(Des Moines) House District #23 State Representative Ray “Bubba” Sorensen explains his vote for legislation to modify Iowa’s Major Economic Growth Attraction, or MEGA, program in connection with a proposed $15 billion steel manufacturing project.
House File 2801 passed the Iowa House 75-17 and the Senate 28-19 on October 2 during the special session. The legislation modifies the MEGA program to allow one qualifying project located in a rural county to receive an investment tax credit of up to 10% of its qualifying investment.
Representative Sorensen wants to set the record straight. The Iowa House did not write a billion-dollar check to a corporation. He says the legislation does not amount to the state writing a check to a corporation, but instead changes existing economic-development authority to allow Iowa to compete for the proposed project.
Under the legislation, the investment tax credit would not be issued until the project, or a designated portion of it, is placed into service and at least 50% of the jobs associated with that portion have been added to the company’s payroll at qualifying wage levels. The credit would be paid over 10 years.
The Iowa Legislature’s fiscal note estimates the proposed project at $15 billion in total investment, with $11.15 billion considered qualifying investment. Under the legislation, the project could receive a 10% investment tax credit on the qualifying investment.
Sorensen says the proposed project could create thousands of construction jobs and at least 1,750 permanent jobs. He also points to potential economic activity involving contractors, equipment suppliers, transportation, housing, hotels, restaurants, and other businesses.
He says the project also represents an opportunity to expand domestic steel manufacturing, with Midwest resources, transportation and workers contributing to production in Iowa.
Representative Sorensen acknowledges the project will require additional steps, including development agreements with the Iowa Economic Development Authority and decisions involving infrastructure, utilities and workforce needs.
Sorensen says he voted to allow Iowa to compete for the proposed investment while maintaining performance requirements for the incentives.
HF 2801 was enacted after passing during the special session.
