Kenyan Constitution, Chapter Twelve, Part 1, Article 204 to 205

Part 1: Principles and framework of public finance

Article 204: Equalization Fund

(1) There is established an Equalization Fund into which shall be paid one half per cent of all the revenue collected by the national government each year calculated on the basis of the most recent audited accounts of revenue received, as approved by the National Assembly.
(2) The national government shall use the Equalization Fund only to provide basic services including water, roads, health facilities and electricity to marginalized areas to the extent necessary to bring the quality of those services in those areas to the level generally enjoyed by the rest of the nation, so far as possible.
(3) The national government may use the Equalization Fund–

(a) only to the extent that the expenditure of those funds has been approved in an Appropriation Bill enacted by Parliament; and
(b) either directly, or indirectly through conditional grants to counties in which marginalized communities exist.

(4) The Commission on Revenue Allocation shall be consulted and its recommendations considered before Parliament passes any Bill appropriating money out of the Equalization Fund.
(5) Any unexpended money in the Equalization Fund at the end of a particular financial year shall remain in that Fund for use in accordance with clauses (2) and (3) during any subsequent financial year.
(6) This Article lapses twenty years after the effective date, subject to clause (7).
(7) Parliament may enact legislation suspending the effect of clause (6) for a further fixed period of years, subject to clause (8).
(8) Legislation under clause (7) shall be supported by more than half of all the members of the National Assembly, and more than half of all the county delegations in the Senate.
(9) Money shall not be withdrawn from the Equalization Fund unless the Controller of Budget has approved the withdrawal.

Article 205: consultation on financial legislation affecting counties

(1) When a Bill that includes provisions dealing with the sharing of revenue, or any financial matter concerning county governments is published, the Commission on Revenue Allocation shall consider those provisions and may make recommendations to the National Assembly and the Senate.
(2) Any recommendations made by the Commission shall be tabled in Parliament, and each House shall consider the recommendations before voting on the Bill.