When a district is excepted, under section 67, from all the provisions of this chapter, a committee shall, except where the Local Government for special reasons otherwise directs, be constituted for the control and administration in that district of the matters mentioned in section 20, or of such of them as the Local Government may, from time to time, specify; and the Local Government shall, from time to time, determine the manner in which the members of the committee shall be appointed and removed, define the functions and authority of the committee, and place at its disposal, subject to such control as the Local Government thinks fit,--
         (a) the balance standing at the credit of the district fund at the time when the district is excepted or, as the case may be, the balance of the allotments made for the district under section 7 of the Panjab Local Rates Act, 1878 (5 of 1878), and of the road and school cesses, which may be available for expenditure in the district at that time;
         (b) all proceeds of rates which, but for the district being excepted, would be allotted to the district board under section 9 of this Act; and
         (c) such other sources of income mentioned in section 35 of this Act as the Local Government thinks fit:
         Provided that not less than one-half of the members of the committee shall be persons who own landed property or reside or carry on trade or business in the district and are not servants of the Government.