HOUSE BILL NO. 171 am "An Act repealing the charter school grant program; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated that this bill, sponsored by the House Rules Committee, at the request of the Governor, "eliminates the charter school grant start-up program of $500 per student beginning in July first of 2004. HB 171 takes effect only if the State receives federal funding for charter school start-up costs that equals or exceeds the State funding available in FY 03." EDDY JEANS, Manager, School Finance and Facilities Section, Education Support Services, Department of Education and Early Development, outlined a spreadsheet titled, "Breakdown of Alaska Charter School Federal and State Grants" provided by the Department. He pointed out the information showing the charter schools that received federal grants in addition to State grants and the total amount of start-up funding received. He exampled the Soldotna and Chinook charter schools that also received federal and State grants. Mr. Jeans pointed out the effective date delay of one year in this bill is to accommodate "the State's commitment" to fund charter schools with appropriations included in the Governor's proposed FY 04 operating budget. Mr. Jeans explained this legislation proposing to eliminate the State grant program is a result of a State application to the US Department of Education to increase the amount of federal grants to $495,000 over a four-year period. He described the application process and the proposal to appropriate $150,000 each year for three years and $45,000 in the fourth year. He emphasized this amount is larger than the any of the combined State and federal grants received by any other Alaskan charter schools. He indicated the Department would reapply for federal grant funds after five years. He noted that the State Board of Education recently approved four charter schools listed on the aforementioned handout. Senator Hoffman asked the communities in which the new charter schools are located that would receive the new federal grant funds. Mr. Jeans listed Ketchikan and Mat-Su, and stated he would provide the location of the two other charter schools. Senator Hoffman asked if Fairbanks was included. Co-Chair Wilken understood it was not. Mr. Jeans indicated he would provide detailed information. Senator Olson asked about alternatives to charter schools. Mr. Jeans replied students have the option of attending regular public schools or one of the statewide correspondence programs. Larger communities, he noted, also have alternative high schools. Senator Olson asked the cost per student compared to regular schools. Mr. Jeans responded that the amount depends on the number of students enrolled in a charter school and explained that under the current foundation formula funding statute, at least 150 students must be enrolled to qualify as a separate school. Otherwise, he said, the charter school is funded in conjunction with the largest school within the same school district. He noted the Department is in the process of evaluating whether the education is comparable to that of regular public schools. ROGER SHANNON testified via teleconference from Kenai to request that charter schools be allowed to continue. He opined that the National Education Association (NEA) has become involved in how children are educated, which has subsequently resulted in higher costs. He emphasized he was speaking to the Committee "from street level" as a layperson on the subject. Senator Taylor offered a motion to report HB 171 am from Committee with individual recommendations and accompanying fiscal note. There was no objection and HB 171am MOVED from Committee with zero fiscal note #1 from the Department of Education and Early Development. AT EASE 9:43 AM / 9:43 AM