Legislature(1999 - 2000)

04/14/1999 01:09 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 104 - ENTRY MORATORIA ON PARTICIPANTS/VESSELS                                                                                
Number 0101                                                                                                                     
CO-CHAIR OGAN announced that the first item of business would be                                                                
House Bill No. 104, "An Act revising the procedures and authority                                                               
of the Alaska Commercial Fisheries Entry Commission, the Board of                                                               
Fisheries, and the Department of Fish and Game to establish a                                                                   
moratorium on participants or vessels, or both, participating in                                                                
certain fisheries; and providing for an effective date."  Before                                                                
the committee was CSHB 104(FSH).                                                                                                
Number 0154                                                                                                                     
REPRESENTATIVE BILL HUDSON, Alaska State Legislature, sponsor,                                                                  
noted that Mary McDowell of the Commercial Fisheries Entry                                                                      
Commission (CFEC) could answer technical questions.  He explained                                                               
that HB 104 amends existing moratorium law to provide for a                                                                     
streamlined and more effective process, in order to better manage                                                               
Alaska's fisheries resources.  The current moratorium statute,                                                                  
which Ms. McDowell could address, has proven cumbersome and                                                                     
unworkable.  That, in turn, prevents quick response - not only by                                                               
the CFEC, but also by other agencies - to fisheries that are                                                                    
growing too rapidly to ensure effective management.  As a result,                                                               
both the resource and the economic livelihoods of the participants                                                              
could be jeopardized.                                                                                                           
REPRESENTATIVE HUDSON pointed out that a new element is allowing                                                                
petitioners to request a moratorium directly from the CFEC.  The                                                                
moratorium would be established if the CFEC found that it was                                                                   
necessary to promote the conservation and sustained yield                                                                       
management of the resource, and the economic health and stability                                                               
of commercial fishing in the state.  The bill also authorizes the                                                               
CFEC to implement a moratorium on entry of new vessels, as well as                                                              
participants, providing an additional management tool when a number                                                             
of different skippers are used on one vessel, as occurs in some                                                                 
offshore fisheries.                                                                                                             
REPRESENTATIVE HUDSON informed members that HB 104 allows the state                                                             
to extend its moratorium authority to offshore fisheries adjacent                                                               
to state waters, when it is consistent with federal law.  The                                                                   
state's fisheries go out three miles, and the territorial sea goes                                                              
out twelve miles.  However, there are fisheries that move in and                                                                
out of both state and federal waters.  Wherever there is a                                                                      
consistency, the CFEC would be able to apply this moratorium, to                                                                
take care of the health of the fisheries there.                                                                                 
REPRESENTATIVE HUDSON advised the committee that the bill also                                                                  
authorizes the CFEC to extend the current moratorium on the Bering                                                              
Sea Korean hair crab and the weathervane scallop fisheries for an                                                               
additional two years.  "We gave, by law, a few years back, the                                                                  
authority or the ability for them to create a four-year                                                                         
moratorium," he noted, "and this would give them an additional two                                                              
years."  He indicated that Ms. McDowell could explain why that is                                                               
needed, then reminded members that a similar bill had passed the                                                                
House during the Twentieth Alaska State Legislature, with                                                                       
overwhelming support.                                                                                                           
Number 0490                                                                                                                     
REPRESENTATIVE BARNES brought attention to two letters from Ray                                                                 
Campbell, which discussed the belief that amendments made to HB 204                                                             
the previous year had greatly improved the bill, but were not                                                                   
included in the present legislation.  She asked why Representative                                                              
Hudson had chosen not to introduce the final version from the                                                                   
previous legislature.                                                                                                           
REPRESENTATIVE HUDSON answered that it was primarily at the                                                                     
recommendation of the CFEC.  He deferred to Ms. McDowell.                                                                       
Number 0632                                                                                                                     
MARY McDOWELL, Commissioner, Commercial Fisheries Entry Commission                                                              
(CFEC),  Alaska Department of Fish and Game (ADF&G), explained that                                                             
this bill incorporates everything adopted by the House last year,                                                               
but is missing one amendment made in the Senate Resources                                                                       
Committee; that amendment had jumped into the next phase, saying                                                                
that any fishery that came under a moratorium under these                                                                       
provisions could not later go under a limited entry program with a                                                              
transferable permit.  Other changes have been made to address                                                                   
concerns expressed as the previous bill went through.  In                                                                       
particular, Co-Chairman Ogan had expressed concern about making                                                                 
sure that the Board of Fisheries continued to have involvement in                                                               
the process; that has been incorporated in several places in the                                                                
Number 0734                                                                                                                     
REPRESENTATIVE BARNES asked why the Senate Resources Committee                                                                  
amendment was not incorporated.  She also requested that Ms.                                                                    
McDowell address the fact that once a limited entry permit exists,                                                              
it becomes a thing of value that can be sold or transferred.                                                                    
MS. McDOWELL noted that transferability is controversial, in that                                                               
it creates value for permits when they are transferred for money.                                                               
However, that feature has kept the limited entry program as Alaskan                                                             
as it is today.  It is a constitutional way for permits to change                                                               
hands, from a parent to a child, for example, and still not be                                                                  
considered a closed class under the federal constitution and                                                                    
interstate commerce.  Without transferability, if the permits came                                                              
back to the state, to be handed back out, the list of those who                                                                 
would receive them would have to include nonresidents and everyone                                                              
else.  A parent could no longer transfer a permit to his or her                                                                 
child, to keep it in the family.                                                                                                
Number 0836                                                                                                                     
REPRESENTATIVE BARNES said she doesn't believe that is a good                                                                   
argument.  She asked whether it is not a fact that permit owners                                                                
sell their permits outside of their families, "for big bucks."                                                                  
MS. McDOWELL agreed they can be sold, although many permits change                                                              
hands as a gift, inheritance or survivorship to the spouse at the                                                               
death of the permit holder.  Restating that transferability has                                                                 
always been controversial, she reported that 77 percent of all                                                                  
permits are in the hands of Alaskans, and the system has been                                                                   
upheld as constitutional.  The legislature, in adopting limited                                                                 
entry, had felt that transferability was a feature of the program                                                               
that would help make that happen, she added, which seems to have                                                                
proven true over the years.                                                                                                     
Number 0943                                                                                                                     
REPRESENTATIVE BARNES responded that although limited entry was                                                                 
approved by a constitutional amendment, that doesn't make it right.                                                             
She said the resources belong to all the people of this state,                                                                  
adding, "I don't believe that 77 percent of the permits are still                                                               
held by Alaskan residents, because people from Washington, Oregon,                                                              
North Carolina and all over own those permits and come up here and                                                              
fish every year, when Alaskan people can't fish."                                                                               
Number 1021                                                                                                                     
CO-CHAIR OGAN asked Ms. McDowell to specifically address Section 1,                                                             
as well as the remainder of the bill.                                                                                           
MS. McDOWELL explained that the bill essentially fine-tunes and                                                                 
updates this one aspect of the limited entry law.  The intent is to                                                             
meet the needs of the evolving Alaska fisheries.  Although current                                                              
law has a moratorium provision for the CFEC, it is not a useful                                                                 
tool because it requires a long, cumbersome process.  Fishermen who                                                             
recognize the need for some kind of cap on their fishery would have                                                             
to petition the commissioner of the ADF&G, who would then go to the                                                             
Board of Fisheries; the board would schedule it on their agenda,                                                                
then decide whether to give the commissioner of the ADF&G                                                                       
permission to then petition the CFEC.  This process could take                                                                  
months or years.                                                                                                                
MS. McDOWELL pointed out that the lengthy process could actually                                                                
worsen the situation by causing a rush into that fishery by                                                                     
speculators.  "As soon as you notify people that we're considering                                                              
having a lid put on this fishery, and then give them a year or two                                                              
to rush in, participate and get grandfathered in, you actually                                                                  
aggravate the problem," she explained, adding that no one has ever                                                              
petitioned for a moratorium under the current statute, because it                                                               
is so cumbersome and counterproductive.                                                                                         
MS. McDOWELL noted that the situation that gives rise to the need                                                               
for a more effective moratorium process didn't exist when the                                                                   
Limited Entry Act was passed in 1973, when people could primarily                                                               
make a living in one fishery.  Now fisheries are diversifying, she                                                              
said.  New fisheries are springing up, for under-utilized species                                                               
and gear types, for example.  This is good economic development and                                                             
diversification for the state, and it creates job opportunities.                                                                
However, these new fisheries tend to come into existence and expand                                                             
very rapidly, and they can quickly create a resource conservation                                                               
or overcapitalization problem.  That is why a more efficient                                                                    
moratorium process is more important than ever now.  Ms. McDowell                                                               
advised members:                                                                                                                
     Currently, ... the only tool we have for getting a quick                                                                   
     handle on an expanding fishery is limited entry.  So,                                                                      
     this bill could actually avoid the need to go straight to                                                                  
     a limited entry permit program in a fishery.  If a                                                                         
     fishery is mushrooming, a moratorium would give us a tool                                                                  
     for putting a temporary lid on that fishery, and give us                                                                   
     four years to assess the resource, look over the fishery,                                                                  
     go the Board of [Fisheries] and see if they have an                                                                        
     alternative way of getting a handle on that fishery -                                                                      
     gear restrictions or whatever.                                                                                             
     So, it's possible that this moratorium tool would                                                                          
     actually prevent the need to go into limited entry in                                                                      
     some of these fisheries, because it buys you some time to                                                                  
     get a lid on something that's getting out of control and                                                                   
     figure out what the next step should be.  During that                                                                      
     four years, we could assess the situation, determine                                                                       
     whether we need to propose limited entry and, if so, how                                                                   
     to best structure it to conserve the resource and take                                                                     
     care of the orderly development of that fishery, and to                                                                    
     look for alternatives to limited entry for that fishery.                                                                   
     So, we believe that the ability to administratively enact                                                                  
     a moratorium like this is a very important management                                                                      
     tool, ... and helps keep our options open for the future.                                                                  
     And the whole bill is structured to make this process so                                                                   
     that the fishermen could petition the entry commission.                                                                    
     There'd be an open public process, then, for public                                                                        
     comment and so on, ... while that moratorium is in place,                                                                  
     and just avoids this need to go through this convoluted                                                                    
     process of going to the commissioner, who goes to the                                                                      
     board, who goes back to the commissioner, who comes to                                                                     
     the commission.  And we believe this process is a sound                                                                    
Number 1304                                                                                                                     
MS. McDOWELL advised members that Representative Hudson had asked                                                               
her to address the issue of extending moratoriums.  She reported                                                                
that the moratoriums enacted by the legislature in the last two                                                                 
years - on dive fisheries, scallops and hair crab - have all been                                                               
for four years.  This bill allows for those moratoriums, or any                                                                 
enacted in the future under this statute, if necessary, to be                                                                   
extended for up to two more years.  She stated:                                                                                 
     We would hope to not have to use that tool in any                                                                          
     fishery, because people need some certainty, and there                                                                     
     should, ... in most cases, be time to resolve the                                                                          
     question in four years.  If there is an instance where                                                                     
     you can't resolve it in four years, we believe the                                                                         
     ability to extend is an important thing to have.  For                                                                      
     example, if the Board of [Fisheries] is planning to take                                                                   
     action and get a lid on things some other way, this would                                                                  
     buy time for doing that.                                                                                                   
     In the case of the scallop fishery and the Korean hair                                                                     
     crab fishery, the legislature put those under a                                                                            
     moratorium based on the vessels, not on the individuals.                                                                   
     We don't have a vessel limited entry program.  Right now,                                                                  
     we don't really have a tool in place to limit those                                                                        
     fisheries before those moratoriums expire.  We've drafted                                                                  
     legislation to do that, but until that's passed, we don't                                                                  
     really have a tool for limiting those fisheries.  If we                                                                    
     didn't have the ability to extend this, and the                                                                            
     moratorium would expire on those fisheries, it gets                                                                        
     thrown wide-open to open access again, and probably would                                                                  
     create a rush of nonresidents into the fisheries.  So,                                                                     
     that provision for extending the moratorium is one we                                                                      
     would hope to not have to use, but believe is an                                                                           
     important tool to have in place, in case it ever is                                                                        
Number 1409                                                                                                                     
CO-CHAIR OGAN referred to Ms. McDowell's comments about creating a                                                              
rush into a fishery.  He noted that interstate commerce laws                                                                    
prohibit discrimination against nonresidents.                                                                                   
MS. McDOWELL explained that in the case of the fisheries under                                                                  
moratorium now, if the moratorium expired and there were no                                                                     
limitation in place, it would go back to open access and anyone                                                                 
could get back in.  In the case of a couple of the fisheries in the                                                             
Exclusive Economic Zone (EEZ), the concern is that several other                                                                
fisheries have been closed; license limitation has been put in                                                                  
place in federal waters, and "there are boats looking for things to                                                             
do, many of those nonresident vessels that could move into the                                                                  
fisheries."  If there were a lag time between when a moratorium was                                                             
proposed and its implementation, there potentially would be a rush                                                              
of speculators who weren't already active participants, who may                                                                 
jump in to see whether they can be grandfathered in.                                                                            
Number 1499                                                                                                                     
CO-CHAIR OGAN asked whether, if this moratorium legislation isn't                                                               
passed, the ADF&G, through the board, could limit seasons or take                                                               
a total poundage limit, for example.                                                                                            
MS. McDOWELL affirmed that, noting that those are tools the board                                                               
has all of the time.  The moratorium wouldn't even be proposed in                                                               
a fishery if tools were already in place to keep a lid on that                                                                  
fishery, she explained.  A moratorium could get a handle on a                                                                   
fishery that is mushrooming and hold it at its present level while                                                              
the Board of Fisheries has time to act.  If the board had tools and                                                             
met in the meantime, and if it found a way to get a handle on that                                                              
fishery, then the need to limit it, at the end of the moratorium,                                                               
would go away.                                                                                                                  
Number 1544                                                                                                                     
REPRESENTATIVE BARNES recalled that the last moratorium, for the                                                                
dive fishery, was for four years.  Noting the request to provide                                                                
authorization to extend that two years, she asked, "In four years,                                                              
you mean to tell me, the board of fish and game has not addressed                                                               
the problem in that dive fishery?"                                                                                              
MS. McDOWELL answered that the moratorium is in place now, in the                                                               
dive fishery, and they hope it will be resolved by the end of the                                                               
four years; a number of species are under that one moratorium.                                                                  
This bill would not extend that moratorium, but it would provide                                                                
the ability to do that.  Ms. McDowell pointed out that there are                                                                
several proposals floating around, about combined fisheries or                                                                  
endorsements, for example, where one permit would be handed out for                                                             
all the dive fisheries, but there would be endorsements for                                                                     
individual species.  She stated:                                                                                                
     We don't have the ability to do that now.  But if the                                                                      
     legislature decided that you were interested in providing                                                                  
     that tool, there might be a reason to hold off on                                                                          
     finalizing the action on limitation until we knew whether                                                                  
     that tool was going to be provided. ... We would always                                                                    
     try to finish making a decision in four years, because                                                                     
     people need certainty, they need to get on their lives.                                                                    
     And if it's going to be opened up, it needs to be opened                                                                   
     up; if it's going to be limited, it needs to be limited.                                                                   
     So, our goal would always be [to] resolve it in four                                                                       
     years.  We're primarily concerned about hair crab and                                                                      
     scallops right now, where it's a vessel moratorium.  We                                                                    
     don't have a vessel limitation program.  We don't have a                                                                   
     way to limit those right now, ... unless given the tools                                                                   
     to do a vessel limitation.                                                                                                 
Number 1675                                                                                                                     
CO-CHAIR OGAN noted that he had provided members with copies of the                                                             
section of Title 16 that is repealed by Section 1 of the bill.                                                                  
Number 1705                                                                                                                     
AMY DAUGHERTY, Lobbyist for Pacific Associates and Alliance                                                                     
Fisheries, came forward, clarifying that she was speaking on behalf                                                             
of hair crabbers and scallop vessel owners.  She read her written                                                               
testimony into the record, with comments, as follows:                                                                           
     I'm here to speak in support of this legislation.  In my                                                                   
     four-year tenure with the Fisheries Committee, I assisted                                                                  
     in putting through two statutory moratoriums, for the                                                                      
     hair crab  and scallop fisheries.  In both cases, the                                                                      
     harvesting effort was beginning to exceed what those                                                                       
     small fisheries could endure, so we contained them                                                                         
     legislatively.  We were fortunate that these situations                                                                    
     were dealt with so expediently in a political setting,                                                                     
     but that was before most of the legislature's attention                                                                    
     was on budget concerns and subsistence.                                                                                    
     Of particular importance in this bill are Sections 2 and                                                                   
     8, which would allow CFEC to extend the current                                                                            
     moratoriums up to two years.  The hair crabbers and                                                                        
     scallopers, who I now represent, are in support of                                                                         
     extending their current moratoriums, especially if a more                                                                  
     long-term solution cannot be attained.  It is critical                                                                     
     that we not let these fisheries open up again.  In both                                                                    
     cases, open access would open a floodgate of effort, to                                                                    
     the extent where these small fisheries ... would be                                                                        
     difficult or impossible to manage ....                                                                                     
     Particularly in the hair crab fisheries, now that AFA                                                                      
     [American Fisheries Act] has passed and pollock is                                                                         
     essentially co-oped, there's a lot of flexibility, so                                                                      
     that they can assign their pollock quota.  And this, I                                                                     
     believe, is the only fishery that's open in the EEZ,                                                                       
     which is just a red flag for people to rush into. ...                                                                      
     I hope the legislature will enable the state with this                                                                     
     management tool.  Both of these fisheries reside                                                                           
     primarily offshore in federal waters yet have been                                                                         
     delegated to the state for management.  Both have a                                                                        
     higher percentage of Alaskan involvement than most                                                                         
     offshore fisheries.  If the state effectively "drops the                                                                   
     ball" or neglects to show interest, it increases the                                                                       
     likelihood that these fisheries will return to federal                                                                     
     management.  It's in Alaska's best interest to have its                                                                    
     fishery management tools in place.                                                                                         
     My partner, Joe Kyle, is an Alaskan designate on the                                                                       
     North Pacific Fishery Management Council, and he couldn't                                                                  
     be with us today.  But he stated on numerous occasions                                                                     
     that Alaska needs to show its capability in fisheries                                                                      
     management, in order to retain control of these                                                                            
     fisheries, and also to keep our state's best interest                                                                      
     prevailing in the offshore fisheries.  He has indicated                                                                    
     that restoring a license limitation program under a                                                                        
     federal regime would most probably decrease Alaska's                                                                       
     involvement in these fisheries.  It's just a matter of                                                                     
     numbers out there.                                                                                                         
     Why should you care?  These fisheries add to Alaska's                                                                      
     economy.  They pay landing tax or business tax and fuel,                                                                   
     and, I believe, $1,000 annual license fees.  Some                                                                          
     Alaskans participate in these fisheries.  Some have                                                                        
     direct employment, and some have indirect.  They can't                                                                     
     help but add to the Alaskan economy when they sell to                                                                      
     processors onshore or the product is shipped through                                                                       
     Anchorage after charter planes pick up the produce from                                                                    
     the grounds.  They buy fuel and groceries from Alaskans.                                                                   
     They strengthen our state's infrastructure.                                                                                
     This legislation will enable CFEC to more effectively do                                                                   
     their job, limiting participation when fishing effort                                                                      
     exceeds a level of sustainability - resource and economic                                                                  
     sustainability.  I urge your support for HB 104.                                                                           
Number 1989                                                                                                                     
RAYMOND CAMPBELL testified via teleconference from Ketchikan.  A                                                                
former commercial fisherman, he told members he was put out of                                                                  
business on a moratorium.  It seems that public access is being                                                                 
described as a convoluted procedure, he said.  "We're talking about                                                             
very valuable resources here, and to have a small group of people                                                               
go in and petition the CFEC, to put a moratorium on a fishery, and                                                              
then have the CFEC just do it, it seems to be taking a lot of the                                                               
public process out of it," he stated.                                                                                           
MR. CAMPBELL said he understands that there have been more than ten                                                             
requests to place other fisheries under a moratorium.  If this bill                                                             
goes through, the CFEC could shut down those fisheries through a                                                                
moratorium, putting people out of work.  Furthermore, he suggested,                                                             
removal of transferability and getting rid of the money incentive                                                               
may keep speculators from getting into the fisheries.  If this bill                                                             
goes through, he wants to see it amended as HB 204 was amended in                                                               
the last session.  "And I think the whole issue of limited entry                                                                
won't be an issue anymore, if we take the transferability and the                                                               
money incentive out of it," he concluded.                                                                                       
Number 2115                                                                                                                     
CO-CHAIR OGAN asked Mr. Campbell about his letter dated March 11,                                                               
1999, which says in the fourth paragraph that there have been                                                                   
transfers of moratorium permits, which puts a value on them.  He                                                                
asked Mr. Campbell if he could cite specific examples of what the                                                               
transfers have been.                                                                                                            
MR. CAMPBELL answered, "There have been transfers of the moratorium                                                             
permits in the dive fisheries; there have been medical transfers.                                                               
... One of the things that the dive moratorium did was it gave                                                                  
permits to people who never participated in the urchin fishery, and                                                             
maybe Miss [McDowell] can give us numbers on how many medical                                                                   
transfers there's been on moratorium permits in the dive fishery.                                                               
And that is driven by money, too. ... On a medical transfer,                                                                    
there's money traded."                                                                                                          
Number 2261                                                                                                                     
GERON BRUCE, Legislative Liaison, Office of the Commissioner,                                                                   
Alaska Department of Fish and Game (ADF&G), came forward,                                                                       
specifying that the ADF&G supports this legislation.  He said he                                                                
would focus on biological issues relating to why a moratorium is                                                                
helpful in maintaining the health of the resources.  He told                                                                    
     As both the sponsor and Ms. McDowell indicated, there's                                                                    
     increased interest in Alaska in developing the new                                                                         
     fisheries on species that are currently under-utilized or                                                                  
     not utilized at all. ... In nearly all cases involving                                                                     
     these species, the department knows very little about                                                                      
     their life history, the distribution, how productive they                                                                  
     are, how they will respond to commercial harvest. ... And                                                                  
     so, we are very cautious in approaching new fisheries,                                                                     
     and there have been cases where new fisheries have been                                                                    
     started - abalone is probably the instance I'd like to                                                                     
     use the best in Southeast Alaska, where an abalone                                                                         
     fishery started off at a very low level at first,                                                                          
     interest in it expanded, harvest rapidly expanded, beyond                                                                  
     what the resource could support, the fishery collapsed,                                                                    
     and we no longer have an abalone fishery.                                                                                  
     And while there are mechanisms that we can put on - using                                                                  
     seasons, quotas or trip limits, other kinds of things -                                                                    
     you don't always know which of those tools are                                                                             
     appropriate.  And you have to remember, always, that                                                                       
     we're starting, with these new fisheries, with very, very                                                                  
     limited information about the size of the resource, its                                                                    
     productivity, and its ability to respond to intensive                                                                      
     harvest.  So, ... we often need some time to begin to                                                                      
     develop some information, because in some cases, the                                                                       
     fishery may actually be the only way we have of                                                                            
     collecting information.  We're not getting increased                                                                       
     funding for supporting new fisheries, so there's very                                                                      
     limited funds.  We basically have to borrow from the                                                                       
     staff that's dedicated to existing fisheries to try to                                                                     
     begin to collect this information.  And so, sometimes the                                                                  
     fishery itself is a very important data collection tool.                                                                   
     However, being a fishery, it ... doesn't operate the same                                                                  
     way that a scientific survey would.  And that's part of                                                                    
     the reason why you need to be cautious, and why a                                                                          
     moratorium like this would be very helpful.  It helps the                                                                  
     department be able to ensure that while we may not have                                                                    
     exact data about the size of the resource and its                                                                          
     productivity, we can do our best to hold the harvest at                                                                    
     a conservative level, until we get enough information                                                                      
     that we can then increase the harvest or allow the                                                                         
     harvest to conform to what the resource ... can sustain.                                                                   
     So, for those reasons, Mr. Chairman, we are in support of                                                                  
     this legislation and urge you to pass it.                                                                                  
Number 2437                                                                                                                     
REPRESENTATIVE MASEK asked whether the number of permits is a                                                                   
factor in establishing a quota.                                                                                                 
MR. BRUCE replied that it wouldn't be a factor in establishing the                                                              
quota, which would be based on the size of the resource, its                                                                    
productivity, its distribution, and the harvest that it could                                                                   
maintain on a sustained basis.                                                                                                  
Number 2494                                                                                                                     
CO-CHAIR OGAN asked whether anyone else wished to testify, then                                                                 
announced that he wouldn't close public testimony at this time.                                                                 
[HB 104 was held over.]                                                                                                         

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