In December, the Alaska Law Review published an article focusing on the Alaska Native Claims Settlement Act (ANCSA) Section 7(i).
The article, the second in a series, was written by Ethan Schutt, CIRI’s senior vice president, Land and Energy Development, and his brother, Aaron Schutt, president and CEO of Alaska Native regional corporation Doyon, Limited. Both brothers graduated from Stanford Law School.
Titled “The Grand Compromise: The ANCSA Section 7(i) Settlement Agreement,” the article reviews the history of 7(i), including some of the early litigation among the regional corporations over 7(i) issues, and emphasizes the negotiations that led up to the execution of the agreement, before proceeding to a section-by-section analysis of the agreement and discussion of court cases and arbitration decisions regarding the agreement since its passage. In addition, the co-authors recommend that the 12 Alaska-based Native regional corporations consider amending the agreement to modernize it and address issues that have arisen since its passage.
“The ANCSA Section 7(i) Settlement Agreement is among the most important commercial agreements in Alaska because its terms govern and direct the flow of tens of millions of dollars annually among the 12 Alaska-based Native regional corporations,” Ethan Schutt said. “It was fun to work with my brother to research and write a scholarly piece regarding such an important agreement.”
The article can be found online at https://alr.law.duke.edu.
What is Section 7(i)?
Section 7(i) requires that ANCSA regional corporations distribute 70 percent of revenues received from certain resources into a common pool to be distributed among all 12 of the land-owning regional corporations—including the distributing region—while retaining the 30 percent balance of such revenues. Each regional corporation’s distributable share from the 7(i) pool is fixed and was determined based on its original number of enrolled shareholders under ANCSA. Because the payments made among the regional corporations are made pursuant to the mandate of Section 7(i), they are known as 7(i) payments. Each regional corporation is required to make its 7(i) payment, if any, at least annually, and to provide an audited Section 7(i) report to the other 11 regional corporations.
Under Section 7(j) of ANCSA, the percentage of the 70-percent pool that a regional corporation receives is divided equally between itself and the village corporations and at-large shareholders in its region. Thus, the regional corporation retains 50 percent for reinvestment, operating expenses and the payment of shareholder dividends, with the remaining 50 percent divided among at-large shareholders and village corporations in its region and paid out in the form of an annual resource revenue distribution.