Montana House Bill HB405

Montana 2025 Regular Session

• Introduced: 2/6/25
• Refer: 2/6/25
• Refer: 2/20/25
• Failed: 5/20/25

Caption

Increase on-schedule reimbursement rates for school transportation

Summary

HB 405 would increase the state reimbursement rates used to pay school districts for transportation costs, including both bus miles and nonbus mileage. The bill raises the per-mile reimbursement schedule for school buses across all capacity categories and increases the nonbus mileage rate as well. It also keeps the existing framework that limits reimbursement to approved routes and qualified vehicles, while preserving the rule that districts may budget more than the reimbursable amount if needed. The bill amends Section 20-10-141, MCA, which governs on-schedule transportation reimbursements for school districts. Under the proposal, higher reimbursement rates would apply to school fiscal years beginning on or after July 1, 2025, with the act itself effective July 1, 2025. In practical terms, the measure would shift more transportation funding support from local property tax sources and county/state transportation revenue toward higher state reimbursement levels for school transportation expenses.

Impact

HB 405 would directly change Montana school transportation reimbursement law by increasing the statutory mileage rates used to calculate on-schedule payments to school districts. Because these reimbursements are tied to school district transportation budgets, the bill would likely reduce the share of transportation costs that must be covered locally through school district property taxes and other local funding sources, while increasing state and county reimbursement obligations under the existing transportation funding system. The bill does not alter route approval rules, vehicle eligibility, or pupil capacity limits, but it would increase the dollar amount districts may claim for eligible transportation miles.

Sentiment

The bill appears to have had generally favorable support in the House early in the process, passing the House Education Committee unanimously and clearing second reading by a wide margin. That suggests broad agreement that school transportation reimbursement rates needed to be increased. However, the bill ultimately died in the process after being sent to the House Appropriations Committee to table, indicating that fiscal concerns likely outweighed the policy support. Overall, the sentiment was supportive of helping school districts with transportation costs, but not enough to overcome budgetary resistance.

Contention

The main point of contention was likely cost: increasing reimbursement rates would require more public funding and could affect the state budget and local tax burdens. Supporters would view the bill as a needed adjustment to keep pace with transportation expenses and relieve pressure on school district property taxes, while opponents or fiscal skeptics would be concerned about the added expenditure and whether the increase was affordable. The committee vote to table the bill in Appropriations indicates that funding impact, rather than the underlying policy, was the central obstacle.