State and Local Energy Block Grant Act of 1981

State and Local Energy Block Grant Act of 1981 - Title I: State Energy Plans - Authorizes the Secretary of Energy to provide financial assistance (block grants) to States and Indian tribes for energy conservation programs. Requires a State to submit to the Secretary a State energy plan in order to receive such assistance. Requires that such plan describe: (1) the State's energy supply and demand and its energy conservation and renewable resources goals and policies; (2) the programs the State will implement to achieve its energy goals and an implementation schedule; (3) the process established for the solicitation and consideration of the views of local governments, regional councils, Indian tribes, local educational agencies, and the public; and (4) how the State intends to implement State energy programs established pursuant to other law.

Directs the Secretary to approve a State energy plan or modification thereto unless the plan or modification does not comply with this title and is inconsistent with Federal law. Requires written notice of disapproval of a State's application for assistance or of a recipient State's failure to comply with this title or to establish programs required under Federal law. Authorizes the Secretary to: (1) withhold financial assistance for any part of a State energy plan not in compliance with this title until compliance occurs; and (2) suspend payments to noncomplying recipient States.

Specifies the method for annual allocation of funds under this Act among the States, U.S. territories and possessions, and Indian tribes.

Directs the Secretary to amend existing agreements for financial assistance with a State in connection with State energy conservation plans, energy conservation programs for schools, hospitals, and municipal and public care institution buildings, or energy planning programs to transfer available funds under such agreements for development or implementation of an approved State energy plan.

Specifies the amount of non-Federal assistance which a State must provide to develop and implement the State energy plan. Limits the amount of Federal funds which may be used for administrative costs. Requires States receiving energy grants under this title to report to the Secretary and keep records on actions under such grants. Directs the Secretary to: (1) conduct annual reviews and audits to insure that States are implementing their energy plans; and (2) report annually to Congress on the program under this title.

Authorizes appropriations to carry out this title for fiscal years 1982 through 1984.

Title II: Local Governments - Authorizes financial assistance to local governments upon approval of applications of such local governments by the Governor of the State. Requires that such applications include a community energy strategy which shall be consistent with the State energy plan. Requires an application to be forwarded to the Secretary if the Governor has not approved such application within 60 days or has disapproved it. Specifies procedures for approval or disapproval of applications not acted upon by the Governor and review of applications disapproved by the Governor.

Requires the allocation of funds according to a specified formula to each State for distribution to the following categories of communities within that State: (1) metropolitan cities and urban counties in metropolitan areas; (2) local government units within metropolitan areas (other than metropolitan cities and urban counties); and (3) nonmetropolitan areas. Entitles metropolitan cities and urban counties to annual grants, the amounts of which shall be determined by the Secretary according to a specified formula. Provides for grants to other local government units and nonmetropolitan areas to be made by the Governor on the basis of applications submitted by such units.

Specifies the amount of non-Federal assistance which a local government unit must provide for any activity assisted under this title. Limits the amount of Federal funds which may be used for administrative costs. Requires local government units receiving energy grants under this title to report to the Secretary and keep records on the use of such grants. Directs the Secretary to report annually to Congress on action taken by such local government units.

Authorizes appropriations to carry out this title for fiscal years 1982 through 1984.

Amends the Energy Policy and Conservation Act to repeal State energy conservation programs.

Title III: Weatherization - Amends the Energy Conservation in Existing Buildings Act of 1976 to authorize the Secretary to include materials, devices, or measures which promote energy efficiency in the definition of "weatherization materials" for purposes of the weatherization assistance program of a State, upon petition by the Governor of that State and without regard to certain consultation requirements under such Act.

Authorizes appropriations for fiscal year 1982 for the weatherization assistance program.