II 

112TH CONGRESS 

2D SESSION S. 3466 

To amend the Internal Revenue Code of 1986 to provide a credit for 

employer-provided job training, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2012 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a credit for employer-provided job training, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Better Education and 

5 Skills Training for America’s Workforce Act’’. 

6 SEC. 2. JOB TRAINING TAX CREDIT. 

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 is amended by adding at the end the following new 

10 section: 


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1 ‘‘SEC. 45S. JOB TRAINING CREDIT. 

2 ‘‘(a) IN GENERAL.—For the purposes of section 38, 

3 the job training credit determined under this section for 

4 the taxable year is an amount equal to 100 percent of the 

5 qualified training expenses paid by the qualifying taxpayer 

6 during the taxable year. 

7 ‘‘(b) LIMITATION.—The credit allowed under sub8 section (a) with respect to any eligible trainee of the quali9 fying taxpayer shall not exceed the excess (if any) of 

10 $4,000 over the aggregate credit allowed to such taxpayer 

11 under this section with respect to such eligible trainee for 

12 all prior taxable years. 

13 ‘‘(c) DEFINITIONS.—For purposes of this section— 

14 ‘‘(1) QUALIFIED TRAINING EXPENSES.— 

15 ‘‘(A) IN GENERAL.—The term ‘qualified 

16 training expenses’ means, with respect to any 

17 eligible trainee of the qualifying taxpayer, ex18 penses paid or incurred by such taxpayer for 

19 qualified tuition costs of such eligible trainee. 

20 ‘‘(B) QUALIFIED TUITION COSTS.—The 

21 term ‘qualified tuition costs’ means costs for 

22 books and enrollment in a training program at 

23 a qualified educational organization, the out24 come of which, if completed, will provide the eli25 gible trainee a certificate or credential recog26 nized by a State accrediting body, Federal ApVerDate Mar 15 2010 16:27 Aug 02, 2012 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3466.IS S3466

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1 prenticeship Agency, or any other national ac2 crediting body recognized by the Department of 

3 Education as an independent, third-party ac4 crediting body. Such training program— 

5 ‘‘(i) may include a single course, mul6 tiple courses, or a combination of work 

7 training and study, and 

8 ‘‘(ii) must be reasonably necessary for 

9 employment with the qualifying taxpayer. 

10 ‘‘(C) QUALIFIED EDUCATIONAL ORGANIZA11 TION.—The term ‘qualified educational organi12 zation’ means any educational organization de13 scribed in section 101 of the Higher Education 

14 Act of 1965. 

15 ‘‘(2) QUALIFYING TAXPAYER.—The term ‘quali16 fying taxpayer’ means any taxpayer who— 

17 ‘‘(A) with respect to any eligible trainee, is 

18 training and hiring individuals for positions 

19 based in the United States, and 

20 ‘‘(B) provides, with respect to any eligible 

21 trainee, such documentation as required by the 

22 Secretary regarding qualified training expenses 

23 and proof of unemployment status as described 

24 in paragraph (3)(A). 


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1 ‘‘(3) ELIGIBLE TRAINEE.—The term ‘eligible 

2 trainee’ means any individual who— 

3 ‘‘(A) has been unemployed for at least 90 

4 days before the date of enrollment in a training 

5 program described in paragraph (1)(B), and 

6 ‘‘(B) had not been employed by the quali7 fying taxpayer at any time prior to the date on 

8 which such trainee was hired. 

9 ‘‘(d) SPECIAL RULES.— 

10 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No credit 

11 shall be allowed under subsection (a) for any quali12 fied training expense for which a deduction or other 

13 credit is allowed to the taxpayer under any other 

14 provision of this chapter. 

15 ‘‘(2) AGGREGATION.—For purposes of this sec16 tion, all persons treated as a single employer under 

17 subsection (a) or (b) or section 52, or subsection (m) 

18 or (o) of section 414, shall be treated as one person. 

19 ‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—A 

20 taxpayer may elect (at such time and in such manner as 

21 the Secretary may by regulations prescribe) to have this 

22 section not apply for any taxable year. 

23 ‘‘(f) TERMINATION.—This section shall not apply to 

24 expenses paid after December 31, 2015.’’. 


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1 (b) CREDIT TO BE PART OF GENERAL BUSINESS

2 CREDIT.—Subsection (b) of section 38 of the Internal 

3 Revenue Code of 1986 is amended by striking ‘‘plus’’ at 

4 the end of paragraph (35), by striking the period at the 

5 end of paragraph (36) and inserting ‘‘, plus’’, and by add6 ing at the end the following new paragraph: 

7 ‘‘(37) the job training credit determined under 

8 section 45S(a).’’. 

9 (c) CREDIT ALLOWED AGAINST ALTERNATIVE MIN10 IMUM TAX.—Section 38(c)(4)(B) of the Internal Revenue 

11 Code of 1986 is amended by redesignating clauses (vii), 

12 (viii), and (ix) as clauses (viii), (ix), and (x), respectively, 

13 and by inserting after clause (vi) the following new clause: 

14 ‘‘(vii) the credit determined under sec15 tion 45S,’’. 

16 (d) TECHNICAL AMENDMENT.—Section 6501(m) of 

17 the Internal Revenue Code of 1986 is amended by insert18 ing ‘‘ ‘45S(e),’ ’’ after ‘‘ ‘45H(g),’ ’’. 

19 (e) CLERICAL AMENDMENT.—The table of sections 

20 for subpart D of part IV of subchapter A of chapter 1 

21 of such Code is amended by adding at the end the fol22 lowing new item: 

‘‘Sec. 45S. Job training credit.’’. 

23 (f) EFFECTIVE DATES.— 

24 (1) IN GENERAL.—The amendments made by 

25 this section shall apply to expenses paid or incurred 


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1 after the date of the enactment of this Act, in tax2 able years ending after such date. 

3 (2) MINIMUM TAX.—The amendments made by 

4 subsection (c) shall apply to credits determined 

5 under section 45S of the Internal Revenue Code of 

6 1986 in taxable years ending after the date of the 

7 enactment of this Act, and to carrybacks of such 

8 credits. 

9 SEC. 3. QUALIFIED JOB TRAINING PARTNERSHIPS CREDIT. 

10 (a) IN GENERAL.—Subpart E of part IV of sub11 chapter A of chapter 1 of the Internal Revenue Code of 

12 1986 is amended by inserting after section 48D the fol13 lowing new section: 

14 ‘‘SEC. 48E. QUALIFIED JOB TRAINING PARTNERSHIPS 

15 CREDIT. 

16 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

17 Qualified Job Training Partnership credit for any taxable 

18 year is an amount equal to the percentage determined by 

19 the Secretary (not to exceed 100 percent) of the qualified 

20 investment for such taxable year with respect to any 

21 Qualified Job Training Partnership. 

22 ‘‘(b) QUALIFIED INVESTMENT.— 

23 ‘‘(1) IN GENERAL.—For purposes of subsection 

24 (a), the qualified investment for any taxable year is 

25 the aggregate amount of the costs paid or incurred 


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1 in such taxable year for expenses necessary for and 

2 directly related to the conduct of a Qualified Job 

3 Training Partnership in the form of contributions of 

4 cash, cash equivalent, equipment, or any combina5 tion of the three where 100 percent of the invest6 ment is used for the planning, implementation, or 

7 operation of a Qualified Job Training Partnership 

8 and the training financed through the investment 

9 must result in a type of certificate or credential rec10 ognized by a State accrediting body, Federal Ap11 prenticeship Agency, or any other national accred12 iting body recognized by the Department of Edu13 cation as an independent, third-party accrediting 

14 body. 

15 ‘‘(2) LIMITATION.—The amount which is treat16 ed as qualified investment for all taxable years with 

17 respect to any Qualified Job Training Partnership 

18 shall not exceed the amount certified by the Sec19 retary as eligible for the credit under this section. 

20 ‘‘(3) EXCLUSIONS.—The qualified investment 

21 for any taxable year with respect to any Qualified 

22 Job Training Partnership shall not take into account 

23 any cost for student tuition or for any other expense 

24 as determined by the Secretary as appropriate to 

25 carry out the purposes of this section. 


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1 ‘‘(4) CERTAIN PROGRESS EXPENDITURE RULES

2 MADE APPLICABLE.—In the case of costs described 

3 in paragraph (1) that are paid for property of a 

4 character subject to an allowance for depreciation, 

5 rules similar to the rules of subsections (c)(4) and 

6 (d) of section 46 (as in effect on the day before the 

7 date of the enactment of the Revenue Reconciliation 

8 Act of 1990) shall apply for purposes of this section. 

9 ‘‘(c) QUALIFIED JOB TRAINING PARTNERSHIP.— 

10 ‘‘(1) IN GENERAL.—The term ‘Qualified Job 

11 Training Partnership’ means a formal or informal 

12 partnership between at least 1 eligible private busi13 ness employer and— 

14 ‘‘(A) 1 qualified educational institution, or 

15 ‘‘(B) 1 labor organization (as defined in 

16 section 2(5) of the National Labor Relations 

17 Act), 

18 where the stated goal of the partnership is to train 

19 students in job-ready skills. 

20 ‘‘(2) ELIGIBLE PRIVATE BUSINESS EM21 PLOYER.—The term ‘eligible private business em22 ployer’ means— 

23 ‘‘(A) a business entity at least 50 percent 

24 of the gross income of which is derived from 


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1 qualified production activities (within the mean2 ing of section 199(c)), or 

3 ‘‘(B) any type of domestic business entity 

4 the average number of employees of which for 

5 any taxable year is not more than 500 employ6 ees. 

7 ‘‘(3) QUALIFIED EDUCATIONAL ORGANIZA8 TION.—The term ‘qualified educational organization’ 

9 means any educational organization described in sec10 tion 101 of the Higher Education Act of 1965 which 

11 provides a 2-year program that culminates in an as12 sociate degree. 

13 ‘‘(d) QUALIFIED JOB TRAINING PARTNERSHIP PRO14 GRAM.— 

15 ‘‘(1) ESTABLISHMENT.— 

16 ‘‘(A) IN GENERAL.—Not later than 60 

17 days after the date of the enactment of this sec18 tion, the Secretary, in consultation with the 

19 Secretary of Labor, shall establish a Qualified 

20 Job Training Partnership program to consider 

21 and award certifications for qualified invest22 ments eligible for credits under this section to 

23 Qualified Job Training Partnerships. 


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1 ‘‘(B) LIMITATION.—The total amount of 

2 credits that may be allocated under the pro3 gram shall not exceed $1,000,000,000. 

4 ‘‘(2) CERTIFICATION.— 

5 ‘‘(A) APPLICATION PERIOD.—Each appli6 cant for certification under this paragraph shall 

7 submit an application containing such informa8 tion as the Secretary may require during the 

9 period beginning on the date the Secretary es10 tablishes the program under paragraph (1). 

11 ‘‘(B) TIME FOR REVIEW OF APPLICA12 TIONS.—The Secretary shall take action to ap13 prove or deny any application under subpara14 graph (A) within 30 days of the submission of 

15 such application. 

16 ‘‘(C) MULTI-YEAR APPLICATIONS.—An ap17 plication for certification under subparagraph 

18 (A) may include a request for an allocation of 

19 credits for more than 1 year. 

20 ‘‘(3) SELECTION CRITERIA.—In determining 

21 the Qualified Job Training Partnerships with re22 spect to which qualified investments may be certified 

23 under this section, the Secretary— 

24 ‘‘(A) shall give priority to those applica25 tions which demonstrate— 


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1 ‘‘(i) the greatest probability that those 

2 who complete the program will secure em3 ployment; 

4 ‘‘(ii) the greatest potential for pro5 viding workers who complete the program 

6 with skills that can provide long-term job 

7 and income security; 

8 ‘‘(iii) the strongest market demand 

9 for the type of training offered; 

10 ‘‘(iv) the greatest probability that the 

11 program would create a net increase in job 

12 training opportunities; 

13 ‘‘(v) a strong need in the community 

14 for skills training; 

15 ‘‘(vi) the ability to allow nontradi16 tional learners to complete the training; 

17 and 

18 ‘‘(vii) the ability and capacity to im19 plement the program in a reasonable pe20 riod of time; and 

21 ‘‘(B) shall take into additional consider22 ation which applications show— 

23 ‘‘(i) the ability to leverage additional 

24 sources of capital; and 


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1 ‘‘(ii) the greatest ability to offer train2 ing programs that result in a certificate or 

3 credential (within the meaning of sub4 section (b)(1)) that is stackable or portable 

5 or both. 

6 ‘‘(4) REVIEW AND ADDITIONAL ALLOCATION.— 

7 ‘‘(A) REVIEW.—Not later than 1 year after 

8 the date of enactment of this section, the Sec9 retary shall review the credits allocated under 

10 this section as of such date. 

11 ‘‘(B) ADDITIONAL ALLOCATION.—If the 

12 Secretary determines at the time of the review 

13 that credits under this section are available for 

14 allocation pursuant to the requirements set 

15 forth in paragraph (2), the Secretary is author16 ized to allocate such available credits through 

17 the conduct of an additional program or pro18 grams for applications for certification. 

19 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec20 retary shall, upon making a certification under this 

21 subsection, publicly disclose the identity of the appli22 cant and the amount of the credit with respect to 

23 such applicant. 

24 ‘‘(e) SPECIAL RULES.— 


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1 ‘‘(1) BASIS ADJUSTMENT.—For purposes of 

2 this subtitle, if a credit is allowed under this section 

3 for an expenditure related to property of a character 

4 subject to an allowance for depreciation, the basis of 

5 such property shall be reduced by the amount of 

6 such credit. 

7 ‘‘(2) DENIAL OF DOUBLE BENEFIT.— 

8 ‘‘(A) BONUS DEPRECIATION.—A credit 

9 shall not be allowed under this section for any 

10 investment for which bonus depreciation is al11 lowed under section 168(k), 1400L(b)(1), or 

12 1400N(d)(1). 

13 ‘‘(B) DEDUCTIONS.—No deduction under 

14 this subtitle shall be allowed for the portion of 

15 the expenses otherwise allowable as a deduction 

16 taken into account in determining the credit 

17 under this section for the taxable year which is 

18 equal to the amount of the credit determined 

19 for such taxable year under subsection (a) at20 tributable to such portion. This subparagraph 

21 shall not apply to expenses related to property 

22 of a character subject to an allowance for de23 preciation the basis of which is reduced under 

24 paragraph (1), or which are described in section 

25 280C(g).’’. 


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1 (b) INCLUSION AS PART OF INVESTMENT CREDIT.— 

2 Section 46 of the Internal Revenue Code of 1986 is 

3 amended— 

4 (1) by adding a comma at the end of paragraph 

5 (4), 

6 (2) by striking ‘‘and’’ at the end of paragraph 

7 (5), 

8 (3) by striking the period at the end of para9 graph (6) and inserting ‘‘, and’’, and 

10 (4) by adding at the end the following new 

11 paragraph: 

12 ‘‘(7) the Qualified Job Training Partnerships 

13 credit.’’. 

14 (c) CONFORMING AMENDMENTS.— 

15 (1) Section 49(a)(1)(C) of the Internal Revenue 

16 Code of 1986 is amended— 

17 (A) by striking ‘‘and’’ at the end of clause 

18 (v), 

19 (B) by striking the period at the end of 

20 clause (vi) and inserting ‘‘, and’’, and 

21 (C) by adding at the end the following new 

22 clause: 

23 ‘‘(vii) the basis of any property to 

24 which paragraph (1) of section 48E(e) ap25 plies which is part of a Qualified Job 


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1 Training Partnership under such section 

2 48E.’’. 

3 (2) Section 280C of such Code is amended by 

4 adding at the end the following new subsection: 

5 ‘‘(j) QUALIFIED JOB TRAINING PARTNERSHIP CRED6 IT.— 

7 ‘‘(1) IN GENERAL.—No deduction shall be al8 lowed for that portion of the qualified investment (as 

9 defined in section 48E(b)) otherwise allowable as a 

10 deduction for the taxable year which is equal to the 

11 amount of the credit determined for such taxable 

12 year under section 48E(a), reduced by— 

13 ‘‘(A) the amount disallowed as a deduction 

14 by reason of section 48E(e)(2)(B), and 

15 ‘‘(B) the amount of any basis reduction 

16 under section 48E(e)(1). 

17 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP18 ITALIZES RATHER THAN DEDUCTS EXPENSES.—In 

19 the case of expenses described in paragraph (1)(A) 

20 taken into account in determining the credit under 

21 section 48E for the taxable year, if— 

22 ‘‘(A) the amount of the portion of the 

23 credit determined under such section with re24 spect to such expenses, exceeds 


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1 ‘‘(B) the amount allowable as a deduction 

2 for such taxable year for such expenses (deter3 mined without regard to paragraph (1)), 

4 the amount chargeable to capital account for the 

5 taxable year for such expenses shall be reduced by 

6 the amount of such excess. 

7 ‘‘(3) CONTROLLED GROUPS.—Paragraph (3) of 

8 subsection (b) shall apply for purposes of this sub9 section.’’. 

10 (d) CLERICAL AMENDMENT.—The table of sections 

11 for subpart E of part IV of subchapter A of chapter 1 

12 of the Internal Revenue Code of 1986 is amended by in13 serting after the item relating to section 48D the following 

14 new item: 

‘‘Sec. 48E. Qualified Job Training Partnership credit.’’. 

15 (e) GRANTS FOR QUALIFIED INVESTMENTS IN

16 QUALIFIED JOB TRAINING PARTNERSHIPS IN LIEU OF

17 TAX CREDITS.— 

18 (1) IN GENERAL.—Upon application, the Sec19 retary of the Treasury shall, subject to the require20 ments of this subsection, provide a grant to each 

21 person who makes a qualified investment in a Quali22 fied Job Training Partnership in an amount not to 

23 exceed 100 percent of such investment. 

24 (2) APPLICATION.— 


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1 (A) IN GENERAL.—At the stated election 

2 of the applicant, an application for certification 

3 under section 48E(d)(2) of the Internal Rev4 enue Code of 1986 for a credit under such sec5 tion for any taxable year shall be considered to 

6 be an application for a grant under paragraph 

7 (1) for such taxable year. 

8 (B) SUBMISSION DATE.—An application 

9 for a grant under paragraph (1) for any taxable 

10 year shall be submitted— 

11 (i) not earlier than the day after the 

12 last day of such taxable year, and 

13 (ii) not later than the due date (in14 cluding extensions) for filing the return of 

15 tax for such taxable year. 

16 (C) INFORMATION TO BE SUBMITTED.—An 

17 application for a grant under paragraph (1) 

18 shall include such information and be in such 

19 form as the Secretary of the Treasury may re20 quire to state the amount of the credit allow21 able (but for the receipt of a grant under this 

22 subsection) under section 48E for the taxable 

23 year for the qualified investment with respect to 

24 which such application is made. 

25 (3) TIME FOR PAYMENT OF GRANT.— 


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1 (A) IN GENERAL.—The Secretary of the 

2 Treasury shall make payment of the amount of 

3 any grant under paragraph (1) during the 30- 

4 day period beginning on the later of— 

5 (i) the date of the application for such 

6 grant, or 

7 (ii) the date the qualified investment 

8 for which the grant is being made is made. 

9 (B) REGULATIONS.—In the case of invest10 ments of an ongoing nature, the Secretary of 

11 the Treasury shall issue regulations to deter12 mine the date on which a qualified investment 

13 shall be deemed to have been made for purposes 

14 of this paragraph. 

15 (4) QUALIFIED INVESTMENT.—For purposes of 

16 this subsection, the term ‘‘qualified investment’’ 

17 means a qualified investment that is certified under 

18 section 48E(d) of the Internal Revenue Code of 

19 1986 for purposes of the credit under such section 

20 48E. 

21 (5) APPLICATION OF CERTAIN RULES.— 

22 (A) IN GENERAL.—In making grants 

23 under this subsection, the Secretary of the 

24 Treasury shall apply rules similar to the rules 

25 of section 50 of the Internal Revenue Code of 


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1 1986. In applying such rules, any increase in 

2 tax under chapter 1 of such Code by reason of 

3 an investment ceasing to be a qualified invest4 ment shall be imposed on the person to whom 

5 the grant was made. 

6 (B) SPECIAL RULES.— 

7 (i) RECAPTURE OF EXCESSIVE GRANT

8 AMOUNTS.—If the amount of a grant made 

9 under this subsection exceeds the amount 

10 allowable as a grant under this subsection, 

11 such excess shall be recaptured under sub12 paragraph (A) as if the investment to 

13 which such excess portion of the grant re14 lates had ceased to be a qualified invest15 ment immediately after such grant was 

16 made. 

17 (ii) GRANT INFORMATION NOT TREAT18 ED AS RETURN INFORMATION.—In no 

19 event shall the amount of a grant made 

20 under paragraph (1), the identity of the 

21 person to whom such grant was made, or 

22 a description of the investment with re23 spect to which such grant was made be 

24 treated as return information for purposes 


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1 of section 6103 of the Internal Revenue 

2 Code of 1986. 

3 (6) SECRETARY.—Any reference in this sub4 section to the Secretary of the Treasury shall be 

5 treated as including the Secretary’s delegate. 

6 (7) OTHER TERMS.—Any term used in this sub7 section which is also used in section 48E of the In8 ternal Revenue Code of 1986 shall have the same 

9 meaning for purposes of this subsection as when 

10 used in such section. 

11 (8) DENIAL OF DOUBLE BENEFIT.—No credit 

12 shall be allowed under section 46(7) of the Internal 

13 Revenue Code of 1986 by reason of section 48E of 

14 such Code for any investment for which a grant is 

15 awarded under this subsection. 

16 (9) APPROPRIATIONS.—There is hereby appro17 priated to the Secretary of the Treasury such sums 

18 as may be necessary to carry out this subsection. 

19 (f) EFFECTIVE DATE.—The amendments made by 

20 subsections (a) through (d) of this section shall apply to 

21 amounts paid or incurred after the date of the enactment 

22 of this Act, in taxable years beginning after such date. 

Æ 


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