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Update: April 21, 2004 4:10 p.m.
Sen. Dan Sparks (DFL-Austin) carried a bill, S.F. 1666, that appropriates federal money the state will receive for implementation of the Help America Vote Act (HAVA). The federal law imposes several requirements, including that every polling place be equipped with a voting machine to permit persons with disabilities to vote in private without assistance. Kevin Corbid, director of elections for Washington County, explained the fundamental differences between the proposal brought forward by the secretary of state and the bill. He said the bill permits the counties to purchase voting machines under contracts negotiated by the Office of the Secretary of State (OSS), rather than having the OSS purchase machines from one vendor for all 87 counties. Having multiple vendors, Corbid said, means that not every county will be calling the same place for service if problems arise on election day. He also noted that counties will be looking at long-term costs of machines, which the counties will bear, when making purchases. While everyone agrees that having machines suitable for the disabled in every precinct is the first priority for the use of federal funds, Corbid said, the bill does not make having precinct-count voting machines in every precinct the second priority. He noted that over 1,000 precincts have fewer than 100 voters. It is an inefficient use of resources, Corbid said, to place high-maintenance machines in those precincts. Sherri Mortensen-Brown said the OSS has no position on the bill.
A measure permitting local units of government to request the Dept. of Finance to prepare a local fiscal impact and fiscal benefit note regarding proposed rules was carried by Sen. David Senjem (R-Rochester). The bill provides that the department may charge the local unit up to $35 per hour to prepare the note. In addition, S.F. 2895 stays the enactment of any proposed rule that costs any business or city with fewer than 50 full-time employees more than $50,000 initially or on an on-going annual basis. The proposed rule may take effect, under the bill, if it is approved by the Legislature or the governor waives the requirement for legislative approval. Senjem said a similar bill was approved by both bodies last year but vetoed by the governor. He said S.F. 2895 is a watered-down version of the earlier proposal and should address the governor's concerns. Mike Hickey, National Federation of Independent Business, spoke in support of the bill. He said there has been an explosion, over the past several years, of rules and regulations costing small business significant sums of money. "It would take a fairly onerous rule to cost a small business $50,000," he said. The rule-making process is not broken, said Mark Ten Eyck, Minnesota Center for Environmental Advocacy. He said the bill presumes that there is a problem with most major rule changes. The current process works, he said, because when there is a problem with a proposed or enacted rule, the Legislature intervenes. Such intervention, Ten Eyck said, has been rare.
S.F. 2437, sponsored by Sen. Ann Rest (DFL-New Hope), provides for more complete implementation of the statewide central computerized filing system for recording liens on agricultural products. S.F. 2573, carried by Sen. Scott Dibble (DFL-Mpls.), transfers the responsibilities of the Office of Strategic and Long-Range Planning to the Dept. of Administration. The measure also re-establishes the technology enterprise fund and focuses the fund on capturing savings realized from technology updates to fund further updates in technology for state agencies. Sen. Dallas Sams (DFL-Staples) sponsored S.F. 1721, which regulates contracts between health care plans and care providers.
The plan has a net general fund savings of $3.656 million in FY 04-05. It authorizes additional expenditures in the Departments of Military Affairs, Revenue, Commerce and Public Safety, as well as for the judicial branch, totaling $19.175 million over the biennium. The plan creates general fund revenue through transfers from other funds and from $16 million anticipated from increased tax compliance efforts authorized for the Department of Revenue. The proposal also includes several policy provisions heard by the division over the course of the year.
Members considered several amendments to the plan. One, offered by Sen. David Knutson (R-Burnsville), creates an exception to the required use of the central mailing system operated by the Department of Administration. The exception in the amendment is limited to Dept. of Public Safety renewal notices. The amendment was adopted. Another amendment adopted by the panel, offered by Sen. Richard Cohen (DFL-St. Paul), permits a court commissioner in Ramsey County to retire and serve as a retired commissioner, rather than as a retired referee. Cohen said the amendment does not create a new position and has no fiscal impact to the state. However, he said, the provision does save the county money. Sen. Satveer Chaudhary (DFL-Fridley) offered an amendment providing that state employees are entitled to paid sick and bereavement leave to care for persons who are regular members of their households. The amendment was adopted.
Knutson moved to delete a section requiring the commissioner of commerce to develop a plan to reduce greenhouse gas emissions. Minnesota cannot be an island, he said. The proposal puts forward a plan that we do not know anything about, Knutson said. If a plan is to be created, we should study the possible impacts first, including costs, job losses, feasibility and the ability of Minnesota acting alone to change the environment, he said. The motion was defeated on a 3-5 roll call vote.
In other action, division members considered S.F. 1866, carried by Sen. Linda Scheid (DFL-Brooklyn Park). The bill ratifies several labor agreements between the state and public employee unions. Chaudhary offered the sick and bereavement leave amendment to the bill. He said the benefit was part of the agreement that ended the 2001 strike by MAPE and AFSCME, but does not have to do with domestic partner benefits. However, Scheid spoke against the amendment, saying the agreements should be ratified without condition. Knutson said that if the Legislature is going to put certain contract terms into the ratification legislation, then the legislation should contain all the terms of the contracts. Julie Bleyhl, AFSCME, said the leave provision in the amendment was not part of the negotiated contract. She urged the panel not to go beyond the negotiated contract. The amendment was defeated. S.F. 1866 was sent to the Finance Committee.
S.F. 1863, carried by Sen. Leo Foley (DFL-Coon Rapids), is the omnibus crime bill. The measure increases statutory maximum sentences for sex offenders, provides for indeterminate sentencing with a lifetime maximum for repeat sex offenders, amends predatory offender registration requirements, increases penalties for methamphetamine-related crimes, funds pilot project methamphetamine treatment programs, creates a revolving loan fund for methamphetamine laboratory cleanup and revises other criminal justice laws. A fiscal analysis of the bill indicates that the measure will cost the state $7.95 million in FY 05 and $26.78 million in FY 06-07. The analysis also indicates that the implementation of the bill requires half a dozen new judgeships and over 40 new staff in public defenders' offices and adds 376 prisoners to the state corrections system in 10 years.
An amendment offered by Sen. James Metzen (DFL-South St. Paul) permits the commissioner of public safety to reimburse police officers for the replacement of inferior body armor. Another amendment, offered by Sen. Jane Ranum (DFL-Mpls.), asks the chief justice of the Supreme Court and the Conference of Chief Judges to develop a protocol for the use of polygraph examinations for sex offenders placed under probation. Both amendments were adopted. The bill was returned to the full Finance Committee to be heard by other divisions.
Sen. Yvonne Prettner Solon (DFL-Duluth) carried S.F. 1966, which provides for prescription drug bulk purchasing programs established by the Dept. of Human Services and requires the Dept. of Administration to negotiate drug prices for the programs. S.F. 1760, carried by Sen. Linda Berglin (DFL-Mpls.), is a health care cost containment plan. It was before the division because of provisions relating to the Departments of Finance and Employee Relations. Both bills were also returned to the full committee so that they could be heard by other divisions.
The division, chaired by Ranum, took no action on the other measures it heard.
S.F. 1866, carried by Sen. Linda Scheid (DFL-Brooklyn Park), ratifies labor agreements between the state and several public employee unions. Another Scheid bill, S.F. 2607, establishes a Division of Insurance Fraud Prevention in the Department of Commerce. Metzen also carried two bills. S.F. 2366 appropriates $100,000 in FY 04-05 for the operation of the Minnesota National Guard Youth Camp. S.F. 2466, which was not officially before the division, increases the petroleum inspection fee. S.F. 1786, sponsored by Sen. Charles "Chuck" Wiger (DFL-North St. Paul), permits counties to retain District Court filing fees if the county has examiner of titles and deputy examiner of titles positions that are paid in the same manner as other county employees.
S.F. 1850, authored by Sen. Steve Kelley (DFL-Hopkins), extends the life of the Electronic Real Estate Recording Task Force by three years. S.F. 2687, also carried by Kelley, makes energy reliability utility assessments retroactive to July 1, 2001. A third Kelley bill, S.F. 2894, authorizes the State Board of Investment to participate in venture capital investments. S.F. 2580, sponsored by Sen. Ellen Anderson (DFL-St. Paul), requires the Commissioner of Commerce to propose a plan to reduce greenhouse gas emissions.
In other action, division members heard two reports from the Office of the Legislative Auditor on CriMNet, the statewide criminal justice information system. The program evaluation report includes three main recommendations: amending state law to resolve criminal justice data classification issues, to modify the CriMNet governance structure and to require more detailed information from CriMNet to support spending plans; having the Dept. of Public Safety provide day-to-day support and direction for the CriMNet Office and expedite hiring CriMNet Office staff; and ensuring that the CriMNet policy group receives from the CriMNet Office and other agencies the information it needs to assess, prioritize, and facilitate statewide integration efforts and uses the information to make timely decisions. The full program evaluation report is available online: http://www.auditor.leg.state.mn.us/ped/2004/pe0405.htm.
The financial audit of CriMNet concluded that CriMNet program managers do not have complete, timely, or reliable accounting data to monitor, analyze, and control project costs, that the CriMNet Office incurred unnecessary and unreasonable expense when it leased office space in excess of its needs and that the office did not always comply with statutory provisions and state policy regarding the disposition of frequent flyer miles. The full financial audit report is also available online: http://www.auditor.leg.state.mn.us/fad/2004/fad04-08.htm.
Two of the measures relate to the public radio communication system. S.F. 1972, sponsored by Ranum, increases the 911 emergency telephone service fee, from 10 cents to 20 cents per month, to eliminate a deficit and to help defray the cost of operating public safety answering points. The measure also repeals the expiration date and expands the jurisdiction and membership of the Metropolitan Radio Board. In addition, the bill authorizes the sale of revenue bonds for phases 2 and 3 of the 800 megahertz public safety radio communication system. S.F. 1638, authored by Sen. Dave Kleis (R-St. Cloud), expands and makes permanent the sales and use tax exemption for public safety radio communication system products and services. The bill also expands the definition of subsystems, expands the purposes for public safety radio communication systems' revenue bonds, and increases the dollar limits and clarifies the kind of subsystem revenue bonds may be used for.
Members then turned their attention to three bills relating to CriMNet. S.F. 2727, sponsored by Foley, makes several changes to CriMNet provisions. The bill provides that the CriMNet program manager serves at the pleasure of the Criminal and Juvenile Justice Information Policy Group, expands the duties of the task force to include assistance to the policy group in providing oversight of CriMNet operations, adds education and training to the list of accepted management techniques to be used for CriMNet projects, requires the policy groups, with the assistance of the task force, to include in the annual report the status of CriMNet integration efforts and projects. S.F. 2079, authored by Sen. Julianne Ortman (R-Chanhassen), authorizes the commissioner of public safety to impose fees on local users of CriMNet to support the capital cost of its development and authorizes the issuance of state revenue bonds.
Several additional bills were heard by the division. S.F. 2937, carried by Sen. Mee Moua (DFL-St. Paul), appropriates $3.77 million for crime victim service programs and crime and sexual violence prevention efforts. Ranum carried two additional bills. S.F. 2809 appropriates money to the commissioner of public safety to restore public safety services, including the Crime Victim Services Center, the Bureau of Criminal Apprehension, the fire marshal and the Criminal Gang Strike Force grants. S.F. 2827 extends the availability of extra unemployment insurance benefits.
S.F. 2260, carried by Sen. Jim Vickerman (DFL-Tracy), is the omnibus National Guard or military reserves active members and veterans benefits measure. Among other provisions, the bill requires the commissioner of veterans affairs to provide the legislative committees with jurisdiction over veterans affairs the information needed to implement a Global War on Terrorism bonus to veterans.
All of the bills were laid over for possible inclusion in the division's omnibus bill.
The complete budget recommendations may be found online.
S.F. 1803, carried by Sen. John Hottinger (DFL-St. Peter), enacts a new Uniform Limited Partnership Act (ULPA) and repeals the current law. According to the inter-state commission on uniform laws, the new act targets sophisticated commercial deals whose participants commit for the long term and estate planning arrangements. Members adopted an amendment to S.F. 1803 containing the provisions of S.F. 1829, sponsored by Sen. Steve Kelley (DFL-Hopkins). S.F. 1829 includes the bar association's recommendations and provides consistency between laws governing business corporations, nonprofit corporations and limited liability companies. The combined bill also contains a doubling of fees charged by the Secretary of State for the filing of new corporate information. The fee is intended to cover the one-time costs of implementing the new ULPA and returns to its current level after one year, under the bill. S.F. 1803 was advanced to the full Finance Committee.
Division members, chaired by Sen. Jane Ranum (DFL-Mpls.), also considered four other measures. S.F. 1551, carried by Sen. Jim Vickerman (DFL-Tracy), provides planning assistance grants to regional development commissions. S.F. 1786, authored by Sen. Charles "Chuck" Wiger (DFL-North St. Paul), provides that counties with examiners of title and deputy examiners of title may retain certain district court filing fees. The bills were laid over for inclusion in an omnibus bill.
Two bills were approved and sent to the Finance Committee. S.F. 2241, carried by Ranum, appropriates $117,000 from the technology enterprise fund to complete small agency infrastructure and electronic government services projects. Sen. David Knutson (R-Burnsville) sponsored S.F. 1836, which simplifies filing procedures in the Secretary of State's Office.
The panel considered the recommendations for the Department of Public Safety. The full recommendations are available online.
Division members also heard a report from the Office of the Legislative Auditor on the State Lottery. The report is available online from the auditor's office.
The panel considered the recommendations for the state's constitutional officers-the governor, attorney general, secretary of state and state auditor-and state agencies. Most agencies' general fund operating budgets are reduced by three percent in FY 2005 under the recommendations. The full recommendations are available online.
Division Chair Jane Ranum (DFL-Mpls.) carried S.F. 2097, which clarifies that the share of contributing entities in bond-financed property must be determined on the fair market value of the property at the time the bond-financed betterment of the property began. S.F. 1495, authored by Sen. Steve Murphy (DFL-Red Wing), provides $400,000 for a workers memorial on the Capitol grounds. Sen. Richard Cohen (DFL-St. Paul) sponsored S.F. 1975, which appropriates $1 million to fund the pre-design costs of four to five biomass-fueled, municipal and state college or university-owned community heating and cooling systems.
The panel also approved, for recommendation to the Capital Investment Committee, a spreadsheet of bonding proposals it has heard this year. The document includes 17 proposals, in priority order: a World War II veterans memorial, Dept. of Military Affairs asset preservation, Dept. of Military Affairs facility life and safety improvements, indoor range abatement and conversion for the Dept. of Military Affairs, Capitol interior renovation design, Capitol building repair, Dept. of Transportation headquarters exterior maintenance, the statewide asset preservation account (CAPRA), agency relocation and asset preservation for properties maintained by the Dept. of Administration. The final seven priorities are demolition of the Ford Building, energy retrofitting, parking facilities, phase two of the National Volleyball Center in Rochester, the workers memorial, the bio-mass energy systems proposal and a regional public safety training center in Rochester.
The report, presented by Charlie Peterson, Management Analysis Division, was mandated by legislation enacted in the 2003 session. Peterson outlined the methodology used, conclusions and recommendations. Peterson said the methodology included interviews, regional focus groups, line level staff focus groups, site visits, surveys, operational data, existing reports and studies and best practice interviews from other states. Peterson said the study showed PSAP consolidation can provide cost savings and public safety benefits under the right circumstances, but determining whether those circumstances exist for specific PSAPs is difficult without detailed study. He said the study recommends that the state role in local consolidation be focused on incentives, rather than mandates and that the PSAP Advisory Committee recommends that the state appoint a committee to develop PSAP standards in six areas. The minimum standards for PSAP include performance, personnel, training, infrastructure, administration and governance.
Peterson said the study team concluded that PSAP consolidation is feasible and has the potential to offer cost saving and public safety benefits when the circumstances are right. Further, the study team recommends that PSAPs examine their operations to see if the circumstances exist and to consider consolidation as a means to save money and improve public safety, he said. In addition, the study team recommends that the state not mandate or coerce PSAP consolidation, but that funding incentives for consolidation be structured around cost-savings and public safety rather than consolidation as an end in itself, Peterson said. Finally, Peterson said the study recommends that jurisdictions exploring consolidation consider a governance structure similar to those used by Anoka County and the Red River Dispatch Center in Fargo, North Dakota.
The panel also heard a 911 fund status check and an update on the 800 megahertz radio system. Ranum said she wanted members to hear how the 911 fund was impacting the implementation of the 800 megahertz radio system.
Deputy Commissioner Dennis Erno reviewed the three initiatives undertaken by the department since FY 2002. In FY 02, the department began a non-filer initiative, he said, which identified and collected tax liabilities from individuals and businesses that did not pay taxes owed. The initiative was funded at $2 million for FY 02-03 and was expected to bring in $20 million to the general fund. However, Erno said, the initiative exceeded expectations and resulted in the collection of $27.4 million. Also in FY 02, the department began an expanded tax compliance initiative, which relied on increased audit activity and delinquent tax collection. The department was provided $5.2 million to fund the activity, with an expected return of $32.4 million in new revenue. Erno said the expanded compliance initiative brought in $52.5 million in revenue in FY 02-03. In FY 03, Erno said, the department sought legislative authorization for a second expanded compliance initiative, funded at $2.6 million, with an expectation of $7.6 million in new revenues. The initiative, he said, actually resulted in the collection of $17.4 million in FY 03. Total initiative spending over FY 02-03, Erno said, was $9.7 million and resulted in new revenues of $97.2 million.
Erno said the department was able to identify the increased revenues by isolating in its accounting system the activity of employees hired to conduct each tax compliance initiative. However, he said, the new positions do not represent departmental growth. Non-skilled jobs are being eliminated in the department and in state agencies in general, Erno said, as technology brings greater efficiencies to tax filing and agency activity. The loss of non-skilled jobs would have occurred without the need for budget cuts, he said, but was accelerated by the need to trim agency budgets. At some point, perhaps in the near future, Erno said, further reductions in the agency's budget will mean a decrease in revenue collections. The agency has become weighted toward compliance activity, he said. Sen. David Knutson (R-Burnsville) said he was willing to keep funding the agency, since the returns on investment are so high. Erno said the agency does not know how much non-compliance is going on in the state. "We don't know how long we can sustain these returns," he said. The department's worst fear is failing to meet expectations, he said, because it not only costs the department credibility, it also means greater-than-anticipated cuts in other state agencies' budgets.
Division members also discussed the effects of budget cuts on crime victims services with Mary Ellison of the Dept. of Public Safety. The discussion centered on questions members had developed during earlier hearings on the cuts.
The Dept. of Administration proposal, presented by Kath Ouska focuses on preserving state assets. The department is requesting $15 million for cooperative local facilities grants, $8.6 million for Dept. of Transportation building exterior work, $4 million for statewide CAPRA, $10.4 million for agency relocation, $6.6 million for asset preservation, $1.18 million for Ford Building demolition and $1.7 million for parking for employees relocated to the Capitol Complex.
The Hotel and Resort Fire Safety Inspection Task Force report was presented by Tim Leslie, assistant commissioner, Dept. of Public Safety; Pat Sheenan, state fire marshal bureau chief; Tom Day, Hospitality Minnesota; Dave Thompson, Congress of Minnesota Resorts; and Doug Anderson, Minnesota Innkeepers Association. The task force was composed of state agency representatives, local fire officials, private sector businesses and legislators to address the state's recent changes in how it finances inspections of lodging industry businesses. The report recommends reversing changes that altered funding mechanisms for the State Fire Marshal's Office. The task force found that the fees adopted last year only generate 24 percent of the cost of conducting fire safety inspections in lodging facilities. The report recommends several options including re-dedicating the entire fire marshal tax back to the State Fire Marshal. Other options include dedicating any amount from a budgeted surplus of the fire marshal tax, re-dedicating a portion of the fire marshal tax or creating a public-private partnership utilizing a dedication of some of the insurance tax, along with some modest fees for service on the industry.
Ellison said the new Office of Justice Programs brings together programs formerly operated through five separate agencies. She said the goal of the new office is to improve the effectiveness of state government's criminal justice planning and grant administration activities. Ellison said in the past there were funding disparities between various areas of the state and that the department undertook a redesign of the funding distribution process. She said the agency involved people at the local level in the redesign. As a result, the new design provides for distributing funds by judicial district under a formula involving a variety of data elements such as population and other information.
Ellison also provided information on the grant programs and the services provided by the Crime Victim Services Unit. The Crime Victim Services Unit provides assistance to crime victims in four program areas-crime victim reparations, grants to local programs, training and communication and crime victim justice. The crime victim reparations unit provides victims and families direct compensation for losses as a result of violent crime. The grants to local programs provide funding for sexual assault, general crime, battered women's and child abuse victim support and advocacy programs. The training and communications program provides training to criminal justice professionals and the crime victim justice program helps victims in navigating the criminal justice system.
Ranum said last year's budget contained a 46 percent general fund cut for services and asked the individuals scheduled to speak to explain the impact of the cuts. Members heard from groups providing services and from individuals who have accessed the services.
Chief Judge Kevin Burke, Hennepin County, spoke on the incidence of domestic violence and the need for a meaningful long-term program of reducing the level of domestic violence in the state. The panel also heard from Linda Riddle, service provider from southeast Minnesota; Louise Seliski, battered women service provider, northwest Minnesota; Kaarin Long, Minnesota Coalition Against Sexual Assault; Eileen Hudon, Clan Star; Luci Banks, executive director, Minnesota General Crime Victims Coalition; Cami Bruder, director, Winona County Victim Services Program and Barb Hermanson, executive director, Fillmore Family Resources. In addition, individuals who have experienced domestic violence also spoke on the services they received. The speakers outlined the services needed, the services provided and the need for continued funding.
The Dept. of Administration requested a total of $64.8 million for 2004, including $40.5 million in general obligation bonds. The governor's recommendation for the department was a total of $47.6 million, including $26.9 million in general obligation bonds. The Capitol Area Architectural Planning Board requested a total of $5.6 million in 2004, including $4.3 million in general obligation bonds; the governor's recommendation for the board was a total of $1.87 million, all in general obligation bonds.
The 2004 request of the Dept. of Military Affairs was for $7.3 million, all in general obligation bonds. The governor's recommendation was $5 million. Grants requested by political subdivisions in 2004 totaled $322 million, including $318 million in general obligation bonds; the governor recommended $16.9 million, entirely in general obligation bonds.
Information about capital budget requests can be found online.
Commissioner Brian Lamb provided a brief overview of the department's organization and outlined the department's accomplishments for 2003. According to materials provided by the department, the agency seeks to provide services that result in government being faster, better and more cost-effective. Highlights of the department's success over the course of the last year include an electronic automation system to manage the state's insurance needs, on-line demographic information on more than 400 population characteristics, on-line professional licensing procedures, automation of surplus property auctions, the creation of the Minnesota State Government Internal Auditing Roundtable to serve as a professional resource and to improve state agency operations, and the development of a shared carrier call center infrastructure. In addition, the agency has also pursued cost-effectiveness through a warrant printing and mailing solution that reduces mailing costs, a new electronic data storage system that reduces maintenance and equipment costs, the aggregating of information technology purchases to save funds and by meeting or exceeding energy efficiency standards.
The mobile telecommunication device expenditure reduction plan was required by the Legislature last year. As a result, the department has fulfilled the requirement through three primary activities: the development of a revised statewide telecommunication device use and expenditure policy, improvement of telecommunication device purchasing analysis and tools, and updating cabinet-level state agencies' telecommunication device inventories.
The vehicle expenditure reduction plan was also required by the Legislature. The department is working to fulfill the requirement by implementing a three-year, phased plan. At a minimum, the plan will ensure that an agency are making more informed business decisions relating to vehicles and anticipates that the plan can reduce state agency light-duty fleet expenditures by a total of 5 percent by the end of FY 2006.
Will Fluegel, board chair, reviewed the process the board used in evaluating fee schedules. The board consulted with the entities it regulates-lobbyists, political committees and funds, principal campaign committees and party units-and determined the percentage of board operating costs attributable to each category, he said. Fluegel said a survey of other states showed that 12 states, including Minnesota, charge no registration fees for the entities. The unanimous recommendation of the board is not to impose any fees, he said.
The fee schedule proposed, however, is intended to simplify administration and address issues of equity, according to the report. The schedule imposes a $75 annual fee on lobbyists, a sliding scale of annual fees for political committees and funds and political party units, based on contributions and disbursements. Principal campaign committees, under the proposal, pay a one-time registration fee, an additional fee upon filing an affidavit of candidacy and a third fee by July 1 of each election year.
Members of the panel discussed the recommendation and the fee schedule. Sen. Jim Vickerman (DFL-Tracy) said he was concerned the fees for principal campaign committees were too high. With fees totaling over $1,800 for candidates for state Senate, he said, "are we going to price people out of running for office?"
The full report is available from the Campaign Finance and Public Disclosure Board online.
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