(a) The collection of any tax levied pursuant to this chapter shall be distributed as follows:

(1) To the county for the acquisition, construction, and equipping of the project, fifty percent (50%) of the tax collections; and

(2) To the county and to each municipality located in the county, proportionately on the basis of population as reflected in the latest federal census, fifty percent (50%) of the tax collections.

(b) Funds received by the counties and municipalities pursuant to the provisions of this chapter, other than those required to be applied to a project, as set forth in subsection (a) of this section may be used by the counties and municipalities for any purpose for which the county general funds or the municipal general funds may be used.

(c) (1) When any tax adopted by a county pursuant to this chapter is terminated, the Director of the Department of Finance and Administration shall retain in the account of that county in the Local Sales and Use Tax Trust Fund for a period of one (1) year an amount equal to five percent (5%) of the final remittance to the county and municipalities therein at the time of termination of the collection of the tax to:

(A) Cover possible rebates by the county;

(B) Cover refunds for overpayment of taxes; and

(C) Redeem dishonored checks and drafts deposited to the credit of the Local Sales and Use Tax Trust Fund.

(2) After one (1) year has elapsed after the effective date of the abolition of the tax in any county, the director shall transfer the balance in that county's account to the county and municipalities in the county and shall close the account.

(d) The Treasurer of State is authorized to make refunds for overpayment of the tax and to redeem dishonored checks and drafts issued in payment of the tax from the Local Sales and Use Tax Trust Fund.