State financial aid shall be granted to air authorities qualifying under these regulations subject to the following limitations:

(1) State financial aid shall not exceed an amount equal to fifty percent of the locally funded portion of the annual recurring expenditures of such air authority in each of the first three years during which state financial aid is utilized by the air authority and shall not exceed an amount equal to one hundred percent of the locally funded portion in each following year.

(2) The department may limit the amount of financial aid available to a grantee when it becomes necessary due to the lack of sufficient funds available for distribution to meet the needs of all qualified grantees throughout the state.

(3) The department may limit the amount of financial aid to less than the amount for which the applicant applies when the department determines that proposed items of expenditure are not consistent with air pollution control program needs in the applicant's area of jurisdiction, or are not in the best interests of a coordinated statewide air pollution control program, or where such items of expenditure duplicate the responsibilities and activities of the department.