SENATE BILL No. 37
An Act concerning the uniform principal and income act; relating to
minerals and other
natural resources; amending K.S.A. 2002 Supp. 58-9-411 and
repealing the existing
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2002 Supp.
58-9-411 is hereby amended to read as
follows: 58-9-411. (a) To the extent that a trustee accounts for
from an interest in minerals or other natural resources pursuant to
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 allo-
cated to income if and to the extent that the agreement creating
production payment provides a factor for interest or its
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 15 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 subsection (1), (2), or (3),
90 15 percent of
the net amount received must be allocated to principal and the
(b) An amount received on account of an
interest in water that is
renewable must be allocated to income. If the water is not
percent of the amount must be allocated to principal and the
(c) This act applies whether or not a
decedent or donor was extracting
minerals, water, or other natural resources before the interest
subject to the trust.
(d) If a trust owns an interest in
minerals, water, or other natural
resources on the effective date of this act, the trustee may
from the interest as provided in this act or in the manner used by
trustee before the effective date of this act. If the trust
acquires an interest
in minerals, water, or other natural resources after the effective
this act, the trustee shall allocate receipts from the interest as
in this act.
Sec. 2. K.S.A. 2002 Supp. 58-9-411
is hereby repealed.
Sec. 3. This act shall take effect
and be in force from and after its
publication in the statute book.
Approved April 10, 2003.