Amend HB 2965 (House engrossment) as follows: (1) In SECTION 1.03(b) of the bill strike "(b) The district" (page 5, line 18) and substitute "(b) The authority" and strike Subdivisions (5) and (6) (page 6, lines 1 and 2) and substitute: "(5) District 130; (6) District 135; and (7) District 150." (2) In SECTION 1.03 of the bill, following Subsection (c) of that section (page 6, between lines 6 and 7), insert: "(d) After the confirmation election held under Section 2.05 of this Act, the authority includes only that part of the area described by this section that the temporary board determines is inside the authority's boundaries as provided by Section 2.05(e) of this Act. (e) On a municipality's annexation of any of the authority's territory, the annexed territory is excluded from the authority's territory. The authority shall continue to provide services to the annexed territory in accordance with contracts in effect at the time of the annexation unless a written agreement between the board and the governing body of the municipality provides otherwise." (3) Following SECTION 1.03 of the bill (page 6, between lines 6 and 7), add the following section: "SECTION 1.04. EXCLUSION OF CERTAIN TERRITORY. (a) A district organized under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, that is located in the portion of the territory described by Section 1.03(a) of this Act that is south of Beltway 8 or east of U.S. Highway 59 may petition for exclusion of its territory from the authority's territory. Before the 61st day after the date the authority receives the petition, the board shall: (1) grant the petition and order the territory excluded if the petition: (A) includes an accurate legal description of the boundaries of the territory to be excluded; and (B) the petition is filed with the authority before March 1, 2001; and (2) if the board grants the petition, file for recording in the office of the county clerk of Harris County a copy of the order and a description of the authority's boundaries as they exist after the exclusion of the territory. (b) The order excluding the territory is effective immediately after the order and description are recorded." (4) In ARTICLE 1 of the bill, redesignate SECTION 1.04 of the bill (page 6, lines 7-11) as SECTION 1.05 and redesignate SECTION 1.05 of the bill (page 6, lines 12-16) as SECTION 1.06. (5) In SECTION 2.02(a) of the bill (page 7, line 2), strike "the nine" and substitute "nine". (6) In SECTION 4.01 of the bill, following Subsection (b) of that section (page 13, between lines 6 and 7), insert: "(c) The authority's rights, powers, privileges, authority, functions, and duties are subject to the continuing right of supervision of the state, to be exercised by and through the commission. (d) The authority shall exercise its rights, powers, privileges, and authority in a manner that will promote regionalization of water treatment and distribution." (7) In SECTION 4.03 of the bill: (A) at the end of Subdivision (2) of Subsection (b) (page 13, line 25), strike "or"; and (B) at the end of Subdivision (3) of Subsection (b) (page 13, line 26), between "crops" and the period, insert: "(4) that produces 10 million gallons or less annually; or (5) used solely for electric generation". (8) In the heading of SECTION 4.06 of the bill between "SYSTEMS." and "The" (page 15, line 10), insert "(a)". (9) Following Section 4.06(4) of the bill (page 15, between lines 20 and 21), insert: "(b) The authority shall give persons outside the authority's boundaries, including the City of Houston, the option to contract for available excess capacity of the authority's water treatment or supply system or, before construction of a water treatment or supply system begins, for additional capacity of the system. The authority must offer a contract that would enable the person to pay for the excess capacity or additional capacity in accordance with the person's pro rata share of the capital investment and operational and maintenance costs for providing the excess capacity or additional capacity." (10) In SECTION 4.10 of the bill, following Subsection (b) of that section (page 17, between lines 17 and 18), insert: "(c) The board shall coordinate with the City of Houston to develop an interregional plan for a system to distribute treated surface water in an economical and efficient manner."