Some of the ANCSA corporations are extremely successful today. They have invested in a wide variety of businesses all over the United States, and some of them have invested internationally. Business subsidiaries include construction companies, security, technology and communications, tourism and hospitality, oil-field support services and many others. They are a major contributor to the Alaskan economy and have also created significant employment opportunities for both shareholders and other citizens. This was not the case immediately after ANCSA, and the learning curve was steep. Some corporations came close to bankruptcy, and several of the village corporations essentially went out of business.
Upon the completion of Module 14 a student will be able to
- Describe and compare “Net Operating Losses’ (NOL’s) and “8(a)’ contracts and their impacts on some ANCSA corporations.
- Compare size limits of ANCSA corporation 8(a) contracts with other minority business 8(a) contracts.
- Compare the economic successes of at least three ANCSA corporations and how they compare with other Alaska corporations.
- Recite how many of the top ten revenue producing corporations in Alaska are ANCSA corporations.
- Describe at least two examples of ANCSA corporations’ business interests nationally and internationally.
Module 14 reading assignment:
- ANCSA and SBA 8a Program. Institute of Social and Economic Research, UAA, July 2009. Online at https://www.iser.uaa.alaska.edu/Publications/8(a)/Full_Report.pdf
- National Oceanic and Atmospheric Administration, (NOAA) Acquisition and Grants Office. “Unique rights of Alaska Native corporation owned 8(a) businesses in the federal government procurement process.’ https://www.ago.noaa.gov/ago/acquisition/docs/alaska_native_contracting.pdf
- “NACA Executive Director Lukin Helps Set the Record Straight About the Native 8(a) Program.’ On-line at: https://www.nativecontractors.org/media/pdf/NACA_Post_Hearing_Release7-20-09FINAL.pdf
In 1986 a provision in the 1986 Tax Reform Act (Public Law 99-514) allowed the ANCs to sell net operating losses. A net operating loss (NOL) is defined as: A loss resulting from a situation in which a business has more allowable tax deductions than it has taxable income. In this case, the business has negative income, or a net operating loss. (https://biztaxlaw.about.com/od/glossaryn/g/netoperatloss.htm )
The NOLs were then purchased by profitable corporations who used the losses as tax write-offs. Up to 80% of the tax savings were then shifted back to the ANCs. This helped stabilize their finances and promote recovery.
Another program that has proved extremely helpful to the ANCs is the Small Business Administration’s 8(a) contracting arrangement. This has brought significant revenues to the corporations and continues to be utilized by them today. There has recently been controversy about this program with non-Natives suggesting that ANCs should no longer qualify for 8(a) preference due to their size. Much of the objection comes from other minority businesses (not just non-Natives) who have restrictions on the size and feel it is unfair that ANC’s don’t have those restrictions.
Certainly ANCSA regional corporations are larger than most of the businesses served by the SBA, but they also have far more owners (shareholders) than other small businesses. As we discussed in earlier units ANCSA shareholders are not like shareholders in other corporations; they cannot buy or sell shares nor do most of them come from the same socio-economic background as mainstream shareholders. While the businesses may be larger, the majority of shareholders are exactly the kind of people the 8(a) contracting program is intended to help. The ISER report included in your readings for this unit provides a very current picture of the communities that the ANCs 8(a) contracting arrangement serves.
Unit 14 speakers who hold prominent positions with ANCSA corporations and Native business organizations discuss 8a contracting and how it has benefited their people. They also give some insight into the extent and success of Native owned businesses today.
Unit 14 investigates some of the financial and legal options that have helped the ANCSA corporations to achieve their goals. The Small Business Administration’s 8 (a) contracting program has been controversial. What do you think about it? Do you think the program should continue to be available to the ANCSA corporations? Why or why not?
- Alaska Business Monthly Top 49
- Alaska Native corporations Net Operating Losses
- Sarah Lukin
Video and Audio files for this unit are located here
Please click on a thumbnail to start a slide show.