Notice of Proposed Rulemaking

MAR Notice No. 2026-154.1

Summary

Revisions to ARM 42.4.803 Regarding Student Scholarship Organization (SSO) Certifications; Implementation of Senate Bill 253 (2025)(SB 253)

Hearing Date and Time

Monday, August 17, 2026, at 10:00 a.m.

Hearing Information

Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana

Comments

Comments may be submitted using the contact information below. Comments must be received by Monday, August 24, 2026, at 5:00 p.m.

Accommodations

The agency will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. Requests must be made by Friday, July 31, 2026, at 5:00 p.m.

Contact

Todd Olson, Rule Reviewer - Department of Revenue, Legal Services Office

(406) 444-7905

todd.olson@mt.gov

Rulemaking Actions

Amend

The rule proposed to be amended is as follows, stricken matter interlined, new matter underlined:

42.4.803 School District and Student Scholarship Organization (Sso) Requirements and Preapproval Process

1. Prior to registering a donation with the department, a inserted: public, end inserted school district inserted: (PSD), end inserted deleted: or SSO shall submit a complete application to the department, end deleted inserted: must designate at least one administrative user who is responsible for creating and maintaining an account at the department’s education donations portal.  Before accepting donations for the tax credit under 15-30-3110, MCA, the PSD’s administrative user must request preapproval from the department, end inserted.  The deleted: application, end deleted inserted: preapproval request, end inserted is located on the department's website at the education donations portaldeleted: . The application, end deleted inserted: and the request, end inserted must include the following information:
   1. the deleted: school district or SSO, end deleted inserted: PSD, end inserted name, address, and federal employer identification number; and
   2. inserted: identity of, end inserted the deleted: school district or SSO, end deleted inserted: PSD’s, end inserted donation managerdeleted: 's, end deletedinserted: , including , end insertedname, title, phone number, and e-mail address.
2. inserted: Prior to registering a donation eligible for the tax credit under 15-30-3111, MCA, a student scholarship organization (SSO) shall apply for certification as required by 15-30-3103, MCA. An SSO may apply between July 1 and September 1, and a certification is issued for a two-year period.  After expiration of a certification, an SSO must re-apply for certification.  The application is located on the department's website at the education donations portal, and must include the following information:, end inserted
   1. inserted: the SSO’s name, address, and federal employer identification number; , end inserted
   2. inserted: identify the SSO’s donation manager, including title, phone number, and e-mail address; and , end inserted
   3. inserted: an attestation that the SSO has met the criteria established under 15-30-3103(1)(b) through (j), MCA., end inserted
3. inserted: The department will review an application under (2) and issue a written approval or denial to the SSO within 60 days of receipt.  For purposes of this rule, date of receipt means the date the application was entered into the department’s tax administration system.  If the department does not issue a decision within 60 days, the SSO shall be deemed certified unless the failure to issue a decision was because the SSO did not provide information necessary to process its application or otherwise respond to department requests.  An application that is deemed certified under this rule does not prohibit the department from subsequently reviewing an SSO’s qualifications under 15-30-3113, MCA., end inserted
4. inserted: An SSO is allowed 30 days from the date of the department’s denial letter to request reconsideration and an opportunity to correct any application deficiencies that were the basis for the denial. , end inserted
   1. inserted: The applicant’s reconsideration request must be in writing and state the basis for its objection to the denial.  The applicant must also provide or correct the information or documents the department determined deficient. , end inserted
   2. inserted: If the reconsideration request is sent by the U.S. Postal Service or by any other generally accepted delivery service, the objection must be postmarked within 30 days of the date of the denial letter.  If it is sent by e-mail, it must be sent within 30 days of the date of the denial letter.  Failure to respond within 30 days is an admission that the SSO agrees with the department’s denial., end inserted
5. inserted: The department shall review the request and the materials in (4) and will issue a final written decision within 30 days of receipt.  The department and SSO may mutually agree to an extension of this 30-day period.  The department’s final decision is not appealable; however, an SSO may apply for certification with the department for the tax year following the tax year for which the denial was issued., end inserted
6. inserted: No later than December 31 of each year, an SSO must provide links to its public website that contains the information required under 15-30-3103(1)(j), MCA.  The SSO is also responsible for ensuring website and link functionality at all times., end inserted
7. deleted: (2), end deletedinserted: (7), end inserted A deleted: school district, end deleted inserted: PSD, end inserted or SSO must register each donation, upon receipt, in the department's registration system.  Preapproval of the amount of donation eligible for the credit will be provided at the time the deleted: school district, end deleted inserted: PSD, end inserted or SSO registers the donation in the department's registration system.
8. deleted: (3), end deletedinserted: (8), end inserted With respect to the aggregate limit of tax credits allowed for a year, the priority of donations is based upon the time and date stamp issued by the department's registration system when a deleted: school district, end deleted inserted: PSD, end inserted or SSO completes registration of the donation.  Donations made in excess of the aggregate limits and credit cap, which is the amount of the credit provided under 15-30-3110 and 15-30-3111, MCA, will not be eligible for the tax credit.
9. deleted: (4), end deleted inserted: (9), end inserted The department will certify to a deleted: school district, end deleted inserted: PSD, end inserted or SSO the amount of credit available to the taxpayer when the deleted: school district, end deleted inserted: PSD, end inserted or SSO completes the registration of the donation in the department's registration system.

Authorizing statute(s): 15-1-201, 15-30-3114, MCA

Implementing statute(s): 15-30-3102, 15-30-3103, 15-30-3105, 15-30-3106, MCA

Reasonable Necessity Statement

The department proposes to amend ARM 42.4.803 primarily to align the rule with new Student Scholarship Organizations (SSOs) certification requirements that Senate Bill 253 (2025)(SB 253) enacted and which the department administers.

In the amendments to (1), the department proposes to specify the application period for organizations to utilize when applying for certification with the agency, clarify the purpose of the rule, including helpful statutory cross references.

The proposed application period in (2) — July 1 to September 1— begins one month earlier than in prior years (August 1-October 1) but is necessary to accommodate increased workload demands placed upon department personnel in administering the educational tax credit program.  Advancing an earlier application deadline also allows the department and applicants more time to resolve certification issues before the close of the calendar year and the January opening of the education portal.

The proposed amendment as new (2)(c) reflects the requirements that an applicant attest that it has satisfied all the requisite criteria in 15-30-3113(1)(b) through (j), MCA.

The proposed amendments as new (3) through (5) provide necessary administrative clarity of the application process provided in 15-30-3103, MCA, as well as the statutory appeal of denial/application correction process applicants must follow.

Finally, the proposed amendment as new (6) explains that an SSO must provide links to its public website that contains the information required under 15-30-3103(1)(j), MCA, and that an SSO is also responsible for ensuring website and link functionality at all times.

Small Business Impact

With regard to the small business impact analysis requirements of 2-4-111, MCA, as amended by HB 592 (2025), the department has analyzed the proposed rulemaking and the groups or class of businesses directly affected by this rulemaking if they meet the definition of a small business under 2-4-102(13), MCA.

The department contends that any direct small business impact does not arise from the proposed rulemaking but from the legislature’s enactment of SB 253 and the revision or clarification of the rule does not create any new requirements.

Documentation of the small business impact analysis is available upon request.

Bill Sponsor Notification

The primary bill sponsor of SB 253 was contacted by electronic mail on June 30, 2026, and again on July 10, 2026.  The department received no comments from the bill sponsor to incorporate into the proposal notice.

Interested Persons

The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding particular subject matter or matters.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  A written request may be mailed or delivered to the contact person in this notice or may be made by completing a request form at any rules hearing held by the Department of Revenue.

Rule Reviewer

Todd Olson

Approval

Brendan Beatty, Director of Revenue