A major state government reorganization in 1974 resulted in the creation of the Department of Self-Governing Agencies. This new department consisted of all agricultural commodity commissions, the Board of Examiners, the Division of Building Safety, and all professional and occupational licensing boards. The Idaho Bureau of Occupational Licenses (IBOL) was created, within the Department of Self-Governing Agencies, to serve the needs of many of those boards.

The IBOL is empowered by Idaho Law to enter into written agreements with state boards to provide administrative, investigative, fiscal, and legal services. This arrangement, often referred to as an "umbrella", allows several boards to share resources and the costs of operation while maintaining each board's independence.

The IBOL operation depends solely on dedicated funds generated through renewals, applications, and examination fees. Neither tax dollars nor other funds from Idaho's General Fund are used for the operation of the IBOL. The IBOL provides each Board with an annual budget based on IBOL's annual appropriation from the Legislature. That appropriation is distributed among the Boards based on historical needs and new programs & requests. Financial status reports are available throughout the year for IBOL and the individual boards.