1999 Alaska Statutes
Title 13 DECEDENTS' ESTATES, GUARDIANSHIPS, TRANSFERS, AND TRUSTS
Chapter 13.38. PRINCIPAL AND INCOME OF TRUSTS
Sec. 13.38.080. Disposition of natural resources.

(a) If part of the principal consists of a right to receive royalties, overriding or limited royalties, working interests, production payments, net profit interests, or other interests in minerals or other natural resources in, on or under land, the trustee shall allocate receipts from the natural resources from the land as follows:

(1) if received as rent on a lease or extension payments on a lease, the receipts are income;

(2) if received from a production payment, the receipts are income to the extent of any factor for interest or its equivalent provided in the governing instrument; the trustee shall allocate to principal the fraction of the balance of the receipts that the unrecovered cost of the production payment bears to the balance owed on the production payment, exclusive of any factor for interest or its equivalent; the receipts not allocated to principal are income;

(3) if received as a royalty, overriding or limited royalty, or bonus, or from a working, net profit, or another interest in minerals or other natural resources, receipts not provided for in (1) and (2) of this subsection shall be apportioned on a yearly basis in accordance with this paragraph whether or not a natural resource was being taken from the land at the time the trust was established; 271/2 percent of the gross receipts, but not to exceed 50 percent of the net receipts remaining after payment of all expenses, direct and indirect, computed without allowance for depletion, shall be added to principal as an allowance for depletion; after payment of all direct and indirect expenses from gross receipts, the balance is income.

(b) If a trustee, on December 31, 1984, holds an item of depletable property of a type specified in this section, the trustee shall allocate receipts from the property in the manner used before January 1, 1985, but as to all depletable property acquired on or after January 1, 1985 by an existing or new trust, the trustee shall use the method of allocation provided in this chapter.

(c) This section does not apply to timber, water, soil, sod, dirt, turf, or mosses.