II 

Calendar No. 119 

110TH CONGRESS 

1ST SESSION H. R. 1681 

IN THE SENATE OF THE UNITED STATES 

APRIL 18, 2007 

Received; read twice and placed on the calendar 

AN ACT 

To amend the Congressional Charter of The American National Red Cross to modernize its governance structure, 

to enhance the ability of the board of governors of The 

American National Red Cross to support the critical 

mission of The American National Red Cross in the 

21st century, 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 ‘‘The American Na5 tional Red Cross Governance Modernization Act of 2007’’. 

6 SEC. 2. FINDINGS; SENSE OF CONGRESS. 

7 (a) FINDINGS.—Congress makes the following find8 ings: 


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1 (1) Substantive changes to the Congressional 

2 Charter of The American National Red Cross have 

3 not been made since 1947. 

4 (2) In February 2006, the board of governors 

5 of The American National Red Cross (the ‘‘Board of 

6 Governors’’) commissioned an independent review 

7 and analysis of the Board of Governors’ role, com8 position, size, relationship with management, govern9 ance relationship with chartered units of The Amer10 ican National Red Cross, and whistleblower and 

11 audit functions. 

12 (3) In an October 2006 report of the Board of 

13 Governors, entitled ‘‘American Red Cross Govern14 ance for the 21st Century’’ (the ‘‘Governance Re15 port’’), the Board of Governors recommended 

16 changes to the Congressional Charter, bylaws, and 

17 other governing documents of The American Na18 tional Red Cross to modernize and enhance the ef19 fectiveness of the Board of Governors and govern20 ance structure of The American National Red Cross. 

21 (4) It is in the national interest to create a 

22 more efficient governance structure of The American 

23 National Red Cross and to enhance the Board of 

24 Governors’ ability to support the critical mission of 


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1 The American National Red Cross in the 21st cen2 tury. 

3 (5) It is in the national interest to clarify the 

4 role of the Board of Governors as a governance and 

5 strategic oversight board and for The American Na6 tional Red Cross to amend its bylaws, consistent 

7 with the recommendations described in the Govern8 ance Report, to clarify the role of the Board of Gov9 ernors and to outline the areas of its responsibility, 

10 including— 

11 (A) reviewing and approving the mission 

12 statement for The American National Red 

13 Cross; 

14 (B) approving and overseeing the corpora15 tion’s strategic plan and maintaining strategic 

16 oversight of operational matters; 

17 (C) selecting, evaluating, and determining 

18 the level of compensation of the corporation’s 

19 chief executive officer; 

20 (D) evaluating the performance and estab21 lishing the compensation of the senior leader22 ship team and providing for management suc23 cession; 


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1 (E) overseeing the financial reporting and 

2 audit process, internal controls, and legal com3 pliance; 

4 (F) holding management accountable for 

5 performance; 

6 (G) providing oversight of the financial 

7 stability of the corporation; 

8 (H) ensuring the inclusiveness and diver9 sity of the corporation; 

10 (I) ensuring the chapters of the corpora11 tion are geographically and regionally diverse; 

12 (J) providing oversight of the protection of 

13 the brand of the corporation; and 

14 (K) assisting with fundraising on behalf of 

15 the corporation. 

16 (6)(A) The selection of members of the Board 

17 of Governors is a critical component of effective gov18 ernance for The American National Red Cross, and, 

19 as such, it is in the national interest that The Amer20 ican National Red Cross amend its bylaws to provide 

21 a method of selection consistent with that described 

22 in the Governance Report. 

23 (B) The new method of selection should replace 

24 the current process by which— 


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1 (i) 30 chartered unit-elected members of 

2 the Board of Governors are selected by a non3 Board committee which includes 2 members of 

4 the Board of Governors and other individuals 

5 elected by the chartered units themselves; 

6 (ii) 12 at-large members of the Board of 

7 Governors are nominated by a Board committee 

8 and elected by the Board of Governors; and 

9 (iii) 8 members of the Board of Governors 

10 are appointed by the President of the United 

11 States. 

12 (C) The new method of selection described in 

13 the Governance Report reflects the single category of 

14 members of the Board of Governors that will result 

15 from the implementation of this Act: 

16 (i) All Board members (except for the 

17 chairman of the Board of Governors) would be 

18 nominated by a single committee of the Board 

19 of Governors taking into account the criteria 

20 outlined in the Governance Report to assure the 

21 expertise, skills, and experience of a governing 

22 board. 

23 (ii) The nominated members would be con24 sidered for approval by the full Board of Gov25 ernors and then submitted to The American 


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1 National Red Cross annual meeting of delegates 

2 for election, in keeping with the standard cor3 porate practice whereby shareholders of a cor4 poration elect members of a board of directors 

5 at its annual meeting. 

6 (7) The United States Supreme Court held The 

7 American National Red Cross to be an instrumen8 tality of the United States, and it is in the national 

9 interest that the Congressional Charter confirm that 

10 status and that any changes to the Congressional 

11 Charter do not affect the rights and obligations of 

12 The American National Red Cross to carry out its 

13 purposes. 

14 (8) Given the role of The American National 

15 Red Cross in carrying out its services, programs, 

16 and activities, and meeting its various obligations, 

17 the effectiveness of The American National Red 

18 Cross will be promoted by the creation of an organi19 zational ombudsman who— 

20 (A) will be a neutral or impartial dispute 

21 resolution practitioner whose major function 

22 will be to provide confidential and informal as23 sistance to the many internal and external 

24 stakeholders of The American National Red 

25 Cross; 


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1 (B) will report to the chief executive officer 

2 and the audit committee of the Board of Gov3 ernors; and 

4 (C) will have access to anyone and any 

5 documents in The American National Red 

6 Cross. 

7 (b) SENSE OF CONGRESS.—It is the sense of Con8 gress that— 

9 (1) charitable organizations are an indispen10 sable part of American society, but these organiza11 tions can only fulfill their important roles by main12 taining the trust of the American public; 

13 (2) trust is fostered by effective governance and 

14 transparency, which are the principal goals of the 

15 recommendations of the Board of Governors in the 

16 Governance Report and this Act; 

17 (3) Federal and State action play an important 

18 role in ensuring effective governance and trans19 parency by setting standards, rooting out violations, 

20 and informing the public; 

21 (4) while The American National Red Cross is 

22 and will remain a Federally chartered instrumen23 tality of the United States, and it has the rights and 

24 obligations consistent with that status, The Amer25 ican National Red Cross nevertheless should mainVerDate Aug 31 2005 05:32 Apr 19, 2007 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1681.PCS H1681

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1 tain appropriate communications with State regu2 lators of charitable organizations and should cooper3 ate with them as appropriate in specific matters as 

4 they arise from time to time; and 

5 (5) while The American National Red Cross is 

6 and will remain a Federally chartered instrumen7 tality of the United States, and it has the rights and 

8 obligations consistent with that status, The Amer9 ican National Red Cross nevertheless should main10 tain appropriate communications and collaborations 

11 with local, community, and faith-based non-profit or12 ganizations, including those organizations that work 

13 within minority communities. 

14 SEC. 3. ORGANIZATION. 

15 Section 300101 of title 36, United States Code, is 

16 amended— 

17 (1) in subsection (a), by inserting ‘‘a Federally 

18 chartered instrumentality of the United States and’’ 

19 before ‘‘a body corporate and politic’’; and 

20 (2) in subsection (b), by inserting at the end 

21 the following new sentence: ‘‘The corporation may 

22 conduct its business and affairs, and otherwise hold 

23 itself out, as the ‘American Red Cross’ in any juris24 diction.’’. 


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1 SEC. 4. PURPOSES. 

2 Section 300102 of title 36, United States Code, is 

3 amended— 

4 (1) by striking ‘‘and’’ at the end of paragraph 

5 (3); 

6 (2) by striking the period at the end of para7 graph (4) and inserting ‘‘; and’’; and 

8 (3) by adding at the end the following para9 graph: 

10 ‘‘(5) to conduct other activities consistent with 

11 the foregoing purposes.’’. 

12 SEC. 5. MEMBERSHIP AND CHAPTERS. 

13 Section 300103 of title 36, United States Code, is 

14 amended— 

15 (1) in subsection (a), by inserting ‘‘, or as oth16 erwise provided,’’ before ‘‘in the bylaws’’; 

17 (2) in subsection (b)(1)— 

18 (A) by striking ‘‘board of governors’’ and 

19 inserting ‘‘corporation’’; and 

20 (B) by inserting ‘‘policies and’’ before 

21 ‘‘regulations related’’; and 

22 (3) in subsection (b)(2)— 

23 (A) by inserting ‘‘policies and’’ before 

24 ‘‘regulations shall require’’; and 

25 (B) by striking ‘‘national convention’’ and 

26 inserting ‘‘annual meeting’’. 


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1 SEC. 6. BOARD OF GOVERNORS. 

2 Section 300104 of title 36, United States Code, is 

3 amended to read as follows: 

4 ‘‘§ 300104. Board of governors 

5 ‘‘(a) BOARD OF GOVERNORS.— 

6 ‘‘(1) IN GENERAL.—The board of governors is 

7 the governing body of the corporation with all pow8 ers of governing and directing, and of overseeing the 

9 management of the business and affairs of, the cor10 poration. 

11 ‘‘(2) NUMBER.—The board of governors shall 

12 fix by resolution, from time to time, the number of 

13 members constituting the entire board of governors, 

14 provided that— 

15 ‘‘(A) as of March 31, 2009, and thereafter, 

16 there shall be no fewer than 12 and no more 

17 than 25 members; and 

18 ‘‘(B) as of March 31, 2012, and thereafter, 

19 there shall be no fewer than 12 and no more 

20 than 20 members constituting the entire board. 

21 Procedures to implement the preceding sentence 

22 shall be provided in the bylaws. 

23 ‘‘(3) APPOINTMENT.—The governors shall be 

24 appointed or elected in the following manner: 

25 ‘‘(A) CHAIRMAN.— 


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1 ‘‘(i) IN GENERAL.—The board of gov2 ernors, in accordance with procedures pro3 vided in the bylaws, shall recommend to 

4 the President an individual to serve as 

5 chairman of the board of governors. If 

6 such recommendation is approved by the 

7 President, the President shall appoint such 

8 individual to serve as chairman of the 

9 board of governors. 

10 ‘‘(ii) VACANCIES.—Vacancies in the 

11 office of the chairman, including vacancies 

12 resulting from the resignation, death, or 

13 removal by the President of the chairman, 

14 shall be filled in the same manner de15 scribed in clause (i). 

16 ‘‘(iii) DUTIES.—The chairman shall 

17 be a member of the board of governors 

18 and, when present, shall preside at meet19 ings of the board of governors and shall 

20 have such other duties and responsibilities 

21 as may be provided in the bylaws or a res22 olution of the board of governors. 

23 ‘‘(B) OTHER MEMBERS.— 

24 ‘‘(i) IN GENERAL.—Members of the 

25 board of governors other than the chairVerDate Aug 31 2005 05:32 Apr 19, 2007 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1681.PCS H1681

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1 man shall be elected at the annual meeting 

2 of the corporation in accordance with such 

3 procedures as may be provided in the by4 laws. 

5 ‘‘(ii) VACANCIES.—Vacancies in any 

6 such elected board position and in any 

7 newly created board position may be filled 

8 by a vote of the remaining members of the 

9 board of governors in accordance with such 

10 procedures as may be provided in the by11 laws. 

12 ‘‘(b) TERMS OF OFFICE.— 

13 ‘‘(1) IN GENERAL.—The term of office of each 

14 member of the board of governors shall be 3 years, 

15 except that— 

16 ‘‘(A) the board of governors may provide 

17 under the bylaws that the terms of office of 

18 members of the board of governors elected to 

19 the board of governors before March 31, 2012, 

20 may be less than 3 years in order to implement 

21 the provisions of subparagraphs (A) and (B) of 

22 subsection (a)(2); and 

23 ‘‘(B) any member of the board of gov24 ernors elected by the board to fill a vacancy in 

25 a board position arising before the expiration of 


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1 its term may, as determined by the board, serve 

2 for the remainder of that term or until the next 

3 annual meeting of the corporation. 

4 ‘‘(2) STAGGERED TERMS.—The terms of office 

5 of members of the board of governors (other than 

6 the chairman) shall be staggered such that, by 

March 31, 2012, and thereafter, 1 7 ⁄3 of the entire 

board (or as near to 1 8 ⁄3 as practicable) shall be elect9 ed at each successive annual meeting of the corpora10 tion with the term of office of each member of the 

11 board of governors elected at an annual meeting ex12 piring at the third annual meeting following the an13 nual meeting at which such member was elected. 

14 ‘‘(3) TERM LIMITS.—No person may serve as a 

15 member of the board of governors for more than 

16 such number of terms of office or years as may be 

17 provided in the bylaws. 

18 ‘‘(c) COMMITTEES AND OFFICERS.—The board— 

19 ‘‘(1) may appoint, from its own members, an 

20 executive committee to exercise such powers of the 

21 board when the board is not in session as may be 

22 provided in the bylaws; 

23 ‘‘(2) may appoint such other committees or ad24 visory councils with such powers as may be provided 


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1 in the bylaws or a resolution of the board of gov2 ernors; 

3 ‘‘(3) shall appoint such officers of the corpora4 tion, including a chief executive officer, with such 

5 duties, responsibilities, and terms of office as may be 

6 provided in the bylaws or a resolution of the board 

7 of governors; and 

8 ‘‘(4) may remove members of the board of gov9 ernors (other than the chairman), officers, and em10 ployees under such procedures as may be provided in 

11 the bylaws or a resolution of the board of governors. 

12 ‘‘(d) ADVISORY COUNCIL.— 

13 ‘‘(1) ESTABLISHMENT.—There shall be an advi14 sory council to the board of governors. 

15 ‘‘(2) MEMBERSHIP; APPOINTMENT BY PRESI16 DENT.— 

17 ‘‘(A) IN GENERAL.—The advisory council 

18 shall be composed of no fewer than 8 and no 

19 more than 10 members, each of whom shall be 

20 appointed by the President from principal offi21 cers of the executive departments and senior of22 ficers of the Armed Forces whose positions and 

23 interests qualify them to contribute to carrying 

24 out the programs and purposes of the corpora25 tion. 


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1 ‘‘(B) MEMBERS FROM THE ARMED

2 FORCES.—At least 1, but not more than 3, of 

3 the members of the advisory council shall be se4 lected from the Armed Forces. 

5 ‘‘(3) DUTIES.—The advisory council shall ad6 vise, report directly to, and meet, at least 1 time per 

7 year with the board of governors, and shall have 

8 such name, functions and be subject to such proce9 dures as may be provided in the bylaws. 

10 ‘‘(e) ACTION WITHOUT MEETING.—Any action re11 quired or permitted to be taken at any meeting of the 

12 board of governors or of any committee thereof may be 

13 taken without a meeting if all members of the board or 

14 committee, as the case may be, consent thereto in writing, 

15 or by electronic transmission and the writing or writings 

16 or electronic transmission or transmissions are filed with 

17 the minutes of proceedings of the board or committee. 

18 Such filing shall be in paper form if the minutes are main19 tained in paper form and shall be in electronic form if 

20 the minutes are maintained in electronic form. 

21 ‘‘(f) VOTING BY PROXY.— 

22 ‘‘(1) IN GENERAL.—Voting by proxy is not al23 lowed at any meeting of the board, at the annual 

24 meeting, or at any meeting of a chapter. 


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1 ‘‘(2) EXCEPTION.—The board may allow the 

2 election of governors by proxy during any emer3 gency. 

4 ‘‘(g) BYLAWS.— 

5 ‘‘(1) IN GENERAL.—The board of governors 

6 may— 

7 ‘‘(A) at any time adopt bylaws; and 

8 ‘‘(B) at any time adopt bylaws to be effec9 tive only in an emergency. 

10 ‘‘(2) EMERGENCY BYLAWS.—Any bylaws adopt11 ed pursuant to paragraph (1)(B) may provide spe12 cial procedures necessary for managing the corpora13 tion during the emergency. All provisions of the reg14 ular bylaws consistent with the emergency bylaws re15 main effective during the emergency. 

16 ‘‘(h) DEFINITIONS.—For purposes of this section— 

17 ‘‘(1) the term ‘entire board’ means the total 

18 number of members of the board of governors that 

19 the corporation would have if there were no vacan20 cies; and 

21 ‘‘(2) the term ‘emergency’ shall have such 

22 meaning as may be provided in the bylaws.’’. 


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1 SEC. 7. POWERS. 

2 Subsection (a)(1) of section 300105 of title 36, 

3 United States Code, is amended by striking ‘‘bylaws’’ and 

4 inserting ‘‘policies’’. 

5 SEC. 8. ANNUAL MEETING. 

6 Section 300107 of title 36, United States Code, is 

7 amended to read as follows: 

8 ‘‘§ 300107. Annual meeting 

9 ‘‘(a) IN GENERAL.—The annual meeting of the cor10 poration is the annual meeting of delegates of the chap11 ters. 

12 ‘‘(b) TIME OF MEETING.—The annual meeting shall 

13 be held as determined by the board of governors. 

14 ‘‘(c) PLACE OF MEETING.—The board of governors 

15 is authorized to determine that the annual meeting shall 

16 not be held at any place, but may instead be held solely 

17 by means of remote communication subject to such proce18 dures as are provided in the bylaws. 

19 ‘‘(d) VOTING.— 

20 ‘‘(1) IN GENERAL.—In matters requiring a vote 

21 at the annual meeting, each chapter is entitled to at 

22 least 1 vote, and voting on all matters may be con23 ducted by mail, telephone, telegram, cablegram, elec24 tronic mail, or any other means of electronic or tele25 phone transmission, provided that the person voting 

26 shall state, or submit information from which it can 


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1 be determined, that the method of voting chosen was 

2 authorized by such person. 

3 ‘‘(2) ESTABLISHMENT OF NUMBER OF

4 VOTES.— 

5 ‘‘(A) IN GENERAL.—The board of gov6 ernors shall determine on an equitable basis the 

7 number of votes that each chapter is entitled to 

8 cast, taking into consideration the size of the 

9 membership of the chapters, the populations 

10 served by the chapters, and such other factors 

11 as may be determined by the board. 

12 ‘‘(B) PERIODIC REVIEW.—The board of 

13 governors shall review the allocation of votes at 

14 least every 5 years.’’. 

15 SEC. 9. ENDOWMENT FUND. 

16 Section 300109 of title 36, United States Code is 

17 amended— 

18 (1) by striking ‘‘nine’’ from the first sentence 

19 thereof; and 

20 (2) by striking the second sentence and insert21 ing the following: ‘‘The corporation shall prescribe 

22 policies and regulations on terms and tenure of of23 fice, accountability, and expenses of the board of 

24 trustees.’’. 


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1 SEC. 10. ANNUAL REPORT AND AUDIT. 

2 Subsection (a) of section 300110 of title 36, United 

3 States Code, is amended to read as follows: 

4 ‘‘(a) SUBMISSION OF REPORT.—As soon as prac5 ticable after the end of the corporation’s fiscal year, which 

6 may be changed from time to time by the board of gov7 ernors, the corporation shall submit a report to the Sec8 retary of Defense on the activities of the corporation dur9 ing such fiscal year, including a complete, itemized report 

10 of all receipts and expenditures.’’. 

11 SEC. 11. COMPTROLLER GENERAL OF THE UNITED STATES 

12 AND OFFICE OF THE OMBUDSMAN. 

13 (a) IN GENERAL.—Chapter 3001 of title 36, United 

14 States Code, is amended by redesignating section 300111 

15 as section 300113 and by inserting after section 300110 

16 the following new sections: 

17 ‘‘§ 300111. Authority of the Comptroller General of 

18 the United States 

19 ‘‘The Comptroller General of the United States is au20 thorized to review the corporation’s involvement in any 

21 Federal program or activity the Government carries out 

22 under law. 

23 ‘‘§ 300112. Office of the Ombudsman 

24 ‘‘(a) ESTABLISHMENT.—The corporation shall estab25 lish an Office of the Ombudsman with such duties and 


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1 responsibilities as may be provided in the bylaws or a reso2 lution of the board of governors. 

3 ‘‘(b) REPORT.— 

4 ‘‘(1) IN GENERAL.—The Office of the Ombuds5 man shall submit annually to the appropriate Con6 gressional committees a report concerning any 

7 trends and systemic matters that the Office of the 

8 Ombudsman has identified as confronting the cor9 poration. 

10 ‘‘(2) APPROPRIATE CONGRESSIONAL COMMIT11 TEES.—For purposes of paragraph (1), the appro12 priate Congressional committees are the following 

13 committees of Congress: 

14 ‘‘(A) SENATE COMMITTEES.—The appro15 priate Congressional committees of the Senate 

16 are— 

17 ‘‘(i) the Committee on Finance; 

18 ‘‘(ii) the Committee on Foreign Rela19 tions; 

20 ‘‘(iii) the Committee on Health, Edu21 cation, Labor, and Pensions; 

22 ‘‘(iv) the Committee on Homeland Se23 curity and Governmental Affairs; and 

24 ‘‘(v) the Committee on the Judiciary. 


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1 ‘‘(B) HOUSE COMMITTEES.—The appro2 priate Congressional committees of the House 

3 of Representatives are— 

4 ‘‘(i) the Committee on Energy and 

5 Commerce; 

6 ‘‘(ii) the Committee on Foreign Af7 fairs; 

8 ‘‘(iii) the Committee on Homeland Se9 curity; 

10 ‘‘(iv) the Committee on the Judiciary; 

11 and 

12 ‘‘(v) the Committee on Ways and 

13 Means.’’. 

14 (b) CLERICAL AMENDMENT.—The table of sections 

15 for chapter 3001 of title 36, United States Code, is 

16 amended by striking the item relating to section 300111 

17 and inserting the following: 

‘‘300111. Authority of the Comptroller General of the United States. 

‘‘300112. Office of the Ombudsman. 

‘‘300113. Reservation of right to amend or repeal.’’. 

Passed the House of Representatives April 17, 2007. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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Calendar No. 119 

110TH CONGRESS 

1ST SESSION H. R. 1681 

AN ACT 

To amend the Congressional Charter of The Amertury, and for other purposes. American National Red Cross in the 21st cen- Red Cross to support the critical mission of The board of governors of The American National ance structure, to enhance the ability of the ican National Red Cross to modernize its governAPRIL 18, 2007 

Received; read twice and placed on the calendar 


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