[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1681 Enrolled Bill (ENR)]

        H.R.1681

                       One Hundred Tenth Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Thursday,
            the fourth day of January, two thousand and seven


                                 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
    This Act may be cited as the ``The American National Red Cross 
Governance Modernization Act of 2007''.
SEC. 2. 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--
            (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 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--
        (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).
                ``(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.
    ``(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:
``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.
``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.''.


                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.