Congressionally Chartered Nonprofit Organizations ("Title 36 Corporations"): What They Are and How Congress Treats Them

Congressionally Chartered Nonprofit
Organizations (“Title 36 Corporations”):
What They Are and How Congress Treats Them
Updated July 14, 2008
Kevin R. Kosar
Analyst in American National Government
Government and Finance Division

Congressionally Chartered Nonprofit Organizations
(“Title 36 Corporations”):
What They Are and How Congress Treats Them
The chartering by Congress of organizations with a patriotic, charitable,
historical, or educational purpose is essentially a 20th century practice. There are
currently some 93 nonprofit corporations listed in Title 36, Subtitle II, of the U.S.
Code. These so-called “Title 36 corporations,” such as the Girl Scouts of America
and the National Academy of Public Administration, are typically incorporated first
under state law, then request that Congress grant them a congressional or federal
Chartered corporations listed in Title 36 are not agencies of the United States,
and the charter does not assign the corporate bodies any governmental attributes. For
instance, the corporation’s debt is not guaranteed, explicitly or implicitly, by the full
faith and credit of the United States. The attraction of Title 36 status for national
organizations is that it tends to provide an “official” imprimatur to their activities,
and to that extent it may provide them prestige and indirect financial benefit.
In recent years, some in Congress have expressed concern that the public may
be misled by its chartering process into believing that somehow the U.S. government
approves and supervises the corporations, when in fact this is not the case. As a
consequence, the House Judiciary Committee decided upon a moratorium on granting
new charters. (The Senate generally defers to the House on chartering matters.) This
moratorium has been reaffirmed by the committee at the beginning of each Congress
since. On several recent occasions, however, Congress has established Title 36
corporations nonetheless.
In 1998, Congress approved, and the President signed, legislation recodifing
Title 36 of the Code (P.L. 105-225). This revision did not substantively alter any of
the provisions in Title 36; rather, the objective was to reorder and revise where
necessary the wording of the provisions to better ensure consistency and readability.
This report will be updated at the beginning of each Congress or to reflect
significant legislative developments.

Current Context...................................................1
Historical and Legal Context.........................................3
Patriotic and National Organizations: Subtitle II..........................4
Governmental or Private?...........................................5
Congressional Procedures...........................................7
Oversight of Chartered Corporations...................................9
Ending Charters — Maybe..........................................12
Conclusion ......................................................14
Appendix: Title 36, Subtitle II: Patriotic and National Organizations........16

Congressionally Chartered Nonprofit
Organizations (“Title 36 Corporations”): What
They Are and How Congress Treats Them
Current Context
This report1 discusses a category of congressionally chartered2 nonprofit
organizations that have as their purpose the promotion of patriotic, charitable,
educational, and other eleemosynary activities.3 Title 36 of the United States Code,
where such corporate organizations are listed with their charters, was recodified by
law in 1998 (P.L. 105-225).4
Title 36 is comprised of three subtitles: Subtitle I: Patriotic and National
Observances and Ceremonies; Subtitle II: Patriotic and National Organizations; and

1 This report was originally authored by Ronald C. Moe, who retired from CRS. It has been
revised a number of times by the current author. Readers with questions about Title 36
corporations may contact Kevin R. Kosar.
2 The term “congressional charter” is used rather than “federal charter” because this report
considers only those entities which received a charter from Congress. It excludes other
nonprofit corporations, such as the Universal Service Administrative Company (USAC), that
have federal policy responsibilities and have charters, but were chartered without
legislation. On USAC, see U.S. Congress, House, Committee on Energy and Commerce,
Subcommittee on Oversight and Investigations, Problems with the E-Rate Program: Waste,th
Fraud, and Abuse Concerns in the Wiring of Our Nation’s Schools to the Internet, 108nd
Cong., 2 sess., July 17, 22, 2004 (Washington, GPO, 2004).
3 The term “nonprofit” is employed here instead of the more accurate “not-for-profit”
because “nonprofit” is the preferred term of the U.S. Code.
4 H.R. 1085, introduced March 17, 1997, by the chairman of the House Judiciary Committee,
Henry Hyde, had as its official title: “A bill to revise, codify, and enact without substantive
change certain general and permanent laws, related to patriotic and national observance,
ceremonies and organizations as Title 36, United States Code, ‘Patriotic and National
Observances, Ceremonies and Organizations.’” The House Judiciary Committee reported
the bill on October 21, 1997 (H.Rept. 105-226). The House passed H.R. 1085 by a voice
vote on February 3, 1998 (Congressional Record, daily edition, vol. 144, February 3, 1998,
H114). The Senate followed by a voice vote of approval, and the bill was sent to the
President, who signed it on August 18, 1998 as P.L. 105-225. The Office of Law Revision
Counsel of the House of Representatives is under statutory mandate (2 U.S.C. 285b) to
prepare, one title at a time, a restatement and revision of the general and permanent laws of
the United States for enactment into positive law. The respective bills make certain changes
in language. Some changes result form consolidating related provisions of law. Others are
made to achieve uniformity within a title and to conform to contemporary usage. Although
P.L. 105-225 made changes in language, no substantive changes are made within the law.

Subtitle III: Treaty Obligation Organizations. This report concerns itself with
Subtitle II, which includes 93 congressionally chartered corporations.
These chartered organizations have been collectively referred to under any of
three terms: “Congressionally chartered organizations;” “Title 36 corporations;” and
“patriotic societies.” In this report, the term “Title 36 corporation” will be used,
although it should be noted that even within this category of organizations, there are
The United States Constitution, although not providing express power to
Congress to charter corporations, is generally cited as the authority, under Article I,
Section 8, Clause 18, by which Congress can pass all laws “necessary and proper”
to implement the assigned expressed powers.5 Congress has authority to establish
organizations within both the governmental and private sectors. In the governmental
sector, the authority and responsibility to establish all agencies and all offices to be
filled by appointed officers of the United States is clear. The permissible actions of
all agencies and officers of the United States are determined by public law.
Congress also has authority to establish new for-profit and nonprofit
organizations in the private sector. Congress, for instance, established the fully
private, stockholder-owned Communications Satellite Corporation (ComSat) in 1962
(47 U.S.C. 701; 76 Stat. 419). Congressional authority with respect to organizations
functioning essentially under state law, however, has not been free of controversy.
The basis of the controversy often comes down to fundamental issues of managerial
accountability, fiduciary responsibility, and rights that inhere to governmental
organizations, but not to private organizations, such as the right to the full faith and
credit of the U.S. Treasury.6
Title 36 corporations constitute one of the categories of corporate organizations
chartered by Congress.7 It should be noted at the outset, however, that since 1994 the
House Judiciary Committee has placed a moratorium on the chartering of additional
nonprofit corporate organizations, a position agreed to by the Senate Judiciary
Committee. On four occasions since that time, however, the House and Senate have
acted on their own plenary authority to charter such corporations. Additionally, in
1997, the Judiciary Committees, citing unusual circumstances, chartered two
veterans’ organizations and then reasserted the moratorium.

5 U.S. Senate, The Constitution of the United States of America: Analysis and Interpretation,
S. Doc 108-17, 108th Cong., 2nd sess. (Washington: GPO, 2002), pp. 359-361, available at
[http://www.gpoaccess.go v/ c onstitution/pdf2002/011.pdf].
6 See discussion of the earlier status of the defunct Federal Asset Disposition Association
(FADA) established by the Federal Home Loan Bank Board in 1985 under the incorporation
act of the state of Colorado in U.S. General Accounting Office, Failed Thrifts: No
Compelling Evidence of a Need for the Federal Asset Disposition Association, FFO/FFD-89-
26 (Washington: GAO, 1989); and U.S. Congress, Senate, Committee on Governmental
Affairs, Managing the Public’s Business: Federal Government Corporations, by Ronald C.thst
Moe, Comm. Print 104-18, 104 Cong., 1 sess. (Washington: GPO, 1995), pp. 22-26.
7 On congressional charters generally, see CRS Report RS22230, Congressional or Federal
Charters: Overview and Current Issues, by Kevin R. Kosar.

Historical and Legal Context
There is no general law of incorporation at the federal level as there is in the
states and the District of Columbia. If Congress wishes to establish or charter a
corporation, it does so by enacting a law, and it is this specific legislation that
provides for the mission, authorities, and restrictions that will apply to the chartered
The general practice has been for each state and the District of Columbia to
exercise jurisdictional authority over the incorporation of for profit and nonprofit
organizations within their boundaries. This exercise of authority by states devolved
from the concept that states had authority at common law to create artificial bodies
for the purpose of engaging in various enterprises and carrying on certain activities.
Historically, state legislatures chartered each organization seeking corporate status
on a situation-specific basis, in much the same way as the federal government does
today. As time passed, states moved to provide for the creation of corporations
pursuant to statutory procedures.
Today, states have general incorporation laws, and often separate laws for profit
and nonprofit entities, which stipulate procedures, information, and standards to be
met for the issuance of a charter (“articles of incorporation”). A fee is typically
associated with the process.
Corporations operating in the District of Columbia are subject to the
constitutional delegation of authority over the District of Columbia as provided in
Article I, Section 8 of the United States Constitution. It was the practice of Congress
in the early years of the republic to grant franchises to District of Columbia
corporations on a case-by-case basis. For example, Congress incorporated the
Trustees of the Presbyterian Congregation in Georgetown in 1806 (2 Stat. 356). In
1901, Congress enacted a general statutory procedure allowing incorporation in the
District of Columbia by means of filing paperwork rather than by special action of
Congress. This procedure, analogous to that now used by the states, is found in Title

29 of the District of Columbia Code.

Given that Congress has never passed a general body of law applicable to the
operation and powers of the for-profit and nonprofit corporations it charters, it is
necessary for Congress to include such provisions in each act granting a charter.
There is considerable similarity between powers granted to federal corporations and
those granted by states to their corporations. Among the powers typically provided
(1) to sue and be sued;
(2) to contract and be contracted with;
(3) to acquire, hold and convey property;
(4) to enact by-laws;
(5) to have a seal;
(6) to appoint officers; and
(7) to borrow money for the purposes of the corporation.

There are also differences between a federal charter and a typical state charter.
One feature peculiar to federal charters is that, in most instances, statutes granting
federal charters require the submission of periodic financial statements to Congress
on certain activities of the corporation. On the other hand, states often permit actions
that are not permitted federally chartered corporations. For instance, under the
District of Columbia Nonprofit Act, a corporation is permitted “to lend money to and
otherwise assist its employees other than its officers and directors.” (D.C. Code, 29-


Title 36 corporations can, and generally do, function simultaneously under both
federal and state charters. Indeed, in most instances, organizations were chartered
and functioned under state law before, often long before, receiving federal charters.
Patriotic and National Organizations: Subtitle II
The chartering by Congress of organizations with a patriotic, charitable,th
historical, educational, or other eleemosynary purpose is essentially a 20 century
practice. Title 36 of the U.S. Code, where such corporate organizations are listed
with their charters, was revised in 1998 (P.L. 105-225), and in the process three
subtitles of nonprofit corporate organizations were listed:
Subtitle I: Patriotic and National Observances and Ceremonies. Part A,
Observances and Ceremonies, includes (1) the Benjamin Franklin Tercentenary
Commission (P.L. 107-202), (2) the Brown v. Board of Education 50th Anniversary
Commission (P.L. 107-41), (3) the James Madison Commemoration Commission
(P.L. 106-550), and (4) the Abraham Lincoln Bicentennial Commission (P.L. 106-
173). Part B, United States Government Organizations Involved with Observances
and Ceremonies, has three entries: (1) the American Battlefield Monuments
Commission, (2) the U.S. Holocaust Memorial Council, and (3) the President’s
Commission on Employment of People With Disabilities.
Subtitle II: Patriotic and National Organizations. The 93 corporate entries
included under Subtitle II range from the Agricultural Hall of Fame to Big Brothers
— Big Sisters of America to the Women’s Army Corps Veterans’ Association.
Subtitle III: Treaty Obligation Organizations. This is an organizational
category with one entry, the American National Red Cross (ANRC), which was first
chartered in 1900 and then re-chartered in 1905. The ANRC is an unusual
organization because the federal government has charged it with fulfilling U.S. treaty
obligations under the Geneva Conventions and aiding in disaster response.8
The attraction of Title 36 status for national organizations is that it tends to
provide an “official” imprimatur to their activities and, to that extent, it may provide
them prestige and indirect financial benefit.

8 See CRS Report RL33314, The Congressional Charter of the American National Red
Cross: Overview, History, and Analysis, by Kevin R. Kosar.

Congress, in chartering patriotic, charitable, professional and educational
organizations under Subtitle II, such as the National Academy of Public
Administration (36 U.S.C. 1501), does not make these organizations “agencies of the
United States” or confer any powers of a governmental character or assign any
benefits.9 These organization generally do not receive direct appropriations, they
exercise no federal powers, their debts are not covered by the full faith and credit of
the United States, and they do not enjoy original jurisdiction in the federal courts.
In effect, the federal chartering process is honorific in character. This honorific
character may be misleading to the public, however, when such organizations feature
statements or display logos that they are “chartered by Congress,” thus implying a
direct relationship to the federal government that does not in fact exist. In addition,
there may be an implication that Congress approves of the organizations and is
somehow overseeing its activities, which is not the case.
As with nearly all generalizations about congressionally chartered nonprofit
organizations, there are exceptions. At least one of these nonprofits receives much
congressional attention of its management, the U.S. Olympic Committee (36 U.S.C.
2005). In early 2003, the Senate Commerce Committee held hearings on
reorganizing the USOC.10
Governmental or Private?
While it is correct to state that the congressionally chartered nonprofit
organizations in Title 36 are not agencies of the United States, there are instances
when the boundary between the private and governmental sectors are blurred at best.
It is possible to argue that at least in a few instances the private character of the Title

36 corporation is reasonably in question.

For many years the Department of Defense administered the Civilian
Marksmanship Program. The program came under political pressures for various
reasons and the Department decided to request Congress to “privatize” the program,
which Congress agreed to in creating a federally chartered corporation titled
Corporation for the Promotion of Rifle Practice and Firearms Safety (36 U.S.C.
40701). This “privatization” exercise raises questions about the limits, if any, to
Congress’s authority to assign a “private” label to functions of a governmental
character. While the Corporation has some admittedly governmental attributes (e.g.,
upon dissolution of the Corporation, its assets are to be sold and revert to the U.S.

9 There was an exception to the rule that congressional charters do not confer any
governmental power upon or assign benefits to title 36 corporations. The Department of
Veterans Affairs formerly had a departmental rule that any veterans organization seeking
free space and telephones in its facilities had to have a congressional charter. That
requirement was removed in 1992.
10 Amy Shipley, “Senators Scold USOC Leaders: Congressional Oversight Urged as Part of
Restructuring,” Washington Post, January 29, 2003, p. D-1. A case could be made that the
U.S. Olympic Committee is misplaced being in Subtitle II. Its legal status and international
responsibilities, arguably, make it similar to the ANRC, which is found in Subtitle III.

Treasury), Congress has declared in its enabling statute that “the corporation is a
private corporation, not a department, agency, or instrumentality of the U.S.
Government.” Furthermore, the law provides that “an officer or employee of the
corporation is not an officer or employee of the Government.” Whether Congress has
the constitutional authority to assign an entity “private” status when in fact it has
substantial “governmental” attributes has been subject to debate and judicial
In the 106th Congress, a new entry was included in Part B of subtitle II of Title
36, the National Recording Preservation Foundation (Foundation). The background
for this Foundation requires some explanation. A National Recording Registry
(established under Public Law 106-474; 2 U.S.C. 1701) is to be housed in the Library
of Congress and managed by the Librarian of Congress through an adjunct
organization of the Library titled the National Recording Preservation Board (Board).
This Board consists of 17 members, selected by the Librarian from the organizations
listed in the statute. Personnel working for the Board are appointed by the Librarian
and are employees of the United States.
Additionally, the statute provided for the establishment of a National Recording
Preservation Foundation (Foundation) as a Title 36 nonprofit corporation (chapter
1524), not to be considered as an agency or establishment of the United States. The
purpose of the Foundation is to accept and administer private gifts to the Board. The
board of the Foundation consists of nine members, selected by the Librarian with the
latter serving in an ex-officio capacity. The Foundation is governed by its own by-
laws. The Librarian appoints a Secretary of the Board who serves as the executive
director. Officers of the Foundation are appointed and removed by the board of
directors while the Secretary appoints and removes employees. The Foundation has
“the usual powers of a corporation acting as a trustee in the District of Columbia.”
The U.S. government “is not liable for any debts, defaults, acts, or omissions of the
corporation,” yet the Foundation is authorized to directly receive appropriated funds.
The Foundation and its relationship to the Board and to the Librarian of Congress
may raise questions as to how “private” the Foundation actually is. At a minimum,

11 The Supreme Court in a 1995 case (Michael Lebron v. National Railway Passenger
Corporation; 513 U.S. 374) addressed the question of whether Congress can declare, by
statutory language, that a corporation created by Congress and assigned attributes of the
state, is a “private corporation.” The National Railway Passenger Corporation (AMTRAK),
established by Congress (45 U.S.C. 451) and enumerated as a “mixed-ownership
corporation” under 31 U.S.C. 9101(2), was sued by Michael Lebron for rejecting on
political grounds an advertising sign he had contracted with them to display. Lebron
claimed that his First Amendment rights had been abridged by AMTRAK because it is a
government corporation, and therefore an agency of the United States. AMTRAK argued,
on the other hand, that its legislation provides that it “will not be an agency or establishment
of the United States government” and thus is not subject to constitutional provisions
governing freedom of speech. The Court decided that while Congress can determine
AMTRAK’s governmental status for purposes within Congress’s control (e.g., whether it
is subject to statutes such as the Administrative Procedure Act), Congress cannot make the
final determination of AMTRAK’s status as a government entity for purposes of
determining constitutional rights of citizens affected by its actions.

the Foundation represents something of a departure from the usual Title 36 nonprofit
Another departure from the usual Title 36 nonprofit corporation model was
forthcoming in the 107th Congress with its approval of the National Help America
Vote Foundation. The Foundation is “a charitable and nonprofit corporation and is
not an agency or establishment of the U.S. Government.” (36 U.S.C. 1526; 116 Stat.
1717). The Foundation, which carries out its statutory mandate in consultation with
the chief election officials of the several states, receives its funding through direct
appropriations. Although it must follow provisions of a number of federal laws, it
is nonetheless to act as a trustee under District of Columbia law which permits it,
among other things, “to borrow money and issue instruments of indebtedness.” All
of which suggests questions regarding who is ultimately responsible for the
indebtedness. Is the National Help America Vote Foundation really private with the
right to declare bankruptcy?
Those private, nonprofit organizations seeking federal charters under Title 36
presumably perceive value behind such charters, and indeed, such may be the case.
Less recognizable, however, are the risks to private, nonprofit organizations of
having a charter. A chartered private organization may lose some of its private rights
and be made subject to management laws and regulations generally applicable only
to agencies of the United States. Such a situation came about in 1997 when Congress
amended the Federal Advisory Committee Act (5 U.S.C. Appendix; 86 Stat. 700) so
as to include two Title 36 corporations, the National Academy of Public
Administration and the National Academy of Sciences, under specific provisions
involving the appointment, permissible activities, and reports of corporation
committees doing work for executive agencies (P.L. 105-153).
This is the first instance in which Congress has made Title 36, Subtitle II
corporations subject to the provisions of a general management law, and while the
action may be supportable on public policy grounds, it does, to the extent of the
applicable provisions, diminish the private character of the affected organizations.
As such, it constitutes a precedent with implications.
Congressional Procedures
Corporate charters are granted in law by act of Congress. The procedure for the
grant begins like any other act of Congress, with the introduction of a bill by a
member of either the House of Representatives or the Senate. Bills proposing Title

36 corporate bodies are generally referred to the judiciary committees of each house.

If the measure is reported out of committee and approved by that house, it is sent to
the other house for approval, and then on to the President for signature, whereupon
it becomes law.
Prior to 1965, requests for congressional charters were considered on a case-by-
case basis without standards or criteria for incorporation. That year President Lyndonth
Johnson vetoed H.R. 339 (89 Congress), a bill that would have granted a corporate
charter to the Youth Councils on Civil Affairs. In his veto message President

Johnson raised several questions about the wisdom of continuing to grant charters on
a case-by-case basis “without the benefit of clearly established criteria as to
eligibility.” In the President’s veto message to Congress, he noted:
For some time I have been concerned with the question of whether we are
granting Federal charters to private organizations on a case-by-case basis without
the benefit of clearly established standards and criteria as to eligibility. Worthy
civic, patriotic, and philanthropic organizations can and do incorporate their
activities under state law. It seems obvious that Federal charters should be
granted, if at all, only on a selective basis and that they should meet some12
national interest standard.
The President requested in his veto message that the two judiciary committees
conduct a comprehensive study on the entire matter. Various proposals had been
made over the years to adopt federal statutory procedures for chartering nonprofit
organizations, but Congress remained unpersuaded.
In 1969, in response to the President’s request, subcommittees of both the House
and Senate Judiciary Committees jointly agreed to a statement of policy, “Standards
for Granting of Federal Charters.” This statement set forth five “minimum
standards” to be met by a private organization seeking a federal charter from
Any private organization petitioning Congress for the purpose of obtaining the
status of a Federal corporation shall be required to demonstrate to the satisfaction
of Congress that it is an organization which is —
(1) operating under a charter granted by a State or the District of
Columbia and that it has so operated for a sufficient period of time to
demonstrate its permanence and that its activities are clearly in the
public interest;
(2) of such unique character that chartering by the Congress as a Federal
corporation is the only appropriate form of incorporation;
(3) organized and operated solely for charitable, literary, educational,
scientific, patriotic, and civil improvement purposes;
(4) organized and operated as a nonpartisan and nonprofit organization;
(5) organized and operated for the primary purpose of conducting
activities which are of national scope and responsive to a national
need, which need cannot be met except upon the issuance of a Federal13
The status of a private, nonprofit organization receiving a federal charter does
not appear to be substantially different from that of a similar organization
incorporated under state law. Under the congressional standards agreed to in 1969,

12 A copy of the veto message is printed as H.Doc. 292, 89th Cong., 1st sess. (Washington:
GPO, 1965), p. 1.
13 U.S. Congress, House, Committee on the Judiciary, Standards for Granting of Federal
Charters to Non-Profit Corporations, committee print, 91st Cong.,, 1st sess. (Washington:
GPO, 1969).

it became a “minimum requirement” that organizations seeking a federal charter
demonstrate that they have been functioning properly under a state charter and that
their activities are clearly in the public interest. However, there are two elements of
a federal charter that appear to create some legal differences between federally
chartered corporations and similar corporate bodies functioning solely under state
First, there is a matter of the “citizenship” of the corporation. Generally,
corporations chartered by states are deemed to have “citizenship” in the state of
establishment. A corporate body created by Congress, however, may be designated
as a citizen of the United states for judicial purposes.14 The latter rule has been
supported in at least one instance involving a Title 36 corporation. In that case the
American Legion was held not to be a citizen of any state for the purposes of
invoking diversity of citizenship jurisdiction under 28 U.S.C. 1332(a)(1).15 Further,
Congress can itself provide for federal judicial jurisdiction in the charter.16
Second, because federal charters are laws of the United States, they may only
be amended by another law of the United States. If an organization seeks to alter its
primary purpose or change a provision in its charter, even a minor provision, it must
return to Congress and subject its request to the full legislative process. While the
process is generally routine, there are occasions when making even minor legislative
changes in the charter may open the organizations to challenge from the outside.
Oversight of Chartered Corporations
At present, federal supervision of congressionally chartered nonprofit
organizations is limited. All “private corporations established under federal law,” as
defined and listed in Subtitle II, are required to have independent audits annually,17
and to have the reports of the audits submitted to Congress (36 U.S.C. 10101). In
practice, the Subcommittee on Citizenship, Refugees, Border Security, and18
International Law receives the audit reports of all listed corporations and, where
corporations have not submitted reports in a timely manner, makes every effort to
communicate with said organizations and remind them of their legal responsibility.

14 Bankers Trust Company v. Texas and Pacific Railroad Company, 241 U.S. 295; 36 S.Ct.

569; 60 L.Ed. 1010 (1916).

15 Harris v. American Legion, 163 F.Supp. 700 (S.D. Ind. 1958), aff’d 261 F.2d. 594.
16 Patterson v. American National Red Cross, 101 F.Supp. 655 (S.D. Fla. 1951), aff’d 261
F.2d 594.
17 Exceptions to this rule exist. The Corporation for the Promotion of Rifle Practice and
Firearms Safety, created in 1996 by Congress, and not incorporated first in a state, is
exempted (§40707) from the audit requirements.
18 In the 104th Congress, the Subcommittee on Immigration and Claims became responsible
for congressionally chartered organizations, taking jurisdiction from the formerth
Subcommittee on Administrative Law and Government Relations. In the 108 Congress,
the title of this subcommittee was changed to Subcommittee on Immigration, Border
Security, and Claims.

Most of the corporations take this responsibility seriously and submit the necessary
reports. The House Judiciary Committee refers all received audits to the Government
Accountability Office (GAO) for review.19 The committee’s current role is strictly
ministerial. A GAO official testified on its review procedures in 1975:
Our reviews of the reports are generally restricted to desk review unless serious
questions or problems arise. When this occurs, we contact the independent
public accountant or the organization for clarification. The purpose of our
review is to determine whether in our professional judgement, the reports meet
the standards for reporting set forth in law.
The major problems noted by us to date have been: (1) lack of timely submission
of reports; (2) lack of sufficient explanations in the report; (3) financial
statements which do not meet the stipulated requirements of law; (4) audits not
conducted by independent certified public accountants; and (5) in some few
cases failure to follow generally accepted auditing standards.20
In addition, corporate bodies are required to make annual reports of their21
activities to the Congress. Public access to the records and reports of Title 36
corporations varies. For example, the charter of the National Ski Patrol System (36
U.S.C 1527) requires that its annual report be submitted each year to Congress but
prohibits the public printing of it. Traditionally, the Senate Judiciary Committee has
deferred to the House committee on these matters.
It is not the intention of the Judiciary committees of Congress or the
Government Accountability Office to “look over the shoulder” of these
organizations, or to conduct audits on their own authority. Congress is
understandably ambivalent with respect to these chartered organizations; on the one
hand it attempts to protect the public interest against abuse by those corporate bodies
while simultaneously seeking to limit its involvement in the internal affairs of these
private organizations. Thus far, in no instance has the charter of a Title 36
corporations been revoked although there have been several controversies in recent22

years involving chartered organizations and the chartering process generally.
19 See, for instance, U.S. General Accounting Office, Federally Chartered Corporation:
Review of the Financial Statement Audit Report for the United States Capitol Historical
Society for Fiscal Year 1997, B-280210, directed to the Chairman of the House Judiciary
Committee, Henry Hyde, June 16, 1998.
20 U.S. Congress, House, Committee on the Judiciary, Subcommittee on Administrative Law
and Government Relations, Oversight of Federal Incorporations, Hearings, 94th Cong., 1st
sess. (Washington: GPO, 1975), p. 18.
21 Again, exceptions to this rule exist. The Daughters of the American Revolution (36
U.S.C. 153107) and the American Historical Association report annually to the Smithsonian
Institution (36 U.S.C. 153107).
22 Conflicts involving Title 36 corporations arise from time to time. In September 1998, for
instance, press accounts described a decision by the Pentagon to ban for three years agents
of Academy Life Insurance Company from selling insurance on military bases. The
Pentagon charged that Academy Life agents routinely presented themselves as impartial
financial counselors with the non-profit, congressionally chartered Non Commissioned

In the 106th Congress, there was a controversy involving the Boy Scouts of
America (36 U.S.C. 309) with legislation introduced to revoke its congressional
charter. The Supreme Court in Boy Scouts of America v. Dale (120 S.Ct. 2446
(2000)) ruled that the Boy Scouts of America were within their First Amendment
rights as a private organization to exclude from a leadership position a person who
was in fundamental disagreement with its purposes as an organization. In this case,
the facts were that the Boy Scouts of America removed from an assistant scout
master position a young man who professed and practiced a homosexual lifestyle.
The national organization argued that this individual, whatever his personal merits,
had no “right” to hold a leadership position in an organization which disavowed that
lifestyle. The individual involved, James Dale, and some supporting organizations,
argued that as assistant scout master, Dale had performed his assigned
responsibilities well and that his lifestyle, irrespective of being contrary to one of the
purposes of the organization, was not a legitimate grounds to deny him a position of
leadership. To do so denied Dale his rights under New Jersey’s public
accommodations law. The issue, Dale’s attorneys argued, was not a constitutional,
First Amendment question.
Several members of Congress introduced legislation (H.R. 4892) to repeal the
federal charter of the Boy Scouts. Against the wishes of its sponsors, however, a
motion was brought to suspend the rules, an action that would pave the way for a
vote in the House. The tactic intended to put members on record as favoring or
opposing the bill without having to vote directly. The motion failed; 12-362, thereby
supporting the Supreme Court decision and, presumably, the chartering of the Boy
Scouts of America.23 During this debate the character and utility of the chartering
process was discussed.
More recently, in 2005, American Gold Star Mothers (36 U.S.C. 211) reportedly
refused to admit to membership a woman whose son was killed while serving in Iraq
in 2004 because she is not a citizen of the United States, as the corporation’s
constitution — not charter — required.24 Congressional concern over exclusionary
membership practices grew when Members learned that the congressional charters
of three Title 36 corporations explicitly limit membership to U.S. citizens.25

22 (...continued)
Officers Association (NCOA), not as salesmen. The company paid more than $1 million
a year for the endorsement of NCOA. Bradley Graham, “Pentagon Bars Life Insurance
Firm Because of ‘Deceptive’ Practices,” Washington Post, Sept. 18, 1998, p. A8.
23 U.S. Congressional Record, daily edition, Sept. 12, 2000, H7448-H7455. Sean Scully,
“House Rejects Effort to Punish Boy Scouts Over Gay Ban,” Washington Times, Sept. 14,

2000, p. A-3.

24 Jim Fitzgerald, “S.J. Woman Who Will Head Group Responds to Flap Over
Noncitizen,”Courier-Post, May 29, 2005; and Peter Applebome, “Some Mothers Are More
Equal Than Others,” New York Times, June 1, 2005, p. B1. AGSM has revised its
constitution to permit non-citizen mothers.
25 They are (1) American War Mothers, (2) Italian American War Veterans of the United
States, and (3) Paralyzed Veterans of America.

In 2006, another Title 36 organization drew media criticism. The National
Education Association of the United States (36 U.S.C. 1511) was chartered by
Congress in 1906, and its purposes are “(1) to elevate the character and advance the
interests of the profession of teaching; and (2) to promote the cause of education in
the United States.” (36 U.S.C. 151102) Reportedly the organization has been using
the dues of members to make contributions to political organizations (e.g., Rainbow
PUSH Coalition) and organizations with agendas that would not appear to be readily
connected with teaching and schooling (e.g., the Gay and Lesbian Alliance Against
Defamation). 26
Ending Charters — Maybe
In some cases, Title 36 corporations have ceased to exist without congressional
action. The Grand Army of the Republic (43 Stat. 458) and the United Spanish War
Veterans (54 Stat. 152) ceased to exist once their last members died. A similar fate
awaits the Veterans of World War I (36 U.S.C. 2303) of the United States, whose27
membership has dwindled from over 800,000 to less than a dozen.
Hearings held by subcommittees of the respective judiciary committees of the
House and Senate in the early 1970s indicated an increasing level of dissatisfaction
by members of Congress respecting the intent and practice of congressional
chartering of private, nonprofit organizations. More organizations, through
sympathetic members of Congress, were requesting charters, and the requesting
organizations were often extending the definition of congressionally chartered
corporations beyond that typically associated with patriotic and service
organiz ations.28
In April 1992, chairman Barney Frank announced that the House Subcommittee
on Administrative Law and Government Relations would no longer consider requests
for charters. The reason, Frank said, was that the charters were “a nuisance,” a

26 Editorial, “Teachers Pets,” Opinion Journal, January 3, 2006, available at
[]. This is not the first instance
where the media has reported that the National Education Association has engaged in
political activities. In 1980, the New York Times reported that an NEA spokesperson told
one of its reporters, “We endorsed Carter in 1976 on the basis of his campaign pledges. And
he delivered on virtually every one of those promises: increased Federal funding for public
education, the establishment of the Department of Education, opposition to the tuition tax
credit program, support of the E.R.A. and human and civil rights.” Leslie Bennetts,
“Teachers Show Their Strength at Garden,” New York Times, August 14, 1980, p. B3.
27 Lisa Hoffman, “A Dozen Vets of World War I Still Soldier On,” Scripps Howard News
Service, November 8, 2006, available at [
detail&pk=WWIV ET S-11-08-06].
28 U.S. Congress, Senate, Committee on the Judiciary, Subcommittee on Federal Charters,
Holidays and Celebrations, Federal Charters for Nonprofit Corporations, Hearings, 92ndst
Cong., 1 sess. (Washington: GPO, 1971); U.S. Congress, House, Committee on the
Judiciary, Subcommittee on Administrative Law and Government Relations, Oversight onthst
Federal Incorporations, Hearings, 94 Cong., 1 sess. (Washington: GPO, 1975).

meaningless act; granting charters implied that Congress was exercising some sort
of supervision over the groups and it was not. “When I first raised the issue, ‘What
is a federal charter?’ The answer was, a federal charter is a federal charter is a
federal charter.... You could make up an organization for the preservation of Albert
DeSalvo, the Boston Strangler. We’d have no way of checking into it.”29 Moreover,
the subcommittee understood that the committee could be drawn into public disputes
touched off by any controversial activities or statements by a Title 36 corporation or
employees or members thereof.
Continuing to review applications on the basis of merit with the possibility of
rejection, it was asserted, was subjecting the subcommittee to pressures and the
potential for embarrassment to both the requester and Congress. By indicating an end
altogether of the practice of chartering, it was hoped the subcommittee also would
be “leveling the playing field” among worthy organizations. This view was
formalized in the 104th Congress when the subcommittee decided that it would no
longer consider any legislation to grant new federal charters because such charters
were unnecessary for the operations of any charitable, nonprofit organization and
falsely implied to the public that a chartered organization and its activities somehow
carried a congressional “seal of approval.” This moratorium has been continued by
the House subcommittee of jurisdiction30 in each subsequent Congress, most recently
on June 6, 2007.31
This subcommittee moratorium did not, however, stop all requests for, or
consideration of, charter requests. Notably, it remains possible for another
committee, or for the full Congress in its plenary capacity, to “charter” nonprofit
organizations and have them listed in Title 36. Indeed, this has been the case in
several instances in recent years. In 1996, the Fleet Reserve Association was
chartered (110 Stat. 2760) without the legislation being referred to the Judiciary
committees of the respective chambers. Also in recent years, corporate bodies (e.g.,
Corporation for Promotion of Rifle Practice and Firearms Safety, 36 U.S.C. 40701;
National Recording Preservation Foundation, 36 U.S.C. 152401) have been created
by Congress and listed by the House Office of Law Revision Counsel under Title 36.
In the 105th Congress, the moratorium notwithstanding, two additional nonprofit
organizations were chartered. Each case represented a specific and unusual set of
circumstances. In the first session, the Senate Committee on Armed Forces approved
a bill, one provision of which chartered the Air Force Sergeants Association (AFSA).
This charter proposal had not been referred to the judiciary committees for their
review and approval. When the bill reached conference, the jurisdictional issues
were raised and a negotiated settlement reached. AFSA would receive its charter in

29 Bill McAllister, “Congressional Charters Abolished: Laws Recognizing Organizations
Seen as Meaningless Nuisance,” Washington Post, April 9, 1992, p. 25.
30 In the 110th Congress, the Subcommittee on Immigration, Citizenship, Refugees, Border
Security, and International Law has jurisdiction of legislation on federal charters. See
[http://j about/subcommittee.html ].
31 The moratorium is not to be found in the rules of the subcommittee. Rather, the practice
has been for the subcommittee move to adopt a policy of not granting new charters and then
to vote to approve this policy.

this instance (P.L. 105-85; 36 U.S.C. 20201), but the jurisdictional authority of the
judiciary committees, and thus the moratorium, was reaffirmed.32
In the second session of the 105th Congress, a bill to award a charter to the
American GI Forum was approved, this time with the approval of the judiciary
committees. In this instance, the circumstances involved an act of discouragement
by the committee toward a would-be charter applicant under the rules followed prior
to 1989. The organization believed that it had been improperly informed and unfairly
evaluated during its earlier application and deserved to be reconsidered for
chartering. The committee permitted the organization to make its case and concluded
that due to exceptional circumstances, an exemption from the moratorium was
warranted in this instance and thus a charter was granted (P.L. 105-231; 36 U.S.C.


Despite the moratorium, Congress chartered another veteran’s group, the Korean
War Veterans Associated, Incorporated in 2008 (P.L. 110-254). H.R. 2852 was
introduced by Representative Steny Hoyer on June 25, 2007. The bill was referred
to the House Subcommittee on Immigration, Citizenship, Refugees, Border Security,
and International Law, which took no action on it. Senator Benjamin L. Cardin
introduced S. 1692 on the same date. S. 1692 was referred to the Senate Committee
on the Judiciary, which reported it favorably on September 7, 2007. Five days later,
the Senate passed S. 1692 by unanimous consent. S. 1692 was received in the House
of Representatives on September 14, 2007, and held at the desk. On June 17, 2008,
S. 1692 was passed by a voice vote under a suspension of rules. President George
W. Bush signed it on June 30, 2008.
The congressional practice of chartering selected private, nonprofit
organizations that engage in patriotic, charitable, historical, and educational activitiesth
was a 20 century phenomenon. The chartering process itself tends to send mixed
signals to the public. Although the charter does not award any material governmental
status to the nonprofit corporation (e.g., right of eminent domain) there is an
understandable assumption on the part of the public that somehow the charter
signifies U.S. government approval of the corporation’s activities and that the
corporation is being supervised. Neither assumption is merited.

32 H.Rept. 105-340, sec. 1085 (b) reads: “(a) FINDINGS — Congress finds that the practice
of providing by statute Federal charters to certain nonprofit organizations — (1) may be
perceived as implying a Government imprimatur of approval of those organizations; and (2)
may mistakenly lead to public perception that the United States ensures the integrity and
worthiness of those organizations. (b) SENSE OF CONGRESS — It is the sense of
Congress — (1) that because of the perceived implicit Government imprimatur of approval
conveyed by enactment of a Federal charter for an organization, such a charter should be
granted only in the rarest and most extraordinary cases; and (2) that no statutory Federal
charter should be enacted after the enactment of this Act unless the charter is approved by
Congress upon favorable report by the committees of jurisdiction of the respective Houses.”

The House Judiciary Committee, the key committee in the process, after some
years of experience and several hearings, concluded that the chartering process
served no useful public purpose and issued a formal moratorium on requests for
charters in 1992. It remains possible, however, for another committee or the full
Congress to bypass the judiciary committees and initiate on their own the approval
process for chartering a nonprofit organization. This bypass strategy for chartering
Title 36 corporations has been successfully pursued (concluding with a presidential
public law signature) on several occasions in recent years. Partly in response to
these actions, with each new Congress the House Judiciary Committee has reaffirmed
its moratorium on approval of charters. It remains to be seen, however, how effective
this moratorium will be against the many attractions of the chartering practice.

Appendix: Title 36, Subtitle II:
Patriotic and National Organizations
Part B — Organizations
201. Agricultural Hall of Fame20101
202. Air Force Sergeants Association 20201
203. American Academy of Arts and Letters20301
205. American Chemical Society20501
207. American Council of Learned Societies20701
209. American Ex-Prisoners of War20901
210. American GI Forum of the United States21001
211. American Gold Star Mothers, Incorporated21101
213. American Historical Association 21301
215. American Hospital of Paris21501
217. The American Legion21701
219. The American National Theater and Academy21901
221. The American Society of International Law22101
223. American Symphony Orchestra League22301
225. American War Mothers22501
227. AMVETS (American Veterans of World War II, Korea, and Vietnam)22701
229. Army and Navy Union of the United States of America22901
231. Aviation Hall of Fame23101
301. Big Brothers — Big Sisters of America30101
303. Blinded Veterans Association30301
305. Blue Star Mothers of America, Inc.30501
307. Board for Fundamental Education30701
309. Boy Scouts of America30901
311. Boys and Girls Clubs of America31101
401. Catholic War Veterans of the United States of America40101
403. Civil Air Patrol40301
405. Congressional Medal of Honor Society of the United States of America40501
407. Corporation for the Promotion of Rifle Practice and Firearms Safety40701
501. Daughters of Union Veterans of the Civil War 1861-6550101
503. Disabled American Veterans50301
601. 82nd Airborne Division Association, Inc.60101
701. Fleet Reserve Association70101
703. Former Members of Congress70301
705. The Foundation of the Federal Bar Association70501
707. Frederick Douglass Memorial and Historical Association70701
709. Future Farmers of America70901
801. General Federation of Women’s Clubs80101
803. Girl Scouts of the United States of America80301

805. Gold Star Wives of America80501

1001. Italian American War Veterans of the United States100101
1101. Jewish War Veterans of the United States of America110101
1103. Jewish War Veterans, USA, National Memorial, Inc.110301
1201. Korean War Veterans Association, Incorporated120101
1301. Ladies of the Grand Army of the Republic130101
1303. Legion of Valor of the United States, Inc.130301
1305. Little League Baseball, Inc.130501
1401. Marine Corps League140101
1403. The Military Chaplains Association of the United States of America140301
1405. Military Order of the Purple Heart of the United States of America,140501
1407. Military Order of the World Wars140701
1501. National Academy of Public Administration150101
1503. National Academy of Sciences150301
1505. National Conference of State Societies, Washington, District of150501
1507. National Conference on Citizenship150701
1509. National Council on Radiation Protection and Measurements150901
1511. National Education Association of the United States151101
1513. National Fallen Firefighters Foundation151301
1515. National Federation of Music Clubs151501
1517. National Film Preservation Foundation151701
1519. National Fund for Medical Education151901
1521. National Mining Hall of Fame and Museum152101
1523. National Music Council152301
1524. National Recording Preservation Foundation152401
1525. National Safety Council152501
1526. Help America Vote Foundation152601
1527. National Ski Patrol System, Inc.152701
1529. National Society, Daughters of the American Colonists152901
1531. The National Society of the Daughters of the American Revolution153101
1533. National Society of the Sons of the American Revolution153301
1535. National Tropical Botanical Garden153501
1537. National Woman’s Relief Corps, Auxiliary to the Grand Army of the153701
1539. The National Yeomen F153901
1541. Naval Sea Cadet Corps154101
1543. Navy Club of the United States of America154301
1545. Navy Wives Clubs of America154501
1547. Non Commissioned Officers Association of the United States of154701
America, Inc.
1701. Paralyzed Veterans of America170101
1703. Pearl Harbor Survivors Association170301

1705. Polish Legion of American Veterans, U.S.A.170501

1901. Reserve Officers Association of the United States190101
1903. Retired Enlisted Association, Inc.190301
2001. Society of American Florists and Ornamental Horticulturists200101
2003. Sons of Union Veterans of the Civil War200301
2101. Theodore Roosevelt Association210101
2103. 369th Veterans’ Association210301
2201. United Service Organizations, Inc.220101
2203. United States Capital Historical Society220301
2205. United States Olympic Committee220501
2207. United States Submarine Veterans of World War II220701
2301. Veterans of Foreign Wars of the United States230101
2303. Veterans of World War I of the United States of America, Inc.230301
2305. Vietnam Veterans of America, Inc.230501
2401. Women’s Army Corps Veterans’ Association240101