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.