I 112th CONGRESS 1st Session H. R. 344 IN THE HOUSE OF REPRESENTATIVES January 19, 2011 Mr. Neugebauer introduced the following bill; which was referred to the Committee on Financial Services 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.

1.

Short title

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

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.