BILL ANALYSIS
AB 667
Page 1
Date of Hearing: April 19, 2005
ASSEMBLY COMMITTEE ON JUDICIARY
Dave Jones, Chair
AB 667 (Jones) - As Amended: April 13, 2005
SUBJECT : CHILD SUPPORT: COLLECTION IMPROVEMENT AND
ACCOUNTABILITY
KEY ISSUES :
1)IN ORDER TO INCREASE CHILD SUPPORT COLLECTIONS FOR FAMILIES
AND MAXIMIZE FEDERAL INCENTIVES, SHOULD PERFORMANCE TARGETS BE
ESTABLISHED, TIED TO NATIONAL AVERAGES?
2)SHOULD THE STATE DEPARTMENT OF CHILD SUPPORT SERVICES BE GIVEN
ADDITIONAL MANAGEMENT TOOLS TO HELP HOLD LOCAL CHILD SUPPORT
AGENCIES ACCOUNTABLE FOR THEIR PERFORMANCE AND TO HELP IMPROVE
COLLECTION EFFORTS FOR FAMILIES THROUGHOUT CALIFORNIA?
SYNOPSIS
On March 1, 2005, this Committee held an informational hearing
on child support, entitled "The Child Support Program in
California: Current Challenges, Future Objectives." That
hearing, in which state and local officials, as well as experts
and advocates participated, focused on child support performance
and automation efforts. At the hearing, it was revealed that
while the state has improved child support collections
substantially in the last five years, it still lags well behind
the nation on several key measures; and, in spite of this
underperformance, has actually reduced performance expectations
this year.
This bill, sponsored by the National Center for Youth Law, would
establish statewide performance targets and would provide the
Department of Child Support Services (DCSS) with additional
management tools for those local child support agencies (LCSAs)
that are either failing to meet their performance targets or
failing to comply with required laws. According to the author,
AB 667 would enhance child support collections and improve
accountability by establishing statewide performance targets
tied directly to national performance. This will help the state
both improve collection efforts for children and maximize
federal incentive dollars. AB 667 would also provide DCSS with
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additional management tools to hold local child support agencies
accountable for meeting collection targets. The bill's
supporters argue that it establishes clear performance
expectations and outcome accountability in the child support
program. It will not only increase the federal incentives for
California, but will improve child support collections for
children and families.
SUMMARY : Establishes performance targets for the state child
support program and provides the state Department of Child
Support Services (DCSS) with additional tools to manage
performance. Specifically, this bill :
1)Establishes the following child support performance measures:
(a) a medical support measure, comparing cases with medical
support established and provided to all cases with support
orders, less cases with orders for arrears only; (b) a
customer service measure, comparing complaints resolved timely
to all complaints received; and (c) a measure for collections
in all cases, comparing cases with collections to all cases,
less cases for medical support and cases with zero orders.
2)Eliminates an exemption for reporting performance data for
local child support agencies (LCSAs).
3)Establishes the following annual performance targets:
a) For the paternity and child support order establishment
measures, and the current support and arrears collections
measures, if state performance in the preceding year is
equal to or above the national average, excluding
California, then the performance target is 2% above the
prior year's performance up to a maximum performance of
80%. If performance is below the national average, then
the performance target is a 5% increase over the prior
year's performance.
b) For the cost-effectiveness measure, if state performance
in the preceding year is equal to or above the national
average, excluding California, then the performance target
is 2% above the prior year's performance up to a maximum
performance of $5. If performance is below the national
average, then the performance target is a 5% increase over
the prior year's performance.
c) For the medical support measure, if state performance in
the preceding year is 50% or above, then the performance
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target is the prior year's performance plus 2% up to a
maximum performance of 80%. If performance is below 50%,
then the performance target is 5% above the prior year's
performance.
d) For the complaints measure, if state performance in the
preceding year is 90% or above, then the performance target
is the prior year's performance plus 2% up to a maximum
performance of 98%. If performance is below 90%, then the
performance target is five percent above the prior year's
performance.
e) For the collections on all cases measures, if state
performance in the preceding year is 60% or above, then the
performance target is the prior year's performance 2% up to
a maximum performance of 80%. If performance is below 50%,
then the performance target is 5% above the prior year's
performance.
4)Requires DCSS, in consultation with the LCSAs, to develop
annual performance targets for each LCSA that will
cumulatively total the state's performance target.
5)Requires that performance data on the child support program,
which must be provided annually, must show if an LCSA has met
its performance targets and must be posted on the DCSS web
site, as well as all LCSA web sites.
6)Requires that if an LCSA has failed to meet the required
performance standards or if the director of DCSS determines
that an LCSA is failing in a substantial manner to comply with
the required state plan or applicable laws, the LCSA must
enter into a two-phase improvement process. Under Phase I of
the process, DCSS and the LCSA shall jointly develop and
implement a performance improvement plan. If the LCSA has
been in the Phase I for a year and DCSS determines that the
LCSA is failing in a substantial manner to achieve performance
targets or is failing to comply with the state plan and
applicable laws, DCSS must either:
a) Require replacement of the LCSA administrator; or
b) Assess a performance incentive charge against the LCSA
equal to the federal incentive funding lost as a result of
the LCSA's failure to meet it performance target. The
performance incentive charge shall be held in abeyance
provide the LCSA reinvests it in the area that led to the
imposition of the performance improvement plan. If, after
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a year of reinvestment, DCSS determines that the LCSA has
failed to make sufficient progress in achieving its
performance targets, the performance incentive charge shall
be levied for all subsequent years until the LCSA achieves
its performance target.
EXISTING LAW :
1)Requires DCSS to develop performance measures on locating
obligors, obtaining and enforcing medical support and
providing customer service and requires the LCSAs to report
monthly on those measures. (Family Code Section 17600.
Unless otherwise specified, all subsequent references are to
the Family Code.)
2)Requires LCSAs to provide DCSS with data on child support
performance and costs, as specified, and requires DCSS to
comply the data semi-annually and report to all members of the
county boards of supervisors, county chief executive officers,
LCSAs and the Legislature. Allows LCSAs to apply for a
one-year exemption from reporting some of the data if DCSS
determines that the LCSA cannot compile the data on their
automated system and manual compilation would significantly
harm their collection efforts. (Section 17600.)
3)Requires DCSS to adopt the federal minimum standards as the
baseline standard of performance for the LCSAs and work in
consultation with the LCSAs to develop program performance
targets on an annual federal fiscal year basis. The
performance targets must represent ongoing improvement in the
performance measures for each LCSA's performance, as well as
the department's statewide performance level. (Section
17602.)
4)Requires the director of DCSS to adopt a three-phase process
to be used statewide when a LCSA is out of compliance with the
performance standards adopted or the director determines that
the LCSA is failing in a substantial manner to comply with any
provision of the state plan, applicable laws or regulations,
or the cooperative agreement. The three-phase process begins
with the development of a performance improvement plan,
developed jointly by DCSS and the LCSA, moves to onsite
oversight by DCSS and, finally, to take over by DCSS.
(Section 17602.)
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FISCAL EFFECT : As currently in print, this bill is keyed
fiscal.
COMMENTS : On March 1, 2005, this Committee held an
informational hearing on child support, entitled "The Child
Support Program in California: Current Challenges, Future
Objectives." That hearing, which included participation by
state and local officials, as well as experts and advocates,
focused on child support performance and automation efforts. At
the hearing, it was revealed that while the state has improved
child support collections substantially in the last five years,
it still lags well behind the nation on several key measures.
This bill would establish statewide performance targets and
would provide DCSS with additional management tools for those
LCSAs that are either failing to meet their performance targets
or failing to comply with required laws. According to the
author:
Child support is critical to the financial security of
millions of children across the nation and throughout
California. Child support helps lift families off of
welfare and out of poverty. It accounts for 40% of
income for low-income families who receive it.
Successful child support enforcement also saves the
state money by recouping welfare expenditures, while
reducing the need for welfare in the first place.
California's child support program - which had
historically been one of the worst in the nation - was
overhauled five years ago. Since then, California has
improved its performance substantially on some
measures, but has continued to lag well behind the
nation on other measures.
AB 667 would enhance child support collections and
improve accountability by establishing statewide
performance targets tied directly to national
performance. This will help the state both improve
collection efforts for children and maximize federal
incentive dollars. . . . AB 667 would also provide . .
. DCSS with additional management tools to hold local
child support agencies accountable for meeting
collection targets. Local child support agencies are
funded entirely by state and federal funds and are
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under the direction and control of DCSS. However,
because they are county agencies, it has been
difficult for the state to exercise sufficient control
to hold the local programs accountable. This bill
would help improve collections by ensuring that both
the state and local agencies are directly accountable
for collection efforts.
Effective child support enforcement has additional benefits even
beyond the families who receive it. Studies have shown that
effective child support enforcement promotes marriage and
reduces births to unwed parents. In addition, parents who pay
child support are more likely to be involved with their
children. ( See Seltzer, J., et al , Will Child Support
Enforcement Increase Father-Child Contact and Paternal Conflict
After Separation? in Garfinkel, et al , Fathers Under Fire
(1998).)
According to the bill's sponsor, the National Center for Youth
Law, AB 667 will provide DCSS with the tools it needs to manage
LCSAs in meeting established statewide performance targets that
will move the state to, and then beyond, national performance
levels, maximizing federal incentive payments and collections
for families:
Specifically, AB 667 will establish clear statewide
performance targets on the federal performance
measures and require DCSS to establish consistent
targets for each of the local child support agencies.
Additionally, DCSS is given greater authority for
holding local child support agencies accountable for
improved performance through fiscal allocations and
greater management control. . . .
The Governor's California Performance Review put great
emphasis on accountable government and the utilization
of performance metrics and measures to achieve that
accountability. AB 667 establishes clear performance
expectations and outcome accountability in the child
support program. It will not only increase the
federal incentives for California, but more
importantly, will improve child support collections
for children and families.
Background on the child support program . Enacted in 1975, Title
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IV-D of the Social Security Act requires all states with a
welfare program to operate a child support program which
establishes and enforces child support obligations. Title IV-D
requires every state to establish a single organizational unit
responsible for the state's child support enforcement program.
The federal child support requirements have been expanded and
strengthened considerably since the program's creation, most
recently by the Child Support Performance and Incentive Act of
1998 (CSPIA), which established new federal performance measures
and an incentive and penalty structure to fund and motivate
states to improve their child support performance efforts.
Under CSPIA, states receive federal incentives based on
performance on five federal performance measures: (1)
paternities established; (2) support orders established; (3)
current support collected; (4) arrears collected; and (5)
cost-effectiveness. The penalty, for states that perform below
specified levels, is a loss of one to two percent of the state's
welfare block grant.
The incentive pool for the states is capped. Thus, California's
incentive is based not only on its performance on the five
measures, but also on the performance of the other states. The
federal incentive pool for federal fiscal year 2005 is $446
million, increasing to $458 million in 2006 and $471 million in
2007. In addition, the incentive dollars are matched $2 for
each $1 with federal match dollars.
California's child support program was substantially reformed in
1999, providing the State with control over the local programs .
In 1999, the Legislature spearheaded major structural reforms in
the program by (1) transferring state responsibility from the
Department of Social Services to DCSS; (2) transferring local
responsibility for the program from the district attorneys to
the LCSAs which, except for hiring decisions, were put under the
control of DCSS; and (3) creating a complaint resolution and
fair hearing process for resolving child support complaints.
Pursuant to the legislation, DCSS is required to develop uniform
forms, policies and programs, and performance standards. If
LCSAs fail to meet required performance standards, DCSS is to
assist in program operations and management. Although local
employees were left at the local level, control of all other
aspects of the program were transferred to the state level.
Family Code Section 17304(b) gave the director of DCSS:
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[D]irect oversight and supervision of the Title IV-D
operations of the local child support agency, and no
other local or state agency shall have any authority
over the local child support agency as to any
function relating to its Title IV-D operations. The
local child support agency shall be responsible for
the performance of child support enforcement
activities required by law and regulation in a manner
prescribed by the department. The administrator of
the local child support agency shall be responsible
for reporting to and responding to the director on
all aspects of the child support program.
The Legislature also made quite clear, through its
findings, that while LCSAs remained local the child support
program was of statewide concern and required state
control. Family Code Section 17303 provides, in pertinent
part:
(b) The lack of coordination and integration between state
and local child support agencies has been a major
impediment to getting support to the children of this
state. An effective child support enforcement program
must have strong leadership and effective state oversight
and management to best serve the needs of the children of
the state.
(c) The state would benefit by centralizing its obligation
to hold counties responsible for collecting support.
Oversight would be best accomplished by direct management
by the state.
(d) A single state agency for child support enforcement
with strong leadership and direct accountability for local
child support agencies will benefit the taxpayers of the
state by reducing the inefficiencies introduced by
involving multiple layers of government in child support
enforcement operations.
In addition, in contrast to its previous funding structure, the
reformed program is now funded entirely through federal and
state funds. The counties provide no funding for the program.
California's child support program has made substantial progress in
the last five years, but still lags behind the nation on several key
measures, and, as a result, federal incentives lag . In an effort to
improve performance, DCSS, in collaboration with local agencies and
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other child support stakeholders, developed a strategic plan that
set forth annual statewide performance goals for the five federal
measures and additional state measures. The statewide measures were
then translated down annually to local performance expectations for
each of the LCSAs.
The results of California's child support performance efforts
since 1999 are for the most part positive. California has
improved performance on three of the five federal measures
(paternities established, orders established and current support
collections) held relatively flat on one measure (arrears
collections) and lost ground on one measure
(cost-effectiveness). The chart below sets forth California and
national performance on the federal measures, comparing 1999 and
2003. (Note, while California data are available for 2004,
national data for that year are not yet available.) Some states
had unreliable data, so rankings are not always based on 54 (50
states, plus the District of Columbia, Guam, Puerto Rico and
Virgin Islands). In addition, the paternity measure reported in
the chart is the IV-D case measure, one of the two measures
permitted. The data comes from the federal Office of Child
Support Enforcement; the rankings are based on that data.
Of the five measures, California performs above the national
average on two measures (paternity and support order
establishment), below on one (arrears collections) and
significantly below on two (current support collections and
cost-effectiveness).
Comparing California and National Child Support Performance
------------------------------------------------------------------
|Performanc| 1999 Performance | 2003 Performance |
|e Measure | | |
------------------------------------------------------------------
|----------+--------+--------+--------+--------+--------+--------|
| |Californ|National|Californ|Californ|National|Californ|
| | ia | |ia Rank | ia | |ia Rank |
|----------+--------+--------+--------+--------+--------+--------|
|Paternitie| Data | 64.8% | Not | 87% | 81.7% | 11/26 |
|s |Unreliab| |Applicab| | | |
|Establishe| le | | le | | | |
|d | | | | | | |
|----------+--------+--------+--------+--------+--------+--------|
|Orders | 69% | 62.2% | 22/51 | 76.4% | 72.3% | 24/54 |
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|Establishe| | | | | | |
|d | | | | | | |
|----------+--------+--------+--------+--------+--------+--------|
|Current | 40% | 56.1% | 45/48 | 45.2% | 58% | 51/54 |
|Support | | | | | | |
|Collection| | | | | | |
|s | | | | | | |
|----------+--------+--------+--------+--------+--------+--------|
|Arrears | 53.4% | 59.9% | 37/46 | 55.4% | 59.8% | 41/54 |
|Collection| | | | | | |
|s | | | | | | |
|----------+--------+--------+--------+--------+--------+--------|
|Cost-Effec| $3.23 | $4.21 | 45/53 | $2.31 | $4.33 |50/54 |
|tiveness | | | | | | |
----------------------------------------------------------------
The incentive payments that a state receives from the federal
government are based not only on the state's performance on the
five federal measures, but also the performance of the other
states. Thus, even if California improves its performance, if
its rate of improvement is less than that of other states, it
will lose incentives. While California has made significant
progress on some measures, its gains on the measures have failed
to keep pace with national gains. According to the Center for
Law and Social Policy, widely regarded as the national experts
on child support policy:
California is improving at a slower pace than the
national average, and the gap is widening. . . . In
order to maintain federal incentive funding and to
avoid penalties, California must keep its focus on
performance and look for ways to improve over current
levels, particularly in its enforcement
functions-current support and arrears-and its
cost-effectiveness.
Even with California's low collections rate, DCSS recently reduced
collection expectations in spite of the consequences to both
families and federal incentives dollars . Despite the importance of
improving performance, DCSS has recently reduced its performance
goals for current support and arrears collections, areas where
California already performs substantially below the national
average, by permitting local agencies to performance at either their
2004 goal or just 0.5 or 1 percentage point above that goal. (Child
Support Services (CSS) Letter No. 04-23 (October 22, 2004).) This
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is a retreat from the DCSS Strategic Plan, which required
improvements of five percentage points per year for current support
and two percentage points per year for arrears collections. Under
the Strategic Plan, program targets for 2005 are supposed to be 60%
for collections of current support and 64% for collections of
arrears. In 2004, the latest state data available, DCSS achieved
performance of just 48% for current and 55% for arrears, well below
the Strategic Plan goals and well below the national average. A
reduction in expectations now would likely not only reduce support
collected for children, but could also reduce California's incentive
payments, particularly because no other state appears to be reducing
its performance expectations.
Can California afford to reduce performance expectations while
automation efforts are continuing? DCSS argues that it is necessary
to reduce performance expectations for LCSAs based on flat budgets
and automation requirements. At the child support informational
hearing, a representative of the Child Support Directors Association
stated that such a reduction is necessary due to automation, flat
budgets and to ensure goals are achievable.
California is in its 17th year of attempting to implement a
statewide child support system, as required by the federal
government, and subject to substantial federal penalties ($754
million to date) for failure to have implemented a statewide
automated system. The system is not scheduled to be fully completed
until the end of 2008. As discussed above, if California reduces
its performance expectations, not only will children receive less
support, but the state will fall behind other states and receive
less incentive funding. Every other state, save South Carolina, has
completed its automated system. Those states are not reducing
performance expectations. Given California's continuing budget
crises, can the state afford to receive less incentive dollars from
the federal government, especially when the incentives are tripled
by the two-for-one federal match? Any effort by California to
reduce its performance expectations could have significant
consequences for needy children and federal incentives dollars,
alike. Given that the federal incentives are used to fund the child
support program, any reduction in performance expectations could
have the effect of reducing program funding, which could result in
still further reductions in performance.
The Harriett Buhai Center, which provides family law and domestic
violence assistance to low-income families in Los Angeles, writes in
support of the bill that "Los Angeles County had historically been
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one of the worst performing counties in the state and although some
progress has been made, the performance in our county remains on of
the worst in the state. . . . It is important that local county
child support agencies have clear performance goals and targets and
that they be held accountable for meeting those targets."
New performance measures already required by state law . This bill
would establish three new performance measures, two of which - the
medical support and customer service measures - DCSS is already
required to establish. In addition, the medical support measure
will soon become a new federal performance measure, with incentives
tied to a state's performance on that measure. This bill could have
the effect of giving California a head start on improving its
performance on that measure and put California in a strong position
to maximize federal incentives on that measure.
Additional management tools could help DCSS better manage the
performance of local agencies . As discussed above, although
LCSAs are under the management and control of the state, because
LCSAs employ local employees who report to the county boards of
supervisors, DCSS has lacked some management tools to help
improve program performance. This bill would give DCSS
additional tools to help manage local programs. AB 667 would
tighten up the existing performance improvement program for DCSS
to use with struggling LCSAs. The improvement program would
apply only to LCSAs that failed to meet the required performance
standards or to LCSAs that the DCSS director determined had
failed in a substantial manner to comply with the required state
plan or applicable laws.
Under the first phase of the program, DCSS and the LCSA would
jointly develop and implement a performance improvement plan.
Development of the plan would include onsite investigation,
evaluation and monitoring. DCSS and the LCSA would be required
to work closely for that year to help improve the LCSA. After
the LCSA has been in the first phase for a year, if DCSS
determined that the LCSA was still failing in a substantial
manner to achieve performance targets or failing to comply with
the state plan or applicable laws, DCSS would then have the
option to either seek replacement of the LCSA administrator or
assess a performance incentive charge against the LCSA equal to
the federal incentive funding lost as a result of the LCSA's
failure to meet its performance target.
Performance incentive charge . In an effort to assist struggling
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LCSAs, if DCSS elects to assess a performance incentive charge
against an underperforming LCSA who has been operating under a
performance improvement plan for a year, the charge would be
held in abeyance provided the LCSA reinvests the charge in the
area that led to the imposition of the performance improvement
plan. After a year of reinvestment - fully two years after the
LCSA had been placed into the performance improvement program,
DCSS would assess whether the LCSA has made sufficient progress
in achieving performance targets. Only if DCSS determines that
the LCSA has failed to make sufficient progress would the
performance incentive charge be levied against the LCSA in
subsequent years, until such time as the LCSA achieves its
performance targets.
Replacement of local administrator . Typically, the county boards of
supervisors have authority over the hiring and firing of local
officials. Subject to unrelated exceptions, Government Code Section
25300 provides: "The board of supervisors shall prescribe the
number, compensation, tenure, appointment and conditions of
employment of county employees."
Beyond that, charter counties are provided additional rights under
the California Constitution. The State Constitution provides that
county charters shall provide for the manner of appointment and
removal of persons employed by the county, and that charter entities
"may make and enforce all ordinances and regulations in respect to
municipal affairs, subject only to restrictions and limitations
provided in their several charters and in respect to other matters
they shall be subject to general laws." (Cal. Constitution, Art.
XI, Sections 4 and 5.) Thus, on the surface, the provision that
DCSS seek the replacement of a local administrator exceeds DCSS's
power in charter counties.
However, charter provisions do not supersede general state laws
in conflict if "(b) the subject matter is on of state concern,
and the general law occupies the entire field, or (c) the
subject matter is of such statewide concern that it can no
longer be deemed a municipal affair." ( Younger v. Board of
Supervisors of San Diego County (1979) 93 Cal.App.3d 864, 870
(quoting In re Hubbard (1964) 62 Cal.2d 119, 127 (overruled on
other grounds)).)
As set forth in detail above, the Legislature has made clear
that child support enforcement is of significant statewide
concern. The 1999 reforms gave the state direct oversight and
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supervision of local programs. In addition, legislative
findings make clear that the oversight of the program should
best be accomplished by direct management by the state and that
a single state agency for child support enforcement with strong
leadership and direct accountability for local child support
agencies benefits the taxpayers of the state by reducing the
inefficiencies introduced by involving multiple layers of
government in child support enforcement operations. Finally,
the fact that the program is funded entirely by state and
federal dollars adds further weight to the argument that child
support is a matter of state concern. Given this, it appears
that the provision that DCSS require replacement of an LCSA
administrator is constitutional.
According to the author these new management tools are designed
to be flexible and used only, as determined by DCSS, if
necessary due to an LCSA's repeated and substantial failure to
meet program targets or comply with program requirements. These
tools should help DCSS effectively manage a statewide program
with agencies and should help ensure direct accountability, as
envisioned by the Legislature in the 1999 reform legislation.
It is hoped that it would never be necessary to use these tools.
Rather, simply having them at its disposal should be sufficient
for DCSS to be able to exercise sufficient control over local
agencies, ensure accountability and achieve improved collections
for children.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of Children for Enforcement of Support (ACES)
California National Organization for Women
Children's Advocacy Institute
Harriett Buhai Center for Family Law
National Center for Youth Law (Sponsor)
Single Parents United 'N' Kids (SPUNK)
Two individuals
Opposition
None on file.
Analysis Prepared by : Leora Gershenzon / JUD. / (916)
319-2334
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