(a) During each fiscal year the Comptroller shall pay to each municipality for its unrestricted use, from any funds appropriated for such purpose, a grant-in-aid to assist it in meeting its urban problems. Payment of such grants shall be made in March of each year. The Secretary of the Office of Policy and Management shall in February of each year calculate the amount due each municipality in accordance with the allocation formulas provided in subsection (c) of this section and shall certify to the Comptroller the amount due. In January of each year the Commissioner of Public Health shall certify to the Secretary of the Office of Policy and Management the population of each municipality.

(b) For purposes of this section: (1) “Population” means the number of persons according to the most recent federal decennial census, except that, in intervening years between such censuses, “population” means the number of persons according to the most recent estimate of the Department of Public Health; (2) “density of a municipality” means the population of the municipality divided by the number of square miles in the municipality; (3) “density of the state” means the population of the state divided by the number of square miles in the state; and (4) “public housing rooms” means rooms contained in publicly or privately owned dwelling units which are assisted by the United States under the United States Housing Act of 1937, as amended, and dwelling units which are assisted by or owned or leased by the state under chapter 128 or 129. The number of such rooms shall be determined in accordance with the methods established and used by the United States Department of Housing and Urban Development.

(c) Any funds appropriated from the General Fund, for any fiscal year, for the purposes of this section, shall be distributed among the municipalities in the following manner: (1) Ten per cent of the amount shall be distributed pro rata on the basis of the ratio of the population of each municipality to the population of the state. (2) Fifty per cent of the amount shall be divided among those municipalities whose density exceeds the density of the state. The distribution shall be made to each such municipality pro rata on the basis of the following ratio: The density of such municipality multiplied by the population of such municipality shall be the numerator of the fraction. For each municipality whose density exceeds that of the state, the density of such municipality shall be multiplied by the population of such municipality. The resulting products shall be added together, and the sum shall be the denominator of the fraction. (3) Forty per cent of the amount shall be distributed pro rata on the basis of the ratio of the number of public housing rooms within such municipality to the number of such rooms in the state. The amounts computed under subdivisions (1), (2) and (3) of this subsection shall then be multiplied by the ratio between the per capita income of the state as numerator and the per capita income of such town as the denominator, prorated to the level of the funds allocated. “Per capita income” means that which is reported in the most recent current population report series issued by the United States Department of Commerce, Social and Economic Statistics Administration, Bureau of the Census.

(d) Notwithstanding the provisions of this section, the sum distributed to municipalities by the Comptroller in accordance with the provisions of this section, for the fiscal year ending June 30, 1981, shall not exceed eleven million nine hundred thousand dollars.