SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Value-Added Development Act for 
American Agriculture''.

SEC. 2. AGRICULTURE INNOVATION CENTER DEMONSTRATION PROGRAM.

    (a) Purposes.--The purposes of this section are to carry out a 
demonstration program under which agricultural producers are provided--
            (1) technical assistance, including engineering services, 
        applied research, scale production, and similar services to 
        enable the producers to establish businesses for further 
        processing of agricultural products;
            (2) marketing, market development, and business planning;
            (3) overall organizational, outreach, and development 
        assistance to increase the viability, growth, and 
        sustainability of value-added agricultural businesses.
    (b) Nature of Program.--The Secretary of Agriculture (in this 
section referred to as the ``Secretary'') shall--
            (1) make grants to eligible applicants for the purposes of 
        enabling the applicants to obtain the assistance described in 
        subsection (a); and
            (2) provide assistance to eligible applicants through the 
        research and technical services of the Department of 
        Agriculture.
    (c) Eligibility Requirements.--
            (1) In general.--An applicant shall be eligible for a grant 
        and assistance described in subsection (b) to establish an 
        Agriculture Innovation Center if--
                    (A) the applicant--
                            (i) has provided services similar to those 
                        described in subsection (a); or
                            (ii) shows the capability of providing the 
                        services;
                    (B) the application of the applicant for the grant 
                and assistance sets forth a plan, in accordance with 
                regulations which shall be prescribed by the Secretary, 
                outlining support of the applicant in the agricultural 
                community, the technical and other expertise of the 
                applicant, and the goals of the applicant for 
                increasing and improving the ability of local producers 
                to develop markets and processes for value-added 
                agricultural products; and
                    (C) the applicant meets the requirement of 
                paragraph (2).
            (2) Board of directors.--The requirement of this paragraph 
        is that the applicant shall have a board of directors comprised 
        of representatives of the following groups:
                    (A) The 2 general agricultural organizations with 
                the greatest number of members in the State in which 
                the applicant is located.
                    (B) The Department of Agriculture or similar State 
                organization or department, for the State.
                    (C) Organizations representing the 4 highest 
                grossing commodities produced in the State, according 
                to annual gross cash sales.
    (d) Grants and Assistance.--
            (1) In general.--Subject to the availability of 
        appropriations, the Secretary shall make annual grants to 
        eligible applicants under this section, each of which grants 
        shall not exceed $1,000,000.
            (2) Initial limitation.--In the first 3 years of the 
        demonstration program under this section, the Secretary may 
        make grants under this section, on a competitive basis, to not 
        more than 10 eligible applicants, including those whose 
        applications provide for the operation of an Agriculture 
        Innovation Center in the following States:
                    (A) Missouri.
                    (B) Mississippi.
                    (C) Ohio.
                    (D) New Mexico.
                    (E) South Dakota.
                    (F) Texas.
                    (G) Wisconsin.
            (3) Expansion of demonstration program.--In the second year 
        of the demonstration program under this section, the Secretary 
        may make grants under this section to not more than 10 eligible 
        applicants, in addition to any entities to which grants are 
        made under paragraph (2) for such year.
            (4) State limitation.--In the first 3 years of the 
        demonstration program under this section, the Secretary shall 
        not make a grant under this section to more than 1 entity in 
        any State.
    (e) Use of Funds.--An entity to which a grant is made under this 
section may use the grant only for the following purposes:
            (1) Applied research.
            (2) Consulting services.
            (3) Office equipment.
            (4) Hiring of employees, at the discretion of the board of 
        directors of the entity.
            (5) The making of matching grants, each of which shall be 
        not more than $5,000, to agricultural producers, so long as the 
        aggregate amount of all such matching grants shall be not more 
        than $50,000.
    (f) Limitations on Authorization of Appropriations.--For grants and 
assistance under this section, there are authorized to be appropriated 
to the Secretary not more than--
            (1) $10,000,000 for fiscal year 2001;
            (2) $15,000,000 for fiscal year 2002; and
            (3) $20,000,000 for fiscal year 2003.
    (g) Report on Best Practices.--Not later than 3 years after the 
first 10 grants are made under this section, the Secretary shall 
prepare and submit to the Committee on Agriculture, Nutrition, and 
Forestry of the Senate and to the Committee on Agriculture of the House 
of Representatives a written report on the effectiveness of the 
demonstration program conducted under this section at improving the 
production of value-added agricultural products and on the effects of 
the program on the economic viability of the producers, which shall 
include the best practices and innovations found at each of the 
Agriculture Innovation Centers established under the demonstration 
program under this section, and detail the number and type of 
agricultural projects assisted, and the type of assistance provided, 
under this section.
Authorizes up to ten initial grants during the demonstration project's first three years, including operation of a Center in: (1) Missouri; (2) Mississippi; (3) Ohio; (4) New Mexico; (5) South Dakota; (6) Texas; and (7) Wisconsin.
Authorizes appropriations.
Value-Added Development Act for American Agriculture