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Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

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COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO – SABESP

PUBLICLY-HELD COMPANY
CORPORATE TAXPAYER’S ID (CNPJ) 43.776.517/0001 -80

     MANAGEMENT PROPOSAL
ALLOCATION OF NET INCOME

CVM Rule no. 481/2009 Article 9

On January 28, 2010, the Company republished its 2008 Financial Statements due to the current stage of discussions with the São Paulo State Government (GESP), which resulted in the recognition of expenses related to the benefits paid to retirees and pensioners, provided for by Law 4,819/58, the responsibility of which is originally the State’s, but which are paid by SABESP, pursuant to a court decision, as well as to a liability referring to the actuarial commitment with the beneficiaries of Law 4,819/58.

Due to the republication, the Management submits to the Shareholders’ Meeting a new proposal of allocation of net income for the year.

The table below shows the differences between the previous proposal, approved by the Shareholders’ Meeting of April 29, 2009 and the new proposal to be submitted at the Shareholders’ Meeting of March 4, 2010.

		from	to
Net income for the year	R$	1,008,084,989.05	63,571,000.00
( + ) Realization of Revaluation Reserve	R$	86,816,329.02	86,816,329.02
( - ) Interest on Own Capital	R$	(296,187,609.90)	(296,187,609.90)
( - ) 5% Legal Reserve	R$	(50,404,249.45)	(3,178,000.00)
Retained Earnings	R$	748,309,458.72

As a consequence of the republication of the 2008 Financial Statements, we present:

1. Net income for the year: R$ 63,571 thousand.

2. Overall amount and value per share of dividends, including prepaid dividends and interest on own capital already declared: R$296,187 thousand; VPS = 1.3.

3. Percentage of paid net income for the year: 465.92% .

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COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO – SABESP

PUBLICLY-HELD COMPANY
CORPORATE TAXPAYER’S ID (CNPJ) 43.776.517/0001 -80

4. Overall amount and value per share of dividends paid based on the income of previous years: R$296,187 thousand; VPS = 1.3, being R$63,571 thousand related to the 2008 fiscal year and R$232,616 thousand related to the 2007 fiscal year.

5. Deducting prepaid dividends and interest on own capital already declared:
a) gross amount of dividends and interest on own capital, separately, per share of each type and class: total of the R$296,187 thousand paid, corresponding to R$1.3 per common share.
NOTE: the entire capital stock is represented by registered, non-par, common shares of a single class and with voting right, with no restrictions, at general meetings.
b) method and term of payment of dividends and interest on own capital: as Interest on Own Capital, and within 60 days after the 2009 Annual General Meeting.
c) possibility for adjustment and interest on dividends as well as of interest on own capital to take place: nonexistent.
d) date of declaration of payment of dividends and interest on own capital considered for identification of shareholders who will be entitled to receiving them: Interest on Own Capital declared in the period from January to December of 2008 will be paid to the holders of shares on the reference dates of August 12, 2008, and January 26, 2009.

6. Declaration of dividends or interest on own capital based on income determined on half-yearly balance sheets or shorter periods:
a) the amounts of dividends or interest on own capital already declared: from January to June of 2008, the amount of R$200,496 thousand, and from July to December 2008, the amount of R$95,691 thousand.
b) payments made on June 26, 2009.

7. Comparative table showing the following values per share of each type and class:
a) net income for the year and for the three (3) previous years; b) dividends and interest on own capital paid in the three (3) previous years:

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COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO – SABESP

PUBLICLY-HELD COMPANY
CORPORATE TAXPAYER’S ID (CNPJ) 43.776.517/0001 -80

	2005	2006	2007	2008
Net income for the Fiscal Year	R$ 3.7994	R$ 3.4647	R$ 4.6316	R$ 0.279
Dividends and interest on own capital paid	R$ 1.5283	R$ 1.1887	R$ 1.32	-

8. Allocation of income to legal reserve:
a) Amount allocated to legal reserve: R$3,178 thousand.
b) Legal reserve calculation: 5% of the net income.

9. The capital stock is represented by registered, non-par, common shares of a single class and with voting right, with no restrictions, at general meetings.

10. Mandatory dividends:
a) calculation method established in the Bylaws: twenty-five percent (25%) of the net income for the fiscal year after the deductions established or permitted by law.
b) fully paid.
c) no amount has been retained.

11. There is no retention of mandatory dividends due to the company’s financial position.

12. There is no allocation of income for contingency reserve.

13. There is no allocation of income for realizable profits reserve.

14. There is no allocation of income for statutory reserves.

15 There is no profit retention established in the capital budget.

16. There is no allocation of income for fiscal incentive reserve.

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COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO – SABESP

PUBLICLY-HELD COMPANY
CORPORATE TAXPAYER’S ID (CNPJ) 43.776.517/0001 -80

MANAGEMENT’S COMMENTS ON THE COMPANY’S FINANCIAL SITUATION, UNDER THE TERMS OF ITEM 10 OF REFERENCE FORM

CVM Rule 481/2009 Article 9

According to the Management’s understanding, the table below shows the cash and cash equivalents, financial investments, short-term and long-term debt and capital structure of SABESP for the period ended December 31, 2008, prepared pursuant to the BR GAAP, due to the republication of the 2008 Financial Statements.

Year ended December 31, 2008  (in thousands of R$)		FROM		TO
Cash and cash equivalents and financial investments		625,732		625,732
Short-term debt:
Reais-denominated debt		477,362		477,362
Foreign currency-denominated debt		105,580		105,580
Debentures		865,918		865,918
Total short-term debt:		1,448,860		1,448,860
Long-term debt:
Reais-denominated debt		3,152,039		3,152,039
Foreign currency-denominated debt		1,267,045		1,267,045
Debentures		997,164		997,164
Total long-term debt:		5,416,248		5,416,248
Shareholders’ Equity:
Capital stock		6,203,688		6,203,688
Capital reserves		124,255		124,255
Profit reserves		1,911,474		966,960
Revaluation reserve		2,253,012		2,253,012
Total shareholders’ equity		10,492,429		9,547,915
Total capitalization
(long-term debt and shareholders’ equity)
		15,908,677		14,964,163

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This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

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