Amended in Assembly May 5, 2014

Amended in Assembly April 22, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 2222


Introduced by Assembly Member Nazarian

February 20, 2014


An act to amend Sections 65915 and 65915.5 of the Government Code, relating to housing.

LEGISLATIVE COUNSEL’S DIGEST

AB 2222, as amended, Nazarian. Housing density bonus.

The Planning and Zoning Law requires, when a developer of housing proposes a housing development within the jurisdiction of the local government, that the city, county, or city and county provide the developer with a density bonus and other incentives or concessions for the production of lower income housing units or the donation of land within the development if the developer, among other things, agrees to construct a specified percentage of units for very low, low-, or moderate-income households or qualifying residents.

Existing law requires continued affordability for 30 years or longer, as specified, of all very low and low-income units that qualified an applicant for a density bonus.

This bill instead would require continued affordability for 55 years or longer, as specified, of all very low and low-income units that qualified an applicant for a density bonus. This bill also would prohibit an applicant from receiving a density bonus unless the proposed housing development would replace the existing affordable units with at least the same number of affordable units of equivalent size or type, or both, andbegin insert the proposed developmentend insert wouldbegin insert eitherend insert include the additional required set aside of affordable units according to specified percentagesbegin insert or consist in its entirety of affordable unitsend insert.

Existing law also requires a city, county, or city and county to grant a density bonus or other incentives, as specified, when an applicant for approval to convert apartments to a condominium project agrees, among other things, to provide a specified percentage of units for low or moderate income persons and families or for lower income households, as defined.

This bill also would prohibit an applicant from receiving a density bonus unless the proposed condominium project would replace the existing affordable units with at least the same number of affordable units of equivalent size or type, or both, andbegin insert the proposed developmentend insert wouldbegin insert eitherend insert include the additional required set aside of affordable units according to specified percentagesbegin insert or consist entirely of affordable unitsend insert.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 65915 of the Government Code is
2amended to read:

3

65915.  

(a) When an applicant seeks a density bonus for a
4housing development within, or for the donation of land for housing
5within, the jurisdiction of a city, county, or city and county, that
6local government shall provide the applicant with incentives or
7concessions for the production of housing units and child care
8facilities as prescribed in this section. All cities, counties, or cities
9and counties shall adopt an ordinance that specifies how
10compliance with this section will be implemented. Failure to adopt
11an ordinance shall not relieve a city, county, or city and county
12from complying with this section.

13(b) (1) A city, county, or city and county shall grant one density
14bonus, the amount of which shall be as specified in subdivision
15(f), and incentives or concessions, as described in subdivision (d),
16when an applicant for a housing development seeks and agrees to
17construct a housing development, excluding any units permitted
P3    1by the density bonus awarded pursuant to this section, that will
2contain at least any one of the following:

3(A) Ten percent of the total units of a housing development for
4lower income households, as defined in Section 50079.5 of the
5Health and Safety Code.

6(B) Five percent of the total units of a housing development for
7very low income households, as defined in Section 50105 of the
8Health and Safety Code.

9(C) A senior citizen housing development, as defined in Sections
1051.3 and 51.12 of the Civil Code, or mobilehome park that limits
11residency based on age requirements for housing for older persons
12pursuant to Section 798.76 or 799.5 of the Civil Code.

13(D) Ten percent of the total dwelling units in a common interest
14development as defined in Section 4100 of the Civil Code for
15persons and families of moderate income, as defined in Section
1650093 of the Health and Safety Code, provided that all units in the
17development are offered to the public for purchase.

18(2) For purposes of calculating the amount of the density bonus
19pursuant to subdivision (f), the applicant who requests a density
20bonus pursuant to this subdivision shall elect whether the bonus
21shall be awarded on the basis of subparagraph (A), (B), (C), or (D)
22of paragraph (1).

23(3) For the purposes of this section, “total units” or “total
24dwelling units” does not include units added by a density bonus
25awarded pursuant to this section or any local law granting a greater
26density bonus.

27(c) (1) An applicant shall agree to, and the city, county, or city
28and county shall ensure, continued affordability of all low- and
29very low income units that qualified the applicant for the award
30of the density bonus for 55 years or a longer period of time if
31required by the construction or mortgage financing assistance
32program, mortgage insurance program, or rental subsidy program.
33Rents for the lower income density bonus units shall be set at an
34affordable rent as defined in Section 50053 of the Health and Safety
35Code. Owner-occupied units shall be available at an affordable
36housing cost as defined in Section 50052.5 of the Health and Safety
37Code.

38(2) An applicant shall agree to, and the city, county, or city and
39county shall ensure that, the initial occupant of the
40moderate-income units that are directly related to the receipt of
P4    1the density bonus in the common interest development, as defined
2in Section 4100 of the Civil Code, are persons and families of
3moderate income, as defined in Section 50093 of the Health and
4Safety Code, and that the units are offered at an affordable housing
5cost, as that cost is defined in Section 50052.5 of the Health and
6Safety Code. The local government shall enforce an equity sharing
7agreement, unless it is in conflict with the requirements of another
8public funding source or law. The following apply to the equity
9sharing agreement:

10(A) Upon resale, the seller of the unit shall retain the value of
11any improvements, the downpayment, and the seller’s proportionate
12share of appreciation. The local government shall recapture any
13initial subsidy, as defined in subparagraph (B), and its proportionate
14share of appreciation, as defined in subparagraph (C), which
15amount shall be used within five years for any of the purposes
16described in subdivision (e) of Section 33334.2 of the Health and
17Safety Code that promote home ownership.

18(B) For purposes of this subdivision, the local government’s
19initial subsidy shall be equal to the fair market value of the home
20at the time of initial sale minus the initial sale price to the
21moderate-income household, plus the amount of any downpayment
22assistance or mortgage assistance. If upon resale the market value
23is lower than the initial market value, then the value at the time of
24the resale shall be used as the initial market value.

25(C) For purposes of this subdivision, the local government’s
26proportionate share of appreciation shall be equal to the ratio of
27the local government’s initial subsidy to the fair market value of
28the home at the time of initial sale.

29(3) An applicant shall be ineligible for a density bonus or any
30other incentives or concessions under this section if the housing
31development is proposed on any property that includes a parcel or
32parcels on which dwelling units have, at any time in the five-year
33period preceding the application, been occupied by lower or very
34low income households, been subject to a recorded covenant,
35ordinance, or law that restricts rents to levels affordable to persons
36and families of lower or very low income, or been subject to any
37other form of rent or price control through a public entity’s valid
38exercise of its police power, unless the proposed housing
39development replaces the existing units with at least the same
40number of units of equivalent size or type, or both, to be made
P5    1available for rent at affordable housing costs to, and occupied by,
2persons and families in the same or lower income category in the
3same proportion as the existing affordable units, andbegin delete theend deletebegin insert either of
4the following applies:end insert

5begin insert(A)end insertbegin insertend insertbegin insertTend insertbegin insertheend insert proposed housing development includes the additional
6required

7set aside of affordable units at the percentages set forth in
8subdivision (b).

begin insert

9(B) Each unit in the development is affordable to, and occupied
10by, either a lower or very low income household.

end insert

11(d) (1) An applicant for a density bonus pursuant to subdivision
12(b) may submit to a city, county, or city and county a proposal for
13the specific incentives or concessions that the applicant requests
14pursuant to this section, and may request a meeting with the city,
15county, or city and county. The city, county, or city and county
16shall grant the concession or incentive requested by the applicant
17unless the city, county, or city and county makes a written finding,
18based upon substantial evidence, of any of the following:

19(A) The concession or incentive is not required in order to
20provide for affordable housing costs, as defined in Section 50052.5
21of the Health and Safety Code, or for rents for the targeted units
22to be set as specified in subdivision (c).

23(B) The concession or incentive would have a specific adverse
24impact, as defined in paragraph (2) of subdivision (d) of Section
2565589.5, upon public health and safety or the physical environment
26or on any real property that is listed in the California Register of
27Historical Resources and for which there is no feasible method to
28satisfactorily mitigate or avoid the specific adverse impact without
29rendering the development unaffordable to low- and
30moderate-income households.

31(C) The concession or incentive would be contrary to state or
32federal law.

33(2) The applicant shall receive the following number of
34incentives or concessions:

35(A) One incentive or concession for projects that include at least
3610 percent of the total units for lower income households, at least
375 percent for very low income households, or at least 10 percent
38for persons and families of moderate income in a common interest
39development.

P6    1(B) Two incentives or concessions for projects that include at
2least 20 percent of the total units for lower income households, at
3least 10 percent for very low income households, or at least 20
4percent for persons and families of moderate income in a common
5 interest development.

6(C) Three incentives or concessions for projects that include at
7least 30 percent of the total units for lower income households, at
8least 15 percent for very low income households, or at least 30
9percent for persons and families of moderate income in a common
10interest development.

11(3) The applicant may initiate judicial proceedings if the city,
12county, or city and county refuses to grant a requested density
13bonus, incentive, or concession. If a court finds that the refusal to
14grant a requested density bonus, incentive, or concession is in
15violation of this section, the court shall award the plaintiff
16reasonable attorney’s fees and costs of suit. Nothing in this
17subdivision shall be interpreted to require a local government to
18grant an incentive or concession that has a specific, adverse impact,
19as defined in paragraph (2) of subdivision (d) of Section 65589.5,
20upon health, safety, or the physical environment, and for which
21there is no feasible method to satisfactorily mitigate or avoid the
22specific adverse impact. Nothing in this subdivision shall be
23interpreted to require a local government to grant an incentive or
24concession that would have an adverse impact on any real property
25that is listed in the California Register of Historical Resources.
26The city, county, or city and county shall establish procedures for
27carrying out this section, that shall include legislative body
28approval of the means of compliance with this section.

29(e) (1) In no case may a city, county, or city and county apply
30any development standard that will have the effect of physically
31precluding the construction of a development meeting the criteria
32of subdivision (b) at the densities or with the concessions or
33incentives permitted by this section. An applicant may submit to
34a city, county, or city and county a proposal for the waiver or
35reduction of development standards that will have the effect of
36physically precluding the construction of a development meeting
37the criteria of subdivision (b) at the densities or with the
38concessions or incentives permitted under this section, and may
39request a meeting with the city, county, or city and county. If a
40court finds that the refusal to grant a waiver or reduction of
P7    1development standards is in violation of this section, the court
2shall award the plaintiff reasonable attorney’s fees and costs of
3suit. Nothing in this subdivision shall be interpreted to require a
4local government to waive or reduce development standards if the
5waiver or reduction would have a specific, adverse impact, as
6defined in paragraph (2) of subdivision (d) of Section 65589.5,
7upon health, safety, or the physical environment, and for which
8there is no feasible method to satisfactorily mitigate or avoid the
9specific adverse impact. Nothing in this subdivision shall be
10interpreted to require a local government to waive or reduce
11development standards that would have an adverse impact on any
12real property that is listed in the California Register of Historical
13Resources, or to grant any waiver or reduction that would be
14contrary to state or federal law.

15(2) A proposal for the waiver or reduction of development
16standards pursuant to this subdivision shall neither reduce nor
17increase the number of incentives or concessions to which the
18applicant is entitled pursuant to subdivision (d).

19(f) For the purposes of this chapter, “density bonus” means a
20density increase over the otherwise maximum allowable residential
21density as of the date of application by the applicant to the city,
22county, or city and county. The applicant may elect to accept a
23lesser percentage of density bonus. The amount of density bonus
24to which the applicant is entitled shall vary according to the amount
25by which the percentage of affordable housing units exceeds the
26percentage established in subdivision (b).

27(1) For housing developments meeting the criteria of
28subparagraph (A) of paragraph (1) of subdivision (b), the density
29bonus shall be calculated as follows:


30

 

Percentage Low-Income UnitsPercentage Density Bonus
1020 
1121.5
1223 
1324.5
1426 
1527.5
1730.5
1832 
1933.5
2035 
P8    37P8   1623P8   1628P8   11

 

4(2) For housing developments meeting the criteria of
5subparagraph (B) of paragraph (1) of subdivision (b), the density
6bonus shall be calculated as follows:

 

Percentage Very Low Income UnitsPercentage Density Bonus
520 
622.5
725 
827.5
930 
1032.5
1135 
P8   1623P8   1628P8   11

 

17(3) For housing developments meeting the criteria of
18subparagraph (C) of paragraph (1) of subdivision (b), the density
19bonus shall be 20 percent of the number of senior housing units.

20(4) For housing developments meeting the criteria of
21subparagraph (D) of paragraph (1) of subdivision (b), the density
22bonus shall be calculated as follows:

 

Percentage Moderate-Income UnitsPercentage Density Bonus
105
116
127
138
149
1510
1611
1712
1813
1914
2015
2116
2217
2318
2419
2520
2621
2722
2823
2924
3025
3126
3227
3328
3429
3530
3631
3732
3833
3934
4035
P8   1628P8   11

 

17(5) All density calculations resulting in fractional units shall be
18rounded up to the next whole number. The granting of a density
19bonus shall not be interpreted, in and of itself, to require a general
20plan amendment, local coastal plan amendment, zoning change,
21or other discretionary approval.

22(g) (1) When an applicant for a tentative subdivision map,
23parcel map, or other residential development approval donates
24land to a city, county, or city and county in accordance with this
25subdivision, the applicant shall be entitled to a 15-percent increase
26above the otherwise maximum allowable residential density for
27the entire development, as follows:

 

Percentage Very Low IncomePercentage Density Bonus
1015
1116
1217
1318
1419
1520
1621
1722
1823
1924
2025
2126
2227
2328
2429
2530
2631
2732
2833
2934
3035
P8   11

 

12(2) This increase shall be in addition to any increase in density
13mandated by subdivision (b), up to a maximum combined mandated
14density increase of 35 percent if an applicant seeks an increase
15pursuant to both this subdivision and subdivision (b). All density
16calculations resulting in fractional units shall be rounded up to the
17next whole number. Nothing in this subdivision shall be construed
18to enlarge or diminish the authority of a city, county, or city and
19county to require a developer to donate land as a condition of
20development. An applicant shall be eligible for the increased
21density bonus described in this subdivision if all of the following
22conditions are met:

23(A) The applicant donates and transfers the land no later than
24the date of approval of the final subdivision map, parcel map, or
25residential development application.

26(B) The developable acreage and zoning classification of the
27land being transferred are sufficient to permit construction of units
28affordable to very low income households in an amount not less
29than 10 percent of the number of residential units of the proposed
30development.

31(C) The transferred land is at least one acre in size or of
32sufficient size to permit development of at least 40 units, has the
33appropriate general plan designation, is appropriately zoned with
34appropriate development standards for development at the density
35described in paragraph (3) of subdivision (c) of Section 65583.2,
36and is or will be served by adequate public facilities and
37infrastructure.

38(D) The transferred land shall have all of the permits and
39approvals, other than building permits, necessary for the
40development of the very low income housing units on the
P11   1transferred land, not later than the date of approval of the final
2subdivision map, parcel map, or residential development
3application, except that the local government may subject the
4proposed development to subsequent design review to the extent
5 authorized by subdivision (i) of Section 65583.2 if the design is
6not reviewed by the local government prior to the time of transfer.

7(E) The transferred land and the affordable units shall be subject
8to a deed restriction ensuring continued affordability of the units
9consistent with paragraphs (1) and (2) of subdivision (c), which
10shall be recorded on the property at the time of the transfer.

11(F) The land is transferred to the local agency or to a housing
12developer approved by the local agency. The local agency may
13require the applicant to identify and transfer the land to the
14developer.

15(G) The transferred land shall be within the boundary of the
16proposed development or, if the local agency agrees, within
17one-quarter mile of the boundary of the proposed development.

18(H) A proposed source of funding for the very low income units
19shall be identified not later than the date of approval of the final
20subdivision map, parcel map, or residential development
21application.

22(h) (1) When an applicant proposes to construct a housing
23development that conforms to the requirements of subdivision (b)
24and includes a child care facility that will be located on the
25premises of, as part of, or adjacent to, the project, the city, county,
26or city and county shall grant either of the following:

27(A) An additional density bonus that is an amount of square
28feet of residential space that is equal to or greater than the amount
29of square feet in the child care facility.

30(B) An additional concession or incentive that contributes
31 significantly to the economic feasibility of the construction of the
32child care facility.

33(2) The city, county, or city and county shall require, as a
34condition of approving the housing development, that the following
35occur:

36(A) The child care facility shall remain in operation for a period
37of time that is as long as or longer than the period of time during
38which the density bonus units are required to remain affordable
39pursuant to subdivision (c).

P12   1(B) Of the children who attend the child care facility, the
2children of very low income households, lower income households,
3or families of moderate income shall equal a percentage that is
4equal to or greater than the percentage of dwelling units that are
5required for very low income households, lower income
6households, or families of moderate income pursuant to subdivision
7(b).

8(3) Notwithstanding any requirement of this subdivision, a city,
9county, or city and county shall not be required to provide a density
10bonus or concession for a child care facility if it finds, based upon
11substantial evidence, that the community has adequate child care
12facilities.

13(4) “Child care facility,” as used in this section, means a child
14day care facility other than a family day care home, including, but
15not limited to, infant centers, preschools, extended day care
16facilities, and schoolage child care centers.

17(i) “Housing development,” as used in this section, means a
18development project for five or more residential units. For the
19purposes of this section, “housing development” also includes a
20subdivision or common interest development, as defined in Section
214100 of the Civil Code, approved by a city, county, or city and
22county and consists of residential units or unimproved residential
23lots and either a project to substantially rehabilitate and convert
24an existing commercial building to residential use or the substantial
25rehabilitation of an existing multifamily dwelling, as defined in
26subdivision (d) of Section 65863.4, where the result of the
27rehabilitation would be a net increase in available residential units.
28For the purpose of calculating a density bonus, the residential units
29shall be on contiguous sites that are the subject of one development
30application, but do not have to be based upon individual
31subdivision maps or parcels. The density bonus shall be permitted
32in geographic areas of the housing development other than the
33areas where the units for the lower income households are located.

34(j) The granting of a concession or incentive shall not be
35interpreted, in and of itself, to require a general plan amendment,
36local coastal plan amendment, zoning change, or other discretionary
37approval. This provision is declaratory of existing law.

38(k) For the purposes of this chapter, concession or incentive
39means any of the following:

P13   1(1) A reduction in site development standards or a modification
2of zoning code requirements or architectural design requirements
3that exceed the minimum building standards approved by the
4California Building Standards Commission as provided in Part 2.5
5(commencing with Section 18901) of Division 13 of the Health
6and Safety Code, including, but not limited to, a reduction in
7setback and square footage requirements and in the ratio of
8vehicular parking spaces that would otherwise be required that
9results in identifiable, financially sufficient, and actual cost
10reductions.

11(2) Approval of mixed-use zoning in conjunction with the
12housing project if commercial, office, industrial, or other land uses
13will reduce the cost of the housing development and if the
14commercial, office, industrial, or other land uses are compatible
15with the housing project and the existing or planned development
16in the area where the proposed housing project will be located.

17(3) Other regulatory incentives or concessions proposed by the
18developer or the city, county, or city and county that result in
19identifiable, financially sufficient, and actual cost reductions.

20(l) Subdivision (k) does not limit or require the provision of
21direct financial incentives for the housing development, including
22the provision of publicly owned land, by the city, county, or city
23and county, or the waiver of fees or dedication requirements.

24(m)  This section shall not be construed to supersede or in any
25way alter or lessen the effect or application of the California
26Coastal Act of 1976 (Division 20 (commencing with Section
2730000) of the Public Resources Code).

28(n) If permitted by local ordinance, nothing in this section shall
29be construed to prohibit a city, county, or city and county from
30granting a density bonus greater than what is described in this
31section for a development that meets the requirements of this
32section or from granting a proportionately lower density bonus
33than what is required by this section for developments that do not
34meet the requirements of this section.

35(o) For purposes of this section, the following definitions shall
36apply:

37(1) “Development standard” includes a site or construction
38condition, including, but not limited to, a height limitation, a
39setback requirement, a floor area ratio, an onsite open-space
40requirement, or a parking ratio that applies to a residential
P14   1development pursuant to any ordinance, general plan element,
2specific plan, charter, or other local condition, law, policy,
3resolution, or regulation.

4(2) “Maximum allowable residential density” means the density
5allowed under the zoning ordinance and land use element of the
6general plan, or if a range of density is permitted, means the
7maximum allowable density for the specific zoning range and land
8use element of the general plan applicable to the project. Where
9the density allowed under the zoning ordinance is inconsistent
10with the density allowed under the land use element of the general
11plan, the general plan density shall prevail.

12(p) (1) Upon the request of the developer, no city, county, or
13city and county shall require a vehicular parking ratio, inclusive
14of handicapped and guest parking, of a development meeting the
15criteria of subdivision (b), that exceeds the following ratios:

16(A) Zero to one bedroom: one onsite parking space.

17(B) Two to three bedrooms: two onsite parking spaces.

18(C) Four and more bedrooms: two and one-half parking spaces.

19(2) If the total number of parking spaces required for a
20development is other than a whole number, the number shall be
21rounded up to the next whole number. For purposes of this
22subdivision, a development may provide “onsite parking” through
23tandem parking or uncovered parking, but not through onstreet
24parking.

25(3) This subdivision shall apply to a development that meets
26the requirements of subdivision (b) but only at the request of the
27applicant. An applicant may request parking incentives or
28concessions beyond those provided in this subdivision pursuant
29to subdivision (d).

30

SEC. 2.  

Section 65915.5 of the Government Code is amended
31to read:

32

65915.5.  

(a) When an applicant for approval to convert
33apartments to a condominium project agrees to provide at least 33
34percent of the total units of the proposed condominium project to
35persons and families of low or moderate income as defined in
36Section 50093 of the Health and Safety Code, or 15 percent of the
37total units of the proposed condominium project to lower income
38households as defined in Section 50079.5 of the Health and Safety
39Code, and agrees to pay for the reasonably necessary administrative
40costs incurred by a city, county, or city and county pursuant to this
P15   1section, the city, county, or city and county shall either (1) grant
2a density bonus or (2) provide other incentives of equivalent
3financial value. A city, county, or city and county may place such
4reasonable conditions on the granting of a density bonus or other
5incentives of equivalent financial value as it finds appropriate,
6including, but not limited to, conditions which assure continued
7affordability of units to subsequent purchasers who are persons
8and families of low and moderate income or lower income
9households.

10(b) For purposes of this section, “density bonus” means an
11increase in units of 25 percent over the number of apartments, to
12be provided within the existing structure or structures proposed
13for conversion.

14(c) For purposes of this section, “other incentives of equivalent
15financial value” shall not be construed to require a city, county,
16or city and county to provide cash transfer payments or other
17monetary compensation but may include the reduction or waiver
18of requirements which the city, county, or city and county might
19otherwise apply as conditions of conversion approval.

20(d) An applicant for approval to convert apartments to a
21condominium project may submit to a city, county, or city and
22county a preliminary proposal pursuant to this section prior to the
23submittal of any formal requests for subdivision map approvals.
24The city, county, or city and county shall, within 90 days of receipt
25of a written proposal, notify the applicant in writing of the manner
26in which it will comply with this section. The city, county, or city
27and county shall establish procedures for carrying out this section,
28which shall include legislative body approval of the means of
29compliance with this section.

30(e) Nothing in this section shall be construed to require a city,
31county, or city and county to approve a proposal to convert
32apartments to condominiums.

33(f) An applicant shall be ineligible for a density bonus or other
34incentives under this section if the apartments proposed for
35conversion constitute a housing development for which a density
36bonus or other incentives were provided under Section 65915.

37(g) An applicant shall be ineligible for a density bonus or any
38other incentives or concessions under this section if the
39condominium project is proposed on any property that includes a
40parcel or parcels on which dwelling units have, at any time in the
P16   1five-year period preceding the application, been occupied by lower
2or very low income households, been subject to a recorded
3covenant, ordinance, or law that restricts rents to levels affordable
4to persons and families of lower or very low income, or been
5subject to any other form of rent or price control through a public
6entity’s valid exercise of its police power, unless the proposed
7condominium project replaces the existing units with at least the
8same number of units of equivalent size or type, or both, to be
9made available for sale at affordable housing costs to, and occupied
10by, persons and families in the same or lower income category in
11the same proportion as the existing affordable units, andbegin delete theend deletebegin insert either
12of the following applies:end insert

13begin insert(1)end insertbegin insertend insertbegin insertTheend insert proposed condominium project includes the additional

14required set aside of affordable units at the percentages set forth
15in subdivision (a).

begin insert

16(2) Each unit in the development is affordable to, and occupied
17by, either a lower or very low income household.

end insert


O

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