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(1) that the United States owns Federal property in the school district of such local educational agency, and that such property (A) has been acquired by the United States since 1938, (B) was not acquired by exchange for other Federal property in the school district which the United States owned before 1939, and (C) had an assessed value (determined as of the time or times when so acquired) aggregating 10 per centum or more of the assessed value of all real property in the school district (similarly determined as of the time or times when such Federal property was so acquired); and

(2) that such acquisition has placed a substantial and continuing financial burden on such agency; and

(3) that such agency is not being substantially compensated for the loss in revenue resulting from such acquisition by increases in revenue accruing to the agency from the carrying on of Federal activities with respect to the property so acquired,

then the local educational agency shall be entitled to receive for such fiscal year such amount as, in the judgment of the Secretary, is equal to the continuing Federal responsibility for the additional financial burden with respect to current expenditures placed on such agency by such acquisition of property. Such amount shall not exceed the amount which, in the judgment of the Secretary, such agency would have derived in such year, and would have had available for current expenditures, from the property acquired by the United States (such amount to be determined without regard to any improvements or other changes made in or on such property since such acquisition).

(b) Property excluded

For the purposes of this section any real property with respect to which payments are being made under section 8311 of title 16 shall not be regarded as Federal property.

(c) School district consolidations

Where the school district of any local educational agency shall have been formed at any time after 1938 by the consolidation of two or more former school districts, such agency may elect (at the time it files application under section 240 of this title) for any fiscal year to have (1) the eligibility of such local educational agency, and (2) the amount which such agency shall be entitled to receive, determined under this section only with respect to such of the former school districts comprising such consolidated school district as the agency shall designate in such election.

(Sept. 30, 1950, ch. 1124, title I, § 2, formerly § 2, 64 Stat. 1101; Aug. 8, 1953, ch. 402, § 1, 67 Stat. 530; Aug. 12, 1955, ch. 868, § 1, 69 Stat. 713; Aug. 3, 1956, ch. 915, title II, § 201, 70 Stat. 970; Aug. 12, 1958, Pub. L. 85-620, title II, § 201, 72 Stat. 559; Oct. 3, 1961, Pub. L. 87-344, title I, § 102(a), 75 Stat. 759; Dec. 18, 1963, Pub. L. 88-210, title III, § 302, formerly § 32, 77 Stat. 419, renumbered Oct. 16, 1968, Pub. L. 90-576, title I, § 101(a)(1), 82 Stat. 1064; Oct. 16, 1964, Pub. L. 88-665, title XI, § 1102(a), 78 Stat. 1109; renumbered and amended Apr. 11, 1965, Pub. L.

89-10, title I, §§ 2, 5, 79 Stat. 27, 36; Jan. 2, 1968, Pub. L. 90-247, title II, § 204(a)-(c), title III, § 301(e), 81 Stat. 808, 813; Apr. 13, 1970, Pub. L. 91-230, title II, § 201(b), 84 Stat. 154; Aug. 21, 1974, Pub. L. 93-380, title III, § 303(a)(1), 88 Stat. 522; Apr. 21, 1976, Pub. L. 94-273, § 3(5), 90 Stat. 376; Nov. 1, 1978, Pub. L. 95-561, title X, § 1001(a), 92 Stat. 2306; Oct. 17, 1979, Pub. L. 96-88, title III, § 301(a)(1), title V, § 507, 93 Stat. 677, 692.)

AMENDMENTS

1978-Subsec. (a). Pub. L. 95-561 substituted "1983" for "1978".

1976-Subsec. (a). Pub. L. 94-273 substituted "October" for "July".

1974-Subsec. (a). Pub. L. 93-380 substituted "1978" for "1973".

1970-Subsec. (a). Pub. L. 91-230 substituted "1973" for "1970".

1968-Subsec. (a). Pub. L. 90-247, §§ 204(a), (b), 301(e), substituted "1970" for "1968" and deleted the requirement that other Federal payments with respect to any property acquired by the United States in the school district of any local educational agency be deducted from the compensation to which such local educational agency is entitled by reason of such acquisition.

Subsec. (b). Pub. L. 90-247, § 204(c), deleted the definition of "other Federal payments".

1965-Subsec. (a). Pub. L. 89-10, § 5, substituted "1968" for "1966".

Subsec. (b). Pub. L. 89-10, § 2, substituted "this title" for "this Act", and for purposes of codification, "this title" is changed to "this subchapter".

1964-Subsec. (a). Pub. L. 88-665 substituted "1966" for "1965".

1963-Subsec. (a). Pub. L. 88-210 substituted "1965" for "1963".

1961-Subsec. (a). Pub. L. 87-344 substituted “July 1, 1963" for "July 1, 1961".

1958-Subsec. (a). Pub. L. 85-620, § 201(a), substituted "any fiscal year ending prior to July 1, 1961" for "the fiscal year beginning July 1, 1950, or for any of the seven succeeding fiscal years".

Subsec. (b)(1). Pub. L. 85–620, § 201(b), provided that "other Federal payments" shall not include payments pursuant to contract or other arrangement under section 452 of title 25.

1956-Subsec. (a). Act Aug. 3, 1956, substituted "seven succeeding fiscal years" for "six succeeding fiscal years".

1955-Subsec. (a). Act Aug. 12, 1955, substituted the words "six succeeding fiscal years" for "five succeeding fiscal years" in the first sentence thereof.

1953-Subsec. (a). Act Aug. 8, 1953, § 1(a), (b), substituted the words "five succeeding fiscal years" for "three succeeding fiscal years" in the first sentence thereof and inserted the words "with respect to the property so acquired" after the phrase "other Federal payments" wherever appearing.

Subsec. (b)(1). Act Aug. 8, 1953, § 1(c), extended the definition of "other Federal payments" to include, expressly, property taxes paid with respect to Federal property whether paid by the United States or other parties.

EFFECTIVE DATE OF 1978 AMENDMENT

Section 1032 of title X of Pub. L. 95-561 provided that:

"This title [amending sections 237, 238, 239, 240, 241, 241-1, 244, 633, 635, 640, 645, and 646 of this title, enacting provisions set out as notes under sections 236, 240, and 244 of this title, and amending a provision set out as a note under section 238 of this title] shall be effective with respect to the 1979 fiscal year, and subsequent fiscal years, except that

"(1) the amendments made by section 1006 [amending section 240 of this title] shall be effective upon enactment of this Act [Nov. 1, 1978], and actions of the Commissioner of Education under the Act of September 30, 1950 (Public Law 874, Eightyfirst Congress) [this chapter], during or with respect to fiscal year 1978, shall be subject to the provisions of such amendments;

"(2) the amendments made by sections 1003, 1007, 1011, and 1012 [amending sections 238, 240, and 244 of this title] shall be effective with respect to fiscal year 1980, and subsequent fiscal years; and

"(3) the provisions of section 1015 [enacting provisions set out as a note under section 236 of this title] shall be effective upon enactment of this Act (Nov. 1, 1978]."

EFFECTIVE Date of 1974 AMENDMENT

Section 303(b) of Pub. L. 93-380 provided that: "The amendments made by this section [amending sections 237, 239, and 241-1 of this title] shall be effective on and after July 1, 1973."

EFFECTIVE DATE OF 1968 AMENDMENT Section 208 of Pub. L. 90-247 provided that: "The amendments made by sections 201, 203, 204, 205, 206, and 207 of this part [amending sections 237, 238, 244, 635, to 644, and 645 of this title] shall be deemed to have been enacted prior to June 30, 1967, and shall be effective for fiscal years beginning thereafter."

EFFECTIVE Date of 1963 AMENDMENT

Section 303, formerly § 33 of Pub. L. 88-210, as renumbered by Pub. L. 90-576, title I, § 101(a)(1), Oct. 16, 1968, 82 Stat. 1064, provided that: "The amendments made by sections 31 and 32 [amending sections 237, 238, 239, 633, 644, and 645 of this title] shall be effective July 1, 1963."

EFFECTIVE DATE OF 1961 AMENDMENT Amendment by Pub. L. 87-344 effective for the period beginning July 1, 1961, see section 103 of Pub. L. 87-344, set out as an Effective Date of 1961 Amendment note under section 633 of this title.

EFFECTIVE DATE of 1958 AMENDMENT

Section 207 of Pub. L. 85-620 provided that: "The amendments made by this title [amending sections 237, 238, 239, 243, 244 of this title, and repealing section 245 of this title] shall be effective for the period beginning July 1, 1958."

EFFECTIVE DATE OF 1956 AMENDMENT

Section 213 of act Aug. 3, 1956, provided that amendments to subsec. (a) of this section and to sections 238, 239, 240, 243, 244, and 245 of this title shall be effective July 1, 1956.

EFFECTIVE DATE OF 1953 AMENDMENT Section 12 of act Aug. 8, 1953, provided that: "(a) Except where a different effective date is specified, the amendments made by the preceding sections of this Act [amending sections 237(a), (b), 238, 239(a), (c), (d), 240(b), (c), 241, 243(a), (d), 244(1), (8), and 245 of this title] shall become effective July 1, 1954. In the case of any local educational agency which is entitled to payments for the fiscal year ending June 30, 1954, under section 4(a) of the Act of September 30, 1950 [section 239(a) of this title], as in effect prior to the enactment of this Act [Aug. 8, 1953], with respect to an increase in average daily attendance occurring in such fiscal year, such agency shall be entitled to payments for the fiscal year ending June 30, 1955, in accordance with the provisions following clause (B) of such section as amended by this Act; and for such purpose the amount to which such agency is so entitled for the fiscal year ending June 30, 1954, shall be deemed to be the product referred to in such section as amended by this Act.

“(b) The amendments made by the following provisions of this Act shall become effective as of July 1, 1953:

"(1) Subsections (b) and (c) of the first section [amending sections 237(a), (b) of this title];

"(2) Subsections (b)(1) and (c) of section 2, and the second sentence of subsection (d) of such section 2 [amending sections 238(d), (e) of this title];

"(3) Section 8 (amending section 241 of this title]; and "(4) Subsection (a) of section 10 [amending section 244(1) of this title]."

TRANSFER OF FUNCTIONS

"Secretary", meaning the Secretary of Education, was substituted for "Commissioner" in subsec. (a) pursuant to sections 301(a)(1) and 507 of Pub. L. 96-88, which are classified to sections 3441(a)(1) and 3507 of this title and which transferred all functions of the Commissioner of Education to the Secretary of Educa

tion.

LIMITATION ON AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEARS 1982, 1983, AND 1984; AVAILABILITY OF FUNDS FOR CERTAIN PROGRAMS

Pub. L. 97-35, title V, § 505(a)(1), Aug. 13, 1981, 95 Stat. 442, provided that: "The total amount of appropriations to make payments under the Act of September 30, 1950 (Public Law 874, 81st Congress) [this chapter), shall not exceed $455,000,000 for each of the fiscal years 1982, 1983, and 1984 of which—

"(A) $10,000,000 shall be available for payments under section 2 of such Act [this section]; and

"(B) $10,000,000 shall be available for payments under section 7 of such Act [section 241-1 of this title].

Funds available for section 2 of such Act for each such fiscal year shall also be available for section 16 of the Act of September 23, 1950 (Public Law 815, 81st Congress) [section 646 of this title]."

REDUCTION IN ENTITLEMENTS DUE TO INSUFFICIENCY OF AMOUNTS APPROPRIATED FOR FISCAL YEAR 1982, 1983, OR 1984

Pub. L. 97-35, title V, § 505(a)(3), Aug. 13, 1981, 95 Stat. 442, provided that: "If the amount appropriated for making payments under such Act [this chapter] for fiscal year 1982, 1983, or 1984 is not sufficient to pay in full the sum of the entitlements established under section 2 of such Act [this section], then the amount of each such entitlement shall be ratably reduced. If, for any fiscal year in which such a reduction is required, additional amounts are made available for making such payments, then such entitlements shall be increased on the same basis as they were reduced." FISCAL YEAR TRANSITION PERIOD OF JULY 1, 1976, THROUGH SEPTEMBER 30, 1976, DEEMED PART OF FISCAL YEAR BEGINNING OCTOBER 1, 1976

Fiscal year transition period of July 1, 1976, through Sept. 30, 1976, deemed part of fiscal year beginning Oct. 1, 1976, for purposes of this section, see section 205(26) of Pub. L. 94-274, Apr. 21, 1976, 90 Stat. 393, set out as a note under section 5532 of Title 5, Government Organization and Employees.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 240 of this title.

§ 238. Payments to local school agencies

(a) Children of persons who reside and work on Federal property; parent in uniformed services; residents of Indian lands

For the purpose of computing the amount to which a local educational agency is entitled under this section for any fiscal year, the Secre

tary shall determine the number of children who were in average daily attendance at the schools of such agency, and for whom such agency provided free public education, during such fiscal year, and who, while in attendance at such schools, resided on Federal property and

(1) did so with a parent employed on Federal property situated (A) in whole or in part in the county in which the school district of such agency is located, or (B) if not in such county, in whole or in part in the same State as the school district of such agency; or

(2) had a parent who was on active duty in the uniformed services (as defined in section 101 of title 37).

In making a determination under clause (2) of the preceding sentence with respect to a local educational agency for any fiscal year, the Secretary shall include the number of children who were in average daily attendance at the schools of such agency, and for whom such agency provided free public education, during such year, and who, while in attendance at such schools, resided on Indian lands, as described in clause (A) of section 244(1) of this title.

(b) Children of persons who reside or work on Federal property, who are on active duty in uniformed services, or who are refugees

For the purpose of computing the amount to which a local educational agency is entitled under this section for any fiscal year ending prior to October 1, 1983, the Secretary shall, in addition to any determination made with respect to such agency under subsection (a) of this section, determine the number of children (other than children with respect to whom a determination is made for such fiscal year under subsection (a) of this section) who were in average daily attendance at the schools of such agency, and for whom such agency provided free public education, during such fiscal year and who, while in attendance at such schools, either

(1) resided on Federal property, or

(2) resided with a parent employed on Federal property situated (A) in whole or in part in the county in which the school district of such agency is located, or in whole or in part in the school district of such agency if the school district is located in more than one county, or (B) if not in such county or district, in whole or in part in the same State as the school district of such agency, or

(3) had a parent who was on active duty in the uniformed services (as defined in section 101 of title 37).

For such purpose, with respect to a local educational agency, in the case of any fiscal year ending prior to October 1, 1983, the Secretary shall also determine the number of children (other than children to whom subsection (a) of this section or the preceding sentence applies) who were in average daily attendance at the schools of such agency and for whom such agency provided free public education, during such fiscal year, and who, while in attendance at such schools resided with a parent who was, at any time during the three-year period imme

diately preceding the beginning of the fiscal year for which the determination is made, a refugee who meets the requirements of clauses (A) and (B) of section 2601(b)(3) of title 22, except that the Secretary shall not include in his determination under this sentence for any fiscal year any child with respect to whose education a payment was made under section 2601(b)(4) of title 22.

(c) Eligibility for payments; waiver of paragraph (1)(B) requirement

(1) Except as is provided in paragraph (2), no local educational agency shall be entitled to receive a payment for any fiscal year with respect to a number of children determined under subsection (a) and subsection (b) of this section, unless the number of children so determined with respect to such agency amounts to

(A) at least four hundred such children; or (B) a number of such children which equals at least 3 per centum of the total number of children who were in average daily attendance, during such year, at the schools of such agency and for whom such agency provided free public education;

whichever is the lesser.

(2)(A)(i) Clause (B) of paragraph (1) shall not operate to make any local educational agency eligible for a payment under this section for any fiscal year unless the number of children with respect to whom determination was made under subsections (a) and (b) of this section respecting such agency for that fiscal year is at least ten.

(ii) If a local educational agency is eligible for a payment for any fiscal year by the operation of clause (B) of paragraph (1), it shall continue to be so eligible for the two succeeding fiscal years even if such agency fails to meet the requirement of such clause (B) during such succeeding fiscal years, except that the number of children determined for the second such succeeding fiscal year with respect to such agency for the purpose of any clause in paragraph (1) of subsection (d) of this section shall not exceed 50 per centum of the number of children determined with respect to such agency for the purpose of that clause for the last fiscal year during which such agency was so eligible.

(iii) If the Secretary determines with respect to any local educational agency for any fiscal year that

(I) such agency does not meet the requirement of clause (B) of paragraph (1); and

(II) the application of such requirement, because of exceptional circumstances, would defeat the purposes of this subchapter;

the Secretary is authorized to waive such requirement with respect to such agency.

(B) No local educational agency shall be entitled to receive a payment for any fiscal year with respect to a number of children determined under the second sentence of subsection (b) of this section unless the number of children so determined constitutes at least 20 per centum of the total number of children who were in average daily attendance at the schools of such agency and for whom such agency,

during such fiscal year, provided free public education.

(d) Amount of payments; special education programs, entitlement; criteria; local contribution rate; formula; special determination for territories; "handicapped children", "State", and "average per pupil expenditure" defined

(1) Except as is provided in paragraph (2), the amount to which a local educational agency shall be entitled under this section for any fiscal year shall be

(A) in the case of any local educational agency with respect to which the number of children determined for such fiscal year under subsection (a) of this section amounts to at least 20 per centum of the total number of children who were in average daily attendance at the schools of such agency during such fiscal year and for whom such agency provided free public education, an amount equal to 100 per centum of the local contribution rate multiplied by the number of children determined under such subsection plus the sum of the products obtained with respect to such agency under clauses (B)(iii), (B)(iv), and (B)(v); and

(B) in any other case, an amount equal to the sum of

(i) the product obtained by multiplying 100 per centum of the local contribution rate by the number of children determined with respect to such agency for such fiscal year under clause (2) of subsection (a) of this section,

(ii) the product obtained by multiplying 90 per centum of the local contribution rate by the number of children determined with respect to such agency for such fiscal year under clause (1) of subsection (a) of this section,

(iii) the product obtained by multiplying 50 per centum of the local contribution rate by the number of children determined with respect to such agency for such fiscal year under clause (3) of subsection (b) of this section,

(iv) the product obtained by multiplying 45 per centum of the local contribution rate by the number of children determined with respect to such agency for such fiscal year under clauses (1) and (2)(A) of subsection (b) of this section, and

(v) the product obtained by multiplying 40 per centum of the local contribution rate by the number of children determined with respect to such agency for such fiscal year under clause (2)(B) of subsection (b) of this section.

(2)(A) Repealed. Pub. L. 95-561, title X, § 1004, Nov. 1, 1978, 92 Stat. 2307.

(B) If the Secretary determines that—

(i) the amount computed under paragraph (1), as is otherwise provided in this subsection with respect to any local educational agency for any fiscal year, together with the funds available to such agency from State and local sources and from other sections of this subchapter, is less than the amount necessary to enable such agency to provide a level of education equivalent to that maintained in the

school districts of the State which are generally comparable to the school district of such agency;

(ii) such agency is making a reasonable tax effort and exercising due diligence in availing itself of State and other financial assistance; (iii) not less than 50 per centum of the total number of children who were in average daily attendance at the schools of such agency during such fiscal year and for whom such agency provided free public education were, during such fiscal year, determined under either subsection (a) or subsection (b) of this section, or both; and

(iv) the eligibility of such agency under State law for State aid with respect to free public education of children residing on Federal property, and the amount of such aid, are determined on a basis no less favorable to such agency than the basis used in determining the eligibility of local educational agencies for State aid, and the amount thereof, with respect to the free public education of other children in the State;

the Secretary shall increase the amount computed under paragraph (1) with respect to such agency for such fiscal year to the extent necessary to enable such agency to provide a level of education equivalent to that maintained in such comparable school districts. The Secretary shall not, under the preceding sentence, increase the amount computed under paragraph (1) with respect to any local educational agency for any fiscal year to an amount which exceeds the product of—

(I) the amount the Secretary determines to be the cost per pupil of providing a level of education maintained in such comparable school districts during such fiscal year,

multiplied by

(II) the number of children determined with respect to such agency for such year under either subsection (a) or subsection (b) of this section, or both,

minus the amount of State aid which the Secretary determines to be available with respect to such children for the fiscal year for which the computation is being made.

(C)(i) The amount of the entitlement of any local educational agency under this section for any fiscal year with respect to handicapped children and children with specific learning disabilities for whom a determination is made under subsection (a)(2) or (b)(3) of this section and for whom such local educational agency is providing a program designed to meet the special educational and related needs of such children shall be the amount determined under paragraph (1) with respect to such children for such fiscal year multiplied by 150 per centum. (ii) For the purposes of division (i), programs designed to meet the special educational and related needs of such children shall be consistent with criteria established under division (iii).

(iii) The Secretary shall by regulation establish criteria for assuring that programs (including preschool programs) provided by local educational agencies for children with respect to whom this subparagraph applies are of suffi

cient size, scope, and quality (taking into consideration the special educational needs of such children) as to give reasonable promise of substantial progress toward meeting those needs, and in the implementation of such regulations the Secretary shall consult with persons in charge of special education programs for handicapped children in the educational agency of the State in which such local educational agency is located.

(iv) For the purpose of this subparagraph the term “handicapped children" has the same meaning as specified in section 1401(1) of this title and the term "children with specific learning disabilities" has the same meaning as specified in section 1401(15) of this title.

(D) The amount of the entitlements of any local educational agency under this section for any fiscal year with respect to children who, while in attendance at such agency, resided on Indian lands, as described in clause (A) of section 244(1) of this title, shall be the amount determined under paragraph (1) with respect to such children for such fiscal year multiplied by 125 per centum.

(E)(i) The amount of the entitlement of any local educational agency under this section for fiscal year 1982 with respect to children determined under subsection (b) of this section with respect to such agency shall be the amount determined under paragraph (1) with respect to such children multiplied by 66% per centum.

(ii) The amount of the entitlement of any local educational agency under this section for fiscal year 1983 with respect to children determined under subsection (b) of this section with respect to such agency shall be the amount determined under paragraph (1) with respect to such children multiplied by 33% per centum.

(iii) The amount of the entitlement of any local educational agency under this section for fiscal year 1984 or any succeeding fiscal year with respect to children determined under subsection (b) of this section with respect to such agency shall be zero.

(3)(A) Except as is provided in subparagraph (B), in order to compute the local contribution rate for a local educational agency for any fiscal year, the Secretary, after consulting with the State educational agency of the State in which the local educational agency is located and with the local educational agency, shall determine which school districts within such State are generally comparable to the school district of the local educational agency for which the computation is being made. The local contribution rate for such agency shall be the quotient of

(i) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the computation is made, which the local educational agencies of such comparable school districts derived from local sources,

divided by

(ii) the aggregate number of children in average daily attendance for whom such agency provided free public education during such second preceding fiscal year.

(B)(i) The local contribution rate for a local educational agency in any State shall not be less than

(I) 50 per centum of the average per pupil expenditure in such State, or

(II) 50 per centum of such expenditures in all the States,

whichever is greater, except that clause (II) shall not operate in such a manner as to make the local contribution rate for any local educational agency in any State exceed an amount equal to the average per pupil expenditure in such State.

(ii) If the current expenditures in those school districts which the Secretary has determined to be generally comparable to the school district of the local educational agency for which a computation is made under subparagraph (A) are not reasonably comparable because of unusual geographical factors which affect the current expenditures necessary to maintain, in the school district of such agency, a level of education equivalent to that maintained in such other school districts, the Secretary is authorized to increase the local contribution rate for such agency by such an amount which he determines will compensate such agency for the increase in current expenditures necessitated by such unusual geographical factors.

(iii) The local contribution rate for any local educational agency in

(I) Puerto Rico, Wake Island, Guam, American Samoa, the Northern Mariana Islands, or the Virgin Islands, or

(II) any State in which a substantial proportion of the land is in unorganized territory, or

(III) any State in which there is only one local education agency,

shall be determined for any fiscal year by the Secretary in accordance with policies and principles which will best achieve the purposes of this section and which are consistent with the policies and principles provided in this paragraph for determining local contribution rates in States where it is possible to determine generally comparable school districts.

(C) For the purposes of this paragraph

(i) the term "State" does not include Puerto Rico, Wake Island, Guam, American Samoa, the Northern Mariana Islands, or the Virgin Islands; and

(ii) the "average per pupil expenditure" in a State shall be (I) the aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the computation is made of all local educational agencies in the State, divided by (II) the aggregate number of children in average daily attendance for whom such agencies provide free public education during such second preceding fiscal year.

(e) Adjustment for certain decreases in Federal activities

Whenever the Secretary determines that

(1) for any fiscal year, the number of children determined with respect to any local educational agency under subsections (a) and

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