Congressional charter

A congressional charter is a law passed by the United States Congress that states the mission, authority and activities of a group. Congress issued federal charters from 1791 until 1992 under Title 36 of the United States Code.

The relationship between Congress and the organization is largely a symbolic honorific giving the organization the aura of being "officially" sanctioned by the U.S. government. However Congress does not oversee or supervise organizations with the charter (other than receiving a yearly financial statement). In order to clarify that the chartered organizations are not government entities and not supervised by the government both the House and the Senate in 1990s agreed not to issue additional charters.^[1]

Background

Prior to the District of Columbia being granted the ability to issue corporate charters in the late 1800s, corporations operating in the District required a congressional charter. With limited exceptions, most corporations created by Congress are not federally chartered, but are simply created as District of Columbia corporations as a result of the enabling law.

Some charters create corporate entities and is akin to being incorporated at the federal level. Examples of such charters are the Federal Reserve Bank, Federal Deposit Insurance Corporation, Fannie Mae, Freddie Mac, and the Tennessee Valley Authority. Other national level groups with such charters are the American Red Cross, National Academy of Sciences, Boy and Girl Scouts, the 4H Club, National Park Foundation and the Disabled American Veterans, National Trust for Historic Preservation, the United States Olympic Committee, the National Conference on Citizenship, or NeighborWorks America.

More common is a charter that recognizes a group already incorporated at the state level. These mostly honorific charters tend "to provide an 'official' imprimatur to their activities, and to that extent it may provide them prestige and indirect financial benefit." ^[2] Groups that fall into this group are usually veterans’ groups, fraternal groups or youth groups like the USO, the Girl Scouts of the USA or the Boy Scouts of America. Congress has chartered about 100 fraternal or patriotic groups.^[3]

Process

Eligibility for a charter is based on a group’s activities, whether they are unique, and whether or not they are in the public interest. If this is the case, a bill to grant a charter is introduced in Congress and must be voted into law.

There have been questions about the federal government’s power to manage corporations who have received a charter.^[2] Because of questions on who is responsible for the activities of these entities, the issuance of charters was officially stopped in 1992, though some exceptions have been made. The granting of a charter does not include congressional oversight.^[3]

See also

• Title 36 of the United States Code
• Royal charter

External links

• Congressional or Federal Charters: Overview and Current Issues
• Congressionally Chartered Nonprofit Organizations ("Title 36 Corporations"): What They Are and How Congress Treats Them
• U.S. Code Title 36, via United States Government Printing Office
• U.S. Code Title 36, via Cornell University
• National Tropical Botanical Garden

References

1. ^ http://www.llsdc.org/attachments/wysiwyg/544/CRS-RL30340.pdf
2. ^ ^{a b} "Congressionally Chartered Nonprofit Organizations ("Title 36 Corporations"): What They Are and How Congress Treats Them". Congressional Research Service. 2004-04-08. http://www.opencrs.com/document/RL30340/2004-04-08%2000:00:00. 
3. ^ ^{a b} "What is a congressional charter?". Knight Ridder Newspapers. 2007-12-12. http://www.mcclatchydc.com/reports/veterans/story/13136.html.