SB 104-REPEAL CHARTER SCHOOL GRANTS    CHAIR FRED DYSON announced SB 104 to be up for consideration. He told members in preparing this legislation for charter schools, he asked if federal funding was assured and when it would start. The answer he got was almost certainly, but [DEED] wouldn't know until mid-summer. He wondered if the Legislature should delay passing this bill until it is sure of funding and the answer he got back today was that the governor would prefer that it pass with contingency language. He prepared draft contingency language saying this bill only goes into effect if the federal government agreement happens. MR. EDDY JEANS, Department of Education and Early Development (DEED), explained that this legislation would repeal the state grants for start-up funds for charter schools. It was his understanding that one of the reasons the state started down that road was because of minimal federal support to start charter schools. He has a chart that shows the state was granting charter schools $140,000 to $180,000 in federal funds. The Legislature passed the state program that consisted of $500 per student in addition to the federal grants. The highest total for the two grants combined for any of the state's original charter schools was $478,000 - a family partnership school in Anchorage. He said the department had a dialogue with the federal government and talked with the director of charter schools and floated a proposal that gave charter schools $150,000 per year for the first four years with a $45,000 grant in the fifth year for a total of $495,000. That would easily exceed the combined federal and state grant that school districts received previously. However, there is no signed grant agreement yet, and the application is due April 28. DEED should know by mid-to-late June whether or not those funds are coming. The charter school coordinator received an e-mail from the director, Dean Kern, who said he liked the proposal, but DEED still has to go through the grant application process. SENATOR WILKEN moved to adopt conceptual amendment number 1. SENATOR GUESS objected for discussion purposes. She asked if the Legislature would evaluate the federal funds it would receive each year or just the first year. MR. JEANS replied that he understands that this amendment would delay the repeal of the state charter school grant until the department knows whether or not it has secured federal funding this summer. The effective date of the bill as it is currently written is July 1, 2004. DEED currently has a $158,000 request in this year's budget, which will make all charter schools whole under this state program. He thought that Senator Dyson's concern was if the state doesn't get the funding, then the repeal date would become July 1, 2004 and it would just fall off the books. If the state secures the federal funds this year, he understands that the state grant would come off the books in July 1, 2004. CHAIR DYSON said the fundamental question that Senator Guess was asking is what happens if the federal funds go away in the future. MR. JEANS replied that at that point the Legislature would have to determine whether it wanted to initiate a state grant program again. CHAIR DYSON asked what the length of the federal commitment is. MR. JEANS replied five years and DEED will be requesting $10 million in federal start up grants. SENATOR GUESS commented that he had answered her question and then asked whether he had thought about putting a sunset of five years on the repeal. She was concerned about what would happen if the federal funds and the start up funds for charter schools both go away. MR. JEANS replied that he did not have any discussions with the administration about a sunset date. CHAIR DYSON added that Senators Guess and Davis had discussions with him about a possible task force to take a much broader look at the whole charter school business. He thought this would be one of the things they would look at, but he, personally, would not recommend a sunset right now. SENATOR WILKEN moved to report CSSB 104(HES) from committee with individual recommendations and attached fiscal notes. There were no objections and it was so ordered.