WASHINGTON - House Financial Services Committee chairman Barney Frank is expected to introduce legislation today that will give the Treasury Department and the Federal Reserve explicit authority to purchase or guarantee municipal debt under their economic recovery programs, congressional sources briefed on the legislation said.

Meanwhile, the National Association of Bond Lawyers issued a white paper yesterday suggesting Congress consider several tax-law changes to include in the forthcoming stimulus package that would spur increased issuance of municipal bonds. The six-page document provides options for how Congress could employ muni bonds to help finance infrastructure projects and state and local government activities, as well as increase demand for tax-exempt bonds.

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