Iceland - 2010 Party Finance Law

Title Article 5. Contributions from municipalities to political organisations
Chapter Chapter II. State and municipal government contributions to political activities
Article

5

Municipalities with over 500 inhabitants must, while other municipalities may, annually, contribute funds for the activities of political organisations that had at least one person elected to the local council or that received at least 5% of votes in the immediately preceding municipal election. The municipal government decides on such contributions while approving the budget. The amount shall be allocated in proportion to the number of votes.
The Board of the Association of Local Authorities may establish guidelines to promote harmonised execution of the payment of contributions from municipal governments to political organisations pursuant to this Article. During the year in which municipal government elections are held, political organisations will be allocated contributions for the latter part of that year in accordance with the weight of votes that they received in the recently held elections.

Categories - Party finance (Direct public funding)
Source http://www.althingi.is/lagas/138b/2006162.html