116 3rd St SE
Cedar Rapids, Iowa 52401
Proposed incentives for ‘megasite’ business development advanced
A proposal that stalled at the end of the 2023 legislative session is moving again, and this time appears headed for lawmakers’ approval
Jan. 31, 2024 6:01 pm, Updated: Feb. 1, 2024 8:07 am
DES MOINES — A $93 million tax incentive program designed to lure economic development projects on so-called mega sites — projects that span at least 250 acres with investments of at least $1 billion — is advancing in the Iowa Capitol after it stalled in the waning days of the 2023 legislative session.
Iowa Rep. Bobby Kaufmann, a Republican from Wilton, said Wednesday that he believes the bill will earn fast approval this year.
The proposal was introduced late in the 2023 session and was approved by the Iowa Senate, but shelved by Iowa House Republican leadership over concerns the proposal was not being given time for a proper vetting.
“We just didn’t have enough time,” Kaufmann said of the proposal’s fate last year. Asked if he believes the bill will advance this year, Kaufmann said, “I do.”
The proposal was introduced by the Iowa Economic Development Authority, the state’s economic development agency. Under the bill, a Qualifying Investment Tax Credit, a sales tax refund and a withholding tax credit would be available to qualifying projects. If qualifying projects are approved, the program would cost the state $93 million initially, and then $18 to $19 million at full implementation, according to projections from the state’s nonpartisan Legislative Services Agency. Separately, a local government could provide property tax abatement as an additional incentive, the agency noted.
To qualify for the incentives, a project must:
- Be located on a site greater than 250 acres, have investments totaling at least $1 billion
- Be primarily engaged in advanced manufacturing, biosciences or research and development
- Create jobs that pay at least 140 percent of the qualifying wage and provide comprehensive benefits to each employee
- Not have a record of violations, as determined by the state economic development agency.
The bill allows a foreign business to purchase Iowa land in order to qualify for the program, provided the business is from a country that is an ally to the United States.
An amendment to the proposal, introduced at a subcommittee hearing Wednesday in the Iowa House, expands eligibility to include businesses with existing facilities that meet the qualifications.
Eleven business groups and worker unions testified in support of the proposal.
“We need bills like this in the state of Iowa to remain competitive. So we need to support them,” Stacie Lovan, the senior vice president of economic development for the Greater Des Moines Partnership, said during the hearing.
Debi Durham, director of the Iowa Economic Development Authority, told The Gazette last year that the state missed out on luring a large solar energy manufacturer to Iowa because of a lack of the kind of incentives in the agency’s proposal. An agency spokeswoman repeated that during Wednesday’s legislative hearing.
Lawmakers moved the proposal, Senate File 574, out of subcommittee, making it eligible for consideration by the full House committee on tax policy.
Comments: (515) 355-1300, erin.murphy@thegazette.com
Daily Newsletters