The Environmental Protection Agency yesterday halted $850 million in federal funding to California and $34.5 million to Kentucky because the two states still have no laws requiring that automobiles be inspected for faulty air pollution controls.

EPA Administrator Douglas Costle said that under terms of the Clean Air Act the agency had no choice on the cutoff, which is effective today. The two states are the only ones that have not yet acted as required under the law, which mandated inspection and enforcement programs in 29 states with large urban areas suffering air pollution from automobiles. The original deadline was July 1979.

An EPA spokesman said little real impact on road and sewer construction was expected before the end of January, by which time the California legislature could enact the necessary legislation. The cutoff would then be lifted immediately, he said. However, the California legislature previously has been unable to agree on such a law despite much wrangling, largely because of public opposition to the idea.

The options are less clear in Kentucky, where the legislature adjourned in March after decisively rejecting any pollution control program and is not scheduled to meet again until January 1982.

The California cutoff involves $457 million in road-building money and $389 million for sewer lines, treatment plants and related projects in six urban areas: Los Angeles, San Francisco, San Diego, Sacramento, Fresno and Ventura. The Kentucky action applies to Kenton and Campbell counties, both in the Cincinnati area.

"People who live in these areas have as much right to clean air under federal law as do people in other parts of the country where that goal has already been achieved," Costle said. "We simply cannot ignore them."

Both Govs. Edmund G. Brown of California and John Y. Brown Jr. of Kentucky (no relation) tried in their states' last legislative sessions to pass the necessary laws.

"He knew all along the federal government was not kidding about their mandate," said Frank Ashley, press secretary to Kentucky's governor.

Brown had offered the reluctant counties $2 million in state aid to help set up local programs that would satisfy the requirement, "but it was vehemently rejected," Ashley said. Further action is up to local officials, since the governor has no plans to call a special legislative session.

"Why should he, when just nine months ago he went through all the possibilities for this legislation and they would not hear of it?" Ashley said.

Sen. Alan Cranston (D-Calif.) said he had engineered a delay in the proposed action in order to give his state lawmakers more time to adopt a law.

"I support the Clean Air Act and the motor vehicle inspection requirement, and I feel EPA had no alternative but to do what it did," he said.

Gov. Brown's press secretary, Cari Beauchamp, said work on a bill would begin as soon as the legislature reconvenes.

The required inspection and maintenance programs would involve controls on emissions of carbon monoxide and hydrocarbons. Costle said hydrocarbons contribute to ozone, or smog, and can cause coughing, choking and damage to the lungs. Carbon monoxide reduces the capacity of the blood to carry oxygen and affects the brain and the heart, he continued.

The EPA cut off funds to Montana for similar reasons in May, but the state legislature acted promptly and funds were restored within a week, an EPA official said. Tests of emission control devices so far actually have started only in Rhode Island and New Jersey.