Alaska Native corporations share wealth: ANCSA 7(i) and 7(j) mandates redistribution of some profits.

• Author: Stricker, Julie
• Position: ALASKA NATIVE BUSINESS NEWS - Alaska Native Claims Settlement Act

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Here's a puzzle for you. Alaska is one-fifth the size of the continental United States, is home to many diverse peoples, and has a wealth of unevenly distributed natural resources, many of which have yet to be developed or even discovered. When it comes to dividing the state's lands among its aboriginal people, how do you divide the resources pie so all get a fair share?

That was a central question in the late 1960s and early 1970s when Alaska Native leaders, State officials and federal lawmakers drafted the Alaska Native Claims Settlement Act. The legislation, which passed in 1971, aimed to help stimulate economic development in the state and was key to settling aboriginal land claims to clear the way for construction of the trans-Alaska oil pipeline.

ANCSA OUTCOME

Under the act, 12 regional corporations and more than 200 village corporations were created and 44 million acres--nearly a tenth of the state--and $962.5 million was divided among them. The regions were created based on the lands traditionally used by the groups.

"What you had to work with in terms of natural resources, that was an act of God," said Helvi Sandvik, president and CEO of Kotzebue-based NANA Regional Corp. Inc. and NANA Development Corp., its business arm.

The drafters of the legislation "worked to develop a balance to ensure there was a way that all Alaska Natives benefited from the development of natural resources, whether or not those resources were actually on their traditional lands," Sandvik said.

7(i) CLARIFIED

After years of negotiations and discussion, a solution was found. The clause, known as 7(i), mandates 70 percent of all revenues received by each regional corporation from timber resources and subsurface mineral rights will be divided annually by the regional corporation among all 12 regional corporations. A 13th corporation, created for Alaska Natives living outside the state, is excluded from the agreement.

"It was rather vague, although they probably didn't think so at the time," says Richard Rinehart, vice president and chief financial officer of Sealaska Corp., based in timber-rich Southeast Alaska.

The clause left a lot of room for interpretation. For years, the corporations sued each other until a settlement was reached in 1982 that clarified the provisions.

"Revenues became net revenues," Rinehart says, adding that much of the changes were geared toward the timber industry, which provided a huge chunk of the early...