Background of ANCSA: Bristol Bay's Land and Money

Background of ANCSA: Bristol Bay's Land And Money, "Bristol Bay Native Corporation Newsletter, December/January, 1985. Used with permission of Bristol Bay Native Corporation for educational purposes.

Most people know that the Alaska Native Claims Settlement Act paid Alaska's Native peoples 44 million acres of land and $962 million.

But what does that mean specifically to the peoples of Bristol Bay?

The following four sections contain background information on BBNC's land and money, and some comments from the shareholder survey in these areas.

I. The Land

Shareholder comment:

If a person was registered to a village corporation and a regional corporation with the intent of getting Native land, how would a person receive the land? There has never been any mention of what land was to be given.

Q.   Who Gets What Land Under ANCSA?
A. 1) Village corporations in the Region got the surface rights to 2.9 million acres, and

2) BBNC got the subsurface rights to those same 2.9 million acres. Additionally, BBNC got 100,000 acres with both surface and subsurface rights.

3) Individuals got title to land used at the time of the Act for a primary residence, place of business, or subsistence campsite.

Although ANCSA gives all these land rights. it has taken — and will continue to take — money to protect them.

The selection process for three million acres has been expensive.

Lawsuits to protect Native lands from excessive public easements or governmental regulation cost money. Trespass programs and land use planning require knowledge and personnel (which cost money). Hundreds of thousands of dollars have been spent to select, secure and preserve Native land rights.

Q. How Was Corporate Land Chosen?
A. The Act required a village corporation to begin selecting land around the village site, and then choose contiguous lands. Choices were made for subsistence. recreation or other values.

The Act also required the Regional Corporation own the subsurface rights to a village corporation's land.

Q. What Do "Surface" And "Subsurface" Mean?
A. These words refer to the legal ways land can be used, not the physical location of land.

"SURFACE" means that you can build a subdivision or commercial building on it and that it can be set aside for subsistence.

"SUBSURFACE" means you can sell the land's minerals, oil and gas.

With "Surface" or "Subsurface" rights, you can secure a loan; you can sell, lease or trade; and you can keep other people out.

Q. Does Bristol Bay Have Valuable Land?
A. It depends on what you mean by "valuable."

For example, land that is excellent for hunting, fishing and berry-picking may not have any minerals, oil or gas underneath. To date no commercial quantities of minerals or petroleum have been found on BBNC land.

Also, some land may be in great demand for its recreational opportunities, like in the Iliamna area, while land in other areas of the Region may not be valuable in that way.

II. The Money

Shareholder comment:

If some corporations don't plan for the future better than they are doing now, there may not be anything left of the existing village and regional corporations to protect. Lawyers, consultants and con men and even untrained management has left many organizations in financial and political shambles.

Q. Why Was Money Part Of The Settlement?
A. Some of the land claimed by Native people was already owned by others, like cities, boroughs and private citizens. So. instead of receiving land which others were using, money was paid to the Native people. They then dropped their claims to any more land.
Q. Who Got The Money?
A. The money came to the Regional Corporation and to the village corporations. By choosing corporations, Congress set up a structure to own the land and create the possibility of economic opportunities.
Q. How Much Money Came To Bristol Bay?
A. For each Native who enrolled in BBNC, approximately $6,000 was given to the Regional Corporation.

For each Native who enrolled in a village corporation, approximately $6,000 was also given to that corporation. Those Natives who chose not to enroll in a village corporation, "at large shareholders," personally received $6,000 over time.

Q. When Did The Money Go To The Corporations?

Over an 11 year period. The money didn't come in one lump sum, which would have been better, of course, for investing.

Much of the first money the Regional Corporation received had to be spent on enrolling shareholders, setting up the corporations, and choosing land.

Q. What Do Corporations Do With Money?
A. Invest it, and operate.

They invest it into projects which, hopefully, make more money. BBNC is one of only four Native Regional Corporations that have added money to the original shareholders' investment.

If a project makes money (after paying wages, taxes and other expenses), successful corporations do two things with the profits:

1) they put money back into the business to strengthen it, and

2) pay some money to shareholders in the form of dividends.

BBNC has paid out more than $3 million to its shareholders — and STILL managed to increase its original amount received under ANCSA.

Shareholder comment:

All I can say is in the decisions you make, please don't be greedy or selfish. Please be honest in all things you do. Please think about us shareholders that lead a very simple life because my husband and I rely on the dividend checks to help us financially. Please don't let selfishness. greed or the love of money ruin us.


III. Outlining The Facts

Some of the shareholder comments reflected an incomplete or incorrect understanding of the benefits of ANCSA. It is a complicated document and not a simple law to put into practice. It's easy to think it is supposed to do something it's really not.

So, we hope the following review of one shareholder comment will help outline the facts.

Shareholder comment:

Unless the assets owned by the Corporation produced more income, the stock will be worthless to its holders. Management must strive for higher returns on assets and have a liberal dividend policy. The federal money was to ensure no Native Alaskan ever wanted again. Present returns on assets will not keep a person off welfare rolls.

— BBNC is one of the four healthiest Regional Corporations. Some corporations have suffered when management is inexperienced, dishonest. or has abused power. BBNC has been fortunate through the years with its Board of Directors and management, and has progressed rather than losing ground.

— We certainly agree that striving "for higher returns on assets" is desirable. And we're working toward that goal.

— Successful companies, however, reinvest much of their profit in the business to strengthen it, rather than having a "liberal dividend policy."

— Congress wanted Alaska Natives to have the greatest possible economic opportunity with their land and money. The way to do that is to put large amounts of money and land together.

Congress knew that payments of $6,000 to individuals would not amount to much in the long run for the Region. But putting all that together — $32 million — can accomplish a great deal!

As we mentioned before, BBNC is one of just four Regional Corporations to have increased its original investment of money. (At least one Regional Corporation has lost more than BBNC received in the first place.)

This shareholder is absolutely right in saying that the present return of $6,000 isn't enough to keep a person off the welfare rolls. Even at the best possible rate of return, it wouldn't be enough!



Q. So what SHOULD an individual shareholder expect from ANCSA?
A. If a corporation is healthy — and BBNC is among the four healthiest Regional Corporations — an individual can expect:

1) some return on investment (dividends)

2) Native control of Native land

3) the opportunity to share in the overall growth of the corporation's worth

4) to be part of a base of political power offered by the corporation.

The shareholders of BBNC enjoying benefits.

Much of this success is due to the growth and strength of the Board of Directors. Much of their time and energy has gone into learning the skills necessary to guide the policies of a major corporation. Their dedication to hiring honest, hard working, and experienced staff has paid off with a healthy corporation.

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