Legislature(1993 - 1994)
03/10/1993 01:12 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
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HOUSE FINANCE COMMITTEE
March 10, 1993
1:12 p.m.
TAPE HFC 93-43, Side 1, #000 - end.
TAPE HFC 93-43, Side 2, #000 - end.
TAPE HFC 93-44, Side 1, #000 - 442.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 1:12 p.m.
PRESENT
Co-Chair Larson
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
Representative Hoffman was absent from the meeting.
ALSO PRESENT
Representative Toohey; Representative Ulmer; Mike Greany,
Director, Legislative Finance Division; Margot Knuth,
Criminal Division, Department of Law; John Salemi, Director,
Public Defender Agency, Department of Administration; Remond
Henderson, Director, Division of Administrative Service,
Department of Community and Regional Affairs; Andrew Grose,
Western Legislative Conference; Marilynn May, Assistant
Attorney General, Department of Law; Chris Christensen III,
Staff Counsel, Alaska Court System.
SUMMARY INFORMATION
PRESENTATION BY WESTRENDS/WESTERN LEGISLATIVE CONFERENCE
HB 55 "An Act making appropriations for the operating
and loan program expenses of state government and
to capitalize funds; and providing for an
effective date."
SUBCOMMITTEE CLOSEOUTS:
DEPARTMENT COMMUNITY AND REGIONAL AFFAIRS
HB 55 was HELD in Committee.
HB 64 "An Act creating the crimes of stalking in the
first
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and second degrees and providing penalties for
their violation; providing a peace officer with
the authority to arrest without a warrant a person
the peace officer has reasonable cause to believe
has committed stalking; relating to the release
before trial of a person accused of stalking; and
prohibiting the suspension of imposition of
sentence of a person convicted of stalking."
CSHB 64 (FIN) was reported out of Committee with a
"do pass" recommendation and with two zero fiscal
notes by the Department of Administration and with
a zero fiscal note by the Department of
Corrections and with a zero fiscal note by the
Department of Public Safety, dated 3/1/93 and with
a zero fiscal note by the Department of Law, dated
3/1/93.
HB 116 "An Act directing the commissioner of natural
resources to accept, under certain circumstances,
the contract price agreed to between a lessee of
federal land and a gas or electric utility as the
value of the federal government's royalty share
from natural gas production when royalty is
payable to the state under applicable federal law;
and providing for an effective date."
CSHB 116 (FIN) was reported out of Committee with
a "do pass" recommendation and with a zero fiscal
note by the Department of Natural Resources.
HB 151 "An Act relating to payment by indigent persons
for legal services and related costs; and
providing for an effective date."
HB 115 was HELD in Committee.
PRESENTATION BY WESTRENDS/WESTERN LEGISLATIVE CONFERENCE
ANDREW GROSE, WESTERN LEGISLATIVE CONFERENCE gave a slide
presentation regarding economic trends in Western states.
He provided members with charts represented by the slide
presentation (Attachment 1). Mr. Grose concluded that:
* While the West continues to grow in population
twice as fact as the rest of the country, the
biggest demographic story of the 1980's was
foreign immigration which accounted for 40 percent
of the growth in the region.
* Once the economic leader in income and gross state
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product, the West has slipped badly, falling
behind every other region in growth in median
family income and GSP in the past 10 years.
* The economic decline of the West is reflected in
state government revenues in education.
Mr. Grose stressed that:
* Alaska was the only state in the West to grow
faster in the 1980's than in the 1970's;
* Alaska's foreign population growth has been slow;
* Alaska's has a fast growing ethnic group;
* Alaska was next to last in increase in personal
income of Western states;
* Alaska had the third lowest growth in family
income;
* Alaska had the next to last growth in Gross State
Product of Western states;
* Manufacturing jobs rose in the West;
* Alaska had a 60 percent gain in tourism jobs from
1985 - 1990;
* Alaska has less foreign tourists than other
Western states;
* Alaska has the highest export per capita in the
United States;
* The West has more foreign owned firms than other
areas;
* Alaska has more Asian investment than European;
* Alaska ranks number two in the country in regards
to the percentage of small businesses in the
state;
* Alaska ranks number one in the country in regards
to the percentage of minority owned business;
* Alaska is number six in women owned businesses;
Mr. Grose concluded that:
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* Per capita revenues are lagging;
* Education has paid the price of a decline in
Western state's economies;
* Alaska had the slowest economic growth;
* Alaska has the highest tax capacity in the
country;
* Alaskans have the lowest tax effort;
Mr. Grose emphasized that Western states must pool their
resources to offset their relative economic decline.
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS
The House Finance Subcommittee on the Department of
Community and Regional Affairs consists of Chair MacLean
with members Representatives Olberg, Williams, B. Davis and
Brice.
Co-Chair MacLean noted that the Department of Community and
Regional Affairs had 42 positions transferred in the FY 93
Operating Budget. The Governor's FY 94 proposed budget for
the Department of Community and Regional Affairs is
$124,406.3 million dollars. Total funds represents a 15.6
percent decrease below FY 93 Authorized. The General Fund
request is 21.1 percent below FY 93 Authorized.
Co-Chair MacLean emphasized that the Subcommittee's intent
is to increase support for service delivery in remote
regions of the State. She noted that the Subcommittee
reduced all designated grants. She provided members with
the Transaction Summary for the House (Attachment 2). She
reviewed the Subcommittee's proposed reductions:
* Administrative Services - <$75.0> thousand dollars
This reduction will eliminate at least 2 full time
equivalent positions in administrative services.
Co-Chair MacLean stated that the Subcommittee approved
intent language regarding Reimbursable Service Agreement
(RSA) (Attachment 3). She stressed that the Subcommittee is
adamantly opposed to the transfer of funding from other
areas of the Department by use of a RSA, to reinstate
reductions made by the Legislature.
* Designated Grants - <$160.3> thousand dollars
Designated Grants were classified for reductions.
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Gaming/Training Programs - 30 percent
People Count - 15 percent
Native Cultural Activities - 10 percent
Life, Health and Safety - 10 percent
* Training and Development/Travel - $20.0
Twenty thousand dollars was added for travel of
local government specialists at the eight regional
offices, to improve outreach to communities. It
is the intention of the Subcommittee that
additional travel money above that which is
allocated in the Governor's proposal be equitably
distributed among all regional offices.
* Rural Utility Business Advisors (RUBA) - <$175.0
thousand dollars>
The authorization of interagency receipts was
reduced. Authorization was contingent upon a
request of $1 million dollars in the Department of
Environmental Conservation's capital budget. The
capital appropriation has been reduced to $500.0
thousand dollars.
* Community Development Assistance - <93.9 thousand
dollars>
The request for a deputy director position in
Anchorage was denied. Three positions were
approved.
Co-Chair MacLean noted that the Subcommittee adopted intent
language for the Day Care Assistance Program, urging the
Department to request a supplemental if the program is short
in FY 94.
Representative Brown asked Co-Chair MacLean to reiterate the
classification of reductions to designated grants. She
asked why Native Cultural grants were given priority over
Gaming and Training. Co-Chair MacLean declined to respond.
Representative Brown expressed her concern with reductions
to Alaska Legal Services. She asked if the Subcommittee
considered restoring Alaska Legal Services to the FY 92
level. Co-Chair MacLean stated that the Subcommittee did
consider increasing this component. She added that under
the 1 percent reduction plan the Subcommittee did not feel
the component could be increased. An office in Unalaska
will remain closed.
Representative Therriault asked if there is a criteria for
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designated grants.
REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS
clarified that designated grants are at the discretion of
the Legislature. Some grants have been in the Department's
budget for eight years. Co-Chair MacLean provided members
with a history of designated grants (Attachment 4).
Representative Parnell asked for a clarification of the
reductions to designated grants. Co-Chair MacLean clarified
that Perseverance Theatre was reduced by 30 percent. Alaska
Native Arts was reduced by 10 percent. Alaska Special
Olympics and Arctic Winter Games were reduced 30 percent.
Co-Chair MacLean MOVED to adopt the Intent Language,
Attachment 3. There being NO OBJECTION, it was so ordered.
Co-Chair MacLean noted that the Department has submitted
budget amendments totaling $325.2 thousand dollars. The
budget amendments were adopted but are not reflected in
Attachment 2.
Representative Brown observed that the Department estimates
that the Subcommittee's proposed funding level for Day Care
Assistance would result in 340 children or 240 families that
would not be served.
(Tape Change, HFC 93-43, Side 2)
Co-Chair MacLean justified the Subcommittee's reduction to
Day Care Assistance. She noted that Day Care Assistance is
pure general fund dollars. She gave statistics regarding
Child Care Programs:
* Daycare Assistance Programs: subsidies to low
income; parents has $11,173.9 million dollars left
in the current year.
* Funding has not been changed for Child Care
Subsidy Grants, FSA Entitlement Program, At Risk
Assistance Program and Block Grant Programs.
Co-Chair MacLean emphasized that the funding level for Day
Care Assistance has remained at the Governor's proposed
level.
Co-Chair MacLean observed that there was excess federal
authorization for FY 93 because the State received two years
of At-Risk funding in FY 92. In FY 92 $2.5 million dollars
in child care was lapsed. All applicants were served. The
Department voluntarily reduced $500.0 thousand dollars from
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Child Care in FY 94. She asserted that the Department can
request a supplement if the FY 94 demand exceeds the
appropriation.
Representative Brown referred to a letter from John Walsh,
Deputy Director, Department of Community and Regional
Affairs to Representative Bette Davis, dated March 3 1993.
She quotes the letter as stating: "Should the FY 94 budget
be approved as proposed, using an estimate of $345.00 per
month for a child, 340 children would not be served...
Based upon an average ratio of children to families, this
reduction would impact approximately 240 families... As I
stated during the overview, the Department was unaware of
the marked increase in enrollment at the time we prepared
our FY 94 budget document, nor do we have access to leading
economic indicators that correlate to changes in child care
demand."
Representative Brown alleged that the Day Care Assistance
Program will be under-funded.
Co-Chair MacLean MOVED to adopt the Subcommittee's proposals
as contained in Attachment 2.
Co-Chair Larson clarified, for Representative Grussendorf,
that the Subcommittee on Formula Programs will make
recommendations for formula programs to the full House
Finance Committee. Representative Brown noted her OBJECTION
to not funding the Home Owners Property Tax Exemption and
Renters Rebate Program. Co-Chair MacLean reiterated that
formula programs were not considered by the Subcommittee.
There being NO OBJECTION, the Subcommittee's proposals for
the Department of Community and Regional Affairs non-formula
programs were adopted and incorporated into HB 55.
HOUSE BILL NO. 116
"An Act directing the commissioner of natural resources
to accept, under certain circumstances, the contract
price agreed to between a lessee of federal land and a
gas or electric utility as the value of the federal
government's royalty share from natural gas production
when royalty is payable to the state under applicable
federal law; and providing for an effective date."
House Bill 116 was in a subcommittee consisting of Chair
Representative Parnell with members Representatives MacLean,
Hanley and Brown.
Representative Parnell provided members with a proposed
Committee Substitute of HB 116, Work Draft 8-LS0442\O, dated
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3/10/93 (Attachment 5). He noted that two amendments were
adopted.
Representative Hanley MOVED to adopt Work Draft 8-LS0442\O,
dated 3/10/93. There being NO OBJECTION, it was so ordered.
Representative Brown discussed provisions adopted by the
Subcommittee on HB 116. She referred to page 2, line 6.
She explained that the provision will define which utilities
will be involved. Only utilities that are in the business
of providing service to the general public. The provision
includes that the "utility with which the lessee has entered
into the contract is not an affiliated interest, as that is
defined in AS 42,05.990, with the lessee or with a
subsequent purchaser of more than 10 percent of the
utility's gas or electricity..." She emphasized that CSHB
116 (FIN) will require that the arms length provision is met
before the State is locked into a contract price that may
not represent the value of the resource.
Representative Hanley discussed Section 3. The amendment
clarifies that the State is able to collect excess royalties
based on an increased federal assessment.
Representative Hanley MOVED to report CSHB 116 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. Representative Grussendorf
OBJECTED. He expressed concern that negotiations regarding
the state/federal 90/10 distribution of future resource
royalties will be adversely affected.
Representative Brown shared Representative Grussendorf's
concerns. She stated that it "generally sets a poor
precedent for the Legislature to become involved in contract
interpretations that affect the royalty value." She
asserted that a selective benefit is being provided to a
few. She noted the difficulty in retroactively collecting
from individuals that may not have been involved when the
original benefits were received. She cautioned that the
North Slope interests may be affected. She stressed that a
$21 million dollar benefit is being giving to a subset of
the State's citizens. She wondered how many hundreds of
millions of dollars may be "inadvertently passed down the
pipe" by the adoption of CSHB 116 (FIN).
Co-Chair MacLean asked for further clarification of Section
3. Representative Hanley explained that if the federal
government, on its own, negotiates a higher contract price
that the State can accept the State's portion of the higher
amount.
Representative Hanley observed that CSHB 116 (FIN) does not
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change the fiscal note.
Representative Therriault pointed out that the intertie was
not active during the time disputed. Residents of the
Fairbanks Northstar Borough would be asked to pay 25 percent
although they did not receive electricity.
Representative Brown stated that her husband is a public
utilities Commissioner and she is an EnStar Gas consumer.
Co-Chair Larson noted that he is an EnStar Gas consumer.
Representative Navarre noted that he is an EnStar and Homer
Electric Association consumer. Representative Martin stated
that he is a consumer of EnStar Gas and Chugach Electric.
Representative Parnell stated that he is a consumer of
Chugach Electric.
Co-Chair Larson reiterated the motion MOVED to report CSHB
116 (FIN) out of Committee with individual recommendations
and with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 116 (FIN) was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Natural Resources.
HOUSE BILL NO. 64
"An Act creating the crimes of stalking in the first
and second degrees and providing penalties for their
violation; providing a peace officer with the authority
to arrest without a warrant a person the peace officer
has reasonable cause to believe has committed stalking;
relating to the release before trial of a person
accused of stalking; and prohibiting the suspension of
imposition of sentence of a person convicted of
stalking."
Representative Brown asked what would be accomplished by
extending the parole requirement.
REPRESENTATIVE TOOHEY stated that the extended parole
requirement will help to keep perpetrators in line. The
original proposal was 5 to 99 years.
Representative Parnell asked if other crimes would be
impacted. Representative Toohey clarified that all crimes
with a five year probation period would be brought up to ten
years. Representative Brown noted that the legislation has
been broadened to cover all crimes. She expressed concern
that the zero fiscal note is inadequate.
MARGOT KNUTH, CRIMINAL DIVISION, DEPARTMENT OF LAW explained
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that the legislation originally addressed the stalking
offense. The Department of Law expressed concern that
probation for a single offense was dramatically altered.
She pointed out that legislation in the prior legislative
session would have extended probation for all felony
offenses to ten years. The House Judiciary Committee
incorporated the legislation to extend the probation period
for all felony offenses into HB 64. She asserted that the
fiscal cost will be minimal due to the fact that most
probation violations are new crimes. She stressed that
offenders would be returned to jail via a probation
revocation rather than through a new prosecution. Probation
revocation proceedings are faster and less costly than
prosecution proceedings.
Representative Brown emphasized that because the potential
time that an offender could have their parole revoked is
extended there would be an impact on the department of
Corrections.
JOHN SALEMI, DIRECTOR, PUBLIC DEFENDERS AGENCY (PD) stated
that the parole extension will result in an increased
caseload. He disagreed with Ms. Knuth. He stressed that
most probation revocations are due to technical violations
such as failure to appear for meetings with probation
officers, failing to comply with rehabilitation programs or
change of residence or employment without approval. He
added that probation officers feel they must report
technical violations because of civil liability concerns.
He expected a number of new cases would be filed as a result
of the parole extension. He disagreed with the Department
of Corrections's assumption that the impact would be zero.
The PD is asking for two paralegal assistants.
Representative Brown observed that the fiscal note submitted
by the Public Defenders Agency suggests that the anti-
stalking provision may be susceptible to a constitutional
challenge. Mr. Salemi stated that the sponsor has worked
with the Department of Law to address the constitutional
challenge.
Representative Brown asked if the probation extension was
limited to the anti-stalking provision if the fiscal note
would be lower. Mr. Salemi stated that if the original
probation provision was reinstated that the fiscal impact
would be minimal. He stated that there would be no need for
a fiscal impact note.
Representative Toohey offered Amendment 1 (Attachment 6).
She observed that the amendment would return the probation
period to five years.
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Representative Brown MOVED to adopt Amendment 1.
Representative Martin OBJECTED for purpose of discussion.
He asked for clarification of the amendment's effect.
Representative Toohey clarified that the deletions in
Amendment 1 would return current law.
Co-Chair Larson reiterated the motion to adopt Amendment 1.
There being NO OBJECTION, Amendment 1 was adopted.
Representative Foster asked if a person sitting in a car all
day long near to the victims place of employment would be
considered "stalking." Ms. Knuth emphasized that in order
for an offense to be committed the defendant must place the
person in fear of death or physical injury. She did not
think the example given would be an offense.
Representative Brown MOVED to report CSHB 64 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
(Tape Change, HFC 93-44, Side 1)
Representative Navarre questioned if the creation of a new
law as proposed in Amendment 1 would have fiscal impact on
the Public Defender Agency.
Mr. Salemi clarified that the impact will be minimal. He
stated that it would be difficult to quantify.
Representative Navarre WITHDREW HIS OBJECTION.
Representative Parnell referred to page 2, line 23, CSHB 64
(JUD). He asked if it is the intent that the victim be held
in reasonable fear of death.
Ms. Knuth answered that line 23 refers to the victims
subjective fear. She added that there must be a basis for
the fear in reality. She noted that since stalking often
results from a prior relationship it is possible for the
perpetuator to have an inside knowledge of what will
frighten the victim.
Representative Parnell asked Mr. Salemi to expound on the
definition of "in fear of death". Mr. Salemi replied that
the fear must be reasonable. He stated that the course of
conduct issue may be a larger issue. He did not think that
constitutional problems would arise.
In response to a question from Representative Parnell, Ms.
Knuth explained that the fear of death element is included
in existing assault statutes.
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Co-Chair Larson reiterated the motion to MOVE CSHB 64 (FIN)
out of Committee with individual recommendations and with
the accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
CSHB 64 (FIN) was reported out of Committee with a "do pass"
recommendation and with two zero fiscal notes by the
Department of Administration and with a zero fiscal note by
the Department of Corrections and with a zero fiscal note by
the Department of Public Safety, dated 3/1/93 and with a
zero fiscal note by the Department of Law, dated 3/1/93.
HOUSE BILL NO. 151
"An Act relating to payment by indigent persons for
legal services and related costs; and providing for an
effective date."
CHRIS CHRISTENSEN, III, STAFF COUNSEL, ALASKA COURT SYSTEM
provided members with a letter dated February 28, 1993,
explaining CSHB 151 (JUD) (Attachment 7). He observed that
CSHB 151 (JUD) was introduced by the Judiciary Committee at
the request of the Supreme Court. Under both the United
States and Alaska Constitutions, a criminal defendant has
the right to an attorney. The State must appoint attorneys
to defendants that cannot afford representation.
Mr. Christensen observed that in 1990 the Legislature
amended AS 18.85.120 (c) to allow judgments to be entered
against defendants represented by the Public Defender or
OPA. If a defendant became solvent the judgement would be
enforced. Judgments could not be collected for three years
following incarceration.
He explained that HB 151 would allow judgments to be entered
against defendants who are represented by the public
defender or OPA whether or not the defendant is convicted.
Indigent defendants would be treated the same as non-
indigent defendants. In addition, HB 151 would eliminate
the three year moratorium on repayment following
incarceration.
Representative Grussendorf expressed concern that CSHB 151
(JUD) would prevent innocent indigent persons from seeking
counsel.
Co-Chair Larson presented members with a proposed House
Finance as for CSHB 151 (JUD) (Attachment 8). He also
provided members with an analysis of the proposed changes to
CSHB 151 (JUD) (Attachment 9).
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Co-Chair MacLean MOVED to adopt the proposed as, Work Draft
8-LS0618\E, dated 3/10/93. Representative Parnell OBJECTED
for purpose of discussion.
Representative Brown asked that CSHB 151 (JUD) be HELD in
Committee. She expressed concerns with how poor persons
access to the criminal justice system will be effected. She
asked what will be accomplished by taking resources from
indigent individuals.
Co-Chair MacLean reviewed the proposed as. She explained
changes to CSHB 151 (JUD): (See Attachment 9)
* Expands the title;
* Takes out language that would require people who
are acquitted to pay for costs of legal services.
This change returns to existing law that, "upon a
person's conviction, the court may enter a
judgement...";
* Takes out language that could allow the court to
impose costs for services and facilities. This
change narrows CSHB 151 (JUD) to the costs of
representation;
* Allows delay of payment if the case is under
appeal;
* Allows the court to remit or reduce the judgement
or to change the method of payment if there is a
hardship on the defendant or his family;
* Adds a report requirement to review and study the
effect of the law.
Representative Martin asked if the report is necessary. Co-
Chair MacLean stressed that the Committee Substitute will be
revenue enhancing. She felt that a study would be
inexpensive. Co-Chair MacLean asked why the Alaska Court
System did not supply a fiscal note reflecting enhanced
revenues. She noted the Office of Public Advocacy has
estimated that the legislation would result in $3 million
dollars a year.
Mr. Christensen stressed that there would be no financial or
administrative benefit to the court. He clarified that
income resulting from the legislation will be deposited in
the General Fund. He suggested that the Department of Law
and the Department of Corrections would incur administrative
savings.
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MARILYN MAY, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW
clarified that 1200 judgments have been issued since July 1,
1992. The judgments are worth approximately $240.0 thousand
dollars. One hundred and Twenty-three have been paid
voluntarily. The Department of Law has collected $21.0
thousand dollars.
Ms. May emphasized that there is an administrative burden
since some judgments cannot be executed immediately. The
Department of Law coordinate with the Department of
Corrections to determine when collections can begin. She
asserted that an additional administrative burden is caused
by a hardship provision which allows petitions to the
Department. She stated that the Department of Law can
comply with the reporting provision with the existing
computer system.
CSHB 151 (JUD) was HELD in Committee.
ADJOURNMENT
The meeting adjourned at 3:15 p.m.
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