites the state’s Major Economic Growth Attraction (MEGA) program, which was built for advanced manufacturing projects worth over $1 billion. Instead of offering up to two companies a 5% refundable investment tax credit, Iowa would now offer a 10% credit to a single qualifying company. The state’s nonpartisan Legislative Services Agency projects the credits to Mesabi could total $1.36 billion by 2041.
State economic development director Debi Durham defended the design, noting the credits are strictly performance-based: no money changes hands until the plant is operating and jobs are in place. The previous record for state incentives was the $109 million package for a $3 billion fertilizer plant — also in Lee County — back in 2017.
Critics warn of a rushed deal
Not everyone is celebrating. Senator Dan Dawson, a Republican who chairs the Senate Ways and Means Committee, delivered a fiery speech arguing the package works out to roughly $880,000 per job and that the company might not pay any Iowa taxes for more than a decade. He accused the governor of negotiating against herself, saying a competing state he named was never seriously in play.
Others objected to the haste. The Sierra Club’s Iowa chapter called the process “rushed,” while labor groups said the project was “coming in to land a little too fast.” Democrats tried unsuccessfully to widen the session to address affordability for ordinary Iowans.
Mesabi CEO Joe Broking told lawmakers his vision is to take iron ore from the company’s $3 billion facility in Minnesota’s Iron Range and turn it into high-quality American steel. He addressed the past bankruptcy of a predecessor company, blaming a 2015 commodities price collapse, and said the firm has since invested billions in its US operations. The company claims the project will generate $95 billion in total economic output during construction and its first decade, though it has not yet released the study behind that figure.
Source: Des Moines Register