There is a newer version of the South Dakota Codified Laws
2006 South Dakota Code - 55-13-9 — Disposition of natural resources.
55-13-9. Disposition of natural resources. (a) If any 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 receipts from taking the natural resources from the land shall be allocated 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. There shall be
allocated to principal the fraction of the balance of the receipts
which 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 any
other interest in minerals or other natural resources, receipts not
provided for in the preceding paragraphs of this section shall be
apportioned on a yearly basis in accordance with this paragraph
whether or not any natural resource was being taken from the land
at the time the trust was established. Twenty-seven and one-half
percent of the gross receipts (but not to exceed fifty 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. The balance of
the gross receipts, after payment therefrom of all expenses, direct
and indirect, is income.
(b) If a trustee, on July 1, 1984, held an
item of depletable property of a type specified in this section he
shall allocate receipts from the property in the manner used before
July 1, 1984, but as to all depletable property acquired after July
1, 1984 by an existing or new trust, the method of allocation
provided herein shall be used.
(c) This section does not apply to timber,
water, soil, sod, dirt, turf, or mosses.
Source: SL 1984, ch 323, § 9.
Source: SL 1984, ch 323, § 9.
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