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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 441 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  1st Session
                                 S. 441

  To establish American opportunity accounts, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           February 15, 2023

   Mr. Booker (for himself, Mr. Durbin, Mr. Markey, Mr. Merkley, Ms. 
  Warren, Mr. Sanders, Mr. Brown, Mr. Blumenthal, Mr. Van Hollen, Mr. 
 Schatz, Mr. Whitehouse, Mr. Schumer, Ms. Baldwin, Ms. Klobuchar, Mrs. 
Gillibrand, and Mr. Heinrich) introduced the following bill; which was 
          read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To establish American opportunity accounts, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``American 
Opportunity Accounts Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. American Opportunity Fund.
Sec. 4. AO accounts.
Sec. 5. Assignment, alienation, and treatment of deceased individuals.
Sec. 6. Rules governing AO accounts relating to investment, accounting, 
                            and reporting.
Sec. 7. American Opportunity Fund Board.
Sec. 8. Fiduciary responsibilities.
Sec. 9. Accounts disregarded in determining eligibility for Federal 
                            benefits.
Sec. 10. Reports.
Sec. 11. Programs for promoting financial capability.
Sec. 12. Tax treatment.

SEC. 2. DEFINITIONS.

    For purposes of this title--
            (1) American opportunity fund.--The term ``American 
        Opportunity Fund'' means the fund established under section 3.
            (2) AO account.--The term ``AO account'' means an American 
        opportunity account established under section 4.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
            (4) American opportunity fund board.--The term ``American 
        Opportunity Fund Board'' means the board established pursuant 
        to section 7.
            (5) Executive director.--The term ``Executive Director'' 
        means the executive director appointed pursuant to section 7.

SEC. 3. AMERICAN OPPORTUNITY FUND.

    (a) Establishment.--There is established in the Treasury of the 
United States a fund to be known as the ``American Opportunity Fund''.
    (b) Amounts Held by Fund.--The American Opportunity Fund consists 
of the sum of all amounts paid into the Fund under this title, 
increased by the total net earnings from investments of sums held in 
the Fund or reduced by the total net losses from investments of sums 
held in the Fund, and reduced by the total amount of payments made from 
the Fund (including payments for administrative expenses).
    (c) Use of Fund.--
            (1) In general.--The sums in the American Opportunity Fund 
        are appropriated and shall remain available without fiscal year 
        limitation--
                    (A) to make contributions to AO accounts;
                    (B) to invest under section 6;
                    (C) to make distributions in accordance with this 
                title;
                    (D) to pay the administrative expenses of carrying 
                out this title; and
                    (E) to purchase insurance as provided in section 
                8(c)(2).
            (2) Exclusive purposes.--The sums in the American 
        Opportunity Fund shall not be appropriated for any purpose 
        other than the purposes specified in this section and may not 
        be used for any other purpose.
    (d) Transfers to American Opportunity Fund.--The Secretary shall 
make transfers from the general fund of the Treasury to the American 
Opportunity Fund as follows:
            (1) Initial contribution for eligible individuals born 
        after december 31, 2023.--Upon receipt of a certification under 
        section 4(b)(2) with respect to an individual born after 
        December 31, 2023, the Secretary shall transfer $1,000 to the 
        AO account of the individual.
            (2) Annual contributions.--
                    (A) In general.--Each year which occurs after the 
                year in which an AO account is established for an 
                eligible individual and before the year the eligible 
                individual attains the age of 18, the Secretary shall 
                transfer the annual contribution amount to the AO 
                account of the individual.
                    (B) Annual contribution amount.--The annual 
                contribution amount shall be the amount such that the 
                annual contribution amount for any taxpayer whose 
                household income is within an income tier specified in 
                the following table shall decrease, on a sliding scale 
                in a linear manner, from the initial amount to the 
                final amount specified in such table for such income 
                tier:

------------------------------------------------------------------------
In the case of household income  (expressed as  The initial
  a percent of the poverty line)  within the     amount is--  The final
            following income tier:                           amount is--
------------------------------------------------------------------------
Up to 100 percent.............................       $2,000       $2,000
100 percent up to 125 percent.................        2,000        1,500
125 percent up to 175 percent.................        1,500        1,000
175 percent up to 225 percent.................        1,000          500
225 percent up to 325 percent.................          500          250
325 percent up to 500 percent.................          250            0
500 percent or more...........................            0           0.
------------------------------------------------------------------------

                    (C) Applicable household income; poverty line.--For 
                purposes of this paragraph--
                            (i) Applicable household income.--The term 
                        ``applicable household income'' means household 
                        income (as defined in section 36B(d) of the 
                        Internal Revenue Code of 1986), except that--
                                    (I) with respect to any calendar 
                                year, the Secretary shall use the 
                                income of the second calendar year 
                                preceding the calendar year for which 
                                the contribution relates; and
                                    (II) in determining household 
                                income the Secretary shall aggregate 
                                the income of married individuals 
                                filing separate tax returns.
                            (ii) Special rule for individuals not 
                        filing returns.--
                                    (I) In general.--In the case of any 
                                taxpayer who was not required to file a 
                                return of tax for the tax imposed by 
                                section 1 for the taxable year 
                                described in clause (i)(I) or for whom 
                                the information described in clause (i) 
                                is not available for such year, such 
                                taxpayer shall be treated as a taxpayer 
                                with a household income which is less 
                                than 100 percent of the poverty line.
                                    (II) Use of other data.--Subclause 
                                (I) shall not apply if the Secretary 
                                determines, based on such other 
                                information from any agency of the 
                                United States as the Secretary 
                                determines is reliable, that the 
                                taxpayer's household income for such 
                                year is 100 percent of the poverty line 
                                or greater.
                            (iii) Poverty line.--The term ``poverty 
                        line'' has the meaning given such term under 
                        section 36B(d) of the Internal Revenue Code of 
                        1986.
                    (D) Authority to provide tax information.--
                            (i) In general.--Section 6103(l) of the 
                        Internal Revenue Code of 1986 is amended by 
                        adding at the end the following new paragraph:
            ``(23) Disclosure of return information to carry out 
        eligibility requirements for certain programs.--
                    ``(A) In general.--The Secretary shall disclose to 
                officers and employees of the Department of the 
                Treasury or the American Opportunity Fund Board return 
                information of any taxpayer whose income is relevant in 
                determining any annual contribution to an American 
                Opportunity Account under section 3 of the American 
                Opportunity Accounts Act. Such return information shall 
                be limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer,
                            ``(iii) the number of individuals for whom 
                        a deduction is allowed under section 151 with 
                        respect to the taxpayer (including the taxpayer 
                        and the taxpayer's spouse),
                            ``(iv) the modified adjusted gross income 
                        (as defined in section 36B) of such taxpayer, 
                        of any spouse of such taxpayer who filed a 
                        separate return, and of each of the other 
                        individuals included under clause (iii) who are 
                        required to file a return of tax imposed by 
                        chapter 1 for the taxable year,
                            ``(v) such other information as is 
                        prescribed by the Secretary by regulation as 
                        might indicate whether the taxpayer is eligible 
                        for such an annual contribution (and the amount 
                        thereof), and
                            ``(vi) the taxable year with respect to 
                        which the preceding information relates or, if 
                        applicable, the fact that such information is 
                        not available.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Department of the Treasury or the American 
                Opportunity Fund Board for the purposes of, and to the 
                extent necessary in establishing eligibility for, and 
                verifying the appropriate amount of, any annual 
                contribution described in subparagraph (A).''.
                            (ii) Procedures and recordkeeping related 
                        to disclosures.--Paragraph (4) of section 
                        6103(p) of such Code is amended by striking 
                        ``or (22)'' each place it appears and inserting 
                        ``(22), or (23)''.
                    (E) Study on incorporation of other wealth 
                factors.--Not later than 2 years after the date of the 
                enactment of this Act, the Comptroller General shall 
                submit to Congress and the Secretary of the Treasury a 
                report on the feasibility and distributive impacts of a 
                new measure for determining the amount of the annual 
                contribution amount under this paragraph based on 
                family wealth, total assets, and overall net worth. 
                Such measure may--
                            (i) include financial assets, the value of 
                        family home, retirement accounts, business and 
                        entrepreneurial ventures, potential future 
                        inheritances, and any other assets or debts; 
                        and
                            (ii) continue to factor in current or past 
                        income to the extent such information is useful 
                        in estimating overall household wealth.
            (3) Adjustment for inflation.--
                    (A) In general.--For each calendar year beginning 
                after 2024, each of the dollar amounts under paragraphs 
                (1) and (2)(B)(i) shall be increased by such dollar 
                amount multiplied by the cost-of-living adjustment 
                determined under section 1(f)(3) of the Internal 
                Revenue Code of 1986 determined by substituting 
                ``calendar year 2023'' for ``calendar year 2016'' in 
                subparagraph (A)(ii) thereof.
                    (B) Rounding.--If any amount adjusted under 
                paragraph (1) is not a multiple of $50, such amount 
                shall be rounded to the next lowest multiple of $50.
    (e) Prohibition on Use of Payroll Taxes To Fund AO Accounts.--The 
American Opportunity Fund and AO accounts are wholly separate and 
unique from the Social Security system. No amount from any tax on 
employment may be contributed to the American Opportunity Fund or AO 
accounts.

SEC. 4. AO ACCOUNTS.

    (a) In General.--
            (1) Establishment.--The Executive Director shall establish 
        in the American Opportunity Fund an account (to be known as an 
        ``American Opportunity account'' or an ``AO account'') for each 
        eligible individual certified under subsection (b). Each such 
        account shall be identified to its account holder by means of a 
        unique personal identifier currently recognized by the Internal 
        Revenue Service and shall remain in the American Opportunity 
        Fund.
            (2) Account balance.--The balance in an account holder's AO 
        account at any time is the excess of--
                    (A) the sum of--
                            (i) all deposits made into the American 
                        Opportunity Fund and credited to the account 
                        under paragraph (3); and
                            (ii) the total amount of allocations made 
                        to and reductions made in the account pursuant 
                        to paragraph (4); over
                    (B) the amounts paid out of the account with 
                respect to such individual under subsection (c).
            (3) Crediting of contributions.--Pursuant to regulations 
        which shall be prescribed by the Executive Director, the 
        Executive Director shall credit to each AO account the amounts 
        paid into the American Opportunity Fund under section 3(d) 
        which are attributable to the account holder of such account.
            (4) Allocation of earnings and losses.--The Executive 
        Director shall allocate to each AO account an amount equal to 
        the net earnings and net losses from each investment of sums in 
        the American Opportunity Fund which are attributable, on a pro 
        rata basis, to sums credited to such account, reduced by an 
        appropriate share of the administrative expenses paid out of 
        the net earnings, as determined by the Executive Director.
    (b) Eligible Individual.--For purposes of this title--
            (1) In general.--The term ``eligible individual'' means any 
        individual who--
                    (A) was born after December 31, 2007;
                    (B) has not yet attained the age of 18 years; and
                    (C) has a valid, unique, Federal Government issued 
                identification number recognized by the Internal 
                Revenue Service.
            (2) Certification of account holders.--
                    (A) Automatic certification for certain individuals 
                born after december 31, 2023.--On any date after 
                December 31, 2023, on which an eligible individual is 
                issued a social security account number under section 
                203(c)(2) of the Social Security Act, the Commissioner 
                of Social Security shall certify to the Executive 
                Director and the Secretary of the Treasury the name of, 
                and social security number issued to, such eligible 
                individual.
                    (B) Other individuals.--In the case of an eligible 
                individual who is not certified under subparagraph (A), 
                such individual may request the establishment an AO 
                account under this subparagraph by application to the 
                Executive Director, and the Executive Director shall 
                certify such individual under this subparagraph.
    (c) Restrictions on Distributions.--
            (1) Age-related restrictions.--
                    (A) In general.--Except as otherwise provided in 
                this paragraph, no amount may be distributed from an AO 
                account before the date on which the account holder 
                attains the age of 18.
                    (B) Higher education expenses.--Subparagraph (A) 
                shall not apply to amounts paid for qualified tuition 
                and related expenses (as defined in section 25A(f)(1) 
                of the Internal Revenue Code of 1986) of the account 
                holder if the account holder is an eligible student (as 
                defined in section 25A(b)(3) of such Code) with respect 
                to such expenses.
                    (C) Authority to provide higher age limit for 
                certain distributions.--The Secretary, in consultation 
                with the American Opportunity Fund Advisory Board, may 
                by regulations provide for a higher age limitation with 
                respect to distributions relating to certain categories 
                of qualified expenses if the Secretary determines that 
                such higher age limitation is appropriate.
            (2) Use-related restrictions.--
                    (A) In general.--No amount may be distributed from 
                an AO account unless the account holder establishes, 
                under rules established by the Executive Director in 
                consultation with the American Opportunity Fund 
                Advisory Board, that such amount shall be used for a 
                qualified expense.
                    (B) Qualified expense.--For purposes of this 
                subsection--
                            (i) In general.--The term ``qualified 
                        expense'' means expenses for any of the 
                        following:
                                    (I) Education of the account holder 
                                at--
                                            (aa) an institution of 
                                        higher education (as defined in 
                                        section 101 of the Higher 
                                        Education Act of 1965 (20 
                                        U.S.C. 1001)); or
                                            (bb) an area career and 
                                        technical education school (as 
                                        defined in section 3 of the 
                                        Carl D. Perkins Career and 
                                        Technical Education Act of 2006 
                                        (20 U.S.C. 2302)).
                                    (II) Ownership of a home by the 
                                account holder.
                                    (III) Any expenses paid or incurred 
                                on or after the date on which the 
                                account holder attains age 59\1/2\.
                                    (IV) Any other investment in 
                                financial assets or personal capital 
                                that provides long-term gains to wages 
                                and wealth, as established under 
                                regulations promulgated by the 
                                Secretary, in consultation with the 
                                Executive Director and the American 
                                Opportunity Fund Advisory Board.
                            (ii) Exception.--Such term shall not 
                        include any expense described in clause (i) 
                        which is paid to a person who does not meet 
                        such standards as are prescribed by the 
                        Secretary, in consultation with the Executive 
                        Director and the American Opportunity Fund 
                        Advisory Board.
            (3) American opportunity account advisory board.--For 
        purposes of this subsection, the term ``American Opportunity 
        Fund Advisory Board'' means an advisory board established by 
        the Secretary consisting of individuals with expertise in 
        savings and asset-building, home financing, education 
        financing, consumer financial protection, and such other areas 
        as the Secretary may determine appropriate.

SEC. 5. ASSIGNMENT, ALIENATION, AND TREATMENT OF DECEASED INDIVIDUALS.

    (a) Assignment and Alienation.--Under regulations which shall be 
prescribed by the Executive Director, rules relating to assignment and 
alienation applicable under chapter 84 of title 5, United States Code, 
with respect to amounts held in accounts in the Thrift Savings Fund 
shall apply with respect to amounts held in AO accounts in the American 
Opportunity Fund.
    (b) Treatment of Accounts of Deceased Individuals.--In the case of 
a deceased account holder of an AO account which has an account balance 
greater than zero, upon receipt of notification of such individual's 
death, the Executive Director shall close the account and shall 
transfer the balance in such account to the AO account of such account 
holder's surviving spouse or, if there is no such account of a 
surviving spouse, to the duly appointed legal representative of the 
estate of the deceased account holder, or if there is no such 
representative, to the person or persons determined to be entitled 
thereto under the laws of the domicile of the deceased account holder.

SEC. 6. RULES GOVERNING AO ACCOUNTS RELATING TO INVESTMENT, ACCOUNTING, 
              AND REPORTING.

    (a) Investment Program.--
            (1) In general.--The American Opportunity Fund Board shall 
        invest amounts in the American Opportunity Fund in securities 
        of the United States Government issued as provided in paragraph 
        (2).
            (2) Securities.--
                    (A) In general.--The Secretary of the Treasury is 
                authorized to issue special interest-bearing 
                obligations of the United States for purchase by the 
                American Opportunity Fund.
                    (B) Investment.--
                            (i) Obligations issued for the purpose of 
                        this paragraph shall have maturities fixed with 
                        due regard to the needs of the American 
                        Opportunity Fund as determined by the Executive 
                        Director, and shall bear interest at a rate 
                        equal to the average market yield (computed by 
                        the Secretary of the Treasury on the basis of 
                        market quotations as of the end of the calendar 
                        month next preceding the date of issue of such 
                        obligations) on all marketable interest-bearing 
                        obligations of the United States then forming a 
                        part of the public debt which are not due or 
                        callable earlier than 10 years after the end of 
                        such calendar month.
                            (ii) Any average market yield computed 
                        under clause (i) which is not a multiple of 
                        one-eighth of 1 percent, shall be rounded to 
                        the nearest multiple of one-eighth of 1 
                        percent.
    (b) Independent Public Accountant.--
            (1) In general.--Under regulations which shall be 
        prescribed by the Executive Director, and subject to the 
        provisions of this title, section 8439(b) of title 5, United 
        States Code (relating to engagement of independent qualified 
        public accountant), shall apply with respect to the American 
        Opportunity Fund and accounts maintained in such Fund in the 
        same manner and to the same extent as such section relates to 
        the Thrift Savings Fund and the accounts maintained in the 
        Thrift Savings Fund.
            (2) Application rules.--For purposes of paragraph (1), 
        references in such section 8439(b) to an employee, Member, 
        former employee, or former Member shall be deemed references to 
        an account holder of an AO account in the American Opportunity 
        Fund.
    (c) Confidentiality and Disclosure.--
            (1) In general.--Except as otherwise authorized by Federal 
        law, the American Opportunity Fund Board, the Executive 
        Director, and any employee of the American Opportunity Fund 
        Board shall not disclose information with respect to the 
        American Opportunity Fund or any account maintained in such 
        Fund.
            (2) Disclosure to designee of beneficiary.--The Executive 
        Director may, subject to such requirements and conditions as he 
        may prescribe by regulations, disclose such information with 
        respect to the AO account of the beneficiary to such person or 
        persons as the beneficiary may designate in a request for or 
        consent to such disclosure, or to any other person at the 
        beneficiary's request to the extent necessary to comply with a 
        request for information or assistance made by the beneficiary 
        to such other person.

SEC. 7. AMERICAN OPPORTUNITY FUND BOARD.

    (a) In General.--There is established in the executive branch of 
the Government an American Opportunity Fund Board.
    (b) Composition, Duties, and Responsibilities.--Subject to the 
provisions of this title, the following provisions shall apply with 
respect to the American Opportunity Fund Board in the same manner and 
to the same extent as such provisions relate to the Federal Retirement 
Thrift Investment Board:
            (1) Section 8472 of title 5, United States Code (relating 
        to composition of Federal Retirement Thrift Investment Board).
            (2) Section 8474 of such title (relating to Executive 
        Director).
            (3) Section 8476 of such title (relating to administrative 
        provisions).

SEC. 8. FIDUCIARY RESPONSIBILITIES.

    (a) In General.--Under regulations of the Secretary of Labor, the 
provisions of sections 8477 and 8478 of title 5, United States Code, 
shall apply in connection with the American Opportunity Fund and the 
accounts maintained in such Fund in the same manner and to the same 
extent as such provisions apply in connection with the Thrift Savings 
Fund and the accounts maintained in the Thrift Savings Fund.
    (b) Investigative Authority.--Any authority available to the 
Secretary of Labor under section 504 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1134) is hereby made available to the 
Secretary of Labor, and any officer designated by the Secretary of 
Labor, to determine whether any person has violated, or is about to 
violate, any provision applicable under subsection (a).
    (c) Exculpatory Provisions; Insurance.--
            (1) In general.--Any provision in an agreement or 
        instrument which purports to relieve a fiduciary from 
        responsibility or liability for any responsibility, obligation, 
        or duty under this title shall be void.
            (2) Insurance.--Amounts in the American Opportunity Fund 
        available for administrative expenses shall be available and 
        may be used at the discretion of the Executive Director to 
        purchase insurance to cover potential liability of persons who 
        serve in a fiduciary capacity with respect to the Fund and 
        accounts maintained therein, without regard to whether a policy 
        of insurance permits recourse by the insurer against the 
        fiduciary in the case of a breach of a fiduciary obligation.

SEC. 9. ACCOUNTS DISREGARDED IN DETERMINING ELIGIBILITY FOR FEDERAL 
              BENEFITS.

    Amounts in any AO account shall not be taken into account in 
determining any individual's or household's financial eligibility for, 
or amount of, any benefit or service, paid for in whole or in part with 
Federal funds, including student financial aid.

SEC. 10. REPORTS.

    (a) Reports to Congress.--The Executive Director, in consultation 
with the Secretary, shall annually transmit a written report to the 
Congress. Such report shall include--
            (1) a detailed description of the status and operation of 
        the American Opportunity Fund and the management of the AO 
        accounts; and
            (2) a detailed accounting of the administrative expenses in 
        carrying out this title, including the ratio of such 
        administrative expenses to the balance of the American 
        Opportunity Fund and the methodology adopted by the Executive 
        Director for allocating such expenses among the AO accounts.
    (b) Reports to Account Holders.--The American Opportunity Fund 
Board shall prescribe regulations under which each individual for whom 
an AO account is maintained shall be furnished with an annual statement 
relating to the individual's account, which shall include--
            (1) a statement of the balance of individual's AO account;
            (2) a projection of the account's growth by the time the 
        individual attains the age of 18; and
            (3) such other information as the Secretary deems relevant.

SEC. 11. PROGRAMS FOR PROMOTING FINANCIAL CAPABILITY.

    The Secretary of the Treasury, in coordination with the Financial 
Literacy and Education Commission, shall develop programs to promote 
the financial capability of account holders of AO accounts.

SEC. 12. TAX TREATMENT.

    (a) Contributions and Distributions.--Part III of subchapter B of 
chapter 1 of the Internal Revenue Code of 1986 is amended by inserting 
after section 139I the following new section:

``SEC. 139J. CONTRIBUTIONS TO AND DISTRIBUTIONS FROM AO ACCOUNTS.

    ``Gross income shall not include--
            ``(1) any contribution credited to the AO account of the 
        taxpayer under section 4(a)(3) of the American Opportunity 
        Accounts Act, and
            ``(2) any distribution from such an AO account.''.
    (b) Tax Treatment of Earnings and Distributions.--Subchapter F of 
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new part:

          ``PART IX--AMERICAN OPPORTUNITY FUND AND AO ACCOUNTS

``Sec. 530A. American Opportunity Fund and AO accounts.

``SEC. 530A. AMERICAN OPPORTUNITY FUND AND AO ACCOUNTS.

    ``(a) General Rule.--The American Opportunity Fund and AO accounts 
shall be exempt from taxation under this subtitle. Notwithstanding the 
preceding sentence, a AO account shall be subject to the taxes imposed 
by section 511 (relating to imposition of tax on unrelated business 
income of charitable organizations).
    ``(b) Definitions.--For purposes of this section, the terms 
`American Opportunity Fund' and `AO account' have the meanings given 
such terms under the American Opportunity Accounts Act.''.
    (c) Conforming Amendments.--
            (1) The table of sections for part III of subchapter B of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        inserting after the item related to section 139I the following 
        new item:

``Sec. 139J. Contributions to and distributions from AO accounts.''.
            (2) The table of parts for subchapter F of chapter 1 of 
        such Code is amended by adding at the end the following new 
        item:

        ``Part IX--American Opportunity Fund and AO Accounts''.

    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.
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