House Education Committee hears wide-ranging testimony on Senate Bill 2400, proposed education savings account program

At a House Education Committee hearing in Bismarck, lawmakers and dozens of witnesses debated Senate Bill 2400, a proposal from Senator Michelle Axman to create an education savings account (ESA) program administered by the Department of Public Instruction (DPI) that would allow families to use state-directed funds for approved education services across public schools, nonpublic schools and homeschool settings.

The bill sponsor, Senator Michelle Axman, told the committee she crafted the measure after studying other states’ programs and said Senate Bill 2400 would “actually make North Dakota the very first state ever to have an ESA program that would support all students, including public school students.” Axman described a tiered structure: a public-school tier (listed in the bill at $500 per public-school student, with the sponsor saying she will seek $1,000 in appropriations), means-tested amounts for nonpublic-school students (up to $3,500 for families at or below 300% of the federal poverty level, $2,000 for families between 300% and 500%, and $500 for families above 500%), and a $500 allotment for home-educated students. Axman said the program would run through a “high-quality online digital wallet or marketplace” that would only list preapproved, services-based providers and that DPI would contract with a third-party vendor to operate the marketplace and auditing functions.

Why it matters: supporters said the plan would expand access to tutoring, dyslexia or speech services, dual-credit courses and — for the first time in a state ESA bill, the sponsor said — mental-health services as an approved expense. Governor Armstrong’s office, represented by Maria Nesit, described the bill as an “opt-in” tool to supplement existing funding, and Nesit told the committee, “I I wanna reiterate that the current form of Senate Bill 2,400 is not a voucher bill.” Proponents said the marketplace model reduces fraud risk compared with a simple receipt-reimbursement system and may help rural families access virtual courses or specialists not locally available.

Details of the proposal and amendments: Axman reviewed printed amendments that (among other changes) clarify that participation does not change the legal status of home education outside the program, allow reduced payments for nonparticipating nonpublic students, require participating nonpublic schools to administer state assessments for students using funds toward tuition, and include language intended to allow federal funds (Title I, IDEA, and other federal streams referenced in testimony) to be used through the ESA framework if federal distributions change. The fiscal note cited a $3,000,000 appropriation for DPI to stand up marketing and contracting; Axman said the fiscal office used a 70% take-up estimate and that she might recommend a $60,000,000 cap on total program commitments during rollout.

Supporters’ testimony: multiple parents, private-school leaders and interest groups urged passage. Maria Nesit (Governor’s office) and Scott Jensen (American Federation for Children, online) emphasized flexibility and student outcomes. Dr. Alyssa Martin of the North Dakota Center for Distance Education asked for an amendment to make $500 available to students enrolled in her full-time diploma program and sought an opt-out from state assessments for those families in that program. Parents and private-school leaders described cases in which a different school setting or supplemental services produced measurable gains for specific students; for example, multiple parents testified that Montessori or parochial settings were the best fit for their children’s social, emotional or learning needs.

Opposition and concerns: superintendents, homeschool advocates, public-school teachers and some parents urged caution or rejection. Rick Deagle, superintendent of Kidder County School District, said, “this bill does threaten the quality and the stability of our public schools, especially in rural areas like Kidder County,” and warned that ESA funding would be taken from the finite pool used for public education. Opponents highlighted several themes raised repeatedly during questioning:

- Fiscal risk and program growth: witnesses and several committee members cited other states’ experience where ESA programs expanded and administrative costs rose beyond initial estimates, and some witnesses said the fiscal note likely understates long-term costs. One outside attorney noted that the bill is novel because it would make public-school students eligible and said take-up rates would likely differ from prior ESA programs.

- Tuition inflation and caps: witnesses cited studies and examples from other states where private-school tuition rose after ESAs were implemented; some suggested tuition caps tied to changes in per-pupil state funding (for example, CPI or per-pupil increases).

- Accountability and public-access rules: critics noted that private providers are not subject to open-records or open-meetings laws and that participating nonpublic schools would not be required to accept all students. Superintendents said public schools must provide services to all district students, including high-cost special-education placements, and that losing students could reduce public-school revenue.

- Homeschool protections: North Dakota homeschool groups urged a “firewall” amendment to distinguish conventional homeschool families from those who opt into an ESA, warning that inclusion without a firewall invites later regulation of all homeschoolers. Homeschool leaders and student witnesses said parental flexibility and minimal regulation are core to their model and that ESA participation should be separate from the state’s Century Code requirements for home education.

- Fraud prevention and marketplace mechanics: Axman and proponents described automated price and fair-value checks within a marketplace and third-party auditing contracts; committee members asked how purchases, vendor approval and reimbursement would operate in practice and whether families could access funds instantly or only after approval. Axman described a digital-wallet experience in which families select approved services and the marketplace pays providers directly, rather than requiring parental reimbursement.

Constitutional and legal points: Father Jaden Nelson, president of Bishop Ryan Catholic School, invoked federal precedent to argue for parity for nonpublic-school students and quoted Pierce v. Society of Sisters (1925): “the fundamental theory of liberty upon which all governments in this union repose excludes any general power of the state to standardize its children by forcing them to accept instruction from public teachers only. The child is not the mere creature of the state.” Opponents cited North Dakota’s Article 8 Section 5 (the so‑called Blaine language) in the state constitution; supporters and external witnesses noted a November 29, 2022 attorney-general opinion that concluded the state Blaine language was unenforceable, an opinion that supporters used to argue legal feasibility.

Committee process and next steps: the hearing collected pro and con testimony and a series of technical amendment proposals; no final committee vote was recorded in the transcript. Axman told members she intends to work with appropriators on funding levels, will press for marketplace procurement handled by DPI and said she may recommend $1,000 per public-school student in appropriations. Committee members pressed for more fiscal detail, data on private-school capacity, and specific language to separate homeschool participation from existing Century Code protections.

What the bill does not yet resolve: the transcript shows disagreements and unresolved items — the final per-student amounts and appropriation level, whether to adopt a program cap, whether and how to firewall homeschoolers who do not opt in, precise auditing and marketplace rules, and limits or caps on private-school tuition increases. Several witnesses urged either stronger caps or other guardrails before adopting a full universal program.

Votes or formal actions: the hearing transcript records no committee vote or formal adoption of amendments. The item remains under consideration by the House Education Committee.

Ending: the hearing closed after several hours of testimony; committee members said they will continue review, amendments and fiscal discussion before any committee recommendation is made.