Senate Bill 410, passed by the 2015 Legislature, established a tax credit for individuals wishing to contribute to K-12 public schools and K-12 private, non-parochial schools. The bill calls for the program to be established in accordance with Article V, Section 11(5) and Article X, Section 6(1) of the Montana Constitution, which prohibit the direct or indirect appropriations or payment from any public fund to any sectarian or religious purpose. Accordingly, the Department of Revenue adopted rules that manage the program and exclude church-affiliated schools from participation.
The Department of Revenue rules were challenged in both Federal and State Court. See the Timeline of Recent Events (lower left) for up-to-date litigation information.
Timeline of Recent Events
8.17.17: The Montana Department of Revenue files Notice of Appeal to the Montana Supreme Court re: Espinoza et al. Read the notice here.
6.26.17: MQEC files suit against the State of Montana and the Montana Department of Revenue challenging SB 410 based on Article V, Section 11(5) and Article X, Section 6 of the Montana Constitution. The suit is filed in Lewis & Clark County District Court and is assigned to Judge Mike Menahan. Read the complaint here.
5.23.17: Judge Heidi Ulbricht rules in favor of Plaintiffs' Motion for Summary Judgement, leaving in place the ability for Student Scholarship Organizations to distribute funds to sectarian schools. Read the ruling here.
3/7/17: Motions for Summary Judgement are heard by Judge Heidi Ulbricht in Flathead County District Court.
11/29.16: MQEC files Amicus Curiae Brief in Flathead County District Court. View the brief here.
11/10/16: Judge David Ortley grants MQEC's Motion for Leave to File Amicus Curiae Brief in Espinoza et al. Judge Ortley sets a submittal deadline of November 29, 2016. View the order here.
10/31/16: MQEC files Motion for Leave to File Amicus Curiae Brief in Espinoza et al. View the motion here.
10/27/16: The Montana Supreme Court denies MQEC's Petition for Writ of Supervisory Control and is in unanimous agreement that MQEC should be permitted to file an amicus brief at the District Court level. View the decision here.
9/26/16: The Montana Department of Revenue responds to the Petition for Writ of Supervisory Control, supporting MQEC's request for intervention. View the response here.
9/23/16: The Institute for Justice responds to the Petition for Writ of Supervisory Control, stating that intervention by MQEC will delay resolution of the proceeding. View the response here.
9/15/16: Judge David Ortley informs the Montana Supreme Court that he does not intend to respond to the Petition for Writ of Supervisory Control and that his original order sufficiently states his reasons for denying our motion to intervene. View the communication here.
8/25/16: The Montana Supreme Court orders (1) that all interested parties file a response to MQEC's Petition for Writ of Supervisory Control, and (2) that all proceedings in Espinoza et al are stayed (suspended) until the Petition for Writ of Supervisory Control is decided. View the order here.
8/19/16: MQEC files a Petition for Writ of Supervisory Control with the Montana Supreme Court, asking that Judge Ortley's decision be overturned and MQEC be allowed to intervene in Espinoza et al. View the petition and exhibits here.
8/4/16: Flathead District Court Judge David Ortley denies MQEC's Motion to Intervene in State suit (Espinoza et al.), finding "there is no basis [to] conclude that MQEC is either entitled to intervene or should be allowed to do so." View the order here.
7/6/16: Montana Department of Revenue responds to Plaintiffs' Motion for Summary Judgment, opposing the motion. The Department also files a Cross-Motion for Summary Judgment to enforce the Religious School Ban and dismiss the case. View the response, the cross-motion, and exhibits here.
6/7/16: MQEC files response to Plaintiffs' response re: Motion to Intervene. View the response here.
6/1/16: Plaintiffs in State suit (Espinoza et al) file response to MQEC Motion to Intervene, stating no opposition to the motion provided intervention does not delay resolution of the proceeding. View the response here.
5/18/16: Federal Judge Sam Haddon affirms dismissal of Armstrong suit. View the order here.
5/13/16: Plaintiffs in State suit (Espinoza et al) file Motion for Summary Judgment to permanently prevent enforcement of the Religious School Ban and dismiss the case. This would permit religious schools to receive distributions from student scholarship organizations. View the motion and brief here.
5/11/16: Montana Department of Revenue Answers Plaintiff's' Complaint in State suit (Espinoza et al). View the document here.
4/20/16: Federal suit (Armstrong) is dismissed without prejudice. This is not unusual when both a State suit and Federal suit address the same issue. The federal suit can be refiled if deemed necessary, after conclusion of the State suit. View the order here.
3/31/16: Preliminary injunction issued in State suit (Espinoza et al) preventing enforcement of the Religious School Ban. This is a setback for the Department of Revenue. View the order here.
3/8/16: Hearing scheduled in State suit re: motion to dismiss.
2/12/16: Plaintiffs in Federal suit (Armstrong) file motion for preliminary injunction requesting the Court temporarily enjoin the Department of Revenue from enforcing the Religious School Ban. View the brief here.
1/28/16: Plaintiffs in State suit (Espinoza et al) file motion for preliminary injunction requesting the Court enjoin the Department of Revenue from enforcing Rule 1 re: exclusion of church-affiliated schools. View the motion and supporting brief, as well as the DoR's response.
12/28/15: Two plaintiffs (Armstrong) file suit in U.S. District Court against MT Department of Revenue Director Mike Kadas. Plaintiffs are represented by the Pacific Legal Foundation (Sacramento, CA). View the complaint here.
12/16/15: Three plaintiffs (Espinoza et al.) file suit in Flathead County District Court against the MT Department of Revenue and Director Mike Kadas. Plaintiffs are represented by the Institute for Justice (Arlington, VA) and Holland & Hart, LLP (Billings, MT). View the complaint here.
12/15/15: Department of Revenue adopts final rules regarding administration of SB 410 tax credits. Parochial schools are not permitted to receive funds from school scholarship organizations. The adoption notice includes DoR responses to public comment from the November 5 hearing.
12/1/15: Results of Legislative Poll released. 89 legislators stated the proposed rules are contrary to legislative intent and 51 legislators stated the proposed rules are consistent with legislative intent.10 legislators did not respond to the poll. Individual votes on the poll are available here.
11/17/15: Montana Attorney General's Office writes letter to Department of Revenue opposing the proposed administrative rules.
11/10-11/24/15: The Revenue and Transportation Interim Committee conduct a poll regarding whether the proposed Department of Revenue rules to implement SB 410 is consistent with or contrary to legislative intent. This background material on SB 410 was provided to all Legislators.
11/5/15: Public hearing held on proposed administrative rules. MQEC, MEA-MFT, MTSBA, and SAM, among others, testify in support of proposed rules.
10/5/15: Montana Department of Revenue releases proposed administrative rules pertaining to implementation of SB 410, specifically regarding tax credits for contributions to qualified education providers and student scholarship organizations. The rules define a "qualified education provider" in accordance with Art. V, Section 11(5) and Art.X, Section 6(1) of the Montana Constitution, which prohibits the direct or indirect appropriations or payment from any public fund to any sectarian or religious purpose. The Department of Revenue rules exclude church-affiliated schools from "qualified education provider" status.
News Articles and Related Links
- 6.1.17: State to appeal School Choice ruling (KTVH News, Helena)
- 6.5.17: Judge OKs using state tax credits for religious schools (Daily Interlake)
- 5/13/16: Montana officials defend stand in School Choice battle (Education Week)
- 4/2/16: Montana judge rules against state in
School Choice lawsuit (Washington Times)
- 12/29/15: Lawsuit challenges religious schools' exclusion from program - Armstrong et al. v. Kadas (Helena I.R.)
- 12/17/15: Kalispell Lawsuit Challenges Religious Schools’ Exclusion from Program - Espinoza et al. v. MT Department of Revenue et al. (Flathead Beacon)
- Institute for Justice, representing Plaintiffs in Espinoza et al. v. MT Department of Revenue et al.
- 12/16/15: Rules excluding religious schools from tax credit program become official (Billings Gazette)
- 11/30/15: Panel OKs results of legislative poll (Great Falls Tribune)
- 11/19/15: AG’s office opposes rule on tax credit program (Great Falls Tribune)
- 11/6/15: Lawmakers Polled on Barring Religious Schools from Program (Flathead Beacon)