What Is the New Homestead Act of 2005?
The New Homestead Act of 2005 was a bill first introduced in Congress--as the New Homestead Act--in 2003. Intended to attract residents and businesses to rural counties that had experienced a net population loss of at least 10 percent over the previous 20 years, the act failed to become law.
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First Reintroduction
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The bill was reintroduced in the Senate as The New Homestead Act of 2005 on March 17, 2005. It was reintroduced in the House of Representatives as the New Homestead Act of 2006 on May 11, 2006. The bill died in committee in both houses of Congress.
Second Reintroduction
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Renamed the New Homestead Act of 2007, it was reintroduced in the Senate on April 12 that year. The bill, never reintroduced in the House of Representatives, met the same fate as its predecessors.
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Incentives
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The act would have established a $3 billion venture capital fund to aid businesses in qualifying counties. In addition, it granted residents of qualifying counties the remission of half of their student loan debt if they were a recent graduate; tax credits for purchasing a home, developing a business or constructing a new building in the county; and Individual Homestead Accounts.
Individual Homestead Accounts
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IHAs would have been tax-exempt savings accounts into which an individual could deposit up to $2,500 annually, with the government making matching contributions. After 5 years, the account's owner could withdraw the money--without penalty--to pay for certain expenses, such as higher education costs.
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