In order to encourage the maintenance and development of proper standards, including personnel standards, and the combination of libraries or library systems into larger and more economical units of service, grants of state aid from funds available shall be made by the Board to any free public library or library system which qualifies under the standards set by the Board. The grants to each qualifying library or system in each fiscal year shall be as follows:
a. Forty cents of state aid for every dollar expended, or to be expended, exclusive of state and federal aid, by the political subdivision or subdivisions operating or participating in the library or system. The grant to any county or city shall not exceed $250,000;
b. A per capita grant based on the population of the area served and the number of participating counties or cities: Thirty cents per capita for the first 600,000 persons to a library or system serving one city or county, and an additional ten cents per capita for the first 600,000 persons for each additional city or county served. Libraries or systems serving a population in excess of 600,000 shall receive ten cents per capita for the excess; and
c. A grant of ten dollars per square mile of area served to every library or library system, and an additional grant of twenty dollars per square mile of area served to every library system serving more than one city or county. The Board may establish procedures for the review and timely adjustment of such grants when the political subdivision or subdivisions operating such library or library system are affected by annexation.