Alabama § 19-3A-411 Minerals, Water, and Other Natural Resources

Alabama Statutes

§ 19-3A-411 — Minerals, Water, and Other Natural Resources

Alabama § 19-3A-411

Title 19Fiduciaries and Trusts

Ch. 3AAlabama Principal and Income Act

Art. 4Allocation of Receipts During Administration

This text of Alabama § 19-3A-411 (Minerals, Water, and Other Natural Resources) is published on Counsel Stack Legal Research, covering Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ala. Code § 19-3A-411 (2026).

Text

(a)To the extent that a fiduciary accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the fiduciary shall allocate them as follows:

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

(2)If received from a production payment, a receipt shall 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 shall be allocated to principal.

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

(4)If an amount is rec

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(a) To the extent that a fiduciary accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the fiduciary shall allocate them as follows:
(1) If received as nominal delay rental or nominal annual rent on a lease, a receipt shall be allocated to income.
(2) If received from a production payment, a receipt shall 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 shall be allocated to principal.
(3) If an amount received as a royalty payment, shut-in-well payment, take-or-pay payment, bonus, or a delay rental that is more than nominal, then ninety percent (90%) shall 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 subdivisions (1), (2), or (3), then ninety percent (90%) of the net amount received shall be allocated to principal and the balance to income.
(b) An amount received on account of an interest in water that is renewable shall be allocated to income. If the water is not renewable, then ninety percent (90%) of the amount shall 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 January 1, 2001, then the fiduciary may allocate receipts from the interest as provided in this chapter or in the manner used by the fiduciary before January 1, 2001. If the trust acquires an interest in minerals, water, or other natural resources after January 1, 2001, then the fiduciary shall allocate receipts from the interest as provided in this chapter.