; (B) in paragraph (2), by inserting eligible before producers each place it appears; and (C) in paragraph (3), by striking participating and inserting eligible ; and (4) by adding at the end the following: (d) Funding arrangements through grant agreements (1) In general A contract entered into under this section may be a grant agreement entered into with an eligible partner in accordance with this subsection. (2) Requirements Under a grant agreement under paragraph (1)— (A) using amounts made available to carry out this subtitle, the Secretary shall provide to the eligible partner a grant; (B) the eligible partner shall carry out eligible activities on eligible land (including by contracting with 1 or more producers, if the eligible partner determines the contracting to be appropriate), on the condition that the eligible activities directly or indirectly benefit agricultural producers (including forestry producers), to address natural resource concerns on a regional or watershed scale, such as— (i) infrastructure investments relating to agricultural or nonindustrial private forest production that would benefit multiple producers, such as a multiproducer irrigation water delivery system; (ii) projects addressing water quality or quantity concerns in coordination with producers, including the development and implementation of watershed plans; (iii) projects that use innovative approaches to leveraging the Federal investment in conservation with private financial mechanisms, in conjunction with agricultural production or forest resource management, such as— (I) the provision of performance-based payments to eligible producers; and (II) support for an environmental market; (iv) projects that promote groundwater replenishment; (v) projects that facilitate pilot testing of new conservation practices, technologies, or activities