Mines have played key role in success of ANCSA
BY ELWOOD BREHMER Alaska Native corporations across the state face a “fiscal cliff” of their own that is still years off, but there are currently few options to avoid it. For decades, the 12 Alaska Native regional corporations and nearly 200 village corporations statewide have shared revenue generated from re- source projects amongst themselves to the tune of roughly $3 billion since 1982, according to figures from a 2018 report on the revenue sharing pro- gram by the McDowell Group com- bined with more recent data. Generally known as the “Section 7(i)” program for its place in the Alas- ka Native Claims Settlement Act, the provision in the landmark legislation directs Alaska Native corporations to distribute 70% of the revenue origi-
nating from resource projects on their land to the other Native corporations statewide. The land or resource owner company keeps the remaining 30%. ANCSA Regional Association Exec- utive Director Kim Reitmeier said the 7(i) program is a critical component of ANCSA “that truly reflects the Alaska Native values of unity and collabora- tion.” Revenue from the 7(i) program has been a significant source of funds for benefits each of the regional corpora - tions have offered their shareholders, according to Reitmeier. The money is often used for cultural education, lan- guage revitalization, and scholarships, or is paid directly in shareholder divi- dends, but the individual corporations ultimately determine how it is spent. “There’s been trials and tribula- tions for the regional corporations and
7(i) revenue, and assistance from the other regional corporations has been paramount in the success of all of them,” she said. Revenue shared in the program — greatly influenced by commodity prices and production — totaled $246 million in fiscal year 2019 and $158.4 million last year, according to Reit- meier. She also noted it’s a model that flies in the face of the country’s tradi - tional business principles. “It’s really something that baffles the mind. Ask Lowe’s and Home Depot and all those entities to share profits with each other. You take those con- cepts to Western business cultures, and it blows people’s minds,” Reit- meier said. From 2015 to 2017 Bristol Bay Na- tive Corp. collected between $5.6 million and $9.6 million per year in 7(i) revenue, net of what the compa- ny also turned around and distributed to village corporations in its region through the closely linked 7(j) pro- gram, according to BBNC’s 2017 an- nual report. Section 7(j) of ANCSA subsequently directs the 12 regional corporations to distribute half of the shared revenue they receive to the area’s village cor- porations. The 12 regional corporations are all involved in numerous industries and business sectors, from government contracting to oil field services to re - mote fishing lodges, typically through subsidiaries and partnerships. And while many village corporations are often more focused on a single in- dustry, whether drilling oil wells or managing parking garages, Alaska Native Village Corporation Association Executive Director Hallie Bissett said that the 7(j) income accounts for all or nearly all of the revenue collected by approximately two-thirds of the 177 village corporations that are ANVCA members. Similar to Reitmeier, Bissett said
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The Alaska Miner
Fall 2021
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