diff --git a/x/auth/ante.go b/x/auth/ante.go
index 5b2cdb155..46daf39dd 100644
--- a/x/auth/ante.go
+++ b/x/auth/ante.go
@@ -255,6 +255,3 @@ func deductFees(acc Account, fee StdFee) (Account, sdk.Result) {
 	}
 	return acc, sdk.Result{}
 }
-
-// BurnFeeHandler burns all fees (decreasing total supply)
-func BurnFeeHandler(_ sdk.Context, _ sdk.Tx, _ sdk.Coins) {}
diff --git a/x/auth/feekeeper.go b/x/auth/feekeeper.go
index 3e03a81aa..ef8754809 100644
--- a/x/auth/feekeeper.go
+++ b/x/auth/feekeeper.go
@@ -20,7 +20,6 @@ type FeeCollectionKeeper struct {
 	cdc *wire.Codec
 }
 
-// NewFeeKeeper returns a new FeeKeeper
 func NewFeeCollectionKeeper(cdc *wire.Codec, key sdk.StoreKey) FeeCollectionKeeper {
 	return FeeCollectionKeeper{
 		key: key,
@@ -28,7 +27,7 @@ func NewFeeCollectionKeeper(cdc *wire.Codec, key sdk.StoreKey) FeeCollectionKeep
 	}
 }
 
-// Adds to Collected Fee Pool
+// retrieves the collected fee pool
 func (fck FeeCollectionKeeper) GetCollectedFees(ctx sdk.Context) sdk.Coins {
 	store := ctx.KVStore(fck.key)
 	bz := store.Get(collectedFeesKey)
@@ -41,14 +40,12 @@ func (fck FeeCollectionKeeper) GetCollectedFees(ctx sdk.Context) sdk.Coins {
 	return *feePool
 }
 
-// Sets to Collected Fee Pool
 func (fck FeeCollectionKeeper) setCollectedFees(ctx sdk.Context, coins sdk.Coins) {
 	bz := fck.cdc.MustMarshalBinary(coins)
 	store := ctx.KVStore(fck.key)
 	store.Set(collectedFeesKey, bz)
 }
 
-// Adds to Collected Fee Pool
 func (fck FeeCollectionKeeper) addCollectedFees(ctx sdk.Context, coins sdk.Coins) sdk.Coins {
 	newCoins := fck.GetCollectedFees(ctx).Plus(coins)
 	fck.setCollectedFees(ctx, newCoins)
@@ -56,7 +53,7 @@ func (fck FeeCollectionKeeper) addCollectedFees(ctx sdk.Context, coins sdk.Coins
 	return newCoins
 }
 
-// Clears the collected Fee Pool
+// clear the fee pool
 func (fck FeeCollectionKeeper) ClearCollectedFees(ctx sdk.Context) {
 	fck.setCollectedFees(ctx, sdk.Coins{})
 }
diff --git a/x/distribution/begin_block.go b/x/distribution/begin_block.go
new file mode 100644
index 000000000..7edfc2cf0
--- /dev/null
+++ b/x/distribution/begin_block.go
@@ -0,0 +1,9 @@
+package distribution
+
+import "github.com/cosmos/cosmos-sdk/x/distribution/keeper"
+
+// slashing begin block functionality
+func BeginBlocker(ctx sdk.Context, req abci.RequestBeginBlock, dk keeper.Keeper) (tags sdk.Tags) {
+
+	return
+}
diff --git a/x/distribution/keeper/allocation.go b/x/distribution/keeper/allocation.go
index 19d4e2e16..662d848b4 100644
--- a/x/distribution/keeper/allocation.go
+++ b/x/distribution/keeper/allocation.go
@@ -1,34 +1,48 @@
 package keeper
 
-import sdk "github.com/cosmos/cosmos-sdk/types"
+import (
+	sdk "github.com/cosmos/cosmos-sdk/types"
+	abci "github.com/tendermint/tendermint/abci/types"
+)
 
 // Allocate fees handles distribution of the collected fees
-func (k Keeper) AllocateFees(ctx sdk.Context, _ sdk.Tx, feesCollected sdk.Coins, proposerAddr sdk.ConsAddress) {
-
-	sumPowerPrecommitValidators := sdk.NewDec(1) // XXX TODO actually calculate this
-	communityTax := sdk.NewDecWithPrec(1, 2)     // XXX TODO get from global params store
-
-	feePool := k.GetFeePool(ctx)
-	stakePool := k.stakeKeeper.GetPool(ctx)
+func (k Keeper) AllocateFees(ctx sdk.Context, req abci.RequestBeginBlock) {
 
+	// get the proposer of this block
+	proposerAddr := req.Header.Proposer.PubKey // XXX use address?
 	proserValidator := k.stakeKeeper.GetValidatorFromConsAddr(ctx, proposerAddr)
 	proposerDist := k.GetFeeDistribution(ctx, proserValidator.OperatorAddr)
 
+	// get the fees which have been getting collected through all the
+	// transactions in the block
+	feesCollected := k.FeeCollectionKeeper.GetCollectedFees(ctx)
 	feesCollectedDec := NewDecCoins(feesCollected)
+
+	// allocated rewards to proposer
+	stakePool := k.stakeKeeper.GetPool(ctx)
+	sumPowerPrecommitValidators := sdk.NewDec(1) // XXX TODO actually calculate this
 	proposerMultiplier := sdk.NewDecWithPrec(1, 2).Add(sdk.NewDecWithPrec(4, 2).Mul(
 		sumPowerPrecommitValidators).Div(stakePool.BondedTokens))
 	proposerReward := feesCollectedDec.Mul(proposerMultiplier)
 
+	// apply commission
 	commission := proposerReward.Mul(proserValidator.Commission)
 	proposerDist.PoolCommission = proposerDist.PoolCommission.Add(commission)
 	proposerDist.Pool = proposerDist.Pool.Add(proposerReward.Sub(commission))
 
+	// allocate community funding
+	communityTax := sdk.NewDecWithPrec(1, 2) // XXX TODO get from global params store
 	communityFunding := feesCollectedDec.Mul(communityTax)
+	feePool := k.GetFeePool(ctx)
 	feePool.CommunityFund = feePool.CommunityFund.Add(communityFunding)
 
+	// set the global pool within the distribution module
 	poolReceived := feesCollectedDec.Sub(proposerReward).Sub(communityFunding)
 	feePool.Pool = feePool.Pool.Add(poolReceived)
 
 	SetValidatorDistribution(proposerDist)
 	SetFeePool(feePool)
+
+	// clear the now distributed fees
+	k.FeeCollectionKeeper.ClearCollectedFees(ctx)
 }
diff --git a/x/distribution/types/keepers.go b/x/distribution/types/keepers.go
index 15a137718..7b0539216 100644
--- a/x/distribution/types/keepers.go
+++ b/x/distribution/types/keepers.go
@@ -12,6 +12,12 @@ type StakeKeeper interface {
 }
 
 // expected coin keeper
-type CoinKeeper interface {
+type BankKeeper interface {
 	AddCoins(ctx sdk.Context, addr sdk.AccAddress, amt sdk.Coins) (sdk.Coins, sdk.Tags, sdk.Error)
 }
+
+// from ante handler
+type FeeCollectionKeeper interface {
+	GetCollectedFees(ctx sdk.Context) sdk.Coins
+	ClearCollectedFees(ctx sdk.Context)
+}