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Preheat oven to 350.
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In a large mixing bowl, beat butter, brown sugar and sugar until creamy.
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In a separate bowl, melt half of the butterscotch chips in the microwave according to the package directions.
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Add melted butterscotch chips, peanut butter, egg and vanilla to the sugar mixture.
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Beat until smooth.
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Stir in flour, baking soda and salt.
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Stir in the remaining butterscotch chips.
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Pour about 1/2 cup of sugar on a small plate.
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Roll the dough into 1 inch balls and roll in the sugar to cover completely.
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Place on a parchment lined cookie sheet, 2 inches apart.
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Bake for 9 - 10 minutes or until very light brown on the edges.