A. Each fiscal year the department shall allocate and the state treasurer shall distribute revenues of the Arizona highway user revenue fund remaining after the distribution provided in sections 28-6534 and 28-6537 as follows:

1. 1. To the state highway fund, fifty and one-half percent.
2. 2. To the counties, nineteen percent.
3. 3. To the incorporated cities and towns, twenty-seven and one-half percent.
4. 4. To incorporated cities with a population of three hundred thousand or more persons, three percent.

B. At least twelve and six-tenths percent of the revenues allocated each year to the state highway fund pursuant to subsection A of this section shall be further distributed in the following proportions and for the following purposes:

1. 1. Seventy-five percent of the revenues shall be spent, pledged or accumulated in counties with a population of one million five hundred thousand or more persons for the design, right-of-way purchase or construction of controlled access highways that are included in the plan as defined in section 28-6351 and that are accepted into the state highway system either as a state route or as a state highway.

2. 2. Twenty-five percent of the revenues shall be spent, pledged or accumulated in counties with a population of more than eight hundred thousand but less than one million five hundred thousand persons for:

   1. (a) The design, right-of-way purchase or construction of controlled access highways that are included in the plan as defined in section 28-6351 and that are accepted into the state highway system either as a state route or as a state highway or related grade separations of controlled access highways that are included in the plan as defined in section 28-6351.
   2. (b) Notwithstanding sections 28-6993 and 28-6995, the design, right-of-way purchase, construction, standard and reduced clearance grade separation, extension and widening of arterial streets and highways that are included in the plan as defined in section 28-6351.