I 
109TH CONGRESS 
2D SESSION 
H. R. 5380 
To reward the hard work and risk of individuals who choose to live in 
and help preserve America’s small, rural towns, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 11, 2006 
Mr. POMEROY (for himself, Mr. OSBORNE, and Ms. HERSETH) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committees on Agriculture and Education and the 
Workforce, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To reward the hard work and risk of individuals who choose 
to live in and help preserve America’s small, rural towns, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘New Homestead Act of 2006’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—NEW HOMESTEAD OPPORTUNITIES 
Sec. 101. Loans for leadership initiative. 
Sec. 102. Credit for certain rural homebuyers. 
Sec. 103. Capital loss deduction allowed with respect to sale or exchange of 
principal residence in certain rural areas. 
Sec. 104. Individual homestead accounts. 
TITLE II—INCENTIVES FOR MAIN STREET BUSINESSES 
Sec. 201. Rural investment tax credit. 
Sec. 202. Qualified rural small business investment credit. 
Sec. 203. Accelerated depreciation for rural investment property. 
TITLE III—NEW HOMESTEAD VENTURE CAPITAL FUND 
Sec. 301. New homestead venture capital fund. 
TITLE I—NEW HOMESTEAD 
OPPORTUNITIES 
SEC. 101. LOANS FOR LEADERSHIP INITIATIVE. 
(a) DEFINITIONS.—In this section: 
(1) DEGREE.—The term ‘‘degree’’ means an as-
sociate’s or bachelor’s degree awarded by an institu-
tion of higher education. 
(2) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given the term in section 101 of the Higher 
Education Act of 1965 (20 U.S.C. 1001). 
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(3) QUALIFYING
COUNTY.—The term ‘‘quali-
fying county’’ means any county which— 
(A) is outside a metropolitan statistical 
area (defined as such by the Office of Manage-
ment and Budget), and 
(B) during the 20-year period ending with 
the calendar year preceding the date of enact-
ment of this Act, has a net out-migration of in-
habitants from the county of at least 10 percent 
of the population of the county at the beginning 
of such period. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Education. 
(b) PROGRAM.— 
(1) IN
GENERAL.—The Secretary shall carry 
out a program of assuming the obligation to repay, 
pursuant to subsection (c), a loan made, insured, or 
guaranteed under part B, D, or E of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1071 et 
seq., 20 U.S.C. 1087a et seq., and 20 U.S.C. 
1087aa et seq.), excluding loans made under section 
428B of such Act or comparable loans made under 
part D of such Act, for any borrower who— 
(A) completes a degree; 
(B) resides in a qualifying county; and 
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(C) is employed in a qualifying county. 
(2) REGULATIONS.—The Secretary is author-
ized to prescribe such regulations as may be nec-
essary to carry out the provisions of this section. 
(c) LOAN REPAYMENT.— 
(1) IN GENERAL.—The Secretary shall assume 
the obligation to repay, after each of the first 5 
years of the residency and employment described in 
subparagraphs (B) and (C) of subsection (b)(1) that 
occur after the date of enactment of this section, 10 
percent of the total amount of all loans made to a 
student under the provisions of the Higher Edu-
cation Act of 1965 as described in subsection (b)(1), 
up to a maximum amount of $2,000 each year. 
(2) CONSTRUCTION.—Nothing in this section 
shall be construed to authorize the refunding of any 
repayment of a loan made under part B, D, or E 
of title IV of the Higher Education Act of 1965. 
(3) INTEREST.—If a portion of a loan is repaid 
by the Secretary under this section for any year, the 
proportionate amount of interest on such loan which 
accrues for such year shall be repaid by the Sec-
retary so long as the total amount repaid by the 
Secretary in any 1 year does not exceed $2,000. 
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(d) REPAYMENT TO ELIGIBLE LENDERS.—The Sec-
retary shall pay to each eligible lender or holder for each 
fiscal year an amount equal to the aggregate amount of 
loans which are subject to repayment pursuant to this sec-
tion for such year. 
(e) APPLICATION FOR REPAYMENT.— 
(1) IN GENERAL.—An eligible borrower desiring 
loan repayment under this section shall submit a 
complete and accurate application to the Secretary 
at such time, in such manner, and containing such 
information as the Secretary may require. 
(2) CONDITIONS.—An eligible borrower may 
apply for loan repayment under this section after 
completing each year of qualifying residency and em-
ployment. The eligible borrower shall receive forbear-
ance while engaged in qualifying residency and em-
ployment unless the borrower is in deferment while 
so engaged. 
(f) DEFINITION OF ELIGIBLE BORROWER.—In this 
section the term ‘‘eligible borrower’’ means any borrower 
who is not in default on any of the borrower’s student 
loans under part B, D, or E of title IV of the Higher 
Education Act of 1965. 
(g) AUTHORIZATION OF APPROPRIATIONS.— 
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