Dear Shareholders,
Longer periods of daylight have thankfully returned to the Arctic and soon Spring will be upon us. As our
people have done each Spring for hundreds of years, many will venture out to replenish food supplies with harvests of migratory birds, caribou, reindeer and sea mammals.
Subsistence defines a major part of who we are as Arctic peoples, and I am proud to see photos submitted in BSNC’s Annual Photo Contest of the younger generation continuing our traditional ways of life. We are always happy to include photos that repeat the cycles of our lives as Arctic subsistence-based people. Please be sure to send your photos in to media@beringstraits.com by April 30 to qualify for prizes and awards. BSNC uses shareholder-submitted photos in our newsletters, proposals, website and presentations.
The year 2020 was very challenging for many, but I am optimistic about our path ahead in 2021, particularly as the COVID-19 vaccines become widely available in Alaska. I want to share my own reasons why I received the COVID-19 vaccine. Of all the decisions I made this year, it was the easiest one: I decided to get vaccinated for my health and the health of my family and community. I understand that some people may be apprehensive about getting vaccinated. I know that the thought of these COVID vaccines for some is scary. I chose to get vaccinated because scientific research shows that the vaccines are safe and will serve to protect me and those around me. I encourage you to get the COVID-19 vaccine when it becomes available to you.
COVID-19 vaccination is a necessary step toward ending the pandemic. The health and safety of BSNC employees, shareholders and the communities in which we work and live remains BSNC’s top priority. Therefore, the BSNC Board of Directors took the strong step of mandating that all employees be vaccinated against COVID-19 once the vaccine is available. I applaud the BSNC Board of Directors for making this ground-breaking decision. Many other Alaska Native Corporations (ANCs) are considering this mandate.
I have become concerned about the future of Alaska Native Corporation Settlement Act (ANCSA) section 7(i) and 7(j) resource development revenue-sharing payments, and the dependence of some village corporations on the receipt of 7(j) payments to operate their village corporations. Congress
mandated in section 7(i) of ANCSA that regional corporations that own natural resources, such as oil and gas, zinc, and timber, share 70% of the net revenues from developing those resources with the other regional corporations. Revenue distributions to each regional corporation is based on a formula that relies on the number of original enrollees of each receiving regional corporation.
ANCSA also mandated that the regional corporations distribute 50% of the 7(i) payments they receive to their respective village corporations, also based on the number of original village corporation enrollees. Both NANA and ASRC have indicated that 7(i) revenue-sharing payments to the regional corporations will significantly decrease or stop in the next several years because the natural resources subject to ANCSA’s revenue sharing requirements are close to being exhausted.
In addition, Sealaska is no longer harvesting and selling timber that was subject to the ANCSA 7(i) revenue sharing requirements. Instead, Sealaska elected to trade the right to harvest and sell its timber resources for carbon credits issued by the State of California, which Sealaska could then sell to industries that engage in operations that emit carbon into the atmosphere. BSNC and other regional corporations are currently challenging Sealaska’s position that the carbon credits it received from the sale of its timber harvesting rights are not subject to ANCSA 7(i) revenue sharing.
Many of you know that the CARES Act which Congress passed last year contained a provision which allocated $8 billion to Indian Tribes. We believe the definition of Indian Tribes was clearly intended to include ANCs. Distribution of those funds is based not on the number of original enrollees in each ANCSA corporation, but on a formula that uses NAHASDA-eligible Natives currently living in each of the regional corporation areas. A lawsuit was filed by several tribes asserting that ANCSA corporations are not eligible to share in the receipt of the CARES Act funds. I note that, under the formula used, BSNC is scheduled to receive the minimum distribution under the law if we are successful in our efforts defending the right for ANCs to receive the distribution. More importantly, the definition used for the CARES Act fund allocation is the same definition we use to qualify for numerous other federal programs and to engage in government contract work. Therefore, we have considerable stake in the outcome of the lawsuit.
The U.S. Supreme Court has agreed to hear the ANCSA Regional Association and Alaska Native Village Corporation Association case on the litigation related to CARES Act funds for ANCs and their respective shareholders and descendants. Alaska Native people and Alaska Native communities continue to suffer disproportionately from the effects of the COVID-19 pandemic. As ANCSA intended, ANCs support our Alaska Native shareholders economically, culturally and socially. ANCs accordingly perform a wide range of functions that would ordinarily be performed by tribal governments.
ANCs have spent considerable funds from their own operations to assist with the COVID-19 response. BSNC deployed $2.1 million in direct financial assistance to its shareholders by declaring special dividends in March to shareholders for COVID-19 relief, including a special emergency dividend distribution of $3.00 per share, and a special emergency Elder dividend distribution of $250. If ANCs are left out of the CARES Act Tribal Relief Funding, Alaska Native people will be underrepresented in terms of financial aid intended to protect Alaska’s rural communities from COVID-19, and to help repair our economies. We look forward to a resolution on this matter and will update BSNC shareholders once a ruling is announced.
As a precautionary measure in response to the COVID-19 pandemic, BSNC’s Nome and Anchorage offices continue to remain closed to visitors until further notice. Shareholders may contact BSNC’s Shareholder Department via phone, email and MyBSNC. The Shareholder Department can be reached toll-free at 1-800-478-5079 or by email at shareholders@beringstraits.com.
Finally, I am deeply saddened to share that my longtime friend and former BSNC Board Member Louise L. Avessuk (Keller) Bauman passed away in February. Louise was proud to have served on BSNC’s Board of Directors for 15 years. She was a friend, mentor and inspiration to many. I will forever
remember Louise for her strong values, kindness, determination and incredible work ethic. On behalf of BSNC’s Board of Directors, I express our sincere condolences to Louise’s loved ones.
In closing, we remain steadfast in our mission to improve the quality of life of Our People through economic development while protecting our land and preserving our culture and heritage. Quyanna for your continued support and involvement in your Corporation.
Gail R. Schubert
BSNC President & CEO