State and local air pollution control programs in the United State are funded through a variety of sources. These include federal, state and local appropriations; the federal permit fee program under Title V of the Clean Air Act; state and local permit and emissions fee programs; and other funding programs that individual agencies operate. Federal grants are provided under two provisions of the Clean Air Act: Sections 103 and 105. Section 103 authorizes the federal government to provide grants to conduct, and promote the coordination and acceleration of research, investigations, experiments, demonstrations, surveys, and studies relating to the causes, effects (including health and welfare effects), extent, prevention, and control of air pollution. Typically Section 103 has been used for specialized air monitoring programs. Section 105 – designed to support the implementation of programs to prevent and control air pollution and address primary and secondary ambient air quality standards – authorizes the federal government to provide grants equaling up to 60 percent of the cost of state and local programs, while state and local agencies must provide a 40-percent match. In practice, the federal share represents approximately 25 percent of total state/local air budgets, while state and local governments provide 75 percent.
In recent years, federal grants under Sections 103 and 105 have been a little over $200 million annually. These grants are an essential source of funding for state and local agency programs. Unfortunately, they have not been sufficient to meet the needs of state and local air pollution control programs.