‘‘SEC. 385G. INNOVATION GRANTS.

‘‘(a) IN GENERAL.—The National Board shall use amounts made available under section 385E(b)(2) to make innovation grants, on a competitive basis, to Regional Boards to implement projects that are identified in the regional plans of the Regional Boards.

‘‘(b) ELIGIBILITY.—

‘‘(1) IN GENERAL.—For a Regional Board to be eligible to receive an innovation grant, the National Board shall determine that—

‘‘(A) the regional plan of a Regional Board meets the requirements of this subtitle;

‘‘(B) the management and organizational structure of the Regional Board is sufficient to oversee grant projects;

‘‘(C) the Regional Board will be able to provide the grantee share required under this section; and

‘‘(D) the Regional Board agrees to achieve, to the maximum extent practicable, the performance-based benchmarks of the regional plan.

‘‘(2) RELATIONSHIP TO PLANNING GRANTS.—A Regional Board that meets the requirements of paragraph (1) shall be eligible to receive an innovation grant, regardless of whether the Regional Board receives a planning grant.

‘‘(c) SELECTION.—Subject to subsection (d), of the applications submitted by Regional Boards for innovation grants, the National Board shall, to the maximum extent practicable, select not fewer than 30 regional boards to receive innovation grants.

‘‘(d) PREFERENCES.—In awarding innovation grants, the National Board shall give a preference (in order of priority) to Regional Boards that—

‘‘(1) exhibit collaborative innovation and entrepreneurship, particularly within a public-private partnership;

‘‘(2) represent a broad coalition of interests described in section 385C(b)(2)(A);

‘‘(3) demonstrate a plan to leverage public (Federal and non-federal) and private funds and existing assets, including natural assets and public infrastructure;

‘‘(4) address gaps in existing basic services within a region;

‘‘(5) address economic diversification, including agricultural and non-agriculturally based economies, within a regional framework;

‘‘(6) demonstrate a plan to achieve multijurisdictional regional planning and development, with particular evidence of economic development successes within diverse stakeholder frameworks; or

‘‘(7) meet other community development needs identified by a Regional Board.

‘‘(e) USES.—

‘‘(1) LEVERAGE.—A Regional Board shall prioritize projects, in part, on the degree to which the Regional Board is able to leverage additional funds for the implementation of the projects.

‘‘(2) PURPOSES.—A Regional Board may use an innovation grant provided for a region—

 ‘‘(A) to support the development of critical infrastructure necessary to facilitate economic development in the region;

‘‘(B) to provide assistance to entities within the region that provide basic public services;

‘‘(C) to assist with job training, workforce development, or other needs related to the development and maintenance of strong local and regional economies;

‘‘(D) to assist in the development of unique new collaborations that link public, private, and philanthropic resources to achieve collaboratively designed regional advancement; and

‘‘(E) to provide support to business investment.

‘‘(3) OTHER DEPARTMENT PROGRAMS.—A Regional Board may not use an innovation grant provided for a region for any purpose for which funding may be obtained under any other rural development program of the Department of Agriculture unless—

‘‘(A) the Regional Board—

‘‘(i) has submitted an application for the funding under the other program; and

‘‘(ii) withdraws the application; and

‘‘(B) the National Board approves use of the innovation grant for that purpose.

‘‘(4) OPERATING EXPENSES.—A Regional Board may use for administrative costs in carrying out programs and activities related to the grant the greater of—

‘‘(A) $100,000; or

‘‘(B) 5 percent of the amount of an innovation grant provided.

‘‘(f) AMOUNT.—

‘‘(1) IN GENERAL.—The amount of an innovation grant made to a Regional Board shall not exceed $3,000,000.

‘‘(2) AVAILABILITY.—The amount of an innovation grant made to a Regional Board shall remain available until expended.

‘‘(g) COST SHARING.—

‘‘(1) IN GENERAL.—Subject to paragraphs (2) and (3), the share of the costs of projects covered by an innovation grant made to a Regional Board under this section shall not exceed 75 percent, as determined by the National Board.

‘‘(2) FORM.—A Regional Board may pay the grantee share of the costs of projects covered by an innovation grant in the form of cash or services, materials, or other in-kind contributions.

‘‘(3) WAIVER OF GRANTEE SHARE.—The National Board may waive the grantee share of the costs of projects covered by an innovation grant made to a Regional Board under this section if the National Board determines that such a waiver is appropriate.

‘‘(4) OTHER FEDERAL PROGRAMS.—For the purpose of determining grantee share requirements for any other Federal programs, funds provided for innovation grants shall be considered to be non-Federal funds.

 ‘‘(h) NEGOTIATION.—The National Board may—

‘‘(1) negotiate with a Regional Board on the substance, size, and scope of a regional plan; and

‘‘(2) approve an innovation grant for an amount that is lower than the amount requested by the Regional Board.

‘‘(i) NONCOMPLIANCE.—If a Regional Board fails to comply with the requirements of this section, the National Board may take such actions as are necessary to obtain reimbursement of unused grant funds.

‘‘(j) OTHER USES.—The National Board may use not more than 5 percent of the amounts made available for innovation grants—

‘‘(1) to provide assistance to interests described in section 385C(b)(2)(A) to obtain certification of a Regional Board;

‘‘(2) to provide assistance for emergent innovative opportunities that are not covered by existing regional plans;

‘‘(3) to provide technical assistance, research, organizational support, and other capacity building infrastructure to support existing Regional Boards;

‘‘(4) to provide assistance for other entrepreneurial opportunities to advance the goals of the program; or

‘‘(5) to advance a more integrative rural policy framework for the United States.

‘‘(k) TRANSFERS.—To ensure maximum use of funds provided under this subtitle, the National Board may transfer not more than 10 percent of the amount of funds made available between planning grants and innovation grants.