(1) For the purpose of apportioning state and federal-aid highway funds, the commission shall designate the public highways and streets to be placed on the following systems:
(a) the national highway system;
(b) the primary highway system;
(c) the secondary highway system; or
(d) the urban highway system.
(2) The commission shall consult with the board of county commissioners of the county in which a highway is located prior to designating a public highway to be placed on the secondary highway system.
(3) The commission shall consult with the appropriate local government authorities prior to designating a highway or street to be placed on the urban highway system.
(4) The commission may designate public highways not placed on the systems listed in subsection (1) as state highways.