§ 11-A-4.11 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 a bonus, delay rental or annual rent on a lease, a
receipt of less than one thousand dollars must be allocated to income
and a receipt of one thousand dollars or more must be allocated fifteen
percent to principal and eighty-five percent 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 received as a royalty, shut-in-well payment, or take-or-pay
payment, a receipt must be allocated fifteen percent to principal and
eighty-five percent to income;

(4) If an amount is received from a working interest or any other
interest not provided for in subparagraph (a)(1), (2), or (3), a receipt
must be allocated fifteen percent to principal and eighty-five percent
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,
ninety percent of the amount must be allocated to principal and the
balance to income.

(c) This article 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 exists on the effective date of this section, the
trustee may allocate receipts from an interest in minerals, water, or
other natural resources as provided in this section or in the manner
used by the trustee before the effective date of this section. For every
trust created after the effective date of this section, the trustee
shall allocate receipts from an interest in minerals, water, or other
natural resources as provided in this section. If and to the extent that
the terms of a trust expressly provide for a different allocation of
receipts or grants the trustee discretionary authority to determine the
amount of the allocation, this section shall not apply to those
receipts.