USA – IDAHO Trends and Developments Contributed by: Steve Frinsko, Christopher Cook, Paul Street and Matthew Havili, Hawley Troxell
Regulated entity The Idaho Public Utilities Commission (IPUC) regu - lates privately-owned utilities that provide water, gas, electric, and some telecommunication services for profit. For such regulated entities, IPUC regulatory activity includes reviewing and approving M&A, and the issuance of securities or long-term debt. Such transactions may require IPUC approval before clos - ing. Transaction counsel should evaluate regulatory approvals early in the transaction process, confirm whether the target holds a certificate or other authori - sation issued by the IPUC, and structure closing con - ditions and timelines to account for potential regula - tory review. Failure to obtain required approval may prevent the successful consummation of the trans - action or subject the parties to adverse regulatory consequences under Idaho’s public utility regulatory framework. Liquor licences In Idaho, the production, distribution, and retail sale of alcoholic beverages is regulated by the Federal gov - ernment (via the Alcohol and Tobacco Tax and Trade Bureau) and the state government (via the Idaho State Liquor Division and Idaho State Police Department of Alcohol Beverage Control, or ABC). Additionally, such activities are regulated locally by the city or county, depending on the type of licence held and the loca - tion and use of the premises. The principal statutory provisions appear in Title 23 of the Idaho Code, and related administrative rules promulgated by ABC (IDA - PA, § 11, 5 May 2001). For any transaction involving a business engaged in the production, distribution, or retail sale of alcoholic beverages, transaction counsel should be prepared to analyse and carefully diligence all appropriate licensure and permitting requirements to ensure successful consummation of the transaction and uninterrupted business operations. Most issues arise in connection with transactions involving busi - nesses holding licences for the retail sale of hard alco - hol (aka liquor), as opposed to licences for the retail sale of beer and wine. This is because Idaho licences liquor sales separately from beer and wine sales. Under Idaho law, licences for the retail sale of liquor are “quota” (ie, population-based) system licences issued to business premises located within city limits, on a basis of two licences for every 1,500 people (eg, of population) of such city. Therefore, these licences
compete covenants is 18 months after termination. Idaho does not have regulations regarding restrictive covenants with respect to the sale of a business, and five-year restrictive covenants are common and would likely be enforced. National security review There are no national security review requirements other than those imposed under US federal law. Recent Legal Developments There have been no significant court decisions or legal developments. Significant changes to takeover law There have been no significant changes to takeover law in the past 12 months, nor is takeover legislation under review in a way that could result in significant changes in the coming 12 months. Transactions Charitable organisations The Idaho Charitable Assets Protection Act (ICAPA), codified as Idaho Code § 48-1900 et seq, generally prohibits a charitable organisation from knowingly mis - using its charitable assets and vests certain authority in the Idaho Attorney General to enforce the same. In the M&A context, ICAPA provides a procedure for a charitable organisation to notify the Attorney General, at least 30 days in advance, of the organisation’s intent to dissolve, convert to a non-charitable organisation, or terminate and dispose of (eg, sell or transfer) all or substantially all of its charitable assets. ICAPA defines, without limitation, the terms “charitable organisation” and “charitable asset” as well as outlining certain exemptions and criteria for applicability, so careful attention should be given as to whether compliance is required given the particular facts and circumstances of the underlying transaction. If the Attorney General suspects a charitable organisation has failed to com - ply with ICAPA or is misusing its charitable assets, the Attorney General may investigate, negotiate compli - ance, or file suit seeking remedies such as injunctive relief, termination and liquidation of the organisation, and civil penalties.
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