DES MOINES — A $93 million package of state tax incentives designed specifically to entice billion-dollar economic development projects to Iowa was approved by state lawmakers Tuesday and needs just Gov. Kim Reynolds’ signature to become law.
The proposed incentive program, which was designed by the state’s economic development agency, would be made available to projects in Iowa that invest at least $1 billion and span at least 250 acres.
The incentives would include an investment tax credit, a sales tax refund on construction costs and a withholding tax credit on wages.
If qualifying mega site projects are approved, the program would cost the state $93 million in the first year and then $18 to $19 million at full implementation, according to projections from the state’s nonpartisan Legislative Services Agency.
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Separately, local governments could provide property tax relief as an additional incentive, the agency noted.
To qualify for the incentives, a project would be required to:
- Be located on a site greater than 250 acres and make 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.
Businesses with existing facilities that meet the qualifications also would be eligible for the incentives.
The planned $576 million Google data center in Cedar Rapids’ Big Cedar Industrial Center will not be eligible for the new incentive program because it does not project a $1 billion investment and does not qualify under the categories of eligible industries, an IEDA spokeswoman confirmed Tuesday.
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 a legislative hearing on the proposal earlier this year.
The company went to Louisiana instead, Iowa Sen. Bill Dotzler, a Democrat from Waterloo, said Tuesday during Senate debate.
“It’s unfortunate that this delay occurred. But I know that the Economic Development Authority are working on some projects here in Iowa and I really hope that this will (entice) them to land here in Iowa,” Dotzler said.
The bill, Senate File 574, unanimously passed the Iowa Senate on Tuesday. It was the second time the chamber signed off on the bill; the Senate also passed it late during the 2023 session, but the House did not take it up.
It passed the Iowa House earlier this year on an 89-4 vote.
“It’s been a little bit of a journey here but we finally got across the finish line,” Sen. Dan Dawson, a Republican from Council Bluffs, said during Senate debate.
Having passed both chambers of the Iowa Legislature, the proposal now heads to Gov. Kim Reynolds for her consideration. Reynolds’ office did not immediately respond to a request for comment Tuesday.