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Senate committee backs memorial urging repeal of 2021 Corporate Transparency Act
Summary
The Senate Commerce and Human Resources Committee voted to send House Joint Memorial 3 to the Senate floor with a "do pass" recommendation after testimony that the federal Corporate Transparency Act places undue burdens on small businesses and raises privacy concerns.
The Senate Commerce and Human Resources Committee on a voice vote sent House Joint Memorial 3 to the Senate floor with a due-pass recommendation after testimony urging Congress to repeal the 2021 Corporate Transparency Act.
The memorial, presented by State Senator Todd Lakey, asks Idaho’s congressional delegation to pursue repeal. Lakey told the committee that the federal rule requires small-business owners to disclose personal details and "has been a nightmare in its scope and attempts to implement." He said the memorial reflects concerns that the rule goes beyond its stated goal of catching money launderers and instead burdens typical small businesses.
The matter drew testimony from Idaho Secretary of State Phil McGrane, who said state officials have been among the most vocal critics. "This really is like the epitome of government overreach," McGrane said, and he warned about the statute’s criminal penalties for failing to file beneficial-ownership information, which he described as "up to $10,000 and 2 years in federal prison." McGrane also noted a recent Department of the Treasury cybersecurity incident and said that heightened the urgency of the privacy concerns.
Committee members asked whether federal enforcement has been paused; Lakey and McGrane noted that Treasury recently signaled it would not enforce penalty provisions while litigation and implementation continue, but they said that a pause does not remove the statutory requirement. McGrane referenced a joint letter from 20 secretaries of state asking for repeal and said Idaho joined an amicus brief in litigation challenging the rule.
Senators who spoke in support described the rule as confusing for small-business owners and pointed to practical difficulties with the online filing system. Vice Chairman Lenny, who seconded the committee motion, said he had submitted the required data and received no confirmation, adding the website lacked help or customer service.
The committee recorded the motion to send the memorial to the floor, moved by Senator Nichols and seconded by Vice Chairman Lenny; the motion carried by voice vote. No public testimony was offered on the memorial during the hearing.
