Amend CSHB 3526 (Senate committee report) at ARTICLE 4 (page 
8, line 26) by inserting the following new ARTICLE 4 and renumbering 
the subsequent articles accordingly:

ARTICLE 4.  STATE PARTICIPATION ACCOUNT.
	SECTION 4.01.  Section 16.131, Water Code, is amended to 
read as follows:    
	Sec. 16.131.  AUTHORIZED PROJECTS.  The board may use the 
state participation account of the development fund:
		(1)  to encourage optimum regional development of 
projects including the design, acquisition, lease, construction, 
reconstruction, development, or enlargement in whole or part of:
			(A) [(1)]  reservoirs and storm water retention 
basins for water supply, flood protection, and groundwater 
recharge;
			(B) [(2)]  facilities for the transmission and 
treatment of water; and
			(C) [(3)]  treatment works as defined by Section 
17.001 of this code; and
		(2)  to acquire water rights or existing public water 
systems to encourage optimum regional development of desalination 
projects.
	SECTION 4.02.  Section 16.135, Water Code, is amended to 
read as follows:    
	Sec. 16.135.  BOARD FINDINGS.  Before the board may acquire a 
facility or interest in a facility, the board shall find 
affirmatively that:
		(1)  it is reasonable to expect that the state will 
recover its investment in the facility;
		(2)  the cost of the facility exceeds the current 
financing capabilities of the area involved, and the optimum 
regional development of the facility cannot be reasonably financed 
by local interests without state participation;
		(3)  the public interest will be served by acquisition 
of the facility; [and]

		(4)  the facility to be constructed or reconstructed 
contemplates the optimum regional development which is reasonably 
required under all existing circumstances of the site; and
		(5)  if appropriate, the facility to be acquired 
encourages optimum regional development of a desalination project.
	SECTION 4.03.  This Act takes effect September 1, 2009.