Title 36 Congressional Charters

November 15, 2021

Title 36 Congressional Charters

In the United States, the states have generally had the

authority to create and oversee corporate entities within

their boundaries. Beginning with the Bank of the United

States’ statutory establishment in 1791, however, Congress

periodically has passed legislation to incorporate both

public and private organizations. Broadly speaking, the

term “congressional charter” can be understood to include

any statute that establishes a new organization or gives

legal recognition to an existing organization.

The congressional charters of more than 90 organizations

can be found in Subtitle II of Title 36 of the United States

Code; they are commonly referred to as “Title 36 charters.”

In general, these charters include those of private, nonprofit

corporations that appear to be of a patriotic character or

national in scope, such as various veterans’ organizations

and the Boys and Girls Clubs of America. Charters of some

other nonprofit corporations with diverse purposes and

differing relationships with federal government agencies are

also included, such as the United States Olympic and

Paralympic Committee and the National Film Preservation

Foundation.

Legislating New Title 36 Congressional

Charters

Title 36 charters are public laws, and the process for their

enactment follows the process for the enactment of many

other legislative initiatives. It has generally begun with the

drafting, introduction, and referral of a bill in either

chamber. Such charter bills are generally structured as

amendments to Title 36 of the Code, included as a note to

Title 36, or written as an amendment to a different title of

the Code, at the discretion of the Office of Law Revision

Counsel.

The Senate and House Judiciary Committees usually have

been the committees of jurisdiction for Title 36 charter bills

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

subcommittees have been given jurisdiction within the

Judiciary Committee.

The same legislative process has been used to make

changes to existing charters. As public laws, the terms of

charters may be changed through enactment of other public

laws. Generally, existing charters also have been repealed

through this process. For example, the 1907 congressional

charter of the National German-American Alliance of the

United States of America was repealed in 1918.

Committee Moratorium on New

Charters

From 1989 through 2018, the House Judiciary

subcommittee of jurisdiction over the matter maintained a

moratorium on granting additional Title 36 charters. The

subcommittee’s reasoning was included in the opening

paragraph of the policy:

[S]uch charters are unnecessary for the operations

of any charitable, non-profit organization and

falsely imply to the public that a chartered

organization and its activities carry a congressional

“seal of approval,” or that the Federal Government

is in some way responsible for its operations. The

Subcommittee believes that the significant

resources required to properly investigate

prospective chartered organizations and monitor

them after their charters are granted could and

should be spent instead on the subcommittee’s large

range of legislative and other substantive policy

matters. This policy is not based on any decision

that the organizations seeking Federal charters are

not worthwhile, but rather on the fact that Federal

charters serve no valid purpose and therefore ought

to be discontinued.

Although the subcommittee does not appear to have

formally readopted this policy since the 115th Congress

(2017-2018), the committee did not report new Title 36

charter legislation during the 116th Congress (2019-2020) or

the beginning of the 117th Congress (2021-2022).

Chartering During the Moratorium

The moratorium did not bring a complete end to bills

seeking to establish these charters while it was in effect.

Examples of new charters enacted and added to Title 36

during the moratorium period, although not reported by the

House Judiciary Committee, include the following:

 In 1996, the charter for the Corporation for the

Promotion of Rifle Practice and Firearms Safety was

included in the National Defense Authorization Act for

FY1996 (P.L. 104-106, Title XVI; 110 Stat. 515).

 Also in 1996, the Fleet Reserve Association was

chartered through legislation that was included in the

National Defense Authorization Act for FY1997 (P.L.

104-201, Title XVIII; 110 Stat. 2760).

 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

was chartered in an act with that sole purpose (P.L. 105231; 112 Stat. 1530).

 In 2000, the National Recording Preservation Foundation was chartered as part of the National Recording

Preservation Act (P.L. 106-474, Title II; 114 Stat. 2091).

 In 2008, the Korean War Veterans Association,

Incorporated, was given a federal charter by an act with

that sole purpose (P.L. 110-254; 122 Stat. 2419).

 In 2009, the Military Officers Association of America

was chartered by an act with that sole purpose (P.L.

111-95; 123 Stat. 3001).

 In 2010, the National Foundation on Fitness, Sports, and

Nutrition was chartered by an act with that sole purpose

(P.L. 111-332; 124 Stat. 3576).

No new Title 36 charters were enacted from 2010-2020.

Appropriations

A Title 36 charter does not inherently establish an

organization as a federal agency, confer upon it any

governmental authority, or assign it any governmental

benefits. Organizations with such charters do not typically,

by virtue of their chartered status, receive appropriated

funds. Nor are they prevented from receiving such funds,

unless such a prohibition is provided for in the charter.

A few Title 36 charters include authorizations to receive

appropriated funds, either directly or through a federal

agency. For example, the National Film Preservation

Foundation’s charter includes an authorization of

appropriations not to exceed $1 million for each fiscal year

through 2026 (36 U.S.C. §151711). The National Academy

of Public Administration’s charter provides that upon

request of the federal government, it “shall investigate,

examine, experiment, and report on any subject of government.” The related costs are to be paid “from appropriations

available for that purpose” (36 U.S.C. §150104).

Oversight

Congress has periodically grappled with the oversight and

accountability of Title 36 chartered corporations, as

reflected in the subcommittee moratorium excerpt above.

During the post-World War II period, as numerous groups

of veterans, their supporters, and others requested charters,

Congress sought to establish both standards by which such

requests could be evaluated and an audit process for

chartered groups. P.L. 88-504 (78 Stat. 635; 36 U.S.C.

§10101), enacted in 1964, required Title 36 chartered

corporations to obtain an annual audit of their financial

statements. It also required that an audit report be submitted

to Congress. However, a subsequent statute terminated

specified statutorily required reporting requirements for

federal agencies, and it also terminated the audit report

requirement for most Title 36 chartered corporations. (36

U.S.C. §10101note.)

Some Title 36 charters facilitate organizations’ accountability to voting members by requiring maintenance and

circumscribed availability of accurate corporate records.

For example, the Air Force Sergeants Association’s charter

requires that the corporation keep records of account;

minutes of Association proceedings; and record of the

names and addresses of its members entitled to vote (36

U.S.C. §20209). Voting members or their agents or

attorneys “may inspect the records of the corporation at any

reasonable time.”

Some Title 36 charters include restrictions related to

issuance of stock or dividends; participation in, or funding

of, political activities; and distribution of corporate income,

assets, or loans to leaders or members. For example,

AMVETS’ (American Veterans’) charter provides that the

“corporation may not issue stock or declare or pay a

dividend” (36 U.S.C. §22707). In addition, the corporation

and its leaders “may not contribute to, support, or assist a

political party or candidate for elective public office.” The

corporation’s income and assets may not be used for “the

benefit of, or be distributed to, a director, officer, or

member ... except on dissolution ... of the corporation.”

Additional oversight tools beyond the requirements of a

Title 36 corporation’s charter might include those

associated with the organization’s tax and state

incorporation status. A tax-exempt Title 36 chartered

corporation might be required to file an annual Form 990

with the Internal Revenue Service, which then would

generally be publicly available. In many cases, Title 36

chartered corporations are also incorporated at the state

level and may be subject to additional state-level

accountability and transparency laws and regulations.

As the committees of jurisdiction, the House and Senate

Judiciary Committees have sometimes exercised oversight

over the charters or activities of Title 36 chartered

corporations. A Title 36 charter does not, per se, require a

corporation to be more responsive than other organizations

to congressional oversight. Should the committees find such

a group to be unresponsive, however, they might elect to

review its charter for potential amendment or repeal.

Other congressional committees also have sometimes

conducted oversight concerning the activities and

organization of Title 36 chartered corporations. For

example, a House Energy and Commerce Committee

subcommittee and the Senate on Commerce, Science, and

Transportation Committee each held multiple hearings in

2003 to review the operations and management of the

United States Olympic Committee (USOC, now the United

States Olympic and Paralympic Committee), following

reports of perceived leadership dysfunction. Subsequently,

several USOC reform bills were introduced, including one

that was passed by the Senate.

Henry B. Hogue, Specialist in American National

Government

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IF11972

Title 36 Congressional Charters

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