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House Bill 643 — Improper state corporations

House Bill 643 — Improper state corporations

Parrish Miller
February 27, 2024

Bill Description: House Bill 643 would clarify the process for the state to create a corporation and require improperly created corporations to brought into compliance. 

Rating: +1

Does it in any way restrict public access to information related to government activity or otherwise compromise government transparency, accountability, or election integrity? Conversely, does it increase public access to information related to government activity or increase government transparency, accountability, or election integrity?

House Bill 643 would amend Section 30-501, Idaho Code, to clarify the process whereby the state may create a corporation, saying, "Except as authorized by the legislature through the enactment of general laws, the state shall not authorize the creation of a corporation."

It further stipulates that "a corporation shall not be incorporated to carry out a purpose or function of the state or to receive or expend moneys of the state in furtherance of such purpose or function." The bill provides an exception for "an independent public body politic and corporate," which is created by the state. 

House Bill 643 would also create Chapter 5, Title 30, Idaho Code, to provide corporations that are out of compliance with state law "an opportunity to reform or, if a nonprofit corporation, to disassociate from the state of Idaho."

The primary process of reform will be through self-reporting to the office of the state treasurer and providing greater transparency into the organizational structure and purpose of the corporation. The new section would say, "A corporation that self-reports pursuant to subsection (3) of this section may, by statute, be reformed by the legislature as an independent public body politic and corporate."

Conversely, "a corporation that does not self-report pursuant to the provisions of subsection (3) of this section or that frustrates the reform or disassociation procedures provided for in this section shall be considered to be in violation of the provisions of section 30-501, Idaho Code, and shall not be recognized as a corporation under Idaho law."

The primary benefit of this law seems to be increased transparency for corporations created by the state, but it could result in the disbanding of some corporations that fail or choose not to comply. 


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