The method used for computing the respective Federal and State shares in total program costs is specifically set forth in the Act. The term ``State'' means the several States, the District of Columbia, the Virgin Islands, Guam and Puerto Rico; the term ``United States'' includes the several States and the District of Columbia and excludes the Virgin Islands, Guam and Puerto Rico, and, prior to 1962, Alaska and Hawaii. The following steps are employed in the calculations:

For each State (except the Virgin Islands, Guam, Puerto Rico, and, prior to 1962, Alaska and Hawaii), determine the average per capita income for the last three years. (the same amount used in item 1 under Method of Computing allotments, above.)

Determine the average per capita income for the United States for the last three years. (The same amount used in item 2 under Method of Computing Allotments, above.)

Determine the ratio of 40% to the average per capita income of the United States. (Divide 40 by the amount used in item 2 above.)

Determine for each State (except the Virgin Islands, Guam, Puerto Rico, and, prior to 1962, Alaska and hawaii), that percentage which bears the same ratio to 40% as the particular State's average per capita income bears to the average per capita income of the United States. (Multiply the result obtained in item 3 above by the amount used for each State in item 1 above.)

Determine the particular State's ``Federal Share.'' By law this is 70% for the Virgin Islands, Guam and Puerto Rico. (Alaska and Hawaii had fixed Federal share percentages in effect prior to fiscal year 1962.)