Finance02 October, 20262 min read
Kim Reynolds Signs Bill Boosting Tax Incentives for Mesabi Metallics $15B Steel Plant
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Iowa approves $1.36 billion in incentives for a $15 billion Mesabi Metallics steel plant. Legislation passed in a one-day special session, House 75-17 and Senate 28-19.
5 outlets told this the same way.
Iowa boosts steel incentives
Iowa Gov. Kim Reynolds signed a bill Friday to increase the ceiling on state tax incentives tied to a $15 billion steel plant project announced at the White House earlier in the week.
The bill clears the way for Mesabi Metallics, the Minnesota company owned by the India-based conglomerate Essar Group, to receive more than $1.3 billion in public dollars and tax savings as the project gets completed.
Commerce Secretary Howard Lutnick told reporters at the White House that the “deal is done,” while the state and local officials in the days after suggested otherwise.
Debi Durham, director of Iowa’s Economic Development Authority, told lawmakers they wouldn’t have been called back if Mesabi Metallics had been willing to build the plant in Iowa under the law’s current 5% over five years.
Special session and votes
Protesters at the Iowa statehouse carried signs reading "No Steel Steal!" as lawmakers raced through a one-day special session to award Mesabi Metallics $1.36 billion over ten years in tax incentives in Lee County.
The Iowa House passed the package 75-17 and the Senate passed it 28-19, and Gov. Kim Reynolds signed it into law Friday night.
CBS News reported that opponents of the $1.36 billion in incentives wanted more safeguards and guarantees of public benefits, while the incentives roughly amount to about $777,000 in credits per permanent job over 10 years.
Senate Democrats offered two labor-protection amendments in the special session, and both of those amendments failed.
Performance rules and open questions
Debi Durham told lawmakers the bill rewrites the state’s Major Economic Growth Attraction (MEGA) program so that, instead of up to two projects at a 5% credit paid over five years, it allows one project in a county of 50,000 people or fewer to receive up to 10%, paid over 10 years. Durham said the state can claw back the credits if the company fails to perform, and she said Iowa “did not issue any award until these plants are built.”
Mesabi CEO Joe Broking told lawmakers he couldn’t lay out the capital structure when asked how the $15 billion Iowa plant would be financed, and the company has a $770 million Export-Import Bank commitment for the first phase. The bill’s approval did not mean the project was a done deal, because Mesabi must still file a full application with IEDA, whose board must vote before the state enters a contract.