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DORGAN’S NEW HOMESTEAD ACT MOVING FORWARD
7/1/2004
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If you live in a rural community somewhere in America’s Heartland, chances are you’ve seen it: young people moving away, tax bases plummeting, towns shrinking.
Even as North Dakota’s major cities grow with high-tech industries and great educational centers, the relentless out-migration of people and resources from smaller towns and counties is devastating many of them, threatening their very survival. Those who remain find it harder and harder to operate a business or find high-paying jobs. Customers and employees are drawn to bigger markets elsewhere, and private investment is dropping.
The fact is, America’s Heartland is being relentlessly depopulated. Several decades ago, when America’s cities were in trouble, the Congress enacted urban renewal and model cities programs to help them. Now, it’s time to help America’s Heartland.
It took a bold act of government back in the 19th century, the Homestead Act – to spur settlement of America’s Heartland with the promise of land for those who would agree to move there and build America’s future. In the 21st century, there’s no land to give away, but U.S. Senators Byron Dorgan (D-ND) and Chuck Hagel (R-NE) have introduced the New Homestead Act, which would establish other incentives – tax credits, repayment of educational loans, access to venture capital funding - for people and businesses to move to or remain in rural communities in America’s Heartland.
More and more policymakers understand that a healthy Heartland is a vital interest for all America, and the New Homestead Act has 17 co-sponsors in the U.S. Senate. This year, Congress is taking steps to advance some of the main provisions contained in the Act.
Earlier this year, Congress approved language making room in next year’s budget for two key parts of the Act: a venture capital fund that could be tapped by entrepreneurs to help start or grow businesses in communities where venture capital would otherwise be unavailable, and a provision for the partial repayment of student loans for graduates who agree to live and work in communities suffering from high out-migration.
Then in May, the U.S. Senate approved other important provisions from the New Homestead Act that would provide an estimated $641 million in business tax credits over 10 years – including up to $87 million for North Dakota - to encourage investments, job creation and population growth in areas experiencing high out-migration.
Under these measures, North Dakota would receive an allocation of $185,000 in tax credits annually for each of the 47 rural counties in the state experiencing chronic out-migration. The credits help businesses that choose to locate or expand in high out-migration regions off-set a large portion of their construction or expansion costs—significantly reducing their taxes over time and encouraging investment in these regions.
The credits are central to what New Homestead Act is meant to achieve, and were passed by the Senate as part of a larger corporate tax bill. The House of Representatives is now taking up the underlying tax bill.
“This is big step forward,” Dorgan said. “America needs a strong Heartland, and these new tax credits will be important incentives for businesses, large and small, to invest in rural America. North Dakota and other rural areas are good places to live, raise a family, and grow a business. But we need good jobs to keep our kids there, and this is a good start.”
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More Info, Contact: |
Sanjay Talwani, Deputy Press Secretary |
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(202) 224-0140 |
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Sanjay_Talwani@dorgan.senate.gov |
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