BISMARCK, N.D. — The Appropriations - Education and Environment Division voted to advance House Bill 12-14 on a due-pass recommendation after testimony that the bill replaces the current block grant for K-12 transportation with a formula tied to the foundation aid payment.

The bill’s sponsor, Representative Pat Heiner, District 32, told the committee the measure “sets up parameters” and moves transportation funding into a worksheet linked to the K-12 foundation aid rather than awarding a post-session grant to the Department of Public Instruction (DPI). Heiner said the change would give districts more certainty about funding.

Why it matters: Supporters said tying transportation to the foundation aid will make funding automatic when that aid is adjusted and let the state target money to costs that vary by district. Opponents in committee raised equity concerns because districts that receive significant in-lieu or production-based revenue will be affected differently than districts that do not.

What the bill does: Superintendent Steve Holden of Mackenzie County School District No. 1 in Watford City, who helped develop the proposal through the Interim School Funding Task Force and the University of North Dakota study, said the bill removes “rides” as a reimbursement factor, keeps miles, and adds two new weighting factors: district geographic size (square miles) and the number of buildings the district serves. Holden said those two factors were statistically significant in the UND study and “should increase the greater accuracy” of payments.

DPI school finance officer Adam Tesher described the fiscal calculations: last biennium the Legislature appropriated about $58.1 million for transportation; DPI expects to turn back roughly $7 million of that, and the proposal would increase the total distributed to about $61 million. Tesher told the committee the fiscal note attached to the bill reflects that the change is largely a reallocation of funds already appropriated and would require roughly an additional $3 million of appropriation compared with amounts actually spent in the current biennium. Committee members and witnesses clarified that a separate fiscal scenario — moving the foundation aid baseline to a higher rate (3-and-3 in testimony) — would raise the appropriation further (testimony estimated an additional $2.6 million in that scenario).

Several members and witnesses told the committee the formula aims for greater predictability. Holden said the state’s prior per-student target for transportation had “dropped on average below 40 percent,” meaning districts were reimbursed far less than historical targets, and that the proposed approach would let transportation funding escalate alongside the foundation aid.

Operational and reporting details: Witnesses and DPI officials said the bill uses data districts already report to DPI (large-bus miles, small-bus miles, large-bus runs, small-bus runs) and keeps the existing 90 percent reimbursement cap. DPI staff noted one counting decision used for the fiscal note: school buildings counted for the new “number of buildings” factor were those with enrollment associated in DPI counts; career-technical center facilities or buildings that host students from multiple schools were not counted in the initial fiscal note unless enrollment is recorded there. Tesher also said DPI will need to refine how it counts runs where districts use staggered start times (one vehicle serving two schedules) so the data reflect intended policy.

Committee action and next steps: Representative Lauser moved a due-pass recommendation; Representative Martinson seconded. The committee voted in favor (roll call recorded the motion as passing). Representative Richter will carry the bill to the full appropriations committee for further consideration and potential appropriation adjustments.

What committee members asked for: Legislators and witnesses discussed potential follow-up changes, including adding more weighting factors in future sessions if additional data systems (e.g., statewide student-information system) make more detailed reporting feasible. Members also asked DPI and sponsors to clarify building-count definitions and the exact fiscal impact under alternative foundation aid scenarios. Tesher and proponents said they would bring clarifications back to the committee.

Ending note: Proponents described House Bill 12-14 as a first step toward a transportation funding structure intended to increase predictability and better target funds; supporters urged further technical refinement during the appropriations process.