AB 927, as introduced, McCarty. Health facilities: nursing homes.
Existing law provides for the licensure and regulation of health facilities, as defined. A violation of those provisions is a crime. Existing law requires any person or government entity desiring a license for a health facility, approval for a special service, or approval to manage a health facility currently licensed as a general acute care hospital, acute psychiatric hospital, skilled nursing facility, intermediate care facility, or special hospital, that has not filed an application for a license to operate that facility, to file with the department a verified application containing specific information.
This bill would require the denial of an application under those provisions if the applicant fails to provide the requisite information or provide it in the form requested.
Existing law requires each applicant for a license to operate a skilled nursing facility or intermediate care facility to make certain disclosures regarding corporate governance and ownership to the State Department of Public Health. Existing law prohibits certain persons, as defined, from governing or owning a beneficial interest of 5% or more of a skilled nursing facility or intermediate care facility, as specified, without approval of the department.
This bill would expand those disclosure requirements and the provisions that prohibit certain persons from governing or owning a beneficial interest in a skilled nursing facility or intermediate care facility, as specified. The bill would establish provisions for the denial of an application under circumstances in which a person named in an application has governed or owned a facility that has violated the law during a certain timeframe, as specified.
Existing law requires the department to implement a consumer information service system regarding long-term care facilities.
This bill would revise the information the system is required to contain and would require it to be available on the Internet by March 1, 2016.
Because this bill would require additional disclosures, of which a failure to disclose or a false disclosure would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
This act shall be known as the Nursing Home
2Ownership Disclosure Act of 2015.
Section 1265 of the Health and Safety Code is amended
4to read:
begin insert(a)end insertbegin insert end insert Any person, political subdivision of the state, or
6governmental agency desiring a license for a health facility,
7approval for a special service under this chapter, or approval to
8manage a health facility currently licensed as a health facility, as
9defined in subdivision (a), (b), (c), (d), or (f) of Section 1250, that
10has not filed an application for a license to operate that facility
11shall file with the department a verified application on forms
12prescribed and furnished by the department, containing all of the
13following:
14(a)
end delete
15begin insert(1)end insert The name of the applicant and, if an individual, whether the
16applicant has attained the age of 18 years.
P3 1(b)
end delete2begin insert(2)end insert The type of facility or health facility.
3(c)
end delete4begin insert(3)end insert The location thereof.
5(d)
end delete6begin insert(4)end insert The name of the person in charge thereof.
7(e)
end delete
8begin insert(5)end insert Evidence satisfactory to the department that the applicant
9is of reputable and responsible character. If the applicant is a firm,
10association, organization, partnership, business trust, corporation,
11or company, like evidence shall be submitted as to the members
12or
shareholders thereof, and the person in charge of the health
13facility for which application for license is made. If the applicant
14is a political subdivision of the state or other governmental agency,
15like evidence shall be submitted as to the person in charge of the
16health facility for which application for license is made.
17(f)
end delete
18begin insert(6)end insert Evidence satisfactory to the department of the ability of the
19applicant to comply with this chapter and of rules and regulations
20promulgated under this chapter by the department.
21(g)
end delete
22begin insert(7)end insert Evidence satisfactory to the department that the applicant
23to operate a skilled nursing facility or intermediate care facility
24possesses financial resources sufficient to operate the facility for
25a period of at least 45 days. A management company shall not be
26required to submit this information.
27(h)
end delete
28begin insert(8)end insert Each applicant for a license to operate a skilled nursing
29facility or intermediate care facility shall disclose to the department
30evidence of the right to possession of the facility at the time the
31
application will be granted, which may be satisfied by the
32submission of a copy of applicable portions of a lease agreement
33or deed of trust. The names and addresses of any persons or
34organizations listed as owner of record in the real estate, including
35the buildings and the grounds appurtenant to the buildings, shall
36be disclosed to the department.
37(i)
end delete
38begin insert(9)end insert Any other information as may be required by the department
39for the proper administration and enforcement of this chapter.
40(j)
end delete
P4 1begin insert(10)end insert Upon submission of an application to the department by
2an intermediate care facility/developmentally disabled habilitative
3or an intermediate care facility/developmentally disabled-nursing,
4the application shall include a statement of need signed by the
5chairperson of the area board pursuant to Chapter 4 (commencing
6with Section 4570) of Division 4.5 of the Welfare and Institutions
7Code. In the event the area board has not provided the statement
8of need within 30 days of receipt of the request from the applicant,
9the department may process the application for license without the
10statement.
11(k)
end delete
12begin insert(b)end insert The information required pursuant to this section, other than
13individuals’ social security numbers, shall be made available to
14the public upon request, and shall be included in the department’s
15public file regarding the facility.
16(l)
end delete
17begin insert(c)end insert With respect to a facility licensed as a health facility, as
18defined in subdivision (a), (b),begin insert (c), (d),end insert or (f) of Section 1250, for
19purposes of this section, “manage” means to assume operational
20control of the facility.
21(d) Failure of an applicant to cooperate with the licensing
22agency in the completion of an application pursuant to this section
23shall result in the denial of the application. “Failure of an
24applicant to cooperate” means that the information required
25pursuant to this chapter and by regulations of the department has
26not been provided, or has not been provided in the form requested
27by the licensing agency, or both.
Section 1265.3 of the Health and Safety Code is
29amended to read:
(a) For any individual or entity that seeks approval to
31operate or manage a health facility licensed pursuant to subdivision
32(a), (b),begin insert (c), (d),end insert or (f) of Section 1250 and is subject to Section
331265, the department shall consider the following:
34(1) To determine whether the applicant is of reputable and
35responsible character, the department shall consider any available
36information that the applicant has demonstrated a pattern and
37practice of violations of state or federal laws and regulations. The
38department shall give particular consideration to those violations
39that affect the applicant’s ability to deliver safe
patientbegin insert or residentend insert
40 care.
P5 1(2) To determine whether the applicant has the ability to comply
2with this chapter and the rules and regulations adopted under this
3chapter, the department shall consider evidence that shall include
4all of the following:
5(A) If any, prior history of operating in this state any other
6facility licensed pursuant to Section 1250, and the applicant’s
7history of substantial compliance with the requirements imposed
8under that license, applicable federal laws and regulations, and
9requirements governing the operators of those facilities.
10(B) If any, prior history of operating in any other state any
11facility authorized to receive Medicare Program reimbursement
12or Medicaid Program reimbursement,
and the applicant’s history
13of substantial compliance with that state’s requirements, and
14applicable federal laws, regulations, and requirements.
15(C) If any, prior history of providing health services as a licensed
16health professional or an individual or entity contracting with a
17health care service plan or insurer, and the applicant’s history of
18substantial compliance with state requirements, and applicable
19federal law, regulations, and requirements.
20(b) The department may also require the entity described in
21subdivision (a) to furnish other information or documents for the
22proper administration and enforcement of the licensing laws.
Section 1267.5 of the Health and Safety Code is
24amended to read:
(a) (1) Each applicant for a license to operate a skilled
26nursing facility or intermediate care facility shall disclose to the
27state department the name and business address of each general
28partner if the applicant is a partnership, or each director and officer
29if the applicant is a corporation, and each person having a beneficial
30ownership interest of 5 percent or more in the applicant corporation
31or partnership.
32(2) If any person described in paragraph (1) has served or
33currently serves as an administrator, general partner, trustee or
34trust applicant, sole proprietor of any applicant or licensee who is
35a sole proprietorship, executor, or corporate officer or director of,
36or has held abegin insert
direct or indirectend insert beneficial ownership interest of 5
37percent or more in, any other skilled nursing facility or intermediate
38care facilitybegin delete orend deletebegin insert in this state or any other state,end insert in any community
39care facility licensed pursuant to Chapter 3 (commencing with
40Section 1500)begin delete of this divisionend delete,begin insert or in any residential care facility
P6 1for the elderly licensed pursuant to Chapter 3.2 (commencing with
2Section 1569),end insert the applicant shall disclose the relationship to the
3state department, including the name and current or last address
4of the health facilitybegin delete orend deletebegin insert,end insert
community care facilitybegin insert, or residential
5care facility for the elderly,end insert and the date the relationship
6commenced and, if applicable, the date it was terminated.
7(3) (A) If the facility is operated by, or proposed to be operated
8in whole or part under, a management contract, the names and
9addresses of any person or organization, or both, having an
10ownership or control interest of 5 percent or more in the
11management company shall be disclosed to the state department.
12This provision shall not apply if the management company has
13submitted an application for licensure with the state department
14and has complied with paragraph (1).
15(B) If the management company is a subsidiary of one or more
16other organizations, the information shall include the
names and
17addresses of the parent organizations of the management company
18and the names and addresses of any officer or director of the parent
19organizations. The failure to comply with this subparagraph may
20result in action to revoke or deny a license. However, once the
21information that is required under this subparagraph is provided,
22the action to revoke the license shall terminate.
23(C) If the management company or parent organizations of the
24management company manage or previously managed any other
25skilled nursing facility or intermediate care facility in this state
26or any other state, any community care facility licensed pursuant
27to Chapter 3 (commencing with Section 1500), or any residential
28care facility for the elderly licensed pursuant to Chapter 3.2
29(commencing with Section 1569), the applicant shall disclose the
30name and current or last address of the
health facility, community
31care facility, or residential care facility for the elderly, and the
32date the management commenced and, if applicable, the date it
33was terminated.
34(4) begin insert(A)end insertbegin insert end insert If the applicant or licensee is a subsidiary of one or
35more other organizations, the information shall include the names
36and addresses of the parent organizations of the subsidiary and the
37names and addresses of any officer or director of the parent
38organizations.
39(B) If the parent organizations of the subsidiary or applicant
40own or manage, or previously owned or
managed, any other skilled
P7 1nursing facility or intermediate care facility in this state or any
2other state, any community care facility licensed pursuant to
3Chapter 3 (commencing with Section 1500), or any residential
4care facility for the elderly licensed pursuant to Chapter 3.2
5(commencing with Section 1569), the applicant shall disclose the
6relationship to the state department, including the name and
7current or last address of the health facility, community care
8facility, or residential care facility for the elderly, and the date the
9relationship commenced and, if applicable, the date it was
10terminated.
11(5) The applicant shall disclose the history of compliance and
12any history of noncompliance with any applicable state or federal
13law or regulation for each facility described in paragraph (2),
14subparagraph (C) of paragraph (3), and
subparagraph (B) of
15paragraph (4) during the period in which any of the following
16apply:
17(A) Any person described in paragraph (1) had a relationship
18to the facility.
19(B) Any management company described in paragraph (3)
20managed the facility.
21(C) Any parent organizations described in paragraph (4) had
22a relationship to the facility.
23(5)
end delete
24begin insert(6)end insert The information required by this subdivision shall be
25provided to the state department upon initial application for
26licensure, and any change in the information shall be provided to
27the state department within 30 calendar days of that change.
28(6)
end delete
29begin insert(7)end insert Except as provided in subparagraph (B) of paragraph (3),
30the failure to comply with this section may result in action to
31revoke or deny a license.
32(7)
end delete
33begin insert(8)end insert The information required by this section shall be made
34available to the public upon request, shall be included in the public
35file of the facility, and by July 1, 2002, shall be included in the
36department’s automated certification licensing administration
37information management system.
38(b) begin insert(1)end insertbegin insert end insert On and after January 1, 1990, no person may acquire
39abegin insert
direct or indirectend insert beneficial interest of 5 percent or more in any
40corporationbegin delete orend deletebegin insert,end insert partnershipbegin insert, or limited liability companyend insert licensed
P8 1to operate a skilled nursing facility or intermediate care facility,
2begin delete orend deletebegin insert in any parent organizations of a corporation, partnership, or
3limited liability company licensed to operate a skilled nursing
4facility or intermediate care facility,end insert in any management company
5under contract with a licensee of a skilled nursing facility or
6intermediate care facility,begin insert
or in any parent organizations of a
7management company under contract with a licensee of a skilled
8nursing facility or intermediate care facility,end insert nor may any person
9become an officer or director of, or general partner in, a
10corporation, partnership,begin insert limited liability company,end insert or management
11company of this type without the prior written approval of the state
12department. Each application for departmental approval pursuant
13to this subdivision shall include the information specified in
14subdivision (a) as regards the person for whom the application is
15made.
16 The
end delete
17begin insert(2)end insertbegin insert end insertbegin insertTheend insert state department shall approve or disapprove the
18application within 30 days after receipt thereof, unless the state
19department, with just cause, extends the application review period
20beyond 30 days.
21(c) The state department may deny approval of a license
22application or of an application for approval under subdivision (b)
23if a person named in the application, as required by this section,
24was an officer, director, general partner, or owner of a 5-percent
25or greater beneficial interest in a licensee of, or in a management
26company under contract with a licensee of, a skilled nursing
27facility, intermediate care facility, community care facility, or
28residential care facility for the elderly at a time when one or more
29violations of law were committed therein
that resulted in
30suspension or revocation of its license, or at a time when a
31court-ordered receiver was appointed pursuant to Section 1327,
32or at a time when a final Medi-Cal decertification action was taken
33under federal law. However, the prior suspension, revocation, or
34court-ordered receivership of a license shall not be grounds for
35denial of the application if the applicant shows to the satisfaction
36of the state department (1) that the person in question took every
37reasonably available action to prevent the violation or violations
38that resulted in the disciplinary action and (2) that he or she took
39every reasonably available action to correct the violation or
P9 1violations once he or she knew, or with the exercise of reasonable
2diligence should have known of, the violation or violations.
3(c) The state department shall deny approval of a
license
4application or of an application for approval under subdivision
5(b) if a person named in the application, as required by this section,
6was an officer, director, general partner, or owner of a 5-percent
7or greater direct or indirect beneficial interest in a licensee or in
8any parent organizations of a licensee of, or in a management
9company under contract with a licensee of, a skilled nursing
10facility, intermediate care facility, community care facility, or
11residential care facility for the elderly at a time during the
12seven-year period prior to the application in which that facility
13committed one or more violations of law or regulatory
14requirements that resulted in any of the following:
15(1) Immediate jeopardy to the health, safety, or welfare of one
16or more residents.
17(2) Suspension or revocation of a facility’s license.
end insertbegin insert
18(3) Termination of a facility’s Medicare or Medi-Cal
19certification.
20(4) Appointment of a court-ordered receiver pursuant to Section
211327.
22(d) The state department may deny approval of a license
23application or of an application for approval under subdivision
24(b) if a person named in the application, as required by this section,
25was an officer, director, general partner, or owner of a 5-percent
26or greater beneficial interest in a licensee or in any parent
27organizations of a licensee of, or in a management company under
28contract with a licensee of, a skilled nursing facility, intermediate
29care facility, community care facility, or residential care facility
30for the elderly at a time during the seven-year period prior to the
31application in which any of the following occurred:
32(1) The department revoked,
suspended, or denied a nursing
33home administrator’s license held or sought by the person.
34(2) The State Department of Social Services revoked, suspended,
35or denied a residential care facility for the elderly administrator’s
36certificate held or sought by the person pursuant to Chapter 3.2
37(commencing with Section 1569).
38(3) The person prevented or attempted to impede the work of
39any authorized representative of the department.
P10 1(4) The person failed to demonstrate competence in operating
2a facility.
3(5) The person failed to report abuse of residents in accordance
4with any state or federal requirement.
5(6) The facility committed one or more violations of law or
6regulatory requirements that
resulted in any of the following:
7(A) A settlement agreement to resolve proceedings to suspend,
8deny, or revoke the license of a facility or to terminate a facility’s
9Medicare or Medi-Cal certification.
10(B) Appointment of a temporary manager pursuant to Section
111325.5.
12(C) One or more class “A” or class “AA” citations pursuant
13to Section 1424 or 1424.5.
14(D) A court order or judgment granting damages or any form
15of equitable relief, including an injunction, resulting from an action
16filed by the Attorney General.
17(d)
end delete
18begin insert(e)end insert No application shall be denied pursuant to this section until
19the state department first (1) provides the applicant with notice in
20writing of grounds for the proposed denial of application, and (2)
21affords the applicant an opportunity to submit additional
22documentary evidence in opposition to the proposed denial.
23(e)
end delete
24begin insert(f)end insert Nothing in this section shall cause any individual to be
25personally liable for any civil penalty assessed pursuant to Chapter
262.4 (commencing with Section 1417) or create any new criminal
27or civil liability contrary to general laws limiting that liability.
28(f)
end delete
29begin insert(g)end insert This section shall not apply to a bank, trust company,
30financial institution, title insurer, controlled escrow company, or
31underwritten title company to which a license is issued in a
32fiduciary capacity.
33(g) As used in this section, “person” has the same meaning as
34specified in Section 19.
35(h) This section shall not apply to the directors of a nonprofit
36corporation exempt from taxation under Section 23701d of the
37Revenue and Taxation Code that operates a skilled nursing facility
38or intermediate care facility in conjunction with a licensed
39residential facility, where
the directors serve without financial
P11 1compensation and are not compensated by the nonprofit corporation
2in any other capacity.
3(i) For purposes of this section:
end insertbegin insert
4(1) “Beneficial interest” means the interest held by any person,
5including a private equity firm and real estate investment trust,
6that acquires an interest in any entity, including, but not limited
7to, any firm, association, organization, partnership, business trust,
8investment trust, corporation, or limited liability corporation, that
9is licensed to operate a facility, as defined in subdivision (c) or
10(d) of Section 1250, by assuming that entity’s debt.
11(2) “Indirect beneficial interest” means the internet held by any
12person, including a private equity firm and real estate investment
13trust, that provides capital or assets to a facility, as defined in
14subdivision (c) or (d) of Section 1250, in exchange for a share of
155 percent or more of the facility’s gross income or profits.
16(3) “Management company” means any company or entity that
17has assumed operational or managerial control over the facility
18or who directly or indirectly conducts the day-to-day operations
19of the facility either under contract or through some other
20arrangement.
21(4) “Person” has the same meaning as specified in Section 19.
end insertSection 1422.5 of the Health and Safety Code is
23amended to read:
(a) The department shall develop and establish a
25begin insert statewideend insert consumer information service system to providebegin delete updatedend delete
26begin insert currentend insert and accurate information to the general public and
27consumers regarding long-term care facilities in their communities.
28The consumer information service system shall include, but need
29not be limited to, all of the following elements:
30(1) An on-line inquiry system accessible through a statewide
31toll-free telephone number and the Internet.
32(1) An online information system available on the Internet
33through an accessible Internet Web site. The Internet Web site
34created pursuant to this paragraph shall be operational and made
35available to the public by March 1, 2016, and shall include the
36information elements specified in paragraph (2).
37(2) Long-term health care facility profiles, with data on services
38provided, a history of allbegin insert deficiencies,end insert citationsbegin delete andend deletebegin insert, andend insert complaints
39for the lastbegin delete twoend deletebegin insert
threeend insert full survey cycles, andbegin insert currentend insert ownership
P12 1information. The profile for each facility shall include, but not be
2limited to, all of the following:
3(A) The name, address, and telephone number of the facility.
4(B) The number of units or beds in the facility.
5(C) Whether the facility accepts Medicare or Medi-Cal patients.
6(D) Whether the facility has a special care unit or program for
7people with Alzheimer’s disease and other dementias, and whether
8the facility participates in the voluntary disclosure program for
9special care units.
10(E) Whether the facility is a for-profit or not-for-profit provider.
11(3) Information regarding substantiated complaints shall include
12the action taken and the date of action.
13(4) Information regarding the state citations assessed shall
14include the status of the state citation, including the facility’s plan
15or correction, and information as to whether an appeal has been
16filed.
17(5) Any appeal resolution pertaining to a citation or complaint
18shall be
updated on the file in a timely manner.
19(b) Where feasible, the department shall interface the consumer
20information service system with its Automated Certification and
21Licensure Information Management System.
22(c) It is the intent of the Legislature that the department, in
23developing and establishing the system pursuant to subdivision
24(a), maximize the use of available federal funds.
25(d) (1) Notwithstanding the consumer information service
26system established pursuant to subdivision (a), by January 1, 2002,
27the state department shall develop a method whereby information
28is provided to the public and consumers on long-term health care
29facilities. The information provided shall include, but not be limited
30to, all of the following elements:
31(A) Substantiated complaints, including the action taken and
32the date of the action.
33(B) State citations
assessed, including the status of any citation
34and whether an appeal has been filed.
35(C) State actions, including license suspensions, revocations,
36and receiverships.
37(D) Federal enforcement sanctions imposed, including any
38denial of payment, temporary management, termination, or civil
39money penalty of five hundred dollars ($500) or more.
P13 1(E) Any information or data beneficial to the public and
2consumers.
3(2) This subdivision shall become inoperative on July 1, 2003.
end delete
4(B) The name of the current administrator, director of nursing,
5and medical director.
6(C) Current and accurate ownership information pursuant to
7Sections 1265, 1267.5, 1599.64, and 1599.645, including, but not
8limited to, all of the following:
9(i) Whether the facility is a for-profit or not-for-profit provider.
end insertbegin insert10(ii) The name, address, and telephone number of the licensee.
end insertbegin insert
11(iii) The name and contact information of a single entity that is
12responsible for all aspects of patient care and the operation of the
13facility.
14(iv) Whether the facility is part of a multifacility organization
15and, if so, the name, address, and telephone
number of the
16organization and, if applicable, of any parent organizations.
17(v) Whether the facility is operated by a management company
18and, if so, the name, address, and telephone number of the
19management company and, if applicable, of any parent
20organizations of the management company.
21(vi) The names and addresses of each person who is an officer
22or director of the licensee, parent organizations, and management
23company, if applicable.
24(vii) The names and addresses of any person or organization,
25or both, having an ownership or control interest of 5 percent or
26more in the licensee, parent organizations, and management
27company, if applicable.
28(viii) The names and addresses of all long-term health care
29facilities owned, leased, managed, or operated by
any person,
30corporation, management company, parent organization, or other
31entity described in clauses (ii) to (vii), inclusive.
32(ix) The names and addresses of the property owners.
end insertbegin insert33(D) The number of licensed beds in the facility.
end insertbegin insert34(E) Whether the facility accepts Medicare or Medi-Cal patients.
end insertbegin insert
35(F) Whether the facility has filed a notice of intent to withdraw
36from the Medi-Cal program, and the date that the notice of intent
37to withdraw
was filed with the department.
38(G) Whether the facility has a special care unit or program for
39people with Alzheimer’s disease and other dementias, and whether
P14 1the facility participates in the voluntary disclosure program for
2special care units.
3(H) Information regarding all complaints, along with any
4outcome, including, but not limited to, the date of the complaint,
5the nature of the complaint, the date the complaint was
6investigated, the action taken, and the date of the action taken.
7(I) Information describing all state and federal deficiencies
8issued to the facility, including, but not limited to, the date of the
9deficiency, the nature of the deficiency, the scope and severity of
10the deficiency, and a statement that the facility’s plan of correction
11is available upon request through the department’s district offices.
12(J) Information describing all state citations assessed, including,
13but not limited to, the date of the citation, the nature of the citation,
14the class of the citation, the amount of the penalty assessed, and
15the status of the citation.
16(K) Updated information, on a regular and timely basis,
17regarding any appeal
resolution pertaining to a citation or
18complaint.
19(L) Information describing state enforcement actions imposed,
20including, but not limited to, license suspensions, revocations, and
21the appointment of temporary managers and receiverships.
22(M) Information describing federal enforcement sanctions
23imposed, including, but not limited to, any denial of payment,
24temporary management, termination, or any civil monetary penalty
25imposed.
26(N) Information on compliance with staffing ratio requirements.
end insertbegin insert
27(O) Any information or data the department deems beneficial
28to the public and consumers.
29(b) It is the intent of the Legislature that the department, in
30developing and establishing the system pursuant to subdivision
31(a), maximize the use of available federal funds.
32(e)
end delete
33begin insert(c)end insert In implementing this section, the department shall ensure
34the confidentiality of personal and identifying information of
35residents and employees and
shall not disclose this information
36through the consumer information service system developed
37pursuant to this section.
38(d) The department shall make current written copies of the
39long-term health care facility profiles available to the public
40through its district offices.
No reimbursement is required by this act pursuant to
2Section 6 of Article XIII B of the California Constitution because
3the only costs that may be incurred by a local agency or school
4 district will be incurred because this act creates a new crime or
5infraction, eliminates a crime or infraction, or changes the penalty
6for a crime or infraction, within the meaning of Section 17556 of
7the Government Code, or changes the definition of a crime within
8the meaning of Section 6 of Article XIII B of the California
9Constitution.
O
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