Iowa lawmakers weigh MEGA changes for steel plant

Why MEGA is back before lawmakers

Gov. Kim Reynolds called lawmakers into an Oct. 2, 2026, special session to consider changing Iowa’s Major Economic Growth Attraction program for a proposed billion steel plant in Lee County. President Donald Trump announced the project Sept. 28 alongside Reynolds, members of Iowa’s congressional delegation and Attorney General Brenna Bird.

Mesabi Metallics, a foreign-owned company, plans to refine direct reduced iron mined in northern Minnesota’s Iron Range. The proposed development has brought new attention to MEGA because state officials are considering using the program for the first time.

Iowa lawmakers created MEGA in 2024 through Senate File 574. The measure passed 89-4 in the Iowa House and 47-0 in the Senate. It is intended for companies investing more than billion in advanced manufacturing, biosciences, or research and development.

What the program could offer

MEGA awards are negotiated for each project. The Iowa Economic Development Authority considers investment, job creation, wages, economic effects and the project’s need for assistance. Its board approves awards.

Current law allows a refundable investment tax credit worth up to 5% of project costs, a withholding tax credit of up to 3% for newly created jobs and refunds of certain state taxes paid during construction. Projects must create jobs paying at least 140% of the qualifying wage threshold and offer qualifying benefits to all full-time workers.

Projects generally must be built on an Iowa Certified Site of at least 250 acres unless the company controls the property. Iowa has nine certified sites of that size, but none is in Lee County.

The law also bars ties to foreign adversaries. Mesabi’s parent, Essar Group, has received more than billion in loans from Russia’s state-owned VTB bank, while a Russian state-owned energy company has acquired nearly billion in Essar assets. Mesabi Metallics denies receiving Russian money.