Session Law

Identifying Information:L. 2003 ch. 038
Other Identifying Information:2003 Senate Bill 37
Tax Type:Corporate Income Tax; Mineral Severance Tax
Brief Description: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 section.
Keywords:


Body:

CHAPTER 38

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


section.


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 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 allo-

cated 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 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 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 act 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 the effective date of this act, the trustee may allocate receipts

from the interest as provided in this act or in the manner used by the

trustee before the effective date of this act. If the trust acquires an interest

in minerals, water, or other natural resources after the effective date of

this act, the trustee shall allocate receipts from the interest as provided

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, 2002.


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Date Composed: 10/29/2003 Date Modified: 10/29/2003