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
