State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-4-411

§ 37A‑4‑411. Minerals, water, and other natural resources.

(a)        To the extent thata trustee accounts for receipts from an interest in minerals or other naturalresources under this section, the trustee shall allocate them as follows:

(1)        If received as nominaldelay rental or nominal annual rent on a lease, a receipt shall be allocated toincome.

(2)        If received from aproduction payment, a receipt shall be allocated to income if and to the extentthat the agreement creating the production payment provides a factor forinterest or its equivalent. The balance shall be allocated to principal.

(3)        If an amountreceived as a royalty, shut‑in‑well payment, take‑or‑paypayment, bonus, or delay rental is more than nominal, ninety percent (90%)shall be allocated to principal and the balance to income.

(4)        If an amount isreceived from a working interest or any other interest not provided for insubdivision (1), (2), or (3) of this subsection, ninety percent (90%) of thenet amount received shall be allocated to principal and the balance to income.

(b)        An amount receivedon account of an interest in water that is renewable shall be allocated toincome. If the water is not renewable, ninety percent (90%) of the amount shallbe allocated to principal and the balance to income.

(c)        This Chapterapplies whether or not a decedent or donor was extracting minerals, water, orother natural resources before the interest became subject to the trust.

(d)        If a trust owns aninterest in minerals, water, or other natural resources on January 1, 2004, thetrustee may allocate receipts from the interest as provided in this Chapter orin the manner used by the trustee before January 1, 2004. If the trust acquiresan interest in minerals, water, or other natural resources after January 1,2004, the trustee shall allocate receipts from the interest as provided in thisChapter. (2003‑232,s. 2.)

State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-4-411

§ 37A‑4‑411. Minerals, water, and other natural resources.

(a)        To the extent thata trustee accounts for receipts from an interest in minerals or other naturalresources under this section, the trustee shall allocate them as follows:

(1)        If received as nominaldelay rental or nominal annual rent on a lease, a receipt shall be allocated toincome.

(2)        If received from aproduction payment, a receipt shall be allocated to income if and to the extentthat the agreement creating the production payment provides a factor forinterest or its equivalent. The balance shall be allocated to principal.

(3)        If an amountreceived as a royalty, shut‑in‑well payment, take‑or‑paypayment, bonus, or delay rental is more than nominal, ninety percent (90%)shall be allocated to principal and the balance to income.

(4)        If an amount isreceived from a working interest or any other interest not provided for insubdivision (1), (2), or (3) of this subsection, ninety percent (90%) of thenet amount received shall be allocated to principal and the balance to income.

(b)        An amount receivedon account of an interest in water that is renewable shall be allocated toincome. If the water is not renewable, ninety percent (90%) of the amount shallbe allocated to principal and the balance to income.

(c)        This Chapterapplies whether or not a decedent or donor was extracting minerals, water, orother natural resources before the interest became subject to the trust.

(d)        If a trust owns aninterest in minerals, water, or other natural resources on January 1, 2004, thetrustee may allocate receipts from the interest as provided in this Chapter orin the manner used by the trustee before January 1, 2004. If the trust acquiresan interest in minerals, water, or other natural resources after January 1,2004, the trustee shall allocate receipts from the interest as provided in thisChapter. (2003‑232,s. 2.)


State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-4-411

§ 37A‑4‑411. Minerals, water, and other natural resources.

(a)        To the extent thata trustee accounts for receipts from an interest in minerals or other naturalresources under this section, the trustee shall allocate them as follows:

(1)        If received as nominaldelay rental or nominal annual rent on a lease, a receipt shall be allocated toincome.

(2)        If received from aproduction payment, a receipt shall be allocated to income if and to the extentthat the agreement creating the production payment provides a factor forinterest or its equivalent. The balance shall be allocated to principal.

(3)        If an amountreceived as a royalty, shut‑in‑well payment, take‑or‑paypayment, bonus, or delay rental is more than nominal, ninety percent (90%)shall be allocated to principal and the balance to income.

(4)        If an amount isreceived from a working interest or any other interest not provided for insubdivision (1), (2), or (3) of this subsection, ninety percent (90%) of thenet amount received shall be allocated to principal and the balance to income.

(b)        An amount receivedon account of an interest in water that is renewable shall be allocated toincome. If the water is not renewable, ninety percent (90%) of the amount shallbe allocated to principal and the balance to income.

(c)        This Chapterapplies whether or not a decedent or donor was extracting minerals, water, orother natural resources before the interest became subject to the trust.

(d)        If a trust owns aninterest in minerals, water, or other natural resources on January 1, 2004, thetrustee may allocate receipts from the interest as provided in this Chapter orin the manner used by the trustee before January 1, 2004. If the trust acquiresan interest in minerals, water, or other natural resources after January 1,2004, the trustee shall allocate receipts from the interest as provided in thisChapter. (2003‑232,s. 2.)

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