Branstad, Reynolds celebrate largest capital investment in Iowa history, calls for Iowa income tax reform
Branstad and Lt. Gov. Reynolds celebrated the single largest capital investment project in the history of the state and called on lawmakers to turn their focus to income tax reform during the next legislative session. They joined representatives of the Iowa Fertilizer Company to announce their final selection of a Lee County site for their $1.4 billion project that will create 165 permanent jobs and more than 2,000 construction-related jobs.
To successfully compete for this project, Iowa had to offer incentives to overcome its current corporate income tax structure. The governor used this project as an example of why tax reform is necessary.
“If our income tax structure was more competitive, we would be better able to compete for job and capital investment creation projects like this one. It also will level the playing field for our existing Iowa companies, allowing them to grow and create even more jobs,” said Branstad.
Iowa Fertilizer Company is a subsidiary of Orascom Construction Industries, one of the world’s largest fertilizer producers. The new plant would supply needed ammonia and other nitrogen fertilizers to farmers in Iowa and the Midwest.
Lt. Governor Reynolds added, “In addition to the jobs and massive capital investment this project will mean for Iowa, it also will have a tremendous impact for our ag economy. In fact, when this fertilizer plant comes online, it could save Iowa farmers hundreds of millions of dollars annually.”
In February 2012, the Iowa Economic Development Authority (IEDA) Board awarded Iowa Fertilizer Company incentives to locate in Lee County, Iowa. Due to some unforeseen challenges with the original site, the company resumed its search for a suitable location and was pursued by other states to locate outside of Iowa.
Earlier today, the IEDA Board met to amend its original award to ensure Iowa would win this project. The amendment that was passed includes an increase to the investment tax credit portion of the High Quality Jobs award, increasing the total tax credits to $57.5 million. The IEDA board will also be asked to consider future amendments in FY14 and FY15 to increase the ITC portion of the award by $25 million in each of those years. If the board passes those amendments, the final award to Iowa Fertilizer Co. would amount to $100 million of tax credits. The direct financial assistance award remains unchanged at $1.6 million (half loan, half forgivable loan).