text:
HOUSE STATE AFFAIRS STANDING COMMITTEE
Representative Bruce Weyhrauch, Chair
Representative Jim Holm, Vice Chair
Representative John Coghill
Representative Paul Seaton
Representative Ethan Berkowitz
"An  Act  relating  to  the  dividends  of  individuals  claiming
allowable absences; and providing for an effective date."
- MOVED HB 547 OUT OF COMMITTEE
"An   Act   establishing   the   Alaska   Statehood   Celebration
Commission; and providing for an effective date."
- MOVED CSHB 476(STA) OUT OF COMMITTEE
"An  Act  relating  to  the   Alaska  Securities  Act,  including
reports,  proxies,  consents, authorizations,  proxy  statements,
and other  materials, civil penalties,  refunds of  proceeds from
violations, restitution, and  investment adviser representatives;
and providing for an effective date."
"An Act  relating to federal  requirements for  governmental plan
and  other qualifications  for the  teachers' retirement  system,
the  public  employees'  retirement   system,  and  the  judicial
retirement system; and providing for an effective date."
- HEARD AND HELD
SHORT TITLE:PFD: DELAY PAYMENT FOR ALLOWABLE ABSENCES
SPONSOR(S): STATE AFFAIRS
Jrn-Date   Jrn-Page                     Action
03/29/04     3110       (H)        READ THE FIRST TIME -
03/29/04     3110       (H)        STA, FIN
03/30/04                (H)        STA AT 8:00 AM CAPITOL 102
03/30/04                (H)        Heard & Held
MINUTE(STA)
SHORT TITLE:AK STATEHOOD CELEBRATION COMMISSION
SPONSOR(S): REPRESENTATIVE(S) ANDERSON
SHORT TITLE:ALASKA SECURITIES ACT
03/01/04     2790       (H)        STA, JUD, FIN
03/09/04                (H)        MINUTE(STA)
03/26/04                (H)        Scheduled But Not Heard
SHORT TITLE:RETIREMENT:TEACHERS/JUDGES/PUB EMPLOYEES
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
05/21/03     2070       (H)        STA, L&C, FIN
05/21/03     2070       (H)        FN1: ZERO(ADM)
05/21/03     2070       (H)        GOVERNOR'S TRANSMITTAL LETTER
03/30/04                (H)        <Bill Hearing Postponed to
Thurs. 4/1/04>
SHARON BARTON, Director
Permanent Fund Dividend Division
Department of Revenue (DOR)
POSITION STATEMENT:  Answered questions on behalf of the
division during the hearing on HB 547.
JIM SHINE, Staff
to Representative Tom Anderson
POSITION STATEMENT:  Reviewed committee substitute (CS) to HB
476, Version LS-1744\D, Utermohle, 4/2/04, on behalf of
Representative Anderson, sponsor.
VINCE USERA, Senior Securities Manager
Division of Banking, Securities & Corporations
Department of Community & Economic Development (DCED)
TERRY ELDER, Alaska Representative
Investment Company Institute (ICI)
POSITION STATEMENT:  Testified and  answered questions during the
hearing on HB 527.
ANSELM STAACK, Chief Financial Officer
Division of Retirement & Benefits
Department of Administration (DOA)
POSITION STATEMENT:   Testified and answered  questions on behalf
of the division during the hearing on HB 331.
TAPE 04-54, SIDE A
CHAIR  BRUCE WEYHRAUCH  called the  House State  Affairs Standing
Committee meeting  to order at  8:01 a.m.   Representatives Holm,
Seaton,  Coghill,  and Weyhrauch  were  present  at the  call  to
order.    Representatives  Lynn  and  Gruenberg  arrived  as  the
HB 547-PFD: DELAY PAYMENT FOR ALLOWABLE ABSENCES
CHAIR WEYHRAUCH announced that the  first order of business would
be  HOUSE BILL  NO. 547,  "An Act  relating to  the dividends  of
individuals  claiming allowable  absences; and  providing for  an
REPRESENTATIVE  SEATON referred  to  a  [two-page chart]  listing
allowable absences from  the years 1999 to 2003  [included in the
committee packet].   He noted some of the amounts  of absences on
the  chart,  for  categories  such  as  "accompanied,"  "enrolled
college,"  "active  duty,"  and  "medical."   In  response  to  a
question from  Chair Weyhrauch, he  confirmed that the  chart was
prepared by the [Permanent Fund Dividend] Division.
REPRESENTATIVE SEATON moved to adopt HB 547 as a work draft.
CHAIR WEYHRAUCH objected for discussion purposes.
SHARON BARTON, Director, Central  Office, Permanent Fund Dividend
Division, Department  of Revenue (DOR), offered  a brief overview
of the previously  mentioned chart.  She noted that  the chart is
an initial  response to  a request  from the  committee to  see a
breakdown  in the  numbers involved  in  the allowable  absences.
She  reminded the  committee that  it  had requested  information
regarding  "behavior patterns  beyond that,"  including how  long
people are  staying out [of Alaska]  and whether or not  they are
returning.  She explained that  the division has that information
stored, but  because of  the age  of its  computers, it  would be
labor  intensive to  retrieve the  information.   Notwithstanding
that,  she said  the  division would  carry  out the  committee's
request  "if it  ends  up being  pivotal  ... to  decision-making
here."
REPRESENTATIVE SEATON offered his  understanding that the request
had been for the division to  take the applications at "six years
and  ten years,"  and follow  those  applications to  see if  the
allowable absences  ended with a  permanent fund  granted without
allowable absences or [if they were] terminated.
MS. BARTON  confirmed that was  true, but clarified that  is what
would be  "terribly labor intensive for  us to dig out  for you."
She  illustrated  that  it  would mean  taking  staff  away  from
important work in order to complete this request.
REPRESENTATIVE SEATON  asked if  following a single  year instead
of two years would cut the work in half.
MS. BARTON answered that it  wouldn't matter.  She specified that
it's a  matter of  asking the computer  to track  each individual
applicant through  some 12 million records,  using an inefficient
system.  Manual  effort would be used to  program each individual
[search].  She  clarified, "So, it doesn't really  matter how far
back we go; once we get  into each individual record, [we] can go
back as far as that record goes."
REPRESENTATIVE HOLM noted  [on the chart] that in  1999, only two
people were  listed under the category  of "secondary education,"
and since  then there have  been close to  1,000.  He  asked what
caused the change.
MS.  BARTON answered  that she  suspects that's  an error  in the
CHAIR WEYHRAUCH closed public testimony on HB 547.
REPRESENTATIVE  SEATON asked  Ms. Barton  if the  fiscal note  is
accurate,  or if  the division  would be  filing a  more detailed
MS.  BARTON confirmed  that more  work needs  to be  done on  the
fiscal  note  because  the  one before  the  committee  was  done
quickly for the last hearing.
REPRESENTATIVE HOLM  said it bothered  him that  approximately $7
million is  being given  away and  Ms. Barton  had said  that the
division has an inefficient computer system with which to work.
MS.  BARTON said  she  thinks  the inefficiency  is  a result  of
different pieces of [the computer  system] being built at various
times  and not  working well  together.   She indicated  that the
division has submitted  a request for funds to  change the system
to a more cohesive one.  She offered details.
REPRESENTATIVE HOLM  asked how the  processing of  permanent fund
dividend (PFD) checks is paid for.
MS.  BARTON  replied that  the  division's  operations are  fully
funded out  of the PFD  fund.   In response to  another question,
she relayed that  updating the division's computer  system is now
the department's number one priority, as well as her own.
CHAIR WEYHRAUCH  offered his understanding  that "this  assumes a
$50,000 expenditure ... in 2005."   He noted that the fiscal note
does not clarify "what that would be going for."
MS. BARTON  confirmed that is  the assumption and  explained that
it was  the staff's  quick estimate at  the programming  costs if
the  research was  handled  as  a special  project  - a  one-time
event.   She explained that the  division is working on  what the
cost would  be "if  we weave  it in to  this upgrade  we're doing
right now."  She added, "We believe  we can hone it down from the
$50,000."
CHAIR WEYHRAUCH  asked if  one possible impact  of passage  of HB
527 would be  a decline in the applications and  payments, and if
that would be reflected in the fiscal note.
MS. BARTON surmised  that there would be  an indeterminate amount
of people  who, because  of the bill,  would be  discouraged from
filling out an application for a  PFD because they know that they
will  not  be  coming  back  to  Alaska.    Out  of  the  625,000
applications  received   every  year,  she  said,   the  division
probably won't notice a change in workload.
CHAIR  WEYHRAUCH asked  what kind  of authorization  the division
would need to print on the  checks the total amount of PFD checks
that are mailed to out-of-state addresses.
MS. BARTON responded that the division  could do that as a matter
of procedural policy; it does  not need statutory authority to do
so.  The [lack of] room on  the check would be a limiting factor,
although the division could find room.
REPRESENTATIVE SEATON  noted that there is  a discrepancy between
the number of checks mailed and  the amount of money sent [out of
state], and asked why.
MS.  BARTON answered  that  some  of the  people  who would  have
applied for the  allowable absence PFD check  would have returned
to Alaska  and received  the check  at their  home address.   She
confirmed that  another reason  could be  that they  are students
and the check was mailed to their parents' Alaska address.
REPRESENTATIVE COGHILL, regarding checks  that are mailed out [of
state], asked  how the division  is presently set up  to discover
fraudulent applications.
MS. BARTON  answered that the  division has just  reorganized its
"fraud  unit" and  has reestablished  working relationships  with
fraud enforcement  people across the  state, as well as  with the
federal government.   She revealed that the  division is probably
most successful  discovering fraud through tips  from the public.
She  stated that  the division  gets  hundreds of  tips from  the
public  and investigates  each one.   Additionally,  the division
performs focused audits.   For example, all  applications with an
out-of-state postmark are audited,  as well as those applications
submitted  by people  who  have refused  jury  duty because  they
claimed not  to be residents of  the state.  Ms.  Barton reported
the findings  of the fraud investigator  for the past year.   She
noted  that  the office  of  the  inspector general  in  Seattle,
Washington, has  agreed to  take all  of the  division's identity
theft cases, of which there are presently three.
REPRESENTATIVE COGHILL  said he  is trying to  decide:   "Is this
huge policy call worth the effort of those very, very few?"
CHAIR  WEYHRAUCH   asked  if  the   identity  theft   arose  from
electronically generated applications, or paper [applications].
MS. BARTON answered she doesn't have that information.
CHAIR WEYHRAUCH  turned attention to [Section  1, subsection (a)]
of the bill, which read as follows:
*Section  1.  AS  43.23  is amended  by  adding  a  new
section to read:
Sec. 43.23.009.  Dividends of individuals with
allowable  absences.     (a)     Notwithstanding  other
provisions   regarding   payment  of   dividends,   the
dividend  of  an individual  who  was  absent from  the
state  during  the qualifying  year  as  allowed in  AS
43.23.008(a)(1)-(8) or (10)-(13) shall  be paid to that
individual  on  the  first  subsequent  year  that  the
individual is eligible for  a dividend without claiming
an  allowable absence  under AS  43.23.008(a)(1)-(8) or
(10)-(13).   A  dividend  that has  not become  payable
under  this  subsection  may  not   be  paid  under  AS
43.23.005(h).
CHAIR WEYHRAUCH  - noting that  currently, [paragraph (9)]  of AS
43.23.008(a) pertains to members of  the United States Congress -
brought attention to a possible  Amendment 1, to insert [existing
paragraph  (9) of  statute] in  Section 1,  thus having  the bill
apply  to paragraphs  (1)-(13)  of the  current  statute.   Chair
Weyhrauch explained  that he thinks  it would be unfair  to treat
members of the U.S. Congress differently.
REPRESENTATIVE GRUENBERG  stated opposition  to Amendment 1.   He
indicated that he had been on  a naval ship and he considers that
part  of  the United  States.    He  said  he thinks  an  Alaskan
congressman's turf in  Washington, D.C., is part of  the state of
Alaska.
REPRESENTATIVE SEATON noted that he  has received 17 e-mails that
have raised concerns about the bill,  and 15 e-mails that were in
favor of it.   One of the e-mails in  support expressed the point
of view that everyone should be treated equally.
CHAIR WEYHRAUCH stated  he understands Representative Gruenberg's
point, but  thinks of this issue  as a policy statement  and thus
looks at the  definition of what would be considered  part of the
state a little more tightly.  He  said, "It looks fair, to me, to
treat them like everybody else,  including those who have to care
for a  dying family member  or going  to school or  the military;
once  they  come  back,  they'll   receive  a  large  payment  of
dividends that indicate their leave out of the state."
REPRESENTATIVE  GRUENBERG responded  that  [members  of the  U.S.
Congress]  represent the  state;  they don't  just represent  one
person, as  in the  case of  someone caring for  a relative.   He
offered more examples.   He said, "Frankly, I don't  think any of
us  do as  much for  the  state as  our congressional  delegation
does,  and  I think  it's  just  as  symbolic  to give  them  the
dividend, even if you don't give it to anybody else."
REPRESENTATIVE SEATON pointed out  that, currently, the bill does
not include congressional "staffers" for exemptions.
REPRESENTATIVE  GRUENBERG said  the only  people exempted  in the
bill are  the three  members of U.S.  Congress, and  "they're the
people who  push the button on  the floor (indisc. -  voice faded
out)."
REPRESENTATIVE  COGHILL commented  that  given  the longevity  of
Alaska's  congressional delegation,  its  members  may never  get
[the PFD].
REPRESENTATIVE HOLM remarked  that "you could argue  this on both
sides."
CHAIR WEYHRAUCH withdrew Amendment 1.
REPRESENTATIVE  SEATON emphasized  that the  proposed legislation
is not  so much  concentrated on  fraud as it  is on  offering an
incentive  for people  to  return  from outside  the  state.   He
indicated that the system is the  creation of the state and there
is nothing  inherently right  or wrong about  it; the  state just
needs  to  figure  out how  it  wants  to  run  the system.    He
indicated that  most of  the comments sent  in opposition  to the
bill were [from  those in] the military or college  students.  He
said   the  comments   from   the  military   seemed   to  be   a
misinterpretation   that  the   dividends  would   be  cut   off.
Representative  Seaton emphasized  that's not  the intent  of the
bill.  Conversely,  the bill just states that if  a person who is
out of the state qualifies for  the dividend, he/she will get the
dividends upon his/her return to the  state.  He pointed out that
several [e-mails]  from people in  the military state  support of
that concept.
REPRESENTATIVE  HOLM noted  that  in  Fairbanks, military  people
don't have to get a state  license plate, but they receive a PFD.
He stated that  he finds it bizarre that "we  would allow that to
happen."     He  characterized   the  bill  as   "an  interesting
differential," and applauded Representative  Seaton for taking it
on; however,  he stated that  he is  not convinced that  it's the
right program to  have for Alaska.  He said  he thinks it [sends]
a bad message that people  somehow deserve a "welfare check" just
for being citizens of Alaska."
REPRESENTATIVE SEATON  referred to a memorandum  from Legislative
Legal and  Research Services [included in  the committee packet],
and said  Legislative Legal  and Research  Services was  asked to
address the  issues regarding due  process and  equal protection.
He focused  attention on the  end of  the first paragraph  on the
second page of the memorandum  showing examples of cases in which
a regulation  permitting absences  from Alaska  - if  the absence
was no  longer than the  time physically  present in the  state -
was  upheld.   He  added,  "But apparently  that's  no longer  in
effect."
REPRESENTATIVE  GRUENBERG  offered  his understanding  that  that
referred to the  180-day provision - that a person  cannot be out
of the  state for over half  of the year  - but added that  he is
not certain of that.
MS.  BARTON,  regarding  the  length of  time  for  an  allowable
absence not  exceeding the  time a  person is  a resident  in the
state, said she  doesn't know if that was ever  a regulation, but
it is not one now.  She continued as follows:
I know  in looking  at these  extended absences  at the
five-year   point  where   we  do   review  them   more
carefully,  we certainly  look at  that as  one factor.
... If  they were only a  resident of the state  for 18
months and have been gone  for five years, they need to
have  done  many of  the  other  due-diligent kinds  of
things  to  establish  residency and  their  intent  to
REPRESENTATIVE HOLM  said he would  be interested in  finding out
what   the  results   would  be   of  getting   a  second   fraud
investigator.   He  noted  that  the provisions  on  the PFD  are
rather  specific as  to what  the penalties  are "if  some things
happen."  He  asked whether any of the checks  sent to fraudulent
applicants were recovered.
MS.  BARTON  replied that  the  division  goes after  the  money,
though, in some  cases, it doesn't press criminal  charges if the
money  is  paid  back,  but   the  person  loses  the  next  five
dividends.  She  indicated that it is a little  more difficult to
retrieve  money from  those  who are  out-of-state.   She  added,
"And, of course,  to penalize them for  five subsequent dividends
doesn't mean a thing."
REPRESENTATIVE GRUENBERG read the numbers,  from 1999 to 2003, in
the active duty category of the  chart.  He asked if the increase
was also consistent prior to 1999.
MS.  BARTON  answered  that  she doesn't  know,  but  offered  to
research it.
REPRESENTATIVE  GRUENBERG stated  his assumption  that, with  the
exception of 2001  to 2002, the accompanied  category has "pretty
steadily  increased, as  well."   He stated  his assumption  that
"that reflects those folks who are accompanying military folks."
MS. BARTON  stated that  category is mainly  made up  of military
spouses  and  families, although  it  also  includes spouses  and
families of students and of someone  out of the state for medical
treatment.     In   response  to   a   follow-up  question   from
Representative Gruenberg,  she stated  that she doesn't  know how
many  active duty  military people  are  in Alaska  at any  given
REPRESENTATIVE  SEATON  referred  to  e-mails  in  the  committee
packet.    He  indicated  that  some  of  the  e-mails  expressed
opposition to  the fact  that college  students and  others who's
PFDs  were being  held would  not  be earning  interest on  those
dividends.  He  shared that another e-mail was in  support of the
bill because many  high school students choose to  turn down free
tuition  [to  Alaska's  University  system] in  order  to  attend
colleges out-of-state and so they  should also wait for their PFD
checks until they return; however,  the students should receive a
reasonable amount  of interest on  those checks.   Representative
Seaton explained that he just wanted  it on the record that those
comments had been received by e-mail.
REPRESENTATIVE SEATON  noted that some people  had expressed that
college students often  don't receive a lot of  income, and those
people suggested  a shorter  time period,  for example,  a "four-
year grace."
CHAIR WEYHRAUCH removed his objection  [to the previous motion to
adopt HB 547 as a work draft].
REPRESENTATIVE  LYNN objected.    He stated  that  he thinks  the
intent of the bill is good,  but doesn't think the military needs
"this kind of hassle."  He  noted that [those in the military] go
where  they are  ordered, and  "they take  Alaska with  them when
they  go somewhere  else."    He commented  that  there are  many
students who  are not born  with a  silver spoon in  their mouths
and can use  every dollar they can get.   He stated that although
he knows  it is not the  intent of the sponsor,  "we're inferring
that the military  and students tend to be cheats,  more than the
rest  of the  population."   He  said he  thinks  these kinds  of
things  need to  be investigated  on  a case-by-case  basis.   He
concluded, "We need  to protect the PFD - it's  our obligation to
do so -  but I'm afraid that  this bill throws the  baby out with
the bathwater, and I cannot support it."
REPRESENTATIVE  SEATON  responded, "This  is  a  system that  the
legislature  designed to  allow  extraordinary absences,"  noting
that  the  conditions  that are  placed  on  those  extraordinary
absences  are for  the legislature  to decide.   He  continued as
It  doesn't  mean that  anybody  is  cheating; it  just
means that we  are designing a system  that pays people
to be  outside.  And if  that is our intention,  to pay
people to  be gone  from the  state, that  is sometimes
the outcome of what the system  has crept to.  And that
is the  entire purpose  of the bill,  to give  people a
reason to  become and remain ...  physical residents at
the end  of their  extended allowable absence.  ... And
so there  is no  intent and there  is no  action saying
that the  people that  are receiving  extended absences
that we allow  are in any way cheats.   So, I want that
really  clear.   Fraud  is  something  that is  totally
different  than a  system that  we  create that  allows
people to be paid to be gone from the state.
REPRESENTATIVE  LYNN said  he understands,  but  stated that  the
gist of his previous remarks remains.
REPRESENTATIVE  GRUENBERG directed  the committee's  attention to
page 3, lines 2-5, which read as follows:
(c)  Notwithstanding other provisions, a dividend
that has not become payable  to an individual under (a)
of  this section  is not  subject  to levy,  execution,
garnishment, attachment,  or any  other remedy  for the
collection of debt until  that dividend becomes payable
or is paid to the individual.
REPRESENTATIVE GRUENBERG  said if  he were  a bankruptcy-planning
attorney, he might want to  use that language to protect somebody
who doesn't have  a lot of assets  but has a fair  amount tied up
in dividends.
TAPE 04-54, SIDE B
REPRESENTATIVE GRUENBERG continued as follows:
That   can  be   utilized  to   sequester  funds   from
creditors, in  a (indisc.)  planning situation,  like I
would  be if  I  were a  JAG  [Judge Advocate  General]
lawyer advising  military who have  some debts  and are
about  to be  transferred  from the  state.   It  could
sequester   a  fair   amount  of   money  from   Alaska
creditors.  And  I haven't really thought  about how to
deal with that.   But if somebody could be  gone for 5,
10, [or]  15 years, that could  be $15,000, ultimately,
that's sequestered from creditors.
REPRESENTATIVE  SEATON clarified  that  it  wouldn't be  somebody
leaving the state, because he/she  doesn't have any future credit
for dividends; therefore, it would  only be somebody who has left
the state and  has had allowable absences, and was  not in Alaska
for an extended  period of time, but then  declared bankruptcy or
something else outside of the state.
REPRESENTATIVE GRUENBERG concurred.
REPRESENTATIVE  COGHILL noted  that  what first  appealed to  him
regarding  the bill  was  "the  draw to  bring  people back  into
Alaska to  receive their benefit";  however, the more  he thought
about the practical  "outplay" of the bill, the  more problems he
had  with  it.   He  said  he appreciates  Representative  Lynn's
comments.   He stated  that the  check distribution  would almost
become  "a banking  of  sorts," where  money has  to  be held  in
account for people.  He indicated  that he is not certain whether
he  wants that  [additional work]  given to  the [division].   He
suggested  that   the  intended   consequences  may   be  getting
outweighed  by the  unintended consequences.   He  also mentioned
that there might  be an inherent unfairness.  He  noted that less
than 5 percent of [Alaska's]  overall population has been outside
of the  state with allowable  absences.  He estimated  that about
1-2 percent  may be military.   He stated that he  knows there is
fraud, but said he doesn't know  that it would be worth "having a
big bureaucratic system and delayed recipients for all that."
REPRESENTATIVE  LYNN  said  Alaska   has  no  problem  attracting
military to the state with or without "this program."
REPRESENTATIVE   SEATON  offered   his  understanding   that  the
division already had an accounting system for holding checks.
MS. BARTON stated that the  division currently has to account for
18-year-old filers [whose  parents or guardians did  not file for
their PFDs] and  for estates [where someone has died].   She said
she doesn't think [HB 547]  will create a huge accounting burden.
She  explained  that  the  applications  will  be  processed  and
pended, so  in any given  year, the  division will know  what the
possible liability  is and  those funds will  be retained  in the
fund until such time as they can be released.
MS.  BARTON, responding  to previous  remarks regarding  possible
interest  on [the  withheld dividend]  monies, said  the division
would  have  to think  through  the  process she  just  described
differently if interest were a part of the equation.
REPRESENTATIVE GRUENBERG  offered his  understanding that  as the
bill is  currently written,  the interest  would remain  with the
MS.  BARTON said  that's correct.    In response  to a  follow-up
question  from Representative  Gruenberg,  she said  she did  not
know how  much that would  be per  year, but offered  to research
REPRESENTATIVE LYNN  said, "It would seem  to me that if  we were
... paying interest on money  being withheld, this interest would
belong to the  person that this money would  eventually belong to
when they return  to the state, rather than to  the state.  You'd
be  getting interest  on somebody  else's money  - a  pretty good
deal."
CHAIR WEYHRAUCH said, "All right, there's  a motion on HB 547 and
an  objection."   [Although  the motion  pending  was whether  to
adopt  HB  547  as  a  work  draft,  the  committee  treated  the
following roll call  vote as if it pertained to  a motion to move
the bill from committee.]
A roll  call vote  was taken.   Representatives  Gruenberg, Holm,
Seaton, and Weyhrauch voted in  favor of HB 547.  Representatives
Coghill  and  Lynn voted  against  it.    Therefore, HB  547  was
reported out of  the House State Affairs Standing  Committee by a
vote of 4-2.
HB 476-AK STATEHOOD CELEBRATION COMMISSION
CHAIR WEYHRAUCH announced  that the next order  of business would
be HOUSE BILL NO. 476,  "An Act establishing the Alaska Statehood
Celebration Commission; and providing for an effective date."
CHAIR WEYHRAUCH moved to adopt  the proposed committee substitute
(CS) for  HB 476,  Version 23-LS1744\D,  Utermohle, 4/2/04,  as a
work draft.
REPRESENTATIVE HOLM objected.
JIM  SHINE, Staff  to Representative  Tom Anderson,  Alaska State
Legislature,  reviewed  Version  D on  behalf  of  Representative
Anderson,  sponsor.   He noted  that Version  D would  reduce the
number of  members on the commission  from 17 to 9,  would reduce
the number  of public  members on  the commission  from 12  to 4,
would provide  for one  member from  each judicial  district, and
would eliminate the four "at-large" members.
MR. SHINE  directed the  committee's attention  to page  2, lines
18-19, of  Version D, which read  in part:  "or  if a legislative
member  of  the   commission  is  no  longer  a   member  of  the
legislative  body  from  which  the  member  was  appointed,  the
officer responsible  for appointing  that member shall  appoint a
replacement member as soon as possible."
CHAIR WEYHRAUCH closed public testimony.
REPRESENTATIVE HOLM asked  Mr. Shine if going to  9 members would
affect the fiscal note.
MR. SHINE responded that although a  new fiscal note has not been
received, he  anticipates that there  will be a reduction  in the
fiscal note.  He noted that  the next committee of referral would
be the House Finance Committee.
REPRESENTATIVE HOLM removed his objection.
REPRESENTATIVE HOLM moved  to report the proposed CS  for HB 476,
Version  23-LS1744\D, Utermohle,  4/2/04, out  of committee  with
individual  recommendations and  the  [forthcoming] fiscal  note.
There being no  objection, CSHB 476(STA) was reported  out of the
House State Affairs Standing Committee.
HB 527-ALASKA SECURITIES ACT
be HOUSE BILL NO. 527, "An  Act relating to the Alaska Securities
Act, including reports,  proxies, consents, authorizations, proxy
statements,  and other  materials,  civil  penalties, refunds  of
proceeds  from violations,  restitution,  and investment  adviser
representatives; and providing for an effective date."
REPRESENTATIVE  LYNN  moved  [to adopt]  the  proposed  committee
substitute  (CS)  for  HB 527,  Version  23-LS1792\Q,  Bannister,
4/5/04, [as a work draft].
CHAIR WEYHRAUCH  reviewed that at the  last hearing on HB  527, a
representative  of the  New York  attorney  general's office  had
testified.  He also reminded  the committee of the correspondence
in  the  committee  packet from  [Warren  E.  Buffet,  Chairman],
Berkshire Hathaway.   He stated  that he  is not certain  that HB
527 does what  he would like it  to do.  He  said his inclination
is to  "get into  this with  both feet,"  but thinks  there isn't
time, nor is  there the inclination by the committee  to do that.
He said,  "I just think that  we have an obligation  to equip our
state  with the  means  to do  those kind  of  things the  public
sector  is normally  charged  to do,  without  the public  sector
paying for it when there's wrong-doing."
CHAIR WEYHRAUCH  noted that there  were concerns raised  by other
members  of the  administration  regarding some  portions of  the
bill, which he said have been addressed in Version Q.
VINCE  USERA, Senior  Securities  Manager,  Division of  Banking,
Securities  & Corporations,  Department of  Community &  Economic
Development  (DCED),  described   his  involvement  working  with
[Legislative  Legal  and  Research  Services]  to  come  up  with
Version Q.
REPRESENTATIVE GRUENBERG  stated that  he also wanted  to proceed
as Chair Weyhrauch  did.  He said, "There are  lots of securities
problems in the state, but I think  this is an area that has some
troubling aspects  on a national scale,  and I'd like to  see our
state  in  the forefront  of  protecting  our consumers.    We're
basically  a consumer  state, in  this area."   He  expressed his
appreciation of Mr. Usera's willingness  to look at "the Takeover
Bid Disclosure  Act."  He  stated for  the record that  he thinks
"we" probably all  agree that the Alaska  Takeover Bid Disclosure
Act is  probably unconstitutional and  needs to be repealed.   He
mentioned working  in the House  Judiciary Standing  Committee to
develop a new  Act to add to  the bill.  He asked  Mr. Usera, "Is
that not correct?"
MR. USERA answered, "That's correct."
REPRESENTATIVE GRUENBERG directed attention  to page 3, [line 17-
19], which read in part as follows:
The amount of the restitution paid to the harmed
person may be two times the amount of loss caused to
the person by the violator.
REPRESENTATIVE  GRUENBERG  commented  that's  almost  a  kind  of
punitive damage,  except that it goes  to the victim, not  to the
state.  He asked how "two times" became established.
CHAIR WEYHRAUCH said  he added that language.   He explained that
it's intended  to deter wrongful  conduct, to pay those  who have
been  harmed, and  to give  notice to  those potential  offenders
that "if they're going to do  business here, ... they have to cut
square corners  with the consumer  and, if they don't,  they have
to  pay   a  penalty."     He  revealed  that  he   had  received
confirmation from the drafters of  the bill that "this would pass
muster if it were challenged."   He noted that this is similar to
"the wage and hour statutes."
REPRESENTATIVE GRUENBERG  asked, "Was it  a policy call  for 'two
times', or  was it more  of a  recognition of the  maximum extent
constitutionally permissible?"
CHAIR WEYHRAUCH responded, "There's  a tension there, because the
idea embodied  in the statute is  'two times', but that's  to the
maximum extent allowed by the constitution."
REPRESENTATIVE GRUENBERG asked Chair  Weyhrauch how he would feel
about allowing the  amount of a recovery to be  determined by the
administrator    to   the    maximum   extent    constitutionally
permissible,  thus "leaving  it  to that  person's discretion  to
that extent."
CHAIR   WEYHRAUCH   responded   that   the   problem   with   the
constitutional issue  and punitive damages cases  is that they're
subject to "what ... seems right to a judge."  He said:
This is  a tension between attracting  business capital
in  the state  and  wanting to  do  business here,  and
having a certainty for businesses  in order to do their
work here.   By spelling out in statute,  as opposed to
allowing  an  ambiguous  judge-made  sanction,  you  do
provide  that ...  level  of  certainty to  businesses,
which I  think they  need, as  opposed to  a judge-made
REPRESENTATIVE  GRUENBERG stated  that "these  ... administrative
actions" sometimes  involve brokerage  houses, and the  amount to
an individual  investor may be small.   He noted that  the number
of investors in [Alaska] in a  given corporation may be small and
[so the  bill would] hardly  provide any  deterrence at all.   He
suggested  that it  might be  constitutionally permissible  and a
wise policy  to allow  discretion by  the administrator  to award
more damages.
MR. USERA  noted that the  consumer protection statutes  in Title
45 allow for treble damages.  He continued as follows:
The way we've administered the  statute in the past has
been  to  try to  levy  enough  fines to  convince  the
wrongdoer  to  make  the  victim   whole.    If  it  is
egregious and we can double  that amount, that would be
an  excellent outcome.   I  don't  have any  experience
with  levying two  times  the fine  or  things of  that
nature, ... but I don't see any harm coming from this.
CHAIR WEYHRAUCH  pointed out  that the  language reads  that [the
restitution paid] "may" be two times - it's discretionary.
MR. USERA said  [the double amount] would only  be implemented in
the case of an egregious wrong, and  then it may be in place of a
fine.  He concluded, "This would  give us the ability to make the
victim whole, and perhaps a little bit more than whole."
REPRESENTATIVE GRUENBERG asked how  the department would feel "if
this were  allowed to  be treble damages,  to be  consistent with
the unfair trade factor?"
MR. USERA replied that he would  like the ability to do that, but
he only sees that coming about in an unusual situation.
REPRESENTATIVE  GRUENBERG   said,  "At   least  you'd   have  the
discretion."
REPRESENTATIVE  GRUENBERG  asked  Chair  Weyhrauch  if  he  would
consider that a friendly amendment.
CHAIR  WEYHRAUCH  suggested  that the  House  Judiciary  Standing
Committee  could decide  to make  that change  when it  hears the
TERRY  ELDER, Alaska  Representative for  the Investment  Company
Institute  (ICI),  told  the  committee   that  the  ICI  is  the
professional  organization  whose  members are  the  mutual  fund
industry.   Because  many  of the  mutual  funds have  investment
advisors  that  are  federally  registered,  [the  ICI]  is  also
interested  in  issues  that  affect  those  advisors  and  their
representatives.   He noted that  the ICI  is active both  at the
federal level and  at the state level, and  has historically been
cooperative with Alaska's state regulations.   Mr. Elder said the
ICI has  always supported both  state and federal  regulations of
the security industry  and works closely with all  the states and
the  North American  Securities  Administrators Association,  for
example,  regarding  common  language  that  is  in  the  Uniform
Securities Act.
MR.  ELDER turned  attention to  Section 1  [of Version  Q].   He
explained that  Section 1  would exempt  the Securities  Act from
[AS]  37.10.050,   which  deals  with   fees  that  are   set  by
regulation.   He  stated  that  the ICI's  position  would be  to
encourage the  committee to  delete Section  1 before  moving the
bill out of  committee.  He explained that  when executive branch
agencies  set  fees   by  regulation  and  those   fees  have  no
relationship to  the cost  of regulation,  that becomes  an issue
for the ICI.  He continued as follows:
We  think [that]  to exempt  the Securities  Act almost
all by  itself there, sort of  jumps out at you.   It's
one  of fairness;  you're singling  out the  securities
industry for exemption from  that limitation, which the
ICI doesn't think is fair.   The ICI already provides a
sea of revenue to the  State of Alaska that exceeds the
total  cost of  the Division  of Banking,  Securities &
Corporations,  and so  we would  argue from  a fairness
standpoint  that ...  industries  shouldn't be  singled
out for exemption ....
MR. ELDER, on the subject  of delegating legislative power to the
executive branch,  said [the ICI]  doesn't have any  problem with
legislatures  setting   fees  in  statutes.     The  problem,  he
explained,  is  allowing the  executive  branch  to set  fees  by
regulation.  He said AS  37.10.050 makes sense if the legislature
were to  say, "Okay  go ahead  and do that  by regulation  and we
aren't going  to get  involved in  that or  worry about  that, as
long as  you're covering your costs."   He said he  doesn't think
anybody would disagree with that.   For example, he said, "If you
spent $10  million in regulation and  you wanted to bring  in $50
million of  revenue, that  would be more  of a  legislative issue
than  we  think   should  be  delegated  to   an  agency  through
regulation."
CHAIR WEYHRAUCH said [Section 1 of  Version Q] was added to allow
the executive  branch to collect  fees, because of the  volume of
work  that  it does  through  the  securities  area.   He  added,
"Certainly that's  subject to  any review  and comment  period by
the  industry  on  that  regulation."     He  remarked  that  the
legislature  is   always  troubled  when  the   executive  branch
implements  regulations that  stray  from  what [the  legislature
intends].
MR. ELDER noted that a lot  of discussion when [AS 37.10.050] was
last amended was  focused around resource agencies  and not other
agencies such as the securities  division.  That's another reason
it would be "more appropriate to do  it as a general look at that
issue and deal with all of  them," he said, adding, "Our position
is  that they  should reflect  costs, unless  they're set  by the
legislature."
CHAIR  WEYHRAUCH told  Mr. Elder  that the  bill would  "pick up"
issues more  related to the securities  area when it is  heard in
the House Judiciary  Standing Committee, so "it may  be even more
relative in the next committee."
MR. ELDER clarified:
The fees  that we're talking  about here that  are paid
by the mutual fund for this  are not paid by large Wall
Street companies.  These are  fees that are paid by the
shareholders;  they're  expenses  of the  fund  and  so
they're   passed   on   directly  to   the   individual
shareholders.   And  ...  that's  another concern  that
everybody  has;  if  you're concerned  about  the  fees
charged  within the  mutual  fund  industry, then  that
would show up as one of those fees.
REPRESENTATIVE GRUENBERG asked  how much the fees  are for [state
notice].
MR. ELDER  offered his  understanding that  currently there  is a
flat  fee of  $600 for  [a] one-year  notice and  $1,100 for  two
years, so right now it's a flat  fee.  And  it's a notice filing,
not  a   registration,  because   in  1996,  when   the  National
Securities   Market   Improvement   Act  was   passed,   Congress
established  what it  called "federal  covered  securities."   He
explained  that  mutual  fund shares  are  considered  a  federal
covered security.   He  explained what that  means is  that since
1996,  states can't  require registration  of the  securities and
can't regulate  what's in the  prospectus, for example,  but they
retain enforcement authority,  with respect to fraud.   He added,
"And  so, it's  limited  to fraud  on the  state  level, and  the
Securities Act reflects that now,  because it was amended in 1999
and we also changed to a flat fee."
MR. ELDER, in response to a question from Representative
Gruenberg, explained the difference between a registration and a
notice filing as follows:
When you register, you can  also be denied.  [When] you
register,  you have  to meet  a whole  laundry list  of
criteria  that would  be  in the  statute  in terms  of
whatever  you're  registering  for, and  usually  those
things would  be listed and  disclosed to  investors in
prospectuses  and things  like  that.   And they  would
submit that  to a  state under a  registration concept,
and  the state  would  review that  and  say, "Yes,  it
meets it" or  "No, it doesn't," and either  allow it or
disallow it.
In  a  notice  filing,   it  is  recognized  that  what
Congress  did  was  essentially take  the  registration
authority away from the state.   They are now federally
registered;  they're  registered  with  the  SEC  [U.S.
Securities and Exchange Commission].   And so, what the
state  gets is  in fact  a  notice filing  ... for  two
reasons:   One is to  sort of  let the state  know that
we're ...  going to  be selling  this security  in your
state, and two, it was a  way for the state to continue
to receive  fees.   Because obviously,  one of  the big
issues in  1996, when the federal  government made that
change,  was, "If  we take  the registration  authority
away from the states, won't  that have a big fee impact
on  them?"   And  they  decided  to make  that  revenue
neutral, to  the extent they  could; it  wasn't totally
revenue neutral,  but they tried  to do that.   And so,
one way to  do that was to allow notices  to the states
for  federally covered  securities.    The state  can't
say, "No, I don't want you  to sell XYZ in Alaska," but
the state  can say,  "This is what  we charge  for this
notice."
REPRESENTATIVE GRUENBERG stated that he thinks that Section 1 is
an issue that the House State Affairs Standing Committee should
REPRESENTATIVE HOLM asked how many companies "this" would
involve.
MR. ELDER answered  he isn't certain.  He explained  that the ICI
represents  95   percent  of  the  industry,   and  the  industry
registers at  the federal level  and notices at the  state level,
by fund.  He surmised  that approximately 8,000 funds are noticed
in Alaska.   He  clarified that in  terms of  "mother companies,"
there would be  fewer than that, because, for  example, a company
may have a number of funds and  will notice each one of the funds
that  they  want to  sell  in  Alaska.   Each  of  the funds  are
separate securities that have their own management.
REPRESENTATIVE HOLM  stated that the  intent [of the bill]  is to
ensure that  there's no skullduggery  going on with the  funds to
the detriment  of the investors from  Alaska.  He added:   "Which
leads me to my thought as to  why we're having a notice of filing
other than for  the purpose of oversight.  It  appears to me that
if we  don't really have  much oversight  other than the  fact we
know you're here."
MR.  ELDER said  that's correct.   He  noted that  there are  two
reasons for  the notice  filing, and  one is  simply to  "make it
revenue neutral to  the state."  He said, "You  can maintain your
fee  income by  having this  notice filing  and charging  for the
notice.   That's  why one  must be  careful not  to slip  and use
"registration"  instead   of  "notice,"  because  it   means  two
different  things.    He  concurred   that  there  is  much  more
oversight   involved  with   registration  than   with  [notice].
Notwithstanding  that, he  said,  "Where you  do have  authority,
however,  in terms  of ...  oversight, is  in enforcement  issues
related to  fraud."  He  reiterated that  the ICI has  never been
against that idea.
REPRESENTATIVE HOLM  directed attention  to Section 6,  and asked
Mr. Elder if [the amount of  restitution that may be paid] was of
concern.
MR. ELDER responded that the only  thing he is concerned about is
Section 1.  Notwithstanding that, he added the following:
The only thing that you  might want to think about with
the others is whether or  not you want to differentiate
between   fines   and   potential  fines   related   to
intentional     violations,    versus     unintentional
violations.  But the ICI is not taking that position;
I'm just offering that as a friendly suggestion.
MR.  ELDER,  in  response  to   a  question  from  Representative
Gruenberg, revealed that  he worked in the  Division [of Banking,
Securities & Corporations]  for eight years and  was director for
the last four years, before his retirement.
REPRESENTATIVE GRUENBERG  asked Mr. Elder if  he, personally, had
any other suggestions for the committee to consider.
MR. ELDER,  specifying that he  was responding with  his personal
opinions, noted  that the State of  Alaska has a long  history of
using uniform  language, and stated  that he  personally supports
that as  useful because it's  good for  industry to know  what to
expect from one state  to another.  He noted that  there is a new
Uniform Securities  Act of 2002,  which was recently  passed, and
both  the North  American  Securities Administrative  Association
and  the ICI  support it.   He  also suggested  that it  might be
appropriate to  look at the  Uniform [Securities] Act, or  at the
statute in total, rather than doing something piece meal.
MR.  ELDER   noted  that  currently,   there  is   a  substantial
differentiation    between    intentional    and    unintentional
violations; for  example, he  said, he  has seen  violations that
are bad and violations that are  technical, and so he thinks they
should be differentiated in the way they are fined.
CHAIR WEYHRAUCH asked Mr. Usera to address Section 1.
MR. USERA noted, "Section 1 of  the bill allows us to charge what
we're charging now, plus any increases  that may come along."  He
said he has  estimated that the fees that are  charged now "would
add something  in the range of  .0000006 of a cent  to the dollar
amount of a mutual fund."   He clarified that if somebody owns 50
shares, he/she  is not even going  to see a penny  added to their
fees.   He admitted that this  is one area where  the state takes
in more than it  spends.  He said it's always been  that way.  He
noted that  currently the  amount taken  in is  approximately $10
million.   Doing  away with  Section  1 probably  would have  the
effect of losing  $10 million to the general fund,  which he said
would  be a  "pretty strong  hit."   He said,  "We're one  of the
profit centers  of state  government and  I personally  don't see
anything wrong with making a profit."
MR. USERA remarked:
And it  just seems to  me to  be an improvident  act to
limit  state government  to what  it  spends -  there's
just  no rhyme  or  reason  to it.    We don't  propose
raising  fees beyond  an exorbitant  amount.   I  mean,
right  now  they're  $600.   We  are  proposing  a  fee
change,  ... in  regulation,  basing it  on the  assets
under  management:   One fee  for  under $100  million,
another fee  for up  to $750  million, and  another fee
for those who are $750  million and beyond.  That seems
to be reasonable.  And ...  the cost would be passed on
to  the individual  owner.   If all  50 states  were to
charge  that,  you  might  add  on  fifty  cents  to  a
customer's mutual  fund. ...  The mutual  fund industry
has  been discovered  to have  overcharged fees  in the
range of  $10, $12,  $15 per person,  and ...  the fees
that we would  charge would pale in  comparison to what
they're gouging their customers for now.
REPRESENTATIVE GRUENBERG stated,  "In view of what  Mr. Usera has
said and  hearing what Mr. Elder  has said, I'm not  convinced we
should delete Section (indisc. - voice trailed off)."
CHAIR  WEYHRAUCH offered  his  understanding that  Representative
Lynn had "moved CS  for HB 527, Version Q."   He asked, "Is there
objection to  moving this  with individual  [recommendations] and
attached  fiscal note?"    He said,  "Seeing  none, so  ordered."
[Although the committee  treated the proposed CS  as having moved
from committee, the motion that  was actually pending was whether
to adopt Version Q as a work draft].
HB 331-RETIREMENT:TEACHERS/JUDGES/PUB EMPLOYEES
CHAIR WEYHRAUCH announced  that the last order  of business would
be HOUSE BILL  NO. 331, "An Act relating  to federal requirements
for governmental plan and other  qualifications for the teachers'
retirement system,  the public employees' retirement  system, and
the judicial  retirement system;  and providing for  an effective
date."
REPRESENTATIVE   GRUENBERG   moved   [to  adopt   the   committee
substitute (CS) for HB 331,  Version 23-GH1009\D, Craver, 4/1/04,
as  a work  draft].   There  being no  objection,  Version D  was
before the committee.
ANSELM STAACK, Chief Financial Officer,  Division of Retirement &
Benefits, Department of Administration  (DOA), told the committee
that the division  takes care of the  Public Employees Retirement
System  (PERS),   the  Teachers  Retirement  System   (TRS),  the
Judicial  Retirement  System,  the  Supplemental  Benefit  System
(SBS), and Deferred  Compensation.  He offered a  history of "how
we got here," and stated  that PERS, TRS, the Judicial Retirement
System,  and SBS  are all  qualified  plans.   He explained  that
there are  positive aspects to  a plan remaining  qualified, even
for a tax-exempt agency like the  State of Alaska.  It means that
members of the retirement system  can "pay their contributions in
free tax."   He  said that's a  tremendous benefit,  which lowers
the cost of the system itself.
CHAIR  WEYHRAUCH   asked,  "Is  that  the   state  deferred  comp
program?"
MR. STAACK  answered:  "No, that  is all of them.   For instance,
any contributions  you make to  the public  employees', teachers'
retirement   system,   judicial   retirement  system,   and   the
supplemental benefit  system are all  pre-tax, in terms  of their
contribution."   He said the  SBS is  what is called  the defined
contribution  plan,  while  the   PERS,  TRS,  and  the  Judicial
Retirement System are what are  called defined benefit plans.  In
response  to questions  from Chair  Weyhrauch, he  clarified that
the basic  difference between those types  of plans is that  in a
defined contribution  plan, the  employer puts  in money  and the
employee  makes a  match, and  the employee  directs his/her  own
investments  and walks  off with  whatever amount  is there  when
he/she  terminates.   The  employer is  not  responsible for  any
residual or for  paying any money in the future.   For the [PERS,
TRS, and the  Judicial Retirement System], on the  other hand, it
is required  by law that  the employee gets paid  irrespective of
whether  the system  earns  enough  money to  do  it;  it is  the
responsibility of the state to make up the balance.
MR. STAACK, in  response to a question  from Representative Holm,
noted who  falls under which systems:   Under the PERS,  there is
the  State  of  Alaska,  plus   154  other  employers,  including
municipalities and school districts; under  the TRS, there are 62
school  districts; under  the Judicial  Retirement System,  there
are judges  and certain  members of the  court system;  and under
SBS,  there  is  the  State  of Alaska  employees  and  14  other
political  subdivisions that  are no  longer in  social security.
In response  to a follow-up  question, he said the  University of
Alaska has its own separate plan.
CHAIR WEYHRAUCH stated that he would  like to have an overview of
the PRS and  TRS.  He noted that the  legislature is "funding the
shortfalls as  a separate line  item in  the state."   He related
his understanding of  an issue that was brought  to his attention
regarding  why there  is  a  huge debt  owed  for  PERS/TRS.   He
explained that  it is a  result of some assumptions  of projected
contributions during  a "bear" market.   Now that the  market has
rebounded,  he  said, whoever  is  responsible  for making  those
assumptions that  the legislature has to  fund it has not  met to
revisit what  the legislature  needs to do  to fund  the program;
therefore,  the  legislature  is   acting  on  improper  data  in
planning [the  state's] financial  future.  Chair  Weyhrauch said
it seems  to him  that the  legislature may be  in a  position of
requiring that  the PRS/TRS  people who  make the  estimates meet
more often to provide better information to the legislature.
MR. STAACK  responded that  he could  bring information  to Chair
Weyhrauch  and  the committee  that  "we  went through  with  the
PERS/TRS  board,"  including  an  actuarial  evaluation  and  the
projections that  were done,  and including  all the  earnings up
through January 2004  and any projections that were  made for the
next 25  years that assumed what  would happen with "a  very rosy
scenario."
CHAIR WEYHRAUCH indicated that the  committee members needed more
MR. STAACK indicated a willingness  to help the committee in that
REPRESENTATIVE  GRUENBERG  mentioned  technical problems  in  the
field  of family  law  with  respect to  the  pension plans,  and
offered an example.
REPRESENTATIVE  SEATON  asked  Mr. Staack  to  provide  scenarios
based on the 2004 mortality tables.
MR. STAACK replied that what will  be used are the 1994 mortality
tables.   He explained that  those are the mortality  tables that
are used  for the PRS and  TRS.  He  noted that there is  a newer
mortality table called "RP2000,"  which will update the mortality
[table] that's used in the retirement systems.
[HB 331, Version D, was held over.]
There being no  further business before the  committee, the House
State Affairs  Standing Committee meeting was  adjourned at 10:00


We apologize for the audio issues in this episode. We've returned to the recording studio after surviving the bomb cyclone. After our moments of squee, we talk about genetic forensics and elderly living on the road.


A series of new vanadium(III) chalcogenidoantimonates [VIII(dap)2SbQ3] (Q = S (1), Se (2); dap = 1,2-diaminopropane), [H2dien][VIII2(en)2(dien)2(μ2-O)][SbSe4]2 (3, en = ethylenediamine; dien = diethylenetriamine) and [VIII(dien)2SbSe4] (4) have been solvothermally synthesized and structurally characterized. Both 1 and 2 contain neutral vanadium(III)-centered complexes [VIII(dap)2SbQ3], where the [SbQ3]3− anion acts as a chelating ligand to complex [VIII(dap)2]3+, but they exhibit different molecular conformations. 3 consists of selenidoantimonate anions [SbSe4]3−, the protonated H2dien2+ cation, and the dinuclear complex [VIII2(en)2(dien)2(μ2-O)]4+ based on two [VIII(en)(dien)]3+ units bridged by one μ2-O group. 4 contains neutral [VIII(dien)2SbSe4] moieties with seven coordinated vanadium centres, which offers a rare example of high coordination of a nitro-selenidovanadium(III) complex, mainly because the vanadium(III) ion has a regular octahedral configuration based on the structures in the solid state. The optical, magnetic and photoelectronic properties of all compounds have been investigated, and the density functional theory calculation of 4 has also been studied.


text:
Moon hopes stalled NK nuke diplomacy will pick up from Singapore Declaration
President Moon Jae-in speaks (L) during a New Year's press conference, also available via videoconference, at the presidential office Cheong Wa Dae in Seoul on Monday. (Yonhap)
President Moon Jae-in on Monday expressed hope for the stalled diplomacy on North Korea's denuclearization to move forward from the agreement reached in the Singapore summit between Washington and Pyongyang.
"The Singapore Declaration achieved under the Trump administration was a very important declaration in terms of denuclearization and establishing peace on the Korean Peninsula," Moon said during a New Year's press conference held at Cheong Wa Dae, referring to the agreement produced from the first-ever US-North Korea summit in Singapore in June 2018.
Moon added, "I believe we could speed up the North Korea-US dialogue and inter-Korean talks if we negotiate ways to achieve more concrete steps by starting again from the Singapore Declaration."
The president said he believes the imminent launch of the new US administration under President-elect Joe Biden has provided a "turning point to restart Washington-Pyongyang and inter-Korean dialogue."
Moon also stressed the importance of Seoul's relationship with Beijing and said his government will work to invite Chinese President Xi Jinping to South Korea as soon as the pandemic stabilizes and other conditions are arranged.
"The South Korea-China relationship is very important. (China) is our country's largest trading partner and is in a relationship in which we have to cooperate to move forward the Korean Peninsula's peace," Moon said. (Yonhap)

redpajama_set_name: RedPajamaCommonCrawl


text:
Last Updated: Friday, 19 January 2007, 13:01 GMT
Palestinian girl dies of injuries
Barrier contraction often draws protests by Palestinians and supporters
A 10-year-old Palestinian girl has died in hospital in Jerusalem, three days after being injured during an incident involving Israeli border police.
The child, Abir Aramin, was the daughter of a prominent Palestinian peace activist Bassam Aramin.
She came from the West Bank village of Anata where Israel is building a section of its West Bank barrier.
Palestinians say she was with two other girls in the village when an Israeli border police vehicle drove past.
Stones were thrown in the direction of the police, who responded with tear-gas and stun-grenades. The girl was hit in the head.
The border police have launched an investigation.
An Israeli border police spokeswoman said that they had used "crowd control means against stone throwers" protesting against the construction of Israel's controversial barrier.
660 Palestinians killed by Israeli security services: 141 were children, and 322 had taken no part in hostile acts
23 Israelis were killed by Palestinians
Source: B'Tselem
Guide: West Bank barrier
"The border police expresses its regret over the death of the girl and hopes the circumstances of the incident are quickly revealed."
The Israeli human rights group B'Tselem has said that last year 660 Palestinians were killed by Israeli security forces. In the same period 23 Israeli civilians were killed by Palestinians.
Israel says the defensive system of concrete walls and wire fence is needed to stop suicide bombers. Palestinians say it is part of an Israeli land grab of West Bank territory.
Settlement freeze
Also on Friday, Israeli Defence Minister Amir Peretz ordered a freeze on the building of a new Jewish settlement of Meskiot in the West Bank, less than a month after saying it would go ahead.
A defence ministry official said Mr Peretz wanted to give the matter further consideration.
Last month's announcement that Israel would build its first new settlement in more than a decade prompted criticism from the Palestinians, the European Union and the United States.
The settlement was planned to house Israeli families who had moved from the Gaza Strip when settlers and troops left in 2005.
All settlements in the occupied West Bank, including East Jerusalem, are illegal under international law, although Israel rejects this.
The 2003 Middle East roadmap calls for a complete halt to all settlement activity.
ISRAEL AND THE PALESTINIANS
KEY STORIES
PLO backs new 'talks' with Israel
US envoy returns to Middle East
Netanyahu and Mubarak hold talks
Arab League backs Mid-East talks
Laptops given to Gaza's children
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A climate of pessimism surrounds efforts to restart talks between Israel and the Palestinians
Gazan surfers brave the sewage
Palestinians test out Gandhi-style protest
Peace talks: Palestinian views
Jerusalem Diary: Cairo views
The Thais working Israel's farms
US-Israel row: Israeli views
Jerusalem's tinderbox
History lessons for US policy?
Trouble flares in East Jerusalem
Israel warns of further strikes on Gaza
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Salam Fayyad Hezbollah Sheikh Nasrallah Ehud Olmert Mahmoud Abbas Ismail Haniya Fouad Siniora Mahmoud Zahhar Amir Peretz Shimon Peres Khaled Meshaal Hamas Islamic Jihad Gaza Strip Al-Aqsa Brigade Ariel Sharon
BBC ARABIC.COM
BBC News in Arabic
TOP MIDDLE EAST STORIES
Iranian scientist 'heading home'
Attack on Yemen security offices
Libyan 'Gaza ship' docks in Egypt


text:
Q: Getting number of binary digits combinations without "forbidden" patterns I need to get the number of all combinations of binary digits in an 8-digit binary number, but not including those that follow some "forbidden" patterns like these:
xxxx0xx1
x1xxx0xx
x1xxx0x0

(where x represents any digit)
These shouldn't be in "valid" combinations I would like to count.
My numbers are much larger in fact, so I can't simply enumerate them.
What should I do?

A: Unfortunately I'm joining the party a bit late. I had the (what I think analytic) solution earlier, but there was no time to test it and write it down.
Introduction
What got me thinking was that is is really easy to calculate this with only one forbidden pattern. If you have a word of length n then the number of all possibilities is
$$a = 2^n$$
A forbidden pattern fixes some (say m) of the binary digits. On those places you cannot choose between 0 and 1 anymore and therefore you can calculate the number of forbidden patterns by simply taking the m fixed bits not into accout
$$p=2^{(n-m)}$$
or in our case 2^Count[patt,x]. Now you simply subtract this from a and you have the number of valid combinations. If you have two or more patterns, than this works when the pattern do not interfere. Best example is when you have the same pattern twice. Then obviously you cannot subtract this two times.
The reason for this is that the intersection of those patterns is not empty. They both have the same combinations in it and therefore, we have to take care to subtract them only once. This intersection argument remembered me of the Inclusion-exclusion principle because we basically want the same: We want to count the number of elements in the union of a set of forbidden patterns.
Looking at the formula
$$
\begin{align}
\biggl|\bigcup_{i=1}^n A_i\biggr| &= \sum_{k = 1}^{n} (-1)^{k+1} \left( \sum_{1 \leq i_{1} < \cdots < i_{k} \leq n} \left| A_{i_{1}} \cap \cdots \cap A_{i_{k}} \right| \right).
\end{align}
$$
shows that we only need an patternIntersection operation and a patternCount operation. The argument of the inner sum in above formula contains nothing more than to count the intersection of all pattern-Subsets of length k.
Implementation
Let's first start with something very basic: the pattern-intersection. If we have two digits xx and try to think what the intersection of the patterns x1 and 1x is, then we see, that it can only be 11. Therefore, if we want to intersect two patterns, we make this digit by digit. Let's call this function c for combine
c[x, 1] = c[1, x] = c[1, 1] = 1;
c[x, 0] = c[0, x] = c[0, 0] = 0;
c[x, x] = x;
c[0, 1] = c[1, 0] = 3;
c[3, _] := 3;
c[_, 3] := 3;

So if we have (say on the first place) a x in the one pattern and a 1 in the other, the intersection will have a 1 at this place. The only new thing is, that when patterns clash with a 1 and 0, we set this to 3 which means something like both, 0 and 1 appeared.
Now we can define a patternIntersection which takes an arbitrary number of patterns as argument an gives their intersection as output
patternIntersection[p1_List, p2_List] := c @@@ Transpose[{p1, p2}];
patternIntersection[p1_List] := p1;
patternIntersection[p1_List, p2_List, rest__List] :=
 patternIntersection[patternIntersection[p1, p2], rest]

Quick test shows what we expect:
patternIntersection[{x, x, 1, x, x, 0}, {1, x, 1, x, 0, 1}]

(* {1, x, 1, x, 0, 3} *)

Now we need a function to count the possibilities. This works as explained above: just count the x in the pattern but if there is a 3 anywhere, the count is 0. This is because there does not exists any word which has a 0 and a 1 in one place:
patternCount[p__List] := With[{pp = patternIntersection[p]},
  If[FreeQ[pp, 3], 2^Count[pp, x], 0]
]

Last but not least, we need to write down the formula from the top.
countValidCombinatations[forbidden_] :=
 With[{n = Length[First[forbidden]]},
  2^n - Sum[(-1)^(k - 1) Total[patternCount @@@ Subsets[forbidden, {k}]],
   {k, n}]
 ]

Examples
Now we are ready to go: Testing your example
countValidCombinatations[{{x, x, x, x, 0, x, x, 1}, {x, 1, x, x, x, 0,
    x, x}, {x, 1, x, x, x, 0, x, 0}}]

(* 144 *)

Testing kguglerex
kgulerex = (ToExpression /@ Characters[#]) & /@ {"10x001x1",
    "0xx0110x", "1000xx01", "01xx01x1", "00x1000x", "111101x1",
    "10x00x0x", "0111x0xx", "xx001011", "10x0x010"};
countValidCombinatations[kgulerex]

(* 206 *)

or the examples with 5000 digits which belisarius used to time the operation
l = RandomChoice[{x, 0, 1}, {10, 5000}];
N@Timing@Log[10, countValidCombinatations[l]]

(* {9.16457, 1505.15} *)

A: A straight forward approach is to simply generate all the combinations you don't want and use Complement to remove them from all the possible numbers. You can generate all possible combinations using Tuples:
 expandBinRep[n_]:=n//.{a___,x,b___}:>Sequence[{a,0,b},{a,1,b}]

 Complement[Tuples[{0, 1}, {8}], expandBinRep@{{x, x, x, x, 0, x, x, 1}}]

I would emphasise that this might lead you to deal with huge lists of numbers when it might not bee needed.
An alternative route might be to take the description of numbers to exclude {x,1,0,x} and generate descriptions that can generate remaining numbers, for this example; {x,0,x,x} and {x,x,1,x}. This is done simply by making one difference so it doesn't match and letting all other digits be free:
invertDescription[v_]:=Insert[ConstantArray[x,Length[v]-1],
     Abs[1 - v[[#]]],#]&/@ Flatten[Position[v,0|1]]

However with this definition the descriptions overlap, so you'd need Union to make them only appear once:
invertDescription[{x, x, x, x, 0, x, x, 1}] // expandBinRep // Union

Update
I believe that this definition solves the problem of overlapping patterns:
 invertDescription[v_] :=
   PadRight[Append[v[[1 ;; # - 1]], Abs[1 - v[[#]]]], Length@v, x] &
       /@ Flatten[Position[v, 0 | 1]]

A:  digits = IntegerDigits[Range[0, 255], 2, 8];
 inputList = StringJoin /@ RandomChoice[{"x", "0", "1"}, {10, 8}]
 (* {"10x001x1", "0xx0110x", "1000xx01", "01xx01x1", "00x1000x", "111101x1",
   "10x00x0x", "0111x0xx", "xx001011", "10x0x010"} *)
 forbiddenPatterns =  Alternatives @@ (ToExpression /@ Characters /@ inputList /.
       x -> Blank[])
 (* {1, 0, _, 0, 0, 1, _, 1} | {0, _, _, 0, 1, 1, 0, _} |
    {1, 0, 0, 0, _, _, 0, 1} | {0, 1, _, _, 0, 1, _, 1} |
    {0, 0, _, 1, 0, 0, 0, _} | {1, 1, 1, 1, 0, 1, _, 1} |
    {1, 0, _, 0, 0, _, 0, _} | {0, 1, 1, 1, _, 0, _, _} |
    {_, _, 0, 0, 1, 0, 1, 1} | {1, 0, _, 0, _, 0, 1, 0} *)
Count[digits, Except[forbiddenPatterns]]
(* 206 *)

 opsExample = {"xxxx0xx1", "x1xxx0xx", "x1xxx0x0"};
 inputList2 = Join[inputList, opsExample];
 {Count[digits, Except[Alternatives @@ (ToExpression /@ Characters /@
   opsExample /. x -> Blank[])]],
  Count[digits, Except[Alternatives @@ (ToExpression /@ Characters /@
   inputList2 /. x -> Blank[])]]}
(* {144,122} *)

(Note: this is same as Leonid's deleted answer applied to an arbitrary list of forbidden patterns. Posting it just to get a clarification on why this doesn't work.)

A: The following seems fast and less memory bound, because it's based on SatisfiabilityCount[], a wonderful function to count boolean valued functions with boolean arguments:
count[l : {_String ..}] := Module[{x, sp},
   sp[s_String, sub_String] := StringPosition[s, sub][[All, 1]];
   SatisfiabilityCount[
                 And @@ Not /@ (And @@@ (x /@ sp[#, "1"] && Not /@ x /@ sp[#, "0"]) & /@ l),
    Array[x, StringLength[First@l]]]];

count@ {"xxxx0xx1", "xx1xxx0x"}
(* 144 *)

count@  {"xxxx0xx1", "x1xxx0xx", "x1xxx0x0"}
(* 144 *)

The example from @kguler's answer
kgulerex={"10x001x1", "0xx0110x", "1000xx01", "01xx01x1", "00x1000x", "111101x1",
          "10x00x0x", "0111x0xx", "xx001011", "10x0x010"};
count[kgulerex]
(* 206 *)

count[{"0xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx01"}]
(* 985162418487296 *)

Edit
Let's calculate a really large one (5000 digits, excluding 10 patterns in 10 seconds):
l = StringJoin /@ RandomChoice[{"x", "0", "1"}, {10, 5000}];
N@Timing@Log[10, count[l]]
(* {10.25, 1505.15} *)

A: You could try string patterns:
binary = Table[IntegerString[n, 2, 8], {n, 0, 255}];

(*
{"00000000", "00000001", "00000010", "00000011", "00000100", etc.
*)

DeleteCases[StringReplace[binary,
 {_ ~~ _ ~~ _ ~~ _ ~~ "0" ~~ _ ~~ _ ~~ "1" -> "",
 _ ~~ _ ~~ "1" ~~ _ ~~ _ ~~ _ ~~ "0" ~~ _ ~~ _ -> ""
 }
], ""]

(*
{"00000000", "00000010", "00000100", "00000110", etc.
*)

There's probably a nice way to turn your "xxxx0xx1" into a pattern...

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