Washington ? In an effort to bring economic relief to struggling rural communities — including those in Kansas — the U.S. Senate today approved the New Homestead Economic Opportunity Act. The measure includes an incentive for recent college graduates to move to rural areas: repaying up to $10,000 of their college loans.

The resolution, proposed by Sen. Sam Brownback, R.-Kan., also is designed to reduce out-migration from rural areas. The measure was an amendment to the FY 2005 Budget Resolution.

“The New Homestead Act addresses the plight of rural America, which as of late, has been suffering,” Brownback said in a prepared statement.

The amendment (S.602) increases budget authority by $2.2 billion over five years, offset by requiring appropriators to find savings in the same amount in other discretionary spending areas.

This savings establishes a New Homestead Venture Capital Fund to make equity and near-equity investments in start-up and expanding businesses located in high out-migration rural counties. Also, it will repay up to 50 percent of college loans — up to $10,000 — for recent graduates who live and work in such counties for five years.

The legislation provides new homestead opportunities for those who live in high out-migration counties.

Those opportunities include:

• Repayment of up to 50 percent of college loans, $5,000 in tax credits for home purchases and Individual Homestead Accounts to help build savings;
• New incentives for businesses to expand or locate in high out-migration areas such as Rural Investment Tax Credits and Micro-Enterprise Tax Credits;
• And a new $1.3 billion Homestead Venture Capital Fund to promote business development in high out-migration areas.

“In Kansas, over half of the counties are suffering from out-migration,” Brownback said. “The population of towns and counties in Kansas is dwindling. This is not only devastating to a state like Kansas, where we rank sixth in the nation in out-migration, but also to the entire central portion of the county. This problem cannot be ignored, and I am confident that the provisions included in S.602 will provide the much-needed incentives that rural America desperately needs to survive and thrive.”

The New Homestead Act must now be approved by the Senate Appropriations Committee, of which Brownback is a member.