Iowa Gov. Kim Reynolds on Friday signed into law a measure that changes Iowa’s economic development program, allowing the state to provide $1.36 billion in tax incentives for a $15 billion steel mill project supported 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 in a 75-17 vote, and the Senate approved the bill in a 28-19 vote.
“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 upon signing, modified tax incentives offered through the state’s Major Economic Growth Attraction program to allow for one eligible business to receive up to 10% of its investment in a rural area over 10 years.
State lawmakers passed the legislation to support a large steel investment led by Mesabi Metallics, a Minnesota-based iron ore mining company owned by India conglomerate Essar Group.
Last Monday, President Trump announced the multi-billion-dollar project, saying it will be “largest steel plant in American history.”
The facility, once operational, is expected to employ at least 1,750 people and produce low-emissions steel using direct-reduced iron and electric arc furnace technologies. The company plans to use scrap steel and iron ore from its recently opened mine in Nashwauk, Minnesota, as raw materials.
Reynolds on Tuesday called for a special session following the announcement for the sole purpose of enacting amendments to the state’s MEGA program that would support the project.
“Higher wages attract workforce, strengthen local businesses, and grow communities. This opportunity will accelerate the economic trajectory of our state, and our country, for generations,” she said.
Lawmakers convened at 8:30 a.m. Friday, and the bill was signed just before 9 p.m., the Des Moines Register reported.
While a majority gave their support for the project, calling it a “once-in-a-lifetime” opportunity, multiple Republicans and Democrats raised concerns that the approval process felt rushed given the investment’s size and avoided public discussion or debate.
“No input, no opportunity for an input,” Sen. Tony Bisignano, a Democrat, said during a Senate Ways and Means Committee hearing Friday afternoon. “I can’t rejoice because I don’t know what it is and no one that came today gave us or gave me really confidence.”
At the hearing, Sen. Jeff Reichman, a Republican, said the deal has been “simmering” under a non-disclosure agreement since last year, but gained momentum in August this year. He confirmed Lee County as the site for the mill 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 up to 5% each for two eligible businesses.
Reichman said nobody has taken advantage of the two sites approved at the time. The amendment would allow the state to join those sites together for a 10% impact.
Sierra Club, an environmental advocacy group, called on lawmakers to resist approving incentives for the project.
“There is no question that this subsidy is being rammed through the legislature with very little consideration of the costs, benefits, requests or any other details,” the group said in a blog post last week.
