In the event that, acting under the power granted to it in parts 1-3 of this chapter, the department of economic and community development creates and establishes any planning region composed of the territory of a single municipality, together with territory adjoining but outside of such municipality, no part of which is outside the municipality's urban growth boundary, or, if no such boundary exists, more than five (5) miles beyond the limits of such municipality, and in the further event that such municipality has a municipal planning commission, then in such event the department, in lieu of creating, designating and appointing a new regional planning commission for such region, may designate the municipal commission as the regional planning commission of such region, and when so designated, the commission, when acting as a regional commission for such region, shall have all the powers and be governed by the provisions set forth in parts 1-3 of this chapter, or in any other statutory provision relating to regional planning commissions; provided, that the department shall not have power of appointment or removal of any member of such municipal planning commission serving regional areas. At least one (1) member of a municipal planning commission composed of five (5) members, and two (2) members of a municipal planning commission composed of more than five (5) members but less than eleven (11) members, who are appointed to the municipal planning commission designated as a regional planning commission, shall reside within the regional area outside of the municipal boundaries served by the regional planning commission; provided, that, if the regional area outside of the municipal boundaries is less than fifty percent (50%) of the entire regional area, then only one (1) member of the municipal planning commission shall be appointed from the regional area outside the municipal boundaries regardless of the number of members on the municipal planning commission, or, in the alternative, the municipal planning commission may be increased in size by the number of members who are appointed from the regional area outside the municipal boundaries. The acceptance of any such designation shall not, however, be obligatory upon but shall be subject to the consent of the designated municipal planning commission. Authority granted under this section to the department shall be exercised with the approval of the local government planning advisory committee.