Moneys deposited in the local expense fund created pursuant to section 28 of P.L.1940, c. 17 (C. 5:5-48) as amended by section 2 of P.L.1974, c. 181 shall be held for distribution to those municipalities at or in reasonable proximity to the site of race meetings, and which, in the determination of the commission, have incurred expenses as a result of said meetings, in accordance with the following:

a. The commission shall notify said municipalities of their eligibility for a share of said moneys;

b. Thereupon, said municipalities may submit claims setting forth the nature of the services performed and the amount expended for said services;

c. The commission shall evaluate and determine the validity of the claims based upon reasonable increases to said municipalities in police, fire and court costs, and the costs of other municipal services;

d. The commission shall distribute the moneys deposited in the fund to each municipality to the extent said moneys are available, and if not, then in the proportion that the valid claim bears to the total valid claims so submitted; and

e. Distributions shall be made to a municipality at or in reasonable proximity to the site of a race meeting from only those moneys deposited in the fund by the racing permit holders conducting the race meeting.

Distribution of moneys in the fund shall be subject to the approval of the State Treasurer.

Moneys undistributed in any year shall remain in the fund which shall continue from year to year.

L.1977, c. 313, s. 1, eff. Jan. 6, 1978.