Iowa signs MEGA tax-credit changes for proposed steel investment

Iowa Gov. Kim Reynolds signed changes to the state’s MEGA incentive program Oct. 2, advancing a policy designed to support a proposed $15 billion Mesabi steel project.

According to the governor’s announcement, House File 2801 permits an investment tax credit of up to 10 percent of qualifying investment for one eligible business in a rural county. The credit is spread evenly over 10 years and may be transferred.

For families around La Porte City and Dysart, the connection is the state budget. The announcement does not establish jobs or investment in this area, and the proposed project is not an operating steel mill.

The Legislative Services Agency’s Oct. 2 fiscal note for House File 2801 estimates that the changes would reduce state general fund revenue by an additional $10 million in fiscal 2029, $39 million in fiscal 2030 and $94 million in fiscal 2031 compared with the previous program.

Those estimates depend on assumptions about qualifying investment, construction and the timing of credits. They are not a bill sent to individual taxpayers or proof of credits already paid. The analysis said no MEGA award had been made as of Oct. 1.

The eventual cost and economic return will depend on the project’s development and any state incentive agreement. A proposed investment amount alone does not establish what the state will pay or what local communities will receive.