New State Density Bonus for Student Housing Takes Effect

As of January 1, State law offers a new density bonus to qualifying student housing developments. The legislation (Senate Bill 1227) is one of several bills the Legislature has passed over the last two years to address California’s unprecedented shortage of affordable housing.

As explained by Senator Skinner, the sponsor of SB 1227, the bill is intended to allow student housing projects to become eligible for a density bonus regardless of whether they include apartment-style units or dormitory-style bedrooms. The State Density Bonus Law previously was written to apply only to “units.”

SB 1227 amends the Density Bonus Law by adding a bonus for eligible student housing developments in which at least 20 percent of units, or rental beds, are restricted to lower-income students for 55 years. For purposes of calculating a student housing density bonus, the legislation provides that the term “unit” is equivalent to one rental bed and its pro rata share of associated common area facilities.

To qualify, a project must meet these requirements:

  • All student housing units must be used exclusively for students enrolled full time at an accredited institution of higher education. The developer must enter into an operating agreement or master lease with one or more institutions to occupy all the student housing units.
  • Qualifying “lower-income students” must have a verified household income and asset level that does not exceed the level for “Cal Grant A” or “Cal Grant B” award recipients.
  • Rent in the units restricted to lower-income students may not exceed 30 percent of 65 percent of the area median income for a single-room occupancy unit type.
  • The development must provide a priority for its affordable units for lower-income students experiencing homelessness.

Cities and counties are required to grant qualifying projects a “density bonus” of 35 percent of the student housing units — in other words, a density increase of 35 percent over the otherwise maximum allowable gross residential density. These projects also can become eligible for the several other benefits already available under the Density Bonus Law, including incentives or concessions, waivers or reductions of development standards, and limitations on parking requirements.

Aesthetic and Traffic Issues in Historic Overlay District Necessitate EIR

A court of appeal has overturned a city’s mitigated negative declaration for a small mixed-use development in a historic overlay district, holding that aesthetic and traffic issues require the preparation of an environmental impact report. Protect Niles v. City of Fremont, 25 Cal. App. 5th 1129 (2018).

The proposed project, comprising 98 housing units and 3,500 square feet of commercial uses, was to be located in the Niles Historic Overlay District within the City of Fremont. The city approved a mitigated negative declaration for the project, finding that with mitigation incorporated, the project would cause no significant environmental impacts necessitating an EIR.

Residents sued, alleging that an environmental impact report was required because substantial evidence supported a fair argument that the project would cause significant impacts: due to 1) aesthetic incompatibility with the historic district; and 2) traffic impacts that were not acknowledged in the expert traffic report prepared for the city’s analysis. The court of appeal upheld both challenges and required that an EIR be prepared.

Aesthetics. With respect to aesthetics, the court cited CEQA’s express concern for aesthetic and historic environmental qualities, as well as case law holding that a project’s context is vital to assessment of its aesthetic impacts. Here, members of both the public and the city’s Historical Architectural Review Board had cited the project’s “siting, massing, scale, size, materials, textures and colors” as inconsistent with the historic district’s “small town feeling.”

The court first held that a project’s visual impact on a surrounding officially-designated historical district is an appropriate topic for aesthetic review under CEQA, and that such an aesthetic analysis does not undermine the separate scheme for CEQA review of environmental impacts on historical resources. Next, recognizing that aesthetic judgments are inherently subjective, the court observed that objections raised by HARB members and others “were not solely based on vague notions of beauty or personal preference, but were grounded in inconsistencies with the prevailing building heights and architectural styles of the Niles HOD.” The court found that these personal observations constituted substantial evidence that the project would cause a significant aesthetic impact in the context of the historic district.

Traffic. The court next concluded that the city’s expert traffic report could not prevail over individuals’ observations of existing traffic conditions and predictions of hazards. The traffic report concluded that a new left-turn pocket in front of the project, while recommended, was not necessary, based in part on the posted speed limit. Commenters stated, however, that the posted speed limit was often ignored, and that without a left-turn pocket, the combination of high speeds, queued drivers waiting to turn left into the project, and a blind curve would result in dangerous conditions. The court identified these comments as substantial evidence supporting a fair argument that the project would create a traffic safety hazard.

Nor did the city’s established significance threshold for deterioration in traffic level of service protect it from the need to prepare an EIR. The city acknowledged that with the proposed project, the level of service nearby would deteriorate from an unacceptable LOS E to a still worse LOS F, but under the city’s significance thresholds, this did not constitute a significant impact. The court, citing residents’ and officials’ reports of extreme traffic backups under existing conditions, concluded that these comments “supported a fair argument that unusual circumstances in Niles might render the thresholds inadequate to capture the impacts….”

Conclusion

The Protect Niles decision highlights the importance courts can attach to comments by the public – on both non-technical and technical issues – where an agency proposes to rely on a negative declaration rather than an EIR. Because CEQA is designed to favor EIRs over negative declarations, plausible fact-based comments (as opposed to generalized complaints) can, depending on the circumstances, prevail over both expert reports and agency significance thresholds, leading to the need for an EIR.

School District’s Fee Study Did Not Contain the Information Necessary to Lawfully Impose Development Fees

The Sixth District Court of Appeal invalidated a school district’s Level 1 development fee because the underlying fee study did not properly calculate anticipated growth and included the cost of hypothetical new schools that the district had no plans to build.  Summerhill Winchester v Campbell Union School District, No. H043253 (6th Dist., Dec. 4, 2018).

The Campbell Union School District adopted a Level 1 development fee based on a fee study that concluded the District had no capacity to accommodate new students and calculated an average cost of $22,039 to house each additional student in new school facilities. This figure was based on the projected cost of building a new, 600-student elementary school and a 1,000-student middle school.

Petitioner paid the development fees under protest and sued to recover them, contending that the fee study had failed to calculate anticipated growth from new development or to identify any new facilities that were necessary to accommodate such growth. The court of appeal agreed on both counts and ordered a full refund of the fees.

The court found that although the fee study determined the District was already over capacity (and hence would be impacted by any new students from development), the study had failed to calculate the “total amount of new housing projected to be built within the District.” Instead, the study simply stated that the amount of new development “would be in excess of 133 residential units.” This was inadequate, the court said, because it did not provide the information needed “to determine whether new school facilities are needed due to anticipated development.”  While the Board did not need to identify “specific facilities that would be built,” it did need “to decide whether or not new school facilities were needed and, if so, what type of facilities were needed.”

The court also decided that the Board had improperly assessed the fee based on the cost of new school facilities that were not shown to be necessary to accommodate students from new development. While the fee study based its calculations on the cost of building new elementary and middle schools, there was insufficient evidence either that such schools would be needed to accommodate students from new development or that the District actually planned to build such schools.

The District argued that because its enrollment already exceeded its capacity, every additional student generated by new development would necessarily result in a financial impact on the District. The court accepted the validity of this statement but found it did not satisfy the statutory requirement that the “Board demonstrate a reasonable relationship between the amount of the fee and the impact of development on the need for new or reconstructed school facilities.”  (Emphasis added.) The court concluded that the “fee study’s use of hypothetical new schools that [the District] was not going to build as the financial premise for calculating the fee was not a reasonable alternative methodology that could legally support the fee imposed by the Board.”

Determinations Regarding Compatibility of Residential Uses with Timberland Production are Ministerial and Hence Exempt from CEQA Review

The Third District Court of Appeal rejected a CEQA challenge to a county’s general plan update, holding that a county’s California Timberland Productivity Act finding that a residence or structure is necessary for timberland production zone management is not a discretionary act for CEQA purposes.  High Sierra Rural Alliance v. County of Plumas, 29 Cal. App. 5th 102 (2018).

In December 2013, the County prepared a comprehensive update to its 1984 General Plan, along with an accompanying “first-tier” programmatic environmental impact report.  The general plan focused on new population growth within specific geographic “Planning Areas” to prevent “rural sprawl” and preserve natural resources.  The general plan update called for all new development to take place within, or next to, these Planning Areas.  The EIR and general plan anticipated little population growth or construction outside of the Planning Areas due to historical development patterns and the new general plan policies.

Petitioner contended that the general plan update conflicted with the Timberland Act because the general plan determined that any residence on timberland production zone land is a compatible use with timberland production, so long as the parcel is at least 160 acres.  It also claimed that CEQA review was required each time the County determined whether proposed residences were compatible with timberland use.  The Court of Appeal rejected both arguments.

The Timberland Act imposes mandatory restrictions on parcels zoned for timberland production, limiting the permitted uses to “growing and harvesting timber and to compatible uses.”  Gov. Code § 51110 et. seq.  Timberland production zones are regulated by state statutes, but local governments are required to enforce the zoning restrictions.  Petitioner argued that the general plan update impermissibly determined that all residences are compatible with timberland production zoned land by including a policy confirming that any residence or structure on a parcel zoned for timberland production that is at least 160 acres is a compatible use. Petitioner contended that Government Code Section 51104 requires the County to make case-by-case compatibility determinations based on whether a residence is (1) necessary for management of timberland, and (2) not otherwise incompatible with underlying timber operations.

The court found that the County had been aware of the above Section 51104 requirements and had applied them to previous compatibility determinations.  It concluded that the updated general plan policies concerning timberland production did not conflict with state law merely because they did not repeat Section 51104 in its entirety, and that the general plan policy requiring a finding that a residence or structure was compatible with the Timberland Act was sufficient.

The court also disagreed with petitioner’s contention that the County engages in discretionary review under CEQA when determining whether proposed residences or structures are compatible with timberland production.  Instead, the determination is classified as ministerial because the statutory guidance provided to local governments by the Timberland Act do not allow an agency to deny or condition a building permit to mitigate environmental damage.  The court also noted that the Timberland Act expressly exempts the County’s decisions to put parcels in timberland production zones from CEQA review because the decision “involves the state law’s authorization of residences and structures necessary for the management of these parcels” and the compatibility findings are governed solely by the Timberland Act.  Thus, the court concluded that the County is not required to engage in discretionary review under CEQA each time it approves proposed structures that are compatible with timberland.

California Supreme Court Sets Standard for Air Quality Impact Analyses Under CEQA

The California Supreme Court has overturned the environmental impact report for a mixed-use development project, holding that the EIR inadequately explained the human health consequences of significant air pollutant emissions that would result from the development.  Sierra Club v. County of Fresno, Cal. Supreme Court Case No. S219783 (Dec. 24, 2018).    In so doing, the court has both clarified the standard of review that courts must apply to an EIR’s explanation of significant environmental impacts, and increased the obligation of EIR preparers to provide those explanations.

The court also responded to challenges to the EIR’s air quality mitigation measures.  The court required that the EIR’s claim of “substantial” pollution reduction through mitigation be supported with substantial evidence, but the court upheld mitigation measures that allowed for subsequent replacement based on new technologies and provided for implementation through future County review.

Facts

In the case presented to the Supreme Court, the County’s analysis of criteria air pollutants appears to have been typical.  The EIR generally explained the health impacts of exposure to ozone, particulate matter, carbon monoxide and nitrogen dioxide but, except for ozone, did not identify the concentrations at which symptoms would be expected.  The EIR then quantified the tonnages of air pollutants that would be emitted each year as a result of the project, compared those amounts to the regional air district’s tonnage-based significance thresholds, and concluded that the project’s air quality impacts would be significant because the emissions would substantially exceed the thresholds.  The EIR then identified mitigation measures that would reduce the emissions, but not enough to bring them below the thresholds.  The EIR did not attempt to quantify the extent to which each of the project’s air pollutant emissions might affect human health in the air basin.

Standard of Review

The Sierra Club and other parties challenged the EIR’s discussion of air quality impacts as well as the mitigation measures it identified.  The court began by addressing the standard of review courts must apply to such challenges.  Under CEQA, courts are to apply a deferential “substantial evidence” standard of review to an EIR’s factual determinations (e.g., which scientific methodology to use for analysis of a particular impact), but a non-deferential “de novo” standard to the question whether the agency preparing the EIR has followed the correct procedures.  The court acknowledged that some questions that arise under CEQA are both factual and procedural, and create uncertainty regarding the appropriate standard of judicial review.

Where the question is whether an EIR’s discussion of significant environmental impacts is adequate, the court identified “three basic principles”:

  • An agency has considerable discretion to decide the manner of the discussion of potentially significant effects in an EIR;
  • However, a reviewing court must determine whether “the EIR comports with its intended function of including ‘detail sufficient to enable those who did not participate in its preparation to understand and to consider meaningfully the issues raised by the proposed project’”; and
  • The determination whether a discussion is sufficient is not solely a matter of discerning whether there is substantial evidence to support the agency’s factual conclusions. The court explained: “For example, a decision to use a particular methodology and reject another is amenable to substantial evidence review . . . . But whether a description of an environmental impact is insufficient because it lacks analysis or omits the magnitude of the impact is not a substantial evidence question. A conclusory discussion of an environmental impact that an EIR deems significant can be determined by a court to be inadequate as an informational document without reference to substantial evidence.”

The EIR’s Air Quality Discussion

Applying these principles, the court found the County’s EIR inadequate because it did not explain how the proposed project would change air quality in the air basin; did not indicate the concentrations at which PM, CO and sulfur dioxide would trigger health symptoms; and, even as to ozone, for which the EIR did identify concentrations that would trigger symptoms, the EIR did not identify how many parts per million of ozone would result from the project.

Briefs submitted to the court attempted to explain that the connection between emissions and human health that plaintiffs sought could not be provided given the current state of environmental science modeling.  The court responded that this explanation should have been provided in the EIR rather than in litigation:  “[I]f it is not scientifically possible to do more than has already been done to connect air quality effects with potential human health impacts, the EIR itself must explain why, in a manner reasonably calculated to inform the public of the scope of what is and is not yet known about the Project’s impacts.”

Mitigation Measures

The plaintiffs also challenged the EIR’s air quality mitigation measures on four grounds.  The court upheld the first of these challenges, holding that the EIR lacked facts or analysis to explain its conclusion that the mitigation measures would “substantially reduce air quality impacts.”

The court rejected the plaintiffs’ three remaining challenges.  First, the court approved a “substitution clause” in the mitigation measures that allowed the County to substitute new mitigation measures for those listed in the EIR if the new measures were shown to be equally effective.  Whereas the plaintiffs considered this unlawfully deferred mitigation, the court responded that allowing future substitutions for equal or more efficient technology would promote CEQA’s goal of environmental protection.  Second, the court rejected plaintiffs’ challenge to mitigation measures that would not reduce a project’s impacts below the threshold of significance.  The court noted that under CEQA, agencies may approve projects that have significant unavoidable environmental impacts so long as they adopt all feasible mitigation measures and issue a statement of overriding considerations.   Finally, the court held that the mitigation measures were not vague or otherwise unenforceable.  The County’s Mitigation Monitoring Plan explained when in the development process the various mitigation measures were to be implemented and imposed the duty on the County to ensure that the measures were implemented.  If the County were to fail in this duty, its abuse of discretion could be corrected in a court mandamus proceeding.

Conclusions

The Sierra Club decision reinforces the importance of careful explanations of significance determinations in EIRs, and in particular the importance of presenting the analytical connection between raw data and the resulting impacts to the physical environment.  Every effort should be made to provide clear explanations in an EIR, including a discussion of the evidentiary basis for health-based significance standards, so that decision makers and members of the public can better understand the magnitude of a project’s contribution to risks to human health. Notably, the court recognized that an EIR need not be exhaustive, and perfection is not the legal standard.  But this decision raises the bar for achieving legal adequacy under CEQA.

Zoning Ordinance Adopted To Make Zoning Consistent With General Plan May Be Rejected By Referendum

The California Supreme Court has resolved a split among the courts of appeal, concluding that citizens may bring a referendum to challenge a zoning ordinance even if the referendum would temporarily leave in place zoning inconsistent with the general plan. City of Morgan Hill v. Bushey, 5 Cal.5th 1068 (2018)

Government Code Section 65860 requires a city’s zoning ordinance to be consistent with the general plan. When a zoning ordinance becomes inconsistent due to a general plan amendment, the city must enact a consistent zoning ordinance within a “reasonable time.” Gov’t Code Section 65860(c).

Here, voters in the City of Morgan Hill rejected by referendum a zoning ordinance the city council enacted to bring zoning into consistency with its recently amended general plan. The city claimed that by rejecting the zoning ordinance, the voters essentially enacted inconsistent zoning in violation of Section 65860.

The court disagreed. It held that unlike an initiative or ordinance that enacts inconsistent zoning, a referendum that leaves inconsistent zoning in place simply does so for a limited period of time — “until the local government can make the zoning ordinance and general plan consistent in a manner acceptable to a majority of voters.” So long as there are other consistent zoning designations available, or the local government has other ways to make the zoning consistent and general plan consistent, then such a referendum is valid.

Furthermore, the court interpreted the “reasonable time” provision of Section 65860(c) as providing localities some undefined time to act, and determined that the time taken for a single referendum rejecting a zoning ordinance did not violate this limitation.

Because the trial court had not addressed whether there were other viable zoning designations or other options for the city to resolve the inconsistency between the existing zoning ordinance and the general plan, the court remanded the case for further consideration of these issues.

 

Administrative Mandate is the Exclusive Method for Challenging an LCP under the Coastal Act

An appellate court has held that the sole means of challenging a certified local coastal program (LCP) based on violation of the California Coastal Act is a petition for writ of administrative mandate under Code of Civil Procedure section 1094.5. Beach and Bluff Conservancy v. City of Solana Beach, 28 Cal. App. 5th 244 (2018).

Under the Coastal Act, local governments must develop an LCP consisting of a land use plan (LUP) and a Local Implementation Plan and submit the plans to the Coastal Commission for certification of consistency with the Act. In this case, the City submitted an amended LUP to the Commission for certification and, after a series of proposed modifications accepted by the City, the Commission certified the LUP.

Petitioner filed an action for declaratory relief and traditional mandate under Code of Civil Procedure 1085, asserting a facial challenge to policies in the amended LUP on the grounds that they conflicted with the Coastal Act and/or violated the takings clause of the Fifth Amendment.

The appellate court concluded that petitioner’s sole remedy for claims based on the Coastal Act was a petition for writ of administrative mandamus against the Coastal Commission. The court relied on Public Resources Code § 30801, which states that any challenge to a decision or action by the Coastal Commission must be by writ of mandamus under Code of Civil Procedure § 1094.5 filed within 60 days after the final decision of the Commission.

The court reasoned that any post-approval facial challenge to a local land use policy is “essentially a challenge to the Commission’s quasi-judicial certification decision.” That the City was acting legislatively when it enacted the LUP did not change the fact that a mandamus proceeding against the Commission (with the City named as a necessary party) was petitioner’s exclusive method of challenging policies based on inconsistency with the Coastal Act. The court pointed to the established principle that where a statute creates rights and obligations not previously existing under common law, it may also define the exclusive procedure for judicial review based on those rights and obligations. Because the Coastal Act created new rights and obligations regarding the development and management of coastal property, the exclusive method of challenging decisions of the Commission under the Coastal Act was administrative mandamus, notwithstanding common law remedies that might otherwise have been available.

Turning to petitioner’s constitutional challenge, the court observed that the Commission’s review of an LUP is statutorily limited to a determination of consistency with the Coastal Act, and hence section 30801 arguably did not apply to a constitutional challenge to a Commission-certified LUP. The court found it unnecessary to decide this, however, finding that petitioner’s constitutional claims were not ripe for adjudication because the Commission and City had not adopted a final, definitive, position regarding how policies would be applied to the petitioner’s property. Only then, the court said, could it be determined whether a constitutional violation had occurred. The court added that nothing in its decision precluded any property owner affected by the LUP from later challenging the application any of its policies to the owner’s specific property.

California Affirms Protections for Migratory Birds Despite Contrary Federal Stance

California’s Attorney General and Department of Fish and Wildlife have jointly issued an advisory affirming that California law continues to provide robust protections for migratory birds, including prohibiting incidental takes, notwithstanding the recent reinterpretation of the Migratory Bird Treaty Act by the U.S. Department of the Interior.

The advisory notes that three lawsuits (including one joined by the attorney general) are challenging the Trump administration’s reinterpretation of the Act to allow incidental takes and points to the ongoing, robust protection of migratory birds based on California statutes and caselaw. More information on this advisory is available in this Update by Don Baur, Laura Zagar and Anne Beaumont.

EIR Addendum Process Upheld Against Facial Challenge

The California Court of Appeal rejected a facial challenge to the EIR addendum process, and held that an agency is not required to make new findings in connection with approval of an EIR addendum. Save Our Heritage Organisation v. City of San Diego, 28 Cal. App. 5th 656 (2018).

Background

In 2012, the City of San Diego certified an EIR and approved a project to revitalize Balboa Park, a large urban park in the city. The project involved restricting vehicles from entering many of the central roadways and plazas, building a new road to bypass the car-free areas, and constructing an underground parking structure. Four years later, the city approved minor modifications to the project to account for changed conditions at the project site after the initial project approval, comply with current building and stormwater standards, accelerate the project construction schedule, and reduce project costs. The city adopted an addendum to the EIR, which concluded that a subsequent or supplemental EIR was not required.

Facial Challenge to Addendum Process Rejected

The petitioner claimed the addendum process described in the CEQA Guidelines conflicts with CEQA’s public review requirements and is not expressly authorized by the statute. The court rejected both claims.

The court began its analysis by noting that the addendum guideline implements CEQA Section 21166, which sets forth conditions when project changes, changed circumstances, or new information requires the agency to prepare a subsequent EIR. The court explained: “the addendum process fills a gap in CEQA for projects with a previously certified EIR requiring revisions that do not warrant the preparation of subsequent EIRs. CEQA authorizes the Resources Agency to fill such gaps in the statutory scheme, so long as it does so in a manner consistent with the statute.” The court determined that the addendum process is consistent with and furthers the objectives of CEQA “by requiring an agency to substantiate its reasons for determining why project revisions do not necessitate further environmental review.”

The court also held that the absence of a public review process for addenda was not inconsistent with CEQA. Rather, it reflected the nature of an addendum as a document describing project revisions too insubstantial to require subsequent environmental review. Finally, the court noted that the Legislature’s failure to modify CEQA to eliminate the addendum process in 35 years was a strong indication that it was consistent with legislative intent.

New Findings On Project’s Significant Impacts Not Required

The petitioner also argued that the city was required to make new findings on the project’s significant impacts when it approved the addendum. The court rejected this argument as well. The court held that nothing in the statute or Guidelines required new findings when an agency approves changes to a project based on an addendum. The court explained that the purpose of findings is to address new significant effects, but an addendum is only proper where there are no new significant effects; thus, no purpose would be served by requiring new findings to address the same significant effects that had already been addressed when the project was first approved.

Federal Agencies Must Modify Operations at Columbia River Hydroelectric System to Protect Salmonid Species

The Federal Court of Appeals for the Ninth Circuit recently affirmed a district court order requiring that the National Marine Fisheries Service, the Corps of Engineers, and the Bureau of Reclamation conduct spill operations and monitoring at dams and related facilities in the Federal Columbia River Power System in order to protect migrating salmon and steelhead.  The district court issued the order after finding the continued low abundance of the species made them vulnerable to extinction from shock events such as climate change.  National Wildlife Federation v. NMFS, 886 F.3d 803 (9th Cir. 2018).

This appeal is the latest development in a long-running dispute regarding salmonids in the Columbia River listed as endangered or threatened species under the Endangered Species Act. The fish migrate up and down the Columbia and Snake Rivers every year, encountering the Columbia River dams. Turbines in the dams cause a high rate of mortality for the salmonid species that pass through or near them.

A 2014 Marine Fisheries Service biological opinion concluded that ongoing operation of the dams would jeopardize ESA-listed species and adversely modify their critical habitat. It proposed an alternative that included multiple actions over a 10-year period designed to (i) modify systems operations and structures at the dams to improve fish passage and migration conditions, and (ii) allow some spill from the dams to enhance the likelihood of survival for migrating juveniles. Two years later, the Oregon District Court found that the biological opinion violated the ESA because it had not adequately considered climate change. The federal agencies responded by preparing a new biological opinion for dam operations.
Meanwhile the State of Oregon and a coalition of environmental organizations filed a lawsuit and obtained an injunction ordering the Corps to increase spring spill over the dams as well as to operate juvenile bypass facilities and tag detection systems. The federal agencies appealed.

The Court of Appeals upheld the district court’s injunction, ruling that the court was not required to find irreparable harm due to an “extinction-level threat” to the protected species before it could issue an injunction. Rather, the court’s finding a “definitive threat of future harm, beyond speculation,” was sufficient.

Reviewing the district court’s factual findings, the appellate court agreed they were sufficient to show irreparable harm. The court had found that the salmonids were in a “precarious” state and would remain there without conservation efforts beyond those in the 2014 biological opinion. Sustained low abundance of the species made them vulnerable to extinction, and the federal agencies should have analyzed how “climate change increases the chances of ‘shock events’ that would be catastrophic for the listed species’ survival.”

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