Legislature(1993 - 1994)
03/31/1994 08:35 AM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE March 31, 1994 8:35 A.M. TAPE HFC 94 - 100, Side 2, #000 - end. TAPE HFC 94 - 101, Side 1, #000 - end. TAPE HFC 94 - 102, Side 1, #000 - #85. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:35 A.M. PRESENT Co-Chair Larson Representative Foster Representative Martin Representative Therriault Vice-Chair Hanley Representative Parnell Representative Brown Representative Therriault Representatives Grussendorf, MacLean and Hoffman were not present for the meeting. ALSO PRESENT Representative Con Bunde; Mike Greany, Director, Legislative Finance Division; Remond Henderson, Director, Division of Administrative Services, Department of Community and Regional Affairs; Guy Bell, Director, Division of Administrative Services, Department of Commerce and Economic Development; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Bob Baratko, Director, Division of Administrative Services, Department of Revenue; Bill Andrews, Finance Officer, Department of Natural Resources; Virginia Stonkus, Analysts, Legislative Finance Division, Sharon Barton, Director, Division of Administrative Services, Department of Administration; Laura Baker, Budget Analyst, Office of Management and Budget, Office of the Governor. SUMMARY HB 370 An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date. HB 370 was HELD in Committee for further consideration. 1 HB 334 An Act relating to criminal sentencing; and relating to mandatory life imprisonment, parole, good time credit, pardon, commutation of sentence, reprieve, furlough, and service of sentence at a correctional restitution center for offenders with at least three serious felony convictions. HB 334 was HELD in Committee for further consideration. HOUSE BILL 370 "An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date." FRONT SECTION Section #17 Representative Therriault provided the Committee with Amendment #7 to Section #17. [Copy on file]. He noted that the sum of $150 thousand dollars would be appropriated from the lapsing balance of the employment assistance training program account on June 30, 1994, to the Department of Labor for a grant payment required for an employment program under AS 37.05.316 to the Fairbanks Native Association. Representative Brown questioned the funding source. She understood that it was a federal requirement to place the funds back into the unemployment compensation fund. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION, reiterated that the lapsing balance must go to the unemployment compensation fund. Representative Brown suggested that funding could originate in the STEP Program rather than requesting a designated grant. Representative Therriault noted that the STEP Program would not be available unless the participant had paid into the unemployment system. He added that the proposed program would be created for the chronically unemployed. Mr. Greany commented that in FY93, the lapsing balance was $495 thousand dollars, whereas, the FY94 projected balance is $300 thousand dollars. He thought that the amount requested in Amendment #6 was feasible. REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, remarked that in the past, there had been a grant in which STEP funds were used. A determination was made, based upon an opinion from legislative counsel, that the grant would 2 not need to be allocated in the same manner as the STEP funds although the program participants did have to be eligible for STEP funds. That grant agreement has been rewritten. Mr. Henderson added that funds deposited into the account for the STEP Program were specified for participants who had contributed to the unemployment fund. He pointed out that the majority of the participants listed in Amendment #6 would not be eligible. Representative Therriault indicated that the amendment would not impact the STEP Program. Representative Brown pointed out that the Unemployment Compensation Fund would be impacted. Mr. Henderson stated that money for the Unemployment Compensation Fund originates from wages, whereas, the allocations for the STEP Program was created as a training program to help employ participants. There being NO OBJECTION, Section #17 was adopted. Section #18 Co-Chair Larson pointed out that Section #18 was comprised of three separate sections addressing distribution into the appropriate accounts for Alaska Housing Finance Corporation (AHFC). Co-Chair Larson stated Section #18 would be HELD for further discussion and the addition of a section (d). Section #19 GUY BELL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, advised that the Fisheries Enhancement Loan Fund provides loans to aquaculture associations for operations and capital improvements to their hatchery facilities. The Department anticipates the total loan demand for FY95 to be $11 million dollars and that the $9.9 million dollars balance will come from other loan repayments. Mr. Bell pointed out an impact of no appropriation would keep the funds in the Commercial Fishing Loan Fund which could then be used at a future date for commercial fishing loans and aquaculture associations for basic operations or capital improvements for continued operations. Mr. Bell explained that there is a six year deferment on both principle and interest before payments are required. There being NO OBJECTION, Section #19 was adopted. Section #20 Representative Brown MOVED to HOLD Section #20. There being NO OBJECTION, Section #20 was held. 3 Section #21 NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, indicated that Section #21 refers to appropriations made in HB 370 and should include appropriations requested in the capital project legislation in order to be able to calculate the accurate amount of that request. Mr. Greany recommended amending Section #21 which would delete language "by secs. 25 and 38 of this Act". Co-Chair Larson MOVED the language change. There being NO OBJECTION, it was deleted and changed. There being NO OBJECTION to Section #21, it was adopted. Section #22 Mr. Greany recommended holding Section #22 until the spring forecast is available for current oil price and revenue projections. Representative Hanley suggested that the specific dollar amount be removed from Section #22 adding instead a percentage. Mr. Greany advised that by allowing a specific dollar amount, the State can determine a more accurate breakdown and distribution of funds. Ms. Slagle clarified that according to the Alaska Statutes, the money that is identified available for appropriation from the general fund to the 470 fund should be a sum equal to the sum of A(20) and A(3) during the calendar year preceding the legislative session in which the appropriations are to be made. She added that by the time of the spring forecast, the FY94 receipts would be complete. Section #22 was HELD for further consideration. Section #23 Co-Chair Larson provided the Committee with Amendment #7 to Section #23. [Copy on file]. The amendment would appropriate funds for costs related to legal proceedings and audit activity involving oil and gas revenue due or paid to the state or state title to oil and gas lands. (Tape Change, HFC 94-101, Side 1). Section #23 was HELD for further consideration. Section #24 Representative Therriault recommended the proposed amount for fire suppression be decreased by $1.9 million dollars. 4 BILL ANDREWS, FINANCE OFFICER, DEPARTMENT OF NATURAL RESOURCES, stated that the budget had been reduced by $1.9 million dollars. He pointed out that the average cost of fighting fires is $9.2 million dollars and that the Department would use the emergency declaration process when funds are insufficient to fight fires. VIRGINIA STONKUS, ANALYST, LEGISLATIVE FINANCE DIVISION, stated that Section #23 should read $3,619.1 million dollars. LAURA BAKER, BUDGET SERVICES, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, remarked that the fire suppression amount was contained in the front section of the budget as directed by activity last year which pulled fire suppression out of the main portion of the operating budget. Representative Hanley commented that fixed costs should be identified and placed into the operating costs of the Department in order that the Legislature can anticipate each year those costs and then the supplemental would fund the variable costs. Mr. Andrews replied that fixed costs would be budgeted from the $5.5 million dollar allocation for fire suppression activity. He added that fixed costs amount to $4.2 million dollars for FY95. Representative Brown remarked that the amount allocated was an underfunding and did not include any variable costs. Representative Therriault MOVED the $3,619.1 million dollar change to Section #24. Representative Brown MOVED to AMEND the motion so that fire suppression costs be identified as part of the Department's base budget. Representative Parnell suggested addressing that concern within the individual department budget. Representative Brown WITHDREW THE MOTION. There being NO OBJECTION, it was withdrawn. There being NO OBJECTION to the main MOTION, it was adopted. Section #25 Mr. Greany explained the change to the amount appropriated in the information services fund component for the Department of Administration. The new total was $22,649.9 million dollars. SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION, recalled that the balance of the fund was $452 thousand dollars, however, there have been three capital projects appropriated using those receipts as a funding source. Representative Brown asked when these capital appropriations had been made. Ms. 5 Barton stated they were made in FY92 and are currently valid projects. There being NO OBJECTION, Section #25 was adopted. Section #26 There being NO OBJECTION, Section #26 was adopted. Section #27 There being NO OBJECTION, Section #27 was adopted. Section #28 There being NO OBJECTION, Section #28 was adopted. Section #29 Ms. Slagle testified that the total budget for the Safety Advisory Council program is $109 thousand dollars. She stated that the Council meets on an annual basis and that the requested amount would fund the FY95 meeting. Representative Martin disagreed with the need of continued action by the Council. There being NO OBJECTION, Section Section #30 There being NO OBJECTION, Section #30 was adopted. Section #31 Representative Brown questioned the amount of the unexpended and unobligated balance of the disaster relief fund. Section #31 was HELD open for further discussion. Section #32 There being NO OBJECTION, Section #32 was adopted. Section #33 There being NO OBJECTION, Section #33 was adopted. Section #34 Co-Chair Larson pointed out that Section #34 was contained in HB 505. He asked to hold Section #34 until the final vote on HB 505 was taken on the House Floor. There being NO OBJECTION, Section #34 was held open. Section #35 6 Co-Chair Larson noted that Section #35 was contained in HB 372 and would address those funds deposited in the four dam pool transfer fund during FY95. Mr. Henderson stated that $10.5 million dollars has been placed into that account annually. He added that without the proposed language, there was a possibility that the funds could not be deposited into the separate funds for the four dam pool. Representative Brown advised while the funds are in the four dam pool, they could continue to be assets of the general fund which could then be appropriated elsewhere. She added that when they are in other specified funds, they could then become existing appropriations for authorization of expenditures. Representative Brown suggested this be an area to save money for the State's future. Representative Brown OBJECTED to Section #35 being adopted. Section #35 was HELD for further consideration. Section #36 Representative Martin noted that Section #36 was part of HB 505 and suggested adding a section (b) which would clarify that a simple majority vote was sufficient. Co-Chair Larson stated that if HB 505 passed, he would recommend that Section #36 be removed from the front section of the budget. Section #36 was HELD for further consideration. Section #37 Co-Chair Larson suggested adopting Section #37 which would be subject to necessary adjustments as other sections are deleted or added. There being NO OBJECTION, Section #37 was adopted upon those conditions. Ms. Slagle advised that the Office of the Governor had requested that an amendment be added to the front section of the bill addressing the ASMI tax receipt extension. Mr. Greany remarked that previously the Committee had adopted a motion to include HB 371 within HB 370. He pointed out that there are two relevant front sections included in HB 371. One section would address the amounts of the shared taxes and the second section would address the amount for the salmon enhancement tax. Co-Chair Larson advised this would be Amendment #8. Upon consideration of this information, Co-Chair Larson recommended HOLDING SECTION #37 open in order that the amendment could be drafted to address those concerns. There 7 being NO OBJECTION, Section #37 was held open. HB 370 was HELD in Committee for further consideration. (Tape Change, HFC 94-102, Side 1). HOUSE BILL 334 "An Act relating to criminal sentencing; and relating to mandatory life imprisonment, parole, good time credit, pardon, commutation of sentence, reprieve, furlough, and service of sentence at a correctional restitution center for offenders with at least three serious felony convictions." Representative Hanley MOVED TO RESCIND previous action taken on HB 334. REPRESENTATIVE CON BUNDE stated that the legislation would deal with the most serious felons and repeat offenders. He offered to answer questions of the Committee. Representative Brown strongly OBJECTED stating that procedurally the uniform rules had been violated by not providing 24-hour notice of reconsideration of action taken by the Committee. Co-Chair Larson advised that Tamara Cook, Director of the Division of Legal Services would be consulted regarding this concern. HB 334 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 10:10 a.m. HOUSE FINANCE COMMITTEE March 31, 1994 8:35 A.M. TAPE HFC 94 - 100, Side 2, #000 - end. TAPE HFC 94 - 101, Side 1, #000 - end. TAPE HFC 94 - 102, Side 1, #000 - #85. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:35 A.M. PRESENT Co-Chair Larson Representative Foster Representative Martin Representative Therriault 8 Vice-Chair Hanley Representative Parnell Representative Brown Representative Therriault Representatives Grussendorf, MacLean and Hoffman were not present for the meeting. ALSO PRESENT Representative Con Bunde; Mike Greany, Director, Legislative Finance Division; Remond Henderson, Director, Division of Administrative Services, Department of Community and Regional Affairs; Guy Bell, Director, Division of Administrative Services, Department of Commerce and Economic Development; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Bob Baratko, Director, Division of Administrative Services, Department of Revenue; Bill Andrews, Finance Officer, Department of Natural Resources; Virginia Stonkus, Analysts, Legislative Finance Division, Sharon Barton, Director, Division of Administrative Services, Department of Administration; Laura Baker, Budget Analyst, Office of Management and Budget, Office of the Governor. SUMMARY HB 370 An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date. HB 370 was HELD in Committee for further consideration. HB 334 An Act relating to criminal sentencing; and relating to mandatory life imprisonment, parole, good time credit, pardon, commutation of sentence, reprieve, furlough, and service of sentence at a correctional restitution center for offenders with at least three serious felony convictions. HB 334 was HELD in Committee for further consideration. HOUSE BILL 370 "An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date." FRONT SECTION 9 Section #17 Representative Therriault provided the Committee with Amendment #7 to Section #17. [Copy on file]. He noted that the sum of $150 thousand dollars would be appropriated from the lapsing balance of the employment assistance training program account on June 30, 1994, to the Department of Labor for a grant payment required for an employment program under AS 37.05.316 to the Fairbanks Native Association. Representative Brown questioned the funding source. She understood that it was a federal requirement to place the funds back into the unemployment compensation fund. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION, reiterated that the lapsing balance must go to the unemployment compensation fund. Representative Brown suggested that funding could originate in the STEP Program rather than requesting a designated grant. Representative Therriault noted that the STEP Program would not be available unless the participant had paid into the unemployment system. He added that the proposed program would be created for the chronically unemployed. Mr. Greany commented that in FY93, the lapsing balance was $495 thousand dollars, whereas, the FY94 projected balance is $300 thousand dollars. He thought that the amount requested in Amendment #6 was feasible. REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, remarked that in the past, there had been a grant in which STEP funds were used. A determination was made, based upon an opinion from legislative counsel, that the grant would not need to be allocated in the same manner as the STEP funds although the program participants did have to be eligible for STEP funds. That grant agreement has been rewritten. Mr. Henderson added that funds deposited into the account for the STEP Program were specified for participants who had contributed to the unemployment fund. He pointed out that the majority of the participants listed in Amendment #6 would not be eligible. Representative Therriault indicated that the amendment would not impact the STEP Program. Representative Brown pointed out that the Unemployment Compensation Fund would be impacted. Mr. Henderson stated that money for the Unemployment Compensation Fund originates from wages, whereas, the allocations for the STEP Program was created as a training program to help employ participants. There being NO OBJECTION, Section #17 was adopted. 10 Section #18 Co-Chair Larson pointed out that Section #18 was comprised of three separate sections addressing distribution into the appropriate accounts for Alaska Housing Finance Corporation (AHFC). Co-Chair Larson stated Section #18 would be HELD for further discussion and the addition of a section (d). Section #19 GUY BELL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, advised that the Fisheries Enhancement Loan Fund provides loans to aquaculture associations for operations and capital improvements to their hatchery facilities. The Department anticipates the total loan demand for FY95 to be $11 million dollars and that the $9.9 million dollars balance will come from other loan repayments. Mr. Bell pointed out an impact of no appropriation would keep the funds in the Commercial Fishing Loan Fund which could then be used at a future date for commercial fishing loans and aquaculture associations for basic operations or capital improvements for continued operations. Mr. Bell explained that there is a six year deferment on both principle and interest before payments are required. There being NO OBJECTION, Section #19 was adopted. Section #20 Representative Brown MOVED to HOLD Section #20. There being NO OBJECTION, Section #20 was held. Section #21 NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, indicated that Section #21 refers to appropriations made in HB 370 and should include appropriations requested in the capital project legislation in order to be able to calculate the accurate amount of that request. Mr. Greany recommended amending Section #21 which would delete language "by secs. 25 and 38 of this Act". Co-Chair Larson MOVED the language change. There being NO OBJECTION, it was deleted and changed. There being NO OBJECTION to Section #21, it was adopted. Section #22 Mr. Greany recommended holding Section #22 until the spring 11 forecast is available for current oil price and revenue projections. Representative Hanley suggested that the specific dollar amount be removed from Section #22 adding instead a percentage. Mr. Greany advised that by allowing a specific dollar amount, the State can determine a more accurate breakdown and distribution of funds. Ms. Slagle clarified that according to the Alaska Statutes, the money that is identified available for appropriation from the general fund to the 470 fund should be a sum equal to the sum of A(20) and A(3) during the calendar year preceding the legislative session in which the appropriations are to be made. She added that by the time of the spring forecast, the FY94 receipts would be complete. Section #22 was HELD for further consideration. Section #23 Co-Chair Larson provided the Committee with Amendment #7 to Section #23. [Copy on file]. The amendment would appropriate funds for costs related to legal proceedings and audit activity involving oil and gas revenue due or paid to the state or state title to oil and gas lands. (Tape Change, HFC 94-101, Side 1). Section #23 was HELD for further consideration. Section #24 Representative Therriault recommended the proposed amount for fire suppression be decreased by $1.9 million dollars. BILL ANDREWS, FINANCE OFFICER, DEPARTMENT OF NATURAL RESOURCES, stated that the budget had been reduced by $1.9 million dollars. He pointed out that the average cost of fighting fires is $9.2 million dollars and that the Department would use the emergency declaration process when funds are insufficient to fight fires. VIRGINIA STONKUS, ANALYST, LEGISLATIVE FINANCE DIVISION, stated that Section #23 should read $3,619.1 million dollars. LAURA BAKER, BUDGET SERVICES, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, remarked that the fire suppression amount was contained in the front section of the budget as directed by activity last year which pulled fire suppression out of the main portion of the operating budget. 12 Representative Hanley commented that fixed costs should be identified and placed into the operating costs of the Department in order that the Legislature can anticipate each year those costs and then the supplemental would fund the variable costs. Mr. Andrews replied that fixed costs would be budgeted from the $5.5 million dollar allocation for fire suppression activity. He added that fixed costs amount to $4.2 million dollars for FY95. Representative Brown remarked that the amount allocated was an underfunding and did not include any variable costs. Representative Therriault MOVED the $3,619.1 million dollar change to Section #24. Representative Brown MOVED to AMEND the motion so that fire suppression costs be identified as part of the Department's base budget. Representative Parnell suggested addressing that concern within the individual department budget. Representative Brown WITHDREW THE MOTION. There being NO OBJECTION, it was withdrawn. There being NO OBJECTION to the main MOTION, it was adopted. Section #25 Mr. Greany explained the change to the amount appropriated in the information services fund component for the Department of Administration. The new total was $22,649.9 million dollars. SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION, recalled that the balance of the fund was $452 thousand dollars, however, there have been three capital projects appropriated using those receipts as a funding source. Representative Brown asked when these capital appropriations had been made. Ms. Barton stated they were made in FY92 and are currently valid projects. There being NO OBJECTION, Section #25 was adopted. Section #26 There being NO OBJECTION, Section #26 was adopted. Section #27 There being NO OBJECTION, Section #27 was adopted. Section #28 There being NO OBJECTION, Section #28 was adopted. Section #29 13 Ms. Slagle testified that the total budget for the Safety Advisory Council program is $109 thousand dollars. She stated that the Council meets on an annual basis and that the requested amount would fund the FY95 meeting. Representative Martin disagreed with the need of continued action by the Council. There being NO OBJECTION, Section Section #30 There being NO OBJECTION, Section #30 was adopted. Section #31 Representative Brown questioned the amount of the unexpended and unobligated balance of the disaster relief fund. Section #31 was HELD open for further discussion. Section #32 There being NO OBJECTION, Section #32 was adopted. Section #33 There being NO OBJECTION, Section #33 was adopted. Section #34 Co-Chair Larson pointed out that Section #34 was contained in HB 505. He asked to hold Section #34 until the final vote on HB 505 was taken on the House Floor. There being NO OBJECTION, Section #34 was held open. Section #35 Co-Chair Larson noted that Section #35 was contained in HB 372 and would address those funds deposited in the four dam pool transfer fund during FY95. Mr. Henderson stated that $10.5 million dollars has been placed into that account annually. He added that without the proposed language, there was a possibility that the funds could not be deposited into the separate funds for the four dam pool. Representative Brown advised while the funds are in the four dam pool, they could continue to be assets of the general fund which could then be appropriated elsewhere. She added that when they are in other specified funds, they could then become existing appropriations for authorization of expenditures. Representative Brown suggested this be an area to save money for the State's future. 14 Representative Brown OBJECTED to Section #35 being adopted. Section #35 was HELD for further consideration. Section #36 Representative Martin noted that Section #36 was part of HB 505 and suggested adding a section (b) which would clarify that a simple majority vote was sufficient. Co-Chair Larson stated that if HB 505 passed, he would recommend that Section #36 be removed from the front section of the budget. Section #36 was HELD for further consideration. Section #37 Co-Chair Larson suggested adopting Section #37 which would be subject to necessary adjustments as other sections are deleted or added. There being NO OBJECTION, Section #37 was adopted upon those conditions. Ms. Slagle advised that the Office of the Governor had requested that an amendment be added to the front section of the bill addressing the ASMI tax receipt extension. Mr. Greany remarked that previously the Committee had adopted a motion to include HB 371 within HB 370. He pointed out that there are two relevant front sections included in HB 371. One section would address the amounts of the shared taxes and the second section would address the amount for the salmon enhancement tax. Co-Chair Larson advised this would be Amendment #8. Upon consideration of this information, Co-Chair Larson recommended HOLDING SECTION #37 open in order that the amendment could be drafted to address those concerns. There being NO OBJECTION, Section #37 was held open. HB 370 was HELD in Committee for further consideration. (Tape Change, HFC 94-102, Side 1). HOUSE BILL 334 "An Act relating to criminal sentencing; and relating to mandatory life imprisonment, parole, good time credit, pardon, commutation of sentence, reprieve, furlough, and service of sentence at a correctional restitution center for offenders with at least three serious felony convictions." Representative Hanley MOVED TO RESCIND previous action taken on HB 334. 15 REPRESENTATIVE CON BUNDE stated that the legislation would deal with the most serious felons and repeat offenders. He offered to answer questions of the Committee. Representative Brown strongly OBJECTED stating that procedurally the uniform rules had been violated by not providing 24-hour notice of reconsideration of action taken by the Committee. Co-Chair Larson advised that Tamara Cook, Director of the Division of Legal Services would be consulted regarding this concern. HB 334 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 10:10 a.m. 16
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