I recently received a newsletter touting the overwhelming positive nature of the bill from a rural community economic development organization that will remain unnamed, with the hope, at this point, that their enthusiastic support of the bill was due to a lack of due diligence, cultural awareness and just plan naivete. I hope that their more aware friends and partners teach them a little about what this NEW act has for roots. Why do I say this? Back to the history....
A quick historical review of the ORIGINAL Homestead Act and its justifications and ramifications, clearly show it was a blatant (and eventually violent) move to take the manifest destiny in this country to a new level. Passed in 1862 and not repealed completely until 1976, it was the ultimate case of the pen (and paper) being mightier than the sword, although the sword had its day as well. To the point, land was given away to homesteaders in 160 acre parcels for them to farm and settle. Land that did not belong to the U.S. government, land that was protected by treaties, land that the Native people of this country were promised and was referred to as "unoccupied". This original act even led to land on reservations created after 1862 to be given away right from under the true owners through the sly use of allotments (see the Allotment or Dawes Act for another sordid chapter).
Oh, I understand that its water under the bridge and some will say that it was just part of what made the country come to be. And they would be correct. But at what cost?
So, I have a proposal, let's ask Senator Dorgan to add some very important language to what you see below. I have a few ideas about how to RENEW this act and I know there will be many more:
- How about recognizing that (some or all of) the land now with a questionable future due to out migration was taken from Native people in the first place and should be in part given back?
- How about recognizing the fact that Native people are not leaving their present reservations in droves, but populations are increasing and more land is an ethical solution that this act could support?
- How about about a wide variety of grant, scholarship, loan and investment incentives for Native business owners, students, homeowners, community members to match what is described below?
- How about the expansion of Native Individual Development Accounts to create savings, businesses and home ownership with a specific fund from land sales to private, public and tribal land owners?
- How about not using such a loaded name as the New Homestead Act? Didn't anyone do their research?
Contact Senator Dorgan, contact your senator, make your voice known. There should be NO New Homestead Act unless the tribes are part of the process. It is the right thing to do.
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Summary of S. 1093
I. New Homestead Opportunities for individuals who locate in high out-migration counties*
Repay up to 50% of college loans for recent grads who live and work there for 5 years (maximum of $10,000)
Provide a $5,000 tax credit for the home purchases of individuals who locate there for 5 years (or 10% of purchase price, whichever is lower)
Protect home values by allowing losses in home value to be deducted from federal income taxes
Establish Individual Homestead Accounts to help build savings and increase access to credit
individuals can contribute a maximum of $2,500 per year for up to 5 years
government can provide a match of 12.5-50% (depending on income)
tax and penalty-free distributions can be made after 5 years for small business loans, education expenses, first-time home purchases, and unreimbursed medical expenses
accounts can grow tax-free and all funds are available for withdrawal upon retirement
II. New Incentives for Businesses to expand or locate in high out-migration areas
Create Rural Investment Tax Credits to target investments in high out-migration counties
states receive $1 million of these credits per high out-migration county
they allocate these credits to businesses that move to or expand there
businesses use these credits to offset the cost of newly constructed or existing buildings
over a 10-year period, businesses can use these credits to reduce their taxes by as much as 80% of their total investment
Offer Micro-enterprise Tax Credits to aid small businesses in high out-migration counties
states may choose to allocate up to 20% of their total rural investment tax credit allocation to qualifying start-up or expanding micro-enterprises with five or fewer employees
micro-enterprises would use these credits to offset the cost of new funding needed for business expansion
micro-enterprises can use these credits to reduce their taxes by 30% of their qualifying new investment (limited to $25,000 lifetime).
Accelerate depreciation for equipment purchases tied to Rural Investment Tax Credit projects
III. New Homestead Venture Capital Fund to promote business development in high out-migration areas
Establish $3 billion venture capital fund to invest in businesses in high out-migration counties
the fund can guarantee up to 40% of private investments in existing business and start-ups, and up to 60% of such investments in manufacturing or high-technology ventures
the fund can take equity positions and extend credit to other approved entities
it can provide technical assistance to potential applicants
the federal government would invest $200 million per year for 10 years
states and private investors would be required to provide yearly match of $50 million each
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* A high out-migration county is defined as any non-metro county that has suffered net out-migration of at least 10% over the past 20 years