This final rule amends HUD's regulations governing the Community Development Block Grant (CDBG) program for non-entitlement areas in the state of Hawaii, which were formerly part of the Small Cities Program. Pursuant to statutory authority, the State of Hawaii government has elected not to administer CDBG funds granted to units of general local government located in non-entitlement areas within the state. The statute provides that if Hawaii elects not to assume responsibility for this program, then the Secretary of HUD will make the CDBG grants to the units of general local government located in Hawaii's non-entitlement areas, employing the same distribution formula as was used under prior regulations. This final rule modifies HUD's regulations to clarify how the CDBG program will be implemented in the non-entitlement areas of Hawaii in light of the state's decision. HUD has also taken the opportunity afforded by this rule to update and streamline the regulations, particularly with regard to the HUD- administered Small Cities program in New York, which awarded its last competitive grant in Fiscal Year (FY) 1999. This final rule follows publication of the January 3, 2007, proposed rule and takes into consideration the public comments HUD received. After careful consideration of the issue raised by the comments, HUD has decided to adopt the proposed rule without change.