§ 3361. Minerals, water, and other natural resources
(a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows:
(1) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income.
(2) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.
(3) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 percent must be allocated to principal and the balance to income.
(4) If an amount is received from a working interest or any other interest not provided for in subdivision (1), (2), or (3) of this subsection, 90 percent of the net amount received must be allocated to principal and the balance to income.
(b) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, 90 percent of the amount must be allocated to principal and the balance to income.
(c) This chapter applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.
(d) If a trust owns an interest in minerals, water, or other natural resources on July 1, 2012, the trustee may allocate receipts from the interest as provided in this chapter or in the manner used by the trustee prior to July 1, 2012. If the trust acquires an interest in minerals, water, or other natural resources after July 1, 2012, the trustee shall allocate receipts from the interest as provided in this chapter. (Added 2011, No. 114 (Adj. Sess.), § 1.)
Structure Vermont Statutes
Title 14 - Decedents' Estates and Fiduciary Relations
Chapter 118 - Uniform Principal and Income Act
§ 3323. Fiduciary duties; general principles
§ 3324. Trustee’s power to adjust
§ 3325. Judicial control of discretionary power
§ 3326. Uniformity of application and construction
§ 3331. Determination and distribution of net income
§ 3332. Distribution to residuary and remainder beneficiaries
§ 3341. When right to income begins and ends
§ 3342. Apportionment of receipts and disbursements when decedent dies or income interest begins
§ 3343. Apportionment when income interest ends
§ 3352. Distribution from trust or estate
§ 3353. Business and other activities conducted by trustee
§ 3356. Obligation to pay money
§ 3357. Insurance policies and similar contracts
§ 3358. Insubstantial allocations not required
§ 3359. Deferred compensation, annuities, and similar payments
§ 3361. Minerals, water, and other natural resources
§ 3363. Property not productive of income
§ 3364. Derivatives and options
§ 3365. Asset-backed securities
§ 3371. Disbursements from income
§ 3372. Disbursements from principal
§ 3373. Transfers from income to principal for depreciation
§ 3374. Transfers from income to reimburse principal
§ 3376. Adjustments between principal and income because of taxes