Gov. Kim Reynolds has called the Iowa Legislature back for a special session on Friday, Oct. 2. The announcement comes one day after President Donald Trump announced a $15 billion Mesabi Metallics steel plant for southeast Iowa.
According to The Gazette, the governor’s office says the state and Mesabi Metallics have signed a memorandum of understanding outlining the terms of the partnership. Because the steel plant project is the largest private investment in Iowa history, the office says the state’s Major Economic Growth Attraction (MEGA) program needs adjustments. The Gazette’s report did not detail the memorandum’s terms or the proposed changes.
MEGA is meant for projects with more than $1 billion in capital investment. Incentives are negotiated for each project and can include a refundable investment tax credit of up to 5%, a withholding tax credit of up to 3% on eligible new jobs, and a refund of sales taxes paid during construction. But at $15 billion, the Mesabi steel plant would be significantly larger than what the program was created to leverage.
On Monday, Commerce Secretary Howard Lutnick said the steel plant’s location and construction in Iowa did not depend on state tax incentives. The Gazette asked the governor’s office and others to confirm that and had not received a response as of Monday afternoon.
What is Reynolds saying?
Reynolds called the project “the most consequential economic development opportunity ever for our state” and described the changes as limited updates to an existing program.
Iowa House Speaker Pat Grassley said the steel plant would bring real jobs home to the state.
“I’ve made it my mission in the Iowa House to make sure we bring opportunities for growth to all parts of the state and delivering this plant follows through on that promise,” Grassley said in a statement.
How are Democrats reacting?
House Democratic Leader Brian Meyer said Iowans are still looking for relief from rising costs and that “almost 10,000 Iowans have been laid off since the beginning of 2025.” He called the session “a welcomed step toward creating good-paying jobs and strengthening our economy,” and said House Democrats are “committed to making sure this is a good deal for Iowa taxpayers and working Iowans.”
Senate Democratic Leader Janice Weiner said Senate Democrats are “ready to go to work for Iowans,” and that their goal Friday is “to ensure that any final deal is in taxpayers’ best interests.” She added: “We still have a number of outstanding questions regarding this project, and I am hopeful that a deliberative process will deliver the answers Iowans need.”
