Public Financial Management Amendment Act 2014 - as Plain Text by MWakili

ISSUE SPECIAL Kenya Gazette Supplement No.66 (Acts No.6) REPUBLIC OF KENYA KENYA PPLEMENT GAZETTE SU ACTS, 2914 NAIROBI, 15th Mray,20l4 Act: PAGE The Pulilic Finance Managernent (Amendment) Agt, 2A14.,.,.93 NATIO}dAL COUllCIL FOR LAI,{ REPORTIIiG fqffi#ffiflVf:ffi f,.11.

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NAIROBI I 93 2014 Public Finqnce Management (Amendment) No.6 THE PUBLIC FINANCE MANAGEMENT (AMENDMENT) ACT,20L4 No.6 of 20L4 Date of Assent: 8th May,20l4 Commencement Date: 29th May,20l4 AN ACT of Parliament to amend the Public Finance Managernent Act ENACTED by the Parliament of Kenya, as follows- 1.

This Act may be cited as the Public Finance shorttitre' Management (Amendment) Act, 2014.

2.

Section 2 of the Public Finance Management Act *,ijl|:?'fi:.,, (hereinafter referred to as "the principal Act") is or20r2.

amended- (a) in the definition of the expiession "accounting officer" by deleting the semi colon at the end of paragraph (d) and substituting therefor the words " in respect of the Senate and the Clerk of the National assembly in respect of the National Assembly"; (b) in the definition of the expression "national government security", by- (i) deleting the word "includes" and substituting therefor the word "means"; (ii) inserting the expression "or section 53A" immediately after the expression "section 53".

(c) by inserting the following new definitions in their proper alphabetical sequence- "external government security" means a national government security which is issued outside Kenya; "external loan" means any loan governed by the laws of a jurisdiction other than Kenya; and 94 Public Finance Management (Amertdmenl ) 2014 No.6 "loan" means any borrowing with or without interest frorn any source or any issuance of a national government security.

3.

Section 12 of the principal Act is amended by Anrendment of sectlon 12 ol No.

18 deleting the expression, "annual Division of Reyenue and of 201 2.

the County Allocation of Revenue Bill" and substituting therefore the expression, "legislative proposals on annual Division of Revenue and County Allocation of Revenue".

4.

Section 40 of the principal Act is amended- Amendment of section 40 of No.

l8 (3) ot2Ol2.

(a) in subsection by deleting the words "the Finance Bill" and substituting therefor the words, "a legislative proposal"; and (b) in sub-section (4) by deleting the words, "the Finance Bill by the Cabinet Secretary, the relevant committee of the National Assembly shall introduce the Bill in the National together with the report of the committee on the Bill" and substituting therefor the words, "the legislative proposal of the Cabinet Secretary, the relevant committee of the National .A,ssembly shall introduce a Finance bill in the National Assembly", 5.

Section 50 of the principal Act is amended by Amendment of section 5O of No, l8 deleting, subsection (7) and substituting therefor the otXrl?.

following new subsection- "(7) The Cabinet Secretary shall ensure that the proceeds of any loan raised under this Act are- 95 (Amendmentl 2014 Public Finance Managentent No.

6 (a) paid into the Consolidated Furicl; (b) paid into any other public fund established by the national government or any of its entities as the Cabinet Secretary may determine in accordance with regulations approved hy Parliament; (c) disbursed directly to the suppliers where the loan is a government to government loan and is raised for the purpose of financing goods and services provided by a supplier outside Kenya; or (d) in the case of an external loan or external government security, applied, in part, to pay at closing, prenegotiated expenses associated solely and exhaustively 'with the borrowing, including but not limited to, the fees, commissions and expenses of lenders, financial arrangers, managers and book runners, fiscal agents, trustees, paying agents, exchange and information agents, syndicate agents, counsel, clearing systems, listing agents, and stock exchanges, rating agencies and other expenses of a similar nature arising from the external loan or external government security." 6.

Section 53 of the principal Act is amended in Amendment of rection 53 of No.

18 subsection (6), by inserting the words "the national ot 2012.

government or'o immediately after the words "a loan by".

7.

The principal Act is amended by inserting the Insrtion of a new stion 53A in following new section immediately after section 53- No.l8of20l2.

96 No.

6 Public Finattce Matragetttettt (Atnenclment) 2014 Issuancc ol cxternal 53A.

( l) Notwithstanding the securitics by latiorral go\ ernrncrrl.

provisions of section 53 of this Act, the national government may issue external government securities, for money borrowed or for any other purpose, only in circumstances expressly authorised by this Act.

(2) The Cabinet Secretary may raise an external loan or issue external government securities, authorized by this Act, on behalf of the national government for money borrowed by the national government in such manner as the Cabinet Secretary may determine.

(3) Any external loans or external government securities is.sued by the Cabinet Secretary under this section shall be within the borrowing limits set by Parliament under section 50 (2) of this Act.

(4) The authority of the Cabinet Secretary to borrow money includes the authority to borrow money by raising externa! loans or issuing external govern ment securities.

(5) The Cabinet Secretary shall ensu[e that every external loan or external government security issued.

under this section is given in the name of the Republic of Kenya.

(6) An external loan or external government security may be executed on behalf of the national government only by- 97 2Ol4 Public Finance Management (Amendment) No.6 (a) the C:binet Secretary; (b) a delegate appointed by the Cabinet Secretary, in writing; or (c) a borrowing agent appointed in accordance with section 50 (9) of this Act.

(7) For the purposes of subsection (6), it shall be sufficient if the signature of a person who is required to execute an external government security under this section is reproduced on the security.

(8) External government securities shall be registered and may be recorded and traded in accordance with the terms and conditions of the external government security.

(9) Claims against the borrower or issuer by holders of external loans or extefnal government securities for payment shall be prescribed and become void if the claims are not made within six (6) years from the redemption date in the case of principal and five years from the due date in the case of interest or any other amount.

(10) In the case of external government securities, a duplicate external government security may be issued in accordance with the terms and conditions applicable to the external government security to replace an external government security that is lost, damaged or destroyed.

8.

Section 55 .of the principal.

Act is amended ^by *T;J,o?;:',"i.

,, inserting the following new subsection immediately after azilz-.

subsection (9)- 98 Public Finance Managenrcnt ( Arnendnrcnt) 20t4 No.6 "(10) The provisions of this section shall not apply to external government securities except that notifications shall be made in the Register of the National Government Securities to reflect the outstanding amount of each issue of external debt securities".

9.

Section 191 of the principal Act is amended- Amendnrent of section I9l of No.

l8 ot 2012.

(a) in sub-section (4) by deleting the words, "Division of Revenue Bill and County allocation of Revenue Bill" and substituting therefor the words, "legislative proposals on the Division of Revenue and County Allocation of Revenue"; and (b) in $ub-section (5) by deleting the words, "Division of Revenue Bill and County allocation i of Revenue Bill" and substituting therefor words, " legislative proposal on the Division of Revenue I and County Allocation of Revenue".

l.