[Congressional Record Volume 149, Number 41 (Thursday, March 13, 2003)]
[Senate]
[Pages S3664-S3666]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE NEW HOMESTEAD ACT

  Mr. DORGAN. Madam President, at a time when there is so much 
discussion about partisanship, let me describe legislation introduced 
in the Senate yesterday now called S. 602, which is truly bipartisan. 
We call it the New Homestead Act. Senator Hagel, Senator Johnson, 
Senator Brownback, I, and many others, Republicans and Democrats, have 
introduced legislation to address a very serious problem in the 
heartland of our country.
  I will describe this problem by something a Lutheran minister from 
New England, ND, told me. She said: In this small town in southwestern 
North Dakota, in my church I officiate at four funerals for every 
wedding.
  What does that describe? It describes a small town in a rural State 
where the population is getting older, where they have few young 
people, few marriages and few births, and where they are suffering from 
the out-migration of people.
  I will describe what is happening in the heartland of America with 
this chart. The red on this chart shows the rural counties across 
America that have experienced greater than 10-percent net out-migration 
over the last 20 years. There is a relentless engine of depopulation in 
the heartland of our country. It is from North Dakota to Texas in an 
eggshell shaped form.
  My home county is right in the southwestern corner of North Dakota. 
It is slightly larger than the State of Rhode Island. When I left it, 
there were 5,000 citizens living in that wonderful county. Now there 
are 2,700 citizens, and the demographers say by the year 2020 it will 
have 1,800 citizens. Trying to do business in that county and so many 
others in the heartland is like doing business in a deep recession.
  Nearly a century and a half after we populated the heartland of 
America by something called the Homestead Act, which said, move here, 
become a part of this land, and we will give you the land, we are 
seeing this relentless depopulation. In these areas, we have 
communities that are wonderful places in which to live. In fact, people 
aspire to recreate what we have in other parts of the country--strong 
schools, a great place to raise kids, safe streets, and wonderful 
communities. Yet, these rural areas are being ravaged by the out-
migration of people. It is ruining their economy.
  The question is: Should we care? Do we care? Well, when our cities 
were decaying and America's cities were in trouble, as a national 
policy we rushed to say, let's save America's cities with the Model 
Cities Program, an urban renewal program. We pumped significant 
resources into those cities to save them.
  The question now is: Will we save the heartland in our country? Does 
it matter? S. 602, bipartisan legislation called the New Homestead Act, 
says it matters.
  What the heartland contributes to America is very important. We need 
to give people the tools to help rebuild their economies in the 
heartland. That is what our legislation does.
  We do not have land to give away anymore. But we say to individuals 
and businesses, if you stay there, if you come there, if you build 
there, if you invest there, here are financial incentives for you. We 
can turn this around. That is what S. 602 is about. S. 602 says to 
people, it is in your interest to help us rebuild the economies of the 
States in the heartland.
  The New Homestead Act offers tax and other financial rewards for 
individuals who commit to live and work in high out-migration rural 
areas. It provides help paying college loans, offers tax credits for 
home purchases, protects home values, and establishes Individual 
Homestead Accounts, the economic equivalent of giving them free land as 
we did a century ago.
  S. 602 provides tax incentives for businesses to expand or locate in 
high out-migration areas. Investment tax credits. Micro-enterprise tax 
credits. Accelerated depreciation.
  Finally, a new homestead venture capital fund will help ensure that 
entrepreneurs and companies in these areas get the capital they need to 
start and grow their businesses.
  We can do one of two things with respect to this problem in the 
heartland of America. We can sit here and gnash our teeth and wring our 
hands and say, this is awful. We can watch this depopulation continue 
for the next 20 or 50 years, and lose a significant and important part 
of our country's economy, or we can decide we are not going to let this 
happen, we are not going to be the frog in the pan of water on the 
stove only to find at this time it is too late to get out.
  That is what this is all about. I am proud to work with my 
colleagues, Republicans and Democrats alike, to offer this legislation.
  Mr. HAGEL. Madam President, I rise this morning to join my friend and 
colleague from North Dakota, Senator Dorgan, in introducing the new 
Homestead Act. We have heard from Senator Dorgan as to why many believe 
this issue, this challenge, needs attention. He laid some of those 
reasons out rather clearly.
  Senator Dorgan and I and others introduced this legislation last 
year. The intent of this legislation is simple. It aims to help reverse 
the trend of population decline in rural areas and provide growth and 
opportunities in rural America. Many communities in rural America have 
not shared in the boom that has brought great prosperity to urban 
America. Instead, this out-migration of individuals and resources is 
taking a high toll on rural America. Over the last 50 years, 
nonmetropolitan counties in the Nation lost more than a third of their 
population, about 34 percent. Contrast this with the fact that during 
the same period the number of people living in metropolitan areas grew 
by over 150 percent.
  Today, Nebraska is one of the States hardest hit by out-migration. Of 
93 counties in Nebraska, 56 have lost at least 10 percent of residents 
due to out-migration over the past 2 years. According to the University 
of Nebraska report, most of these counties will see similar population 
losses over the next 2 decades without an expansion of nonagriculture 
industry.
  Why are people leaving rural America? It is rather simple: For jobs 
and opportunities. One of the main provisions of our legislation 
addresses this issue by providing incentives to small businesses and 
other enterprises to locate and expand in rural areas. Small businesses 
are a critical element of the rural economy, as they are to all of 
America, accounting for nearly two-thirds of all rural jobs.
  Our legislation builds upon the same spirit of the Homestead Act of 
1862 which gave land to individuals who were willing to live and work 
in unsettled areas of the country. In fact, the

[[Page S3665]]

first claim made under this act was just outside Beatrice, NE.
  Our bill targets three different categories: Individuals, businesses, 
and capital formation. For individuals who live in or move to high out-
migration counties, the legislation provides, as Senator Dorgan 
mentioned, three basic things: The college loan repayments and home tax 
credits, individual homestead accounts, rural investment tax credits, 
and a venture capital fund.
  Last year, in the Senate Finance Committee, Senators Grassley and 
Baucus called the bill a big idea. Indeed, it is a big idea. But it is 
the kind of big idea we need to help reverse the decline of rural 
America--not just the Midwest--but all of rural America.
  I am proud of the fact our bill has the bipartisan support of 10 
cosponsors and it has the endorsement of a diverse coalition of 
organizations across this country, all kinds of organizations. I am 
pleased again to be working with my friend, Senator Dorgan, in 
reintroducing this legislation. I ask my colleagues in this body to 
learn more about the aim, the specifics of this legislation, and that 
they would help and join us in addressing the challenges facing rural 
areas across our country.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Coleman). The Senator from South Dakota.
  Mr. JOHNSON. Mr. President, I rise today to express my support for 
the New Homestead Act and I want to thank Senator Dorgan and Senator 
Hagel for their leadership on the critically important issue. I am 
pleased to cosponsor this bipartism legislation.
  America was originally a rural place. Many of our citizens lived and 
worked on farms or in rural towns throughout our country. During the 
turn of the century, towns and communities sprang up on railroad lines 
and river crossings. They served as regional trade centers and seats of 
local government. Opportunity was available for the children of these 
communities. Too often that is no longer the case. A changing economy 
from agriculture to technology has reduced opportunity in rural America 
and certainly rural South Dakota. Out-migration is decimating many 
communities in my home State of South Dakota. Currently, 63 percent of 
South Dakota counties are considered high out-migration counties--
averaging a 10 percent population loss over the past 20 years. In these 
counties there is also a 16 percent reduction in youth population, 6 
percent increase in the elderly population, and 25 percent of these 
counties had more deaths than births. Once proud communities that were 
self sufficient are slowly withering away.
  I believe that in order to forestall these trends Congress must now 
prioritize rural America. That is one reason why I am so supportive of 
this legislation. The New Homestead Act hopes to address out-migration 
by offering individuals who make a commitment to live and work in rural 
areas to get a college degree, buy a home, start a business and build a 
nest egg for the future. This legislation will also provide incentives 
for businesses to relocate or develop in high out-migration areas. This 
comprehensive, approach is needed to address this huge problem. While 
the bill will not save every community, it will provide communities 
with the tools they need to survive. Rural communities provide 
businesses and families many benefits. Good schools, low crime rates, a 
high level of civic involvement and a talented and committed workforce 
are just some of the benefits (specifics) that rural America provides 
this country. It is a way of life worth fighting for, and our Nation's 
commitment to this lifestyle is long-standing.
  In fact, in 1862 our government made a commitment to populate rural 
America. The original Homestead Act made a deal with settler's willing 
to travel to the midwest; if you stay and work the land for 5 years we 
will offer you a quarter-section of land. This was a hugely popular and 
successful program. I know this first hand because my great-grandfather 
used this legislation to homestead near Centerville, SD.
  Today we can offer tax incentives and financial rewards to 
individuals to move into out-migration counties. A generation ago the 
United States used a similar approach addressing the needs of our 
metropolitan areas. At that time, our country's cities were facing 
population and job losses, crumbling infrastructure--many of the same 
problems our rural areas face today. Billions of dollars were committed 
to housing, transportation, and job creation in urban areas.
  As a Senator from a rural area, I was proud to participate and join 
in that effort. But now many of our metropolitan areas that were 
struggling thrive. We need this kind of commitment for our rural 
communities at this point in our history.
  While this comprehensive legislation takes aim to remedy many of the 
problems facing small towns, I believe this forward-thinking bill is 
also important for farmers and ranchers who make a living from the 
land. It is critical to understand that prosperity in production 
agriculture can lead to robust conditions in Main Street rural America. 
As such, a decline in the farm economy causes economic hurt for rural 
businesses as well. This downturn in the rural economy is one we know 
all too well in South Dakota. Volatile market conditions for crops and 
livestock, unfair foreign trade, and the disastrous forces of Mother 
Nature, have all taken a toll on our farmers and ranchers in recent 
years.
  Consider the sobering economic damage to South Dakota resulting from 
the ongoing drought: South Dakota State University, SDSU, economists 
estimate $1.4 billion has been eroded from the State's economy due to 
the drought. The impact includes $642 million in direct losses for 
livestock and crops, which is about one-sixth, or 17 percent of the 
average annual cash intake for agriculture.
  I believe the New Homestead Act provides the kind of commitment and 
opportunity that our nation must be willing to once again make in order 
to sustain and grow prosperity for farmers, ranchers, and rural 
America.
  Our entire Nation suffers when rural America suffers. Some of our 
country's most prized virtues, like good school systems, low crime 
rates, and high levels of civic participation, are alive and well in 
these areas, yet many are fighting for their survival. There is no 
doubt in my mind that these areas are worth saving. I urge my 
colleagues to support this important legislation.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mr. BROWNBACK. Mr. President, I am pleased to join colleagues in the 
introduction of the New Homestead Act. I am very pleased to be a 
supporter along with my colleagues from North Dakota, Nebraska, and 
South Dakota.
  Alexander Hamilton once made a statement I think is particularly 
applicable to the current situation we are discussing--what is 
happening in rural America, particularly in a swath of rural America 
from Texas north to the Canadian border that includes the State of the 
Presiding Officer and a number of States throughout the Midwest. He 
said:

       To cherish and stimulate the activity of the human mind, by 
     multiplying the objects of enterprise, is not among the least 
     considerable of the expedients by which the wealth of a 
     nation may be promoted.

  We listen to that and say: What does he mean? In other words, we must 
encourage and support intellectual activity and enterprise, and the 
area in which this has been most neglected has been in our rural 
communities. We must change this before some of these precious entities 
wither away.
  Every year, rural communities become emptier and more desolate as 
fewer and fewer people remain. This out-migration of youth to more 
urban areas is due to the simple fact of a lack of economic opportunity 
within these beautiful settings.
  Although America was originally rural, with most of its people living 
in rural areas and working on farms, that has changed dramatically over 
the course of the past century. Today, after decades of decline, less 
than 2 percent of the Nation's population live on farms in rural areas. 
In my State alone, over half of the counties are suffering from this 
youth drain and out-migration.
  I have a map I want to show to my colleagues. These are counties in 
Kansas. We have 105 counties. These are the counties that would qualify 
for the New Homestead Act; that is 10-percent population decline or 
more over the last 20 years. You can see a huge swath of our State that 
has extensive out-migration.

[[Page S3666]]

  You can say a lot of different factors caused this. One has been the 
concentration and growth in agriculture, where there are fewer farmers 
farming larger tracts of land. That is certainly accurate.
  It is also the fact that a number of people in agriculture have, 
because of a lack of income, had to get off-farm jobs. There are not 
major urban areas in a lot of these places, so they have not been able 
to find that and they have had to move to major urban areas. So you 
have had this combination of difficulty in agriculture, difficulty of a 
lack of jobs on an off-farm basis. It has led to this huge out-
migration.
  If this were just Kansas, it would be problematic enough, but instead 
of a whole swath, particularly in the Middle West, from Texas sweeping 
up north all the way to Montana and Minnesota, you have a number of 
counties like this.
  I believe nearly 90 percent of counties in North Dakota qualify 
because of the same feature: Concentration in agriculture, fewer off-
farm job opportunities, and people saying: We simply don't have 
anyplace to work. We would love to live here. We would love to be able 
to stay here. We have to have a job. We have to be able to make a 
reasonable income.
  This is the total population. If you look at the school-age 
population, it is even worse. It is even a more steep decline. I have 
been in cities in Rawlins County and far Northwest Kansas where the 
school-age population has declined nearly a fourth over the last 5 
years. So while the overall population is going down like this, the 
school-age population is plummeting. As young people don't move back in 
the area, there are not the jobs and opportunities. They are saying: I 
would love to live here, but I can't.

  I have been around a lot of rural development efforts that tried to 
push people back to rural areas. To me, this is a way to pull people 
back to rural areas, by providing economic incentives, the likes of 
which we did to populate the region in the first place. This is a 
region that was populated by the Homestead Act in the first place, 
telling people, if they will stay there and work 160 acres for 5 years, 
it is theirs.
  We had people self-selected. It wasn't people saying: You are going 
to go, and we will select you, we won't pick you--it was the great 
American way. This is the opportunity. If you want to do it, it is your 
choice. You don't have to do it. People took it and moved out.
  The New Homestead Act is recognizing the new economic realities and 
saying what can we do to pull people into these areas. These are ideas 
we tried in major urban areas, we tried them in Washington, DC, and a 
number of other places where we were having the hollowing out of urban 
areas, and they have attracted people back to the core in these urban 
areas. We are trying to take those same proven models, proven tests, to 
another area that has been hollowed out in the United States.
  That is why I am excited about this bill. I am hopeful it is 
something we can move in total, or in part, quickly. We need to do so. 
We need to move this forward aggressively.
  It is providing new hope and new vision in areas where a lot of 
people were of a mind that: I guess nobody is listening or paying 
attention, and we are going to have difficulty making it. Our community 
is not going to make it.
  Here we are saying, no, we want to provide this new hope and 
opportunity with the New Homestead Act. I hope our colleagues, if they 
have other ideas that could strengthen this bill, will bring those 
forward as well.
  It is a very difficult issue for our State. I am delighted to be 
supportive of this effort. My colleagues and I are going to push 
aggressively here and in the House to make it happen.
  It is simple: rural America--our history, our founding lifestyle--is 
suffering and the Congress must not turn our backs. Take, for example, 
the town of Nicodemus, KS, in Graham County. This town was started more 
than a century ago when some 350 freed slaves left Kentucky and made a 
new beginning for themselves on the plains of Kansas. For a while, the 
town prospered, showing a new life to these newly-freed slaves. 
Unfortunately though, the railroad never moved in--a devastating lost 
opportunity that was followed by drought, depression, and, finally, a 
post-war exodus. Suddenly, the town itself and its population seemed 
almost ghost-like. Today, Nicodemus is without a school, and there is 
only one full-time farmer left in the area.
  Unfortunately, this story is not an isolated one, as hard times have 
hit throughout America. In fact, this kind of situation is happening 
across our heartland, and we are here today to provide the much needed 
incentives to preserve rural America and the values instilled there.
  We must revitalize within our heartland that spirit of creativity and 
enterprise that has always allowed our nation to grow and adapt. It has 
long been the key to our success both philosophically and in the wealth 
of our nation. For example, Americans who once held jobs that relied on 
the production of natural resources, such as farming, now work in 
service or technology industries. As a result of new technologies, 
American industries, including agriculture, have become more profitable 
with fewer employees. We in the Congress have an obligation to ensure 
the economic viability of these rural communities, even in light of the 
major problems and out-migration these areas are suffering.
  In 1862, the Homestead Act inspired many to move to places like 
Kansas with promises of 160 acres of free land to those settlers who 
would farm and live there for five years. Today, we are introducing the 
New Homestead Act. While we aren't offering 160 acres, we are rewarding 
those individuals willing to take a risk and locate in a high out-
migration county with the opportunity to get a college degree, buy a 
home, and build a nest egg for the future. Through loan repayment, 
small entrepreneurship credits, home tax credits, protecting home 
values, and individual homestead accounts, this bill reaches out to a 
new generation of Americans.
  And it is this new generation of Americans that will help rejuvenate 
rural America. Since our founding, a strong and vibrant rural America 
has been essential to a strong nation--and this principle remains only 
more true today. Our continued national well-being depends as much, if 
not more, on the condition of our less populated areas as on our urban 
areas.
  It is my hope that the Senate will take a serious look at this bill 
and move quickly to implement the provisions we have set forth. I 
appreciate the work that my colleagues Senators Hagel and Dorgan have 
done on this bill. Their vision and drive have brought this bill to 
where it is today, and I hope that the same spirit will help propel 
this bill through the Senate so that we can start helping our rural 
communities as quickly as possible.
  For, as we struggle through economic hard times nationwide, it would 
be wise to remember a comment George Washington made:

       A people . . . who are possessed of the spirit of commerce, 
     who see and who will pursue their advantages may achieve 
     almost anything.

  I know our rural communities are not only our history, but still have 
much to offer our nation today. Therefore, let us enable that spirit of 
commerce, and put these communities on the path to recovery.

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