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[110th Congress Public Law 26]
[From the U.S. Government Printing Office]

[DOCID: f:publ026.110]

[[Page 121 STAT. 103]]

Public Law 110-26
110th Congress

                                 An Act

 
To amend the Congressional Charter of The American National Red Cross to 
modernize its governance structure, to enhance the ability of the board 
of governors of The American National Red Cross to support the critical 
mission of The American National Red Cross in the 21st century, and for 
         other purposes. <<NOTE: May 11, 2007 -  [H.R. 1681]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: The American National Red 
Cross Governance Modernization Act of 2007. 36 USC 101 
note.>> assembled,
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``The American National Red Cross 
Governance Modernization Act of 2007''.
SEC. 2. <<NOTE: 36 USC 300101 note.>> FINDINGS; SENSE OF CONGRESS.

    (a) Findings.--Congress makes the following findings:
            (1) Substantive changes to the Congressional Charter of The 
        American National Red Cross have not been made since 1947.
            (2) In February 2006, the board of governors of The American 
        National Red Cross (the ``Board of Governors'') commissioned an 
        independent review and analysis of the Board of Governors' role, 
        composition, size, relationship with management, governance 
        relationship with chartered units of The American National Red 
        Cross, and whistle blower and audit functions.
            (3) In an October 2006 report of the Board of Governors, 
        entitled ``American Red Cross Governance for the 21st Century'' 
        (the ``Governance Report''), the Board of Governors recommended 
        changes to the Congressional Charter, bylaws, and other 
        governing documents of The American National Red Cross to 
        modernize and enhance the effectiveness of the Board of 
        Governors and governance structure of The American National Red 
        Cross.
            (4) It is in the national interest to create a more 
        efficient governance structure of The American National Red 
        Cross and to enhance the Board of Governors' ability to support 
        the critical mission of The American National Red Cross in the 
        21st century.
            (5) It is in the national interest to clarify the role of 
        the Board of Governors as a governance and strategic oversight 
        board and for The American National Red Cross to amend its 
        bylaws, consistent with the recommendations described in the 
        Governance Report, to clarify the role of the Board of Governors 
        and to outline the areas of its responsibility, including--

[[Page 121 STAT. 104]]

                    (A) reviewing and approving the mission statement 
                for The American National Red Cross;
                    (B) approving and overseeing the corporation's 
                strategic plan and maintaining strategic oversight of 
                operational matters;
                    (C) selecting, evaluating, and determining the level 
                of compensation of the corporation's chief executive 
                officer;
                    (D) evaluating the performance and establishing the 
                compensation of the senior leadership team and providing 
                for management succession;
                    (E) overseeing the financial reporting and audit 
                process, internal controls, and legal compliance;
                    (F) holding management accountable for performance;
                    (G) providing oversight of the financial stability 
                of the corporation;
                    (H) ensuring the inclusiveness and diversity of the 
                corporation;
                    (I) ensuring the chapters of the corporation are 
                geographically and regionally diverse;
                    (J) providing oversight of the protection of the 
                brand of the corporation; and
                    (K) assisting with fundraising on behalf of the 
                corporation.
            (6)(A) The selection of members of the Board of Governors is 
        a critical component of effective governance for The American 
        National Red Cross, and, as such, it is in the national interest 
        that The American National Red Cross amend its bylaws to provide 
        a method of selection consistent with that described in the 
        Governance Report.
            (B) The new method of selection should replace the current 
        process by which--
                    (i) 30 chartered unit-elected members of the Board 
                of Governors are selected by a non-Board committee which 
                includes 2 members of the Board of Governors and other 
                individuals elected by the chartered units themselves;
                    (ii) 12 at-large members of the Board of Governors 
                are nominated by a Board committee and elected by the 
                Board of Governors; and
                    (iii) 8 members of the Board of Governors are 
                appointed by the President of the United States.
            (C) The new method of selection described in the Governance 
        Report reflects the single category of members of the Board of 
        Governors that will result from the implementation of this Act:
                    (i) All Board members (except for the chairman of 
                the Board of Governors) would be nominated by a single 
                committee of the Board of Governors taking into account 
                the criteria outlined in the Governance Report to assure 
                the expertise, skills, and experience of a governing 
                board.
                    (ii) The nominated members would be considered for 
                approval by the full Board of Governors and then 
                submitted to The American National Red Cross annual 
                meeting of delegates for election, in keeping with the 
                standard corporate practice whereby shareholders of a 
                corporation elect members of a board of directors at its 
                annual meeting.
            (7) The United States Supreme Court held The American 
        National Red Cross to be an instrumentality of the United

[[Page 121 STAT. 105]]

        States, and it is in the national interest that the 
        Congressional Charter confirm that status and that any changes 
        to the Congressional Charter do not affect the rights and 
        obligations of The American National Red Cross to carry out its 
        purposes.
            (8) Given the role of The American National Red Cross in 
        carrying out its services, programs, and activities, and meeting 
        its various obligations, the effectiveness of The American 
        National Red Cross will be promoted by the creation of an 
        organizational ombudsman who--
                    (A) will be a neutral or impartial dispute 
                resolution practitioner whose major function will be to 
                provide confidential and informal assistance to the many 
                internal and external stakeholders of The American 
                National Red Cross;
                    (B) will report to the chief executive officer and 
                the audit committee of the Board of Governors; and
                    (C) will have access to anyone and any documents in 
                The American National Red Cross.

    (b) Sense of Congress.--It is the sense of Congress that--
            (1) charitable organizations are an indispensable part of 
        American society, but these organizations can only fulfill their 
        important roles by maintaining the trust of the American public;
            (2) trust is fostered by effective governance and 
        transparency, which are the principal goals of the 
        recommendations of the Board of Governors in the Governance 
        Report and this Act;
            (3) Federal and State action play an important role in 
        ensuring effective governance and transparency by setting 
        standards, rooting out violations, and informing the public;
            (4) while The American National Red Cross is and will remain 
        a Federally chartered instrumentality of the United States, and 
        it has the rights and obligations consistent with that status, 
        The American National Red Cross nevertheless should maintain 
        appropriate communications with State regulators of charitable 
        organizations and should cooperate with them as appropriate in 
        specific matters as they arise from time to time; and
            (5) while The American National Red Cross is and will remain 
        a Federally chartered instrumentality of the United States, and 
        it has the rights and obligations consistent with that status, 
        The American National Red Cross nevertheless should maintain 
        appropriate communications and collaborations with local, 
        community, and faith-based non-profit organizations, including 
        those organizations that work within minority communities.
SEC. 3. ORGANIZATION.

    Section 300101 of title 36, United States Code, is amended--
            (1) in subsection (a), by inserting ``a Federally chartered 
        instrumentality of the United States and'' before ``a body 
        corporate and politic''; and
            (2) in subsection (b), by inserting at the end the following 
        new sentence: ``The corporation may conduct its business and 
        affairs, and otherwise hold itself out, as the `American Red 
        Cross' in any jurisdiction.''.
SEC. 4. PURPOSES.

    Section 300102 of title 36, United States Code, is amended--

[[Page 121 STAT. 106]]

            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by adding at the end the following paragraph:
            ``(5) to conduct other activities consistent with the 
        foregoing purposes.''.
SEC. 5. MEMBERSHIP AND CHAPTERS.

    Section 300103 of title 36, United States Code, is amended--
            (1) in subsection (a), by inserting ``, or as otherwise 
        provided,'' before ``in the bylaws'';
            (2) in subsection (b)(1)--
                    (A) by striking ``board of governors'' and inserting 
                ``corporation''; and
                    (B) by inserting ``policies and'' before 
                ``regulations related''; and
            (3) in subsection (b)(2)--
                    (A) by inserting ``policies and'' before 
                ``regulations shall require''; and
                    (B) by striking ``national convention'' and 
                inserting ``annual meeting''.
SEC. 6. BOARD OF GOVERNORS.

    Section 300104 of title 36, United States Code, is amended to read 
as follows:
``Sec. 300104. Board of governors

    ``(a) Board of Governors.--
            ``(1) In general.--The board of governors is the governing 
        body of the corporation with all powers of governing and 
        directing, and of overseeing the management of the business and 
        affairs of, the corporation.
            ``(2) Number.--The board of governors shall fix by 
        resolution, from time to time, the number of members 
        constituting the entire board of governors, provided that--
                    ``(A) as of March 31, 2009, and thereafter, there 
                shall be no fewer than 12 and no more than 25 members; 
                and
                    ``(B) as of March 31, 2012, and thereafter, there 
                shall be no fewer than 12 and no more than 20 members 
                constituting the entire board.
        Procedures to implement the preceding sentence shall be provided 
        in the bylaws.
            ``(3) Appointment.--The governors shall be appointed or 
        elected in the following manner:
                    ``(A) Chairman.--
                          ``(i) In general.--The board of governors, in 
                      accordance with procedures provided in the bylaws, 
                      shall recommend to the President an individual to 
                      serve as chairman of the board of governors. If 
                      such recommendation is approved by the President, 
                      the President shall appoint such individual to 
                      serve as chairman of the board of governors.
                          ``(ii) Vacancies.--Vacancies in the office of 
                      the chairman, including vacancies resulting from 
                      the resignation, death, or removal by the 
                      President of the chairman, shall be filled in the 
                      same manner described in clause (i).

[[Page 121 STAT. 107]]

                          ``(iii) Duties.--The chairman shall be a 
                      member of the board of governors and, when 
                      present, shall preside at meetings of the board of 
                      governors and shall have such other duties and 
                      responsibilities as may be provided in the bylaws 
                      or a resolution of the board of governors.
                    ``(B) Other members.--
                          ``(i) In general.--Members of the board of 
                      governors other than the chairman shall be elected 
                      at the annual meeting of the corporation in 
                      accordance with such procedures as may be provided 
                      in the bylaws.
                          ``(ii) Vacancies.--Vacancies in any such 
                      elected board position and in any newly created 
                      board position may be filled by a vote of the 
                      remaining members of the board of governors in 
                      accordance with such procedures as may be provided 
                      in the bylaws.

    ``(b) Terms of Office.--
            ``(1) In general.--The term of office of each member of the 
        board of governors shall be 3 years, except that--
                    ``(A) the board of governors may provide under the 
                bylaws that the terms of office of members of the board 
                of governors elected to the board of governors before 
                March 31, 2012, may be less than 3 years in order to 
                implement the provisions of subparagraphs (A) and (B) of 
                subsection (a)(2); and
                    ``(B) any member of the board of governors elected 
                by the board to fill a vacancy in a board position 
                arising before the expiration of its term may, as 
                determined by the board, serve for the remainder of that 
                term or until the next annual meeting of the 
                corporation.
            ``(2) Staggered terms.--The terms of office of members of 
        the board of governors (other than the chairman) shall be 
        staggered such that, by March 31, 2012, and thereafter, \1/3\ of 
        the entire board (or as near to \1/3\ as practicable) shall be 
        elected at each successive annual meeting of the corporation 
        with the term of office of each member of the board of governors 
        elected at an annual meeting expiring at the third annual 
        meeting following the annual meeting at which such member was 
        elected.
            ``(3) Term limits.--No person may serve as a member of the 
        board of governors for more than such number of terms of office 
        or years as may be provided in the bylaws.

    ``(c) Committees and Officers.--The board--
            ``(1) may appoint, from its own members, an executive 
        committee to exercise such powers of the board when the board is 
        not in session as may be provided in the bylaws;
            ``(2) may appoint such other committees or advisory councils 
        with such powers as may be provided in the bylaws or a 
        resolution of the board of governors;
            ``(3) shall appoint such officers of the corporation, 
        including a chief executive officer, with such duties, 
        responsibilities, and terms of office as may be provided in the 
        bylaws or a resolution of the board of governors; and
            ``(4) may remove members of the board of governors (other 
        than the chairman), officers, and employees under such 
        procedures as may be provided in the bylaws or a resolution of 
        the board of governors.

[[Page 121 STAT. 108]]

    ``(d) Advisory Council.--
            ``(1) Establishment.--There shall be an advisory council to 
        the board of governors.
            ``(2) Membership; appointment by president.--
                    ``(A) In general.--The advisory council shall be 
                composed of no fewer than 8 and no more than 10 members, 
                each of whom shall be appointed by the President from 
                principal officers of the executive departments and 
                senior officers of the Armed Forces whose positions and 
                interests qualify them to contribute to carrying out the 
                programs and purposes of the corporation.
                    ``(B) Members from the armed forces.--At least 1, 
                but not more than 3, of the members of the advisory 
                council shall be selected from the Armed Forces.
            ``(3) Duties.--The advisory council shall advise, report 
        directly to, and meet, at least 1 time per year with the board 
        of governors, and shall have such name, functions and be subject 
        to such procedures as may be provided in the bylaws.

    ``(e) Action Without Meeting.--Any action required or permitted to 
be taken at any meeting of the board of governors or of any committee 
thereof may be taken without a meeting if all members of the board or 
committee, as the case may be, consent thereto in writing, or by 
electronic transmission and the writing or writings or electronic 
transmission or transmissions are filed with the minutes of proceedings 
of the board or committee. Such filing shall be in paper form if the 
minutes are maintained in paper form and shall be in electronic form if 
the minutes are maintained in electronic form.
    ``(f) Voting by Proxy.--
            ``(1) In general.--Voting by proxy is not allowed at any 
        meeting of the board, at the annual meeting, or at any meeting 
        of a chapter.
            ``(2) Exception.--The board may allow the election of 
        governors by proxy during any emergency.

    ``(g) Bylaws.--
            ``(1) In general.--The board of governors may--
                    ``(A) at any time adopt bylaws; and
                    ``(B) at any time adopt bylaws to be effective only 
                in an emergency.
            ``(2) Emergency bylaws.--Any bylaws adopted pursuant to 
        paragraph (1)(B) may provide special procedures necessary for 
        managing the corporation during the emergency. All provisions of 
        the regular bylaws consistent with the emergency bylaws remain 
        effective during the emergency.

    ``(h) Definitions.--For purposes of this section--
            ``(1) the term `entire board' means the total number of 
        members of the board of governors that the corporation would 
        have if there were no vacancies; and
            ``(2) the term `emergency' shall have such meaning as may be 
        provided in the bylaws.''.
SEC. 7. POWERS.

    Subsection (a)(1) of section 300105 of title 36, United States Code, 
is amended by striking ``bylaws'' and inserting ``policies''.
SEC. 8. ANNUAL MEETING.

    Section 300107 of title 36, United States Code, is amended to read 
as follows:

[[Page 121 STAT. 109]]

``Sec. 300107. Annual meeting

    ``(a) In General.--The annual meeting of the corporation is the 
annual meeting of delegates of the chapters.
    ``(b) Time of Meeting.--The annual meeting shall be held as 
determined by the board of governors.
    ``(c) Place of Meeting.--The board of governors is authorized to 
determine that the annual meeting shall not be held at any place, but 
may instead be held solely by means of remote communication subject to 
such procedures as are provided in the bylaws.
    ``(d) Voting.--
            ``(1) In general.--In matters requiring a vote at the annual 
        meeting, each chapter is entitled to at least 1 vote, and voting 
        on all matters may be conducted by mail, telephone, telegram, 
        cablegram, electronic mail, or any other means of electronic or 
        telephone transmission, provided that the person voting shall 
        state, or submit information from which it can be determined, 
        that the method of voting chosen was authorized by such person.
            ``(2) Establishment of number of votes.--
                    ``(A) In general.--The board of governors shall 
                determine on an equitable basis the number of votes that 
                each chapter is entitled to cast, taking into 
                consideration the size of the membership of the 
                chapters, the populations served by the chapters, and 
                such other factors as may be determined by the board.
                    ``(B) Periodic review.--The board of governors shall 
                review the allocation of votes at least every 5 
                years.''.
SEC. 9. ENDOWMENT FUND.

    Section 300109 of title 36, United States Code, is amended--
            (1) by striking ``nine'' from the first sentence thereof; 
        and
            (2) by striking the second sentence and inserting the 
        following: ``The corporation shall prescribe policies and 
        regulations on terms and tenure of office, accountability, and 
        expenses of the board of trustees.''.
SEC. 10. ANNUAL REPORT AND AUDIT.

    Subsection (a) of section 300110 of title 36, United States Code, is 
amended to read as follows:
    ``(a) Submission of Report.--As soon as practicable after the end of 
the corporation's fiscal year, which may be changed from time to time by 
the board of governors, the corporation shall submit a report to the 
Secretary of Defense on the activities of the corporation during such 
fiscal year, including a complete, itemized report of all receipts and 
expenditures.''.
SEC. 11. COMPTROLLER GENERAL OF THE UNITED STATES AND OFFICE OF 
                      THE OMBUDSMAN.

    (a) In General.--Chapter 3001 of title 36, United States Code, is 
amended by redesignating section 300111 as section 300113 and by 
inserting after section 300110 the following new sections:
``Sec. 300111. Authority of the Comptroller General of the United 
                      States

    ``The Comptroller General of the United States is authorized to 
review the corporation's involvement in any Federal program or activity 
the Government carries out under law.

[[Page 121 STAT. 110]]

``Sec. 300112. Office of the Ombudsman

    ``(a) Establishment.--The corporation shall establish an Office of 
the Ombudsman with such duties and responsibilities as may be provided 
in the bylaws or a resolution of the board of governors.
    ``(b) Report.--
            ``(1) In general.--The Office of the Ombudsman shall submit 
        annually to the appropriate Congressional committees a report 
        concerning any trends and systemic matters that the Office of 
        the Ombudsman has identified as confronting the corporation.
            ``(2) Appropriate congressional committees.--For purposes of 
        paragraph (1), the appropriate Congressional committees are the 
        following committees of Congress:
                    ``(A) Senate committees.--The appropriate 
                Congressional committees of the Senate are--
                          ``(i) the Committee on Finance;
                          ``(ii) the Committee on Foreign Relations;
                          ``(iii) the Committee on Health, Education, 
                      Labor, and Pensions;
                          ``(iv) the Committee on Homeland Security and 
                      Governmental Affairs; and
                          ``(v) the Committee on the Judiciary.
                    ``(B) House committees.--The appropriate 
                Congressional committees of the House of Representatives 
                are--
                          ``(i) the Committee on Energy and Commerce;
                          ``(ii) the Committee on Foreign Affairs;
                          ``(iii) the Committee on Homeland Security;
                          ``(iv) the Committee on the Judiciary; and
                          ``(v) the Committee on Ways and Means.''.

    (b) Clerical Amendment.--The table of sections for chapter 3001 of 
title 36, United States Code, is amended by striking the item relating 
to section 300111 and inserting the following:

``300111. Authority of the Comptroller General of the United States.
``300112. Office of the Ombudsman.
``300113. Reservation of right to amend or repeal.''.

    Approved May 11, 2007.

LEGISLATIVE HISTORY--H.R. 1681 (S. 655):
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HOUSE REPORTS: No. 110-87 (Comm. on Foreign Affairs).
CONGRESSIONAL RECORD, Vol. 153 (2007):
            Apr. 17, considered and passed House.
            Apr. 23, considered and passed Senate.

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