(a) During each fiscal year the commissioner shall allocate sums appropriated or otherwise designated for expenditure upon local service roads for that fiscal year among the five allocation districts in the following manner: one-half in the ratio that the area of each allocation district bears to the total area of the state and one-half in the ratio that the population of each allocation district bears to the total population of the state as shown by the latest available federal or state census or other census approved by the Department of Commerce, Community, and Economic Development.

(b) The commissioner shall also further allocate the sums in each allocation district to the boroughs and unified municipalities within each allocation district in the following manner: one-half in the ratio that the area of each organized borough or unified municipality (excluding salt water areas) within that district bears to the total area of the allocation district and one-half in the ratio that the population of each organized borough area or each unified municipality within that district bears to the total population of the allocation district as shown by the latest available federal or state census or other census approved by the Department of Commerce, Community, and Economic Development.

(c) The commissioner shall also further allocate portions of the sum allocated to any organized borough and to any home rule city within the organized borough in the following manner:

(1) one-half in the ratio that the area of each home rule city bears to the total area of the organized borough excluding salt water areas; and

(2) one-half in the ratio that the population of each home rule city bears to the total population of the organized borough as shown by the latest available federal or state census or other census approved by the Department of Commerce, Community, and Economic Development.

(d) The sums not allocated within each district to a local government under (b) and (c) of this section shall be allocated to the unorganized borough and administered by the department.