Gov. Kim Reynolds on Friday signed into law a move that changes Iowa’s economic development program, allowing the state to provide $1.36 billion in tax incentives for a $15 billion steel project backed by President Donald Trump.
The governor signed House file 2801 just hours after Iowa lawmakers approved the proposal during a special session Friday. The Iowa House approved the bill on a vote of 75-17, and the Senate passed the bill on a vote of 28-19.
“Today’s special session advances the most consequential economic development ever to come to our state,” Reynolds said in a statement.
The law, which took effect immediately after signing, modified tax incentives offered through the state’s flagship economic growth attraction program to allow an eligible business to receive up to 10 percent of its investment in a rural area over 10 years.
State lawmakers approved legislation to support a major steel investment led by Mesabi Metallics, a Minnesota-based iron ore mining company owned by Indian conglomerate Essar Group.
Last Monday, President Trump announced multimillion projectsaying it will be “the largest steel plant in U.S. history.”
The facility, once operational, is expected to employ at least 1,750 people and produce low-emission steel using electric arc furnace and direct reduction iron technologies. The company plans to use scrap steel and iron ore from its recently opened mine in Nashwauk, Minnesota, as raw materials.
Reynolds asked Tuesday to special session after the announcement for the sole purpose of enacting amendments to the state’s MEGA program that would support the project.
“Higher wages attract labor, strengthen local businesses and grow communities. This opportunity will accelerate the economic trajectory of our state and our country for generations,” he said.
Lawmakers met at 8:30 a.m. Friday, and the bill was signed into law shortly before 9 p.m., on Des Moines Register informed
While most supported the project, calling it a “once-in-a-lifetime” opportunity, several Republicans and Democrats expressed concern that the approval process felt rushed given the size of the investment and avoided public discussion or debate.
“There’s no input, there’s no opportunity for input,” Sen. Tony Bisignano, D-D., said during a Senate Media and Media Committee hearing Friday afternoon. “I can’t be happy because I don’t know what it is and nobody who came today gave us or really gave me confidence.”
At the hearing, Sen. Jeff Reichman, a Republican, said the deal has been “continuing” under a non-disclosure agreement since last year, but gained momentum in August of this year. He confirmed Lee County as the mill site and called it a “game changer” for the state.
The MEGA program, established in 2024, was created to help Iowa compete for large-scale development projects exceeding $1 billion. As originally enacted, the program allowed tax incentives of up to 5% each for two eligible businesses.
Reichman said no one has taken advantage of the two approved sites at that time. The amendment would allow the state to join those sites together for a 10 percent impact.
Sierra Club, year environmental defense groupasked lawmakers to hold off on approving incentives for the project.
“There is no doubt that this grant is being pushed through the Legislature with very little regard for costs, benefits, applications or any other details,” the group said in a blog post last week.
