Vermont § 3361 - Minerals, water, and other natural resources

§ 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.)