Major economic growth legislation could lift acre limit and attract billion dollar companies

A bill reintroduced into the 2024 Legislative Session would let foreign businesses buy vast tracts of Iowa farmland for facilities focused on manufacturing, biosciences or research, which could have a significant impact on Story County.

Senate File 574 aims to establish a major economic growth attraction or MEGA program under the Economic Development Authority. The bill would lift the 320-acre limit on foreign purchases of Iowa land and create new tax breaks for these MEGA sites.

Though the bill was approved by the Senate last year, it stalled in the House in the closing days of the 2023 legislative session. As of Feb. 6, the bill had passed out of House subcommittee but has yet to progress further.

Dan Culhane, CEO of the Ames Chamber and Economic Development Commission, believes Senate File 574 will pass in this session.

"Everything I’ve heard to date during this legislative session had led me to believe this has a good chance of being approved during this session, and I hope it does," Culhane said. "I’m grateful it appears the MEGA legislation will be approved, because it’s good for Iowa. While we may not have an opportunity today, we may have one tomorrow, or six months from now."

He is hopeful the MEGA legislation will be approved so Ames doesn't lose out on large, capital-intensive projects.

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MEGA increases investments to attract high-capital projects

Big money and significant international industry is the goal, in turn creating jobs and boosting the local economy.

Projects must be built on sites greater than 250 acres and the investments have to exceed $1 billion to qualify for tax breaks under the MEGA program. The business must also primarily engage in advanced manufacturing, biosciences or research and development.

The MEGA program is meant to attract successful companies with plans to significantly invest in the county and the local community, unique projects that may be "once in a community's lifetime," Culhane said.

"This legislation is proposed as a unique economic development tool - it’s not a one-size-fits-all type of incentive program," Culhane said. "It’s for unique opportunities that are contemplating investment in our state."

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The MEGA program is meant to attract new and innovative companies to the state, industries that offer job security and growth potential. Companies that can have a far-reaching impact. If a business is willing to spend $1 billion, the project often will require plenty of land and requiring use of at least 250 acres but not limiting them to 320 access should benefit a company with the necessary capital.

"What the state’s really trying to capture is the investment and the job creation, and those things more often than not wouldn’t occur on a small site," Culhane said.

The MEGA legislation distinguishes itself from other state financial assistance programs with incentives that are greater in size and length of time. The program will likely help Iowa and Story County attract newer, internationally-based companies, allowing the local economy to compete better with others.

"The reason those are important is oftentimes – almost all the time – the projects of that size and scale are looking at other states where they also have programs like this," Culhane said. "I like to look at it as leveling the playing field when it comes to financial assistance programs from our state to other states it might be competing with."

While Ames does not have a company ready to make a $1 billion investment, the potential exists. Culhane said the city and surrounding county often compete for large economic opportunities and projects, which is why he's encouraged by the MEGA legislation.

The program should help Ames and Story County become a more powerful player in the marathon of economic growth.

"There’s lots of great economic development opportunities that occur across our state every year, and then there are these unique opportunities where we have to be more competitive financially, as it relates to financial incentives," Culhane said. "The MEGA legislation would be a great opportunity if approved for communities and regions to compete for large-scale economic development projects."

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Celia Brocker is a government, crime, political and education reporter for the Ames Tribune. She can be reached at CBrocker@gannett.com.

This article originally appeared on Ames Tribune: Here's how a major economic growth bill could impact Story County