59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 114–350 

TO AMEND TITLE 36, UNITED STATES CODE, TO MAKE CERTAIN IMPROVEMENTS IN THE CONGRESSIONAL CHARTER OF THE DISABLED AMERICAN VETERANS 

NOVEMBER 30, 2015.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. GOODLATTE, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 1755] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 1755) to amend title 36, United States Code, to make certain 

improvements in the congressional charter of the Disabled American Veterans, having considered the same, reports favorably thereon without amendment and recommends that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 4 

Committee Consideration ........................................................................................ 4 

Committee Votes ...................................................................................................... 4 

Committee Oversight Findings ............................................................................... 4 

New Budget Authority and Tax Expenditures ...................................................... 5 

Congressional Budget Office Cost Estimate .......................................................... 5 

Duplication of Federal Programs ............................................................................ 6 

Disclosure of Directed Rule Makings ..................................................................... 6 

Performance Goals and Objectives ......................................................................... 6 

Advisory on Earmarks ............................................................................................. 6 

Section-by-Section Analysis .................................................................................... 6 

Changes in Existing Law Made by the Bill, as Reported ..................................... 7 

Purpose and Summary 

H.R. 1755 makes changes to the Federal charter of Disabled 

American Veterans to better reflect its mission. 


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1See 36 U.S.C. sec. 50301 & DAV website. 2 36 U.S.C. sec. 50302. 

3 36 U.S.C. sec. 50303 & DAV website. 

Background and Need for the Legislation 

Disabled American Veterans (‘‘DAV’’) was established in 1920 

and received a Federal charter in 1932.1 Its purposes are: 

1) to uphold and maintain the Constitution and laws of 

the United States; 

2) to realize the true American ideals and aims for which 

those eligible to membership fought; 

3) to advance the interests, and work for the betterment, 

of all wounded, injured, and disabled American veterans; 

4) to cooperate with the Department of Veterans Affairs 

and all other public and private agencies devoted to the 

cause of improving and advancing the condition, health, 

and interests of all wounded, injured, and disabled veterans; 

5) to stimulate a feeling of mutual devotion, helpfulness, 

and comradeship among all wounded, injured, and disabled veterans; 

6) to serve our comrades, our communities, and our country, and 

7) to encourage in all people that spirit of understanding 

which will guard against future wars.2

DAV has over 1.2 million members, with membership open to a 

person who: 

was wounded, gassed, injured, or disabled in the line of 

duty during time of war while in the service of the military 

or naval forces of the United States; and . . . was honorably discharged or separated from that service or is still in 

active service in the Armed Forces of the United States or 

. . . was disabled while serving with any of the Armed 

Forces of a country associated with the United States as 

an ally during any of its war periods . . . is a citizen of 

the United States; and . . . was honorably discharged.3

The mission statement of DAV states that: 

We are dedicated to a single purpose: empowering veterans to lead high-quality lives with respect and dignity. 

We accomplish this by ensuring that veterans and their 

families can access the full range of benefits available to 

them; fighting for the interests of America’s injured heroes 

on Capitol Hill; and educating the public about the great 

sacrifices and needs of veterans transitioning back to civilian life. 

• Providing free, professional assistance to veterans and 

their families in obtaining benefits and services earned 

through military service and provided by the DepartVerDate Sep 11 2014 01:44 Dec 01, 2015 Jkt 059006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6601 E:\HR\OC\HR350.XXX HR350

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4DAV website. 

5Organizations are exempt from Federal corporate and certain other taxes if they are ‘‘[c]ivic 

leagues or organizations not organized for profit but operated exclusively for the promotion of 

social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of 

which are devoted exclusively to charitable, educational, or recreational purposes [so long as] 

no part of the net earnings of such entity inures to the benefit of any private shareholder or 

individual.’’ 26 U.S.C. sec. 501(c)(4). 

See 26 U.S.C. sec. 501(c)(4). 6 26 U.S.C. sec. 170(c)(3) provides that deductible charitable contributions can be made to ‘‘[a] 

post or organization of war veterans, or an auxiliary unit or society of, or trust or foundation 

for, any such post or organization—(A) organized in the United States or any of its possessions, 

and (B) no part of the net earnings of which inures to the benefit of any private shareholder 

or individual.’’ In addition, 26 U.S.C. sec. 2055(a)(4) provides that bequests, legacies, devises and 

transfers ‘‘to or for the use of any veterans’ organization incorporated by Act of Congress, or 

of its departments or local chapters or posts, no part of the net earnings of which inures to the 

benefit of any private shareholder or individual. . . .’’ are not subject to the Federal estate tax. 7Organizations are exempt from Federal corporate and certain other taxes if they are 

‘‘[c]orporations[ or] any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of 

its activities involve the provision of athletic facilities or equipment), or for the prevention of 

cruelty to children or animals, no part of the net earnings of which inures to the benefit of any 

private shareholder or individual, no substantial part of the activities of which is carrying on 

propaganda, or otherwise attempting, to influence legislation . . . and which does not participate in, or intervene in (including the publishing or distributing of statements), any political 

campaign on behalf of (or in opposition to) any candidate for public office.’’ 26 U.S.C. sec. 

501(c)(3). 

ment of Veterans Affairs (VA) and other agencies of government. 

• Providing outreach concerning its program services to 

the American people generally, and to disabled veterans 

and their families specifically. 

• Representing the interests of disabled veterans, their 

families, their widowed spouses and their orphans before 

Congress, the White House and the Judicial Branch, as 

well as state and local government. 

• Extending DAV’s mission of hope into the communities 

where these veterans and their families live through a 

network of state-level Departments and local Chapters. 

• Providing a structure through which disabled veterans 

can express their compassion for their fellow veterans 

through a variety of volunteer programs.4

DAV sent a letter to the Committee requesting a change in its 

Federal charter: 

For decades, DAV has been exempt from Federal taxation 

under Section 501(c)(4) of the Internal Revenue Code 5 and 

its predecessor sections. This designation applies to ‘‘social 

welfare organizations.’’ Donations to most 501(c)(4) organizations are not deductible for income or estate tax purposes. DAV is a rare exception, as it qualifies to receive deductible contributions as a ‘‘war veterans’’ organization.6

Many donors, even sophisticated donors, believe incorrectly 

that charitable deductions are available only for gifts made 

to a 501(c)(3) organization,7 more commonly known as a 

‘‘public charity.’’ We believe that this misconception has 

been limiting DAV’s opportunities to gain corporate support and major gifts, including bequests. 


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8Part III of the Internal Revenue Service’s Form 1023 (Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code) states that ‘‘[s]ection 501(c)(3) requires that your organizing document state your exempt purpose(s), such as charitable, religious, educational, and/or scientific purposes. Check the box to confirm that your organizing document meets this requirement. Describe specifically where your organizing document meets this 

requirement, such as a reference to a particular article or section in your organizing document. 

Refer to the instructions for exempt purpose language. Location of Purpose Clause (Page, Article, and Paragraph):_____’’ It also states that ‘‘[s]ection 501(c)(3) requires that upon dissolution 

of your organization, your remaining assets must be used exclusively for exempt purposes, such 

as charitable, religious, educational, and/or scientific purposes. Check the box on line 2a to confirm that your organizing document meets this requirement by express provision for the distribution of assets upon dissolution. If you rely on state law for your dissolution provision, do 

not check the box on line 2a and go to line 2c. If you checked the box on line 2a, specify the 

location of your dissolution clause (Page, Article, and Paragraph)._____’’ 9Letter from J. Marc Burgess, National Adjutant, DAV, to the Judiciary Committee, July 10, 

2015. 

There is no doubt that DAV’s activities of service to 

wounded and disabled veterans would enable it to qualify 

as a public charity, exempt from taxation under Section 

501(c)(3) of the Internal Revenue Code. To achieve that 

designation, the organization needs to make application to 

the Internal Revenue Service. The application requires 

that certain language be included in the ‘‘organizing document,’’ which in our case is the Federal charter.8

Specifically, the requested amendments make explicit 

DAV’s exclusively charitable purpose, explain the educational component of its mission and mandate the assignment of its assets to the Department of Veterans Affairs 

in the event of dissolution. Inclusion of these provisions in 

the charter will simplify greatly our conversion to (c)(3) 

status.9

Hearings 

The Committee on the Judiciary held no hearings on H.R. 1755. 

Committee Consideration 

On September 17, 2015, the Committee met in open session and 

ordered the bill H.R. 1755 favorably reported without amendment, 

by a voice vote, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that there were 

no recorded votes during the Committee’s consideration of H.R. 

1755. 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 


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New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 1755, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, November 23, 2015. 

Hon. BOB GOODLATTE, CHAIRMAN, Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1755, a bill to amend title 

36, United States Code, to make certain improvements in the congressional charter of the Disabled American Veterans. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Dwayne M. Wright, who 

can be reached at 226-2840. 

Sincerely, 

KEITH HALL, 

DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 1755—a bill to amend title 36, United States Code, to 

make certain improvements in the congressional charter 

of the Disabled American Veterans. 

As ordered reported by the House Committee on the Judiciary 

on September 17, 2015. 

H.R. 1755 would amend the charter of the Disabled American 

Veterans (DAV) to specify that DAV is organized for charitable and 

educational purposes, and to ensure that upon dissolution of the organization any remaining assets would be transferred to the Department of Veterans Affairs. Those changes could allow DAV to 

qualify as a ‘‘public charity’’ under the Internal Revenue Code, and 

thus might lead to an increase in tax deductible donations. However, because DAV is already exempt from Federal taxation and 

qualified to receive deductible contributions as a ‘‘war veterans’’ organization, CBO and the staff of the Joint Committee on Taxation 

expect that such changes would have a negligible effect on Federal 

revenues. 


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Enacting H.R. 1755 would not affect direct spending, but would 

have a negligible effect on revenues; therefore, pay-as-you-go procedures apply. CBO estimates that enacting H.R. 1755 would not increase net direct spending or on-budget deficits by more than $5 

billion in any of the four consecutive 10-year periods beginning in 

2026. 

H.R. 1755 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of State, local, or tribal governments. 

The CBO staff contact for this estimate is Dwayne M. Wright. 

The estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

Duplication of Federal Programs 

No provision of H.R. 1755 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

Disclosure of Directed Rule Makings 

The Committee estimates that H.R. 1755 specifically directs to be 

completed no specific rule makings within the meaning of 5 U.S.C. 

551. 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 1755 makes 

changes to the Federal charter of Disabled American Veterans to 

better reflect its mission. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 1755 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 

Section-by-Section Analysis 

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Congressional Charter of Disabled American Veterans 

Subsection (a) amends 36 U.S.C. section 50302 by stating that 

DAV is organized exclusively for charitable and educational purposes and by adding two new purposes of the organization—1) to 

educate the public about the sacrifices and needs of disabled veterans, and 2) to educate disabled veterans about the benefits and 

resources available to them. 

Subsection (b) adds section 50309 to title 36 providing that on 

dissolution or final liquidation of DAV, any assets remaining after 

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ities shall be transferred to the Secretary of Veterans Affairs for 

the care of disabled veterans. 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

and existing law in which no change is proposed is shown in 

roman): 

TITLE 36, UNITED STATES CODE 

* * * * * * * 

SUBTITLE II—PATRIOTIC AND NATIONAL 

ORGANIZATIONS 

* * * * * * * 

PART B—ORGANIZATIONS 

* * * * * * * 

CHAPTER 503—DISABLED AMERICAN VETERANS 

* * * * * * * 

§ 50302. Purposes 

øThe purposes of the corporation are¿ The corporation is organized exclusively for charitable and educational purposes. The purposes of the corporation shall include—— 

(1) to uphold and maintain the Constitution and laws of 

the United States; 

(2) to realize the true American ideals and aims for which 

those eligible to membership fought; 

(3) to advance the interests, and work for the betterment, 

of all wounded, injured, and disabled American veterans; 

(4) to cooperate with the Department of Veterans Affairs 

and all other public and private agencies devoted to the cause 

of improving and advancing the condition, health, and interests 

of all wounded, injured, and disabled veterans; 

(5) to stimulate a feeling of mutual devotion, helpfulness, 

and comradeship among all wounded, injured, and disabled 

veterans; 

(6) to serve our comrades, our communities, and our country; øand¿ 

(7) to educate the public about the sacrifices and needs of 

disabled veterans; 

(8) to educate disabled veterans about the benefits and resources available to them; and 


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ø(7)¿ (9) to encourage in all people that spirit of understanding which will guard against future wars. 

* * * * * * * 

§ 50309. Dissolution 

On dissolution or final liquidation of the corporation, any assets remaining after the discharge or satisfactory provision for the 

discharge of all liabilities shall be transferred to the Secretary of 

Veterans Affairs for the care of disabled veterans. 

* * * * * * * 

Æ 


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