Legislature(2007 - 2008)CAPITOL 120
05/04/2007 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB200 | |
| HB227 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 200 | TELECONFERENCED | |
| + | HB 227 | TELECONFERENCED | |
| + | HB 232 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
May 4, 2007
1:13 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Chair
Representative Nancy Dahlstrom, Vice Chair
Representative Bob Lynn
Representative Ralph Samuels
Representative Max Gruenberg
Representative Lindsey Holmes
MEMBERS ABSENT
Representative John Coghill
COMMITTEE CALENDAR
HOUSE BILL NO. 200
"An Act relating to the presumption of coverage for a workers'
compensation claim for disability as a result of certain
diseases for certain occupations."
- MOVED CSHB 200(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 227
"An Act relating to the Uniform Money Services Act, to money
transmission services, and to currency exchange services; and
providing for an effective date."
- MOVED CSHB 227(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 232
"An Act relating to the sale, distribution, and purchase of
alcoholic beverages; relating to a state database for records of
certain purchases of alcoholic beverages; relating to the
relocation of a license to sell alcoholic beverages; relating to
procedures for local option elections for control of alcoholic
beverages; and providing for an effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 200
SHORT TITLE: WORKERS' COMP: DISEASE PRESUMPTION
SPONSOR(s): REPRESENTATIVE(s) DAHLSTROM
03/14/07 (H) READ THE FIRST TIME - REFERRALS
03/14/07 (H) L&C, JUD
04/27/07 (H) L&C AT 3:00 PM CAPITOL 17
04/27/07 (H) Heard & Held
04/27/07 (H) MINUTE(L&C)
04/30/07 (H) L&C AT 3:00 PM CAPITOL 17
04/30/07 (H) Moved Out of Committee
04/30/07 (H) MINUTE(L&C)
05/02/07 (H) L&C RPT 1DP 1NR 4AM
05/02/07 (H) DP: GATTO
05/02/07 (H) NR: NEUMAN
05/02/07 (H) AM: LEDOUX, GARDNER, RAMRAS, OLSON
05/02/07 (H) FIN REFERRAL ADDED AFTER JUD
05/04/07 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 227
SHORT TITLE: UNIFORM MONEY SERVICES ACT
SPONSOR(s): REPRESENTATIVE(s) KERTTULA
03/28/07 (H) READ THE FIRST TIME - REFERRALS
03/28/07 (H) L&C, FIN
04/25/07 (H) L&C AT 3:00 PM CAPITOL 17
04/25/07 (H) Moved CSHB 227(L&C) Out of Committee
04/25/07 (H) MINUTE(L&C)
04/26/07 (H) L&C RPT CS(L&C) 3DP 3NR
04/26/07 (H) DP: GARDNER, BUCH, OLSON
04/26/07 (H) NR: LEDOUX, NEUMAN, GATTO
04/26/07 (H) JUD REFERRAL ADDED AFTER L&C
05/04/07 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
KELLY HUBER, Staff
to Representative Nancy Dahlstrom
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 200 on behalf of the sponsor,
Representative Dahlstrom.
MARK JONES
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 200.
ROD HARRIS
Alaska Professional Fire Fighters Association (AKPFFA)
Eagle River, Alaska
POSITION STATEMENT: Provided comments during discussion of HB
200.
MIKE DAVIDSON
Alaska Professional Fire Fighters Association (AKPFFA)
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of HB
200.
LISA WEISSLER, Staff
to Representative Beth Kerttula
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a comment during discussion of HB
227 on behalf of the sponsor, Representative Kerttula.
JESSE KIEHL, Staff
to Senator Kim Elton
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 227 on behalf of
Representative Kerttula, sponsor.
MARK DAVIS, Director
Juneau office
Division of Banking & Securities
Department of Commerce, Community, & Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of HB
227.
W. GRANT CALLOW, Commissioner
National Conference of Commissioners on Uniform State Laws
(NCCUSL)
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of HB
227.
ACTION NARRATIVE
CHAIR JAY RAMRAS called the House Judiciary Standing Committee
meeting to order at 1:13:18 PM. Representatives Lynn, Holmes,
Gruenberg, Dahlstrom, Coghill, and Ramras were present at the
call to order. Representative Samuels arrived as the meeting
was in progress.
HB 200-WORKERS' COMP: DISEASE PRESUMPTION
1:13:46 PM
CHAIR RAMRAS announced that the first order of business would be
HOUSE BILL NO. 200, "An Act relating to the presumption of
coverage for a workers' compensation claim for disability as a
result of certain diseases for certain occupations." [Included
in members packets was the proposed committee substitute (CS)
for HB 200, Version 25-LS0748\E, Bailey, 5/4/07.]
1:14:44 PM
KELLY HUBER, Staff to Representative Nancy Dahlstrom, Alaska
State Legislature, relayed on behalf of Representative
Dahlstrom, sponsor, that the proposed committee substitute (CS)
for HB 200, Version 25-LS0748\E, Bailey, 5/4/07, allows a
presumption for certain diseases and illnesses for firefighters
and first responders. She offered her understanding that the
program is not mandatory and provides that for eligibility, the
firefighter or first responder must have at least seven years of
service and possess a minimum of Firefighter 1 certification.
The diseases listed in the bill are linked to these occupations,
which have an inherent risk. Under the presumption, those who
work in these occupations could pursue workmen's compensation
should they contract any of the listed illnesses.
1:17:14 PM
MARK JONES, after relaying he has 32 years' experience as a fire
fighter, said physical fitness is a necessity in the
firefighting industry. Many fire departments around Alaska, and
the United States, have implemented aggressive physical fitness
programs to ensure employees are in the best physical condition
possible. Improvements in protection, including equipment,
engineering, and barriers, have all provided a tremendous
reduction in exposure to diseases. These prevention programs
are working. However, there are still instances where workers
are exposed. The physical demands, coupled with long term
exposure to carbon monoxide, all lead to continued high levels
of heart and lung disease. Skin contact with smoke carrying
carcinogens is still a major problem, often leading to cancer,
but fully protective equipment and clothing to protect one from
this contact has not yet been developed. One of the goals of
everyone in fire and emergency services is to reduce the
occurrence of these occupational illnesses to zero. Until this
can be achieved, the industry needs the protections of HB 200.
1:21:19 PM
ROD HARRIS, Alaska Professional Fire Fighters Association
(AKPFFA), said that in spite of improvements to the safety gear
and training, firefighters are still regularly exposed to toxic
environments. The nature of their work calls for firefighters
to mitigate emergencies in extreme conditions. As of this year,
41 states have enacted presumptive legislation to protect their
emergency responders. Alaska's emergency responders need this
same protection as their peers in other states.
1:22:32 PM
MIKE DAVIDSON, Alaska Professional Fire Fighters Association
(AKPFFA), said that HB 200 represents an important fix to a hole
in the safety net that currently exists in Alaska. Currently,
AKPFFA members are frequently exposed to known carcinogens,
contagious diseases, and other hazards as part of their
occupation. These hazards are routine, unpredictable, and occur
on a regular basis. Unlike other healthcare and emergency
occupations, there is no opportunity to pre-assess the scene for
potentially hazardous exposures. The AKPFFA has taken every
engineering step possible to prevent these exposures. It is the
goal of everyone in fire service to eradicate these diseases
among their employees. It is difficult to trace these exposures
back to a single event, but rather, it is chronic exposure to
various known carcinogens and diseases. The AKPFFA needs the
protections contained within HB 200 as these diseases can be
terminal, and are not covered by private health insurance. Mr.
Davidson commented that private health insurance is a good
safety net, but it does not provide living expenses for a family
while the firefighter is unable to work. "I am certainly
supportive of HB 200," he concluded.
CHAIR RAMRAS asked if there were any more questions or whether
anyone else wished to speak before he closed public testimony on
HB 200.
1:28:06 PM
REPRESENTATIVE DAHLSTROM moved to adopt the proposed CS for HB
200, Version 25-LS0748\E, Bailey, 5/4/07, as the work draft.
REPRESENTATIVE GRUENBERG objected for the purpose of discussion.
MS. HUBER, in response to a question, explained that the changes
she'd described earlier applied to Version E.
REPRESENTATIVE GRUENBERG removed his objection.
[Although nothing further was stated, Version E was treated as
being before the committee.]
1:28:45 PM
REPRESENTATIVE DAHLSTROM moved to report the proposed CS for HB
200, Version 25-LS0748\E, Bailey, 5/4/07, out of committee with
individual recommendations and the accompanying fiscal notes.
REPRESENTATIVE GRUENBERG asked whether, if the exposure occurred
before the effective date of the act, would a court or a carrier
require that "any or all" of the exposure occur before the
effective date. He said he wanted to be sure there was as broad
a coverage as possible.
MS. HUBER responded that claims must be from the effective date
forward, but the prior exposure is included, if claimants meet
the presumption of seven years service and Firefighter 1
certification. Then, the exposure from the claimants work is
included. No claims from the past can be brought up in the
future.
1:30:51 PM
REPRESENTATIVE GRUENBERG removed his objection.
CHAIR RAMRAS announced that CSHB 200(JUD) was reported from the
House Judiciary Standing Committee.
HB 227-UNIFORM MONEY SERVICES ACT
1:31:32 PM
CHAIR RAMRAS announced that the last order of business would be
HOUSE BILL NO. 227, "An Act relating to the Uniform Money
Services Act, to money transmission services, and to currency
exchange services; and providing for an effective date."
[Before the committee was CSHB 227(L&C).]
1:32:19 PM
LISA WEISSLER, Staff to Representative Beth Kerttula, Alaska
State Legislature, said on behalf of Representative Kerttula,
sponsor, that a representative from Senator Elton's office would
be presenting HB 227.
1:32:36 PM
JESSE KIEHL, Staff to Senator Kim Elton, Alaska State
Legislature, on behalf of the sponsor, Representative Kerttula,
explained that HB 227 would enact the Uniform Money Services Act
here in Alaska. The bill would ensure safety and soundness in
certain financial institutions for those who don't use banks.
This bill doesn't pertain to banks. The bill regulates money
transmitters, both large (Western Union, Money Gram) and small.
He clarified that the small money transmitters found in Alaska
serve people from both cruise ships, and fishing businesses,
neither of which open Alaska bank accounts, but need to wire
money or write checks.
MR. KIEHL noted that Alaskans and visitors have been victimized
by phony money transmitters. This bill would place a prior
restraint on those transmitters by requiring licensure in
advance. The bill addresses two industries, both of which are
of some concern to the federal government because of the risk
posed for money laundering and terrorists financing. The bill
ensures law enforcement coordination between state and federal
governments. The bill is revenue neutral and will be regulated
by the Division of Banking & Securities. The bill is supported
by a consortium of large money transmitting companies, an
association of small money transmitters, the Department of
Commerce, Community and Economic Development (DCCED), a consumer
advocacy group, the bankers association [Alaska Bankers
Association (ABA)], and one of the major cruise lines.
MR. KIEHL referred to [what would later become Amendment 1] and
said it would bring the bill more closely in conformance with
the uniform act, in response to a recent U. S. Supreme Court
decision, [Watters v. Watters, 550 U.S. (2007)]; Amendment 1,
labeled 25-LS0814\E.1, Bannister, 4/27/07, read:
Page 28, line 14, following the first occurrence of
"that":
Insert "(A)"
Page 28, line 15, following "loans;":
Insert "or
(B) engages in credit card operations and
maintains only one office that accepts deposits, does
not accept demand deposits or deposits that the
depositor may use for payments to third parties, does
not accept a savings or time deposit less than
$100,000, and does not engage in the business of
making commercial loans;"
REPRESENTATIVE GRUENBERG asked for clarity on the statement
regarding conformity with the uniform act; specifically, is it
out of conformity, and was there any danger it would not be
interpreted uniformly.
MR. KIEHL responded that there are small differences between the
bill and the uniform act as originally drafted. There is a
category of bank subsidiaries referred to as "rent-a-banks" and
these are not currently doing money transmission in Alaska.
This very narrow category was carved out of the definition of
bank. Banks are exempt, so this would have regulated the
aforementioned subsidiaries should they have started
transmitting money in Alaska. The U.S. Supreme Court's decision
in Watters strictly limited the ability of states to regulate
bank securities. The sponsors thought it best to put back the
original definition as written by the uniform law commissioners,
and that is what Amendment 1 would do. The other significant
difference was that the uniform act had three entities: money
transmitters, check cashers, and currency exchangers. The bill
does not regulate check cashers, because you can't launder money
or finance terrorists by cashing a check, and there is no safety
or soundness risk.
MR. KIEHL concluded by stating that the uniform act was designed
to be modular; the state could adopt any one or all three of the
pieces.
1:39:38 PM
MARK DAVIS, Director, Juneau office, Division of Banking &
Securities, Department of Commerce, Community, & Economic
Development (DCCED), referring to Watters, stated that the issue
was whether a state could regulate a mortgage company that was
an operating subsidiary of a national bank. Operating
subsidiaries are not subject to supervision by states under the
U.S. Office of the Comptroller of the Currency (OCC). The U.S.
Supreme Court agreed, but explicitly noted that affiliates of a
national bank can be subject to state regulation. This bill is
reworded so that it would not cover a bank or an operating
subsidiary of a bank.
REPRESENTATIVE GRUENBERG asked if Alaska will need to change any
of its banking laws to conform to Watters.
MR. DAVIS responded that Alaska would not need to at the present
time because it has not exercised any supervision over any
subsidiaries of national banks. The few national banks that
operate in Alaska have decided to operate through affiliates,
which do fall under the scrutiny of the state.
REPRESENTATIVE GRUENBERG asked whether Mr. Davis was preparing
any legislation to extend state jurisdiction to the limits of
the Watters case.
MR. DAVIS indicated that he was, adding he did not think there
would be state supervision of subsidiaries in the near future.
REPRESENTATIVE GRUENBERG commented that he generally likes to
see Alaska regulate to the extent permitted by the [U.S.]
Constitution, to ensure that businesses and customers are
protected. He asked Mr. Davis where there may be areas in which
Alaska's banking jurisdiction could be extended, as permitted by
Watters.
1:43:27 PM
MR. DAVIS responded that he did not think so. He agreed that
the deferred deposit act covers Internet operations. Alaska has
been successful in enforcing this act against companies only
operating via the Internet in Alaska, which is asserting its
jurisdiction on behalf of consumers in every bill it reviews.
CHAIR RAMRAS expressed concern for the financial security of
crew and passengers of cruise ships, when they are sending money
by wire. He asked for clarity on the security and surety bond
required by the money transmitters.
MR. KIEHL responded that the security requirement in proposed AS
06.55.104 speaks primarily to losses by the consumer should a
money transmitter go out of business. The bill is written with
some flexibility, on the advice of the regulator, with a lower
security requirement than the model Act initially suggested. A
money transmitter can post a bond, a certificate of deposit, or
an acceptable tangible asset which would be for the benefit of
consumers should the transmitter close up shop with outstanding
obligations. The security requirement under this bill is an
acceptable security (including a surety bond or letter of
credit) of $25,000 with an additional $5,000 acceptable security
required for each location. This would apply, primarily, to the
larger money transmitters that have a number of authorized
delegates. This security requirement was written to the lowest
level that the regulator thought would protect consumers, and
yet not affect the competitive environment in Alaska.
REPRESENTATIVE GRUENBERG commented that the security requirement
amount seems very low, as one default on a transaction could
wipe this amount out.
MR. KIEHL replied that proposed AS 06.55.104 operates together
with proposed AS 06.55.107 which is a net worth requirement.
The money transmitters are required to maintain a positive net
worth, which is reported in their regular reports to the
regulator. There are receivership provisions in the bill to
ensure that a money transmitter getting into trouble isn't going
to leave its Alaskan customers in the lurch.
REPRESENTATIVE GRUENBERG asked Mr. Davis and Mr. Callow about
the figures in the uniform Act and what the division and the
NCCUSL commissioners feel about the financial security amounts
in AS 06.55.104(a).
MR. DAVIS said DCCED supports the $25,000 amount because it is
difficult to obtain a larger bond. The sponsors were sensitive
to the issue of not wanting to put small money transmitters out
of business. DCCED does support the maximum of $5,000. There
are the very large companies, including Money Gram and Western
Union, who have more than enough resources to pay back the
consumer; and there are the small companies which can offer no
financial protection to the consumer. This bill is a compromise
based on DCCED experience with the other Act.
1:49:54 PM
W. GRANT CALLOW, Commissioner, National Conference of
Commissioners on Uniform State Laws (NCCUSL), offered that the
Chicago office of the NCCUSL looked at the [Uniform Money
Services Act] with the changes, prior to the Watters decision,
and approved all the changes that were made. It was drafted as
a uniform Act, with the understanding that each state could
adjust the [financial] levels. Unless there have been changes
to the numbers since HB 227 was drafted, the Chicago office is
comfortable with the numbers, he said.
MR. KIEHL in response to a question relayed that the numbers in
the bill have not been changed since the Chicago office reviewed
them. The security requirements (surety bond or letter of
credit) in the model Act were twice the amount required in the
bill. The $25,000 net worth requirement in the model Act reads
the same as in the bill.
CHAIR RAMRAS expressed support for the bill, but wanted to
ensure that those customers who don't speak English as a first
language are not preyed upon. He asked how the fees are
regulated, particularly for those who don't speak English as a
first language. He asked the rights of those who don't speak
English; what the commissions are; how many of these businesses
are there be in Juneau; and how many of these businesses would
be nationally recognized versus only locally recognized.
MR. KIEHL responded that HB 227 won't regulate fees, as it
pertains to a competitive industry, and the competitive
environment is helping to keep fees low. There are consumer
protections in the bill that have been reviewed by both large
and small money transmitter associations, and they refer to
posting, receipts, timely-transmission minimum requirements, and
refund ability requirements. The bill requires businesses to
post a sign detailing where and how to make complaints, and
every money transmission must come with a receipt that clearly
states the fees that were charged, and the exchange rate or the
floating exchange rate for exchanging foreign currencies. For
foreign currency exchange with a floating exchange rate, there
needs to also be an explanation of how this floating exchange
works.
MR. KIEHL further stated that many of the people who use this
service become quite savvy and know how exchange rates operate.
They pick the businesses that serve them best. The timely
transmission requirements set a bare minimum. The competitive
environment allows one minute money transfers, whereby money
goes directly into someone's bank account. There are an array
and variety of services available. The bill does not interfere
with the competitive environment, but ensures the consumer has
the information needed to make a smart choice.
1:57:02 PM
CHAIR RAMRAS made a motion to adopt Amendment 1 [text provided
previously].
REPRESENTATIVE DAHLSTROM objected for the purpose of discussion.
MR. KIEHL stated that Amendment 1 adds to the definition of a
bank. It adds "rent a banks" or "credit card banks", both of
which are federally recognized banking institutions that do not
have "bank locations" and just offer credit cards. This
language is in the uniform Act. It was originally taken out of
the bill, but, after the Watters ruling, it needs to be
returned.
REPRESENTATIVE DAHLSTROM removed her objection.
CHAIR RAMRAS stated that Amendment 1 was adopted.
REPRESENTATIVE GRUENBERG commented that this is a "trust me"
bill. He asked whether there is any other provision in the bill
about which the committee should be informed.
2:00:24 PM
CHAIR RAMRAS asked whether both the transmission time limit of
10 days and the requirements regarding posting the complaint
notice would be established through regulation, or are already
in the bill.
MR. DAVIS responded that the Division of Banking & Securities
will have regulatory power to set the signage requirement and
has been doing that with regard to the deferred deposit. In
response to Representative Gruenberg, Mr. Davis said that
currently, the division is required to keep the money
transmitter information confidential, and so he would like to
have a provision added that would require money service
companies to ensure that customer information is kept
confidential.
CHAIR RAMRAS asked about the 10-day transmission time limit.
MR. DAVIS offered his understanding that this time limit is in
the bill and although 10 days is a long period of time, it is
part of the uniform Act. He recommended retaining that time
limit for now, as there may be problems with foreign banks.
This service, referred to above, is primarily for persons who
don't have a bank account where they are currently.
MR. KIEHL clarified that the 10-day time limitation is not in
the uniform Act, and that it is designed to work with existing
consumer protections that individual states have in effect. The
"timely transmission" language came at the suggestion of the
industry, and it matches the form and content of the language
adopted by both Hawaii and Washington. Almost none of the
transmissions take 10 days, as the competitive environment has
promoted having transmissions happen quickly.
MR. DAVIS concurred.
REPRESENTATIVE GRUENBERG asked why a provision regarding
reciprocal confidentiality was not in the bill.
MR. DAVIS replied that the uniform Act did not address this
issue, and the sponsor decided not to modify the bill in that
regard. In response to Representative Gruenberg, he clarified
that he would like to see customer confidentiality maintained
with money transmitters, as customer information can sometimes
include bank routing numbers.
REPRESENTATIVE GRUENBERG asked whether members understood that
Mr. Davis wants to make the customer information confidential,
as that information may contain bank routing and bank account
numbers.
2:06:01 PM
MR. KIEHL reiterated that it was a change the sponsors elected
not to make. Bank routing numbers are not transmitted by money
transmitters; but, should a person choose to transfer directly
to a bank account, then a bank routing number would be
collected. The sponsor elected not to impose a higher standard
than the uniform Act imposed.
MR. DAVIS responded that for some special transfers, one may
provide a bank number to the transmitter. The transmitter would
then be in possession of bank account records, which he thinks
should be kept confidential. The drafters of the uniform Act
probably did not anticipate the use of such transfers, he
surmised.
REPRESENTATIVE GRUENBERG expressed concern with the lack of
confidentiality for such transfers.
MR. DAVIS said he did not think this was a major flaw in the
bill, but suggested that proposed AS 06.55.407(1) should
probably say "all information collected from a client or
contained in examination is confidential."
REPRESENTATIVE GRUENBERG stated that he would not want his bank
information released to the public. He asked Mr. Kiehl if the
sponsor would reconsider that point.
MR. CALLOW stated his personal opinion that Mr. Davis'
suggestion to protect customer confidentiality seems like a good
idea. He said that [customer confidentiality] does raise some
liability issues with the consequences of revealing that
information. He said he agrees that confidentiality is
important. He said he did not know whether that issue was
addressed during the drafting of the uniform Act, so he could
not say whether it was purposefully left out.
REPRESENTATIVE GRUENBERG suggested that the sponsor work with
Mr. Davis to address his concern in the House Finance Committee.
He said he wants to see Alaskans protected in this regard.
MR. KIEHL responded that he and the sponsors will work with both
the Division of Banking & Securities and the industry to protect
the security of personal financial records, in order to prevent
identity theft.
REPRESENTATIVE GRUENBERG asked whether there is any provision in
the Act whereby other states are immediately informed should a
company be found to be fraudulent.
MR. DAVIS said that once the state passes this legislation,
Alaska can ask the U.S. Department of Treasury, Financial Crimes
Enforcement Network to confirm which companies are registered.
That federal tracking system protects honest companies.
2:13:08 PM
REPRESENTATIVE DAHLSTROM moved to report CSHB 227(L&C), as
amended, out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, CSHB
227(JUD) was reported from the House Judiciary Standing
Committee.
[Members spoke briefly on a couple of topics addressed during
prior meetings.]
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 2:15 p.m.
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