I am excited to share with you news about an opportunity that the new tax law created for BSNC and other Alaska Native Corporations (ANCs) to enhance the benefits we provide to our shareholders and descendants. ANCs have been authorized to create “Settlement Trusts” since the 1980s, and several regional corporations have already created these trusts. Under the law, a Settlement Trust is authorized to promote the health, education, and welfare of its beneficiaries, and to preserve the heritage and culture of Alaska Natives.
At its February 2018 meeting, the BSNC Board authorized the creation of the BSNC Beringia Settlement Trust. This trust will be a separate legal entity from BSNC, and its board will be appointed by BSNC. In order to create a BSNC Settlement Trust, shareholders must approve its creation by a vote of the majority of shares present (in person or by proxy) at a meeting for which a quorum is established. We are asking that you vote YES to authorize the creation of the BSNC Beringia Settlement Trust at the 2018 Annual Meeting.
You may wonder why BSNC wants to create a Settlement Trust right away. The answer is that the new tax law created financial incentives for BSNC to save money on taxes by making contributions to the Trust for the benefit of our shareholders and descendants. The Trust could be used to fund dividends, elder distributions, and bereavement assistance payments. The Trust may also be used for scholarships and funds for cultural preservation and promotion programs. Finally, contributions received by the Trust from BSNC would be taxed just one time at the low flat rate of 10%, and dividends and other distributions from the Trust to shareholders and descendants are expected to be tax free.
Once BSNC contributes cash or other assets to the Settlement Trust, they can only be used for the generation and distribution of benefits to the shareholders and/or beneficiaries of the Trust. BSNC cannot take any money out of the Trust for its own uses once contributions are made.
The BSNC Beringia Settlement Trust will serve to provide a dividend distributions, elder benefits, bereavement assistance, scholarships and support cultural preservation and promotion programs. Additional information will be included on the BSNC website and Facebook page, and in the Annual Report and proxy you will receive prior to the 2018 Annual Meeting.
Again, we ask that you vote YES to allow BSNC to create the BSNC Beringia Settlement Trust. Quyaana to you our shareholders for your ongoing support and involvement in BSNC.
Gail R. Schubert
BSNC President & CEO