(a) In general
The Secretary of Agriculture (referred to in this section as the "Secretary") shall make grants available on a competitive basis to enterprises owned by agricultural producers, for the purposes of demonstrating cost-effective, cellulosic biomass innovations in—

(1) preprocessing of feedstocks, including cleaning, separating and sorting, mixing or blending, and chemical or biochemical treatments, to add value and lower the cost of feedstock processing at a biorefinery; or

(2) 1-pass or other efficient, multiple crop harvesting techniques.

(b) Limitations on grants

(1) Number of grants
Not more than 5 demonstration projects per fiscal year shall be funded under this section.

(2) Non-Federal cost share
The non-Federal cost share of a project under this section shall be not less than 20 percent, as determined by the Secretary.

(c) Condition of grant
To be eligible for a grant for a project under this section, a recipient of a grant or a participating entity shall agree to use the material harvested under the project—

(1) to produce ethanol; or

(2) for another energy purpose, such as the generation of heat or electricity.

(d) Authorization for appropriations
There is authorized to be appropriated to carry out this section $5,000,000 for each of fiscal years 2006 through 2010.