Title 36 Congressional Charters

Title 36 Congressional Charters

November 15, 2021
Title 36 Congressional Charters
In the United States, the states have generally had the
Committee Moratorium on New
authority to create and oversee corporate entities within
Charters
their boundaries. Beginning with the Bank of the United
From 1989 through 2018, the House Judiciary
States’ statutory establishment in 1791, however, Congress
subcommittee of jurisdiction over the matter maintained a
periodically has passed legislation to incorporate both
moratorium on granting additional Title 36 charters. The
public and private organizations. Broadly speaking, the
subcommittee’s reasoning was included in the opening
term “congressional charter” can be understood to include
paragraph of the policy:
any statute that establishes a new organization or gives
legal recognition to an existing organization.
[S]uch charters are unnecessary for the operations
of any charitable, non-profit organization and
The congressional charters of more than 90 organizations
falsely imply to the public that a chartered
can be found in Subtitle II of Title 36 of the United States
organization and its activities carry a congressional
Code; they are commonly referred to as “Title 36 charters.”
“seal of approval,” or that the Federal Government
In general, these charters include those of private, nonprofit
is in some way responsible for its operations. The
corporations that appear to be of a patriotic character or
Subcommittee believes that the significant
national in scope, such as various veterans’ organizations
resources
required
to
properly investigate
and the Boys and Girls Clubs of America. Charters of some
prospective chartered organizations and monitor
other nonprofit corporations with diverse purposes and
them after their charters are granted could and
differing relationships with federal government agencies are
should be spent instead on the subcommittee’s large
also included, such as the United States Olympic and
range of legislative and other substantive policy
Paralympic Committee and the National Film Preservation
matters. This policy is not based on any decision
Foundation.
that the organizations seeking Federal charters are
not worthwhile, but rather on the fact that Federal
Legislating New Title 36 Congressional
charters serve no valid purpose and therefore ought
Charters
to be discontinued.
Title 36 charters are public laws, and the process for their
Although the subcommittee does not appear to have
enactment follows the process for the enactment of many
formally readopted this policy since the 115th Congress
other legislative initiatives. It has generally begun with the
(2017-2018), the committee did not report new Title 36
drafting, introduction, and referral of a bill in either
charter legislation during the 116th Congress (2019-2020) or
chamber. Such charter bills are generally structured as
the beginning of the 117th Congress (2021-2022).
amendments to Title 36 of the Code, included as a note to
Title 36, or written as an amendment to a different title of
Chartering During the Moratorium
the Code, at the discretion of the Office of Law Revision
The moratorium did not bring a complete end to bills
Counsel.
seeking to establish these charters while it was in effect.
Examples of new charters enacted and added to Title 36
The Senate and House Judiciary Committees usually have
during the moratorium period, although not reported by the
been the committees of jurisdiction for Title 36 charter bills
House Judiciary Committee, include the following:
in their respective chambers, regardless of the policy area
related to the organization. In the House, the Subcommittee

on Immigration and Citizenship and its predecessor
In 1996, the charter for the Corporation for the
subcommittees have been given jurisdiction within the
Promotion of Rifle Practice and Firearms Safety was
Judiciary Committee.
included in the National Defense Authorization Act for
FY1996 (P.L. 104-106, Title XVI; 110 Stat. 515).
The same legislative process has been used to make
changes to existing charters. As public laws, the terms of
 Also in 1996, the Fleet Reserve Association was
charters may be changed through enactment of other public
chartered through legislation that was included in the
laws. Generally, existing charters also have been repealed
National Defense Authorization Act for FY1997 (P.L.
through this process. For example, the 1907 congressional
104-201, Title XVIII; 110 Stat. 2760).
charter of the National German-American Alliance of the
United States of America was repealed in 1918.
 In 1997, the Air Force Sergeants Association was
chartered as part of the National Defense Authorization
Act for FY1998 (P.L. 105-85, Title XV; 111 Stat. 1963).
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Title 36 Congressional Charters
 In 1998, the American GI Forum of the United States
Some Title 36 charters facilitate organizations’ account-
was chartered in an act with that sole purpose (P.L. 105-
ability to voting members by requiring maintenance and
231; 112 Stat. 1530).
circumscribed availability of accurate corporate records.
For example, the Air Force Sergeants Association’s charter
 In 2000, the National Recording Preservation Founda-
requires that the corporation keep records of account;
tion was chartered as part of the National Recording
minutes of Association proceedings; and record of the
Preservation Act (P.L. 106-474, Title II; 114 Stat. 2091).
names and addresses of its members entitled to vote (36
U.S.C. §20209). Voting members or their agents or
 In 2008, the Korean War Veterans Association,
attorneys “may inspect the records of the corporation at any
Incorporated, was given a federal charter by an act with
reasonable time.”
that sole purpose (P.L. 110-254; 122 Stat. 2419).
Some Title 36 charters include restrictions related to

issuance of stock or dividends; participation in, or funding
In 2009, the Military Officers Association of America
of, political activities; and distribution of corporate income,
was chartered by an act with that sole purpose (P.L.
assets, or loans to leaders or members. For example,
111-95; 123 Stat. 3001).
AMVETS’ (American Veterans’) charter provides that the

“corporation may not issue stock or declare or pay a
In 2010, the National Foundation on Fitness, Sports, and
dividend” (36 U.S.C. §22707). In addition, the corporation
Nutrition was chartered by an act with that sole purpose
and its leaders “may not contribute to, support, or assist a
(P.L. 111-332; 124 Stat. 3576).
political party or candidate for elective public office.” The
corporation’s income and assets may not be used for “the
No new Title 36 charters were enacted from 2010-2020.
benefit of, or be distributed to, a director, officer, or
Appropriations
member ... except on dissolution ... of the corporation.”
A Title 36 charter does not inherently establish an
Additional oversight tools beyond the requirements of a
organization as a federal agency, confer upon it any
Title 36 corporation’s charter might include those
governmental authority, or assign it any governmental
associated with the organization’s tax and state
benefits. Organizations with such charters do not typically,
incorporation status. A tax-exempt Title 36 chartered
by virtue of their chartered status, receive appropriated
corporation might be required to file an annual Form 990
funds. Nor are they prevented from receiving such funds,
with the Internal Revenue Service, which then would
unless such a prohibition is provided for in the charter.
generally be publicly available. In many cases, Title 36
chartered corporations are also incorporated at the state
A few Title 36 charters include authorizations to receive
level and may be subject to additional state-level
appropriated funds, either directly or through a federal
accountability and transparency laws and regulations.
agency. For example, the National Film Preservation
Foundation’s charter includes an authorization of
As the committees of jurisdiction, the House and Senate
appropriations not to exceed $1 million for each fiscal year
Judiciary Committees have sometimes exercised oversight
through 2026 (36 U.S.C. §151711). The National Academy
over the charters or activities of Title 36 chartered
of Public Administration’s charter provides that upon
corporations. A Title 36 charter does not, per se, require a
request of the federal government, it “shall investigate,
corporation to be more responsive than other organizations
examine, experiment, and report on any subject of govern-
to congressional oversight. Should the committees find such
ment.” The related costs are to be paid “from appropriations
available for that purpose” (36 U.S.C. §150104).
a group to be unresponsive, however, they might elect to

review its charter for potential amendment or repeal.
Oversight
Other congressional committees also have sometimes
Congress has periodically grappled with the oversight and
conducted oversight concerning the activities and
accountability of Title 36 chartered corporations, as
organization of Title 36 chartered corporations. For
reflected in the subcommittee moratorium excerpt above.
example, a House Energy and Commerce Committee
During the post-World War II period, as numerous groups
subcommittee and the Senate on Commerce, Science, and
of veterans, their supporters, and others requested charters,
Transportation Committee each held multiple hearings in
Congress sought to establish both standards by which such
2003 to review the operations and management of the
requests could be evaluated and an audit process for
United States Olympic Committee (USOC, now the United
chartered groups. P.L. 88-504 (78 Stat. 635; 36 U.S.C.
States Olympic and Paralympic Committee), following
§10101), enacted in 1964, required Title 36 chartered
reports of perceived leadership dysfunction. Subsequently,
corporations to obtain an annual audit of their financial
several USOC reform bills were introduced, including one
statements. It also required that an audit report be submitted
that was passed by the Senate.
to Congress. However, a subsequent statute terminated
specified statutorily required reporting requirements for
federal agencies, and it also terminated the audit report
Henry B. Hogue, Specialist in American National
requirement for most Title 36 chartered corporations. (36
Government
U.S.C. §10101note.)
IF11972
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Title 36 Congressional Charters

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