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."