Resource Revenue Distributions
CIRI’s resource revenue--or 7(j)--distributions are paid by CIRI as directed by Section 7(j) of the Alaska Native Claims Settlement Act. Basically, Congress realized that the lands some regional corporations received as their ANCSA entitlement would be richer in natural resources (i.e., oil, timber, gas, coal, etc.) than others, and attempted to equalize this disparity by incorporating a requirement whereby regional corporations must share resource revenues received from ANCSA lands with the other twelve regional corporations within the state of Alaska.
Accordingly, Section 7(i) of ANCSA requires that, after certain allowable costs are deducted, each corporation is able to keep 30% of its net resource revenues, with the remaining 70% divided among the twelve Alaska-based regional corporations--including the distributing region. The portion of the 70% pool that each regional corporation receives is calculated based on the number of original enrollees to the corporation under ANCSA. Because the payments made to the regional corporations are made under Section 7(i) of ANCSA, they are known as 7(i) payments.
Under Section 7(j) of ANCSA, the percentage of the 70% pool that a regional corporation receives is divided equally between itself and the village corporations and at-large shareholders in its region. Thus, CIRI retains 50% for reinvestment, operating expenses and the payment of shareholder dividends, with the remaining 50% divided among at-large shareholders and village corporations in the CIRI region and paid out in the form of CIRI’s annual resource revenue distribution. It is important to note that although ANCSA requires the regional corporations to pay 7(j) amounts associated with village-class shares to the associated village, it does not require the village corporations to then distribute those amounts to their shareholders. The decision of whether or not to do so is made by the directors of the respective village corporations.
Because the amount of 7(i) monies CIRI and the other corporations have to distribute in any given year depends on their resource revenue activities for that year, it is not possible to predict 7(i) amounts. Since the 7(j) amounts depends on the 7(i) payment amounts, the same is true about the resource revenue payments CIRI makes to its shareholders and village corporations.
The yearly amount of CIRI’s resource revenue distribution is calculated shortly after CIRI’s annual audited financial statements for the prior year are approved. Once calculated, the amounts are immediately announced to shareholders via this Web site, the CIRI newsletter and the dividend hotline (263-5100 or 1-800-764-2435), with the actual distribution made shortly thereafter--usually within the first two weeks of April. Resource revenue payments are not dividends or investment income, and represent taxable income to shareholders.
