(a) To the extent that funds are made available by any law for the purposes set out in Code Section 36-40-41, the Office of Treasury and Fiscal Services is authorized and directed to grant such funds to the municipal corporations of this state, as defined in Code Section 36-40-40, on the following basis:

(1) An amount equal to five ten-thousandths of the total sum available at any given time for grants under this article shall be first determined, and each municipal corporation whose population is 500 or less shall receive as its total grant such portion of the five ten-thousandths amount so determined as its population proportionately bears to 500. Such grants shall be referred to as "paragraph (1) grants."

(2) The amount remaining for distribution after deducting the total amount of paragraph (1) grants shall then be divided by the total population of all municipal corporations whose population exceeds 500, to arrive at a per capita amount. Such per capita amount shall be multiplied, in turn, by the population of each municipal corporation whose population exceeds 500. Any such municipal corporation whose population when so multiplied equals less than the five ten-thousandths amount as first determined under paragraph (1) of this Code section shall receive as its total grant the five ten-thousandths amount. Such grants shall be referred to as "paragraph (2) grants."

(3) The amount remaining for distribution after deducting the total amount of paragraph (1) and paragraph (2) grants shall then be divided by the total population of all remaining municipal corporations (eliminating those receiving paragraph (1) and paragraph (2) grants), to arrive at a per capita amount for such remaining municipal corporations. The per capita amount as so determined shall then be multiplied by the population of each such remaining municipal corporation to arrive at its respective grant. Such grants shall be referred to as "paragraph (3) grants."

(b) Whenever the term "population" is used in this article, it means population as determined according to the United States decennial census of 1980 or any future such census.

(c) The computation and payments of individual municipal grants as called for in this article shall be made by the Office of Treasury and Fiscal Services.