HR 344

112th CONGRESS
1st Session

H. R. 344

To amend the Federal Reserve Act to remove the power of Federal reserve banks to buy and sell municipal securities, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

January 19, 2011

Mr. NEUGEBAUER introduced the following bill; which was referred to the Committee on Financial Services

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A BILL

To amend the Federal Reserve Act to remove the power of Federal reserve banks to buy and sell municipal securities, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Fiscal Responsibility Effective Enforcement Act of 2011' or the `FREE Act of 2011'.

SEC. 2. REMOVAL OF POWER TO BUY AND SELL MUNICIPAL SECURITIES.

(a) In General- Section 14(b)(1) of the Federal Reserve Act is amended by striking `and bills, notes, revenue bonds, and warrants with a maturity from date of purchase of not exceeding six months, issued in anticipation of the collection of taxes or in anticipation of the receipt of assured revenues by any State, county, district, political subdivision, or municipality in the continental United States, including irrigation, drainage and reclamation districts,'.

(b) Transition Rule- Notwithstanding the amendment made by subsection (a), a Federal reserve bank shall have the power to sell any bills, notes, revenue bonds, or warrants described in the language struck by such amendment, if such bills, notes, revenue bonds, or warrants are held by the Federal reserve bank on the date of the enactment of this Act.

END