Legislature(1995 - 1996)
03/20/1995 01:12 PM House TRA
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* first hearing in first committee of referral
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HOUSE TRANSPORTATION STANDING COMMITTEE
March 20, 1995
1:12 p.m.
MEMBERS PRESENT
Representative Gary Davis, Chairman
Representative Beverly Masek, Vice Chair
Representative Jeannette James
Representative Eileen MacLean
Representative Jerry Sanders
Representative Bill Williams
MEMBERS ABSENT
Representative Tom Brice
COMMITTEE CALENDAR
HB 210: "An Act relating to issuance of motor vehicle
registrations and titles, and to licenses and
permits to operate a motor vehicle."
HEARD AND HELD
WITNESS REGISTER
REPRESENTATIVE AL VEZEY
Alaska State Legislature
State Capitol Building, Room 216
Juneau, Alaska 99801
Telephone: 465-3719
POSITION STATEMENT: Sponsor of HB 210
JUANITA HENSLEY, Chief, Driver Services
Division of Motor Vehicles
Department of Public Safety
P.O. Box 20020
Juneau, Alaska 99802
Telephone: 465-4361
POSITION STATEMENT: Supported HB 210
PREVIOUS ACTION
BILL: HB 210
SHORT TITLE: PRIVATE MOTOR VEHICLE LICENSING/TESTING
SPONSOR(S): REPRESENTATIVE(S) VEZEY
JRN-DATE JRN-PG ACTION
03/01/95 529 (H) READ THE FIRST TIME - REFERRAL(S)
03/01/95 529 (H) TRANSPORTATION, STATE AFFAIRS
03/17/95 (H) TRA AT 01:00 PM CAPITOL 17
03/20/95 (H) TRA AT 01:00 PM CAPITOL 17
ACTION NARRATIVE
TAPE 95-9, SIDE A
Number 000
The House Transportation Committee was called to order by Chairman
Gary Davis at 1:12 p.m. Members present at the call to order were
Representatives Davis, James, Sanders and Williams. Members absent
were Representatives Brice, Masek and MacLean.
CHAIRMAN GARY DAVIS stated the agenda was to hear testimony on HB
210.
HTRA - 03/20/95
HB 210 - PRIVATE MOTOR VEHICLE LICENSING/TESTING
Number 017
REPRESENTATIVE AL VEZEY, Sponsor, introduced HB 210 and stated HB
210 would mandate that the state set up a system where motor
vehicle and driver license services could be provided to members of
the public by private sector agencies. He explained HB 210 was a
comprehensive bill and costs the state nothing. He explained all
the costs are borne by the private agencies. He indicated it was
designed so the state could not write regulations making it cost
prohibitive for an agent to want to provide this service. He
explained the regulations have been imposed into the statute. He
indicated there were 29 other states using private agencies to
provide this service to the public. He stated it was past time for
Alaska to look into using private agencies. He explained HB 210
was a complex bill. He stated one of his major concerns was the
maintaining of the quality of information and services to the
public. He stated there were certain requirements for the
qualifications. He acknowledged there were representatives from
the Division of Motor Vehicles (DMV) with positive suggestions
regarding HB 210. He noted the DMV was independently exploring
similar areas.
Number 064
CHAIRMAN DAVIS asked if there were any questions. Chairman Davis
asked if the Alaska DMV currently had contract offices.
REPRESENTATIVE VEZEY stated he was not aware of DMV's current
structure as far as the contract office. He stated the difference
seemed to lie with who the employees work for and not so much where
the offices are located. He said he was not aware of any DMV
services being issued by any agency other than state employees.
CHAIRMAN DAVIS commented that this is one of those, "Why didn't I
think of that" issues and acknowledged the DMV felt the same way.
Number 088
JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles
(DMV), Department of Public Safety (DPS), explained that the DMV
currently has 13 contract agents that they contract with the police
departments throughout the state to perform the functions of the
DMV. She stated the reason the DMV utilizes the police
departments as opposed to regular "public" sector is the computer
systems and the access available to them. She stated they have
national as well as international data base systems that have to be
updated. She indicated the police department already has their
computers in place, so there is no additional cost for setting them
up. She mentioned the police department is paid according to the
volume of work they do which currently is fairly small. She made
reference to a statement she requested to present and noted the DMV
was in the process of looking at various alternatives in offering
the public some assistance and to reduce lines at the DMV as well
as any complaints.
Number 122
CHAIRMAN DAVIS stated for the record that Representative Masek
arrived at 1:12 p.m.
MS. HENSLEY continued to explain that HB 210 mandated the DMV to
contract out or privatize most of the DMV's functions. She noted
that "privatization supporter claims that the viable method of
addressing the declining budget and it is a major progressive step
in conducting government business." She commented on what may seem
like progress may not necessarily be progress and exemplified this
comment by explaining a state that widely used privatization for
DMV functions. She indicated the state had only three DMV offices
with in state employees for the largest cities, and the functions
in more than 20 other locations were contracted out.
MS. HENSLEY continued to explain, even in the cities with the state
offices there were multi-contract service providers. She indicated
this was a form of privatization on a large scale as is currently
being proposed by HB 210. She said the system was not without
problems. She indicated the functions of the DMV were so many and
diverse that it was difficult to fit them into a large scale
enforcement contract. She stated that much of the DMV management
time was spent on contract administration training rather than
developing new programs. She said the contract agents established
their own procedures rather than following a standard procedure so
that requirements to obtain a driver license or vehicle title
varied from city to city.
MS. HENSLEY noted because of privacy issues or technology
restraints, the contract agents did not have computer access, thus
creating a three to six month wait for titles and licenses to be
processed by a central office rather than an instant issue
procedure Alaska currently enjoys. She mentioned the contracts
were lucrative, so many agents were awarded the contracts that
possibly should have been held by other people. She indicated the
contracts were costly and reduced revenue from being returned to
the state. She noted these problems rose to such a level that the
legislature demanded a change and created a "strong state DMV" with
a mandate to replace contract agents, improve service and reduce
cost. She explained this mandate was accomplished over a five year
period as contract agents were replaced with state offices, which
were funded by costs previously paid by the contracts. She
explained the contract agents retained only small locations where
the contract costs were lower than that for having a state employee
in that particular location. She mentioned all state offices were
connected to the main computer system so delays in issuing titles,
registrations and licenses were eliminated. She said this example
of privatization was tried and the legislature demanded the change.
MS. HENSLEY stated the situation she just described occurred in
Alaska in the 1970s. She explained the state of Alaska has tried
privatization with poor results and cautioned against recreating
the mistakes of the past. She explained many of the mistakes in
the past can be avoided and noted that privatization is not
applicable to all service problems. Ms. Hensley indicated that in
most cases it would be more costly to the state of Alaska, whether
it comes from state revenue or contract costs for the citizens of
the state of Alaska. She indicated that the DMV is not opposed to
the privatization of some of the functions of the DMV. She
explained when looking at the DMV's track record, they're
initiating various "pilot projects" such as an emissions station
(IM) in Anchorage where, when a person comes into the station for
their IM inspection certificate they have the option of renewing
their registration at that time. She added there are plans for
opening other IM stations in Anchorage and Fairbanks. She stated
there were other areas being considered for IM stations such as
Kiosks, through the automatic teller machine (ATM) renewal process.
She explained the "hold back" with the ATM renewal process is the
fact the state is not equipped to pay the credit card fees
required. She added, the processing fee for the credit cards range
from 1.5 percent to 7.0 percent and DMV does not have the revenue
to do this. Ms. Hensley requested the committee to go over some
amendments proposed by the DMV for HB 210.
Number 199
CHAIRMAN DAVIS asked if there were any questions of Ms. Hensley.
He asked Ms. Hensley about past operations of the DMV within the
state, and did she have any expectations with a more computer
literate society today versus in the 70s.
MS. HENSLEY indicated with the computer checkpoints, there is the
potential for greater audit control over computer literacy
problems. She indicated one of the requirements of HB 210 provides
for an agent to obtain a 95 percent error free and 5 percent error
factor. She stated currently, DMV's contract agents being the
police departments have an error factor of 40 percent and includes
a lot of oversight and a great deal of errors made by the
contracting agents. She emphasized the need for a hold on the
contract agents in order to possibly restrain the amount of money
they receive, stated by their contract when having an error factor
as high as they do. She regretted this subject was not addressed
in HB 210. She explained it is time consuming to correct all their
errors even though it provides a service.
MS. HENSLEY noted the DMV contracted with the Skagway police
department, Department of Public Safety, at North Slope Borough,
Petersburg, Wrangell, Craig, Cordova and Seward police departments.
She mentioned Homer has a DMV employee, and Glennallen has Alaska
state trooper employees, Nome and Talkeetna have a DMV employee
which is paid half-time by the DMV and the other half by the state
troopers (ST). She stated there use to be more sites such as
Galena and Nenana, but due to an extremely high error factor and
the volume of work in those areas they, were not awarded new
contracts. She stated they have the option of using mail service
or going in to the facilities.
CHAIRMAN DAVIS stated for the record that Representative Eileen
MacLean arrived at 1:20 p.m.
REPRESENTATIVE JEANNETTE JAMES stated as much of government that
can be privatized, the better, for numerous reasons and money is
one of them. She stated she had been in contact with the
department regarding the DMV office in Fairbanks. She indicated
the DMV actually seemed to make more money than it spends.
Number 225
MS. HENSLEY acknowledged Representative James was correct and
explained that the DMV collects approximately $34 million of state
revenue each year and the DMV's budget is $8.3 million a year.
REPRESENTATIVE JAMES stated her concerns on attempting to figure
out what should be privatized and what ought not to be, however,
the other problem she noted of great concern by the public is the
complaints of being mistreated not solely because they do not
receive what they want, but also people complaining that they have
been treated rudely. She noted that in Fairbanks there is a lot of
work being done to improve these situations. She asked if
computers were all networked into similar systems enabling them to
gain access to the same information.
MS. HENSLEY said, yes providing they pass the background
investigation that is required in order to obtain access to the
national data bases.
REPRESENTATIVE JAMES asked would it not be possible for a private
industry to have assigned personnel or a "bonding" for those
personnel for less errors or greater mistakes.
MS. HENSLEY stated HB 210 did not allow for any bonding at this
point. She stated she did discuss this issue with the sponsor for
some sort of bonding mechanism that should be available so the
state does not lose interest off the revenues that are collected.
She stated, currently during 1994 when looking at just the DMV
field office functions performed, it cost the state approximately
$2.83 for every transaction. She stated if one looks at all the
functions that the DMV does, it costs the state approximately $5
per transaction. She felt that in this instance the state
government has been frugal because there is a great number of
people processed through their field offices and she noted the
lines at the DMV are longer than they would like them to be and no
one should have to stand in line longer than 5 to 20 minutes. She
expressed concerns she had with the bill as it allows up to $7.50
per transaction for the contract agent to collect. She made
reference to another section in the bill which will address these
concerns. She explained, if there is a contract agent that is
doing strictly renewal registrations in Anchorage for example, they
process over 100 transactions a day, renewal registrations are all
this agent is contracted to do. She noted if they do 100
transactions a day, their collectable fees would be $750 a day,
this equals $180,000 a year that the agent would be able to obtain
from this. She stated her DMV field office personnel is funded at
approximately $37,000 a year. She explained she was not eluding to
not privatizing certain functions and agreed that some should. Ms.
Hensley remarked, the citizens of Alaska may be paying more than
what they have to pay for the DMV and noted if the DMV was funded
properly or even if alternative areas of funding were looked at,
the DMV would be able to reduce some of their costs and people
would be receiving the services they are paying for.
Number 323
REPRESENTATIVE JAMES asked Ms. Hensley if the DMV had an error
factor statewide as to what that error factor is by the office.
MS. HENSLEY said she did not have that information with her but
would make it available, and stated the error factor of the DMV was
not as high as 40 percent. She explained, the DMV employees are
evaluated on their error factor as well as the amount of work
produced in a day.
REPRESENTATIVE JAMES noted that from her past experiences in office
work, that to measure an error factor is easy to do when some one
else makes an error, but when we make it, there tends to be more
oversight and people can sometimes catch their own mistakes later.
Representative James inquired as to the possibility of this not
occurring if that person was contracted but would if they were a
state employee.
REPRESENTATIVE EILEEN MACLEAN asked how HB 210 would impact the
commercial driver licenses (CDL).
MS. HENSLEY explained HB 210 would allow the DMV to contract with
individuals in administering the CDLs.
REPRESENTATIVE MACLEAN asked how HB 210 would impact the rural
areas of Alaska, where they do not have the offices available. She
made reference to the following sections of HB 210; page 3, line
11, indicating "maintain at each approved third party location, for
at least one year." She also made reference to page 3, line 24,
and lines 30 and 31, and lines 12 and 13 on page 4 as to the impact
on rural Alaska.
MS. HENSLEY explained, all driver license documents are
confidential by statute. Ms. Hensley added, all documents must be
held in a secure environment if copies of the documents are to be
kept for one year and added, this concern needs to be addressed in
HB 210 . She said if the committee would like, she would go
through HB 210 and address concerns of the DMV and/or the
committee's.
CHAIRMAN DAVIS agreed to go through HB 210.
Number 369
MS. HENSLEY referred to page 1 of the bill and explained there
should be an amendment to include snow machine registrations,
authorized under Title 5, she added it should also include the
authorization of identification cards (IDs), authorized under Title
18 and any additional functions authorized under Title 28. She
referred to the vehicle records and noted there is a $5 charge per
copy. She added trip permits and temporary permits when purchasing
a new car all should be addressed in Section 1 of HB 210.
CHAIRMAN DAVIS asked if Representative Vezey would approach the
committee table in order to respond to any questions. He asked if
the functions Ms. Hensley referred to were all standard functions
currently being done, and asked if it was the intent of
Representative Vezey to have the DMV take over all functions that
are currently provided.
REPRESENTATIVE VEZEY stated it would not be to take over, but to
allow delegation of the functions.
CHAIRMAN DAVIS asked if there would be objection to the inclusion
of Ids and snow mobile registration.
REPRESENTATIVE VEZEY stated he would not object to the inclusion
of Ids and snow mobile registration.
Number 403
REPRESENTATIVE MACLEAN asked if all terrain vehicles (ATV) would be
included under the snow machine registration.
MS. HENSLEY stated ATVs are not subject to vehicle registration as
snow machines are with a registration sticker.
REPRESENTATIVE VEZEY stated he was not sure about the requirements
for registration of a snow machine.
MS. HENSLEY stated snow machines are required to be registered, but
hard to enforce.
REPRESENTATIVE JAMES inquired as to the requirements of
registration on mobile homes.
MS. HENSLEY explained two years ago, the section of law regarding
the registration of mobile homes was repealed and last year the
legislature decided it was something they needed and developed a
mandate that mobile homes "must be" registered as opposed to the
wording "may be" registered in the state of Alaska.
REPRESENTATIVE JAMES asked if they were mentioned in HB 210
REPRESENTATIVE VEZEY indicated they were not included in this bill.
MS. HENSLEY stated mobile homes are covered under Title 28 under
the Registration and Titling provision and are included in the
certification of agent registrars. She continued to explain, that
page 2, line 9, stated this section mandates that the DMV shall
utilize third party agents. She added the DMV prefers the wording
"may utilize" rather than "shall utilize" (third party agents.)
She stated it may not be economically feasible for the DMV to
contract with someone doing 10 transactions a month as opposed to
someone completing 40 transactions a month.
CHAIRMAN DAVIS suggested the possibility of the wording "shall
unless not economically feasible" with regards to Ms. Hensley's
comments.
MS. HENSLEY stated it was not the intent of the DMV to eliminate
contract agents. She said she was not clear as to the wording
"individual" whether this meant company or contractors currently
working with the DMV.
REPRESENTATIVE VEZEY explained the statutory definition of an
"individual" indicates any entity that has legal standing. He
stated he believed it was stated in Title (indisc).
CHAIRMAN DAVIS stated this was discussed in a previous State
Affairs Committee meeting.
Number 445
REPRESENTATIVE JAMES asked for clarification on who was not
considered an "individual."
REPRESENTATIVE DAVIS suggested anyone you contracted with would be
eligible.
REPRESENTATIVE VEZEY explained the intent is very broad and is not
limited to "nonprofits or for-profits," corporations, partnership,
individuals, natural persons.
REPRESENTATIVE MACLEAN requested the statute for clarification on
the term "individual."
CHAIRMAN DAVIS explained there will probably be a subcommittee
formed on HB 210 to go over topics such as that.
Number 460
MS. HENSLEY referred to the bottom of page 2, there needs to be an
additional paragraph regarding fingerprinting, criminal history and
any criteria for denial of certification based on certification of
the records. She added this is in statute and the DMV will not be
adopting regulations for that, so there is a need for certain
criteria a person must meet. She stated the National Criminal
Investigation Computer (NCIC) and the FBI records for driving
records, CDL (indisc.) are all interchanged within the DMV's
system. She noted a person cannot be convicted of a felony within
ten years or a misdemeanor within five.
REPRESENTATIVE JAMES indicated the language of HB 210 did not seem
to present an option for the "individual" to hire additional
people. She asked the sponsor if there was a provision for people
to be hired, and would they have to meet the same qualifications as
the "point person."
CHAIRMAN DAVIS added this was a concern he had as well with the
recommendation made by the DMV. He asked was it the intent of the
DMV to allow access to the computer system and was this in statute.
MS. HENSLEY stated it was the intent of the DMV to try and
establish some sort of mechanism to where if the person is unable
to meet the criteria establish by the NCIC or the FBI, then they
will not have access to those records. She stated vehicle
registration files are different. If a person only had access to
that particular function it would be different, but when a person
inquires about driver licensing, the driver record and criminal
record are interchanged.
Number 486
REPRESENTATIVE VEZEY commented it was not his intent to provide
access to the NCIC system or any other computer data base. He
stated they were vendors similar to fishing and hunting licenses.
He explained they only need access to the necessary information to
carry out those particular functions. He indicated they have not
spelled out all the details and have left some flexibility to the
department. He stated these individuals may never need to access
any of the computer information and just transmit to a centralized
location for processing. He stated by law, there is access to
limited information on the files.
MS. HENSLEY commented if the intent is to alleviate some of the
long lines at the DMV, "DMV has real time on-line for a person to
obtain their title and/or driver license on the spot." She
indicated to alleviate a central processing point, the DMV would be
counter-productive. She stated it would require more personnel
sitting in an office, updating information and trying to get it
mailed out to people. She stated concern regarding page 3, line 4,
with the term, "all applicable requirements of law." She felt a
requirement should be added to require an agent, examiner or
registrar to have a current Alaska business license, meet all
Americans with Disabilities Act (ADA) building, zoning and fire
codes. She referred to line 9, needing to be addressed which
states driver license documents are all confidential. She added,
currently the DMV commission agents do not keep copies of driver's
license applications, rather they are mailed in on a weekly basis.
She indicated one copy goes with their accounting documents and the
other hard copy goes directly to her office for microfilming and is
incorporated into the individual's driving record.
REPRESENTATIVE VEZEY emphasized the importance of understanding
early on there are three classes of individuals: Agents,
registrars and examiners. He explained an agent has certain duties
excluding driver's license examiners. He stated there are
requirements for registrars and examiners and stated this bill was
long and complicated by virtue of the subject he noted, Section
28.12.030 only deals with third party agents.
REPRESENTATIVE MACLEAN asked why the driver's license documents
have to be kept confidential?
Number 543
MS. HENSLEY stated currently there is a requirement in the
President's Crime Bill which passed last year requiring motor
vehicle registration and information to be confidential. She
stated this was required by law until 1997. She said driver's
license information has always been confidential. She stated the
record contained a complete history of the individual's driving
records.
REPRESENTATIVE JAMES inquired as to the status of the bill
regarding motor vehicles.
MS. HENSLEY stated HB 110 is the bill Representative James was
referring to and is currently in front of the legislature to have
the state motor vehicle registration file in compliance with the
Federal Crime bill that passed the privatization of motor vehicle
records. She referred to line 12, "transmit the documents to the
department by the 15th of each month." She explained if there is
a contract with an agent that processes 200 driver's license
applications a month, that is a tremendous amount to review. She
proposed the deletion of "by the 15th of each month" and insert "as
determined by contract." She suggested the possibility of having
a contract agent not having the volume of work to transmit every
week, but there may be some contract agents where you want the
documents on a daily basis.
CHAIRMAN DAVIS commented on some areas receiving too much work at
one time within a month.
MS. HENSLEY referred to line 13, after the word "subsection",
insert, "and reports required by the department" and delete, "for
the previous months licensing and titling registration." She
proposed to delete, "24 hours" and insert "seven days" on line 17.
She explained if a person should fail their skills test, 24 hours
is not a long enough period of time for them to learn how to drive.
She explained, currently if a person fails the road skills test one
day, then they may retake the road skills test the following week.
She said it was a $15 fee to take the road test and this could add
up if every 24 hours they were attempting to take the road test.
She then referred to line 22, and proposed after the word "all"
insert "initial and advanced training courses." Ms. Hensley
referred to line 23 and proposed the deletion of "the department
may not require more than eight hours of training or other
instruction in a calendar year."
CHAIRMAN DAVIS asked if there were some aspects of the training
that requires more time than others?
MS. HENSLEY said yes and explained, currently DMV belongs to the
American Association of Motor Vehicles Administrators Certified
Driver Examiner program which requires 40 hours of training per
year and for a Commercial Driver License (CDL) examiner, it
requires an additional 40 hours of training. She mentioned there
are currently 25 other states belonging to this program. She
explained the examiner is nationally recognized for the training,
and stated this helped the examiner if they went to another state
that is a certified driver examiner state, they would have some
preference for hiring due to the fact they have been previously
trained and meet the necessary criteria.
Number 550
REPRESENTATIVE JAMES asked if this pertained to examiners only, or
if agents and registrars were included as well, and was this
examining the 40 hours of training?
MS. HENSLEY stated there is a need for training for registration
and is as equally important as driver examiner training. She
stated there are situations where there is a contract agent, such
as one of the police departments, that do everything.
REPRESENTATIVE VEZEY explained they set up three classes of
individuals: Agents, who are in charge of motor vehicle services
and examinations; registrars in charge of motor vehicle services
and do not meet all the requirements under this section being
discussed now; and examiners in charge of motor vehicle licensing
examination and issuance. Agents accomplish both duties,
registrars are responsible for only motor vehicle services and
examiners are responsible for driver license services.
CHAIRMAN DAVIS asked under the Association of Motor Vehicles
Administrators, does the DMV include all employees or are there
varying levels of employees that the DMV wants to have a certain
level of certification. He indicated there seems to be two
different types of structures; the existing structure and the
proposed structure.
MS. HENSLEY noted when looking at this from a DMV standpoint, all
of the DMV's employees would qualify as agents and would need all
the required training, not only for the vehicle registration
titling but also for the driver license. She explained they
receive this training and complete it, and obtain their certified
driver examiner certificate after they have been employed a year.
CHAIRMAN DAVIS asked Representative Vezey if his intentions were to
make changes to the way things are done now.
Number 641
REPRESENTATIVE VEZEY stated yes, but not necessarily to the extent
that the DMV would interpret. He stated this was not necessarily
the final form. He stated one of the first things they wanted to
accomplish is to set up a class of registrars, motor vehicle
vendors, if you would, who would not meet the same requirements
just mentioned. He stated there was no way they would not have
access to classified information, for lack of a better word. He
continued, these (indisc.) an automobile dealer...
TAPE 95-9, SIDE B
Number 000
REPRESENTATIVE VEZEY continued (indisc.) what would be an
appropriate number for training and stated we do not want to end up
in a situation where we require 120 hours of training, and an
automobile dealer will not look favorably on providing the service
and can't afford the overhead. He stated they are just looking for
a reasonable number.
Number 019
REPRESENTATIVE JAMES asked if they have to go out of state for this
training and is it required annually.
MS. HENSLEY stated it was an annual 40 hours of training. Ms.
Hensley stated she had a meeting with Representative Vezey prior to
this meeting and discussed the fact that public safety employees
are considered class one employees, and on certain holidays during
the year public safety employees have to work when everyone else
has off. She stated that the DMV utilizes those holidays for
training days. She added there is a portion of those 40 hours that
is strictly book training. She indicated some of the training is
accomplished through correspondence means and reiterated 40 hours
of training was required.
Number 037
CHAIRMAN DAVIS suggested due to the extent of work required on HB
210, it would be more productive to set up a subcommittee with
himself, members of the committee, Representative Vezey and the
DMV. Chairman Davis stated he wanted to designate Representative
Brice in order to have a minority member on the Committee.
ADJOURNMENT
There being no further business to come before the House
Transportation Committee, Chairman Davis adjourned the meeting at
1:50 p.m.
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