This article first appeared in the Center's newsletter and was later published by the Associated Press. Additional New Homestead Act resources available on our website include a Bill Summary, a Rural Action Brief, and more all available on our New Homestead Act page.

The New Homestead Act has been reintroduced in the United States Senate. It offers bold action to reverse rural community decline.

Sponsored by Senators Bryon Dorgan (D-ND), Chuck Hagel (R-NE), Tim Johnson (D-SD), Sam Brownback (R-KS) and eight others, the Act offers incentives to live and establish businesses in counties that have lost at least 10 percent of their population over the last 20 years.

It includes two provisions championed by the Center:

• A 30 percent tax credit for investing in small owner-operated businesses.
• Tax incentives and matching funds for saving money to start a business, buy a home, get an education or pay for health care.

In addition, the Act would provide:

• Forgiveness of 50 percent of college loans for recent graduates.
• Up to a $5000 tax credit for home purchases.
• Tax incentives for new buildings.
• A federally subsidized $3 billion venture capital fund to invest in businesses.

The 30 percent tax credit for small business was not in the earlier version of the New Homestead Act. It is an important addition.

Development of locally owned small business works. It accounts for over half the job growth in farm and ranch communities in our region. By keeping ownership in the community, it keeps community members in control of their own future. And by dispersing ownership in the hands of many, it enables rural people to build assets, control their lives, and gain a stake. That gives them a reason and the capacity to give back to their community.

The New Homestead Act needs some refinement as it moves forward. As drafted, the tax incentives for new buildings and venture capital could be used to subsidize corporate mega farms.

The Act also needs companion legislation. It needs to be accompanied by farm policy reforms to strengthen family farms and ranches and new conservation initiatives that enable rural communities to use access to land and a quality environment as a development asset.

The New Homestead Act is not the whole answer. But it is a critical part of the comprehensive policy needed to reverse rural decline.

Most important, it makes a statement that the communities of Rural America matter. Strong communities bring out the best in us. They restrain our most selfish impulses and elevate our instinct to help others; essential to building a strong society. It’s time for public policy to recognize that.