Amend HB 2577, SECTION 23. Section 2306.111, Government Code, by adding on page 28, following line 22 the following: (c) In administering federal housing funds provided to the state under the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. Section 12704 et seq.) the department shall give the highest priority to utilizing these funds for the benefit of non-participating small cities and rural areas which do not qualify to receive funds under the Cranston-Gonzalez National Affordable Housing Act directly from the U.S. Department of Housing and Urban Development unless the department finds there is insufficient need and demand for housing funds within these areas.