BISMARCK, N.D. — Lawmakers heard opposing views Tuesday on House Bill 13-81, which would reduce the percentage of “contribution from other local revenue” deducted from state aid worksheets from 75 percent to 50 percent, a change sponsors said would let some districts retain more local funds.

Representative Pat Heiner, who introduced the measure to the Appropriations - Education and Environment Division, told committee members the bill would move the line on the student-aid form (lines 35–43) from a 75 percent deduction to 50 percent and estimated a statewide appropriation impact of about $34.4 million if fully funded. He described the change as targeted: only districts that report significant in-lieu or other local revenue — for example certain energy or utility-related receipts — would see substantial increases in local retained funds.

Why it matters: Witnesses said the change could prevent small, declining districts from cutting staff. Brent Vick, superintendent representing Glen Ellyn School District, walked the committee through the district’s packet of DPI worksheets and said Glen Ellyn’s state aid estimate dropped from about $1.45 million in preliminary October numbers to roughly $1.2 million in the January worksheet because of membership and weighting changes; Vick argued the proposed 50 percent deduction would let the district retain more of locally generated in-lieu funds and ease their budget challenges.

Arguments and context: Testimony from DPI finance officer Adam Tesher and superintendents emphasized that the “other local revenue” line captures a wide range of nontraditional local revenues — oil and gas production payments, wind-generation payments, certain telecommunications and mobile-home revenues, and in some cases payments in lieu of taxes. Tesher clarified that many of those amounts are not traditional property-tax values and that in-lieu formulas differ by revenue type. He told the committee that “every school district in the state except for one receives some sort of in lieu of property tax calculation.”

Supporters said keeping more local revenue would help financially stressed districts. Opponents and some committee members raised equity concerns: districts that receive little or no in-lieu revenue would see little to no benefit, while districts with energy production or wind payments would retain more local money than other districts. Chairman Heiner said he voted against the bill in an earlier committee because he felt it would treat districts differently and that lawsuits over equity have occurred in the past.

Fiscal and legal notes: Witnesses traced the 75 percent figure to past formula design choices and budget balancing in earlier sessions; testimony said impact-aid (federal) payments had previously been treated differently and, in a prior change, were removed from the deduction. Tesher told the committee he had provided an appropriation estimate to sponsors (roughly $34.4 million) but the bill was placed aside in the division pending more information and discussion.

Committee action and next steps: The hearing on House Bill 13-81 closed with the committee putting the bill “off to the side” for additional work; no formal recommendation was made. Members asked DPI and sponsors for more details on how the deduction is calculated, which revenue lines are included, and how the change would affect districts with different mixes of revenue and enrollment trends.

Ending note: Supporters argued the measure gives struggling districts a way to keep more local revenue amid declining enrollment and taxable valuation; critics warned the change could raise equity questions that might prompt legal challenges or require broader formula adjustments.