[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1669 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 1669
To require the Secretary of the Treasury to establish a market for
municipal securities, to require cooperation between the Secretary and
the Chairman of the Board of Governors of the Federal Reserve System in
addressing the municipal securities market situation including through
the establishment of municipal securities funding facilities, and for
other purposes.
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IN THE HOUSE OF REPRESENTATIVES
March 23, 2009
Mr. Connolly of Virginia introduced the following bill; which was
referred to the Committee on Financial Services
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A BILL
To require the Secretary of the Treasury to establish a market for
municipal securities, to require cooperation between the Secretary and
the Chairman of the Board of Governors of the Federal Reserve System in
addressing the municipal securities market situation including through
the establishment of municipal securities funding facilities, 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; DEFINITIONS.
(a) Short Title.--This Act may be cited as the ``Federal Municipal
Bond Marketing Support and Securitization Act of 2009''.
(b) Definitions.--For purposes of this Act the following
definitions shall apply:
(1) Board.--The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(2) Guarantee.--The term ``guarantee'' has the same meaning
as in section 3 of the Federal Financing Bank Act of 1978.
(3) Municipal security defined.--The term ``municipal
security'' has the same meaning as in section 3(a)(30) of the
Securities Exchange Act of 1934 and includes pooled investment
funds under trusts established by State or local governmental
entities and higher education savings plan trusts established
by States to the extent any such trust is not excluded by the
Secretary and does not consist of funds invested by persons
other than States or municipalities the investment of which is
subject to the direction of such person.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
SEC. 2. COOPERATION TO ADDRESS LIMITATIONS ON ACCESS TO MARKETS FOR
MUNICIPAL SECURITIES.
Upon the enactment of this Act, the Secretary of the Treasury and
the Board of Governors of the Federal Reserve System shall consult with
each other extensively for the purpose of--
(1) finding solutions for the grave effects of the current
financial crisis on the markets for municipal securities; and
(2) cooperating in the activities authorized under this Act
to alleviate to the extent practicable such effects on the
municipal securities markets.
SEC. 3. PURCHASE, SALE, GUARANTEE, AND SECURITIZATION OF MUNICIPAL
SECURITIES BY SECRETARY AND FEDERAL FINANCING BANK
AUTHORIZED.
(a) In General.--The Secretary of the Treasury shall establish a
program, directly or through the Federal Financing Bank, to--
(1) purchase municipal securities;
(2) issue securities backed by pools of such municipal
securities; and
(3) provide credit enhancement or guarantees for municipal
securities.
(b) Specific Authority.--In addition to the authority conferred
under section 6 of the Federal Financing Bank Act of 1973 and subject
to subsections (b) and (c) of such section, the Federal Financing Bank
may--
(1) make commitments to purchase and sell, and to purchase
and sell on terms and conditions determined by the Bank, any
municipal security issued under a plan approved by the
Secretary under subsection (c);
(2) may guarantee the repayment of principal and interest
on any municipal security issued under a plan approved by the
Secretary under subsection (c); and
(3) may issue and sell instruments representing interests
in a pool consisting of municipal securities purchased by the
Federal Financing Bank under this section.
(c) Authority of Secretary Over Method, Source, Timing, Terms, and
Conditions of Municipal Securities Issued for Purchase Under This
Section.--To insure the orderly and coordinated marketing of municipal
securities for purchase or guarantee as to principal and interest under
this section, and to ensure that appropriate financing planning has
been made with respect to such municipal securities, no municipal
security may be purchased or guaranteed under this section unless the
Secretary has approved, prior to the issuance of any such security --
(1) the method of financing;
(2) the source of financing;
(3) the timing of financing in relation to market
conditions and financing by Federal agencies; and
(4) the financing terms and conditions, including rates of
interest and maturities, of the municipal securities.
(d) Status of Insurance and Instruments.--Municipal securities sold
by the Secretary, or by the Federal Financing Bank under subsection
(b)(1), and instruments issued by the Secretary, or by the Bank under
subsection (b)(3), that represent pools consisting of municipal
securities--
(1) may be insured by the Secretary or the Bank,
respectively, as to the payment of principal or interest by the
issuer of the municipal security; and
(2) shall not, other than in connection with a guarantee
referred to in paragraph (1), be treated for any purpose as an
instrument which has the full faith and credit of the United
States.
SEC. 4. FEDERAL RESERVE BOARD CREDIT FACILITY.
(a) Establishment Authorized.--The Board of Governors of the
Federal Reserve System may establish a credit facility, using resources
and authority available under the Federal Reserve Act, including
section 10B and the third undesignated paragraph of section 13 of such
Act, to provide financial resources for the purchase of municipal
securities by Federal reserve banks or member banks or other persons.
(b) Funding for Secretary and Federal Financing Bank.--Subject to
the conditions described in the third undesignated paragraph of section
13, the Board may establish a credit facility, or use any credit
facility established under subsection (a), to provide funds to the
Secretary or the Federal Financing Bank to carry out any authority
under section 3.
SEC. 5. BUDGET AUTHORITY.
Any authority of the Secretary or the Federal Financing Bank under
this Act to purchase or guarantee municipal securities shall be
effective for any fiscal year only to the extent or in amounts provided
in advance in appropriation Acts.
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