(a)  Sources.⁠—

(1)  Allowable sources.⁠—The non-Federal share of project costs assisted under this chapter may be derived from general or special purpose State or local revenues, State categorical grants, special appropriations by State legislatures, donations of land, buildings, or building materials, and in-kind construction, technical, and planning services. Reasonable local costs of recovery action program development to meet the requirements of section 200504(a) of this title may be used as part of the local match only when the local government has not received a recovery action program grant.

(2)  Non-allowable sources.⁠—No amount from the Land and Water Conservation Fund or from any other Federal grant program other than the community development block grant programs shall be used to match Federal grants under this program.

(b)  Encouragement of States and Private Interests.⁠—The Secretary shall encourage States and private interests to contribute, to the maximum extent possible, to the non-Federal share of project costs.