Texas Property Code
§ 116.174 — MINERALS, WATER, AND OTHER NATURAL RESOURCES
PR § 116.174Title 9. TRUSTS · Part B. TEXAS TRUST CODE: CREATION, OPERATION, AND TERMINATION OF TRUSTS · Ch. 116. UNIFORM PRINCIPAL AND INCOME ACT · Art. D. ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST
Statute text
View on source(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 delay rental or 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 received as a royalty, shut-in-well payment, take-or-pay payment, or bonus, the trustee shall allocate the receipt equitably.
(4)If an amount is received from a working interest or any other interest not provided for in Subdivision (1), (2), or (3), the trustee must allocate the receipt equitably.
(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, the trustee must allocate the receipt equitably.
…
Legislative history
Acts 2007, 80th Leg., R.S., Ch. 451 (H.B. 564), Sec. 14, eff. September 1, 2007.