The applicable 
‘‘In the case of: 
recovery period is: 
5-year property ........................................................................
3 years
7-year property ........................................................................
4 years
10-year property ......................................................................
6 years
15-year property ......................................................................
9 years
20-year property ......................................................................
12 years
Nonresidential real property ....................................................
22 years. 
‘‘(3) DEDUCTION
ALLOWED
IN
COMPUTING 
MINIMUM TAX.—For purposes of determining alter-
native minimum taxable income under section 55, 
the deduction under subsection (a) for property to 
which paragraph (1) applies shall be determined 
under this section without regard to any adjustment 
under section 56. 
‘‘(4) QUALIFIED
RURAL
INVESTMENT
PROP-
ERTY DEFINED.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
rural investment property’ means property 
which is property described in the table in para-
graph (2) and which is— 
‘‘(i) used by the taxpayer predomi-
nantly in the active conduct of a trade or 
business within a qualified rural invest-
ment project, 
‘‘(ii) not used or located outside the 
qualified rural investment project on a reg-
ular basis, 
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‘‘(iii) not acquired (directly or indi-
rectly) by the taxpayer from a person who 
is related to the taxpayer (within the 
meaning of section 465(b)(3)(C)), and 
‘‘(iv) not property (or any portion 
thereof) placed in service for purposes of 
operating any facility described in section 
144(c)(6)(B). 
‘‘(B) EXCEPTION FOR ALTERNATIVE DE-
PRECIATION
PROPERTY.—The term ‘qualified 
rural investment property’ does not include any 
property to which the alternative depreciation 
system under subsection (g) applies, deter-
mined— 
‘‘(i) without regard to subsection 
(g)(7) (relating to election to use alter-
native depreciation system), and 
‘‘(ii) after the application of section 
280F(b) (relating to listed property with 
limited business use). 
‘‘(C) SPECIAL RULE FOR INFRASTRUCTURE 
INVESTMENT.— 
‘‘(i) 
IN
GENERAL.—Subparagraph 
(A)(ii) shall not apply to qualified infra-
structure property located outside of the 
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qualified rural investment project if the 
purpose of such property is to connect with 
qualified infrastructure property located 
within such project. 
‘‘(ii) 
QUALIFIED
INFRASTRUCTURE 
PROPERTY.—For purposes of this subpara-
graph, the term ‘qualified infrastructure 
property’ means qualified rural investment 
property (determined without regard to 
subparagraph (A)(ii)) which— 
‘‘(I) benefits the qualifying coun-
ty infrastructure, 
‘‘(II) is available to the general 
public, and 
‘‘(III) is placed in service in con-
nection with the taxpayer’s active con-
duct of a trade or business within a 
qualified rural investment project. 
Such term includes, but is not limited to, 
roads, power lines, water systems, railroad 
spurs, and communications facilities. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section, any term used in this section which is used 
in section 42A shall have the meaning given such 
term by section 42A.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act, in taxable years 
ending after such date. 
TITLE III—NEW HOMESTEAD 
VENTURE CAPITAL FUND 
SEC. 301. NEW HOMESTEAD VENTURE CAPITAL FUND. 
The Consolidated Farm and Rural Development Act 
(7 U.S.C. 1921 et seq.) is amended by adding at the end 
the following new subtitle: 
‘‘Subtitle G—New Homestead 
Venture Capital Fund 
‘‘SEC. 383A. SHORT TITLE. 
‘‘This subtitle may be cited as the ‘New Homestead 
Venture Capital Fund Act’. 
‘‘SEC. 383B. DEFINITIONS. 
‘‘In this subtitle: 
‘‘(1) AUTHORIZED
PRIVATE
INVESTOR.—The 
term ‘authorized private investor’ means an indi-
vidual, legal entity, or affiliate or subsidiary of an 
individual or legal entity that— 
‘‘(A) is eligible to receive a loan guarantee 
under this title; 
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‘‘(B) is eligible to receive a loan guarantee 
under the Rural Electrification Act of 1936 (7 
U.S.C. 901 et seq.); 
‘‘(C) is created under the National Con-
sumer Cooperative Bank Act (12 U.S.C. 3011 
et seq.); 
‘‘(D) is an insured depository institution 
subject to section 383D(b)(2); 
‘‘(E) is a Farm Credit System institution 
described in section 1.2(a) of the Farm Credit 
Act of 1971 (12 U.S.C. 2002(a)); or 
‘‘(F) is determined by the Board to be an 
appropriate investor in the Fund. 
‘‘(2) BOARD.—The term ‘Board’ means the 
board of directors of the Fund established under 
section 383F. 
‘‘(3) FUND.—The term ‘Fund’ means the New 
Homestead Venture Capital Fund established under 
section 383C. 
‘‘(4) GROUP OF SIMILAR AUTHORIZED PRIVATE 
INVESTORS.—The term ‘group of similar authorized 
private investors’ means any 1 of the following: 
‘‘(A) Insured depository institutions with 
total assets of more than $250,000,000. 
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‘‘(B) Insured depository institutions with 
total assets equal to or less than $250,000,000. 
‘‘(C) Farm Credit System institutions de-
scribed in section 1.2(a) of the Farm Credit Act 
of 1971 (12 U.S.C. 2002(a)). 
‘‘(D) Cooperative financial institutions 
(other than Farm Credit System institutions). 
‘‘(E) Authorized private investors, other 
than those described in subparagraphs (A) 
through (D). 
‘‘(F) Other nonprofit organizations, includ-
ing credit unions. 
‘‘(5) INSURED DEPOSITORY INSTITUTION.—The 
term ‘insured depository institution’ means any bank 
or savings association the deposits of which are in-
sured under the Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.). 
‘‘(6) QUALIFYING COUNTY.—The term ‘quali-
fying county’ means any county that— 
‘‘(A) is located outside a metropolitan sta-
tistical area (as defined by the Office of Man-
agement and Budget); and 
‘‘(B) during the 20-year period ending 
with the fiscal year preceding the applicable fis-
cal year for which assistance is made available 
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under section 383E, has a net outmigration of 
inhabitants from the county of at least 10 per-
cent of the population of the county at the be-
ginning of the period. 
‘‘(7) RURAL BUSINESS.—The term ‘rural busi-
ness’ means a rural cooperative, a value-added agri-
cultural enterprise, or any other enterprise that is or 
will be located in a qualifying county. 
‘‘SEC. 383C. ESTABLISHMENT OF THE FUND. 
‘‘(a) IN GENERAL.— 
‘‘(1) AUTHORITY TO ESTABLISH.—Upon certifi-
cation by the Secretary that, to the maximum extent 
practicable, the parties proposing to establish a fund 
provide a broad representation of all of the groups 
of similar authorized private investors described in 
subparagraphs (A) through (F) of section 383B(4), 
the parties so certified may establish, a non-Federal 
entity under State law, to purchase shares of, and 
manage a fund to be known as the ‘New Homestead 
Venture Capital Fund’, to generate and provide eq-
uity capital to rural businesses. 
‘‘(2) OWNERSHIP.— 
‘‘(A) IN GENERAL.—To the maximum ex-
tent practicable, equity ownership of the Fund 
shall be distributed among authorized private 
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investors representing all of the groups of simi-
lar authorized private investors described in 
subparagraphs (A) through (F) of section 
383B(4). 
‘‘(B) EXCLUSION OF GROUPS.—No group 
of similar authorized private investors shall be 
excluded from equity ownership of the Fund 
during any period during which the Fund is in 
existence if an authorized private investor rep-
resentative of the group is able and willing to 
invest in the Fund. 
‘‘(b) PURPOSE.—The purpose of the Fund is to 
strengthen the economies of qualifying counties by— 
‘‘(1) making needed investments in qualifying 
counties to reverse the devastating impact of chronic 
outmigration and to help the qualifying counties re-
build and grow; 
‘‘(2) providing equity funding for existing and 
startup rural businesses with high potential for job 
creation that are or will be located in qualifying 
counties; 
‘‘(3) offering the funding described in para-
graph (2) to rural businesses, many of which have 
difficulty obtaining equity capital; 
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‘‘(4) authorizing use of the funding described in 
paragraph (2) only after State and local govern-
ments match a significant portion of the funding; 
‘‘(5) requiring a portion of the funding de-
scribed in paragraph (2) to be used for technical and 
other similar assistance to rural businesses; and 
‘‘(6) providing incentives to greater participa-
tion by authorized private investors through provi-
sion of guarantees of up to 60 percent of the invest-
ments of the authorized private investors in quali-
fying counties. 
‘‘(c) ARTICLES OF INCORPORATION AND BY-LAWS.— 
The articles of incorporation and by-laws of the Fund shall 
set forth purposes of the Fund that are consistent with 
the purposes described in subsection (b). 
‘‘SEC. 383D. INVESTMENT IN THE FUND. 
‘‘(a) IN GENERAL.—The Secretary shall— 
‘‘(1) subject to subsection (b)(1), make avail-
able to the Fund $200,000,000 for each of fiscal 
years 2006 through 2015; 
‘‘(2) subject to subsection (c), guarantee a por-
tion of each investment made by an authorized pri-
vate investor in the Fund; and 
‘‘(3) subject to subsection (d), guarantee the re-
payment of principal of, and accrued interest on, de-
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bentures issued by the Fund to authorized private 
investors. 
‘‘(b) NON-FEDERAL FUNDS.— 
‘‘(1) IN
GENERAL.—Under subsection (a)(1), 
the Secretary shall make an amount available to the 
Fund for a fiscal year only after— 
‘‘(A) at least $50,000,000 has been in-
vested in the Fund for the fiscal year by au-
thorized private investors in accordance with 
this subtitle and the terms and conditions set 
forth in the by-laws of the Fund; and 
‘‘(B) at least $50,000,000 has been in-
vested in the Fund for the fiscal year by State 
and local governments. 
‘‘(2) INSURED DEPOSITORY INSTITUTIONS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C)— 
‘‘(i) an insured depository institution 
may be an authorized private investor in 
the Fund; and 
‘‘(ii) an investment in the Fund may 
be considered to be part of the record of 
an institution in meeting the credit needs 
of the community in which the institution 
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is located under any applicable Federal 
law. 
‘‘(B) INVESTMENT LIMIT.—The total in-
vestment in the Fund of an insured depository 
institution shall not exceed 5 percent of the in-
stitution’s capital and surplus. 
‘‘(C) REGULATORY
AUTHORITY.—An ap-
propriate Federal banking agency may, by regu-
lation or order, impose on any insured deposi-
tory institution investing in the Fund, any safe-
guard, limitation, or condition (including an in-
vestment limit that is lower than the investment 
limit under subparagraph (B)) that the Federal 
banking agency considers to be appropriate to 
ensure that the institution operates— 
‘‘(i) in a financially sound manner; 
and 
‘‘(ii) in compliance with all applicable 
law. 
‘‘(c) GUARANTEE OF PRIVATE INVESTMENTS.— 
‘‘(1) IN GENERAL.—The Secretary shall guar-
antee, under terms and conditions determined by the 
Secretary— 
‘‘(A) except as provided in subparagraph 
(B), 40 percent of any loss of the principal of 
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each investment made by an authorized private 
investor in the Fund; and 
‘‘(B) 60 percent of any loss of the prin-
cipal of each investment made by an authorized 
private investor in the Fund if the investment 
is used for a manufacturing or high-technology 
business. 
‘‘(2) MAXIMUM TOTAL GUARANTEE.—The ag-
gregate potential liability of the Secretary with re-
spect to all guarantees under paragraph (1) shall 
not apply to more than $500,000,000 in private in-
vestments in the Fund. 
‘‘(3) REDEMPTION OF GUARANTEE.— 
‘‘(A) DATE.—An authorized private inves-
tor in the Fund may redeem a guarantee under 
paragraph (1), with respect to the total invest-
ments in the Fund and the total losses of the 
authorized private investor as of the date of re-
demption— 
‘‘(i) on the date that is 5 years after 
the date of the initial investment of the au-
thorized private investor; or 
‘‘(ii) annually thereafter. 
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